- 1 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MS. JUSTICE JYOTI M WRIT PETITION NO. 8032 OF 2020 (L-TER) BETWEEN: THE MANAGEMENT OF M/S. VINAYAKA C.N.C. CENTRE PVT. LTD., PLOT NO.7, 2ND PHASE, ANTHARASANAHALLI INDUSTRIAL AREA TUMAKURU - 572 106. HAVING ITS REGISTERED OFFICE AT: A-347, 9TH MAIN, 2ND STAGE, PEENYA INDUSTRIAL ESTATE BENGALURU-560 058. REPRESENTED BY ITS DIRECTOR MR. C.S.SUKUMARAN, …PETITIONER (BY SRI. K.R.ANAND, ADVOCATE) AND: THE WORKMEN OF VINAYAKA C.N.C CENTRE PVT. LTD., REPRESENTED BY TUMAKURU JILLA OFFICE MATHU ETHARE KARMIKARA SANGHA (CITU) CITU OFFICE: 3RD CROSS, NAZIRABAD, TUMAKURU - 572 106. …RESPONDENT (BY SMT. AVANI CHOKSHI, ADVOCATE FOR SRI. A.J.SRINIVASAN, ADVOCATE) Digitally signed by THEJAS KUMAR N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS. THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 28.10.2025, THIS DAY, AN ORDER IS PRONOUNCED AS UNDER: ORAL ORDER Sri.Anand. K.R., counsel for the petitioner and Ms Avani Chokshi, counsel for the respondent, have appeared in person. 2. The petition averments are as under: The petitioner Company was established in 1985. It had one of its Units established in 2007 in Tumakuru till 06.06.2016 and closed its manufacturing activities with effect from 06.06.2016 permanently. The petitioner was engaged in the business of manufacturing precision CNC Turned and Machined Automotive Components. The only customers of the petitioner's Industrial Undertaking was M/s.BOSCH Limited, to whom the petitioner supplied products known as 'Connecting Flanges'. The petitioner, being the main supplier of the said product, ensured that the - 3 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 timely supply of the said product was the order of the day. Hence, the petitioner could not have offered any delay in supplying the same to its sole customer. It is said that due to the go-slow tactics adopted by the workmen, the petitioner suffered a reduction in production; as such, there was a fall in the placement of orders, compelling the petitioner to permanently close its manufacturing activities to arrest all further financial losses. Hence, the petitioner was compelled to declare closure of its manufacturing activities vide Notice dated 09.01.2016. Pursuant to the permanent closure of the manufacturing activities, since machineries numbering 32 installed in the Unit at Tumakuru were losing its commercial value, the petitioner with an intention to sell such machineries to avoid additional financial losses invited buyers who visited the factory on 25.02.2017 to inspect and negotiate, at which point of time, the respondent workmen illegally and unlawfully restrained them from entering into the factory premises and openly stated that they would not permit those visitors to buy and remove machineries. Hence, - 4 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 the petitioner was compelled to approach the jurisdictional Court seeking appropriate relief to remove and sell the machinery. Pursuant to the order of the Court, the petitioner was able to remove and sell all the machinery installed in the petitioner's unit at Tumakuru. On the 30th day of December, 2015, the petitioner's Tumkuru Unit retrenched the services of four workmen in full compliance of Section 25F of the Industrial Disputes Act, 1947. On 09.01.2016, the petitioner's Tumkuru Unit put up a Notice of Closure as per Section 25FFA of the Act. On 06.06.2016, the Tumkuru Unit closed its manufacturing activities permanently. The workmen raised a dispute in I.D.No.08/2016. The Labor Court vide award dated 05.02.2020 allowed the claim application. Under these circumstances, the petitioner has filed the present Writ Petition on several grounds as set out in the Memorandum of Writ Petition. 3. Counsel for the respective parties urged several contentions. - 5 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 Counsel Sri.K.R.Anand, in presenting his arguments, strenuously urged that the workmen adopted go-slow tactics; the sole reason for the petitioner to retrench four workmen was due to economic re-organization and exigencies of the business, and the same was established through oral and independent evidence. He argued by saying that the same was neither questioned nor disputed by the respondent Union, hence the Labor Court ought to have upheld the retrenchment of four workmen in the normal course. Counsel for the petitioner placed reliance on OSHIAR PRASAD AND OTHERS V/S. EMPLOYERS IN RELATION TO MANAGEMENT OF SUDAMDIH COAL WASHERY OF M/S. BHARAT COKING COAL LIMITED, DHANBAD, JHARKHAND reported in (2015) 4 SCC 71. Counsel Ms.Avani Chokshi., submitted that no doubt go-slow tactics amount to misconduct; however, the management did not initiate disciplinary inquiry proceedings. Urging other contentions, she prayed for the dismissal of the petition. Counsel for the respondent placed reliance on WORKMEN OF SUBONG TEA ESTATE V/S. THE OUTGOING - 6 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 MANAGEMENT OF SUBONG TEA ESTATE AND ANOTHER reported in AIR 1967 SC 420. Heard the arguments and perused the Writ papers and the records with care. 4. The short point that requires consideration is whether the award of the Labor Court requires interference. 