Ibrahim Hanif Mulani vs General Manager, Walchandnagar ...
2002 Latest Caselaw 436 Bom

JUDGMENT

Nishita Mhatre, J.

1. This petition is directed against the order of the Industrial Court dated July 22, 1994 rejecting Complaint (ULP) No. 112 of 1988 filed under Item 5 of Schedule IV read with Items 1 and 4 of Schedule II of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as the "1971 Act"). The case of the Petitioner is that voluntary retirement schemes were floated by Respondent No. 1 company in 1976, 1979, 1983 and 1989. The strength of the workmen was substantially reduced. On February 2, 1988, a Settlement was arrived at between Cooper Kamgar Sangh, the recognised Union in the establishment under the 1971 Act, and the Respondent No. 1 Company agreeing to retrench 492 permanent employees. As a consequence of this Agreement, the services of the Petitioner were terminated with effect from February 5, 1988. The Petitioner and other workmen filed Complaints before the Industrial Court under Item 5 of Schedule IV read with Items 1 and 4 of Schedule II of the 1971 Act pleading, inter alia, that the Settlement of February 2, 1988 was discriminatory as 318 workmen were retained in service although some of them were junior to the petitioner. It was also pleaded that many of the workmen whose services were terminated were not members of the recognised union and thereby the Respondent Company has shown favouritism and partiality to one set of workmen. It was also the claim of the Petitioner in the Complaint that it was because of his trade union activities that his services had been terminated by means of the settlement. The Petitioner, therefore, pleaded that Section 25-G of the Industrial Disputes Act, 1947 (hereinafter referred to as the "1947 Act") and Rules 80 and 81 of the Industrial Disputes (Bombay) Rules, 1957 had been violated.

2. In the written statement filed by Respondent No. 1 company, it was pleaded that since the Settlement dated February 2, 1988 was with a recognised Union and the recognised Union had agreed that 318 workmen would be retained in service while the others would be retrenched, there was no question of any violation of Section 25-G nor was it necessary to comply with Rules 80 and 81 of the Industrial Disputes (Bombay) Rules, 1957. The Settlement in question as well as several other documents were filed before the Industrial Court. Affidavit of the petitioner and the Personnel Manager of the respondent No. 1 company were also filed. However, it was agreed between the parties that the matter should proceed on the basis of the affidavits without any cross-examination in the matter.

3. By a common order dated July 22, 1994, the Industrial Court dismissed the Complaints filed by the Petitioner and other workmen coming to the conclusion that once there was a settlement with a recognised union, an individual workman could not challenge the settlement. The Industrial Court came to the conclusion that there was no unfair labour practice and that the retrenchment was valid. Aggrieved by this order, the petitioner has filed the present writ Petition.

4. The questions, therefore, that arise in the present Writ Petition are whether a trade union recognised under the 1971 Act can decide the fate of all the workmen in the establishment as to their tenure of employment. Can an employer and the recognised Trade Union decide the fate of workmen who are not the members of the recognised union by entering into a settlement agreeing to terminate their services, in violation of provisions of law? If the answer to these questions is in the negative, then the Petitioner must succeed in this Petition.

5. It has been argued on behalf of the Petitioner that the Settlement which was entered into on February 2, 1988 between the Respondent No. 1 company and the recognised Union was void in so far as it provided for the termination of 492 employees while retaining 318 in service. It is submitted that such a Settlement is invalid, the clauses relating to termination of the services of the petitioner are contrary to the provisions of Sections 25-N, 25-F and 25-G of the 1947 Act and, therefore, the termination is non est. Although the contention regarding contravention of Section 25-N has not been raised in the Complaint at all, it is urged that this being a question of law, the petitioner has raised it in the Petition. It is contended that admittedly the employer at that point of time employed more than 100 workmen and no permission was sought for from the Appropriate Government for retrenching the workers as required under Chapter V-B of the 1947 Act. It is further submitted that Section 25-G has also been breached as those who were retained in service were junior to the Petitioner. No reasons have been given for departing from the rule of last-come- first go, except for the settlement. It is also submitted that Section 25-F has also been breached as the workmen were not tendered the retrenchment compensation and notice pay at the time of termination. Rules 80 and 81 of the Industrial Disputes (Bombay) Rules, 1957 which are mandatory have also not been complied with. The learned counsel for the petitioner submitted that for all these reasons, the Respondent No. 1 had committed unfair labour practice under Item 5 of Schedule IV by retaining certain workers in service and had also committed unfair labour practice under items 1 and 4 of Schedule II as the workers whose services are terminated as per the Settlement were members of a different trade union from the recognised union.

