CASE NO.: Appeal (civil) 2419 of 2001 PETITIONER: BOKAJAN CEMENT CORPORATION EMPLOYEES' UNION RESPONDENT: CEMENT CORPORATION OF INDIA LTD. DATE OF JUDGMENT: 10/11/2003 BENCH: Y.K. SABHARWAL & B.N. AGRAWAL JUDGMENT:
JUDGMENT
2003 Supp(5) SCR 400
The Judgment of the Court was delivered by
Y.K. SABHARWAL, J. The short question for determination in this matter is
whether an employee as a result of cessation of employment would lose his
right to continue as a member of the trade union. The High Court, by the
impugned judgment, reversing the decision of a single judge, has answered
the question in the affirmative. The union is the appellant.
The High Court has held that the right to continue as a member of the trade
union continues so long as an employee is actually employed. For its
conclusion, the reliance has been placed by the High Court on Section 6 of
the Trade Union Act, 1926 (for short, “the Act”) and clause 5 of the
Constitution of Bokajan Cement Corporation Employees’ Union. The High Court
has held that the membership of a trade union is not a benefit that accrues
to the employee so as to claim its continuance even after he ceases to be
in employment; his right continues so long as he remains employed and on
cessation of employment, membership of trade union ceases.
There is no specific provision in the Act which provides for automatic
cessation of membership of the trade union on an employee on cessation of
his employment. There is also no specific clause in the Constitution of the
appellant union which provides for such automatic cessation. Learned
counsel for the respondent, however, places strong reliance on Section 6
(e) of the Act and clause 5 of the Constitution of the trade union to
support the impugned judgment.
Let us first look at some provisions of the Act.
Section 2(h) defines the expression ‘trade union’. It reads :
‘”Trade union’ means any combination, whether temporary or permanent,
formed primarily for the purpose of regulating the relations between
workmen and employers or between workmen and workmen, or between employers
and employers, or for imposing restrictive conditions on the conduct of any
trade of business, and includes any federation of two or more Trade Unions:
Provided that this Act shall not affect-
(i) any agreement between partners as to their own business;
(ii) any agreement between an employer and those employed by him as to such
employment; or
(iii) any agreement in consideration of the sale of the goodwill of a
business or of instruction in any profession, trade or handicraft.”
“Registered Trade Union” means a trade union registered under the Act
(Section 2(e)). The mode of registration is provided in Section 4. Every
application for registration of a trade union is required to be accompanied
by a copy of the rules of the trade union and a statement of the
particulars as provided in Section 5 of the Act. Section 6, inter alia,
provides that a trade union shall not be entitled to registration unless
rules thereof provide for the matters enumerated in clauses (a) to (j). For
present purposes clause (e) is levant. Section 6(e) reads as under:
“The admission of ordinary members who shall be persons actually engaged or
employed in an industry with which the Trade Union is connected and also
the admission of the number of honorary or temporary members as (office-
bearers) required under section 22 to form the executive of the Trade
Union.”
Section 22, inter alia, provides that not less than one-half of the total
number of the office-bearers of every registered trade union in an
unrecognized sector shall be persons actually engaged or employed in an
industry with which the trade union is connected.
It is, thus, clear that the rules of the trade union have to provide for
the admission of ordinary members who shall be persons actually engaged or
employed in an industry with which the trade union is connected, and also
the admission of the member of honorary or temporary members as office
bearers required under Section 22 to form the executive of the trade union.
The Constitution of trade union has, inter alia, to comply Section 6(e) so
as to seek registration under the Act.
Mr. Reddy, learned counsel for the respondent contents that the words
‘actually engaged or employed’ would become redundant if an employee can
continue as a member of a trade union even after cessation of employment.
The contention is that on cessation of employment, it cannot be said that
the employee is actually engaged or employed in the industry and,
therefore, such an employee ceases to be an ordinary member as a result of
employment.
In order to appreciate the contention of Mr. Reddy, it is also necessary to
examine the relevant provisions of the Constitution of the appellant trade
union.
Clause 5 of the Constitution of the trade union reads as under:
“Membership: Any worker employed by the Cement Corporation of India Ltd.,
directly or indirectly throughout shall be eligible for the membership of
the Union provides he/she accepts the constitution, Bye-laws and discipline
of the Union and pays the stipulated admission fee of Re. 1.00 along with
stipulated subscription.”
Clause 9 of the Constitution which provides for the cessation of membership
reads as under:
“OBLIGATIONS:
(i) A member, who fails to pay 3 months’ subscription continuously shall
cease to be the member of the union.
(ii) The Union shall remove from the Membership Register the names of those
who have died withdrawn from the Union and ceased to be members of the
Union under any provisions of the Constitution.
(iii) A person who ceases to be member of the Union shall forthwith be
disqualified from exercising the right of a member and shall have no claim
on funds and benefits of the Union.
(iv) Any member losing validity of his/her membership as per provision vide
Sub-section (ii) of this Section, shall be readmitted on payment of Rs. 2
(Two) only as re-admission fee plus the usual subscription for the month in
which he is readmitted subject to the approval of the Executive Committee
of the Union.”
Relying upon the aforesaid clause 5 and laying great emphasis on the word
‘throughout’ therein, it is contended by Mr. Reddy that continuing in
employment all through so as to remain a member of the trade union has been
clearly provided in the Constitution and, therefore, on discontinuance of
employment, the membership of trade union would automatically cease.
