BATCH 2019-24

SUBJECT: LABOUR AND INDUSTRIAL LAW-I

CASE:
WORKMEN OF MESSRS FIRESTONE TYRE AND
RUBBER COMPANY OF INDIA PRIVATE LIMITED
V/S
FIRESTONE TYRE AND RUBBER COMPANY1

SUBMITTED TO: SUMBITTED BY:

MS. VIDHITA RAKHE VAMAXI CHAUHAN
ASSISTANT PROFFESSOR 91909141011
FACULTY OF LAW B.COM LLB (Hons.)
MARWADI UNIVERISTY MARWADI UNIVERISTY

1 1973 AIR 1227, 1973 SCR (3) 587

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DECLARATION BY THE STUDENT

I the undersigned solemnly declare that the project report titled case study on “Case study on:
WORKMEN OF MESSRS FIRESTONE TYRE AND RUBBER COMPANY OF INDIA
PRIVATE LIMITED V/S FIRESTONE TYRE AND RUBBER COMPANY” is based on my
own work carried out during the course of our study under the supervision of MS. VIDHITA
RAKHE. I assert the statements made and conclusions drawn are an outcome of my research
work. I further certify that
• The work contained in the report is original and has been done by me under the general
supervision of my supervisor.
• The work has not been submitted to any other Institution for any other
degree/diploma/certificate in this university or any other University of India or abroad.
• We have followed the guidelines provided by the university in writing the report.
• Whenever we have used materials (data, theoretical analysis, and text) from other
sources, we have given due credit to them in the text of the report and giving their
details in the references.

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SUPERVISOR’S CERTIFICATE

This is to certify that the work incorporated in the project report entitled “Case study on:
WORKMEN OF MESSRS FIRESTONE TYRE AND RUBBER COMPANY OF INDIA
PRIVATE LIMITED V/S FIRESTONE TYRE AND RUBBER COMPANY is a record of
work carried out by VAMAXI SHIVKUMAR CHAUHAN,91901041011 Under my guidance
and supervision for the award of Degree OF B.Com LLB (Hons.), Faculty of Law, Marwadi
University, Rajkot, India. To the best of my/our knowledge and belief the project report

• Embodies the work of the candidates themselves,

• Has duly been completed,
• Fulfils the requirement of the Ordinance relating to the degree of the Marwadi
University and
• Is up to the desired standard both in respect of contents and language for being referred
to the examiners.

MS.VIDHITA RAKHE,
Assistant Professor
Faculty of Law
Marwadi University

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ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistance from
many people and I am extremely privileged to have got this all along the completion of my
project. All that I have done is only due to such supervision and assistance and I would not
forget to thank them.

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Index:

Sr. No. Particulars Pg. No.

1 Facts 6

2 Issues raised by the court 7

3 Rules 7

4 Analysis 8-11

5 Other judgments 12

6 Conclusion 13

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Facts:

• The Petitioners in this case are the workers of the Respondent Company. The company
had its Head Office in Bombay. It manufactures tyres at its Bombay factory and sells
the tyres and other accessories in the markets throughout the country.
• There was a strike in the Bombay factory from 3rd March, 1967 to 16th May, 1967 and
again from 4th October, 1967. As a result of the strike there was a short supply of tyres
etc. to the Distribution office. In the Delhi office, there were 30 employees at that time.
• Thereafter, 17 workmen out of 30 were laid-off by the management as per their notice
dated the 3rd February, 1968. After that the management was unable to give
employment to the following workers due to much reduced production in the company's
factory resulting from strike in one of the factory departments.
• These workmen then were laid-off in accordance with law with effect from 5th
February, 1968.
• The lay-off of the 17 workmen whose names were mentioned in the notice was recalled
by the management on the 22nd April, 1968. The workmen were not given their wages
or compensation for the period of lay-off.
• Dispute arose and it was raised by the Delhi Administration on April 17th even when
the lay-off was in operation. The primary question was Whether the action of the
management to 'lay-off' 17 workmen with effect from 5th Feb. 1968 is illegal and/or
unjustified, and if so, to what relief are these workmen entitled? The Presiding officer
of the Additional Industrial Tribunal, Delhi has held that the workmen are not entitled
to any lay-off compensation.
• Hence there was an appeal by their Union. It was learnt that of the workmen had already
settled their disputes with the management and their cases were not being represented
by the Union.

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Issues delt by the court:

• Whether the management had a right to lay-off their workmen

• Whether the workmen are entitled to claim wages or compensation.
• What is the proper interpretation of Section 11-A of the Industrial Disputes Act?
• Whether Section 11-A applies to industrial disputes which have already been
referred for adjudication and were pending as on 15th Dec., 1971?

