Delhi District Court
Sh. Kishan Lal Bhatt vs Travel Corporation (India) Ltd on 7 October, 2016
IN THE COURT OF SHRI UMED SINGH GREWAL
PO:LCXVII, ROOM NO. 22 : KKD COURTS :DELHI
ID No.6877/16 (Old No. ID 109/10/08).
Unique ID No.02402C0412262008.
In the matter of:
Sh. Kishan Lal Bhatt
S/o Sh. Goverdhan
R/o H. No. 108, Street No. 2, Mangol Puri,
Delhi110083.
............. Workman
Versus
Travel Corporation (India) Ltd.
C35, Connaught Place, New Delhi110001.
..............Management
DATE OF INSTITUTION : 02.06.2008.
DATE ON WHICH AWARD RESERVED : 03.08.2016.
DATE ON WHICH AWARD PASSED : 07.10.2016.
A W A R D :
1. This is a direct industrial dispute filed by the workman
under the Industrial Disputes Act, 1947 (hereinafter referred as "the
Act") for reinstatement with continuity of service and back wages.
2. Claimant's case is that management is a company
incorporated under the provisions of Companies Act, 1956 in the
year 1961 as a Private Limited Company. It was later on converted
into a limited company. It has 25 offices in India and 11 offices
ID No.6877/16. 1/43
abroad having strength of about 2000 employees. He was employed
with it on 01.10.1999 as a Peon. He was a permanent employee and
as per the terms and conditions of service, he was to retire at the age
of 55 years. At the time of illegal termination, he was working as
Peon in Transport / Railway Department. He was a member of
Travel Corporation India Pvt. Ltd. Workers Union (Regd.), Delhi and
his service condition was governed by Industrial Disputes Act and
other labour laws / acts as per settlement arrived at between Union
and management. In November, 2006, Thomas Cook India Limited,
a public limited company incorporated under the provisions of
Companies Act, 1956, purchased 100% equity shares of the
management due to which the management became a wholly owned
subsidiary company of Thomas Cook India Limited. The
management is involved in the business of Travel and Travel related
services which includes booking of air tickets, Railways tickets, road
tickets, hotels, providing of transport service, staff guidesin bound
and out bound, and all other facilities related to tours and travels to
its domestic and international customers. The management is a profit
making company and has been paying around 20% bonus every year
to all its employees. It has been regularly employing more and more
employees in view of the growth of its business. Various
departments / divisions of the management such as ticketing, railway,
traveling, booking account etc. were indispensably interrelated to
ID No.6877/16. 2/43
each other and work of one department was dependent on the work
of other department and in this way, all departments clubbed together
work as a single unit i.e. an Industrial Establishment. None of the
department was severable and all the departments put together were
one integrated unit and part and parcel of the same Industrial
Establishment i.e. management. There was a complete functional
integrity amongst departments and the terms and conditions of the
service of different departments throughout the country was uniform
and they were governed by the same service rules. There was no
division whatsoever of any nature in the entire Industrial
Establishment. The employees of one department can be transferred
to another department and division of the company and group
company.
On 19.04.2005, the management through its Vice
President, Finance and Administration, entered into an undertaking,
terms and conditions of which were effective from 01.06.2004 and
the same was valid for a period of three years ending May, 2007.
The management and union / employees were bound to follow the
same. It was signed by the Chairman of the union Sh. N. Kapoor for
employees. When Thomas Cook India Limited purchased the
business of management in November, 2006, the entire ownership
and management of the management was transferred to it. But even
after change of ownership in its favour, the Thomas Cook India
ID No.6877/16. 3/43
Limited continued entire business in the name of management.
Nothing was changed by way of aforesaid business deal. There was
no change in the terms and conditions of service of the employees.
The understanding / agreement dated 19.04.2005 was also not
disturbed by both parties and hence, the settlement remained in force.
After purchase of 100% shares of the management, the acquirer,
Thomas Cook India Limited, assured employees that everything
would be very smooth and no prejudice would be caused to any of
them. It was assured by the acquirer that it would retain old work
force as it would help the company to make better growth and profits.
It had sought cooperation of the employees which was given to them
whole heartedly. The relationship between new owner /
management of Thomas Cook India Limited and workmen was very
normal, cordial, impartial and professional. He was given equal
treatment initially. However, slowly and gradually, the management,
under the instruction / instigation of Thomas Cook India Limited,
started discriminating and showing unequal approach towards him
being a member of the union. The unionized employees were
initially advised to leave the membership of the union for better
future in the company but later, they were coerced. He and other
employees were threatened that in case they failed to give up the
membership of the union, they would be terminated from service. It
was breach by respondent company that it will not make any
ID No.6877/16. 4/43
discrimination between unionized and no unionized employees. It discriminated with unionized employees by hiking salary of unionized employees 40% to 60% + 2000/ p.m. on preference basis. To create disparity and to dissuade the unionized employees from the bona fide trade union activities, they were offered a hike of meager 20% of their existing pay package. Inadvertently, many of the unionized employees were also given these increments as the management used to maintain list of only 20 employees as union members. Due to discriminatory approach, the members of the union including the workman, raised their voice of protest and made a bona fide demand to the management not to treat them on discriminatory note and requested equality of pay at par with nonunionized employees. The management, with ulterior motive to do away with trade union, refused to give equal treatment at par with other employees. Faced with such situation, in order to protect their interest, the unionized employees approached the Labour Department and filed a complaint before the Assistant Labour Commissioner. The workman through the union raised a charter of demand dated 25.02.2007 in relation to special increment. The Conciliation Officer admitted the demands of the Union of special increments for qualifications, experience, stagnation increment, definition of basic pay, dearness allowance, provident fund, gratuity, medical aid, dispensary, LTA, city compensatory allowance, house rent, hours of ID No.6877/16. 5/43 work, weekly offs, leave fare concession, holidays, leave rules, attendance / late comings, retirement age, uniforms and liveries, special allowance / pay for executive to Sr. Executive and management executive, supervisor / team leader, special pay / special allowance, bonus / exgratia, performance incentive, promotion policy, halting allowance, contract labour, free ticket - domestic / international, cash handling / carrying allowance to peon / messenger, conveyance & Transport allowance, overtime, mobile / cellular phone, lunch allowance, meals and inconvenience allowance. On 13.12.07, the parties arrived at a settlement and signed settlement deed before the Conciliation Officer under the provisions of Section 12(3) read with Section 18(3) of the Act. The preliminary hearing was held by the Assistant Labour Commissioner through Lallan Singh on 27.11.07 and on being satisfied that the union had sanctioned locus standi to represent the workman, a memorandum of settlement was entered into between the workmen represented by the union and the management on 03.01.2008, which was witnessed by Ms. Mahrukh M. Dosabai, the Associate Vice President, Human Resources of Thomas Cook India Ltd. Company and also by the President and Secretary of the union. Only after entering into the settlement, the salary of unionized employees was made at par with nonunionized employees by hiking salary by 70%.