6. The learned counsel for respondent No. 1 company submits that there has been no discrimination and workers from both the Unions have been retrenched under the Settlement of February 2, 1988. He submits that Shashikant R. Mantri, Petitioner No. 2, Ganpat Baba Jadhav, Petitioner No. 3 and workman Vijay Pawar whose heirs, namely, Smt. Leela Pawar and Mahesh Pawar, who are petitioners Nos. 4 and 5 in a companion writ petition being Writ Petition No. 4734 of 1994, were in fact members of the recognised Union and, therefore, it could not be said that Respondent No. 1 company had discriminated against the workmen for not being members of the recognised Union. He further submits that the percentage of workmen retained from the non-recognised Union is substantially higher than those retained from the recognised union. He further submits that the recognised Union is the only bargaining agent which can negotiate with the Respondent No. 1 company and, therefore, the Settlement entered into with the recognised Union is valid. He further submits that an individual workman cannot jeopardise the finality of a Settlement entered into by a recognised union. He further submits that the Complaint filed by the Petitioner is vague and contains averments only in respect of Sections 25-F and25-G and, therefore, the Petitioner should not be permitted to raise issue regarding Section 25-N at this stage.

7. It is no doubt true that the Petitioner has not raised the issue regarding violation of Section 25-N in the Complaint filed by him before the Industrial Court. But this is a question of law as admittedly there were more than 100 workmen employed at the time of termination of the Petitioner's services. Moreover, there is nothing on record to show that permission had been sought for and granted by the Appropriate Government. Therefore, it must be held that Section 25-N has been breached by Respondent No. 1 company. As a consequence, the termination effected in breach of Section 25-N by retaining some workmen in service would be bad.

8. Merely because there is a recognised union, an employer cannot ignore the provisions of law while entering into a Settlement with such a Union. In the present case, it was incumbent on the Respondent No. 1 company to ask for permission from the Appropriate Government prior to retrenching over 100 workmen. Moreover, by retaining the juniors of the Petitioner in service, the respondent No. 1 company has breached the provisions of Section 25-G of the 1947 Act. Section 25-G provides that the services of a workman who is juniormost in service must be retrenched first and thereafter a person who served longer could be terminated from service on account of retrenchment. If the employer desires to depart from the normal rule of "last come-first-go" as envisaged in Section 25-G, it is necessary for the employer to enter into an agreement with the concerned workman and to record the reasons for deviating from this rule. In the present case, an agreement has been entered into with the recognised union and not the concerned workman as envisaged in the Section. Neither there is anything on record to show that reasons had been recorded for retaining juniors to the petitioner in service. Therefore, such a termination of service cannot be considered to be valid in the eye of law. Moreover, under Rule 81, a seniority list of the workmen who are to be retrenched is to be prepared atleast seven days in advance before the actual date of retrenchment and such a list is to be displayed on a conspicuous place in the premises of the establishment. There is nothing on record to show that such an exercise has been carried out. Rule 81 being mandatory, it was necessary for the Respondent No. 1 company to comply with it prior to retrenching the workmen.

9. The contention raised on behalf of the Petitioner that the rights conferred on recognised Union do not include the right to termination of the services of the workmen who are not its members must be accepted. Section 20 Sub-section (2)(b) of the 1971 Act clearly provides that exception is made regarding proceedings in which legality or propriety of an order of dismissal, discharge, removal, retrenchment, termination of service or suspension of an employee is under consideration. In all other matters, the recognised union would have the right to appear or act on behalf of all the workmen in the establishment and any decision arrived at in such a proceeding would be binding on all the employees. Further, Section 18(1) of the 1947 Act also provides that where a recognised Union enters into a settlement or agreement with the employer, such an agreement will be binding on all workmen except if such a settlement or agreement is in respect of dismissal, discharge, removal and termination of service or suspension of an employee. This obviously means that the Legislature has thought it fit to carve out an exception to the normal rule that all agreements regarding service conditions of the workmen in an establishment where a recognised Union exists are binding on every workman of the establishment irrespective of his membership of any Trade Union. In the present case, admittedly, besides providing for certain payments, the Settlement of February 2, 1988 related to the termination of the Petitioner's services while retaining his juniors. Such an agreement in respect of termination cannot be held to be valid and the clauses relating to the termination of the Petitioner's service must be severed from the rest of the agreement, which may be valid.

