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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3123 OF 2005
Indian Smelting and Refining Co.Ltd. ..PETITIONER
VS.
Sarva Shramik Sangh ..RESPONDENT
Mrs.Meena Doshi with Ms.Naina Dutia i/b Nameet & Co. for
petitioner.
Ms.Hutoxi Tavadia a/w Mr.H.V.Kode i/b. Mahesh Thorat for
respondent.
CORAM : A.M.Khanwilkar, J.
DATE : OCTOBER 13, 2008.
P.C.:
1. This Writ Petition under Article 226 of the Constitution of
India takes exception to the Judgment and Order passed by the
Industrial Court, Maharashtra, Mumbai dated 23rd September, 2005
in Complaint (ULP) No. 834 of 2000. The subject complaint was
filed by Respondent-Union to espouse the cause of 21 employees
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enlisted in Annexure A to the Complaint, alleging that the Petitioner
Company had indulged in unfair labour practice covered by Items 6,
9 and 10 of the Schedule IV of Maharashtra Recognition of Trade
Unions & Prevention of Unfair Labour Practices Act, 1971(hereinafter
referred to as “the Act”). The substance of the case made out in the
complaint filed by the Respondent is as follows.
2. It is stated that the Petitioner Company is a public limited
company registered under the provisions of Indian Companies Act, 1956
and is engaged in the business of manufacturing and sale of copper, bronze,
nickel, sheets, strips and foils and non ferrous alloys, etc. It is alleged that
the Petitioner company has a standing of over 30 years with a reputation
and a very good market position. Its financial position is very sound and
strong. The Company had employed about 1000 workers including staff,
watchman and wards. It is stated that the Respondent union is registered
trade union under Trade Unions Act, 1926 and is also recognized union for
the undertaking of the Petitioner company under the provisions of the Act of
1971. It is stated that the Union enjoys majority of membership of the
workers of the petitioner company. As aforesaid, the complaint in
question was filed to espouse the cause of 21 employees enlisted in
Annexure A to the complaint. It is stated that the respective employees
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joined Petitioner company on dates shown against their name in Annexure
A to the complaint and thus were deemed permanent employees of the
Petitioner company as per law. It is alleged that inspite of the fact that the
said employees were working in the Petitioner company for several years,
they have been termed as temporary and are denied and deprived of
permanency status and its benefits and privileges, which are made
applicable to the employees, who are termed as permanent employees. It is
alleged that the named employees are denied of grade and variable Dearness
Allowance of 140% or fixed DA as per settlement dated 3rd February, 1999
signed between the Management of the Petitioner company and the
Respondent union for and on behalf of the workers and which is made
applicable to the daily rated permanent workers of the company. It is
alleged that the Petitioners have discriminated and discriminating amongst
the employees and are denying and depriving the permanency and its
benefits and privileges so also the benefits of the settlement dated 3rd
February, 1999 to the employees named in Annexure `A’ to the Complaint.
It is further stated that the employees named in the Annexure `A’ to the
Complaint have been appointed by the Petitioner company in the category
of dependents of the retired/expired workers of the Petitioner company, as
per the terms of settlements and Award dated 19th March, 1980. It is then
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stated that the said employees were entitled to be made permanent after
completing 18 months continuous service as per the settlement dated 6th
December, 1971. It is further stated that the employees named in
Annexure A to the complaint have already completed more than 18 months
continuous service and were entitled to permanency and its benefits, which
has been wrongfully denied to them by the Petitioner company. It is
alleged that the Union had sent communication to the Petitioner company
in this regard making this grievance vide letter dated 2 nd June, 2000, but no
satisfactory reply was received. According to the Respondent union, as the
Petitioner company had failed to comply with the settlement dated 6th
December, 1971 or the award dated 19th March, 1980 or the settlements
dated 21st February, 1996 and dated 3rd February, 1999, the Petitioner
continued to knowingly and deliberately breach/violate the said settlements
and award thereby denying and depriving the employees named in
Annexure `A’ to the complaint their status of permanency and its benefits
and privileges. It is stated that the Union therefore, sent another letter dated
31st August, 2000 to the Petitioner company which was received by the
company on 4th September, 2000. However, no response was received from
the Petitioner company. The Union therefore, asserted that the Petitioner
company was bound to implement the settlements dated 6th December, 1971
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and Award dated 19th March, 1980 and to extend the benefits of settlements
dated 21st February, 1886 and 3rd February, 1999 to the employees named in
Annexure `A’ to the complaint. It is alleged that as per settlement dated 6th
December, 1971 the company and the management were obliged to hold
meeting with the complainant union and the committee members in the
month of June every year regularly for the claim of permanency and other
benefits of the workers. Having failed to do so, the Union addressed letter
dated 2nd June, 2000 to the Petitioner company.
ig Inspite of the said
communication, the Petitioner company failed to call any meeting nor made
the named employees permanent nor offered them benefits or privileges till
the date of filing of the complaint. It is alleged that on the other hand, the
Petitioner company is refuting the said claim and has failed and neglected to
implement the service conditions as per settlement dated 6th December,
1971, Award dated 19th March, 1980, settlement dated 21st February, 1996
and settlement dated 3rd February, 1999. In that, the named employees have
been continued by the Petitioner company as temporaries, violating
settlement and have denied and deprived the said employees the status,
privileges and benefits of permanency resulting in unfair labour practice
under Item 6, 9 and 10 of Schedule IV of the Act. It is further stated in the
complaint that the provisions of Industrial Employment(Standing Orders)
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Act, 1946 is applicable to the establishment. The complaint then gives
details of the furnaces operated by the Petitioner company and the number
of permanent employees working during the three shifts and the minimum
number of permanent employees required in a day to maintain the normal
level of establishment. Similar details are furnished in respect of several
mills in the establishment and it is asserted that the named employees were
working in the same place where the employees were given the benefits of
permanency while working. Assertion in the complaint is to the effect that
the work undertaken by the named employees is perennial in nature and
they were performing the same job as their counter-parts, who were called
as permanent by the employer and were given higher DA and other benefits.
