Bombay High Court
The Wardha Distt. Co.Op. Banks ... vs The Wardha Nagri Sahakari Bank ... on 3 May, 2019
Bench: R. B. Deo
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
WRIT PETITION NO.5615 OF 2007
The Wardha Nagri Sahakari Bank Ltd.,
Madhao Bhawan, Dhantoli, Wardha
through its Chief Executive Officer. ....... PETITIONER
...V E R S U S...
1] The Wardha District Cooperative
Banks Employees Union, through its
General Secretary Office at C/o The Wardha
District Central Cooperative Bank Ltd.,
Wardha.
2] The Member,
Industrial Court, Nagpur,
Civil Lines, Nagpur. ....... RESPONDENTS
WRIT PETITION NO.4872 OF 2010
The Wardha District Cooperative
Banks Employees Union, through its
General Secretary Office at C/o The Wardha
District Central Cooperative Bank Ltd.,
Wardha. ....... PETITIONER
...V E R S U S...
1] The Wardha Nagri Sahakari Bank Ltd.,
Madhao Bhawan, Dhantoli, Wardha
through its Chief Executive Officer.
2] The Member,
Industrial Court, Nagpur,
Civil Lines, Nagpur. ....... RESPONDENTS
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Shri U.M. Aurangabadkar, Advocate for Petitioner in
WP 5615/2007.
Shri S.D. Thakur, Advocate for Respondent 1 in WP
5615/2007.
Shri N.H. Joshi, AGP for Respondent 2/State in
WP 5615/2007.
---
Shri S.D. Thakur, Advocate for Petitioner 1 in WP
4872/2010.
Shri U.M. Aurangabadkar, Advocate for Respondent 1 in
WP 4872/2010.
Shri N.H. Joshi, AGP for Respondent 2/State in
WP 4872/2010.
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CORAM: ROHIT B. DEO, J.
DATE OF RESERVING THE JUDGMENT : 06.09.2018
DATE OF PRONOUNCING THE JUDGMENT : 03.05.2019
COMMON JUDGMENT:
1] Heard Shri U.M. Aurangabadkar, the learned counsel
for the petitioner, Shri S.D. Thakur, the learned counsel for the
respondent 1 and Shri N.H. Joshi, the learned Assistant
Government Pleader for the respondent 2/State.
2] These petitions which emanate from BIR Case 10 of
2003 instituted under section 78 and 79 of the Bombay Industrial
Relations Act, 1946 ('BIR Act') by the Wardha District Cooperative
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Bank Employees Union, Wardha ('Union) are heard together and
decided by this common judgment.
3] The Wardha Nagari Sahakari Bank Ltd., ('Bank') is a
Cooperative Society engaged in the business of banking and is
concededly covered under the BIR Act.
4] The Union is the representative Union under the BIR
Act.
5] The Union contends that the Bank employees 69
persons as Daily Deposit Collectors ('DDC') whose service
conditions are governed by the Model Standing Orders framed
under the BIR Act. The Union contends that the DDCs are in
continuous service of the Bank from their respective dates of
appointments and the work performed is manual, clerical and
skilled akin to the duties discharged by the Head Clerk. The Union
contends that DDCs have completed 240 days continuous service
and are paid commission of 3% of the amount of deposit collected.
The Union contends that the commission of 3% was reduced by
the Bank to 2.5% without issuing notice to the Union.
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The Union issued approach notice dated 31.10.2003 seeking
change in the service conditions of the DDCs, which went
unheeded. In this backdrop, the Union approached the Labour
Court seeking a direction that the DDCs be made regular and
permanent and be paid wages at par with wages paid to the Head
Clerk.
6] The Bank denied employee - employer relationship.
The Bank specifically contended that the DDCs are neither
employees of the Bank nor the members of the Union.
The certified standing orders are not applicable to DDCs.
The working hours of the DDCs are not controlled or regulated by
the Bank. The DDCs are not required to obtain sanction to the
leave. The nature of work performed by the DDCs is not clerical
and all that is expected of the DDCs is to collect the amount from
the customers and to deposit the same in the Bank.
