Shifting of establishment to another location does not constitute closure or entitle workmen to retrenchment compensation.

The petitioner was employed as an operator by Respondent No. 1 since 2008 at its Wazirpur, Delhi unit.

In 2011-12, the management shifted its establishment from Delhi to Sikandrabad, Uttar Pradesh.

The petitioner alleged his services were illegally terminated on 19.09.2011 without statutory benefits, claiming the shifting amounted to "closure".

Conversely, the management asserted that they issued transfer letters on 21.09.2011 and 07.10.2011, but the petitioner refused to join the new location despite an offer to maintain existing service conditions.

The Labour Court dismissed the petitioner’s claim in its Award dated 31.08.2013, leading to this writ petition.

1. Whether the shifting of an industrial unit from one state to another constitutes "closure" under Section 25FFF of the Industrial Disputes Act, 1947, or merely a relocation/shifting?

2. Whether an employer-employee relationship existed between the petitioner and Respondent No. 2?

3. Whether the petitioner's services were illegally terminated by the respondent management?

The court primarily applied Section 25FFF of the Industrial Disputes Act, 1947, which mandates compensation only upon the permanent closing down of an undertaking.

It relied on *Biddle Sawyer Ltd. v. Chemical Employees Union*, establishing that "closure" refers to the irrevocable end of the business/source of employment, not merely a change in the physical "place of business".

It further cited *Birla Corporation Ltd. v. Birla Corporation Ltd. Sramik Union*, which distinguishes shifting (where employment is preserved) from closure (which results in loss of employment).

and *Shalimar Paints Ltd. v. Third Industrial Tribunal*, affirming an employer's inherent right to choose its place of business.

The Court found that the management did not terminate the petitioner's services but rather relocated the entire unit.

Based on the petitioner's own cross-examination admissions, the management issued multiple directions for him to resume duties at the Sikandrabad site under the same terms and conditions.

Since the "source of employment" remained alive and the petitioner chose not to join, the court determined this was a case of shifting, not closure, rendering Section 25FFF inapplicable.

Regarding Respondent No. 2, the court noted the petitioner failed to provide proof of employment, admitting his records (ESI/PF) were maintained solely by Respondent No. 1, a separate legal entity.

The Court affirmed the Labour Court's findings that: (i) there was no employer-employee relationship with Respondent No. 2;

(ii) the management was not liable for retrenchment compensation as the petitioner refused to join the shifted premises;

and (iii) the inherent right of the employer to shift business locations was exercised bona fide.

All pending applications were disposed of.