Similar details are provided in respect of four Yadar machines and four
Pickling machines. It is also asserted that employee at Sr.No.14 in
Annexure A to the complaint is a Crane Driver, whose work is permanent
and of perennial nature. Details about other named employees are also spelt
out in the complaint. It is then stated that the Petitioner company had
employed about 1150-1200 permanent employees in the establishment.
However, gradually the strength of permanent employees was reduced due
to various reasons such as retirement, death, resignation etc. over the period
of years. The Petitioners however, did not fill up the permanent vacancies
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and managed the work by engaging employees as casuals, temporaries or
contract employees. It is stated that besides the named 21 employees in
Annexure `A’ to the complaint, there are other set of about 170 employees,
who are junior to these employees and another about 200 employees who
are still called as contract employees in the establishment. It is then asserted
that the Petitioner company was extending the facilities of casual leave,
sick leave, privilege leave etc. to the employees who are junior to the
employees named in Annexure `A’ to the complaint. At the same time, the
Petitioner was not extending even the minimum facility of casual leave and
sick leave to these employees named in Annexure `A’ to the complaint. It
is stated that the employees called as permanent by the Petitioner were
being paid DA at the rate of 140%, whereas the employees named in
Annexure `A’ were paid only 100% thereby denying them the substantial
amount of wages every month. It is also asserted by the Respondent union
that the monthly production in the years before 1984, was around 250 to
300 tonnes with the strength of 750 employees. After 1985, during the
period from 1988 to 1991, the production is increased to 500 tonnes and
thereafter during the period 1994-95, it was 625 tonnes and then in the year
1999, it was about 700 tonnes and from around year 2000 onwards, it is
around 800 tonnes. However, the strength of permanent employees of the
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Company has reduced drastically and going down every year by year;
because the Petitioners are not showing employees doing the extra work as
permanent with a view to deprive them the status and benefits of permanent
employees. It is further asserted that under the provisions of Standing
Orders all the employees listed in Annexure A are entitled to be made
permanent on completion of 240 days of service in the establishment. On
the basis of the above assertions, the Respondent Union prayed that it be
declared that the Petitioner has engaged in unfair labour practice under
Items 6,9 and 10 of the Schedule IV of the Act, 1971, and to direct the
Petitioner to cease and desist from engaging in unfair labour practice
complained of. Further relief was claimed by the Respondent to declare that
the employees named in the Annexure `A’ to the complaint are permanent
employees on completion of continuous service of 18 months as per
settlement dated 6th December, 1971. It was further prayed that direction be
issued to the Petitioner to extend benefits under settlements dated 21 st
February, 1996 and 3rd February, 1996 and 3rd February, 1999 respectively
to the employees named in the Annexure `A’ to the complaint and to direct
the Petitioner to pay the difference of the benefits of the settlements dated
21st February, 1996 and 3rd February, 1999 to the employees named in the
Annexure `A’ to the complaint with retrospective effect. Lastly, it was
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prayed that direction be issued to the Petitioner to issue letters of
permanency to the employees named in Annexure `A’ to the complaint with
retrospective effect from the date they have completed 18 months
continuous service.
3. The Petitioner-company contested the complaint. In the first
place, the Petitioner filed affidavit in reply to the interim relief application.
That reply was treated as Written Statement of the Petitioner. In addition,
the Petitioner filed additional Written Statement. Significantly, the
Petitioner has conceded that the workmen named in Annexure `A’ to the
complaint, were neither badli nor casuals nor temporary but were deemed
to be permanent by virtue of provisions of Industrial Employment (Standing
Orders) Act, 1946. It is the case of the Petitioner that the said workmen
were getting consolidated wages, mostly minimum wages, as prescribed by
Government of Maharashtra for engineering workers. However, as and
when they became entitled to the benefits under Industrial Employees
(Standing Orders) Act, 1946 they were fitted in basic wage and granted
100% revised textile DA and other terms and conditions were fixed. This
was done with the knowledge of the complainant union as well as workers
when the settlement dated 3rd February, 1999 was signed. It is the case of
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the Petitioner that the named workmen were not getting benefits which
regular permanent workers were getting due to settlement dated 3rd
February, 1999 and no fault can be found with the Petitioner company in
that behalf. In support of its contention that the named workmen were not
entitled for benefits under the settlement dated 3rd February, 1999, reliance
was placed on Clauses 26 and 27 of the said settlement, which according to
the Petitioner, preserved the right of the Petitioner company to fix separate
service condition for temporary, casual, badli or other types of workmen. It
is the case of the Petitioner that by filing present complaint, the Union is
attempting to resile from the settlement which is only for the benefit of
permanent workmen who were on the rolls of the company on the day of
signing of the settlement and who signed it. According to the Petitioner,
named workmen were not temporaries or were getting service condition of
temporary workmen but were getting basic plus 100% revised textile DA, as
determined by the Petitioner company with mutual consent of the workmen
concerned. According to the Petitioner, while fixing service conditions of
the named workmen, the Petitioner has mostly followed the provisions of
clause 4 of the settlement dated 6th December, 1971 signed with the
respondent union. In substance, the stand of the Petitioner is that the
Petitioner was entitled to provide separate service conditions in respect of
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workmen named in Annexure A to the complaint as they were not covered
by the settlement dated 3rd February, 1999.