7] The Bank further contended that regular staff is
engaged by following the prescribed norms and due procedure of
selection. The DDCs are not required to discharge the work daily
or for that matter for any particular number of days in a week or
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in a month. The Bank did not dispute the reduction of commission
on deposit collected, from 3% to 2.5%. The Bank contended that
the decision was a cost reduction measure consistent with the
policy decision of the Reserve Bank of India. The Bank
categorically denied the entitlement of the DDCs to the pay scale
of Head Clerk.
8] The Labour Court framed the following issues and
recorded its findings:
Issues. Findings.
1) Whether the applicants prove that they are employees Yes.
of the non-applicant under Section 3(13) of the B.I.R. Act,
1946?
2) Whether the applicants prove that all the applicants have No.
completed more than 240 days uninterrupted service with
non applicant and entitled to permanency?
3) Whether the applicants prove that the non applicant has Yes.
committed illegal change under Section 46 of the B.IR. Act,
1946?
4) Whether applicants are entitled to benefits as claimed? As per final
order.
5) If yes, how much amount? Difference
of
commission
only.
6) What order and relief? As per final
order.
9] The Labour Court, on consideration of the evidence
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on record held that the DDCs are employees of the Bank within
the meaning of section 3(13) of the BIR Act. The Labour Court
then held that the reduction of the commission paid to the DDCs
from 3% to 2.5% is an illegal change. The Labour Court held that
the DDCs are not regular and permanent employees nor is it
proved that the nature of work performed is akin to the work
performed by regular employees of the Bank. The Labour Court
declined to grant the relief of permanency or regularization or
parity of wages with the Head Clerk. The Labour Court allowed
the application partly by judgment dated 15.12.2005 and
restricted the relief to the declaration that the reduction of
commission is an illegal change.
10] The judgment of the Labour Court was assailed by
both the Bank and the Union. Appeal 1 of 2006 was preferred by
the Bank while Appeal 3 of 2006 was preferred by the Union.
By common judgment dated 20.10.2007 the Industrial Court
dismissed Appeal 1 of 2006 preferred by the Bank and partly
allowed Appeal 3 of 2006 preferred by the Union. The operative
order of the Industrial Court reads thus:
1) Appeal (BIR) No. 1/2006 filed by the
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Respondent-Bank is hereby rejected.
2) Appeal (BIR) No. 3/2006 filed by the
Applicant-Union is hereby partly allowed.
3) The Respondent-Bank is directed to withdraw
illegal change made by it and to reimburse the
amount of difference of the commission charges
to the employees concerned and to treat the
employees concerned (DDCs) enlisted in Exh.32
as its employees by paying them salary in the
pay-scale of Clerk from the date of filing of
Application (BIR) No. 10/2003, i.e. from
November 2003 and to absorb them
preferentially in the post of Clerk, as per
seniority amongst them, upon availability of
the posts in terms of order above.
4) One month's time is granted to the respondents
for compliance of the order.
5) In the circumstances, parties to bear their own
costs.
6) Record and Proceedings be sent back to Labour
Court, Wardha.
11] The Industrial Court held that the DDCs have
completed uninterrupted services for more than 240 days and are
entitled to the relief of regularization. The consideration of the
Industrial Court and the reasons recorded for molding the relief
reads thus:
16/- In the impugned order, even after considering
the evidence on record of uninterrupted services by
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the employees concerned, and when there is no
defence or submissions made on behalf of the
respondent-Bank that they are not continuously
working with it, surprisingly, the learned Labour
Court has observed that all the applicants (DDCs)
have not completed uninterrupted services for more
than 240 days. From the impugned judgment, it is
clear that the said observations and findings of the
learned Labour Court is without considering the
available material on record and without giving any
reasoning, in support of such findings. It has
observed cryptically that they have not completed
240 days service. This being the position, that much
part of the impugned judgment cannot be allowed to
sustain any more and has to be set aside.