The settlement came into force from 1 st May, 2007 and it ID No.6877/16. 6/43 had to remain in operation till 30.04.2010 and it could be terminated by giving two months notice in writing by either party in accordance with the provisions of law applicable at the relevant time. When the acquisition took place, the officials of the company started pressurizing the employees including the workman to resign and to take job on contract basis failing which their service would be terminated. When the workman and other employees were pressurized and threatened repeatedly of termination of job, they were left with no alternative but to knock at the door of labour department. Accordingly, they made a complaint dated 25.04.2008 in this regard before Assistant Labour Commissioner, K.G. Marg, New Delhi and notice was issued to management for appearance. During the pendency of aforesaid complaint before ALC, on 29.04.2008 at around 5 p.m, he was called by Ms. Maharukh M. Dosabai, claiming to be the authorized signatory of Thomas Cook India Limited. She handed over him a letter of termination dated 29.04.2008, vide which his service stood terminated. Ms. Maharukh M. Dosabai was not the competent person to terminate his service as she was in the employment of Thomas Cook India Limited, the holding company. He sent a demand notice to the management on 05.05.2008 for reinstatement but he was refused vide its reply dated 07.05.2008 sent by Ms. Maharukh M. Dosabai on behalf of management. The submission of company in letter of termination ID No.6877/16. 7/43 dated 29.04.2008 that transport / railway division was no longer economically viable was factually incorrect. It was wrongly stated in letter that the said division has been closed w.e.f. 29.04.2008. The fact is that management has outsourced the entire work to the contractors by dismissing permanent employees. The management failed to satisfy the requirement of Section 25FFF of the Act. No notice of intention of closure of the railway and travel department was given to any of the employees.
3. Written statement is to the effect that termination of service of workman was due to closure of Transport / Railway Divisions / Departments. He was working with management as a Peon in Railway Department.
The management is primarily and predominantly engaged in the business of travel related service to its clients such as Leisure Holidays, Outbound Holidays, Inbound Holidays, corporate booking and ticketing services like Visas, Passports etc. The claimant was working in Transport / Railway Department which did not form part of core activities of the management. The Railway Department used to cater to corporate railway booking requirements and there was no significant business from other sources. The Railway and Transport Departments were making huge losses and were, thus, not economically viable. Due to that reason, the company ID No.6877/16. 8/43 took a policy decision to close down those departments / divisions all over India. Accordingly, the Transport Departments at Delhi, Agra and Patna were closed on 29.04.2008. The Railway Departments were also closed down at Delhi, Agra, Lucknow, Patna, Ahmadabad, Baroda & Surat and services of the workers were terminated as a result of closure of those departments in accordance with Section 25 FFF of the Act. The service of the claimant was also terminated vide order dated 29.04.2008. While terminating his service, he was informed that the Transport and Railway Divisions were no longer economically viable and as such his service was being terminated w.e.f. 29.04.2008. The management had offered him money equivalent to one month salary in lieu of notice as well as closure compensation at the rate of 15 days salary for each completed year of service with management. His other dues like gratuity etc. were also paid to him which were duly accepted by him by way of cheque handed over to him on 29.04.2008 itself. In this way, the claimant's service was terminated as a result of closure of department after paying him requisite compensation under Section 25FFF of the Act.
The Railway and Transport Departments were separate and independent entities for other departments. There was no functional integrity between them. The very fact that the company continues to carry on its business even after closure of those departments shows that there was no interdependence and functional ID No.6877/16. 9/43 integrity. Those departments always constitute separate entity. All the workers were exclusively employed in those departments. Those workers including the claimant were never transferred to any other department during tenure of their service.
The management was having cordial relations with the union. It used to help union to resolve all the grievances and issues of the workers by entering into amicable settlement with union. It had no ill will against union or its members. The claimant's membership with the union had nothing to do with termination of his service. On 19.04.2005, there was no settlement as such signed by the Chairman of the Union. It was merely a Memorandum of Understanding which was duly implemented. No member of the union was ever discriminated. The factual position is that the employees who were members of the union got their wages increased as per the Memorandum of Understanding of the year 2004 which was valid till May, 2007. After acquisition by Thomas Cook (India) Ltd. in December, 2006, the employees, who were not covered under the Memorandum of Understanding, were given wage hike on the basis of their performance and the persons covered under the Memorandum of Understanding got their wage increased under the settlement dated 03.01.2008 with retrospective effect. In this way, the management was not engaged in any type of discrimination. It has been admitted that the union had raised some charter of demands ID No.6877/16. 10/43 before Conciliation Officer and that dispute was resolved.
The management never threatened any of the workman of termination of service if he did not resign from service. No complaint dated 25.04.2008 was ever filed by the workmen in the Labour Department. It was only after closure of the departments that the union managed to get the complaint stamped back dated as 25.04.2008. The fact is that the management was never issued any notice by the Labour Department on the complaint dated 25.04.2008, nor such complaint was ever forwarded to the management nor the conciliation proceedings were ever initiated on that complaint.
The management had not engaged any employee upon termination of service of claimant. It did not outsource any work and so, performance of that work under the direct control and supervision of the company, does not arise.
