LexWORKMEN OF THE STRAW BOARD MANUFACTURING COMPANY LIMITED versus M/S. STRAW BOARD MANUFACTURING COMPANY LIMITED
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
t
A
703
, WORKMEN OF THE STRAW BOARD MANUFACTURING
COMP ANY LIMITED
v.
M/S. STRAW BOARD MA:f{UFACTURING COMPANY LIMITED
March 21, 1974.
B
[P. JAGANMOHAN REDDY; S. N. Pw1vE!i1 AND P. K. Go;WA)ll, JJ.]
c
D
E
F
,:;.,,
U.P. I11dustriaf. Disputh.,A.ct, Si. 2N and
6'N'-l11dl{.S_trial
Djsputes Act
(J.f of 1947) ~·. ·2SFFF-Iw!> units o/ a· business-tests for determining if tl1ey
are. independent~Principles of res ;udicdta-Applicability to industrial adjudi-
cation-Scope of s. 25 FFF of the Central A.ct.
The respondent-company owned'•two units--S.-milt and R-mill.
They were-
in !Cpartte premises, but in close. ·proximity. . The raw-materials used in the
two mills were-different and were obtainCd from different sonrc1.'S.
lhey also
manufactured different products. Electricity was obtained by the two mills from
different Sdurces.
The sale Of:- products manufactured iµ the ·respective-- units.
was effected from their respective . offices and the members of the staff of the'
·t.10 unib; were separate, andJ.Wa~s were paid separately. The accounts of the
two mills we.re maintained lt:~arately although finally they were --a.malgamated
into one account. The Fire Insurance of the\ mills was don~ sej)aratcly;
the
local manager of the Employees State Irisurance Corporation bad allotted different
numbers of provident fund lo the two mills; the assessment of the sales-tax for
the sales of the product of the two units was done separately; and as the products.
we,r,e di,fferent, different . rates of sales-tax were applied. The res1'ondent closed
the:' S-rnill on the groupd of non-availability of ce_rtalO_~ ra:w-niaterial for
it"'
product and termir\ated the services of the workmen of ih8.t
Will
by
stagefl
between Mav 7 and July 28, 1967, 'Jhe first batch consisted of 98 workmen
and_ they raised a dispute which was_ referred for a'djudi~ation b_v the tribunal
under s. 4-K of th~ U.P. Industrial .Disputes Act.
On the qu_estions (1) '\Yhether'-stoppage of work. tly the employers and the-
C3nsequent non-employment of the·- workmen amounted to a lay-off, retrench-
n1ent, Jock-out, oc whether it was a legitimate closure; and (2) to what relief~
if any, t~ workmen concerned were entitled to, the tribunal held
that
the
closure was legitimate; that it was not a case of lay·off, retrench1nent or lock-
out; that, since it was legitimate closure, the question of cvmccnsation could
not Oe determined by it; and that the workmen were not entitled to any relief.
In apoCal to his Court,
HELD :._(l)Ift the circumstances of the case the S mill-which was .an in~
dependent unit and a separate line of business, bad been closed in fact· and
therefore, it wa., not a case of l~y .. off or lock-out or retrenchment.
[713'G-H·
1~m
·
·
(a) Several factors are relevant in deciding the question wh~th~r industrial
establishments owned by the same management constitute sepuralc units or one
cstatJlishment, atld the significance or importance of th':!se relevant-factors, woutd
G
not be the same in each case but depends On the facts of each ca~e. The•c i3
bound to be a shift of emphasis in the application cf the various test-; from
one case to another.
But among these tests functional intt!.i!ralitv, n1·•:1nin!'.!
thereby such functional interdepend~nce that one .unit c31!no~ exist c~nvenient1Y
CIT reasonably without the other, will assume an added s1gnt11cnnc·: 1n the casl!
of a closure of a branch or a unit. In the present case. R·tnHI is a
diffcren~
line of business and'the closure of the S·mill.has nothing to do with the function-
ing of the R-mill. This is a most important aspect in thls ~a1°ticu!ar c~ase though
there are certain common features as between the tw.o u111ts.
1 he ! act of the
ff
unity of ownership. ~uper\'ision and control. and ·the ext-stance of certain ~?mmon
features do not jushfv a contrarv conclusion. That most Jf lh~ cond1ttons o(
tervke of the two n1ills were substantially identical can be- !asi1y explained by
lhc fact that being owned by the same employer i.lnd the two units
b~ing
2-L!4Sup.Cl/75
704
SUPREME COURT REPORTS
[1974] 1 &.C,R,
E;ituate in close p~oximity it will not be in the interest of the management and
pence and .well-be1n~ of. ~e C?Jllpanr tc;> treaf the employees differently. ·creating
heart burning and d1scnm1natton. · Similarly. no particular significance could be
nttached to the fact that the standing orders of the . company were applied to
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