Case: Hotel Ambassador Vs. Its Workmen and Others

It appears that the appellant had retrenched four of its employees one of whom did not raise any dispute, but the other three did : they are Ram Singh I, painter, Ram Singh II, painter and Sadhu Ram, upholsterer. This dispute was referred for adjudication to the industrial tribunal, Delhi. The tribunal has held that the retrenchment of Ram Singh II and and Sadhu Ram was justified, but not that of Ram Singh I. That is why it has given the said employee the main relief of reinstatement and other consequential reliefs as to wages for the period during which he had been retrenched. It is against this order that the appellant has come to this Court by special leave.

Court's reasoning:
Evidence shows that both Budhram and Bhagat Singh were drawing Rs. 150 each per month at the relevant time, and so, what applies to Budhram applies equally to Bhagat Singh. In our opinion, this contention isand must be upheld.Mr. Janardhan Sharma for the respondents attempted to support the finding of the tribunal that the appellant had acted improperly in not applying the principle of S.25G of the Industrial Disputes Act, 1947 (Act 14 of 1947). Section 25G requires that the retrenchment should be effectedand that in effecting retrenchment, the principle of last come first go must be applied. The difficulty in accepting this argument, however, is that in the present case the appellant has altogether closed the special department for painting, whitewashing and polishing upholstering work, and it is not possible to find fault with the appellant, because one of the ways in which economy in expenditure could be effected obviously was to close this department and distribute the work of the said department among some of theemployees. That being so, it is not possible to hold that S. 25G has been contravened. Once it is conceded that there was an occasion for effecting economy, the conclusion is inescapable that the conduct of the appellant in closing the department and dividing its work amongst its other employees cannot be reasonably characterized as improper, or as amounting to an unfair labour practice. It is true that Ram Singh I appears to have been aof the union and no doubt, the respondents contended before the tribunal that the retrenchment of Ram Singh I was really an act of victimization. The tribunal has not made a finding in favour of the respondents on this ground. It has merely held that since Bhagat Singh was not retrenched but Ram Singh I was, that is improper and not bona fide. This conclusion, in our opinion, cannot be upheld.