4. Following issue was framed on 30.09.2008:
1. Whether the services of the workman were terminated illegally and unjustifiably?
5. In order to substantiate the case, the claimant tendered his affidavit in evidence as Ex. WW1/A mentioning all the facts stated in the statement of claim. He relied upon following documents:
1. Ex.WW1/1 is memorandum of settlement between management ID No.6877/16. 11/43 and workers.
2. Ex.WW1/2 dated 08.05.2008 is complaint against management to Assistant Labour Commissioner through union.
3. Ex.WW1/3 is complaint dated 24.04.2008 to Assistant Labour Commissioner.
4. Ex.WW1/4 is certificate dated 21.04.2004 regarding registration of union, namely, M/s. Travel Corporation (India) Pvt. Ltd. Workers Union.
5 Ex.WW1/5 is complaint dated 21.07.2004 by union to SHO PS Connaught Place.
6. Ex.WW1/6 dated 14.03.2006 is complaint against management by union to Assistant Labour Commissioner.
7. Ex.WW1/7 is appointment letter dated 01.10.1999.
8. Ex. WW1/8 dated 05.04.2000 is his confirmation letter.
9. Ex.WW1/9 dated 02.05.2001 is certificate of excellence.
10. Ex.WW1/10 dated 01.09.2004 is wage revision letter.
11. Ex.WW1/11 dated 15.04.2005 is another wage revision letter.
12. Ex.WW1/12 dated 24.10.05 is another wage revision letter.
13. Ex. WW1/13 is salary slip for the month of Jan., 2008.
14. Ex. WW1/14 is salary slip for the month of Feb., 2008.
15. Ex. WW1/15 is tax forecasting for the month of March, 2008.
16. Ex. WW1/16 is salary slip for the month of March, 2008.
17. Ex. WW1/17 is bonus slip for the year 2006 - 2007.
18. Ex. WW1/18 is EPF statements of claimant for the year 2005 - 2006, 2004 - 2005, 2003 - 2004, 2002 - 2003, 2001 - 2002, 2000
- 2001, 1999 2000.
19. Ex. WW1/20 dated 29.12.03 is the letter written by ID No.6877/16. 12/43 management to the Northern Railway for extension of validity of railway I card of some workers, including claimant.
20. Ex. WW1/21 is letter dated 15.01.04 to the Northern Railway for temporary permission for reservation in railway premises for some workers, including claimant.
21. Ex. WW1/22 is receipt issued by Paramount Health Services Pvt. Ltd. showing that the claimant was provided health facility by the management.
22. Ex. WW1/23 is the receipt showing that the claimant was provided group insurance benefit by the management by engaging IFFCOTOKIO General Insurance.
23. Ex. WW1/24 is his ESIC card.
24. Ex. WW1/25 dated 29.04.2008 is termination letter.
25. Ex. WW1/26 is experience certificate issued by management.
26. Ex. WW1/27 is protest letter dated 05.05.2008 by claimant to the management against termination.
27. Ex. WW1/28 is letter dated 05.05.08 written by management to claimant to handover company's property.
28. Ex. WW1/29 dated 07.05.08 is reply of management to the letter dated 05.05.08 of claimant.
29. Ex. WW1/30 is letter dated 31.07.2008 of management.
30. Ex. WW1/31 is newspaper cutting.
31. Ex. WW1/32 is another newspaper cutting.
32. Ex. WW1/33 is another newspaper cutting.
33. Ex. WW1/34 is Annual Report - 2007 of management.
34. Mark B is letter of Labour Officer / Conciliation Officer to management regarding registration of memorandum of settlement.
ID No.6877/16. 13/4335. Mark D is his identity card valid upto 30.06.2008.
36. Mark E is his another identity card valid upto 31.03.2004.
6. WW2 Sh. Jagdish Narayan deposed that Travel Corporation (India) Pvt. Ltd. Workers Union was formed in 2004 and was registered on 21.04.2004 under Trade Union Act, 1926. Initially, there were only 20 members but its strength increased to 67 later. He was Chairman of the union and claimant was its member. That union was the sole union recognized by the management. The management entered into settlement / agreement with that union on 19.04.2005 and 03.01.2008. The terms and conditions entered into the settlement are binding not only upon the workers but also upon the management. The union had submitted a general demand notice to the management on 21.06.2004 and when the management did not file reply to the notice, it was constrained to file a claim petition under Section 10 of the Act before Assistant Labour Commissioner, Kasturba Gandhi Marg on 19.07.2004. The management called a meeting of the staff members on 17.07.2004 vide notice dated 16.07.2004 regarding wage revision. No discussion was held in the meeting but the management started putting pressure on the members to sign blank sheets and due to that reason, the union had filed a complaint in that regard with the police on 21.07.2004. After a lot of discussion and negotiations held between the management and union on the advise of Assistant Labour Commissioner, both parties ID No.6877/16. 14/43 hammered out a settlement effective for three years from 01.06.2004 to 31.05.2007. After settlement, a joint application was filed before Assistant Labour Commissioner for recording settlement and closure of dispute.