4. The Industrial Court, on analyzing the rival stand and
considering the evidence on record, proceeded to hold that the real
controversy centers around the applicability of agreement qua the workmen
named in Annexure A to the complaint. At the outset, the lower Court
opined that there was neither any pleading nor any evidence with regard to
the violation of Item 10 of Schedule IV. The lower Court accordingly,
confined the enquiry only regarding violation or breach of Item Nos. 6 and 9
of Schedule IV. It found as of fact that the benefits under the settlement
were not offered or extended to the workmen named in Annexure “A” to the
complaint. It then considered as to whether the justification offered by the
Petitioner company can be countenanced. It went on to observe that as per
the agreement or settlement, the benefits of the settlement will have to be
extended to daily rated permanent workmen. It went on to observe that
even if the settlement deems to exclude the workmen named in Annexure A
to the complaint, the same cannot bind them as they were not signatories to
the said agreement. In as much as the settlement was against their interest
and detrimental to them. It further found that if the office bearers of the
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Trade Union have agreed to do certain act ignoring interest of one set of
employees who were going to be affected by the arrangement, such
agreement would not disentitle the concerned workmen from claiming their
legitimate rights and ventilating their grievance. It then proceeded to hold
that admittedly the workmen named in Annexure A were continuously
working with the Petitioner company for number of years and their services
were uninterrupted, which was sufficient to confer permanency on them as
well as to extend benefits as given to the permanent employees; failure to
do so results in unfair labour practice within the meaning of Item 6 and 9 of
Schedule IV of the Act. The lower Court has found that in fact the
Petitioner has conceded that the workmen named in Annexure A to the
complaint were deemed permanent employees and that the said employees
had put in more than 240 days of continuous service and were entitled to
seek protection of provisions of law including section 25 (F) of the
Industrial Disputes Act. It has then found that since the Petitioner admits
that the concerned employees were deemed permanent, the Petitioner was
under obligation to confer all the benefits extended to permanent
employees even to the complainant-employees. The lower Court has then
adverted to rule 4(B) of the Industrial Employment(Standing Orders) Rules,
1959 which stipulates that the temporary workman, who has put in 190
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days’ uninterrupted service in aggregate in any establishment of a seasonal
nature or 240 days uninterrupted service in the aggregate in any
establishment during the period of preceding 12 calendar months, shall be
made permanent in that establishment by an order in writing signed by the
Manager or any person authorized in that behalf by the Manager,
irrespective of whether or not his name is on the muster roll of the
establishment during the said 12 calendar months. The lower Court then
adverted to the communication sent by the Respondent Union to the
Petitioner on 2nd June, 2000 calling upon the Petitioner to confer
permanency to the employees concerned. Notwithstanding the Company
asserted that the concerned employees were not temporary employees,
relying on the reported decision, the lower Court then went on to observe
that even if the concerned employees were daily rated employees, denial to
confer permanency and permanency benefits despite clear vacancy, was
admittedly unfair labour practice. The lower Court has found as of fact that
even though the concerned employees were appointed on compassionate
ground, however, they were appointed on clear vacant post and those
persons after their appointment were continued for number of years as
temporary. The lower Court has thus found that ipso facto and ipso jure, the
Petitioner employer has indulged in unfair labour practice within the
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mischief of Item 6 and Item 9 of the Schedule IV of the Act. It is on the
basis of these findings the Court below proceeded to pass following order:
“Complaint is allowed.
It is hereby declared that the respondents have engaged in an
unfair labour practices under items 6 and 9 of Schedule-IV of
the MRTU & PULP Act, 1971 and respondents are directed tocease and desist from engaging in such practices.
It is hereby declared that the employees concerned are entitled
for status of permanency as well as the permanency benefits inpursuance of the agreements that were timely entered into by
the respondent employer, with effect from the date ofcompletion of 19 months continuous service by the concerned
each employee.No order as to the cost.”
5. After having considered the pleadings and documents on
record, to my mind the real controversy is whether the workmen who are
deemed permanent would be entitled to the benefits under the settlement
dated 3rd February, 1999. For, it is common ground that the workmen
named in the Annexure `A’ to the complaint were appointed between 1996
to 1998 on different dates. Their date of appointment is not in dispute. It is
also not in dispute that the said workmen were continuously employed by
the Petitioner. It is also evident from the record that the service of those
workmen was engaged in relation to work which was permanent and
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15perennial in nature. It is conceded by the Petitioner that the workmen
named in Annexure A acquired the status of deemed permanent on
completion of 240 days by virtue of provisions of Industrial Employment
(Standing Orders) Act, 1946. It is a different matter that in response to the
representation sent by the Respondent union, the Petitioner termed the
concerned workmen as temporary. The question is whether the Petitioner
has committed breach of such nature that it results in unfair labour practice
within in the meaning of Item 6 of Schedule IV of the Act.
Item 6 read thus:
“To employ employees as Badlis, casuals or temporaries and to
continue them as such for years with the object of deprivingthem of the status and privileges of permanent employees.”
6. It is not in dispute that on completion of 240 days of
continuous service of the concerned workman, no letter has been issued by
the manager of the Petitioner company informing in writing that they have
been made permanent in the establishment, as required by rule 4B of the
Industrial Employment (Standing Orders) Rules 1959. Indeed, till recently
even when the Respondent made representation to treat the workmen
permanent or deemed permanent employees, the Petitioner company
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16asserted that the said workmen were temporary. The fact remains that
before the Court, the Petitioner has conceded that the concerned workmen
were deemed permanent by virtue of provisions of Industrial
Employment(Standing Order) 1946. Even so the Petitioner cannot be
absolved of the unfair labour practice within the meaning of Item 6. It
would have been a different matter if the manager of the Petitioner company
in compliance of the mandate of the rule 4 B of the Industrial
Employment(Standing Orders) Rules had issued order in writing treating the
concerned workmen as permanent soon after completion of the continuous
service of 240 days in aggregate during a period of preceding 12 calendar
months. Having failed to do so, rigours of item 6 were clearly attracted.
The fact that the concerned workmen were paid on the basis of basic plus
100% revised textile D.A. and other allowances, by itself does not result in
treating the workmen as permanent or deemed permanent. If the said
workmen were to be treated as permanent by the Petitioner company, the
Petitioner Company would be obliged to provide all the privileges and
status as given to its permanent employees. It necessarily follows that the
object of not issuing order in writing as required on account of Rule 4B of
the Industrial Employment (Standing Orders) Rules, was to deprive the
workmen named in the Annexure `A’ of the status and privileges of the
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17permanent employees. This is the gravamen of the grievance made in the
complaint as filed.
