ARMED FORCES EX OFFICERS MULTI SERVICES COOPERATIVE SOCIETY LTD. versus RASHTRIYA MAZDOOR SANGH (INTUC)

Citation: [2022] 6 S.C.R. 1057 · Decided: 11-08-2022 · Supreme Court of India · Bench: BHUSHAN RAMKRISHNA GAVAI · Disposal: Dismissed

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Judgment (excerpt)

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1057
ARMED FORCES EX OFFICERS MULTI
SERVICES COOPERATIVE SOCIETY LTD.
v.
RASHTRIYA MAZDOOR SANGH (INTUC)
(Civil Appeal No. 2393 of 2022)
AUGUST 11, 2022
[B. R. GAVAI AND PAMIDIGHANTAM SRI
NARASIMHA, JJ.]
Service Law – Reinstatement of employees – Drivers-members
of the respondent Union were employed by appellant-Cooperative
society through a settlement for pay and allowances – The settlement
expired – Fresh negotiation commenced – In the negotiations, the
employees demanded for a pay hike and permanency of employment
– The said demand resulted into failure of settlement – Conciliation
proceedings invoked – During pendency of conciliation proceedings
employees resorted to strike – After a short span of strike, the
employees rejoined services – Appellant retrenched the services of
employees on the ground of closure of business – Respondent Union
raised the concern regarding the same before the Conciliation
Officer and demanded reinstatement – The appellant offered re-
employment to employees on new terms and conditions, and as fresh
employment – Upon failure of conciliation proceedings matter was
referred to Industrial Tribunal – Tribunal set aside the termination
of employees and directed reinstatement with continuity of service
and 75% back wages – Appellant filed writ petition before the High
Court – The High Court affirmed the findings of the Tribunal –
Before the Supreme Court, the appellant submitted that, (i) it was
not the case of closure but a simple case of retrenchment; (ii) it was
a case of re-organising business; (iii) Tribunal was not justified in
directing continuity of service; and (iv) direction to pay 75% back
wages was contrary to the principles laid down by the Supreme
Court – Held: The Tribunal as well as the High Court have held
that the method and manner by which the workmen were retrenched
clearly demonstrates that it is virtually a closure – These findings
of facts are confirmed – The bonafide policy decision for
reorganising business is within an enterprise’s propriety decision –
However, in the instant case, the Tribunal has come to the conclusion
[2022] 6 S.C.R. 1057
1057
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1058
SUPREME COURT REPORTS
[2022] 6 S.C.R.
that the entirety of business was not lost due to the strike and the
retrenchment was imposed as retribution against the workmen for
going on a strike – Thus, bonafide policy decision for reorganising
business will not apply to the facts of the instant case – As far as
direction of continuity of service and back wages are concerned,
the order of retrenchment was not bonafide, once the orders of
retrenchment are set aside, the workmen will naturally be entitled to
continuity of service with backwages – The Tribunal had considered
the matter in detail and after appreciating the oral and documentary
evidence, the Tribunal directed reinstatement of the employees with
only 75% back wages – The said finding was upheld by the High
Court, thus cannot be interfered with by the Supreme Court u/Art.136
of the Constitution.
 Dismissing the appeal, the Court
HELD: 1. With respect to the first submission of appellant,
that this is not at all a case of closure but a simple case of
retrenchment, the Tribunal as well as the High Court have held
that the method and manner by which the workmen were
retrenched clearly demonstrates that it is virtually a closure. This
Court have no hesitation in confirming these findings of fact. The
act of terminating the services of all the drivers at the same time,
coupled with the statement of the Appellant that the entire
business is closed down, was sufficient to convey to the workers
and the Union that the transport business had come to a standstill
and that there was no scope of continuing the business any further.
Further, This Court also concur with the findings of fact about
the lack of bona fide in the Appellant’s offers of re-employment
on new terms and conditions, and without continuity of service.
[Para 14][1064-E-G]
2. The second submission of appellant that the management
has a right to organise its business based on economic
considerations is well taken. There is also no quarrel with the
principle of Parry & Co. Ltd. v. P.C. Pal which laid down the
proposition that a bona fide policy decision for reorganising the
business based on economic considerations is within an
enterprise’s proprietary decision and retrenchment in this context
must be accepted as an inevitable consequence. The answer is
here itself, and pertains t

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