1. This writ petition under Articles 226 and 227 of the Constitution of India is directed against an order dated September 30, 1989 made by the Industrial Tribunal, Bombay in Complaint (ULP) No. 886 of 1988 under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as 'the Act').
2. The petitioner is a registered Trade Union which represents the workmen employed in the First Respondent establishment which publishes a Gujarati newspapers known as 'Janmabhoomi'. The second respondent is a trust which controls the first respondent Company. The second respondent trust was carrying on the business of publication of Gujarati Newspapers and periodicals from its printing press called Janmabhoomi Mudranalaya at Janmabhoomi Chambers, Bombay. In the same building it also had a Printing Press in which Job orders for printing of matters in English were accepted by the Printing Press. For the purpose of Management and Supervision of the two activities, the second respondent had engaged the services of the first respondent Company. Prior to 1984, about 450 workmen were employed in the Newspaper Department known as Janmabhoomi Mudranalaya, while about 115 workmen were employed in the job-work Printing Press, popularly known as Job Department. The two Printing Presses were Separately registered under the Factories Act, 1948. Though separate accounts were maintained and separate balance-sheet and profit and loss accounts were drawn up, the accounts wore finally consolidated into the balance-sheet of the Saurashtra Trust. The staff required for both activities was engaged by the States' People Private Limited. The Managers and the finances required for running of the Job Department and Newspaper Department were supplied by the Saurashtra Trust. The State's People Private Limited as Managers used to receive a sum of Rs. 1,00,000/- (Rupees one lac only) annually for Managerial and Supervisory services rendered. In or about 1985 it was found that the job department was incurring repeated losses as it could not withstand competition from smaller Printing Presses which, on account of less overheads, executed Printing Jobs at cheaper rates. As at the relevant time the Job Department had more than 100 employees, the Management had sought permission of the appropriate Government for closing down the Job Department. However, on account of consultations between the Union and the Management, this application, at that point of time, was not pressed. The consultations between the Petitioner-Union and the Management resulted in about 27 workmen of the Job Department opting for retirement under a voluntary retirement scheme. Consequent upon the voluntary retirement scheme being implemented, though the number of workmen in the Job Department was reduced to less than 100, the Job Departmental yet continued to incur losses for want of orders. The Management, therefore, proposed to retrench about 47 workmen and issued notices for retrenchment. Even at this stage the Union intervened and, as the result of its intervention, retrenchment notices were withdrawn and a fresh voluntary and more liberal retirement scheme was offered to the workmen. However, only 7 workmen took advantage of the newly offered voluntary retirement scheme. The finances of the Job Departmental continued to grow worse due to mounting losses and the Management was constrained to lay off about 40 workmen. Finally the Department itself was closed with effect from June 18, 1988 and the services of all workmen employed therein were terminated.
3. The Petitioner-Union challenged the termination of the services of 40 and odd workmen of the Job Department by filing Complaint (ULP) No. 886 of 1988 before the Industrial Court, Maharashtra, Bombay, under Section 28 read with Item 9 of Schedule IV of the Act. The contention of the Petitioner-Union shortly stated, was that the Janmabhoomi Printing Press and the Job Department constituted one integrated industrial establishment and for the purpose of application of the provisions of Chapter V-B, the total number of the workmen employed in the Printing Press as well as in the Job Department had to be reckoned. The Petitioner-Union contended that since admittedly this number was more than 100, the employer could not have resorted to closure of the Job Department without express permission of the State Government as required under Section 25-O of the Industrial Disputes Act, 1947. According to the Petitioner, since this has not been done, the closure and the termination of the services of the workmen were illegal and amounted to Unfair Labour Practice within the meaning of Item 9 of Schedule IV of the Act.
4. When the complaint was pending before the Tribunal, an interlocutory order was made by the Industrial Court, which while refusing interim relief of injunction, made certain observations as to the merits of the case. The Petitioner-Union challenged the said interlocutory order by its Writ Petition No. 5613 of 1988 before this Court which was disposed of by judgment and order dated December 5, 1988 declining to interfere with the inter-locutory order. This Court, however, took undertakings from the first and second respondents to make payment of full wages, in case the workmen finally succeeded and were held entitled to wages. The evidence before the Industrial Court consisted of the affidavit of one Valinam Surya Narayan, General Manager of the States' People Private Limited, on which he was cross-examined. The petitioner-Union examined one Bhalchandra Raghunath Khanvilkar, workman of the first respondent establishment, in support of its case. After considering the evidence on record, the Industrial Court took the view that, though certain tests like Unity of Ownership, Unity in Managerial Control and Supervision, similarity of service conditions, similarity of the wage structure, Geographical proximity, Unity of Finance and consolidation of accounts for drawing balance-sheet and profit and loss position were fulfilled, tests like inter-transferability of the employees and General Unity of purpose and functional integrality and functional interdependence were not fulfilled and that the Gujarati Newspapers Department and Job Department Printing Presses could not be said to be viewed as one establishment for the purpose of application of Section 25-O of the Industrial Disputes Act. Hence, by its impugned order dated September 30, 1989, the Industrial Court dismissed the complaint. Being aggrieved, the petitioner is before this Court.
