Indian Kanoon - Search engine for Indian Law

the accent not being on financial o r other unity but on separate line of business. The test of functional integrality is not re- levant.

(2) Since the test for functional integrality would depend upon the nature of the dispute raised and the test would be different for section 25FFF, there cannot be any question of res judicata; the matters directly and substantially in issue in the present award and the earlier awards being different.

The learned counsel for the appellants drew our attention to a number of decisions of this Court with regard to the tests of determining what is 'one establishment'. In the Associated Cement Companies Limited, Chaibassa Cement Works, Jhinkuni v. Their Workmen, (1) the Court observed, as follows "Several tests were referred to in the course of arguments before us, such as, geographical proximity, unity (1) [1960] 1 S. C. R. 703/716.

of ownership, management and control, unity of employment and conditions of service, functional integrality, general unity of purpose etc.... II is, perhaps impossible to lay down any one test as an absolute and invariable lest for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units, etc. If in their true relation they constitute one integrated whole, we say, that the establishments is one; If on the contrary. they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be _judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation ind also prescribes disqualification therefor. Thus, in one case the unity of ownership, management and control may be the important test, in another case functional integrality or general unity may be the important lest; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for- consideration at the same time".

In Pakshiraja Studios v. Its Workmen,(2) this Court referring to its earlier decision in Pratap Press, etc. v. Their Workmen,(1) reiterated the following principle :

"........ the Court has to consider with care how far there is functional integrality meaning thereby such functional interdependence that one unit cannot exist conveniently and reasonably without the other and the further question whether in matters of finance and employment the employer has actually kept the two units distinct or integrated".

We have got to consider the appellants' submission in the backdrop of the present dispute before the Tribunal. The dispute centres round closure of S. Mill. By raising an industrial dispute the closure is sought to be characterised by the workmen as either a lay-off or lock-out or retrenchment. The controversy between the parties with regard to the oneness of the establishment has to be viewed mainly from the point of view of compensation for deemed retrenchment of the employees on closure since it is absolutely clear that the S. Mill was ultimately closed on July 28, 1967 and remained so till the date of the award. It is, however, pointed out by the appellants and not countered by the respondent that the Strawboard section has again been restarted with about 58 workmen from October 1972 during the pendency of this appeal. It is, therefore, clear that the S. Mill was not functioning at all between July 1967 and October 1972. We will, therefore, have to consider the matter in controversy in the above context and circumstances of this particular case. Adverting to tile common features emphasised by the appellants, although most of these are present, it is not correct that there was mutual transfer of labour from one unit to the other without the consent of the employees. Again too much significance.cannot be given in this case for application of the provisions of the standing orders. The fact that in the earlier award, on a dispute being raised by the workmen of the R. Mill the standing orders were held to be applicable to them, would not assist the appellants for the purpose of this case to enable an unerring conclusion on that ground alone that the two units are one. Similarly that some masala for the R. Mill is prepared in the S. Mill or that the steam in the R. Mill is supplied from the boiler located in the S. Mill are not decisive tests in this case when even for the purpose of economy a common employer may arrange his matters in such a, way that there is certain operational cooperation between units, not necessarily, wholly interdependent one upon the other. The most important aspect in this particular case relating to closure, in our opinion, is whether one unit has such componental relation that closing of one must lead to the closing of the other or the one cannot reasonably exist without the other. Functional integrality will assume an added significance in a case of closure of a branch or unit. That the R. Mill is capable of functioning in isolation is of very material import' in the case of closure. There is bound to be a shift of emphasis in application of various tests from one case to another. In other words, whether independent functioning of the R. Mill can at all be said to be affected by the closing of the S. Mill. At the time we are hearing this appeal we should have, thought that the answer is easy since the R. Mill admittedly has been functioning in the absence of the S. Mill for a little over five years. But we have to consider the correctness of the conclusion of the Tribunal on the date it passed the award when the closure was only for about ten months. That, however, will, in our view, make no difference in principle. The reason for closure of the S. Mill is non-availability of Bagasse, which is the raw material needed for keeping it going. It is clear from the finding of the Tribunal that there is no other oblique reason at all established in the evidence in respect of the closure. The workmen cannot question the motive of the closure once closure has taken place in fact. The matter may be different if under the guise of closure the establishment is being carried on in some shape or form or at a different place and the closure is only a ruse or pretence. Once the Court comes to the conclusion that there is closure of an undertaking, the motive of the employer ordinarily ceases to be relevant. No employer can be compelled to carry on his business if he chooses to close it in truth and reality for reasons of his own. It is because of this that section 25FFF has been inserted by an amendment of the Industrial Disputes Act by Act IS of 1957 and it is not necessary for us to trace the history of the insertion of Chapter V-A in the Central Act by Amendment Act 47 of 1953 and later on of section 25FFF with other provisions. We may only note in passing that the legislature had to introduce these beneficial provisions in the interest of labour on account of the interpretation by this Court of the earlier relevant provisions of the Central Act on the subject.