10. Mr. Nerlekar, learned counsel for Respondent No. 1 company, relied on the judgments in Herbertsons Ltd. v. Workmen of Herbertsons Ltd. and Ors., , Central Bank Employees Union and Ors. v. Central Bank of India and Ors., 1994-I-LLJ-1084 (Ker), Premier Tyres Ltd. v. Premier Tyres Worker's Association and Anr., 1994- I-LLJ-1084 (Ker) and I.T.C. Ltd. Workers' Welfare Association v. Management of I. T. C. Ltd. and Ors., in support of his contention that a settlement which is reached through negotiations and conciliation and is found to be advantageous and beneficial to the majority of the workmen cannot be challenged by an individual workman or a group of workmen. However, these judgments are all regarding service conditions applicable to the workmen and do not consider a case such as the present one where by means of a Settlement the services of 492 workmen have been retrenched. Therefore, these judgments, in my view, have no application to the present case.

11. The question still remains as to whether the Respondent No. 1 company has indulged in an unfair labour practice as complained under Items 1 and 4 of Schedule II of the 1971 Act. Item 1 of Schedule II. provides that it would be an unfair labour practice on the part of an employer to interfere with, restrain or coerce employees in the exercise of their right to organise, form, join or assist a trade union and to engage in concerted activities for the purposes of collective bargaining by threatening employees with discharge or dismissal if they joined a union and threatening a lock-out or closure if a union should be organised or granting wage increase to employees at crucial periods of union organisation with a view to undermine the efforts of the union at organisation. Item 4 of Schedule n deals with an unfair labour practice on the part of the employer to encourage or discourage membership in any union by discriminating against any employee by discharging or punishing an employee because he urged other employees to join or organise a union; discharging or dismissing an employee for taking part in any strike not being a strike which is deemed to be illegal; changing the seniority rating of employee because of union activities; refusing to promote employees to higher posts on account of their trade union activities; giving unmerited promotions to certain employees with a view to sow discord amongst the other employees to undermine the strength of their union and discharging office-bearers or active union members on account of their union activities. It is well settled that the provisions of the 1971 Act must be strictly construed as the consequences of the conclusion that an unfair labour practice has been committed by an employer or in certain instances by a trade union are severe.

12. There is an affidavit on record filed by the Petitioner stating that he was a member of Bharatiya Mazdoor Sangh and it was his case that the members of this Union have been axed from the company by means of the Settlement dated February 2, 1988. He has also stated that after his retrenchment, his place was filled in by his juniors in the Company. The affidavit filed by the employer does not in any way controvert these averments. However, it cannot be said that the services of the Petitioner had been terminated on account of his assisting a trade union. The exercise of organising or assisting a trade union is no doubt an on-going process. But such efforts should lead to the employer threatening the employees with discharge or dismissal if they join the union. This obviously means that this item is attracted at the initial stage when the employee decides to join the union. Admittedly, the Bharatiya Mazdoor Sangh of which the Petitioner is a member, was in existence for a long period of time and the petitioner was its member for a number of years. Therefore, it could not be said that he had been threatened with discharge or dismissal if he joined the union and there is no unfair labour practice under Item 1 of Schedule II.

13. Item 4 of Schedule II also is not attracted except for Item 4(c) i.e. changing seniority rating of an employee because of union activities. The Settlement entered into on February 2, 1988 with the recognised Union has in fact changed the seniority of the Petitioner as juniors to him have been retained in service while he has been retrenched. Obviously, this was done with a view to discourage membership of the trade union of which the petitioner was a member. Therefore, it must be concluded that Respondent No. 1 company had committed an unfair labour practice under Item 4(c) of Schedule II of the 1971 Act.

14. Further, there is nothing on record to show as to how and why the 318 workmen whose services were retained were more meritorious than those 492 workmen whose services were done away by means of a Settlement. Evidently, Respondent No. 1 company has retained one set of workmen in service regardless of merits and, therefore, Item 5 of Schedule IV of the 1971 Act is attracted. This being so, the Petitioner would be entitled to be reinstated in service. However, as he is nearing the age of retirement, no useful purpose would be served by reinstating him in service at this stage. The Respondent No. 1 company shall pay to the Petitioner the back wages from February 5, 1988 to date or till the age of his superannuation, whichever is earlier, within eight weeks from today as also gratuity and other legal dues. Respondent No. 1 company shall assist the Petitioner to claim his provident fund dues from the Provident Fund authorities. The amounts paid to the petitioner shall be spread over the entire period of his unemployment i.e. from 1988. The Petitioner would be entitled to seek exemption under the Income Tax Act.

15. Writ petition disposed of accordingly with no order as to costs.

16. Mr. Nerlekar, learned advocate for Respondent No. 1, prays for stay of this order for eight weeks. Stay refused as the Petitioner has been out of employment since 1988.

17. Issuance of certified copy expedited.