Bombay High Court
M/S. Bennett Coleman And Co. Ltd vs Mumbai Mazdoor Sabha on 13 June, 2016
Bench: S.C. Gupte
sat 1/12 wp 5312-2012.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 5312 OF 2012
M/s.Bennet Coleman & Co.Ltd. ...Petitioner
vs.
Mumbai Mazdoor Sabha ....Respondent
Mr.S.K. Talsania, Senior Advocate with Mr.V.P. Vaidya with Mr.Sagar Sheth
for Petitioner.
Mr.Arshad Shaikh I/b. Mr.Gautam Yadav for Respondent No.1.
CORAM : S.C. GUPTE, J.
13 JUNE 2016
ORAL JUDGMENT :
This petition, filed under Articles 226 and 227 of the
Constitution of India, challenges an order passed by the Industrial Court,
Mumbai, on a complaint filed by the Respondent Union, under Section 28
read with Item 5 of Schedule II and Items 9 and 10 of Schedule IV of the
MRTU and PULP Act, 1971. In its impugned order, the Industrial Court
upheld the Respondent's contention of unfair labour practice only under
Item No.9 of Schedule IV and dismissed the complaint as regards Item 5 of
Schedule II and Item 10 of Schedule IV. Accordingly, in this petition, we are
concerned only with the acceptance of the complaint of unfair labour
practice under Item 9 of Schedule IV.
2 The basis of the complaint of the Respondent union was a
notice issued by the Petitioner proposing four measures with a view to
"maintain proper discipline". The first three measures (Item Nos.1 to 3)
sat 2/12 wp 5312-2012.odt
dealt with the matter of attendance (namely, debiting of "casual Leave" for
three late reportings, "leave without pay" if the concerned employee had no
casual leave to his credit, and forwarding of an "outdoor duty slip" for
approval for proceeding on outdoor duty). The fourth measure (Item No.4)
provided for treatment of holidays, including the weekly holidays, falling
within the period of leave, as follows :
"All holidays including the weekly holidays falling within the
period of any kind of leave shall be treated as leave."
It was the case of the Respondent union that these four measures amounted
to a change of service conditions and accordingly, required a notice of
change within the meaning of Section 9-A of the Industrial Disputes Act,
1947. Whilst the Industrial Court rejected the Respondent union's case that
Item Nos.1 to 3 of the notice amounted to a change of service conditions, it
held that insofar as Item No.4 was concerned, it was indeed a change in
service conditions and required a notice of change in accordance with
Section 9-A. This determination is challenged in the present petition.
3 Mr.Talsania, learned Senior counsel appearing for the
Petitioner, urges the following points :
(i) In the first place, he submits that the service conditions
themselves have to be, in the first place, found by the court in a reference
under the Industrial Disputes Act and cannot be found for the first time by
the Industrial Court considering a complaint under Section 28 read with
Item 9 of Schedule IV of MRTU and PULP Act. He relies upon the judgment
of the Supreme Court in the case of Cipla Ltd. Vs. Maharashtra General
sat 3/12 wp 5312-2012.odt
Kamgar Union1 in this behalf.
(ii) Secondly, it is submitted that standing orders are statutorily
imposed service conditions and that an employer desiring to implement the
standing orders cannot be said to effect any change in service conditions.
He relies on the judgments of the Supreme Court in the cases of Rajasthan
State Road Transport Corporation vs. Krishna Kant 2 and Western India
Match Co.Ltd. vs. Workmen3 in support.
(iii) Thirdly, it is submitted that standing orders supersede any
contractual stipulation to be found in the contract of service between the
employer and the employees.
