IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.04.2010 CORAM: THE HONBLE MR.JUSTICE K.CHANDRU W.P.No.31930 of 2007 and M.P.No.1 of 2007 TASMAC Paniyalargal Sangam (AITUC), Rep. By its President ... Petitioner Vs 1.The Tamil Nadu State Marketing Corporation Limited, Rep.by its Chairperson, CMDA Tower -II, IV Floor, Gandhi Irwin Bridge Road, Egmore, Chennai 600 008. 2.The Managing Director, The Tamil Nadu State Marketing Corporation Limited, CMDA Tower -II, IV Floor, Gandhi Irwin Bridge Road, Egmore, Chennai 600 008. 3.The District Manager, IMFS Depot, The Tamil Nadu State Marketing Corporation Limited, Plot No.G29 & 30, SIDCO Road, Industrial Estate, Kakkalur, Thiruvallur District. ...Respondents Prayer :Petition under Article 226 of the Constitution of India praying for a Writ of Declaration, declaring that Service Rule-11 of the Service Rules of TASMAC and para-3 in page No.2, Para 1 in page No.3, Para 3 and 4 in page No.5, para 10 in page No.7, para 1,4 and 5 in page No.8 of the conditions of services for the workmen employed in Retail Vending Shops and Bars of the TASMAC as unconstitutional and consequently declare that the subsequent follow up proceedings based on the unconstitutional service Rule-11 of the Service Rules of TASMAC and Para-3 in Page No.2, Para-1 in Page No.3, Para 3 and 4 in Page No.5, Para 10 in page No.7,Para 1,4 and 5 in Page No.8 of the conditions of service for the workmen employed in Retail Vending Shops and Bard of the TASMAC is void. For Petitioner : Mr.L.Chandrakumar For Respondents: Mr.J.Ravindran O R D E R
The writ petition is filed by a trade union of employees engaged by respondents TASMAC. They have come forward to challenge the Service Rules framed by the respondent TASMAC with reference to the employees engaged by them. The union is aggrieved by Rule 11, which reads as follows:
11.TERMINATION OF SERVICES: In the event of the Corporation not having any further need of any employee’s services, the appointing authority can dispense with the services of an employee as follows:-
(i) in the case of a temporary employee with immediate notice of termination.
(ii)in the case of probationer and regular employees of Class IV, 30 days notice or salary in lieu thereof.
(iii)in the case of a regular member of staff other than Class IV, 90 days notice or salary in lieu thereof.
The decision of the Corporation will be final in this respect and shall not be questioned by the employee.
Provided that nothing in these regulations will affect the right of the Corporation to dismiss or remove from service any employee for neglect of duty or for misconduct without notice or salary in lieu thereof.
According to the petitioner Union, the Rules are arbitrary and unconstitutional.
2. This Court in B.Sivakumar v. The Managing Director, TASMAC Ltd. in W.P.No.6304 of 2009 dated 15.03.2010, in paragraphs 6 to 12 held as follows:
“6. The learned counsel appearing for the respondents submitted that the petitioner was bound by the terms of appointment and the Rules provided therein and there was no obligation to conduct any enquiry under the said Rules.
7. This Court is unable to agree with the said contention. Undoubtedly, the activity of the respondent/Corporation is selling liquor through various retail shops and the said work can be held to be a commercial establishment coming within the definition of Section 2(3) of the Tamil Nadu Shops and Establishments Act, 1947. Under the said Act, the services of an employee, who is employed for more than six months, cannot be dispensed with unless one month’s notice or wages in lieu of such notice are provided and he can be terminated only for a reasonable cause. Such notice and assigning of reasonable cause are unnecessary if his services are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose. Therefore, the relevant Act makes it obligatory for the respondent/ Corporation to conduct an enquiry, in which there must be satisfactory evidence. Though the Tamil Nadu Shops and Establishments Act, 1947 provides for an appeal under Section 41(2), it is not known as to why the petitioner has not availed the appeal remedy provided which is not only cost effective, but more advantageous to the employees.
8. Apart from this fact, under the Industrial Employment (Standing Orders) Act, 1946, “industrial establishment” has been defined under Section 2(e). As per Section 2(e)(i) of the Industrial Employment (Standing Orders) Act, 1946, “industrial establishment” includes an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act, 1936. By a State amendment introduced under Section 2(ii)(h) by Tamil Nadu Act 9 of 1959, under Section 2(ii)(h) of the Payment of Wages Act, 1936, it has been provided that it includes an establishment or undertaking which the State Government may, by notification in the Official Gazette, declare to be an industrial establishment for the purposes of the Act.
9. By virtue of the said power conferred under the Payment of Wages Act, 1936 through the State amendment, the State Government by a notification made in G.O.Ms.No.78, Labour and Employment Department, dated 26.6.1996 has extended the provisions of the Payment of Wages Act to all the shops and commercial establishments employing twenty or more persons. Therefore, by virtue of this notification, the provisions of the Industrial Employment (Standing Orders) Act, 1946 are applicable to the respondent/Corporation.
