HINDUSTAN STEEL WORKS CONSTRUCTION LTD. ETC. versus HINDUSTAN STEEL WORKS CONSTRUCTION LTD. EMPLOYEES UNION, HYDERABAD AND ANR. ETC.

Citation: [1995] 2 S.C.R. 10 · Decided: 10-02-1995 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
HINDUSTAN STEEL WORKS CONSTRUCTION LTD. ETC. 
B 
v. 
HINDUSTAN STEEL WORKS CONSTRUCTION LTD. 
EMPLOYEES UNION, HYDERABAD AND ANR. ETC. 
FEBRUARY 10, 1995 
[B.P. JEEVAN REDDY, N.P. SINGH AND S.C. SEN, JJ.). 
Labour Law-Industrial Disputes Act, 1947-Section 2-F, 2SFFF(2) 
and 25--G---Undertaking-Construction work of non-pennanent nature 'at dif-
C ferent sites by Government Company-Whether part of an establishment.' 
D 
Wordf & Phrase~"Functional Integrity''-Meaning of 
Labour Law-Industrial Disputes Act, 1947-Retrenchmen~elief­
Reinstatement or compensation. 
Constitution of India-Special Leave Petition-Art. 136-Supreme 
. Court substituting its opinion for that of TribunaH'ower of 
The appellant, Hindustan Steel Works Construction Limited, a com· 
pany wholly owned and controlled by the Government of India, had taken 
E up construction of industrial and engineering plants both within the 
country and abroad. For its project at Hyderabad the company had 
engaged 230 workmen. Upon conclusion of the project 100 workers were 
retrenched and 130 workers were transferred to Vishakhapatnam where 
another project had been undertaken. The retrenched workers appealed 
the High Court which dismissed the same due to the availability of alter· 
F native remedy of reference to the Industrial Tribunal. Re-instatement of 
the 100 workers with full back wages and other consequential benefits was 
ordered by the Tribunal upon reference. 
The appellant question the award in a writ petition. The High Court 
G holding Hyderabad projeC:t to be a separate establishment quashed the 
award except with respect to three workers who had been transferred from 
a project at Bokaro. 
Two appeals were filed, one by the appellant against reten~on of the 
three workers and the other by the respondent against retrenchment of the 
H 97 workers. The Division Bench restored the award of the Industrial 
10 
7 
I 
HINDUSTAN STEEL WORKS LTD. v. EMPLOYEES UNION 
11 
Tri_bunal in full holding that there was no closure of the appellant's A 
establishment, there was functional integrality between the workmen at the 
Vizag unit and the unit at Hyderabad, the two units were not separate 
establishments but components of one single establishment and as such it 
was incumbent upon the appellant to absorb the surplus workers of 
Hyderabad at Vishakhapatnam. 
B 
The questions before this Court were : (1) Whether the work at 
Hyderabad had come to an end? (2) Whether the units at Hyderabad were 
independent establishments or were they parts of the larger establishment 
of the appellant? 
c 
Allowing the appeals, this Court 
- --c 
HELD : 1.1. All the test evolved in several decisions of the Supreme 
Court to answer the second question need not be satisfied in every case. 
One has to look to the nature and character of the undertaking while 
deciding the question. The tests evolved were to serve as guidelines. [18-G] D 
1.2. In the instant case, the appellant was a government company 
wholly owned and controlled by the Government of India. Its job was to 
undertake construction works both in India and abroad. As soon as -
construction work was over, the establishment came to an end at that E 
place. Each of the works or construction projects undertaken by the 
appellant represented distinct establishments and did not constitute units 
of a single establishment. The fact that the Management reserved to itself 
the liberty of transferring employees did not mean that all the units of the 
appellant constituted one single establishment. Mere unity of ownership, 
management and control were not of much significance in such cases. The F 
conclusion was inevitable that the units at Hyderabad were distinct estab-
lishments. Once that was so, workmen of the said units had no right to 
, 
demand absorption in other units. [18-H, 19-A, C, E-G] 
-..I.... 
Management of Hindus!an Steel v. Workmen, [1973) 3 SCR 303; G 
Workmen of the Straw Board Manufacturing Co. Ltd. v. M/s. Straw Board 
_,,., 
Manufacturing Co. Ltd., [1974) 3 SCR 703 and lsha Steel Treatment, Bom-
bay v.Association of Engineering Workers, Bombay and Ors., [1987) 2 SCR 
414, relied on. 
2. In the tagged appeal, as the Corporation was found groani!}g under H 
/ 
;/ 
12 
SUPREME COURT REPORTS 
[1995) 2 S.C.R. 
A the weight of surplus and excessive man power, the Industrial Tribunal was 
helientitled to take note of the fact and mould the relief to suit the justice 
of the case. In exercise of power under Article 1

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