4 Section 9-A is in the following terms :
"9-A. Notice of change.- No employer, who proposes to
effect any change in the conditions of service applicable to
any workman in respect of any matter specified in the
Fourth Schedule, shall effect such change,--
(a) without giving to the workmen likely to be affected by
such change a notice in the prescribed manner of the
nature of the change proposed to be effected; or
(b) within twenty- one days of giving such notice:
Provided that no notice shall be required for effecting any
such change--
(a) where the change is effected in pursuance of any
settlement or award; or
(b) where the workmen likely to be affected by the change
1 (2001) 3 SCC 101
2 (1995) 5 SCC 75
3 (1974) 3 SCC 330
sat 4/12 wp 5312-2012.odt
are persons to whom the Fundamental and Supplementary
Rules, Civil Services (Classification, Control and Appeal)
Rules, Civil Services (Temporary Service) Rules, Revised
Leave Rules, Civil Service Regulations, Civilians in Defence
Services (Classification, Control and Appeal) Rules or the
Indian Railway Establishment Code or any other rules or
regulations that may be notified in this behalf by the
appropriate Government in the Official Gazette, apply; or
(c) where the change is effected due to updating or
replacing of the existing machinery, computerisation or
increase in the immovable property and increase in
production and that,-
(i) such change shall not affect the total wages of the
workmen and their hours of work; and
(ii) the employer provides all the legitimate and required
facilities such as training etc., to the workmen to acquire
the skill of new job.
The Fourth Schedule of the Industrial Disputes Act, which
provides for the conditions of service for the change in which a notice is
required to be given under Section 9-A, is as follows :
" THE FOURTH SCHEDULE
(See section 9-A)
CONDITIONS OF SERVICE FOR CHANGE OF WHICH
NOTICE IS TO BE GIVEN
1. Wages, including the period and mode of payment;
2. Contribution paid, or payable, by the employer to any
provident fund or pension fund or for the benefit of the
workmen under any law for the time being in force;
3. Compensatory and other allowances;
4. Hours of work and rest intervals;
sat 5/12 wp 5312-2012.odt
5. Leave with wages and holidays;
6. Starting, alteration or discontinuance of shift working
otherwise than in accordance with standing orders;
7. Classification by grades;
8. Withdrawal of any customary concession or privilege or
change in usage;
9. Introduction of new rules of discipline, or alteration of
existing rules, except in so far as they are provided in
standing orders;
10. Rationalisation, standardisation or improvement of
plant or technique which is likely to lead to retrenchment
of workmen;
11. Any increase or reduction (other than casual) in the
number of persons employed or to be employed in any
occupation or process or department or shift, not
occasioned by circumstances over which the employer has
no control."
The service conditions, with which we are concerned in the
present case, are under Items 5 and 8 above. The standing orders applicable
to the Petitioner, which were sanctioned in 1958, had the following
relevant provision in respect of leave :
"All holidays including the weekly holidays falling
within the period of any kind of leave shall be treated as
leave."
5 It is not disputed that this particular standing order was not
implemented at any time till the issuance of the circular referred to above.
On the other hand, the 'terms and conditions of service' issued by the
sat 6/12 wp 5312-2012.odt
Petitioner to its employees in the year 1966 had the following provision in
respect of leave rules :
"6. LEAVE RULES:
All applications for leave must be made on the prescribed
forms and leave will be granted subject to the exigencies
of work.
Privilege leave will be allowed only after one year's
service and applications must normally be sent at least a
fortnight before the commencement of the leave period.
Ordinarily privilege leave will not be granted for a period
of less than 7 days at a time. While calculating privilege
leave Sundays and holidays will be excluded.
Casual leave can be taken only in the year in which it
accrued. Previous sanction must be obtained before this is
enjoyed. Sundays and Holidays will not ordinarily be
allowed to be prefixed or suffixed to casual leave. Casual
leave will be non-cumulative."
Thus, for nearly 44 years between 1958 and 2002, the applicable service
conditions, insofar as leave was concerned, required exclusion of
intervening Sundays and holidays whilst calculating privilege leave availed
of by employees. In any event, this particular stipulation in 'terms and
conditions of service' can be termed as a customary concession or privilege
or a matter of usage. The case of the Respondent union before the
Industrial Court was that inasmuch as there is a change in the service
condition, which is consistently followed for more than 44 years either as a
matter of leave with wages and holidays or as a matter of customary
concession or privilege or usage, and such change in service conditions is
covered by Section 9-A of the Industrial Disputes Act, 1947, it was
obligatory on the part of the Respondent to give a notice of change as
sat 7/12 wp 5312-2012.odt
provided in that section.
