Shifting of Industrial Unit to Another State With Employment Continuity Does Not Amount to Closure.

The petitioner workman, Chinta Lal, was employed as a machine operator by Respondent No. 1 (M/s Kiran Engineering and Suppliers) in Wazirpur, Delhi, since 1991.

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

The petitioner alleged that his services were terminated on 19.09.2011 without statutory terminal benefits, claiming the shifting amounted to a "closure" of the undertaking.

Conversely, the management contended that the petitioner was repeatedly directed via letters dated 21.09.2011 and 07.10.2011 to join the shifted premises on the same terms, but he refused to do so.

The Labour Court, vide Award dated 30.08.2013, dismissed the workman's claim, holding it was a case of shifting, not closure.

The petitioner challenged this Award via the present writ petition.

Whether the shifting of an industrial unit from one state to another constitutes a "closure" of the undertaking under Section 25FFF of the Industrial Disputes Act, 1947.

Whether the failure of the workman to join duty at the transferred location despite repeated directions amounts to illegal termination.

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

The court primarily applied Section 25FFF of the Industrial Disputes Act, 1947, which mandates notice and compensation only when an undertaking is "closed down".

It relied on the principle from Biddle Sawyer Ltd. v. Chemical Employees Union, which distinguishes between closing a "place of business" and closing the "business itself," stating that shifting a unit while keeping the business alive does not constitute closure.

It further applied Birla Corporation Ltd. v. Birla Corporation Ltd. Sramik Union, establishing that closure involves loss of employment, whereas shifting—where employment is offered at the new site—results in no such loss.

The Court observed that the petitioner admitted in cross-examination that the management offered him continued employment at the Sikandrabad unit under the same terms and conditions.

Since the employer offered to maintain the source of employment and the petitioner received written transfer directions which he ignored, the Court reasoned there was no loss of employment attributable to the employer.

Following the precedent in Shalimar Paints Ltd. v. Third Industrial Tribunal, the Court held that an employer has an inherent right to choose the place of business and a move does not entitle a workman to retrenchment compensation if the service conditions remain unchanged.

Regarding Respondent No. 2, the Court found that the petitioner failed to discharge the onus of proof, as his records and wages were solely associated with the partnership firm of Respondent No. 1.

The Court found no illegality in the Labour Court’s finding that the workman's services were not terminated, but rather that he failed to join the shifted premises.

The petition was dismissed, and the impugned Award dated 30.08.2013 was upheld.