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PGDHRM 2012-13

Industrial Relations Case Study Presentation


Group members
1. 2. 3. 4. Swapna Kurhe Laxmi Kanapuram Sonali Dhume Kunal Ambre

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

vs

M/S. Empire Industries Ltd.

State Of Maharashtra & Ors. on 17 March, 2010

Author: A Alam Bench: V.S. Sirpurkar, Mukundakam Sharma

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

Sr #
1 2 3 4 5 6 7 8 9 10 11 12 Settlement expires

Event
Last settlement arrived by both sides Appellant responded to Workmen's charter, impossible to proceed with increase in Wages & need to add ceiling to DA Notice under section 9A of the Act Workmen rejected the proposal and the dispute was taken up with Conciliation Conciliation ended in Failure Government referred the dispute to the Industrial Tribunal, Thane Appellant issued lock out notice Order for Prohibition of lock out was issued Factory closed down Bombay High Court dismissed the writ petition

Event Date
24-Dec-1986 Jun-1989 15-Sep-1990 24-Nov-1990

10-Sep-1991 12-Feb-1992 28-Sep-1991 23-Sep-1992 26-Apr-1999 9-Feb-2001 1-Apr-2005

Internal Court appeal was dismissed by division bench of the court

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

The closure of the factory was in connection with three demands, namely
1) The workmen should abjure agitational activities and desist from intimidation and acts of violence, 2) The workmen should accept a ceiling on dearness allowance 3) The workmen should agree to reduction of the workforce and retrenchment of a number of workers.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

10(3): Where an industrial dispute has been referred to a Board, Labour Court, Tribunal or National Tribunal under this section, the appropriate government may by order prohibit the continuance of any strike or lockout in connection with such disputes which may be in existence on the date of the reference.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

Brief Case Summary


Employer had a division Garlick Engg. (Co.), engaged in manufacturing & sale of cranes with a separate P&L a/c Employer & workmen bound by the last settlement in Dec86 which expired in Jun89 On settlement expiry the workmen submitted a charter of demand to increase wages to the employer Employer refused the charter stating the Co. was running in losses hence cannot increase any wages and further wanted to impose a ceiling on DA and peg the monthly DA amt and daily rated workmen at CPI 4524 and declared not to rise the level of CPI over CPI4524 Workmen rejected the proposal and refused to accept any ceiling on the DA. Dispute aroused and it was taken up for conciliation under Sec 11 & 12 of the Act. Conciliation ended in failure.
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The State Government referred the dispute to the Industrial Tribunal, Thane. Meanwhile the employer issued a lock-out notice.

Reasons for the proposed lock-out Give up unlawful/agitational activities. Workmen should agree for ceiling on DA. Reduction of surplus labour
Government of Maharashtra in exercise of powers conferred by sub-section (3) of sec 10 of ID Act prohibited continuance of the lock-out The employer challenged this order before the Bombay High Court and it was dismissed. Against the judgment of single judge the employer preferred an internal court where the again it was dismissed. The employer has now brought the matter in appeal before the Supreme Court
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Prohibition of Lock outs :


Pendency of any conciliation i.e. before conciliation officer or a board, and seven days after the conclusion of such proceedings. Pendency of any conciliation i.e. Labour court, Tribunal or National Tribunals or arbitrations proceedings and two months after the conclusion of such proceedings During any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

Employer had filed a complaint under Maharashtra Recognition of Trade Unions and Prevention of Unfair Labor Practices Act. Having resorted to this act, any proceeding under IDA was barred under section 59 of the former act. Hence no question of any reference of this demand by the petitioner. 9A notice given by employer was only about DA there was no mention of any proposal for retrenchment of workers. Missed opportunity to raise during conciliation.

Even if we are to consider lock out notice, it came up only as advice and not as a demand. Hence there was no dispute regarding the same.
From legal perspective, for retrenchment, the onus lies with the employer . Hence the plea that retrenchment was not considered for adjudication under 10(1) can not be justified to defy the prohibition order.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

It was not necessary that a dispute should come into existence, an apprehended dispute could also be referred under section 10 (1). In support , he added a Constitution bench decision of the Supreme Court in State of Madras vs C.P. Sarathy and Anr, 1953(4) SCR 334.

But the onus of retrenchment, is always with the employer, there is no need to make any reference of demand to the workmen.

True, Law says employer is free to carry out retrenchment on account of surplus labor, but that would not prevent it to have legal confirmation of its action in advance by raising a demand for retrenchment and getting it referred for adjudication.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

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The submission seems reasonable, however, it will nullify and render meaningless a whole lot of provisions of the act. Section 25 N has the detailed scheme for retrenchment of workmen in industrial establishments, where the number is more than 100.
Clauses (a) and (b) lay out the conditions precedent to retrenchment. Section (6) gives the government power of review and the power to refer the employers application for permission to a tribunal or adjudication. Any retrenchment without taking prior permission from the government is illegal.

Without seeking this permission, or following the procedure for retrenchment as in the law and raising a demand for retrenchment., further asking it to be referred for adjudication will lead to a completely different machinery.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

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Conclusion:
It seems that the argument of Mr. Shanti Bhushan is completely unacceptable. There are provisions made for Retrenchment in 25N of the act and it is not left open for the employer to raise a demand with the workmen without following those. 1. Under section 25N the authority to grant or refuse permission for retrenchment is vested in the appropriate government which in this case would be Maharashtra state government. 2. Under section 10(1) too it is the state government that would make a reference of the industrial dispute. But the two provisions are not comparable. This is administrative in nature.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

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So to conclude that on the material date there was no dispute on the basis of any demand raised by the appellant in regard to retrenchment of any workers of factory, Garlick Engineering .

Retrenchment of worker(s) can only be effected by following the provisions laid down under the Act and the Rules. It follows that it is not open to the management to make a demand/proposal for retrenchment of workmen and disregarding the provisions of the Act ask the government to refer the demand/dispute under section 10(1) to the tribunal for adjudication.
The only demand raised by the management regarding imposition of ceiling on dearness allowance was already referred to the Industrial Tribunal. Lockout was indeed illegal due to pendency of proceedings before the industrial tribunal. Hence, the appropriate government was fully competent and empowered to issue the impugned order prohibiting lockout of the factory. There was no illegality or infirmity in the closure notice.
1st September 2012 IR & Labour Law, Garlick v/s State of Maharashtra and others 13

Points to ponder
Does that mean there will never be a dispute regarding retrenchment ? No
There may dispute questioning the validity of the retrenchment If employer has been denied permission for retrenchment by the Government.

Can there be a settlement between the employer and the workmen regarding retrenchment ?
Yes
The employer should have gone through the procedure of formal permission The settlement should confirm to the statutory conditions of the public policy.

1st September 2012

IR & Labour Law, Garlick v/s State of Maharashtra and others

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IR & Labour Law, Garlick v/s State of Maharashtra and others

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