6 The Industrial Court found that the Petitioner's witness had
admitted in evidence that in spite of having a provision to the contrary in
the standing orders, so far holidays and non-working days falling within the
period of earned leave were not included in the leave and that the notice of
2 May 2002 did propose to include these holidays and non-working days
within the period of leave. The Industrial Court held that though the
standing orders were certified in the year 1958, till the issuance of notice
dated 2 May 2002, the relevant clause concerning leave in the standing
orders was not implemented. The Industrial Court held that the change was
introduced by the notice of 2 May 2002 as a change of service conditions
within the meaning of Section 9-A of the Industrial Disputes Act and since
there was no notice of such change, the complainant union had proved an
unfair labour practice falling under Item 9 of Schedule IV of the MRTU and
PULP Act, 1971. Accordingly, the Industrial Court directed the Petitioners to
desist from indulging in such unfair labour practice and discontinue the
same forthwith. The Petitioner was prohibited from implementing Item No.
4 of the notice dated 2 May 2002 without issuing notice under, and
complying with, Section 9-A.
7 As held by our Court in S.G. Chemicals and Dyes Trading
Employees Union vs. S.G. Chemicals and Dyes Trading Ltd. 4, non-
compliance of any statutory provision must be regarded as a failure by the
employer to implement an award, settlement or agreement. It is an implied
condition of every agreement, including any settlement, that the parties
thereto will act in conformity with law. Such provision need not be
4 1986 DGLS (Supreme Court) 478
sat 8/12 wp 5312-2012.odt
expressly stated in any contract. To the same effect are the observations of
our court in the case of Dalanvalan Imarat Bandhkam & Patbandhare
Kamgar Union vs. State of Maharashtra5. Our court was considering in
that case a breach of Section 33(1)(a) of the Industrial Disputes Act, 1947
and held that such breach would lead to an unfair labour practice within
the meaning of Item 9 of Schedule IV. Both Section 33(1)(a) and Section 9-
A of the Industrial Disputes Act deal with protection of conditions of
service, the only difference being that Section 9-A applies when there is no
reference pending, whereas Section 33 applies when there is a reference
pending. The decision, accordingly, applies with equal force to the facts of
the present case. To put the controversy finally to rest, there is also a
Division Bench judgment of our court in the case of Hindustan Lever Ltd.
vs. Hindustan Lever Employees Union 6 which deals with an illegal change
of service conditions under Section 9-A of the Industrial Disputes Act, 1947
itself. The Division Bench held that non-service of notice under Section 9-A
before effecting such change amounts to an unfair labour practice under
Item 9 of Schedule IV of the MRTU and PULP Act, 1971. To the same effect,
are the observations of our court in the case of Mazgaon Dock Ltd. vs.
Ratnakar Sadashiv Vatare7.
8 In the case in hand, all that we need to consider is whether or
not there is a change in the service conditions within the meaning of the
Fourth Schedule of the Industrial Disputes Act read with Section 9-A
thereof. The relevant stipulation in the 'terms and conditions of service'
cannot be termed as anything but a service condition concerning leave. In
any event, being a long standing practice of nearly 44 years, it can also be
5 1991 (4) Bom.C.R. 111
6 2006 1 CLR 543
7 1998 I CLR 1071
sat 9/12 wp 5312-2012.odt
termed as a customary concession or privilege or usage. When there is any
change in the relevant stipulation concerning leave with wages and holidays
or when a customary concession, privilege or usage in respect of calculation
of leave with wages and holidays is withdrawn, a change does take place in
conditions of service within the meaning of Section 9-A read with the
Fourth Schedule of the Industrial Disputes Act, 1947.
9 When the Industrial Court considers a complaint under Section
28 read with Item 9 of Schedule IV of the MRTU and PULP Act, 1971 as to
whether or not a change has occurred in service conditions within the
meaning of Section 9-A read with the Fourth schedule of the Industrial
Disputes Act and whether non-service of a notice under Section 9-A
accordingly amounts to an unfair labour practice within the meaning of
Item 9 of Schedule IV of the MRTU and PULP Act, what the court considers
is the very merits of the controversy brought before it, namely, whether or
not there was a service condition as alleged within the meaning of Schedule
IV and whether there is any change in it within the meaning of Section 9-A.