He further deposed that the management is a profit making company and despite it, it sold 100% shares in 2006 to M/s. Thomas Cook India Ltd. at a very high premium of Rs.200/ crores. Initially, the relationship between new management and workers / union was cordial, but slowly and gradually, the management, under the instruction of holding company i.e. Thomas Cook India Limited, started discriminating members of the union. The unionized employees were initially advised to leave the membership of the union for better future in the company. When they did not budge, the management started coercing and putting pressure on them. WW2 further deposed that the union, through its executive members, submitted charter of demands to the management on 25.02.2007 for the next term and requested to initiate discussions, but the management did not respond. In the meantime, the management, with a view to dislodge the union, increased the wages of large number of employees leaving aside all active members of the union. In this way, the management had shown favour and partiality to one set of workers regardless of merit. There was a lot of resentment amongst members of the union due to discriminatory approach of the ID No.6877/16. 15/43 management. They wanted to go on strike. After conciliation proceedings, a memorandum of settlement was entered into between the workers represented by him through union as Chairman and the management on 03.01.2008 which was signed by Sh. Suryanarayan and Ms. Mahrukh M. Dosabai on behalf of management as authorized representatives. The memorandum of settlement was registered in Settlement Register at serial No. 2 on 16.01.2008. The salary of unionized employees was made at par with nonunionized employees on the strength of the settlement dated 03.01.2008. Prior to entering into memorandum of settlement on 03.01.2008, many proposals put forth by the management were discussed. There was no proposal by the management to reduce the workforce or to close any department. During the whole discussion, there was never any murmur that the management was contemplating to reduce the existing workforce or it was intending to close any department. He further deposed that the management started threatening workers for termination of their job. They were left with no alternative than to knock at the door of labour department. Accordingly a complaint in that regard was made before Assistant Labour Commissioner, K.G. Marg, New Delhi on 25.04.2008. During the pendency of that complaint, several workers were terminated by the management on 29.04.2008 at around 5 p.m by Ms. Maharukh M. Dosabai claiming herself to be the authorized signatory of management. No employee ID No.6877/16. 16/43 was in excess in any of the department. No department was running into losses. In fact, after removal of employees, the management outsourced the Railway and Transport Department to private vendors and contract employees.
6. The management examined only one witness, namely, Sh. Sanjay Dhruga, Associate Vice President, Leisure Travel (inbound).
He deposed that claimant was working with the management as Peon in the Railway Department.
He further deposed that the company was engaged primarily and predominantly in the business of travel related service to its clients such as Leisure Holidays, Outbound Holidays, Inbound Holidays etc. The Railway and Transport Departments were making huge losses and were, thus, not economically viable. The company took a policy decision to close down those departments all over India. Accordingly, the Transport Departments at Delhi, Agra and Patna were closed on 29.04.2008. The Railway Departments situated at Delhi, Agra, Lucknow, Patna, Ahmadabad, Baroda & Surat were also closed down and services of the employees working in those departments were terminated due to closure in accordance with Section 25FFF of the Act.
He further deposed that claimant was duly paid one ID No.6877/16. 17/43 month's salary in lieu of notice as well as closure compensation at the rate of 15 days salary for each completed year of service with management in accordance with Section 25FFF of the Act. All legal dues including gratuity etc. were also paid to him.
MW1 further deposed that the claimant had duly accepted the demand draft of Rs.1,09,338.00 towards notice pay, closure compensation and other dues in full and final settlement. That demand draft was handed over to him alongwith letter of termination dated 29.04.2008.
MW1 further deposed that after closure of the department, it did not engage any of the employees whose services stood terminated as a result of closure. The closure of the departments was not actuated by any mala fide or extraneous considerations. The management is legally entitled to organize / re organize its business. It was also entitled in law to reduce the surplus workforce and to retrench the workers working in excess numbers. The management never made any commitment that it would not close down its any of the department or that it would not retrench the surplus workforce. The profitability of the company has no relevance. The issue of reduction of workforce or closure of any department was neither raised nor discussed in the meeting held with the union and due to that reason even no passing remark was made in the settlement. Settlement dated 03.01.2008 is no bar against closure ID No.6877/16. 18/43 or retrenchment. About the complaint dated 25.04.2008 by the union, he deposed that such complaint was never filed in the Labour Department. Due to that reason, no dispute between the workers and the management was pending when the services of the claimant came to an end. Ms. Maharukh M. Dosabhai was fully competent to sign the termination letter as the Board of Directors of Travel Corporation (India) Limited had duly empowered her to issue termination letter. The Resolution Ex. MW1/1 dated 01.04.2008 proves that fact.
He next deposed that in case of inbound customers who come from outside India to visit India, the company offers them services like hotel accommodation, sight seeing facility and local travel. These services are provided based on the customer's individual requirements. The transport department had a fleet of buses, mini coaches and multi utility vehicles for servicing the customers as and when required. When the requirement exceeded the capacity of servicing internally, the management used to hire vehicles from various service providers. As most of the customers were from outside India, the bus, mini coaches etc. which were more than 3 years old, were not used for serving as they used to demand brand new vehicles. Due to that reason, the vehicles which were more than 3 years old become unusable leading to loss on account of obsolescence and higher depreciation. In this background, it was decided to close the transport department as the accumulated losses ID No.6877/16. 19/43 for the last three years was very high which the company could not afford to take. After closing down of the transport department, the management started arranging vehicles from service providers. Such service is provided by former drivers of the management whose services were also terminated as a result of closure of transport department. Those drivers became entrepreneurs had started their own independent business of transportation after purchasing old vehicles from the company.
About Railway Tickets, MW1 deposed that the company used to provide tickets to customers on their request. Whenever there was request, the Railway Department employee would go to the reservation counter of the Railway Station, would stand physically in queue and book the tickets. The Railway Department used to take help of outside vendors for booking of railway tickets whenever it was not able to manage booking on account of high volumes of booking. However, due to advancement in technology, the Indian Railways has opened the website www.irct.co.inn where one can book railway ticket anywhere in India by sitting in front of a computer. Due to that reason, the earlier system of physically booking railway tickets one was rendered commercially unviable and redundant. Due to technical advancement, the customers started booking tickets themselves instead of asking the management to do so. Moreover, rail travel by the corporate customers is very low now ID No.6877/16. 20/43 a days on account of low cost airlines. In case, a low cost airlines does not fly to a particular destination, the management encourages its customers to book rail tickets themselves by using IRCTC portal (www.irctc.co.in). If any of the customer is unable to book ticket from the site of Indian Railway, the management helps him by booking his tickets from outside vendor Issue No. 1
7. Ld. ARW argued that service of the claimant was terminated by management vide letter dated 29.04.2008 mentioning the reason as closure of Railway / Transport Departments. There was a settlement between the management and union on 03.01.2008. At the time of entering into that settlement, there was no whisper or discussion from the side of the management that it was going to close any of its department. In fact, the Railway and Transport Departments have not been closed. The claimant and other workers have been dismissed from service because they were members of the union. He further submitted that as per settlement Ex. WW1/1 dated 03.01.2008 valid upto 30.04.2010, the management was duty bound to protect the interest of the workers. There was no clause in settlement deed regarding closure of any department and hence the management cannot close any of its activity. Moreover, there was no reason to close the department as the management was running in ID No.6877/16. 21/43 huge profits in December, 2007. He next argued that termination letters have been signed by Ms. Maharukh M. Dosabai who was not employee of management. Rather, she was employee of M/s. Thomas Cook India Ltd. and hence she was not competent to terminate the service of the claimant. The last argument is that even if it is presumed that the management has closed down the Transport and Railway Departments, it should have absorbed the claimant and other employee in other departments as their job, as per settlement dated 03.01.2008, was transferable.