Consequently, the further observations of the
learned Labour Court in respect of non-granting of
relief of permanency are incorrect. On that incorrect
cryptic finding the Labour Court has proceeded
further, making base thereof. The learned Labour
Court has totally ignored the available
material/evidence on record and thereby resulted in
miscarriage of justice. So also it seems that the
learned Labour Court has merely reproduced the
pleadings of the respondent-Bank without giving any
finding in respect of powers of the Labour Court
under Section 78 of the B.I.R. Act. From the
judgment referred to above, it is clear that such
relief can be granted in view of the continuous
working of the employees concerned, DDCs, from
initial appointment, till today. They are not only the
employees, but they are also entitled for the relief of
regularization of the services. The applicant-Union
has thus succeeded in making out case for getting
the relief, whereas the respondent-Bank has failed to
establish its case for not granting the reliefs, prayed
for. The point no.1 is therefore, answered
accordingly. Admittedly, no compliance has been
made prior to making such change.
17/- In view of the above observations and
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findings, it is to be seen as to what relief will meet
the ends of justice. No doubt, the applicant-union
has claimed regularization of services from the date
of completion of 240 days services by each of the
DDCs. As per Exh.32, there are 69 DDCs, so also,
their dates of employment and dates of birth have
been given, alongwith the educational qualifications.
From the record, it is clear that they are doing the
clerical and manual work since the date of their
initial employment, but at the same time, nothing
has been brought on record from the side of the
applicant-union that in fact, there is existence of
vacancies of these much posts, i.e. 69 posts, with the
respondent-Bank. If all of them are granted relief at
a time, it will be very difficult and may create
further complications. The relief in the manner,
asked for by the applicant-union, is also likely to
impose great financial burden and likely to affect it
seriously. In such circumstances, if the relief of
granting wages/pay-scales to the employees
concerned that of clerical grade, from the date of
filing of the B.I.R. Application No.10/2003 is
granted, i.e., from November 2003, then it will serve
the ends of justice. It will be just and proper for the
respondent/Bank that looking to the availability of
the vacancies in the clerical posts, the employees
concerned (DDCs) are absorbed as per their
seniority, as is clear from Exh.32, preferentially.
The respondent/Bank to give priority to these
employees as and when there is need of employing
clerical grade employee. The respondent/Bank,
admittedly, has absorbed about 10 DDCs in regular
employment. The respondent/Bank has further
failed to prove that why such relief cannot be
granted in favour of the employees concerned, in
view of the fact that it had earlier regularized about
10 DDCs in employment. Nothing has been clarified
on its behalf. The relief granted above will meet the
ends of justice. With such observations, following
order needs to be passed.
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12] Writ Petition 5615 of 2007 is preferred by the Bank
and Writ Petition 4872 of 2010 is preferred by the Union,
questioning the judgment in appeal. The Union is aggrieved to the
extent the relief of regularization and permanency and monetary
benefit is denied to the DDCs from the date of completion of 240
days continuous service.
13] I have heard the learned counsel Shri S.D. Thakur for
the Union and the learned counsel Shri U.M. Aurangabadkar for
the Bank at length. With the able assistance of the learned counsel
I have scrutinized the material on record and the reasons recorded
by the courts below.
14] Shri S.D. Thakur would submit that the Industrial
Court erred in molding the relief and in not granting the relief
with effect from the date on which the DDCs completed 240 days
of continuous service. Shri S.D. Thakur would heavily rely on the
provisions of the model standing orders to buttress the submission
that the DDCs are entitled to the relief of regularization from the
date of completion of 240 days continuous service. The obligation
of the employer to confer permanency on the day the employee
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completes 240 days of continuous service is absolute and admits of
no exception, is the submission. Shri S.D. Thakur would further
contend that the direction of the Industrial Court that the DDCs be
absorbed, preferably, as Clerk, as and when vacancies of Clerks
would occur is abdication of jurisdiction.
15] Shri U.M. Aurangabadkar, the learned counsel for the
Bank would submit that the Union did not have the locus to
ventilate the grievance of the DDCs who are commission agents
and not the employees of the Bank. The extended submission is
that the DDCs are not the members of the Union. Shri U.M.
Aurangabadkar assails the order in appeal as a non reasoned order
as regards the material aspects having bearing on the controversy.
