Partly allowed

Deepika Non-Journalist Staff Union v. Industrial Tribunal, Palakkad

Kerala HC4 Mar 2013WP(C)/1550/2008

Case brief

AI extract

What is this about?

This writ petition challenged an Industrial Tribunal award directing reinstatement of workers by a publishing company for employees terminated by a printing unit. The High Court held the Tribunal erred by treating the units as one based on business dealings instead of the Companies Act. Reinstatement was clarified for workers actually employed at the time.

What did the court decide?

The direction to reinstate workers not already employed in RDL was set aside; the award regarding those already reinstated was confirmed.

Deepika Non-Journalist Staff Union Vs… — Labour and Industrial Disputes | Kerala HC (2013)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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MONDAY, THE 4TH DAY OF MARCH 2013/13TH PHALGUNA 1934

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WP(C).No. 1550 of 2008 (H)

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AGAINST THE AWARD IN ID.80/2004 of INDUSTRIAL TRIBUNAL, PALAKKAD DATED 01-10-2007

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PETITIONER:

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DEEPIKA NON-JOURNALIST STAFF UNION, REG.NO.08-9/89, THRISSUR, REPRESENTED BY ITS SECRETARY P.F.FRANCIS.

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BY ADVS.SRI.A.JAYASANKAR

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SRI.MANU GOVIND

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RESPONDENTS:

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1. THE INDUSTRIAL TRIBUNAL, PALAKKAD.

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2. RASHTRA DEEPIKA LIMITED, PALARIVATTOM, COCHIN - 682 025, REPRESENTED BY ITS GENERAL MANAGER.

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3. CARMEL LITHO PRINTERS (PVT) LIMITED, VELIYANNOOR, THRISSUR - 682 001 REPRESENTED BY ITS GENERAL MANAGER.

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R1 BY GOVERNMENT PLEADER SRI.P.P.PADMALAYAN R2, R3 BY ADVS.SRI.JOMY GEORGE

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SRI.SEBASTIAN THOMAS

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16.11.2012, ALONG WITH WP(C) NO.5408/2008 R, THE COURT ON 04-03-2013 DELIVERED THE FOLLOWING:

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WP(C).No. 1550 of 2008 (H)

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APPENDIX

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PETITIONER'S EXHIBIT

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EXHIBIT P1. COPY OF AWARD DATED 1.10.2007 PASSED BY THE 1ST RESPONDENT IN ID NO.80/04.

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RESPONDENT'S EXHIBIT : NIL

/ TRUE COPY /

P.A. TO JUDGE

A.M.SHAFFIQUE, J

*** * * * * * * * * * * * *** W.P.C.Nos.1550 & 5408 of 2008

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Dated this the 4^th day of March 2013

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J U D G M E N T

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An award of the Industrial Tribunal, Palakkad in I.D.No.80/04 is under challenge in both these writ petitions and hence considered together.

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The petitioner in W.P.C.No.1550 of 2008 is the Union representing the workers. Ext.P1 is the award under challenge, wherein the Union is dissatisfied with the award in so far as there is a denial of back wages though there is a direction to reinstate the workers.

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The petitioner in WPC No.5408 of 2008 is the Management. The award is produced as Ext.P4. Their challenge is against the direction of the Tribunal to reinstate 19 workmen in any of the units of the petitioner.

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The documents referred herein are as described in W.P.C.No.5408 of 2008 and the parties are described as Management and Union.

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W.P.C.Nos.1550 & 5408 of 2008

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The Government of Kerala, as per order dated

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30/09/2004, referred the following issues for adjudication to the Industrial Tribunal.

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“(i) Whether Carmel Litho Printers Pvt.Ltd. Thrissur is a subsidiary unit of Rashtradeepika Ltd. Kottayam? (ii) Whether the action of the Management of Carmel Litho Printers Pvt.Ltd. in terminating the service of 19 workmen (List appended) by closing down the establishment is justifiable? (iii) If so what relief they are entitled to?”

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Petitioner in WPC No.5408 of 2008 is Rashtradeepika Ltd.(hereinafter referred as RDL). RDL was the 1^st Management in the Industrial dispute and M/s.Carmel Litho Printers Pvt.Ltd. (hereinafter referred as CLP), the 4^th respondent herein was the 2^nd Management. Rashtradeepika daily was established by C.M.I.Priests in 1887, and later converted as a company.

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The contention raised by the Union would show that the workers involved in the dispute joined service in CLP

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W.P.C.Nos.1550 & 5408 of 2008

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during November 1986. They were confirmed in service after one year training and one year probation. They were extended all benefits and though they were working in CLP at Thrissur, they were being transferred to other units of RDL.

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The management published a notice on 26/8/2003 indicating that they had decided to retrench 18 employees. They were denied employment. Six persons were offered employment in RDL on contract basis. The employees were paid compensation for closure. They received the same under protest. According to the Union, the closure of CLP is not real or genuine. The establishment is functioning in the same building and the Thrissur edition of Deepika is printed there. It is the contention of the Union that the management has not followed the procedure for closure of the establishment. Hence they claimed reinstatement with back wages and consequential benefits.