Rules:

• Industrial Disputes Act, 1947 Section 2 (kkk), 11-A, 25B, 25C, 25M and 33
• Industrial Employment (Standing orders) Act, 1946

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Analysis:

The court has attempted to give the term "layoff" as much leeway as feasible. However, the
definition of "failure, refusal, or inability of an employer to give employment to a workman
whose name is on the muster rolls of his industrial establishment and who has not been
retrenched" under section 2(kkk) of the Industrial Dispute Act is quite detailed and broad.

When we look at the fundamental definition of layoff, we see that it simply refers to the period
of time during which employees have been released from their duties. This discharge could be
for a variety of causes, and it could be legitimate or not. Layoffs are usually announced when
the government (federal or state) does so. When layoffs are announced, workers are usually
compensated; however, in some cases, workers may not be compensated since the layoff was
justified for good reason.

Right of workmen laid-off for compensation is found in Section 25C of the Act, which states
that if an employer lays off any worker continuously or intermittently, he shall be paid by the
employer compensation equal to fifty percent of the total of the basic wages and dearness
allowance that would have been payable to him had he not been so laid-off, except for any
weekly holidays that may intervene. To begin, it is critical to comprehend why case layoffs are
announced. There could be numerous reasons for the layoff, such as a lack of production, raw
materials, or cash flow to pay the workers.

In this example, the layoff was announced by the employer because the company was unable
to provide employment to the workers due to a shortage of tyres and reduced production in the
company's factory as a result of a strike in one of the other manufacturing divisions. The
management, on the other hand, fired 17 workers without compensating them. However, it
should be noted that the provisions of Chapter VA dealing with layoffs are not applicable to
certain establishments, and the respondent company does not fall into this category at all
because it employed only 30 workers at the time in question. As a result, the court did not place
any emphasis on the type of establishment it was, instead focusing on whether the laid-off
workers were entitled to compensation?

Layoffs can be declared either by proper notice or if they are specified in the standing orders,
according to the legislation and the explanation in section 25C. Nowhere in the definition or
the legislation does it say or imply that management has the authority to fire a worker. The

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power to fire someone due to a failure or inability to provide work must be found elsewhere.
This authority is not granted by any clause of the Act.

"If the power to lay-off for the failure or incapacity to provide work has to be sought
elsewhere," Section 25B specifically states. No part of the Act grants this power," implying
that a worker can be fired under the act. However, nowhere in the act does it state that
management has the authority to do so. As a result, such authority must be derived from the
provisions of the service contract or the establishment's Standing Orders. Because there were
only 30 workers in this case, no Standing orders were certified under the Industrial
Employment (Standing Orders) Act of 1946. There was no provision in the service contract
that gave the employee the right to be laid off. In such a case, the conclusion that the workers
were laid off without any legal authority or power in the management under the service contract
seems unavoidable.

Section 25E clearly mentions –

"No remuneration will be paid to a labourer who has been laid-off If he doesn't introduce
himself for work at the foundation at the delegated time during ordinary working hours
something like one time each day."

This plainly demonstrates that it isn't release of the workers. Under typical conditions the
release would be demonstrated by earlier notification and it wouldn't expect them to make
themselves present at the foundation. The entire reason for the release would be crushed then,
at that point.

The Supreme Court maintained the judgment of the council, by expanding the Tribunal's
purview to mediate debates connecting with discipline of release/excusal of a worker under
segment 11A of the Act. For the utilization of Section 11-An it is vital that a modern debate of
the sort referenced in that ought to have been alluded to an Industrial Tribunal for settlement.
Assuming that the Tribunal arrives at the resolution that the request for release or excusal was
not legitimized, it needs to save the request and direct the reestablishment of the labourer based
on such conditions as it suspects fit. The Tribunal is additionally enabled to give some other
alleviation. The stipulation forces an obligation on the Tribunal to depend just on the materials
on record.

The restrictions forced on the powers of the Tribunal by the choice in Indian Iron and Steel Co.
Ltd. ,case may never again be conjured by a business. The Tribunal is currently at freedom to

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consider not just whether the finding of unfortunate behaviour recorded by a business is right,
yet in addition to contrast from the said finding in the event that a legitimate case is made out.
What was once to a great extent in the domain of the fulfilment of the business, has failed to
be thus, and presently the fulfilment of the Tribunal at long last chooses the issues.