5. Mr. Dharap, learned Advocate for the petitioner Union, made a grievance that the Industrial Court had misdirected itself in law in emphasising the test of functional integrality and functional interdependence at the costs of other tests which were highlighted by the Supreme Court in the case of Associated Cement Companies Ltd. (Chaibasa Cement Works, Jhinkpani) v. Their Workmen : (1960)ILLJ1SC . In Associated Cement Companies case (supra) and Supreme Court illustrated some of the tests useful for ascertaining whether two Industrial Establishments could be treated as one for the purpose of application of some of the labour statutes. The Supreme Court, in that case, was concerned with the question as to whether the limestone quarry owned by the Associated Cement Company and the Cement Manufacturing Factory, situated some distance away from it, could be considered to be one Industrial Establishment for the purposes of application of Section 25-E of the Industrial Disputes Act. The Supreme Court indicated that the issue could be considered from several points of view such as (1) Ownership, (2) Control and Supervision, (3) Finance, (4) Management and Employment, (5) Geographical Proximity and (6) General Unity of purpose and functional integrality, with particular reference to the industrial process of making cement. After indicating several possible perspectives from which the problem could be looked at, sounding a note of caution, the Supreme Court observed, at P. 8 :
'It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units, etc. If in their true relation they constitute one integrated whole, we say that the establishments is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes a disqualification therefor. Thus, in one case the unity of ownership, management and control may be the important test; in another case functional integrality or general unity may be the important test; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for consideration at the same time'.
Though in Associated Cement Company case (supra) the Supreme Court indicated that the question would have to be viewed from several angles and no one test determinative of the issue, however, the same question was considered by the Supreme Court in several subsequent judgments and it would appear that the Supreme Court has veered progressively towards the test of general unity of purpose and functional integrality as being of overwhelming importance.
6. The views expressed by the Supreme Court in the case of Workmen of the Straw Board v. M/s. Straw Board . : (1974)ILLJ499SC evidence the shift in thinking. In this case the Straw Board Manufacturing Company owned two Units-Straw Board Mill and the Regmal Mill. These two Mills were situated close to each other, only a railway line intervening. Each factory was registered separately under the Factories Act, but one balance-sheet and one profit and loss account was prepared for both. Straw Board Mill was started in 1932 and Regmal Mill in 1940-41. The Company closed Straw Board Mill on the ground of non-availability of Bagasse which was the raw material necessary for the manufacture of straw board and terminated the services of workmen of the Straw Board Mill by stages. An industrial dispute raised by the workmen was referred by the U.P. Government for adjudication under Section 4-K of the U.P. Industrial Disputes Act. The Industrial Tribunal held that both the Mills did not form parts of one and the same establishment and that it was a case of complete closure of an independent industrial unit. When the matter reached the Supreme Court in appeal it was contended that on the basis of principles laid down in Associated Cement Company, case (supra), that the two Mills ought to be regarded functionally as one establishment on the basis of the common features emphasised viz., unity of ownership, ultimate control and supervision, unity of finance, similarity of service conditions, similarity of wages structure, proximity of units and maintenance of one balance-sheet and profit and loss account. After analysing the facts of the case, the Supreme Court held that the most important aspect in the case relating to closure was whether one unit had such componential relation with the other, so that the closing of one must load to the closing of the other, or the one cannot reasonably exist without the other. The Supreme Court emphasised to the functional integrity test and, since the Regmal Mill had been functioning in the absence of Straw Board Mill for more than five years, the Supreme Court held that the functional integrity test must be answered in the negative. In this view of the matter, the Supreme Court upheld the Industrial Tribunal's finding that the two Mills must be held to be separate Industrial Establishments.
7. In S. G. Chemical and Dyes Trading Employees' Union v. Y. G. Chemicals and Dyes Trading Ltd. and Anr. : (1986)ILLJ490SC , the employer company was operating in Bombay through three divisions, namely, Pharmaceutical Division at Worli, the Laboratory and Dyes Division at Trombay and the Marketing and Sales Division at Express Building, Churchgate. The Company closed down its Churchgate Division without permission of the Government. This Act was challenged by the Union by a complaint under the Act. The issue for consideration was whether the Churchgate and Trombay Divisions could be said to be one Industrial Establishment for the purposes of application of Section 25-O of the Industrial Disputes Act. The Industrial Court took a view adverse to the workmen and dismissed the complaint. When the matter reached the Supreme Court in appeal, the Supreme Court analysed the evidence on record and found that the evidence led before the Industrial Court clearly established that the undertaking of the Churchgate Division of the Company formed part of the Industrial Establishment of the Trombay factory of the Company and that the Trombay factory and the Churchgate Division constituted one establishment, because the functioning of the Churchgate Division and the Trombay factory was neither separate nor independent, but integrally connected. Here again, the Supreme Court emphasised the functional integrality and interdependence test and answered the issue against the employer by holding that both Units constituted one Industrial Establishment for the proposes of Section 25-O of the Act and, hence, that the closure without permission of the State Government was illegal.