7. To get over this position, Counsel for the Petitioner would
contend that even if the complaint is read as a whole, there is no pleading
that the object of not treating the named workmen as permanent was to
deprive them of the status of permanent employees. Counsel for the
Petitioner would rely on the decision of the Apex Court in the case of
Regional Manager, SBI V/s. Rakesh Kumar Tewari, reported in (2006) 1
SCC 530, in particular, paragraph-14 thereof, where the Apex Court has
expounded that unless foundation has been laid in the pleadings, no amount
of evidence can be looked into. Reliance is also placed on the decision
reported in 1994 (I) CLR page 913 in the case of Punjabrao Krishi
Vidyapeeth, Akola Vs. General Secretary, Krishi Vidyapeeth Kamgar Union
& Ors.. Obviously, this submission is advanced on misreading of the
pleadings in the complaint. In my opinion, on a fair reading of the
complaint as a whole, it is seen that at more than one place it is asserted that
the object of not recognising the named workmen was to deprive them of
the status and privilege of permanent employees. That can be culled out
from paragraph-3(c), where it is asserted that the Petitioner had
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18discriminated and discriminating amongst employees and are denying and
depriving the permanency and benefits and privileges thereof so also the
benefits of the settlement dated 3rd February, 1999 to the employees named
in Annexure A to the complaint. In last sub-paragraph of paragraph 3, it is
once again stated as follows:
“..Whereas the strength of permanent employees of the
Company has reduced drastically and going down year by year
because the Respondents are not showing employees doingpermanent job as permanent with a view of deprive them the
status and benefit of permanent employees.”In my opinion, there is sufficient pleading so as to attract the provisions of
Item 6 of Schedule IV. It is well established position that the strict rules of
pleadings as required by the civil code do not apply in relation to the
disputes before the Labour and Industrial Court. If any authority is required
in support of this proposition, reliance can be usefully made to the
observation in paragraph-4 in the case of Bombay Mothers & Children’s
Society V/s. General Labour Union(Red Flag) & anr. reported in 1992 I
CLR 656; as well as Indian Express Newspapers(Bombay) Ltd. v/s. Brihan
Mumbai Union of Journalists, reported in 2001 II CLR page 76 and P.D
Siddhave V/s.G.N.Patwardhan & Ors., reported in 1997 II CLR 1090.
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198. As aforesaid, there is enough pleading to suggest that the
object of the Petitioner to not recognize the named workmen as permanent
was to deprive them of their status and privileges of the permanent
employees. The question is whether the onus was on the respondent union
to establish the factum of object of the Petitioner in not recognizing the
named workmen as permanent. Even this issue is no more res intigra. The
Apex Court in the case of Chief Conservator of
ig Forests & Anr. v/s.Jagannath Maruti Kondhare & Ors. Reported in (1996) 2 SCC 293, has
considered this very aspect. The Apex Court in paragraph-22 however,
proceeded to observe thus:
“We have given our due thought to the aforesaid rival
contentions and, according to us, the object of the State Act,
inter alia, being prevention of certain unfair labour practices,
the same would be thwarted or get frustrated if such a burden isplaced on a workman which he cannot reasonably discharge.
In our opinion, it would be permissible on facts of a particular
case to draw the inference mentioned in the second part of the
item, if badlis, casuals or temporaries are continued as such for
years….” (emphasis supplied)The Division Bench of our High Court has restated the above principle in
the decision in the case of R.P.Sawant vs. Bajaj Auto Ltd., reported in 2001
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20II CLR 982. In paragraph-41 of the said decision, the Court has observed
thus:
“41. Mr.Singh also relied on the judgment of the Supreme
Court in Chief Conservator of Forests & Anr. V.J.M.Kondhare, 1996 I CLR 680, in which the Supreme Court
severely criticized the Forest Department of the Government of
Maharashtra for indulging in similar tactics of repeatedly
terminating the services of employees to prevent them from
becoming permanent. The Supreme Court was considering thevery same Item 6 of Schedule IV of the 1971 Act and observed
(vide paragraph 22) as under:-“… In our opinion, it would be permissible on facts of a
particular case to draw the inference mentioned in thesecond part of the item, if badlis, casuals, or temporaries are
continued as such for years. …”Considering the type of work before them, the Supreme Court
observed as under :“Permanency is thus writ large on the face of both the types of
work. If, even in such projects, persons are kept in jobs on casual
basis for years the object manifests itself; no scrutiny is required.”
We are of the view that these observations of the Supreme Court
clearly apply to the case before us. The evidence on record fully justified
drawing the inference that the object of the Company in keeping the
employees temporary for repeated periods of seven months was to deprive
them of the benefits of permanency so as to amount to an unfair labour
practice within the meaning of Item 6 of Schedule IV of the 1971 Act.”
It will be useful to refer to another decision of the single Judge of our High
Court in the case of Burroughs Welcome (I) Ltd. Vs. D.H. Ghosle [2001 (2)
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MLJ 54], which has followed the said principle. In the present case, the
finding recorded by the lower Court to the effect that the named workmen
were continuously in service for years and were engaged in activities, which
were permanent and perennial in nature is unquestionable. Besides, even
the finding of the lower court that the named workmen were doing the same
work as their counter parts who were called permanent is also
unquestionable. With this background it necessarily follows that the
purpose of not recognizing the named workmen as permanent was with a
view to deprive them of the status and privileges of permanent employees
and would attract provisions of Item 6 of Schedule IV of the Act.
9. That takes me to the question whether the opinion formed by
the lower Court that the Petitioners have also indulged in unfair labour
practice within the meaning of item 9 of Schedule IV of the Act is just and
proper. Item 9 of Schedule IV of the Act reads thus:
“9. Failure to implement award, settlement or agreement.”
On the finding already recorded that the named workmen were deemed
permanent, it would necessarily follow that they ought to get all the benefits
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and facilities, as have been extended to the permanent employees for the
relevant period.
10. As aforesaid, it is common ground that the named workmen
have been employed between 1996 to 1998 on different dates. On
completion of continuous and uninterrupted service, in law, they would
become permanent. They will have to be treated as permanent workmen.
The fact that a formal order in writing has not been issued by the manager as
required in Rule 4B of the Industrial Employment(Standing Order) Rules
1959 would make no difference. For, the law recognizes such workmen to
be permanent workmen. If so, the real question is whether the
memorandum of settlement dated 3rd February, 1999 purports to expressly
exclude the deemed permanent workmen. For that, we will have to analyse
the terms of memorandum of settlement dated 3rd February, 1999. Indeed,
the Petitioner was at pains to point out that the charter of demand of
workers employed in Petitioner company submitted by the Union
specifically makes reference to the daily rated workmen including
temporary and casual workmen in company at Bhandup, relying on the
recital of memorandum of settlement dated 3rd February, 1999. That would
militate against the daily rated workmen employed in the establishment of
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the company at Bhandup. Even so, the question is whether the terms of the
said settlement expressly or by implication deny the benefits provided
thereunder to daily rated deemed permanent workmen. Significantly, the
Petitioner’s witness has unambiguously stated that the demand which was
raised by the union and was the subject matter of the said settlement was in
respect “temporary and casual workmen” other than the named workmen in
Annexure-A to the complaint. In view of this admission, as a matter of fact,
no further scrutiny on the point in issue is required.