Ld. ARM admitted that there was no discussion from the side of the management about closure while entering into settlement with the union on 03.01.2008, but absence of discussion cannot prevent the management from closing any of its department. The Railway and Transport Departments have been closed not in Delhi but all over India. Earlier, the management used to book Rail Tickets of its customers by sending its employees to the booking counters of Indian Railways. The employees would physically stand in the queue for booking tickets. After technical advancement, tickets can be booked from Internet by one person. Moreover, now a days, there are several low cost airlines carriers due to which the customers prefer to travel by air and not by rail. About Transport Department, he argued that the inbound customers (travelling from abroad to India) do not prefer vehicles which were more than three years old.
ID No.6877/16. 22/43Due to that reason, the vehicles which were more than 3 years old, became surplus and with them, their drivers also became surplus. Now a day, the management provides taxis to the customers by hiring from open market. He next argued that the Court cannot question the motive behind closure. About Ms. Maharukh M. Dosabai, he submitted that the lady was authorized vide authorization letter Ex.MW1/1 to take action against any employee of the management. He admitted that the job of the employees was transferable from one department to other department, but that clause in the service condition cannot bind management to transfer the employee, whose service has been terminated due to closure of his Department, to some other department. He next argued that the vehicles which had become surplus / three years old, were sold to the drivers whose services had come to an end. By acquiring those vehicles, said drivers have become independent entrepreneurs by starting their own business. Profit making is no ground to bar the management from closing down any department.
8. In J.K. Synthetics Vs. Rajasthan Trade Union Kendra & Ors., AIR 2001 SC 531, the Hon'ble Apex Court held that closure need not to be of entire plant. The closure can also be of a part of the plant.
In Workmen of the Indian Leaf Tobacco Development ID No.6877/16. 23/43 Col, Ltd., Guntur Vs. The Management of Indian Leaf Tobacco Development Co. Ltd., Guntur, AIR 1970 SC 860, the Apex Court held that the Industrial Tribunal cannot interfere with the discretion exercised by a company in a matter of closing down of some of its branches or depots. It further held that even if such closure may not amount to closure of business of the company, the Tribunal has no power to issue orders directing a company to reopen a closed depot or branch, if the company in fact closes it down and that closure is genuine and real. Stoppage of part of a business is an act of the management which is entirely in the discretion of the company carrying on the business.
9. In District Red Cross Society Vs. Babita Arora and Others, (2007) 7 SC 2879 referring to Straw Board Manufacturing Company Ltd. Vs. Straw Board Manufacturing Company Limited (1974) 1 LLJ 499, the Apex Court held that the test of closure of a unit is whether one unit had such componental relation that closing of one must lead to the closing of the other or the one cannot reasonably exist without the other. It further held that functional integrity assumes an added significance in the case of closure. The Court clarified that the closure means permanent closing down of a place of employment or part thereof. If a unit or part of an undertaking which has no functional integrity with other units is ID No.6877/16. 24/43 closed, it will amount to closure within the meaning of Section 25 FFF.
Regarding rights of the employees of the closed unit, the Hon'ble Apex Court concluded in J.K. Synthetic Vs. Rajasthan Trade Union Kendra & Ors. (supra) that such employees are entitled only to closure compensation as per Section 25F of the Act. It clarified that the employees get only compensation under that Section with the help of Section 25FFF, but both sections are not comparable because in the case of violation of Section 25F, the employee can get reinstatement etc. but if the case falls under Section 25FFF and retrenchment compensation is not paid, he cannot be granted reinstatement etc. He is entitled to get only compensation.
10. In Workmen of Sur Iron and Steel Co. (P) Ltd. Vs. Sur Iron and Steel Co. (P) Ltd. and Anr. (1970) SCC 618, the management had closed down its factory which used to manufacture articles. It started purchasing such articles from other manufacturer and started putting its own trademarks on those articles. Hon'ble Apex Court held that manufacturing units were closed. Stamping of trademark on purchased articles did not amount to manufacturing.
In Massod Ahmed Khan & Ors. Vs. Hamdard Dawakhana (Wakf)/ Hamdard (Wakf) Laboratories & Ors. 2012 LLR 792, the Hon'ble High Court of Delhi held that right reserved ID No.6877/16. 25/43 by an employer to transfer an employee to other concern, does not confer any right in employee to seek continuity of employment in that concern after closure of business of its employer.
11. Hon'ble Supreme Court clarified the rights of employees sacked due to closure of their units, in Hatisingh Mfg. Co. Ltd. and Anr. Vs. Union of India (UOI) and Ors., AIR 1960 SC 923 in following words : "There is between the text of s. 25F and s.
25FFF(1) a significant difference in phraseology. Whereas by s. 25F - the constitutional validity whereof does not fall to be determined in these petitions - certain conditions precedent to retrenchment of workmen are prescribed, s. 25FFF(1) merely imposes liability to give notice and to pay compensation on closure of an undertaking which results in termination of employment of workmen. Under s. 25F, no workman employed in an industrial undertaking can be retrenched by the employer until (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period has expired or the workman has been paid salary in lieu of such notice, (b) the workman has been paid retrenchment compensation equivalent to 15 days' average salary for every completed year of service and (c) notice in the prescribed manner is served on the appropriate Government. Section 25FFF(1) however enacts that the workman shall be entitled to ID No.6877/16. 26/43 notice and compensation in accordance with the provision of s. 25F if the undertaking is closed for any reason, as if the workman has been retrenched. By the plain intendment of s. 25FFF(1), the right to notice and compensation for termination of employment flows from closure of the undertaking; the clause doe not seek to make closure effective upon payment of compensation and upon service of notice or payments of wages in lieu of notice. An employer proposing to close his undertaking may serve notice of termination of employment and if he fails to do so, he becomes liable to pay wages for the period of notice. On closure of an undertaking, the workmen are undoubtedly entitled to notice and compensation in accordance with s. 25F as if they had been retrenched i.e., the workmen are entitled besides compensation to a month's notice or wages in lieu of such notice, but by the use of words "as if the workman had been retrenched" the legislature has not sought to place closure of an undertaking on the same footing as retrenchment under s. 25F. By s.