5. The facts are sufficiently stated and do not require reiteration. This is an interesting case that highlights the interplay between industrial go-slow tactics and the complex process of economic reorganization at the factory level. Let us quickly glance at go-slow tactics and economic reorganization. "Go slow" tactics are a form of protest where employees deliberately work at a slower, less efficient pace to cause production delays and pressure management. This tactic is used to protest dissatisfaction with pay, working conditions, or other employment issues without completely stopping work, like a full strike. This can include slowing - 7 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 down machinery or simply performing tasks with reduced effort. “Economic reorganization” is the process of making significant changes to an economic system, whether at the level of a single company, an industry, or a nation. Economic re-organization of a factory involves significant changes to its financial, operational, or strategic structure, typically to improve efficiency, cut costs, or adapt to new market demands. The primary goal of a company re-organization is to improve the company's efficiency, profitability, or strategic position. Reverting to the facts of the case, the only customers of the petitioner's Industrial Undertaking was M/s.BOSCH Limited, to whom the petitioner supplied products known as 'Connecting Flanges'. Timely supply of the product was the order of the day, as the petitioner was the main supplier. A Memorandum of Understanding was entered into between the management and the Union on 05.10.2012 and it was agreed by the workmen that they would maintain discipline - 8 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 and give normal production of 1800 Nos. of 6 Cylinder type connecting Flange as was done earlier. There was a drop in production against the agreed quantity despite the MOU. The adoption of go-slow tactics by the workforce had led to a significant reduction in the supply of the products to BOSCH. Hence, the management was constrained to issue individual notices on different dates to improve productivity as agreed in the MOU. It is significant to note that the management had issued show cause notices to those workmen who indulged in go-slow tactics and followed by proportionate deduction in wages. The deduction of the wages was questioned by the Union before the appropriate authority under the Payment of Wages Act, and the Authority concerned vide order dated 08.12.2017 (Ex.R.84) ordered in favor of the Management, and it has attained finality. After careful consideration and a thorough review of documented performance issues, including consistent failure to meet expected productivity standards, and in light of the - 9 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 ongoing necessity for economic reorganization and cost- saving measures across the factory, the petitioner made the decision that employment of some of the workmen must end. Due to a necessary economic re-organization, management made the difficult decision to retrench some workmen. As a result of significant economic restructuring, the management decided to reduce the workforce through retrenchment, and the retrenchment order was made not only for these four workmen but also for others who were allotted to the work of BOSCH. It is pivotal to note that the impact of go-slow tactics led to reduced production, lower output, and potentially damage to equipment as the machinery was operated at a slower speed; hence, the management was constrained to sell its machinery, and accordingly, they did so. If I can say in a formal or business context, the implementation of go-slow tactics by the workers necessitated an economic re-organization, which ultimately resulted in the retrenchment of some of the personnel. Furthermore, due to go-slow tactics, the management - 10 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 concluded that the factory's closing (unit at Tumakuru) is a bona fide and justifiable action driven by the need for significant economic reorganization. This Court is not inclined to discuss the matter of closure at this stage, as the dispute is still pending before the Labor Court. As can be seen from the records, it is seen that the Management offered re- employment to four workmen; however, the workmen imposed unreasonable and untenable contentions. Moreover, the offer of re-employment to four retrenched workmen was in alignment with Section 25H of the I.D Act and was fully legal. Hence, the conclusion of the Labor Court that such an offer amounts to victimization, constitutes an unfair labor practice, and is illegal and contrary to the law is untenable. 6. To conclude, I can say only this much that due to the essential economic reorganization of the factory and the resulting need to optimize the workforce, the company had to eliminate certain positions. This decision, made after careful consideration of operational necessities and in full compliance with legal requirements. However, the Labor Court has placed considerable emphasis on the availability of - 11 - HC-KAR NC: 2025:KHC:45198 WP No. 8032 of 2020 re-employment opportunities in the Bengaluru Unit. The Labor Court prioritized the consideration of re-employment in other Units. I decline to accept the prioritization. In my view, this is a fit case of retrenchment. I may venture to say that the Labor Court has failed to have regard to the relevant considerations and disregarded relevant matters. For the reasons stated above, the award of the Labor is liable to be set-aside. Accordingly, it is set-aside. 7. A Writ of Certiorari is ordered. The award dated 05.02.2020 passed by the Labor Court in I.D.No.08/2016 is quashed. 8. Resultantly, the Writ Petition is allowed. Because of disposal of the Writ Petition, pending interlocutory applications, if any are disposed of and interim direction, if any stands discharged. SD/- (JYOTI M) JUDGE TKN List No.: 1 Sl No.: 1