11. Be that as it may, the law recognizes only two categories of
workmen. One, being the permanent workman and the other a temporary
workman. On account of legal fiction, a deemed permanent workman, for
all purposes, is a permanent workman. In other words, the expression
“permanent workman” within the meaning of provisions of the Act and the
Rules would cover both the categories of workmen namely de facto
permanent workman and de jure permanent workman. A de facto
permanent workman is one, who has been appointed by the company by an
order in writing, as a permanent workman; whereas a de jure permanent
workman is one, who, irrespective of whether such order in writing is issued
by the company, is recognised by law to be a permanent workman. With
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this background, we will have to consider whether the memorandum of
settlement in any way provides that the de jure permanent workmen have
been excluded from deriving the benefits under the stated settlement.
12. As aforesaid, the Memorandum of settlement has been reached
in respect of daily rated permanent workman employed in the petitioner
company at Bhandup. The term permanent workmen has not been defined
in the memorandum of settlement. For that, we will have to give the
natural meaning to that expression which is consistent with the provisions
of law. As aforesaid, permanent workman is one who is de facto permanent
workmen and also includes de jure permanent workman. Thus understood,
it is not possible to suggest that the memorandum of settlement dated 3rd
February, 1999 expressly excludes the workmen who fall within the class
of deemed permanent workman on the relevant date as such. In other
words, it will have to be assumed that all workmen who have acquired the
status of permanent workmen as on 3rd February, 1999 would be entitled to
enjoy the benefits provided under the memorandum of settlement dated 3rd
February, 1999.
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13. The Petitioner would rely on clause 20 of the Memorandum of
settlement which reads thus:
“20. NO DEMANDS DURING THE PERIOD OF THIS SETTLEMENT
The union and workmen agree that during the period of operation of this
settlement neither they nor any union nor any party will raise and demand
or disputes on their behalf in respect of any matter which may directly orindirectly involve additional financial burden on the Company except the
demand for bonus under the Payment of Bonus Act, 1965.”
However, in my opinion, this clause does not take the matter any further for
the Petitioner. This clause merely provides that the agreement has been
reached that the demand or dispute in respect of any matter, which may be
directly or indirectly covered by the settlement and involve additional
financial burden on the company except demand for bonus under the
payment of Bonus Act, 1965 can be raised by the Union or any party. Once
it is found that the workmen named in the Annexure-A to the complaint are
covered by the term permanent workmen having completed 240 days of
uninterrupted services on or before 3rd February, 1999, would be covered by
the settlement dated 3rd February, 1999. Emphasis was then placed on
Clauses 22, 26 and 27 of the settlement which read thus:
“22. DEMANDS NOT COVERED IN THIS SETTLEMENT NOT
PRESSED::: Downloaded on – 09/06/2013 13:58:16 :::
26The union and workmen agree that in view of this settlement the demands
which are not specifically covered by this settlement shall be deemed tohave not been pressed by them and as such will be treated as withdrawn.”
“26. APPLICABILITY
It is specifically declared that this settlement is applicable only to daily-
rated permanent workmen and not to temporary, casual, badli or other
types of workmen, if any, for whom the Company will be entitled to laydown separate service conditions. It will also not apply to the ex-
workmen whose demands for reinstatement is pending before Courts/
Competent authorities under the law. It is further agreed that the terms of
this settlement will be applicable only to those daily-rated permanent
workmen who are on the rolls of the Company on the day of signing ofthis settlement and who sign it.”
“27. SIGNING BY WORKMEN
It is further agreed that all the daily-rated permanent workmen who are on
the rolls of the Company, will sign this settlement as token of theiracceptance of the terms of this settlement and then only the settlement will
be applicable to them.”
Reverting to the Clause-22 of the settlement, the agreement was that
demand not specifically covered by the settlement shall be deemed to have
not been pressed by the union and thus the same will be treated as
withdrawn. Relying on this clause, it was argued that the original demand
was for and on behalf of the temporaries and casual workmen of the
companies and that has been withdrawn by the Union. As aforesaid,
management witness in his evidence has conceded that the dropping of
demand was in relation to different set of workmen and not the named
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27
workmen in Annexure-A to the complaint. At any rate, for the view that I
have taken, the workmen named in Annexure-A cannot be treated as
temporary and casual workmen, but those of the workmen who have
completed 240 days of uninterrupted service would be deemed permanent
workman and will have to be treated as daily rated permanent workman as
on 3rd February, 1999. Insofar as those workmen are concerned, the
demand of parity to be extended to such workmen cannot be said to have
been withdrawn under the settlement. Assuming that such a view was
possible, I am in agreement with the opinion recorded by the lower Court
that it would not preclude the named workmen to agitate before the court of
law that the settlement is prejudicial to their interest and not binding on
them.
14. To get over this position, Counsel for the Petitioner would
contend that such grievance cannot be put forth by the Union, who was
party to the settlement. According to the Petitioner, settlement would be
binding on all workmen as it has been entered with the registered and
recognized union. This argument has been rightly countered by the Counsel
for the Respondent by relying on the decision in the case of Oswal Agro
Furnace Ltd. vs. Workers Union reported in (2005) 3 SCC page 224, in
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particular paragraph-15 and 16 thereto, which takes the view that if
settlement arrived at is in effect opposed to the requirements of law, such
settlement will have to be treated as void for which no declaration would be
necessary. The voidness of such settlement can be considered even in a
collateral proceeding. Besides, I am in agreement with the argument of the
respondent union that even if the union has entered into settlement with the
management, it is open to the union to file complaint against the company
and management alleging commission of unfair labour practice within the
meaning of Item 6 of Schedule IV read with Section 21 of the MRTU &
PULP Act, 1971. As a matter of fact, section 21 of the Act, 1971 mandates
that such complaint should be filed only through a recognized union
alleging commission of unfair labour practice within the meaning of this
section. If it so, the named workmen have no other option but to pursue
their grievance through the respondent union. Therefore, institution of
complaint at the instance of such workmen by the Union inspite of being
party to the settlement would be a necessity due to the mandate of section
21 of the Act of 1971. Since the Complaint in relation to the unfair labour
practice in respect of Item 6 could be pursued by the named workmen only
through the Respondent Union, it was logical for the union to also espouse
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the cause of the stated workmen of unfair labour practice under Item 9 of
the Schedule IV.