10. By virtue of the application of the Industrial Employment (Standing Orders) Act, 1946 to the respondent/Corporation, the respondent/Corporation is bound to get standing orders certified under Sections 3 and 4 of the Industrial Employment (Standing Orders) Act, 1946. If no certified standing orders are available, by virtue of Section 12A of the Industrial Employment (Standing Orders) Act, 1946, the model standing orders framed by the Government are applicable to the employees of the respondent/Corporation. The Model Standing Orders framed by the Tamil Nadu Government under Model Standing Order No.14 provides for termination of employment of workmen. The Model Standing Order No.14 reads as follows:
“14. Termination of employment of workmen-
(1) Subject to the provisions contained in standing order 17, no employer shall dispense with the service of any workman with not less than one year of continuous service except for a reasonable cause and without giving such workman atleast one month’s notice or wages in lieu of such notice.
(2) In cases of retrenchment as defined in Section 2(oo) of the Industrial Disputes Act, 1947 (Central Act XIV of 1947), the provisions of the said Act shall apply:
Provided that no such notice shall be necessary in the case of badli and apprentices.
(3) No order of termination of service of a workman shall be made unless the workman is informed in writing of the reasons for the termination of his services and is given an opportunity to show cause against such termination. A copy of the said order shall be communicated to the workman.
(4) Where the employment of any workman is terminated by or on behalf of the industrial establishment, the wages earned by him shall be paid before the expiry of the second working day from the day on which his employment was terminated or the same shall be made available to him by the drawer of the wages, in case he does not turn up for receiving the wages.”
11. In case a workman did not fall under Model Standing Order No.14, the Model Standing Order No.17 provides the punishment for misconducts as well as the procedure for dealing with misconducts. The acts and omissions which constitute misconduct are set out in Model Standing Order No.16. Therefore, it is too late for the respondents to contend that they need not hold any enquiry since the workmen were covered by the terms of the appointment and the contract given to them. When once a matter is covered by the provisions of the Industrial Employment (Standing Orders) Act, 1946, then the question of reading in of a contract into the said Standing Orders will not arise. On the other hand, any agreement signed outside the provisions of the Industrial Employment (Standing Orders) Act, 1946 would be void. The Supreme Court vide its judgment in Western India Match Co. v. Workmen, AIR 1973 SC 2650 in paragraph (8) has held as follows:
“8. In the sunny days of the market economy theory people sincerely believed that the economic law of demand and supply in the labour market would settle a mutually beneficial bargain between the employer and the workman. Such a bargain, they took it for granted, would secure fair terms and conditions of employment to the workman. This law they venerated as natural law. They had an abiding faith in the verity of this law. But the experience of the working of this law over a long period has belied their faith. Later generations discovered that the workman did not possess adequate bargaining strength to secure fair terms and conditions of service. When the workmen also made this discovery, they organised, themselves in trade unions and insisted on collective bargaining with the employer. The advent of trade unions and collective bargaining created new problems of maintaining industrial peace and production for the society. It was therefore considered that the society has also an interest in the settlement of the terms of employment of industrial labour. While formerly there were two parties at the negotiating table the employer and the workman, it is now thought that there should also be present a third party, the State, as representing the interest of the society. The Act gives effect to this new thinking. By Section 4 the Officer certifying the Standing Order is directed to adjudicate upon the fairness or reasonableness of the provisions of the Standing Order. The Certifying Officer is the statutory representative of the society. It seems to us that while adjudging the fairness or reasonableness of any Standing Order, the Certifying Officer should consider and weigh the social interest in the claims of the employer and the social interest in the demands of the workmen. Section 10 provides the mode of modifying the Standing Orders The employer or the workman may apply to the Certifying Officer in the prescribed manner for the modification of the Standing Orders Section 13(2) provides that an employer who does any act in contravention of the Standing Order shall be punishable with fine which may extend to one hundred rupees. It also provides for the imposition of a further fine in the case of a continuing offence. The fine may extend to twenty-five rupees for every day after the first during which the offence continues.”
12. Therefore, in the light of the above, when a workman is completely covered by the provisions of Section 41 of the Tamil Nadu Shops and Establishments Act, 1947 as well as the Model Standing Orders framed under Industrial Employment (Standing Orders) Act, 1946, the application of which is guaranteed by virtue of Section 12A Industrial Employment (Standing Orders) Act, 1946, any termination contrary to these enactments would be void.”
Therefore, merely because, the contractual terms are framed as a Rule, it does not mean that the employees are without statutory remedy as held by this Court in the above said case.
3. Therefore, it is unnecessary to strike down the Rule framed by the Corporation. It is suffice to state that in case of termination, the Corporation will also take note of other statutory safeguards which are provided for employees and it is in their own interest, they follow the various labour enactment which are applicable to them. This care taken by the TASMAC will reduce the number of cases which are filed before this Court on technical violation in dispensing with their service.
4. With these observation, the writ petition stands disposed of. No costs. Consequently, connected miscellaneous petition is closed.
svki
To
1.The Chairperson,
The Tamil Nadu State Marketing
Corporation Limited,
CMDA Tower -II, IV Floor,
Gandhi Irwin Bridge Road,
Egmore, Chennai 600 008.
2.The Managing Director,
The Tamil Nadu State Marketing
Corporation Limited,
CMDA Tower -II, IV Floor,
Gandhi Irwin Bridge Road,
Egmore, Chennai 600 008.
3.The District Manager,
IMFS Depot,
The Tamil Nadu State Marketing
Corporation Limited,
Plot No.G29 & 30, SIDCO Road,
Industrial Estate,
Kakkalur,
Thiruvallur District