Company's Legal Challenges and Remedies
Our company is registered under the Companies Act, so all labor laws are applicable to the company. The brief fact of the case is that we had one unit that was operating on a lease. Due to a financial crisis and the original owner being asked to vacate the premises, the leased unit was closed down in the year 2011/2012 by transferring all permanent workers and staff to our other three units and terminating the labor contract with the contractor who had engaged some contract workers (the said contract was registered under The Contract Labour (R & A) Act 1971).
Since the labor contract of the contractor had been terminated, the contractor also terminated the services of the contract workers. Feeling aggrieved, the contract workers filed a complaint of oral termination before the Assistant Labor Commissioner (ALC) under Section 2 (A) of the ID Act for conciliation, which was not settled. Subsequently, the ALC sent a failure report, and the Reference ID was made in the Labor Court in the year 2012. The said Reference trial on merits, and the court passed an award in the year 2015, holding that the oral termination of the contract workers was illegal, thus directing "Reinstatement with full back wages and Continuity in service."
The workers sent a letter to implement the said order and provide employment. However, since the business of the unit was closed down, the order could not be implemented, and no appeal was filed in the matter. Subsequently, the workers approached the District Collector for the recovery of the claim amount under the provisions of the Land Revenue Act. The Collector issued a notice to us to pay the dues, failing which the complainant workers' names would be entered on the company's property as the dues of land revenue. We informed the Collector that the said property was on lease and the company is closed down.
The Collector then issued directions to the Tahsil, and accordingly, the complainant workers' names were entered on the leased property. Thereafter, the complainants again approached the Collector by filing another application to have their names entered on the personal property of the Managing Director. Based on the application, their names were entered on the personal property of the MD.
Seeking Legal Remedies
Under the circumstances, what remedies are available to the company to defend the matter? Can we file a Writ and obtain a stay order to prevent further actions? Please advise.
Regards, Manager HR
From India, Nashik
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5Our company is registered under the Companies Act, so all labor laws are applicable to the company. The brief fact of the case is that we had one unit that was operating on a lease. Due to a financial crisis and the original owner being asked to vacate the premises, the leased unit was closed down in the year 2011/2012 by transferring all permanent workers and staff to our other three units and terminating the labor contract with the contractor who had engaged some contract workers (the said contract was registered under The Contract Labour (R & A) Act 1971).
Since the labor contract of the contractor had been terminated, the contractor also terminated the services of the contract workers. Feeling aggrieved, the contract workers filed a complaint of oral termination before the Assistant Labor Commissioner (ALC) under Section 2 (A) of the ID Act for conciliation, which was not settled. Subsequently, the ALC sent a failure report, and the Reference ID was made in the Labor Court in the year 2012. The said Reference trial on merits, and the court passed an award in the year 2015, holding that the oral termination of the contract workers was illegal, thus directing "Reinstatement with full back wages and Continuity in service."
The workers sent a letter to implement the said order and provide employment. However, since the business of the unit was closed down, the order could not be implemented, and no appeal was filed in the matter. Subsequently, the workers approached the District Collector for the recovery of the claim amount under the provisions of the Land Revenue Act. The Collector issued a notice to us to pay the dues, failing which the complainant workers' names would be entered on the company's property as the dues of land revenue. We informed the Collector that the said property was on lease and the company is closed down.
The Collector then issued directions to the Tahsil, and accordingly, the complainant workers' names were entered on the leased property. Thereafter, the complainants again approached the Collector by filing another application to have their names entered on the personal property of the Managing Director. Based on the application, their names were entered on the personal property of the MD.
Seeking Legal Remedies
Under the circumstances, what remedies are available to the company to defend the matter? Can we file a Writ and obtain a stay order to prevent further actions? Please advise.
Regards, Manager HR
From India, Nashik
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Dear Ijaj,
Since the original adjudication of the dispute has reached its finality of recovery proceedings without the aggrieved management exhausting the appeal provisions, the description of the facts appears to be selective or insufficient.
Questions Regarding the Lease and Employment Transfer
(1) When the unit/factory was leased out to a third party under a documented agreement by the company, the lessee becomes the occupier of the factory. As such, what prompted you to absorb the permanent workmen of the lessee by way of transfer of their services to your other units?
(2) If the lessee was the principal employer to the contract labor engaged in the leased-out unit, how come you were impleaded as a party in the dispute in the stages of conciliation and adjudication under the I.D Act, 1947?
Without perusing the award, I think that it will not be possible to offer any suggestion about the further action at this stage.
From India, Salem
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Since the original adjudication of the dispute has reached its finality of recovery proceedings without the aggrieved management exhausting the appeal provisions, the description of the facts appears to be selective or insufficient.
Questions Regarding the Lease and Employment Transfer
(1) When the unit/factory was leased out to a third party under a documented agreement by the company, the lessee becomes the occupier of the factory. As such, what prompted you to absorb the permanent workmen of the lessee by way of transfer of their services to your other units?
(2) If the lessee was the principal employer to the contract labor engaged in the leased-out unit, how come you were impleaded as a party in the dispute in the stages of conciliation and adjudication under the I.D Act, 1947?
Without perusing the award, I think that it will not be possible to offer any suggestion about the further action at this stage.
From India, Salem
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Supreme Court of India.Employmen t & Reinstatement.d ocx
TAMIMI LAbor LAw.pdf