15. Reverting to clause 26 of the settlement, it specifies that it is
applicable to the daily-rated permanent workmen and not to temporary,
casual, badli or other types of workmen, if any, for whom company was
entitled to lay down separate service condition. As aforesaid, even the de
jure permanent workmen are permanent workmen and therefore covered by
the term daily-rated permanent workers referred to in the settlement.
16. To my mind, clause 26 preserves the privilege of the Petitioner
company to provide for separate service condition only in respect of
temporary, casual, badli or other types of workmen(other than the daily-
rated permanent workmen). Since the workmen named in Annexure-A, in
law, are covered by the expression daily- rated permanent workmen, it will
not be open to the Petitioner company to provide for separate service
conditions qua them. According to the Petitioner, the later part of clause 26
is self eloquent as it indicates that the settlement will be applicable only to
those daily rated workmen, who are on the roll of the company on the date
of signing of the settlement and who sign it. This clause will have to be
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construed to mean that the settlement is applicable to those daily-rated
workmen, who are de facto permanent or de jure permanent on the relevant
date. Indeed, the names of the de facto permanent workmen would be on
the rolls of the company as permanent workmen; whereas de jure
permanent workmen would be deemed to be on the rolls of the company as
permanent workmen notwithstanding the fact that the Company has shown
them on the rolls of temporary workmen.
17.
Emphasis was then also placed on Clause 27 of the agreement,
which provides that all the daily-rated permanent workmen who are on the
rolls of Company will sign the settlement as token of their acceptance of
the terms of that settlement and then only the settlement will be applicable
to them. This clause does not militate against the claim of the workmen
named in the Annexure A to the complaint merely because they have been
wrongly treated as temporary workmen by the management inspite of the
fact that the law recognises them as permanent workmen, having
completed uninterrupted service of over 240 days on the relevant time in the
preceding 12 months of the calendar year. The fact that this workers did not
have the opportunity of signing the settlement does not mean they can be
deprived of the settlement. That is only a ministerial act to be performed
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31
once the named workmen are given the status of permanent workmen. Any
other view would result in perpetrating injustice and discrimination between
similarly placed persons.
18. Counsel for the Respondent has rightly invited my attention to
the dictum of the Apex Court in the case of Bajaj Auto Ltd. Vs. Bhojane
Gopinath [(2004) 9 SCC 488]. The Apex Court with particular reference to
the provision of the Industrial Employment (Standing Order) Act, 1946,
applicable in the State of Maharashtra after incorporating State amendment
together with the State Rules and Model Standing Orders prescribed
thereunder, held that subsection 2 of section 3 lays down that the provision
shall be made in such draft for every matter set out in the Schedule which
may be applicable to the industrial establishment, and where Model
Standing Orders have been prescribed, shall be, so far as is practicable, in
conformity with the model standing order. It is further held that under
section 4 Standing Orders shall be certifiable, if provision is made therein
for every matter set out in the Schedule, which is applicable to the industrial
establishment and the standing orders are otherwise in conformity with the
provisions of the Act. Inasmuch as, duty is cast on the certifying Officer
or the Appellate Authority to adjudicate upon the fairness and
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reasonableness of the provisions of any draft standing orders. In
paragraph-10, the Apex Court while considering the efficacy of rule 4-C
proceeded to observe thus:
“… Rule 4-C was incorporated in the Model Standing Orders which lays
down that a temporary workman who has put in 240 days’ uninterrupted
service in the aggregate in any establishment during a period of preceding
twelve calender months, shall be made permanent in that establishment by
order in writing signed by the Manager or any person authorised in thatbehalf by the Manager, irrespective of whether or not his name is on the
muster roll of the establishment throughout the period of the said twelve
calendar months. Rule 4-C in the Model Standing Orders has beenincorporated relating to the matter set out in Item 10-C of the Schedule, as
such deletion of the said rule by the Certifying Officer, being in the teeth
of legislative command incorporated in the proviso to Section 3(1), waswholly without jurisdiction and would make the order of the Certifying
Officer to that effect null and void and liable to be disregarded as it is well
settled that if an order is null and void, the same can be disregarded in
collateral proceeding or otherwise. Reference in this connection may be
made to decision of this Court in the case of Dhurandhar Prasad Singh v.
Jai Prakash University.”
Applying the principle expounded by the Apex Court, it would necessarily
follow that it was not open to the management to deprive deemed
permanent workmen of the benefit, which is extended to the permanent
workmen as on 3rd February, 1999. Any other view would necessarily
result in permitting the management to show favouritism to one set of
workers regardless of merits. Indeed, that situation would attract Item 5 of
Schedule IV which reads:
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“5. To show favouritism or partiality to one set of workers,
regardless of merits.”
This grievance is expressly noted in the complaint filed before the lower
Court. Amongst other in paragraph-3(c) whether the Respondent have
alleged that the Petitioners have discriminated discriminating amongst the
employees and are denying and depriving the permanency and its benefits
and privileges so also the benefits of the settlement dated 3 rd February,
1999, to the employees named in the Annexure-A to the Complaint. It is a
different matter that no specific relief is claimed by the union in the context
of item 5 of Schedule IV of the Act.