Shri U.M. Aurangabadkar would further submit that the Labour
Court did not have the jurisdiction to adjudicate on the claim for
permanency. The Labour Court justifiable declined to consider the
claim of permanency and the Industrial Court in appeal erred in
overlooking that the Labour Court did not have the jurisdiction to
deal with the issue of permanency. Shri U.M. Aurangabadkar
would then submit that in the teeth overwhelming evidence on
record the Industrial Court erred in holding that the DDCs
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completed 240 days of continuous service. It is further submitted,
that in any view of the matter, the Industrial Court did not
appreciate that even if it is assumed, arguendo that the DDC an
employee, he is not a regular or permanent employee nor is he
entitled to the pay and other emoluments extended to permanent
and regular employees, the very nature of work being different
and not comparable with the work performed by a Clerk or any
other permanent or regular employee. Shri U.M. Aurangabadkar
would submit that the reference by the Union to the regularization
of 10 commission agents is misleading. The reference is de hors the
pleadings. Such a submission is raised during the course of
arguments and was rebutted by the Bank by pointing out that
there was no regularization as such and the DDCs resigned and
participated in the process of selection as fresh candidates and
were selected. Shri U.M. Aurangabadkar would submit that the
judgment in appeal militates against the enunciation of law in
Indian Banks Association v. Workmen of Syndicate Bank and others
reported in (2001) 3 SCC 36.
16] It is noticed from the judgment in appeal that the
decision of the Hon'ble Apex Court in Indian Banks Association v.
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Workmen of Syndicate Bank and others reported in (2001) 3 SCC
36 was pressed in service by both the Union and the Bank. It
would be apposite to consider the said decision in some detail
since the question which fell for consideration was whether the
commission agents or Deposit Collectors employed in the Banks
specified in the reference were entitled to pay scales, allowances
and other service conditions available to regular clerical
employees of those Banks.
16.1] The directions issued by the Industrial Tribunal,
which were assailed before the Hon'ble Apex Court, read thus:
"All those Deposit Collectors and Agents who
are below the age of 45 years on 3.10.1980 (the
date of the first reference of this industrial dispute)
shall be considered for regular absorption for the
post of Clerks and cashiers if they are matriculates
and above including qualified Graduates and Post
Graduates. They may be taken to banks service as
regular employees if they pass the qualifying
examination conducted by the banks, Those who are
absorbed shall be treated on par with regular
clerical employees of the Bank. Those who are
qualified with 8th Class and below Matriculations
shall be considered for absorption as Sub-Staff by
conducting qualifications examination.
As regards the Deposit Collectors and Agents
who are above 45 years of age on the date
3-10-1980 and also those who are unwilling to be
absorbed in Regular Banks service they shall be paid
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the fall back wages of Rs. 750.00 per month linked
with minimum deposit of Rs. 7,500,00 per month
and they should be paid incentive remuneration at 2
per cent for collection of over and above 7,500.00
per month and they should also pay uniform
conveyance of Rs. 50 per month for deposit of less
than Rs. 10,000.00 and Rs. 100.00 per month for
deposits of more than Rs. 10,00.00 upto or above
Rs. 30,000,00 per month they should be paid
Gratuity of 15 days commission for each year of
service rendered."
16.2] The High Court set aside the direction to absorb the
Deposit Collectors as the regular staff and upheld the other
directions of the Tribunal regarding payment of conveyance
allowance, gratuity etc.
16.3] The contention before the Apex Court was that the
Deposit Collectors could not be treated as workmen since their
engagement was purely a matter of contract between the parties.
The contention was that the Deposit Collectors did their work
without any control or supervision of the Banks and were free to
do other work for and on behalf of other employer/s. It was
submitted that the Deposit Collectors had no fixed time or period
to devote their work as Deposit Collectors or for their attendance
in the Bank. It was further emphasized that there was no
qualification or age limit for engagement as a Deposit Collectors.
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16.4] The Hon'ble Apex Court confirmed the findings of the
Tribunal that the Deposit Collectors were workmen within the
meaning of section 2(5) of the Industrial Disputes Act.
