vikram singh (advocate) 09 February 2009
pls help
can any one sent me the judgments of the below mentioned citations pls.
(1) Indian oxygen employees union
vs
union of india
2003(97)FLR 100.
( 2) on transfer of an establishment no consent of the workmen is necessary.
Management methu beard sell ltd.
vs
workmen of methu beard sell ltd
2006(2)scc 488.
thanks in advance.
PALNITKAR V.V. (Lawyer) 09 February 2009
I am giving one citation. I believe it is same. Please check the names etc of other citation.
2002 INDLAW MAD 778
[MADRAS HIGH COURT]
Indian Oxygen Employees' Union and Another
v
Union of India and Others
V KANAGARAJ
28 Oct 2002
BENCH
V KANAGARAJ
COMPARATIVE CITATIONS
2003 (2) LLJ 222, 2002 INDLAW MAD 778
CASES REFERRED TO
Jawaharlal Nehru University v Dr. K. S. Jawatkar and Others
1989 Indlaw SC 719
Manager, Messrs Pyarchand Kesarimal Ponwal Bidi Factory v
Omkar Laxman Thange and Others 1968 Indlaw SC 416
ACTS REFERRED
Industrial Disputes Act, 1947[s. 9A, s. 25FF, s. 25N]
CASE NO
W.P. No. 17633/1998 & W.M.P. Nos. 26694/1998 & 16863/1999
KEYWORDS
Labour & Industrial Law, Tribunal, Mandamus, University,
Constitutional Validity of a Provision
LAWYERS
N. G. R. Prasad, S. Selvanandam, Ravi, Karthick
.JUDGMENT TEXT
The Judgment was delivered by : V KANAGARAJ
The writ petition praying to issue a writ of declaration that
Section 25-FF of the Industrial Disputes Act, 1947
(hereinafter referred to as "the Act"), is unconstitutional to
the extent it does not require the consent of a workman for
transfer of the services on the transfer of an undertaking and
consequently direct the second respondent to continue the
second petitioner in service from October 1, 1998 and pay him
all the wages and other dues as before October 1, 1998, or in
the alternative issue a writ of declaration that the sale by
the second respondent to the third respondent, vide the second
respondent's notice No. PD/ID/002, dated September 30, 1998,
does not constitute a transfer of undertaking as per the
proviso to Section 25-FF of the Act and consequently direct
the second respondent to continue the second petitioner in its
service in the same manner as before October 1, 1998, without
any interruption and pay all his arrears and wages and other
benefits.
In the affidavit filed in support of the writ petition, the
petitioners would submit that the second respondent is a
public limited company which has branches and factories all
over India with its head office at Calcutta; that in the year
1991, the company sold the factory situated at Calcutta to
Esaab India Limited; that the company transferred all the
workmen in the factory and the employees doing the work of the
medical equipment and welding divisions in its administrative
offices by invoking Section 25-FF of the Act; that this was
objected to by the petitioner-union and that the said
objection was accepted as an interim injunction by this Court
on June 27, 1991, and the same was made absolute on October
25, 1991, in O.A. No. 483 of 1991 in C.S. No. 741 of 1991.
The petitioners would further submit that after 1991, the
business of trading in medical equipment was thereafter
handled by the existing employees of the second respondent who
were engaged in its other activities of manufacture and
trading of gas and ancillary business as well; that the
employees are transferred from one post to another anywhere in
the establishment and there is a common seniority list
maintained for all the sections; that the second petitioner
joined Indian Oxygen Limited on November 8, 1965, as
clerk-cum-typist at the Trichy sales depot; that he has put in
33 years of blemish less service working in various
departments of the second respondent; that the second
respondent is maintaining a common attendance register in the
time office in which he has signed up to October 7, 1998; that
the order of appointment does not contain the name of a
particular department to which he was appointed meaning
thereby his service could be utilised in all the departments
of the second respondent and that the employees working in the
Ohmeda Division were all drawn from other departments of the
second respondent on a rotation basis.