19. Counsel for the Respondent has rightly pressed into service
dictum of Apex Court in the case of Oswal Agro Furnace Ltd. V/s. Workers
Union reported in (2005) 3 SCC 224. In paragraph-15 of this decision, the
Apex Court has expounded that settlement within the meaning of section
2(p) read with sub section 3 of Section 18 of the Act undoubtedly binds the
workmen but the question which would arise is, would it mean that thereby
provisions contained in section 25-N and 25-O are not required to be
complied with ? It went on to answer the said question in the negative. It
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has further opined that settlement can be arrived at between the employer
and workmen. But, an Industrial dispute may arise as regards validity of a
retrenchment or a closure or otherwise. Such a settlement, however, as
regards retrenchment or closure can be arrived at provided such
retrenchment or closure has been effected in accordance with the law. In
paragraph-16 the Apex Court went on to observe as follows:
“16. It is trite that having regard to the maxim “ex turpi causa non oritur
actio”, an agreement which opposes public policy as laid down in terms of
Sections 25-N and 25-O of the Act would be void and of no effect.
Parliament has acknowledged the governing factors of such public policy.
Furthermore, the imperative character of the statutory requirements would
also be borne out from the fact that in terms of sub-section (7) of Section
25-N and sub-section (6) of Section 25-O, a legal fiction has been created.
The effect of such a legal fiction is now well known. (See East End
Dwellings Co.Ltd. v. Finsbury Borough Council, Om Hemrajani v. Stateof U.P. And Maruti Udyog Ltd. v. Ram Lal.
Suffice it to observe that merely because the Respondent union is party to
the settlement dated 3rd February, 1999 that would not preclude the union to
espouse the cause of the workmen named in the Annexure-A to the
Complaint.
20. We may usefully refer to the decision of the Division Bench of
our High Court in the case of R.P.Sawant Vs. Bajaj Auto Ltd. (Supra). In
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35
paragraph-40 of this decision, settled legal position has been restated. The
Court observed thus:
“40. With regard to the Complaint of unfair labour practice under Item 9
of Schedule IV of the 1971 Act by contravention of Model Standing
Orders, Mr.Singh rightly urges that the learned Single Judge has dismissed
it without any reason. Mr. Singh rightly relied on the judgment of the
Division Bench of this Court in Borosil Glass Works Ltd. v. M.G.Chitale,
1974 I LLJ 184, and the judgment of the Division Bench of this Court inThe Premier Automobiles Ltd. v. The Engineering Mazdoor Sabha & Ors.
1976 ICR 206 as also the judgment of the Single Judge of this Court(Nagpur Bench) in Mill Manager, S.R.Mills v. Industrial Court, Nagpur,
1987(1) Bom.C.R. 517, to urge that the provisions of Standing Orders –
whether Model or Service – are mandatory and contravention thereof will
be an unfair labour practice within the meaning of Item 9 of Schedule IV
of the 1971 Act.”(emphasis supplied)
Relying on this observation the Respondent would rightly argue that the
Petitioner having failed to recognize the workmen named in Annexure-A
have acted in contravention of Model Standing Order, that itself would
attract unfair labour practice within the meaning of item 9 of Schedule IV of
the Act. I am in agreement with this contention. In any case, for the
reasons already discussed in the earlier part of this order, I hold that the
workers named in Annexure-A to the complaint were entitled for the same
benefit provided to their counter-part daily rated permanent workmen under
the settlement dated 3rd February, 1999. For that reason, there has been
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failure on the part of the Petitioner-company to implement the said
settlement, attracting Item 9 of Schedule IV of the Act, 1971.
21. I shall now revert to the other contention canvassed on behalf
of the Petitioner. It was argued that the Petitioner had treated the named
workmen in Annexure-A to the Complaint as separate set of workers and
were being offered separate service conditions, which were permissible.
Indeed, this stand has been taken in the reply filed before the lower Court.
The question is: whether it was open to the Petitioner to treat the deemed
permanent workmen differently than the permanent workmen in service at
the relevant time. If this contention is to be accepted, it would inevitably
attract unfair labour practice within the meaning of Item 5 of Schedule IV.
As a matter of fact, the stand taken by the Petitioner presupposes that the
object of not recognizing the named workmen as permanent workmen was
with a view to deprive them of their status and privileges of permanency,
which were extended to the permanent employees. It was argued that the
Petitioner had consciously provided for separate service conditions for the
named workmen and if the Petitioner was required to treat these workmen
on par with the other permanent workmen, Petitioner would not be in a
position to bear the financial implications. It is not possible to countenance
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this argument. The fact that the Petitioner would suffer additional financial
burden, if the named workmen were to be treated on par with the permanent
workmen cannot be the basis to legitimize discriminatory treatment meeted
out to similarly placed workmen. As aforesaid, the named workmen though
treated temporary workmen by the Petitioner company, in fact, on account
of legal fiction were already permanent workmen on completion of 240
days’ continuous and uninterrupted service in the aggregate. On completion
of such qualifying service they have automatically acquired the status of
permanent workmen. In settlement, no reference is made to the fact that the
same is applicable only to workmen, who are appointed on or after a
particular date. The generality of provisions in clause 22, 26 and 27 cannot
be the basis to hold that there was express understanding or for that matter
implied settlement that workmen appointed on or after 1996, 1998 will be
covered by separate service conditions. That is not the settlement between
the Petitioner and the Union. Suffice it to mention that similar argument
regarding financial implications was considered by the Apex Court in the
case of Chief Conservator of Forests (Supra) and came to be negatived on
the reasoning that the same is one of desperation or in terrorem. The Court
opined that the fact remains that on the finding that the Petitioner has
indulged in commission of unfair labour practice within the meaning of
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Item 6 as well as Item 9, it is the duty of the Court to issue appropriate
direction to meet the ends of justice.
22. It was then argued that the allegation on the basis of which the
Union instituted complaint was barred by limitation. Inasmuch as,
appointment of concerned workmen was in 1996, 1997 and 1998
respectively, whereas complaint is filed on 17th October, 2002. It was also
argued that the demand regarding permanency of the named workmen was
given up while entering into settlement on 3rd February, 1999. Taking last
argument first, the same is already dealt with in the earlier part of this
Judgment. In the first place, the management witness has conceded in his
evidence that dropping of demand was in respect of different set of workers.
