SC limits options in cos' shutdown

MUMBAI: Companies, both public and private, which employ over 100 workmen can now have a slightly faster recourse to its closure. The Supreme Court has recently held that there can only be one option after a state government has either refused or granted a company’s permission for closure. The company, its workmen or even the government suo motu can either ask for review of the decision to permit closure or the issue can be referred to the industrial tribunal, not both. In a significant judgment, the SC set aside the stand taken by the Bombay high court that the state government or the company could always go in for a reference of the matter to the tribunal in case the review was rejected. Interpreting the provision under section 25 (N) of the Industrial Disputes Act, a division bench comprising Justices Arijit Pasayat and P Sathasivam on May 16 held that the language of the law was clear and did not permit for both —a review and a reference —after the state gives its decision on an application by a company to close it down or retrench workmen. The SC judgment essentially means that there is an air of finality sooner as one layer of the legal process is cut down. The company or workmen always have the option of going against any decision of the state to the HC. Senior counsel J P Cama, said that fallout of the judgment is not that it gives more power to the government’s elbow, "what is likely to happen is that rather than going in for a review of the government’s decision before the government itself since the state is less likely to modify its own decision, the companies or workmen are likely to seek a reference to the industrial tribunal which statutorily has to pass a decision within 30 days". Judgment was passed in the case involving Cable Corporation of India which has a large manufacturing unit at Borivli in Mumbai. The company established in 1957 for manufacture of high voltage electric cables had sought to retrench 280 of its 509 workmen in the Borivli unit and was partly allowed to do so in 2003 by government.
7 Jun 2008, 0102 hrs IST, Namrata Singh & Swati Deshpande,TNN
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