The petitioner would further submit that all of a sudden, the
second respondent has published a letter Ref. PD/ID/002, dated
September 30, 1998, stating that Ohmeda Division has been sold
to one DATEX Ohmeda India Pvt. Ltd. and the employees who
happened to be working in the said division are transferred to
the said new employer; that while effecting the transfer, the
second respondent has neither sought consent from the affected
employees nor held any discussion with the union; that the
said transfer was effected in a most arbitrary manner; that if
as a result of selling a portion of the business activity to
DATEX, some workers had become surplus, the second respondent
should have resorted to Section 25-N of the Act; the action of
the second respondent in transferring the services of the
second petitioner to the third respondent in the guise of
transfer of undertaking under Section 25-FF of the Act is
patently illegal; that all the employees were paid by the
second respondent and that since there has been no transfer of
undertaking, the second respondent cannot transfer the second
petitioner's contract of service to the third respondent.
The petitioners would also submit that since the second
respondent is a large establishment having more than 100
workers, they are also entitled to the protection of Chapter
V-B of the Act which prohibits lay off, retrenchment and
closure without the prior permission of the Government that
since the so called sale cannot be covered by the proviso to
Section 25-FF of the Act, the conditions of service of workmen
have been changed; that the action of the second respondent in
this case is really covered by items 10 and 11 of the Schedule
IV to Section 9-A of the Act; that any change introduced
without such notice and negotiation and settlement thereafter
is illegal and void as held by several judgments of the
Supreme Court and this Court; that the second respondent
cannot refuse employment to the second petitioner in this case
since no notice was given to the petitioners; that since on
transfer of an undertaking covered by Section 25-FF of the
Act, the service of a workman is transferred to the new
employer, without his consent, it amounts to forced employment
and is contrary to the fundamental right of a workman under
Article 19(1)(g) of the Act and that consent has to be read
into Section 25-FF of the Act as otherwise Section itself
would be unconstitutional, being violative of Article 19(1)(g)
and Articles 21 and 23 of the Constitution of India. On such
averments, the petitioners would pray to the relief extracted
(supra).
In the counter-affidavit filed by the first respondent, it is
submitted that the petitioner has challenged the
constitutional validity of Section 25-FF of the Act to the
extent it does not require the consent of a workman for
transfer of his services on transfer of an undertaking; that
the employment of the workman engaged by the transfer of
ownership or management of an undertaking comes to an end and
it provides for the payment of compensation to the said
employees because of the said termination of their services
provided they satisfy the length of service prescribed by the
Section; that the introduction of Section 25-FF of the Act as
held by the Supreme Court that if industrial undertakings are
transferred the employees of such transferred undertaking
should be entitled to compensation unless of course the
continuity of service in employment is not disturbed and that
can happen if the transfer satisfies the three requirements of
the proviso; that when the legal position remains that the
services of the workmen on a transfer of undertaking comes to
an end, the fact that the transferee has opted to give
continuity of service on the same terms and conditions of
services to the workmen is only to the benefit of the workmen
and consequently cannot be challenged on the ground that the
workmen have been compelled to work with a new employer; that
Section 25-FF of the Act is for the limited purpose of
calculating the compensation payable to workman under this
Section; that this section has nothing to do with the
procedure or legality of transfer of an undertaking. On such
grounds the first respondent would pray that the above writ
petition may be dismissed with costs since Section 25-FF of
the Act is constitutionally and legally valid.
In the counter-affidavit filed by the second respondent, it is
submitted that since this respondent is only public limited
company and is not performing any public duty, a writ of
mandamus is not maintainable; that BOC is manufacturing
industrial and medical gas whereas the Ohmeda Division has
been trading in health care equipment; that an agreement dated
September 24, 1998, was entered into between the second
respondent whereby the Ohmeda Division has been sold off to
the third respondent; that the said transfer was not only in
India but throughout the world; that by virtue of transfer of
undertaking, the second respondent issued a notice dated
September 30, 1998, informing the employees about the transfer
of the entire undertaking of the Ohmeda Health Care Division
to the third respondent; that on and from October 7, 1998, the
employees working in the Ohmeda Health Care Division in
Chennai including the second petitioner became employees of
the third respondent by virtue of transfer of the undertaking;
that the issue regarding consent of workmen on a transfer of
undertaking is covered by Section 25-FF of the Act has been
finally settled by a Division Bench of this Court in Spencer
Group Aerated Water Factory Employees' Union v. Presiding
Officer, Industrial Tribunal 1997-I-LLJ-362; that the legal
position on a transfer of ownership or management of an
undertaking is that the employment of the workmen engaged by
the said undertaking comes to an end and it provides for the
payment of compensation to the said employees because of the
said termination of their services provided they satisfy the
length of service prescribed by the section; that such
termination of service of the employees by the employer on
transfer of undertaking does not in law amount to retrenchment
but the workmen concerned are entitled to compensation as if
the said termination was retrenchment; that this provision has
been made only for the purpose of calculating the amount of
compensation payable to such workmen; that with reference to
interim order in O.A. No. 483 of 1991, it was only an interim
order and there was no conclusive pronouncement; that though
interim order was initially granted by this Court, the suit
itself was ultimately withdrawn by the employees; that the
allegation that the transfer was effected in an arbitrary and
unilateral manner is without any basis; that there is no basis
to read Section 25-N of the Act in a situation arising on a
transfer of undertaking; that when the law permits the
transfer of undertaking, it is not open to the petitioner to
insist on the consent of the workmen for such transfer as the
provision to that effect would amount to imposing unreasonable
restriction on the rights of the employer; that when the third
respondent is always willing to provide employment on the same
terms and conditions and with continuity of service, it is not
open to the second petitioner to claim employment or wages
with this respondent and that the prayers in the writ petition
are factually and legally without basis and hence it ought to
be dismissed.