16.5] In paragraph 26 the Hon'ble Apex Court held that the
submission that the Banks have no control over the Deposit
Collectors cannot be countenanced. Paragraph 26 reads thus:
26. We also cannot accept the submission that
the banks have no control over the Deposit
Collectors. Undoubtedly, the Deposit Collectors are
free to regulate their own hours of work, but that is
because of the nature of the work itself. It would be
impossible to fix working hours for such Deposit
Collectors because they have to go to various
depositors. This would have to be done at the
convenience of the depositors and at such times as
required by the depositors. If this is so, then no time
can be fixed for such work. However, there is control
inasmuch as the Deposit Collectors have to bring the
collections and deposit the same in the banks by the
very next day. They have to then fill in various
forms, accounts, registers and pass books. They also
have to do such other clerical work as the bank may
direct. They are, therefore, accountable to the bank
and under the control of the bank."
16.6] Dealing with the direction to absorb the Deposit
Collectors as regular workmen the Hon'ble Apex Court articulates
thus:
28. Mr. Nageshwar Rao is right in his
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submission that the concession was not binding on
his clients. However, what has been conceded has
been correctly conceded. No question arose of
directing absorption of the Deposit Collectors as
regular workmen. No such demand had been made
and, therefore, there could have been no such
direction. Such direction were beyond the reference.
Even otherwise, the question of absorption would be
fully covered by an authority of this Court in the
case of Union of India v. K.V. Baby. In this case it
has been held that persons who are engaged on the
basis of individual contracts to work on commission
basis cannot be equated with regular employees
doing similar work. It has been held that the mode
of selection and qualifications are not comparable
with those of the employees, even though the
employees may be doing similar works. In the
present case, not only are the modes of selection and
qualifications not comparable, but even the work is
not comparable. The work which the Deposit
Collectors do is completely different from the work
which the regular employees do. There was thus no
question of absorption and there was also no
question of the Deposit Collectors being paid the
same pay scales, allowances and other service
conditions of the regular employees of the banks.
16.7] Thus it can be seen that while the Hon'ble Apex Court
notes that no demand of absorption was made, the Hon'ble Apex
Court holds that even otherwise there was no question of
absorption or the Deposit Collectors being paid the same pay
scales, allowances and other service conditions of the regular
employees of the Bank. The Hon'ble Apex Court emphasized the
difference between persons who are engaged on the basis of
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individual contracts to work on commission and regular employees
doing similar work.
16.8] The Industrial Court clearly erred in brushing aside
the reliance of the Bank on the said decision noting only the first
part of paragraph of 28 which records that no demand for
absorption was made. If paragraph 28, and indeed the decision, is
holistically read, the irresistible conclusion is that the judgment in
appeal militates against the enunciation of law in Indian Banks
Association v. Workmen of Syndicate Bank and others.
17] Shri S.D. Thakur made a valiant effort to persuade me
to hold that the judgment in Indian Banks Association v. Workmen
of Syndicate Bank and others is distinguishable. Shri S.D. Thakur
would contend that the said decision did not consider the effect
and implication of a provision akin to the model standing orders.
I am afraid I cannot concur with the said submission.
18] The evidence on record overwhelmingly shows that
the mode of selection, the qualification and the nature of work of
the DDCs cannot be compared with those of a regular and
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permanent employee. While the courts below have recorded a
finding that the DDCs are employees within the meaning of
section 3(13) of the B.I.R. Act, in view of the decision in Indian
Banks Association v. Workmen of Syndicate Bank and others the
DDCs are not entitled to be treated at par with regular and
permanent employees of the Bank as regards the service
conditions.
19] Shri S.D. Thakur invites my attention to Standing
Order 4B of the Model Standing Order framed in exercise of power
conferred by the Government of Maharashtra by sub-section (5) of
section 35 of the B.I.R. Act which reads thus:
4B. Conformation of temporary employees. --
A temporary employee, who has put in 190 days
uninterrupted service in aggregate in any
undertaking of season nature of 240 days
uninterrupted service in the aggregate in any other
establishment, during a period of preceding twelve
calendar months shall be made permanent in that
undertaking by an order in writing signed by the
Manager of any person authorised in that behalf by
the Manager, irrespective of whether or not his
name is on the master roll of the undertaking
throughout the period of the said twelve calender
months.
