Court Rules Lay-Off Unjust; Full Compensation for Workers Ordered, Settlement Deemed Unfair and Non-Binding.

The Industrial Tribunal's decision was upheld by the Court, declaring the lay-off on 15.04.2007 unjustified and illegal. The Tribunal awarded full wages, allowances, and consequential benefits to the affected workmen, acknowledging the lay-off's non-compliance with legal requirements. The Court affirmed the respondent-Union's representation of the workmen and found the settlement dated 13.04.2007 non-binding and unfair. The Liquidator was instructed to evaluate and distribute claims in accordance with the Insolvency and Bankruptcy Code, 2016, ensuring workmen's dues were prioritized as per Section 53 of the Code.

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Issues Involved:
1. Validity of the lay-off declared on 15.04.2007.
2. Representation of the workmen before the Industrial Tribunal.
3. Consideration of the settlement dated 13.04.2007.
4. Award of back wages, allowances, and consequential benefits to the workmen.
5. Impact of the Insolvency and Bankruptcy Code, 2016 on the proceedings and award.

Issue-wise Detailed Analysis:

1. Validity of the Lay-off Declared on 15.04.2007:
The Industrial Tribunal found the lay-off declared by the petitioner-company on 15.04.2007 to be unjustified and illegal. The Tribunal noted that the lay-off was not in accordance with Section 2(n) of the U.P. Industrial Disputes Act, 1947, as the Company failed to provide documentary or oral evidence demonstrating the legality and rationale of the lay-off. The Tribunal observed that the lay-off continued for ten years without proper compensation, and new appointments were made without giving priority to laid-off workers. The Tribunal concluded that the lay-off was based on the crisis of working capital, which does not justify the lay-off under the provisions of Section 2(n).

2. Representation of the Workmen Before the Industrial Tribunal:
The petitioner-company challenged the representation of the workmen by the respondent-Union before the Industrial Tribunal, citing the cancellation of the Union's registration. However, the Court found that the interim order of the Supreme Court stayed the cancellation, allowing the respondent-Union to represent the workmen. The Court also noted that even unregistered unions could raise industrial disputes. The Tribunal's acceptance of the respondent-Union's representation was upheld.

3. Consideration of the Settlement Dated 13.04.2007:
The settlement dated 13.04.2007, which included the lay-off terms, was scrutinized by the Industrial Tribunal. The Tribunal found that the settlement was not binding on all workmen, as it left the majority without work and only provided partial lay-off compensation. The Tribunal observed that the settlement allowed the employer to lay off workers indefinitely, which was contrary to the Standing Orders and the U.P. Act. The Tribunal concluded that the settlement was not fair or reasonable and did not justify the lay-off.

4. Award of Back Wages, Allowances, and Consequential Benefits:
The Industrial Tribunal awarded full wages, allowances, and consequential benefits to the laid-off workmen from 15.04.2007. The Tribunal held that the workmen were entitled to these benefits as the lay-off was unjustified and illegal. The Court noted that the petitioner-company, being under liquidation, could not claim an "impossible burden" to avoid paying back wages. The Liquidator was directed to assess the claims and distribute the proceeds from the sale of liquidation assets in accordance with the Insolvency and Bankruptcy Code, 2016.

5. Impact of the Insolvency and Bankruptcy Code, 2016 on the Proceedings and Award:
The Court considered the provisions of the Insolvency and Bankruptcy Code, 2016, which took precedence over other laws. The moratorium under Section 14 ceased with the liquidation order dated 23.03.2018, allowing the Industrial Tribunal to proceed with the matter. The distribution of liquidation assets was to be done as per Section 53 of the Code, prioritizing workmen's dues for the 24 months preceding the liquidation commencement date. The Liquidator was to ensure compliance with the Code while disbursing the claims of the workmen.

Conclusion:
The Court upheld the Industrial Tribunal's award, finding no perversity or arbitrariness in its decision. The lay-off was declared unjustified and illegal, and the workmen were entitled to full wages, allowances, and benefits, subject to the provisions of the Insolvency and Bankruptcy Code, 2016. The Liquidator was tasked with assessing and distributing the claims as per the Code.

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