In the counter-affidavit filed by the third respondent, it is
submitted that the petitioners have not claimed any relief
against the third respondent in the main writ petition; when
no relief has been claimed against the third respondent, it is
not permissible for the petitioners to seek any interim order
against the third respondent; that there is no merit in the
present writ petition and the same deserves to be rejected;
that when transfer of an undertaking takes place and such
transfer provides for continued employment of the workmen of
the transferor in the services of the transferee on the same
terms and conditions and without disruption, the concerned
workman should offer his services without any disruption and
on continuous basis; that there is no question of the second
petitioner having an option of making a claim for employment
against the third respondent while pursuing his claim against
the second respondent for continued employment; that when the
petitioner had not offered his services for more than six
months, the third respondent was justified in proceeding on
the footing that the second petitioner has forfeited his claim
for employment and has prayed that the writ petition against
the third respondent should be dismissed.
During arguments, learned counsel appearing on behalf of the
petitioners, besides reiterating the facts pleaded in the writ
petition, would also bring out the instances such as the offer
of appointment, the order of confirmation and the selection as
a stenographer, the reports, the confirmation orders as
stenographer and then as a senior stenographer, personal
representation of the second petitioner and the first
petitioner-union's representation, the salary mentioned, etc.,
learned counsel would ultimately contend that it is a transfer
of only part of the undertaking and not the transfer of the
entire undertaking, i.e. Indian Oxygen Employees Union, citing
various correspondences, learned counsel would point out that
the second petitioner has been transferred to several
departments in the health care division, secondly learned
counsel would point out that the second respondent is washing
off his hands stating that the new employer is willing to take
over on the same terms and conditions but the third respondent
says that the employees' consent is not necessary and would
bluntly say that once you are transferred better go and work
there on the same terms and conditions and therefore Section
25-FF of the Act is relevant in this context. It could also be
said that in such an event, he is only entitled to
retrenchment compensation and cite the following judgments
respectively reported in (1) R.S. Madho Ram & Sons (Agencies)
v. Its Workmen 1964-I-LLJ-366 (SC); (2) P.K.P. Bidi Factory v.
O. L. Thenge, 1968 Indlaw SC 416; (3) J.N.U. v. Jawatkar,
1989 Indlaw SC 719; 1989-II-LLJ 586; and (4) Voltas Volkart
Employees Union v. Voltas Ltd. 2000-I-LLJ-969 (Mad-DB).
In so far as the first judgment cited above is concerned, it
is held as follows 1964-I-LLJ-366 at p. 366 :
"The first and foremost condition for the application of
Section 25-FF of the Industrial Disputes Act is that if the
ownership or management of an undertaking is transferred from
the employer in relation to that undertaking to a new employer
what the section contemplates is that either the ownership or
the management of an undertaking should be transferred;
normally this would mean that the ownership or the management
of the entire undertaking should be transferred before Section
25-FF comes into operation. If an undertaking conducts one
business, it would normally be difficult to imagine that its
ownership or management can be partially transferred to invoke
the application of Section 25-FF. A business conducted by an
industrial undertaking would ordinarily be an integrated
business and though it may consist of different branches or
departments, they would generally be inter-related with each
other so as to constitute one whole business. In such a case,
Section 25-FF would not apply if a transfer is made in regard
to a department or branch of the business run by the
undertaking and the workmen would be entitled to contend that
such a partial transfer is outside the scope of Section 25-FF
of the Act."
