This judgment concerns a cluster of appeals filed by long-serving industrial workmen against their retrenchment by M/s. Advani Oerlikon Ltd. (now Ador Welding Ltd.), challenged under the Industrial Disputes Act, 1947. The case spans more than two decades of litigation, beginning with retrenchment orders issued in 2002, traversing through the Labour Court (2010), a Single Judge decision of the Bombay High Court (2011), and culminating in the Division Bench judgment (2025). Murlidhar Bhikoba Salunkhe (Since Deceased, through LRs.) & Ors. v. M/s. Advani Oerlikon Ltd. (Now known as M/s. Ador Welding Ltd.)
The central issue revolved around whether the retrenchment of five permanent workers—who had each served over twenty years—was legally sustainable merely on the ground of “non-availability of meaningful work,” despite compliance with Section 25F of the Industrial Dispute Act.
The Court’s ruling is significant because it emphasises the necessity of proving substantive reasons for retrenchment beyond mere compliance with procedural safeguards, and it criticises a superficial “hire and fire” approach that undermines workers’ rights.
Case Title: Murlidhar Bhikoba Salunkhe (Since Deceased, through LRs.) & Ors. v. M/s. Advani Oerlikon Ltd. (Now known as M/s. Ador Welding Ltd.)
Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Citation: 2025:BHC-AS:37146-DB (Letters Patent Appeal Nos. 275–279 of 2011 in Writ Petition Nos. 1402, 1403, 1426–1428 of 2011)
Judges: Ravindra V. Ghuge & Gautam A. Ankhad, JJ.
Judgment on: 21 August 2025
Factual Background
Employment History:
- The five workers joined between 1981–1982 as welder, assembler, winder, forklift driver, and helper.
- They became permanent employees and served continuously for about 20 years.
Union Activities:
- Initially members of Bhartiya Majdoor Sangh, later joined an internal union.
- In 2000, they became office-bearers of an external independent union, Bhartiya Kamgar Karmachari Mahasangh.
- They alleged that their activism led to hostility from the employer.
Retrenchment (16 September 2002):
- All five workers were retrenched on the same date, citing “non-availability of meaningful work” due to recession and a fall in work orders.
- Retrenchment compensation and gratuity forms were issued simultaneously.
Labour Court Proceedings:
- The disputes were referred under Section 2A IDA as deemed industrial disputes.
- The Labour Court, by common award (18 June 2010), held the retrenchment illegal and directed reinstatement with continuity and full back wages.
Single Judge Decision (2 August 2011):
- On writ petitions by the employer, the Labour Court’s award was quashed.
- The Judge held that compliance with Section 25F and Rule 80 (Bombay ID Rules, 1957) sufficed, and retrenchment was valid.
Letters Patent Appeals (2011–2025):
- The workers (or their legal heirs) challenged the Single Judge’s order.
- During pendency: two workers (Salunkhe & Choudhary) died; three others attained superannuation in 2016.
Pleadings
A. Workmen’s Contentions
- Retrenchment was mala fide, aimed at victimizing union leaders.
- No seniority list was genuinely published; only five leaders were picked out of 45 workers.
- Contract labourers continued in core manufacturing roles.
- Employer never reduced workforce in production sections—thus plea of recession was false.
- Retrenchment violated natural justice and amounted to unfair labour practice.
B. Employer’s Defence
- Retrenchment was due to recession and reduced orders, making production uneconomical.
- Section 25F ID Act and Rule 80 ID Rules were fully complied with (notice, compensation, intimation to government).
- Retrenchment was not linked to union activity.
- Juniors were not retained, nor were new workers recruited.
- Retrenchment compensation was accepted, making termination legal.
Evidence
Oral Evidence of Workmen
- Reiterated long service and permanent employment.
- No disciplinary action ever taken against them.
- Employer flourishing; no reduction in manufacturing or orders.
- Retrenchment was targeted victimisation of union leaders.
- Contract/temporary employees retained while they were ousted.
Cross-Examination
- Confirmed past membership of other unions.
- Could not identify specific new recruits post-retrenchment.
- Denied existence of published seniority list.
- Highlighted absence of government permission for retrenchment.