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W.P.C.Nos.1550 & 5408 of 2008

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Separate objections were filed by RDL and CLP. The Management contended that CLP and RDL are two establishments and there is no functional integrity. Newspaper was produced and published by RDL and CLP was engaged only in printing. Since there was no sufficient work to engage all the workers, some of the workers at CLP was sent to RDL on deputation. Since CLP had closed down its operations the claim for reinstatement cannot be allowed. It is contended that on account of financial strain, CLP had to wind up its business and the establishment had to be closed with effect from 01/10/2003. Its accumulated losses had come to more than Rs.1,26,00,000/- when the share capital was only Rs.20 lakhs. Therefore they expressed their inability to reinstate the workers as it is a separate establishment which is already closed down.

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The evidence before the Tribunal consisted of the

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oral testimony of MW1 and MW2 on behalf of the Management and two witnesses were examined on the side

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W.P.C.Nos.1550 & 5408 of 2008

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of Union. Exts.M1 to M17 were relied upon on behalf of the management and the Union relied upon Exts.W1 to W14.

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The Tribunal found that CLP was one of the subsidiary units of RDL units. Proceeding on that basis, it was found that the Management was not justified in terminating the services of the workmen on the ground of closure of the establishment. Having found that the establishment was closed with effect from 01/10/2003, the Tribunal came to a finding that the termination of the workers was not justifiable and directed reinstatement in service in the 1^st management company that is RDL, without any back wages.

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The short point that requires to be considered in the above writ petition is whether the Tribunal was justified in directing reinstatement of workers in an establishment where they were not employed.

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Admittedly, the workers were engaged by CLP but the Tribunal proceeded to consider whether it is a subsidiary

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W.P.C.Nos.1550 & 5408 of 2008

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unit of RDL on the basis of the reference. Tribunal considered the issue in the light of Section 4 of the Companies Act 1956 and came to a finding that there is nothing on record to show that any of the conditions specified under Section 4 of the Companies Act has been satisfied to hold that the RDL is the holding company of CLP. But the Tribunal further proceeded to consider whether this is a case where two or more units can be treated as a single establishment and found that on the basis of evidence on record that the CLP was one of the subsidiary units of RDL. This finding is what is impugned by the learned counsel for the petitioner which will ultimately decide the fate of the case.

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The evidence in the case would also show that RDL was a charitable society and later it was incorporated as a public limited company and it had only some shares in the CLP. Reference is made to M49 agreement wherein it is found that there is some processing and printing

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W.P.C.Nos.1550 & 5408 of 2008

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arrangement between the parties. Still further the Tribunal proceeded to consider the rendering of service and transfer of personnels from one institution to another and came to a conclusion that it is a subsidiary unit of RDL. This according to me is not the correct approach to be made. The reference made by the Government is to consider whether the CLP is a subsidiary unit of RDL. This can be considered only in the light of the provisions of the Companies Act and cannot be considered on extraneous considerations. The fact that they have business arrangement between themselves and the employees are being sent for deputation to the other institutions at times does not make the company subsidiary to other. Even in cases where they do business together, for the purpose of understanding whether it is a subsidiary or not, other considerations like existence of contract between the said two companies is totally irrelevant. Therefore I have no hesitation to hold that the finding of the Tribunal to that extent is incorrect.

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W.P.C.Nos.1550 & 5408 of 2008

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The next question is whether an order of

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reinstatement be directed to be passed with reference to a closed establishment and whether a direction can be issued to RDL to reinstate the said workers. Apparently such an order cannot be issued as RDL has no contractual relationship with the workers who were terminated from service. During the course of hearing it is submitted by the learned counsel for either side that when section 17B application was filed by the Union the available workers were already given employment in RDL. Such being the situation, as far as persons who are already employed are concerned I am not intending to disturb the order passed by the Tribunal and they are entitled to continue in employment as if the order passed by the Tribunal is in force.

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However in respect of persons who are not so far employed in RDL, to that extent, the order of reinstatement passed by the Tribunal is set aside.

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W.P.C.Nos.1550 & 5408 of 2008

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In regard to W.P.C.No.1550 of 2008, in view of the finding that the Tribunal was not justified in directing RDL to reinstate the workers, for the same reason the claim for backwages is also rejected.

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In the result, W.P.C.No.1550 of 2008 is dismissed and WPC No.5408 of 2008 is disposed of as follows:

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i) The award of the tribunal, in so far as workmen who are employed/reinstated during the pendency of the writ petition in RDL or their units are concerned, is confirmed.

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ii) In respect of workmen who are not reinstated so far as per the award, it is clarified that RDL has no obligation to reinstate them and to that extent the award shall stand modified.

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(A.M.SHAFFIQUE, JUDGE)

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jsr

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W.P.C.Nos.1550 & 5408 of 2008

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W.P.C.Nos.1550 & 5408 of 2008

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W.P.C.Nos.1550 & 5408 of 2008

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The management declared lock out in respect of Deepika Daily with effect from 04/03/1981 and closed the establishment on 15/6/1981. The lock out was found to be illegal as per an award passed by the Industrial Tribunal Alappuzha. The award was confirmed in O.P.No.1545/1984. The press was reopened in the same premises with effect from 01/11/1986. The previous workers were not provided employment by the management. There were altogether 28 workers out of which one retired from service on attainment of superannuation and 3 of them resigned. 19 of the workers were terminated by the management alleging closure. According to them, the appointment orders were issued by the company, but all of them were asked to work in other units of Deepika. They were also included in the muster rolls of Rashtra Deepika units.

Deepika Non-Journalist Staff Union v. Industrial Tribunal, Palakkad

Case brief

What is this about?

What did the court decide?

Deepika Non-Journalist Staff Union v. Industrial Tribunal, Palakkad

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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