The court's consideration of these matters cannot be likened to the exercise
of jurisdiction by the Labour or Industrial Court under Section 28 of the
MRTU and PULP Act in the face of a contest concerning the existence of
relationship of employer and employee between the parties. The existence
of a relationship of employer and employee in the latter case is a
jurisdictional fact. Only when such relationship exists, can the Labour or the
Industrial Court, as the case may be, can assume jurisdiction to find an
unfair labour practice under Section 28 of the MRTU and PULP Act. The
case of Cipla Ltd. (supra) is on the footing that if employees are working
under a contract covered by the Contract Labour (Regulation and Abolition)
Act, then it is clear that the Labour Court or the Industrial Court cannot
sat 10/12 wp 5312-2012.odt
have jurisdiction to deal with the matter as it falls within the province of an
appropriate government to abolish the same. If a complaint is taken to the
Labour Court that workmen were engaged by the company through a
contractor and though that was the ostensible relationship, the true
relationship between the company and the workman in question is that of
master and servant, such complaint would clearly be beyond the jurisdiction
of the Labour Court under Section 28 of the MRTU & PULP Act even if we
consider the powers of the Labour Court under Section 32 of that Act. The
Court held that the provisions of the Act are summary in nature and give
drastic remedies to the parties concerned and that elaborate consideration
in the complaint as to whether there is a relationship of employer and
employee between the parties cannot be gone into by the court. If a dispute
exists as to the very relationship of employer and employee, the Labour
Court or Industrial Court under the MRTU and PULP Act is not an
appropriate court to decide such question and the matter must go under a
reference before the authorities under the Industrial Disputes Act. Such is
not the matter with the case in hand. In the present case, whether there is a
service condition regarding leave with wages and holidays which is altered
or whether any customary concession or privilege is withdrawn or there is
any change in usage, are matters which reflect on the merits of the
controversy. That is precisely what the Industrial Court has to decide when
a complaint is taken before it that there is non-compliance of Section 9-A
read with the Fourth Schedule of the Industrial Disputes Act, and such non-
compliance amounts to an unfair labour practice under Item 9 of Schedule
IV of the MRTU and PULP Act. The judgment of Cipla Ltd. (supra) has,
therefore, no application to such a case.
10 Insofar as the standing orders are concerned, no doubt it is
sat 11/12 wp 5312-2012.odt
true that the standing orders are statutorily imposed conditions of service
and supersede any contract. But that only means that no one can contract
out of the provisions of the standing orders in the sense that the
beneficiaries of the standing orders are deprived of the benefits thereunder.
Nothing prevents an employer from giving better conditions of service to his
employees than what is statutorily imposed by the standing orders. It
cannot be said that when a service condition offers a better condition of
service concerning a particular matter, that condition must still yield to a
standing order. Standing orders, as statutorily imposed service conditions
which cannot be contracted out from, require that no employer offers
service conditions to his employees adverse to the standing orders. The
standing orders, as held by the Supreme Court in the case of Rajasthan
State Road Transport Corporation (supra), cannot be elevated to the
status of statutory provisions requiring compliance as a matter of law.
11 Mr.Talsania was at pains to point out that mere non-
implementation of a statutorily imposed service condition, namely, standing
order, does not amount to a service condition in itself. He submitted that
after all, the relevant standing order was simply not implemented all this
while, but in any event, if the employer now wants to implement such
standing order, it does not amount to a change in service conditions. The
argument is nothing but a feeble attempt at hair splitting. We are not
concerned here merely with the case of non-implementation of a particular
standing order but with a specific service condition forming part of the
service contract, namely, that holidays and non-working days within a
period of leave shall be excluded for the purpose of calculation of leave. In
nearly 44 years, the Petitioner company offered this service condition with
respect to leave with wages and holidays to its employees. In any event, as I
sat 12/12 wp 5312-2012.odt
have pointed out above, this condition could certainly be termed as a
customary concession or privilege or a matter of usage insofar as leave to be
availed of by the employees is concerned. A concession or a privilege or a
usage can also be a concession from the relevant standing order itself.
Inasmuch as such customary concession or privilege is withdrawn or there
is a change in usage, such withdrawal or change does call for a notice
within the meaning of Section 9-A read with the Fourth Schedule to the
Industrial Disputes Act.
12 In any view of the matter, there is no infirmity in the impugned
order of the Industrial Court. The petition has no merit. The petition is
accordingly dismissed. There shall be no order as to costs.
12 On the application of Mr.Talsania, the stay granted by the
Industrial Court of the impugned order on 8 May 2012 and since continued
by this Court in its order dated 18 June 2012, shall continue to operate for
a period of six weeks from today.
(S.C. Gupte, J.)