Oral Evidence of Employer
- Sole witness: Manager (Quality & R&D in 2002; later GM in 2010).
- Claimed company in poor condition; seniority list published (Exh. 28); notice to government issued (Exh. 29).
- Denied appointment of new or junior workers.
Cross-Examination of Employer Witness
- Admitted no permission from Maharashtra Government was obtained.
- No department was closed on retrenchment date.
- Could not produce evidence of reduced work orders, financial losses, or “no meaningful work.”
- Accepted that no records (balance sheets, production charts) were filed before the Labour Court.
Legal Submissions
By Workmen
- Retrenchment founded on false plea of recession and losses.
- Employer utterly failed to prove lack of work—no documentary evidence adduced.
- Targeted victimisation of union leaders—unfair labour practice.
- Labour Court correctly found retrenchment illegal; Single Judge erred in overlooking evidentiary burden.
By Employer
- Once Section 25F conditions (notice, compensation) were met, retrenchment became valid.
- Labour Court wrongly examined justifiability without framing a proper issue.
- Relied on Parry & Co. Ltd. v. P.C. Pal (1969) 2 SCR 976 and Bombay Union of Journalists v. State of Bombay (AIR 1964 SC 1617).
- Employer has discretion to reorganise workforce; Courts should not interfere unless victimisation proven.
Court’s Analysis
1. On Procedural Compliance v. Substantive Proof
- The Single Judge erred in assuming procedural compliance sufficed.
- Retrenchment of permanent employees after 20 years cannot rest merely on compensation; otherwise it revives the discredited “hire and fire” policy.
2. On Employer’s Evidence
- Employer’s sole witness admitted no proof was produced of reduced orders, recession, or losses.
- No balance sheets, comparative production data, or departmental reductions were shown.
- Failure to prove a foundational reason (“no meaningful work”) rendered the retrenchment illegal.
3. On Seniority List
- Employer admitted list was published on Company’s notice board, not on workers’ notice board.
- Purpose of publication is to inform workmen and union; absence of objections proved workers were unaware.
- Court accepted workmen’s claim that notice was never effectively published.
4. On Targeting of Union Leaders
- Only five workers retrenched, all being union leaders; none from core manufacturing.
- This coincidence raised serious doubts about bona fides of retrenchment.
5. On Precedents
- Distinguished Bombay Union of Journalists: ratio concerned mandatory compliance of Section 25F, not the employer’s absolute right to retrench.
- Followed Nar Singh Pal v. Union of India (2000): acceptance of compensation does not bar challenge.
- Relied on Jagbir Singh v. Haryana State Marketing Board (2009) and ANZ Grindlays Bank v. Grindlays Union (2001) to emphasise the evidentiary burden on the employer.
Conclusions
- The employer failed to substantiate recession or lack of work.
- Retrenchment notices were based on bald statements, unsupported by evidence.
- The Labour Court’s finding of illegal retrenchment was correct.
- The Single Judge erred in upholding retrenchment solely on procedural compliance.
- Division Bench allowed the appeals.
Relief Granted
Reinstatement: Notional reinstatement directed (since all five already superannuated or deceased by 2016).
Back Wages:
- Awarded 75% back wages from retrenchment (16 Sept 2002) until superannuation/death.
- Calculated on the average salary of ₹10,000 per month, with 5% interest p.a.
Gratuity:
- For service till retrenchment (without interest).
- For notional service till superannuation/death, with 10% statutory interest.
Leave Encashment: Up to retrenchment date, with 5% interest p.a.
Timeframe: Employer directed to pay monetary benefits within 60 days.
Significance of the Judgment
Balance Between Employer’s Right & Worker Protection
- The Court reaffirmed that retrenchment requires not just procedural compliance but substantive justification.
Condemnation of Targeted Retrenchment
- Retrenchment of only union leaders highlighted unfair labour practice, even if not explicitly pleaded as ULP.
Protection of Long-Service Workmen
- After 20 years of service, retrenchment cannot be reduced to mere payment of compensation—employment security has constitutional and social justice dimensions.
Judicial Approach
- Demonstrates courts’ readiness to pierce through employer’s facade of compliance to test bonafides of retrenchment.
- Reinforces evidentiary burden: “first plead, then prove.”
Important Link
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