25F, a prohibition against retrenchment until the conditions prescribed by that sections are fulfilled is imposed; by s. 25FFF(1), termination of employment on closure of the undertaking without payment of compensation and without either serving notice or paying wages in lieu of notice, is, not prohibited.
Payment of compensation and payment of wages for the period of notice are not therefore conditions precedent to closure."
ID No.6877/16. 27/43In Indian Hume Pipe Co. Ltd. Vs. Their Workmen, AIR 1968 SC 1002, the Hon'ble Apex Court held that the Court cannot question the motive behind closure of a unit.
12. Following principles are deducible from above case laws:
1. It is not necessary that the management should close down its entire business. Closure of a unit / division / department / part of undertaking is closure in law.
2. There should be actual closure.
3. The court cannot go behind the motive of closure.
4. The closed unit should not have functional integrity with the other units.
5. The employees of a closed unit, with the help of Section 25FFF and Section 25F, are entitled to only closure compensation. If such compensation has not been given, that would not lead to reinstatement. Notice of closure and compensation can be given after termination of service. Prior notice and prior tender of closure compensation is not a condition precedent for closure of a unit.
6. Even if a right has been reserved by employer to transfer an employee to another concern, such right does not confer any right on the employee to seek continuity of employment in another concern, in case of closure.
13. It is correct that Court cannot go behind the motive of closure but there is a difference between motive and reason though ID No.6877/16. 28/43 both are used interchangeably. For example, a murderer driven by jealous and rage has a motive: to cause harm to what he conceives as the source of his pain: his cheating wife. He is driven by his emotions to take an irrational action which he does not validate with logic. His motive is jealousy, but he has no reason to commit murder.
If one takes an umbrella on a sunny day, the reason may be that it would rain later in the day. His decision is conscious and based upon facts which he has considered. In that case, the motive and reason are that he should not get wet. But the reason is the conscious thought and the motive is accompanying emotion.
If a person robs a bank and forces everyone to stay on the floor. His reason is that if those persons are not on the floor, they would be in a better position to resist him or to activate the alarm. The action of robbing a bank may be irrational but the immediate decision to force people to stay on the floor is grounded in a conscious decision guided by facts. The reason to force people to stay on the floor, therefore, is to prevent resistance.
In other words, the motive refers to emotional propelling force for an action while reason is referring to the conscious thinking process and conscious goal behind an action.
14. In the case in hand, the motive alleged by the claimant behind the closure of departments is his membership of union. The ID No.6877/16. 29/43 management wanted to teach such persons a lesson and that is why his service was terminated. Such a plea is thwarted by Indian Hume Pipe Co. Ltd. Vs. Their Workmen (supra). In that case, the Apex Court had clearly held that the Tribunal cannot go into the question as to the motive of the appellant in closing down its factory at Barakar and to enquire whether it was bona fide or mala fide with some oblique purpose, namely, to punish the workman for the union activities in fighting the appellant.
As has been observed above, there is a difference between motive and reason. The Court can definitely examine reasons behind closure. The reason stated by the management is that Railway and Transport Departments were not economically viable as those were running in losses. Such plea of the management has been thwarted by the cross examination of MW1 who admitted it correct that as per Ex. WW1/29, the profit of the management for the year ending 3.12.2006 was Rs.63739429/ and for the year ending 31.12.2007, the same was Rs.209703674/. He further admitted that it was mentioned in Ex. WW1/29 that the management had made good profit during financial year ending 31.12.2007. The management did not place on record the balancesheet / accounts of Railway and Transport Departments to justify that they were running into losses. So, reason behind closure is quite bad.
ID No.6877/16. 30/4315. Moreover, there was functional integrity between various departments of the management. MW1 admitted it correct that management provides end to end services to its customers depending upon their requests such as booking their tickets, air tickets, railway tickets, bus transport as per their itinerary, booking of hotels at the respective places of their visits, providing them vehicles for their tours / travel within the local areas, picking them up from the airport and drop them to the hotels, regularly picking up and dropping them as per the schedule, providing them with guides, local staffs and taking care of all other miscellaneous needs as demanded by the customers. He next admitted that the revenues of the management are generated by selling individual and corporate holiday packages, (outbound and inbound), by ticketing services like Visas, Passports, Tickets - Air and Rail. Due to providing of end to end services, the Railway and Transport Departments were integral parts of other departments.
16. The contention of the management is that it has closed down Railway and Transport Departments but it is the case of the claimant that those departments are still working as there is no closure.
MW1 admitted that http://www.tcindia.com/faq.html was the official website of the management. He further admitted that ID No.6877/16. 31/43 in that website, the management had provided with the details of the services offered by the management in relation to inbound and outbound travels, booking of tickets, mode of taking the services, mode of making the payments. He further admitted that Ex MW1/W2 (25 pages) were the printed downloaded pages from the official website of the management and their contents were true and correct. As per page No. 6 of Ex. MW1/W2, tour package from Delhi to Agra was of 13 days. The tariff of the management included all transfers to or from hotels, city tours, excursions, drives by air conditioned transport. It is further mentioned that tariff includes train fare as per the itinerary. As per page No. 9 of Ex. MW1/W2, holiday tour from Delhi to Jaipur, Jaisalmer, Jodhpur, Sawai Madhhopur, Udaipur, Bharatpur and Agra was of 8 days and tariff charged by the management included cost of travel also. As per page No. 17 of Ex. MW1/W2, the holiday tour package from Chennai to Mysore, Hassan, Bangalore, Kovalam, Periyar, Madurai, Trichy, Pondicherry, Mahabalipuram was of 14 days. It is further mentioned that tariff charged by the management included all transfers to or from hotels, city tours, excursions, drives by an airconditioned transport. It included train fares as per the itinerary also. To the same effect are the pages No. 23 & 24 of Ex. MW1/W2. It becomes clear from Ex. MW1/W2 that the management was charging from its customers for airconditioned transport travelling and for train fare also. It means ID No.6877/16. 32/43 that the management had not closed down Railway and Transport Departments.
