M/S Ariane Orgachem Pvt.Ltd vs Wyeth Employees Union & Ors

On 30.08.2004, the appellant-Company acquired the erstwhile manufacturing facility of M/s. Wyeth Ltd.-respondent No.3 and on 31.8.2004, the respondent No.3 issued letters to its workmen working in its erstwhile factory, informing them about the sale and transfer of the ownership and management of the said factory to the appellant-Company in accordance with the provision of Section 25-FF of the Act. They were further informed that their services will not be interrupted due to such transfer and their services will be treated as continuous and uninterrupted for the purpose of retiral/terminal benefits. Thereafter, all the workmen whose employment came to be transferred from M/s Wyeth Ltd. to the appellant-Company started drawing their wages/salary and all other benefits like advance, LTA and leave, etc. from the appellant.

On 2.9.2004, the respondent no.1-Wyeth Employees Union (for short “the Union”), which is the recognized Union under the Provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for short “the MRTU & PULP Act”), filed Complaint (ULP) No. 534 of 2004, before the Industrial Court challenging the sale and transfer of employment of the employees but no interim relief was granted by the Industrial Court, hence, all the workmen came on the rolls of appellant-Company and started drawing wages from it.

The appellant claimed that it has framed Voluntary Retirement Scheme (for short “VRS”) on 12.4.2005 for the workmen, offering amounts, tax free, to each workman with all other dues such as gratuity, ex-gratia, provident fund, leave encashment etc. which was operative from 12.4.2005 to 30.4.2005. On 15.04.2005, 45 out of the total 143 workmen applied for the said VRS and collected the VRS payments and the remaining workmen collected the VRS payments on 20.04.2005 and 21.04.2005. After the payment of the VRS benefits, the workmen were relieved from their services by the appellant- Company.

After several months of accepting the VRS, the respondent-Union raised the demand seeking their reinstatement in the Company of respondent no.3. In response to the said demand, the appellant-Company replied that all the workmen had taken the VRS benefits and they were not the workmen of either the appellant-Company or the third respondent’s Company anymore, therefore, no industrial dispute could be raised by or on their behalf by the respondent-Union. On 12.12.2005, the respondent-Union, wrote a letter to the Assistant Commissioner of Labour, seeking his intervention in respect of their demand with the Company. On 01.08.2006, the Conciliation Officer sent the failure report to the Assistant Commissioner of Labour, subsequent to which on 14.08.2006, the office of the Deputy Labour Commissioner which took cognizance of the failure report declined to make an order of reference to the Industrial Tribunal stating thereby that there was no industrial dispute in existence between the parties.

Thus, it is urged by the learned senior counsel that in view of the aforesaid reasons the question of the alleged transfer of the workmen from M/s. Wyeth Ltd. to the appellant-Company is only a ruse and was done only with a view to acquire the property for real estate development. Therefore, the factual contentious issue of the alleged voluntary retirement of the concerned workmen and the acceptance of the monetary benefits by them need to be adjudicated by the competent Industrial Tribunal under an order of reference of the industrial dispute which has to be referred by the State Government. This aspect of the matter has not been considered by the State Government at the time of passing an order declining to exercise its administrative power to make an order of reference to the Industrial Tribunal for its adjudication of the existing industrial dispute between the workmen and the employer effectively.

With reference to the above mentioned rival legal contentions urged on behalf of the parties, we have carefully examined the impugned judgment and order, with a view to find out whether the High Court is justified in quashing the order of refusal to make an order of reference regarding the industrial dispute raised by the first respondent-Union on behalf of the concerned workmen to the Industrial Tribunal for its adjudication. We answer the same in the affirmative in favour of the first respondent-Union for the following reasons:-