- (1.) This order will dispose of eleven writ petition bearing numbers 566, 553, 736, 877, 912, 1049, 1175 and 1296 of 1991, 8230 of 1988, 4444 & 8790 to 8806 of 1992 in which common questions of law and fact arise. Since the main arguments were addressed in civil writ petition No. 566 of 1991, facts are being taken from this petition.
(2.) Petitioners who are workmen with the meaning of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act') have filed these writ petitions under Article 226 of the Constitution challenging their orders of retrenchment on the sole ground that conditions precedent to retrenchment as enumerated in Section 25-N of the Act had not been complied with before they were retrenched.
(3.) Petitioners were working as store-keepers in different retail outlets maintained by the Haryana State Federation of Consumer Cooperative Wholesale Stores Limited, Chandigarh (hereinafter called 'CONFED'). CONFED is an apex cooperative society deemed to be registered under the Haryana Cooperative Societies Act, 1984. Its primary activity is to distribute essential commodities to the consumers and for this purpose it has opened various outlets throughout the State of Haryana and outside. There were more than 500 such retail outlets and not more than two or three persons were employed on any one outlet. In addition to these outlets, CONFED also owns a manufacturing unit at Faridabad which is registered as a factory under the Factories Act, 1948 where washing soap, polythene bags, exercise note-book are manufactured in addition to printing of bill books etc. In this factory 16 persons are employed including the managerial and supervisory staff. Due to heavy losses suffered for sometime in the past, the Board of Directors in their meeting held on December 12, 1989 decided to reduce the strength of its staff by abolishing some posts. It was also decided that the retail outlets in excess of 500 would be closed and the Managing Director was authorized to close on the basis of their viability and area population served by them. It was in pursuance of this decision that the petitioners received notices for retrenchment. There is no dispute that while effecting retrenchment, the provisions of Section 25-F of the Act have been complied with but the management did not comply with the provisions of Section 25-N. As already observed earlier, the solitary ground on which the retrenchment is challenged is that the provisions of Section 25-N which, according to the petitioners, were applicable ought to have been followed. Section 25-F falls in Chapter V-A of the Act and it read as under :- 25-F Conditions precedent to retrenchment of workmen - No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until - (a) the workmen has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay (for every completed year of continuous service) or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government (or such authority as may be specified by the appropriate Government by notification in the Official Gazette)." Section 25-N, on the other hand, falls in Chapter V-B of the Act and this Chapter was inserted by Act No. 32 of 1976. This section as it now stands reads as under :- 25-N Conditions precedent to retrenchment of workman. (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until - (a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and (b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf. (2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workman concerned in the prescribed manner. (3) Where an application for permission under sub-section (1) has been made, the appropriate government on the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant of refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen. (4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days. (5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order. (6) The appropriate Government or the specified authority may, either on, its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may because it to be referred, to a Tribunal for adjudication : Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference. (7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him. (8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such period as may be specified in the order. (9) Where permission for retrenchment been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part therof in excess of six months." It will be seen that Section 25-N requires that no workman in any industrial establishment to which Chapter V-B applies can be retrenched until he has been given three month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or he has been paid in lieu of such notice wages for the period of notice and prior permission of the State Government has been obtained on an application made for this purpose. Admittedly, this has not been done by the management while retrenching the petitioners. Provisions of Chapter V-B have been made applicable to an industrial establishment not being an establishment of a seasonal character or in which work is performed only intermittently in which not less than 100 workmen are employed on an average per working day for the preceding 12 months. It is common case of the parties that total number of persons employed by CONFED including those at various retail outlets are far in excess of 100 but what is sought to be argued on behalf of the management is that these outlets are not 'industrial establishment' within the meaning of this term as defined in Section 25-L of the Act and, therefore, Chapter V-B containing Section 25-N was not applicable in the instant case. On the other hand, counsel for the petitioners has contended that CONFED owns a manufacturing unit at Faridabad which is admittedly registered as a factory under the Factories Act and its management along with that of the retail outlets being the same, all the employees have to be clubbed together for the purpose of determining whether the provisions of Chapter V-B would apply. The term 'industrial establishment' has been defined in clause (a) of Section 25-L of the Act in following terms; "25-L. Definitions :- For the purpose of this Chapter, (a) 'industrial establishment' means - (i) a factory as defined in clause (m) of Section 2 of the Factories Act, 1948 (63 of 1948); (ii) a mine as defined in clause (j) of sub-section (1) of Section 2 of the Mines Act, 1952 (35 of 1952); (iii) a plantation as defined in clause (f) of Section 2 of the Plantations Labour Act, 1951 (69 of 1951); (b) xx xx xx xx 'Factory has been defined in clause (m) of Section 2 of the Factories Act, 1948 as under :- '2. Interpretation - In this Act, unless there is anything repugnant in the subject or context :- (a) to (1) xx xx xx (m) "factory" means any permises including the precincts thereof - (i) Whereon ten or more workers are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) Whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, - but does not include a mine subject to the operation of the Mines Act, 1952 (XXXV of 1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place; Explanation (1) - For computing the number of workers for the purposes of this clause all the workers in different groups and relays in a day shall be taken into account; Explanation - II. xx xx xx xx";