Continuity Of Service With Back Wages Can Be Directed In Cases Where The Retrenchment Was Not Bona Fide
Case: Armed Forces Ex Officers Multi Services Cooperative Society Ltd vs Rashtriya Mazdoor Sangh (INTUC)
Coram: Justices BR Gavai and PS Narasimha
Case No.: CA 2393 of 2022
Court Observation: “Even here, there is no quarrel with the principle of law that reemployment of retrenched workmen does not entitle them to claim continuity of service as held in Cement Corpn. of India Ltd. v. Presiding Officer Industrial Tribunal-cum-Labour Court and Anr. , as well as the Maruti Udyog Ltd v. Ram Lal and Ors.. However, the principle laid down in these judgments will only apply to cases where the retrenchment is bona fide. The Tribunal has held that the retrenchment of all the drivers followed by an offer of re-employment on new terms and conditions is not bona fide. Once the orders of retrenchment are set aside, the workmen will naturally be entitled to continuity of service with order of back wages as determined by a Tribunal or a Court of law.”
“There is also no quarrel with the principle of Parry & Co. Ltd. v. P.C. Pal , which laid down the proposition that a bona fide policy decision for reorganising the business based on economic considerations is within an enterprise’s proprietary decision and retrenchment in this context must be accepted as an inevitable consequence. The answer is here itself, and pertains to the material requirement of bona fide of the decision. In the present case, the Tribunal has come to the conclusion that the entirety of business is not lost due to the strike and the retrenchment seems to have been imposed as retribution against the workmen for going on a strike. It is for this reason that the decision of this Court in the case of Parry Company (supra) will not apply to the facts of the present case.”
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