In the second judgment cited above, it is held as follows :
" A contract of service being incapable of transfer
unilaterally a transfer of service from one employer to
another can only be effected by a tripartite agreement between
the employer, the employee and the third party, the effect of
which would be to terminate the original contract of service
and to make a new contract between the employee and the third
party. So long as the contract of service is not terminated, a
new contract is not made and the employee continues to be in
the employment of the employer. When an employer orders him to
do a certain work for another person, the employee still
continues to be in his employment. The employee has the right
to claim his wages from the employer and not from the third
party. Such third party-hirer may pay his wages but that is
because of his agreement with the employer. The hirer may also
exercise control and direction in the doing of the thing for
which he is hired or even the manner in which it is to be
done. But the hirer third party cannot dismiss him."*
In the third judgment cited above, it is held as follows at
1989-II-LLJ-586 :
"The centre of post-graduate studies at Imphal was set up as
an activity of Jawaharlal Nehru University. Since the centre
of post-graduate studies at Imphal represented an activity of
the Jawaharlal Nehru University, the teaching and
administrative staff of the Centre at Imphal must be
understood as employees of the Jawaharlal Nehru University.
The respondent, assistant professor continues to be an
employee of Jawaharlal Nehru University. His employment could
not be transferred by Jawaharlal Nehru University to the
Manipur University without his consent notwithstanding any
statutory provision to that effect, whether in the Manipur
University Act or elsewhere. The contract of service of the
Assistant Professor was a contract with the Jawaharlal Nehru
University and no law can convert that contract into a
contract between him and the Manipur University without
simultaneously making it, either expressly or by necessary
implication, subject to the Assistant Professor's consent.
When the Manipur University Act provides for the transfer of
the services of the staff working at the centre of
post-graduate studies, Imphal to employment in the Manipur
University, it must be construed as a provision enabling such
transfer of employment but only on the assumption that the
employee concerned is a consenting party to such transfer. No
employee can be transferred without his consent from one
employer to another. The consent may be express or implied."
In the last judgment cited above, it is held as follows :
" If the management chooses to vary the existing practice in
vogue namely, of excluding Saturdays and Sundays from the list
of holidays, the management is at liberty to comply with the
requirement under Section 9-A of the Act. The finding of the
Bench that the practice adopted till now had become a
condition of service will be restricted only to the extent
that the union was allowed to opt for holidays excluding
Saturdays and Sundays and not as regards the claim of the
union that their choice of holidays was binding on the
management."*
With such averments, learned counsel would seek to the relief
sought for in the writ petition.
On the other hand, learned counsel appearing on behalf of the
first respondent submits that the petitioners have challenged
the constitutional validity of Section 25-FF of the Act; that
on transfer of an undertaking, the employer of the workmen
engaged by the management or an undertaking comes to an end
and it only provides for payment of compensation to the
employees because of the termination of their services
provided they satisfy the length of services prescribed by
that Section; that even this compensation is not available by
the provision of law wherein the continuity of service in
employment is not disturbed and that can happen if the
transfer satisfies three requirements of the provisions; that
the service of a workman on a transfer of undertaking comes to
an end and its option of continuity of service on the same
terms and conditions of service is only to his benefit which
cannot be challenged on ground that the workmen have been
compelled to work with the new employer; that Section 25-FF of
the Act is for the limited purpose of calculating the
compensation payable to the workmen under this Section and
that this Section has nothing to do with the procedure or
legality of the transfer of undertaking.
Learned counsel appearing on behalf of the second respondent,
besides pointing out that it is a public limited company and
it is not performing any public duty, would submit that a writ
of mandamus is not maintainable. He would further submit that
the issue regarding consent of workmen on a transfer of
undertaking is covered by Section 25-FF of the Act and this
question has been finally settled in a case in Spencer Group
Aerated Water Factory Employees Union v. Presiding Officer,
Industrial Tribunal (supra); that the legal position is that
in such transfer, the employment of the workmen engaged by the
said undertaking comes to an end and it provides only for the
payment of compensation to the employees because of
termination of service provided they satisfy the length of
service prescribed by that Section and the same does not
amount to retrenchment and this provision has been made only
for the purpose of calculating the amount of compensation
payable to such workmen. On such arguments, learned counsel
appearing on behalf of the respondents would pray to dismiss
the above writ petition with costs.