The claimant has placed on record documents from Ex. MW1/W4 to Ex. MW1/W11 to establish that the management used to book rail tickets for its customers. For booking rail tickets for journey to be performed on 10.12.2008 and 12.12.2008 from Delhi to Bhopal and from Delhi to Ajmer respectively, the management had booked tickets for two passengers on 06.12.2008 vide invoice Ex. MW1/W3 and Ex. MW1/W4. After booking the tickets, the management had sent intimation letter Ex. MW1/W5 to its customer by placing the letter in envelopes Ex. WW1/M6 and Ex. WW1/M7. Ultimately, those tickets were booked and such tickets are Ex. MW1/M8 and Ex. MW1/M9 but the management got those tickets cancelled as reflected by Ex. MW1/M10 and Ex. MW1/M11. All these documents have been admitted by MW1 his cross examination. These documents establish that the management was definitely providing rail tickets reservation facility to its customers.
17. Regarding Transport Department, MW1 admitted it correct in cross examination that on the date of termination of service of the claimant, the management had about 15 - 20 buses and 15 - 20 cars. Immediately preceding the date of termination, in view of huge demand in the business, the management had to take vehicles ID No.6877/16. 33/43 on rent from private vendors also. He next admitted it correct that during the one year after termination, the management had hired some vehicles from outside. He further deposed that management had been hiring vehicles from outside regularly. He admitted it correct that on the date of termination of workmen, the Transport Department used to prepare a daily movement chart showing details of reporting time of the drivers, the details of the customers, the name of the hotels, the name of the guide, name of the transporters. He further admitted that at the time of termination, duty slip / bill of the individual driver with the details of the vehicle, etc. were prepared by the transport department of the management. He added that after termination, these duties are performed by Inbound Tours Department. He next deposed that duty slips of the drivers with their respective duties and daily movement orders are maintained on day to day basis.
He next deposed that nature of the business of the management has not been changed even after termination of the claimant. He was asked whether he could produce the daily movement and duty slips of the management from April, 2008 to August, 2008, but he refused saying that the same were misplaced in the course of shifting from Connaught Place to Gurgaon in August, 2010. Had MW1 produced those slips, it would have exposed management that it was still engaged in travelling business. MW1 ID No.6877/16. 34/43 did not place on record any document to show that management had filed any complaint in police or elsewhere regarding missing of those documents. He did not file any document to show that management had made any effort to locate such documents.
Regarding Railway Division, MW1 admitted that for railway ticketing work, the management had a Rail Travel Agent registration number at the time of termination of the workmen. He could not admit or deny that the registration number was AAACT4050CST045. He could not tell whether the registration number has been surrendered or cancelled by the management from railway authorities. He admitted that without registration number, the management cannot book or purchase railway tickets commercially. Retaining of registration number for purchasing the rail tickets commercially definitely indicates that the management is still engaged in purchasing of rail tickets of its customers.
Management's plea is that three years old vehicles had become surplus as the inbound customers used to demand new vehicles. Those vehicles were sold to drivers whose service was terminated due to closure of Railway Department. Such drivers became entrepreneurs by supplying those vehicles to management. The management did not examine any former driver or place on record any document that it had sold any vehicle to a former driver. Plea itself is contradictory. If the customers were not accepting three ID No.6877/16. 35/43 years old vehicles from management, why they would accept those vehicles from drivers.
In view of above discussion, it is held that the management has not closed down Railway and Transport Departments.
18. It is correct that Ms. Maharukh M. Dosabai was not employee of the management when service of the claimant was terminated on 29.04.08. At that time, she was employee of M/s. Thomas Cook India Limited. But she had been authorized by the management vide authorization letter Ex. MW1/1 to take action against the claimant. Moreover, it was Ms. Maharukh M. Dosabai who had signed on behalf of the management on settlement Ex. MW1/1 executed between management and union. At one place, the claimant is trying to take benefit of Ex. MW1/1 but at the other place he is disputing the competency of Ms. Maharukh M. Dosabai. He can not be allowed to pick one and leave other. It is held that the lady was competent to take action against the claimant.
It is correct that job of the claimant was transferable to any other division or department. After holding that management had not closed down Transport / Railway Departments, it is not necessary to decide whether he is entitled to be transferred to some other department, in case of closing of his own department. But for ID No.6877/16. 36/43 the sake of settling the dust, it is held that in view of Massod Ahmed Khan & Ors. Vs. Hamdard Dawakhana (Wakf)/ Hamdard (Wakf) Laboratories & Ors (supra), he is not entitled to be absorbed in any other department if his department was closed down by the management.
19. In view of above discussion, it is held that termination of service by the management is illegal.
Relief.
20. Ld. ARW argued that claimant is jobless since termination of his service and so, reinstatement with continuity of services and full back wages be granted to the workman.
Ld. ARM argued that claimant did not place on record any application etc. which may suggest that he had approached any other management for employment. In fact, he is gainfully employed.
21. Even if, service of a workman has been terminated illegally, that would not automatically lead to reinstatement with 100% back wages. In Nehru Yuva Kendra Sangathan Vs. Union of India & Ors. 2000 IV AD (Delhi) 709, Hon'ble Delhi High Court dealt with the question of reinstatement and back wages and ID No.6877/16. 37/43 observed in paragraphs 27 and 28 as under : "27. We find from the decision of the Supreme Court rendered in the 1970s and 1980s that reinstatement with back wages was the norm in cases where the termination of the services of the workman was held inoperative. The decisions rendered in the 1990s, including the decision of the Constitution Bench in the Punjab Land Development and Reclamation Corporation Ltd., Chandigarh seem to suggest that compensation in lieu of reinstatement and back wages is now the norm. In any case, since we are bound to follow the decision of the Constitution Bench, we, therefore, conclude that reinstatement is not the inevitable consequence of quashing an order of termination; compensation can be awarded in lieu of reinstatement and back wages.
