SVKM’S

SCHOOL OF BUSINESS MANAGEMENT

NMIMS, MUMBAI
MBA (HR) PROGRAMME
(2022 – 2024)
Trimester-V

CLASS ASSIGNMENT
Subject – Labour Laws II

Submitted by:

Group 1

IndrayudhDey
Shankar Raj (A002)
Bhavya Sarna (A013)
Aviral Srivastava (A028)
Keshav Jain (A051)
Shivangi Das (A055)
Krupa Vyas (A057)
Indrayudh Dey (A060)

1
The case of "Delhi Cloth & General Mills Co. Ltd vs. The Workmen & Ors" is a landmark judgment
in Indian Labour law, and it played a crucial role in shaping industrial relations and Labour rights in
India. This case was decided by the Supreme Court of India on 14th October 1966.

Background

The case involved the Delhi Cloth & General Mills, which was a textile company in Delhi. The
company was facing financial difficulties and decided to close down its manufacturing unit. This
decision to close the unit led to a dispute between the management and the workers regarding the
terms and conditions of closure and the compensation to be paid to the workers.

Key Issues

The main issue in this case was whether the closure of the manufacturing unit was justified and
whether the workers were entitled to compensation.
Another significant issue was the legality of the standing orders that governed the conditions of
service for the workers at the mill.

Judgment

The Supreme Court, in its judgment, made several important pronouncements:

• The court held that the closure of the manufacturing unit was not for any anti-union reason
but due to economic and financial difficulties faced by the company. The court recognized
that management had the right to close down a unit for economic reasons.

• The court also established the principle of "last come, first go," which means that in cases of
retrenchment (reduction of the workforce), the last workers to be employed should be the first
to be retrenched. This principle sought to protect the job security of long-serving employees.

• The Supreme Court emphasized the importance of standing orders that regulate the conditions
of service in an industrial establishment. It ruled that standing orders must be in accordance
with labour laws and must be certified by the appropriate government authority.

• The court recognized that workers were entitled to compensation in case of retrenchment, and
the compensation must be fair and reasonable.