8. In Isha Steel Treatment, Bombay v. Association of Engineering Workers Bombay and Ors. : (1987)ILLJ427SC , the employer established one factory for the purpose of carrying of metal processes with 32 workmen and, after about 12 years, the employer established another factory for carrying on the same kind of business employing about 75 workmen at a distance of about 200 yards from the first factory. The employer was maintaining separate stores, accounts and obtaining separate factory and municipal licences. The employer maintained separate muster rolls in respect of workmen of each of the two factories. There was also no provision for inter-transferability of the workmen. The first factory was closed by the employer on account of indiscipline on the part of workmen and lack of production, the services of workmen were terminated and the workmen employed therein were paid off closure compensation. The Union of the workmen raised an industrial dispute demanding reinstatement and the other benefits and the said dispute was referred for adjudication to the Industrial Tribunal. The Industrial Tribunal found that the two factories were independent of each other and that the closure of the first factory had become legally effective. It, therefore, rejected the demand of the workmen. The Award of the Tribunal was successfully challenged before the High Court which set aside the Award of the Tribunal and remanded the matter for fresh disposal to the Tribunal after finding that the two factories were functionally integrated and consequently Section 25-G of the Industrial Disputes Act was applicable. In appeal, the Supreme Court again emphasised the functional integrality and functional interdependence test and came to the conclusion that the two factories were separate entities. Though the Provided Fund Accounts of the employees and the Employees State Insurance Account of the two factories had common numbers with the authorities concerned and the settlements containing similar terms had been entered into between the Management and the workmen of the two factories, it was held that these factors were not sufficient to hold that the two factories were one and the same, eventhough the nature of business carried on by both was identical. The Supreme Court was of the view that unity of ownership, supervision and control that existed in respect of the two Mills involved and identity of conditions of service of the workmen of the two Mills were not by themselves sufficient to hold that there was functional integrality between the two Mills.
9. Finally, we come to the latest judgment of the Supreme Court in Hindustan Steel Works Constructions Ltd. etc. v. Hindustan Steel Works Construction Ltd. Employees' Union, Hyderabad and Anr. etc. 1995 I CLR 598. In this case a Government Company engaged in construction of industrial and engineering plants both within the country and abroad was contending that its Hyderabad Unit and Vizag Unit were different entities for the purpose of application of Section 25-O of the Industrial Disputes Act. Even in this case the Supreme Court emphasised the functional integrality and functional interdependence test and took the view that there was no functional integrality and functional interdependence between the two establishments. Interestingly, in this case, eventhough the Management has reserved to itself the liberty of transferring the employees from one unit to another, that fact was held insufficient to hold that all units of the Company constituted one single establishment. This is one more instance of the Supreme Court holding that mere unity of ownership, management and control are not as significant as the test of functional integrality and interdependence. Having regard to the facts and circumstances of the case and the material on record, the Supreme Court held that the conclusion is inevitable that the units at Hyderabad and Vizag were distinct establishments and that the workmen of the one unit had no right to demand absorption in other units on completion of job and, as the Company was groaning under the weight of surplus and excessive man-power, the Industrial Tribunal was entitled to mould the relief to suit the justice of the case.
10. A survey of the precedents of the Apex Court shows that although several tests were evolved in Associated Cement Company Case (supra), the test of functional integrality and functional interdependence has emerged superior, particularly in cases involving retrenchment and closure. I am unable to accept the contention of Mr. Dharap that the Industrial Court misdirected itself in emphasising and giving greater weightage to the functional integrality test. The Industrial Court has correctly analysed the evidence on record in the present case and come to the conclusion that the evidence did not make out any functional integrality in the Gujarati Newspaper Department and Job Department Printing Presses of the first and second respondents. It also rightly pointed out that there was no functional interdependence between the said two establishments and, therefore, they could not be considered one Industrial Establishment in the eyes of law. In these circumstances, it is not possible to hold that the Industrial Court erred or misdirected itself in law.
11. Though Mr. Dharap read out the evidence on record in detail and invited me to hold that some findings given by the Tribunal are erroneous, I decline. It is not the function of this Court while exercising powers in writ jurisdiction to sit in appeal over the findings of fact recorded by the Court below. Suffice it to say that I am broadly in agreement with the factual conclusions recorded by the Industrial Court and I do not see any reasons to interfere with the same.
12. In the result I find no merit in the petition. The petition is dismissed and the rule is discharged with no order as to costs.
Certified copy expedited.