Subsequently, the ability to obstruct the discipline and change similar has been currently
presented on the Tribunal by Section 11-A. Prior, when the direct is demonstrated, the Tribunal
needed to support the request for discipline except if it was unforgiving showing exploitation.
Presently, the Tribunal can likewise give some other help to the worker, including the forcing
of a lesser discipline (vi) The articulation materials on record in the stipulation to Section 11A
incorporates not just the material which were accessible at the homegrown enquiry at the same
time, additionally incorporates the accompanying:

• The evidence taken by the management at the enquiry and the proceedings of the
enquiry: or
• the above evidence and in addition any further evidence led before the Tribunal, or
• evidence placed before the Tribunal for the first time in support of the action taken by
an employer as well as evidence adduced by workmen contra.

Court saw that no change has been impacted by Section 11-An in Section 33 of the Act.
Consequently, a business under Section 33(1) for consent or Section 33(2) for endorsement
has still to be managed by the standards set somewhere around the Court in its different
choices. The court had before held that even in situations where no homegrown enquiry
has been by a business prior to passing a request for excusal or release, the worker has the
option to show proof interestingly before the Tribunal. In any case, Court brought up that
it doesn't really intend that there is no commitment what is with respect to the business to
hold an enquiry prior to passing a request release or excusal. The Court said that the
business is supposed to hold appropriate enquiry as indicated by the standing requests and
standards of normal equity. Enquiry ought not be a simple convention. That's what the
Court said assuming that a business has led a legitimate enquiry and he has shown up at a
right find with respect to the unfortunate behaviour, the Tribunal, despite the fact that it has
opportunity to life from the ends arrived at by the business, should give exceptionally
pertinent purposes behind not tolerating the perspective on the business.

Besides, in the event that a business holds a legitimate enquiry, he will get away from the
charge of having acted randomly a mala fide. Leading of appropriate and substantial

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enquiry by a business will likewise be helpful for agreeable and solid connection between
the administration and the workers. Thusly, the Court held that Section 11-A doesn't have
any significant bearing to questions which had been alluded preceding Dec 15 1971. It
applies just to those questions which are alluded for settlement on or after Dec. 15, 1971.

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Other judgments:

It was held in The Management of Hotel Imperial, New Delhi and others v. Inn
Workers' Union that assuming without even a trace of such power in express
terms or in the agreement through standing requests, the administration would
have no ability to prohibit the representatives from coming and call it
suspension all alone. The case would have been unique if it could have been in
the agreement or it was composed anyplace then they wouldn't be at risk to pay
remuneration. The equivalent was re-iterated on account of V. P. Gindroniya v.
Province of Madhya Pradesh and Ors.
In Kanhaiya Lal Gupta v. Ajeet Kumar Dey and others a learned single Judge of
the Allahabad High Court appear to have properly held that without any term in
the agreement of administration or in the resolution or in the legal guidelines or
standing requests a business has no option to lay-off a labourer without paying
him compensation.
In Steel and General Mills Co. Ltd. v. Extra District Judge, Rohtak and others
the Punjab and Haryana High Court have depended on the above judgment to
lay out the very reality that assuming the agreement of administration makes
reference to about notice of lay off or standing requests there in really at that
time might it at any point be cancelled lay or, in all likelihood not and afterward
remuneration should be given. So at long last, the court subsequent to hearing
the matter from both the sides concluded that the specialists should be paid 75%
of their essential wages and dearness recompense would be paid to the workers
worried for the time of cutbacks.

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Conclusion:

Modern Disputes act is a broadly spread act which attempts to cover every one of the issues
conceivable with the goal that the debates can be settled as calmly as could be expected. This
current case it examines a tiny part of lay-offs. It has been obviously characterized in the Act
through a change which is most certainly extremely important to comprehend the extent of how
the law decipher the specific term and how it ought to be carried out.

Taking a gander at current realities of the case it is very important to see the situation in which
the cutback was pronounced however there may be points of reference which have proactively
addressed the issues present. The points of reference matter till a specific degree where the
courts have said that it is critical that on the off chance that the cutbacks have been pronounced
through an earlier notification or provided in the standing requests then it would be totally fine
to not pay remuneration but rather in the event that it is being done randomly or disregarding
the time span, the pay is an unquestionable necessity.

This likewise has a common freedom viewpoint since taking a gander at the situation assuming
the laborers are approached to be available in the day of cutback only for it that implies they
are going for work which will cause them some expense. The pay is for their essential living
which is their right and can't be halted when it is recommended by the law.

According to the Apex Court, the new Section 11-A condenses the evening of the business and
empowers the Tribunal interestingly to various both on a finding of wrongdoing showed up at
by a business to a discipline forced by him, there ought to be clear, express and manifest sign
in the segment viewing its review impact and as there is none-the part makes just imminent
difference.

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