The Constitution of a trade union is not required to be construed as a
statute. It deserves to be construed broadly and liberally. The Act and the
Constitution of the trade union, unless clearly stipulate otherwise,
deserve to be interpreted so as to advance the interest of the trade union
and its members. The membership of a trade union is a valuable right which
can be taken away only within clear parameters of the Act and the
Constitution of the trade union.
Clause 5 is also not a provision which provides for the circumstances under
which a member would lose his membership. It provides eligibility/
conditions for becoming member of the union. Regarding Section 6(e) its
only effect is that the rules of a trade union have, inter alia, to provide
for the admission of those who are actually engaged or employed in industry
as ordinary members so as to entitle a trade union to seek registration
under the Act. Section 6(e) does not provide that on cessation of
employment, an employee would cease to be a member. On aspect of cessation
of membership of the trade union, the trade union can make a provision in
its Constitution.
It is one thing to say that the Constitution of trade union shall provide
that those actually engaged or employed would be entitled to be admitted as
members of the trade union and it is altogether different thing to say that
they would cease to be members once they are not actually engaged or
employed. The latter is not what Section 6(e) contemplates. Likewise,
clause 5 of the Constitution of the trade union provides for all workers
employed by the Cement Corporation of India directly or indirectly
throughout to be eligible for the membership of the trade union on
acceptance of the other part of the said clause. The expression
‘throughout’ in clause 5 only shows that all through the said eligibility
condition will continue. Again clause 5 is not a provision for cessation
but is a provision for eligibility to become a member. As already stated,
these clauses are not required to be construed as a statute. The
apprehension of Mr. Reddy that non-acceptance of his contention would
result in a situation of ‘once a member-always a member’, is not of any
significance since that depends upon the Constitution of a trade union. If
a trade union accepts that once a member would always continue to be a
member, there is nothing in the Act which mitigates against it. A trade
union may provide under which circumstances a member would lose the
membership. Apart from clause 9 reproduced earlier, there is no other
clause which provides for cessation of the membership of the trade union.
It is not the case of the respondent that the member in question ceased to
be member of the trade union having suffered disqualification under clause
9. Clause 9 does not stipulate cessation of memberships on cessation of
employment. Further, Section 15 of the Act permits a trade union to spend
its funds on the unemployment of its members. Section 15 of the Act, inter
alia, provides that the general funds of a registered trade union shall not
be spent on any other objects than…(f) allowances to members or their
dependents on account of death, old age, sickness, accidents or
unemployment of such members. Clause 11 of the Constitution of the trade
union in question contemplates the application of the funds of the union
for all or any of the purposes as envisaged in Section 15 of the Act
provided that the total expenditure in any one month shall not exceed 10%
of the total gross annual income. Clause 12(iii)(a) of the Constitution of
the trade union provides that a member of the union who is dismissed for
joining the union or promoting or actively participating in its activities,
shall be entitled to victimization benefits in accordance with the rules
laid down by the Executive Committee of the Union. Clause 12(iii)(b)
entitles a member to legal aid in proceedings which arise out of his
relations with the employer. It reads:
“A member of the Union who has paid the subscription of previous one year,
shall be entitled to legal aid in all proceedings which arise out of his or
her relations with the employer provided that this clause does not apply to
the newly-appointed employee.”
There is no provision in the Act on the Constitution of the trade union
providing for automatic cessation of membership on cessation of employment.
In view of the provisions in the Constitution of the trade union and in
absence of any provision providing for cessation of membership as a result
of cessation of employment, it cannot be held that an employee would cease
to be a member of the trade union on termination of his employment.
Reliance has, however, been placed on behalf of the respondent upon the
decision of this Court in State Bank of India Staff Association and Anr. v.
State Bank of India and Ors., [1996] 4 SCC 378 where it was held that the
management was not supposed to negotiate with the employee as General
Secretary of the Banks Staff Association since he ceased to be an employee
of the Bank after retirement. In the said case, the relevant Rules and
Constitution of the State Bank of India Staff Association provided that
after retirement from Bank’s service, ordinary members shall not continue
to be such members. Considering the said Rules, it was held that “A cursory
look at Rule 5 will make it clear that to become an ordinary member of the
Association one has to be a permanent employee of the State Bank of India
and at the same time not below the age of 18 years whereas Rule 6 provides
that a person who is not a permanent employee of the Bank as contemplated
under Rule 5 but has some sympathy with the objects and spirits of the
Union he may be elected honorary member at the triennial or special meeting
of the General Council etc…. convened for the purpose. Further, according
to Rule 9 ordinary members after retirement from the Bank’s service shall
not continue to be such members while clause (a) of Rule 9 provides that an
ordinary/ honorary member of the Association will be eligible to occupy or
continue in any post in the Central Committee/Central Working
Committee/Circle Committee/Unit Committee but such ordinary/honorary member
of the aforesaid committees will forthwith cease to be such member if he
ceases to be an ordinary/honorary member, notwithstanding contained to the
contrary in the Rules.”
The State Bank of India Staff Association’s case does not lay down that
clause (e) of Section 6 provides for cessation of membership. In our view,
it only provides for admission of membership. In the absence of any
provision in the Constitution of the trade union for automatic cessation of
membership as a result of cessation of employment, it cannot be held that
an employee would cease to be a member of the trade union in such an
eventuality.
For the aforesaid reasons, setting aside the impugned judgment, we restore
the judgment of the learned Single judge of the High Court and allow the
appeal. The parties, in the facts and circumstances of the case, are left
to bear their own costs.