In any case, named workmen cannot be denuded of their right to agitate
about the illegality and unfair labour practice committed by the Petitioner
qua them. Insofar as the claim being barred by limitation and the Industrial
Court could not have entertained complaint unless delay in filing complaint
is condoned is concerned, the same is ill-advised. It is well established
position that unfair labour practice referable to Item 6, Item 9 are continuing
and recurring in nature, as has been found in the case of Maharashtra State
Co-op. Cotton Growers Marketing Federation Ltd. & Anr. V/s. Maharashtra
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State Co-op. Cotton Growers Marketing Federation Emp.Union & Ors.
reported in 1992 1 CLR 350. The substance of the grievance of the named
workmen is that they were denied wages and benefits as made available to
their counter-part permanent workmen in terms of settlement dated 3rd
February,1999. Non-payment of wages on par would give rise to the
recurring cause of action. If it is so, question of complaint in relation to
such unfair labour practice being barred by limitation does not arise.
23.
It was also argued that there is no pleading in the complaint to
the effect that breach has been committed qua the named workmen in
relation to the settlement to attract item 9 of Schedule IV. This argument
deserves to be stated to be rejected. The complaint, if read as a whole, there
is sufficient reference to the act of commission and omission of the
Petitioner resulting in breach of settlement attracting Item 9 of the Schedule
IV of the Act. In paragraph-3(d) of the complaint, it is asserted that no
satisfactory reply was given by the Petitioner-company for having failed to
comply with the settlement dated 6th December, 1971 or the award dated 19th
March, 1980 or the settlement dated 21st February, 1996 and settlement
dated 3rd February, 1999. It is further asserted that the Petitioner-company
continued to breach/violate the said settlements and award thereby denying
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and depriving the employees named in Annexure-A to the Complaint the
status of permanency and its benefits and privileges, knowingly and
deliberately. Suffice it to observe that on a fair reading of the complaint as
a whole, it makes out a clear case for attracting Item 9 of Schedule IV of the
Act.
24. It was also argued that relief in terms of prayer clause (d) was
unavailable to the Respondent in absence of pleadings in respect of non-
compliance of settlement dated 21st February, 1996. In the first place, this
argument overlooks the nature of final relief granted by the Industrial Court.
The Industrial Court has declared that the Petitioner has engaged in unfair
labour practice under item 6 and 9 of the Schedule IV of the Act and
directed the Petitioner to cease and desist from engaging in such practice.
The Lower Court has further declared that employees concerned are entitled
for status of permanency as well as permanency benefits in pursuance of the
agreements entered into by the Respondent union with effect from the date
of completion of 18 months continuous service by the concerned each
employee. On the finding recorded by the lower Court, direction as issued
against the Petitioner was inevitable, rather it was the duty of the Industrial
Court to issue such direction.
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25. It was next contended that the evidence adduced by the
Respondent-union was clearly in variance with the case made out in the
complaint and was in relation to the matters, which have already been given
up by the union. The argument though attractive, at the first blush, will
have to be stated to be rejected. The lower Court has decided the matter on
the basis of relevant facts, which have been either admitted by the Petitioner
company in its pleadings or in evidence by its witness. Even this Court has
proceeded on the same basis. The facts which have been referred to in the
earlier part of the Judgment, in no way, are disputed. Rather those facts are
indisputable. In the circumstances, it is not necessary to burden this
Judgment with the nature of variance in the evidence and the related issues,
as those aspect will not take the matter any further for the Petitioner.
26. During the course of argument, it was contended on behalf of
the Petitioner that although original complaint was filed to espouse the
cause of 21 workmen named in Annexure-A to the Complaint, however, out
of the said 21 workmen 16 workmen have already accepted the offer made
to them by the Petitioner company. Whereas, only five workmen amongst
21 workmen have accepted the offer without prejudice to their rights and
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contention in the pending proceedings. That development will be of no
avail to the Petitioner. The fact remains that atleast five employees have
persisted with their demand for permanency and giving parity alongwith
other daily rated permanent workmen employed by the Petitioner. The
claim put forth on behalf of the said five workmen will have to be accepted
on the finding that the petitioner-company will be obliged to comply with
the mandate of law by treating each of the workmen who has become
permanent on completion of qualifying service and as a consequence grant
same benefits extended to other permanent workmen employed during the
relevant time.
27. It was also contended that the lower Court has not recorded a
clear finding about breach of Item 9 of Schedule IV of the Act. It has only
recorded the fact that the workmen were not party to the settlement, for
which the settlement was not binding on them. In my opinion, the Judgment
of the Industrial Court has mixed up the discussion with regard to the
violation of two separate items of Schedule IV. It would have been
appropriate, if the Court below were to deal with each item separately so
that a clear finding in respect of each item could be discerned. Suffice it to
observe that it is not as if the lower Court has not recorded any finding
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regarding violation of item 9 of Schedule IV. If the Judgment from
paragraph-10 on wards till paragraph-19 is read as a whole, it would appear
that the lower Court has addressed to the violation of both the items albeit
together. In my opinion, some error here or there cannot be the basis to
overturn the entire Judgment of the lower Court, which is otherwise based
on tangible material and cogent basis.
28. It was then argued that the question regarding applicability of
settlement could not be gone into while considering complaint under the
provisions of Act of 1971. To buttress this submission, reliance was placed
on the general observations made by the Apex Court in Cipla Ltd. Vs.
Maharashtra General Kamgar Union & Ors. [(2001) 3 SCC 101]. This
argument deserves to be stated to be rejected. Inasmuch as, it is not the case
of the Petitioner that there was no relationship of employer and employee.
Once relationship was indisputable, all incidental matters to answer the
claim in the complaint was required to be addressed by the Industrial Court
for complete and effectual adjudication of the complaint. In that context,
the Court below was required to consider as to whether the settlement dated
3rd February, 1999 and/or other settlements were applicable to the deemed
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permanent workmen, such as named workmen in Annexure-A to the
complaint.
29. Taking over all view of the matter, therefore, Petition is devoid
of merits. The same should fail. Accordingly, the Petition is dismissed with
costs.
30. At this stage, Counsel for the Petitioner prays that interim
arrangement operating during the pendency of the Petition be continued for
some time to enable the Petitioner to carry the matter in appeal.
Accordingly, it is ordered that the interim arrangement, which operated
during the pendency of this Petition shall continue till 31st January, 2009.
(A.M.KHANWILKAR,J)
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