In consideration of the facts pleaded by parties, having
regard to the materials placed on record and upon hearing the
learned counsel appearing for both, what comes to be known is
that the above writ petition has been filed by the petitioners
seeking to declare Section 25-FF of the Act unconstitutional
to the extent it does not require the consent of a workman for
transfer of the services on the transfer of an undertaking and
consequently direct the second respondent to continue the
second petitioner in service from October 1, 1998, and pay him
all the wages and other dues as before October 1, 1998, or in
the alternative issue a writ of declaration that the sale by
the second respondent to the third respondent, vide the second
respondent's notice No. PD/ID/002 dated September 30, 1998,
which is impugned herein does not constitute a transfer of an
undertaking as per proviso to Section 25-FF of the Act.
At the outset, it would be appropriate to mention that the
relief sought for in the above writ petition is rather
luxurious, particularly meant to serve the purpose of the
second or the moment. Section 25-FF of the Act has been
designed to serve the purpose of the employees and in fact as
a safety valve or a protective measure to safeguard the
genuine cause of workmen in case of transfer of an
undertaking, but the petitioner's case is that there should
not be any transfer of undertaking at all without any
tripartite settlement, thus giving such opportunity for the
petitioners to have the participation in all such transfer of
the very undertaking to the hands of some other party as it is
in the case of the undertaking being transferred from the
hands of the second respondent to the hands of the third
respondent.
But the intention of the law is different in the sense that to
safeguard the genuine interest of the workman, law also does
not want to interfere with or to obstruct the transfer of
undertaking which is the fundamental right guaranteed to the
employer or the undertaking, and therefore, in order to
safeguard the genuine interest of the workmen, the framers of
law have thought it fit to introduce Section 25-FF of the Act,
whereunder every workman who has been in continuous service
for not less than one year in that undertaking immediately
before such transfer shall be entitled to (i) notice; and (ii)
compensation in accordance with the provisions of Section
25-FF of the Act as if the workman had been retrenched.
However, the proviso to Section 25-FF of the Act would
contemplate that the above provision for notice and
compensation shall not apply in cases of change of employer by
reason of transfer if, (a) the service of the workman has not
been interrupted; (b) the terms and conditions of service
applicable to the workman does not alter or is less favourable
to the workmen; and (c) the new employer is legally liable to
pay compensation. It is this provision of law which according
to the petitioners should be declared unconstitutional to the
extent it does not require the consent of workmen for transfer
of service of an undertaking.
At this juncture, the appropriate judgment already decided is
one in Spender. Group Aerated Water Factory Employees' Union
v. Presiding Officer, Industrial Tribunal (supra) wherein a
Division Bench of this Court has held on the subject as
follows 1997-I-LLJ-362 at 373 :
"After the advent of Section 25-FF of the Industrial Disputes
Act there was no scope for invalidating the transfer of the
ownership or management of an undertaking whether by agreement
or by operation of law on the ground that consent of the
workmen had not been obtained. All that the workmen were
entitled to was notice and compensation, if the workman is in
continuous service for not less than one year and that too
only if the proviso to Section 25-FF was not attracted. It is
needless to point out that if the transfer is mala fide or
benami in character then the transfer itself would not only be
illegal, but it would have no effect in law and could be
ignored."*
The section only safeguards the interest of the workmen and
even according to the petitioners, no other provisions of
Section 25-FF of the Act is harmful to them and the only
grievance is that since it does not require the consent of
workmen for transfer, the petitioners want the section to be
declared unconstitutional which is meaningless. For declaring
non-existent clause requiring the consent of the workmen as
unconstitutional but instead the petitioners' prayer should be
for a mandamus directing inclusion of clause requiring the
consent of the workmen for transfer of service on the transfer
of an undertaking and, therefore, if at all they could only
pray to this extent and the very prayer to declare the
non-existent clause requiring the consent of the workmen
unconstitutional is not only meaningless but would not arise
at all. Needless to mention that the consequential relief of
directing the second respondent to continue the service as it
had been prior to October 1, 1998, that all the conditions
established cannot be granted and the above writ petition in
the circumstances would only become liable to be dismissed.
In the result,
(i) the writ petition is dismissed.
(ii) consequently, the connected W.M.P. Nos. 26694 of 1998 and
16863 of 1999 are also dismissed.
(iii) however, there shall be no order as to costs.
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