28. Considering the facts of this case, we are persuaded to award compensation in lieu of reinstatement and back wages to the workman"
22. In Municipal Council, Sujanpur Vs. Surinder Kumar 2006 LLR 662, Hon'ble Supreme Court observed that the relief of reinstatement is not automatic but is in the discretion of the court. In paragraph 16, it was observed as under : "Apart from the aforementioned error of law, in our considered opinion, the Labour Court and consequently the High Court completely ID No.6877/16. 38/43 misdirected themselves insofar as they failed to take into consideration that relief to be granted in terms of section 11A of the said Act being discretionary in nature, a Labour Court was required to consider the facts of each case therefor. Only because relief by way of reinstatement with full back wages would be lawful, it would not mean that the same would be granted automatically".
23. In Vinod Kumar & others vs Salwan Public School & others WP(c)5820/2011 dt.17.11.2014 Hon,ble Justice V. Kameshwar Rao has held as under:
11.Having considered the rival submissions of the counsels for the parties, I do not find any infirmity in the order of the Labour Court. It is a settled position of law that even if termination has been held to be illegal, reinstatement with full back wages is not to be granted automatically. The Labour Court is within its right to mould the relief by granting a lumpsum compensation. In fact, I note that the Labour Court has relied upon three judgments propounding the law that the Labour Court can mould a relief by granting lump sum compensation; the Labour Court is entitled to grant relief having regard to facts and circumstances of each case.
12. Further, the Supreme Court in the following judgments held as under:
(a) In the matter reported as Jaipur Development Authority v. Ramsahai, (2006) 11 SCC 684, the court has stated:ID No.6877/16. 39/43
"However, even assuming that there had been a violation of Sections 25G and 25H of the Act, but, the same by itself, in our opinion, would not mean that the Labour Court should have passed an award of reinstatement with entire back wages. This Court time and again has held that the jurisdiction under Section 11A must be exercised judiciously. The workman must be employed by State within the meaning of Article 12 of the Constitution of India, having regard to the doctrine of public employment. It is also required to recruit employees in terms of the provisions of the rules for recruitment framed by it. The respondent had not regularly served the appellant. The job was not of perennial nature. There was nothing to show that he, when his services were terminated any person who was junior to him in the same category, had been retained. His services were dispensed with as early as in 1987. It would not be proper to direct his reinstatement with back wages. We, therefore, are of the opinion that interest of justice would be subserved if instead and in place of reinstatement of his services, a sum of Rs 75,000 is awarded to the respondent by way of compensation as has been done by this Court in a number of its judgments."
(b) In the matter reported as Nagar Mahapalika v. State of U.P., (2006) 5 SCC 127, the court has stated:
"23. Noncompliance with the provisions of Section 6N of the U.P. Industrial Disputes ID No.6877/16. 40/43 Act, although, may lead to the grant of a relief of reinstatement with full back wages and continuity of service in favour of the retrenched workmen, the same would not mean that such a relief is to be granted automatically or as a matter of course. 25 .....The appellant herein has clearly stated that the appointments of the respondents have been made in violation of the provisions of the Adhiniyam. An appointment made in violation of the provisions of the Adhiniyam is void. The same, however, although would not mean that the provisions of the Industrial Disputes Act are not required to be taken into consideration for the purpose of determination of the question as to whether the termination of workmen from services is legal or not but the same should have to be considered to be an important factor in the matter of grant of relief. The Municipal Corporation deals with public money. Appointments of the respondents were made for carrying out the work of assessment. Such assessments are done periodically. Their services, thus, should not have been directed to be continued despite the requirements therefor having come to an end. It, therefore, in our considered view, is not a case where the relief of reinstatement should have been granted."
(c) In the matter reported as Talwara Coop.
Credit and Service Society Ltd. v. Sushil Kumar, (2008) 9 SCC 486, the court has stated:
"8. Grant of a relief of reinstatement, it is trite, is not automatic. Grant of back wages is ID No.6877/16. 41/43 also not automatic. The Industrial Courts while exercising their power under Section 11A of the Industrial Disputes Act, 1947 are required to strike a balance in a situation of this nature. For the said purpose, certain relevant factors, as for example, nature of service, the mode and manner of recruitment viz. whether the appointment had been made in accordance with the statutory rules so far as a public sector undertaking is concerned, etc., should be taken into consideration."
(d) In the matter reported as Jagbir Singh v.
Haryana State Agriculture Mktg. Board, (2009) 15 SCC 327, the court has stated :
"7. It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. ...
14. An order of retrenchment passed in violation of Section 25F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead ID No.6877/16. 42/43 compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee."
24. The claimant had worked with the management from 01.10.1999 to 29.04.08 i.e. for about 08 & ½ years. He did not pin point any other management visited for reemployment. Had he tried seriously, he would have definitely got job of equal status and salary. It is the case of claimant himself that his retirement age was 55 years. Taking into account all these facts, the management is directed to pay 50% back wages to the claimant from the date of termination till the date of the award / superannuation, whichever is earlier plus 25% of the amount tendered to him. If the amount tendered has been paid, the paid amount shall be deducted from the total of 50% back wages and 25% tendered amount. The amount be paid to him within one month from the date of publication of this award, failing which it shall be liable to pay interest on it @ 9% per annum from today till its realization. Parties to bear their own costs. Award is passed accordingly.
25. The requisite number of copies of the award be sent to the Govt. of NCT of Delhi for its publication. File be consigned to Record Room.
Dictated to the Steno & announced (UMED SINGH GREWAL) in the open Court on 07.10.2016. POLCXVII/KKD, DELHI.
ID No.6877/16. 43/43