Explanation.--For purposes of this clause any
period of interrupted service V caused by cessation of
work which is not due to any fault of the employee
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concerned shall not be counted for the purpose of
computing 190 days or 240 days as the case may be
for making a badli or temporary employee
permanent.
20] Once it is held that the DDCs cannot be equated with
regular and permanent employees in view of the nature of work
performed, the qualification and the mode of selection the
question of conferring permanency on the basis of applicability of
Model Standing Orders 4B does not arise. The applicability of
Model Standing Orders 4B to seasonal employees was considered
by the Hon'ble Apex Court in Maharashtra State Co-operative
Cotton Growers' Marketing Federation Ltd. And another v.
Maharashtra State Co-operative Cotton Growers' Marketing
Federation Employees' Union and another reported in AIR 1994 SC
1046 thus:
9. Coming now to the next contention, viz.,
that in the appointment letter of the seasonal
employees it has been specifically mentioned that
their conditions will be governed by the Model
Standing Orders and Model Standing Order No. 4-B
which is quoted above, requires that the employees
who have put in 240 or more days of service should
be made permanent, we are of the view that the
contention has no substance. It must in the first
instance be remembered that the Model Standing
Orders do not apply to seasonal employees.
Secondly, the seasonal employees in the present case
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are governed by their own service conditions, which
as pointed out above, have in material respects no
relation to the service conditions of the perennial
employees who are governed by the said Model
Standing Orders. It is, therefore, incorrect to say
that all the Model Standing Orders are applicable to
the seasonal employees. By the appointment letter,
the Model Standing Orders have only been
incorporated in the other service conditions of the
seasonal employees only to the extent that the
specific service conditions of the seasonal employees
are silent on the aspects covered by the Model
Standing Orders and which orders would necessarily
apply to the seasonal employees. The Model
Standing Orders, therefore, are applicable to the
seasonal employees mutatis mutandis. The Model
Standing Order No. 4-B in particular will be
inapplicable to the seasonal employees because of
the very nature of their employment and hence it
cannot be read into the service conditions of the
seasonal employees. Lastly, a reading of the said
Model Standing Order No. 4-B would itself make it
clear that it is applicable to the perennial employees
only. It speaks of temporary workmen in any
establishment of a seasonal nature or in other
establishment during a period of preceding twelve
months. Admittedly, the appellant-Federation's
establishment is not of a seasonal nature. It is only
some employees employed therein who are seasonal.
Secondly, as far as the employees in the other
establishments spoken of there, are concerned, they
can only be such employees who are employed for
perennial work but for some reason or the other are
not allowed to complete 240 days in such perennial
work. It is, therefore, clear that the said Model
Standing Order does not apply to seasonal
employees. Hence this contention has also to be
rejected.
Model Standing Order 4B mandates that a temporary
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employee who has put in 240 days uninterrupted service in the
aggregate during the period preceding 12 calendar months shall
be made permanent. Temporary employee is defined as an
employee who has been appointed for a limited period for work
which is of an essentially temporary nature or who is employed
temporarily as an additional employee in connection with
temporary increase in work of a permanent nature and includes an
employee who is appointed in a temporary vacancy of a
permanent employee or probationer. The underlying logic is that if
the work continues for uninterrupted period of 240 days, the work
would not be of temporary nature nor would the engagement be
necessitated by temporary increase in work of a permanent nature.
21] The judgment in appeal directs the Bank to pay the
DDCs salary in the pay scale of Clerk and to absorb them
preferentially in the clerical cadre upon availability of the posts.
Such a direction is unsustainable, even on the touchstone of Model
Standing Orders 4B, even if it is assumed arguendo that the said
model standing order has any relevance or applicability.
22] The judgment of the Labour Court, to the extent the
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reduction of the commission from 3% to 2.5% is unexceptionable.
23] However, the judgment of the Industrial Court in
Appeal 3 of 2006 preferred by the Union is unsustainable and is
quashed and set aside.
24] In the result, while Writ Petition 4872 of 2010
preferred by the Union is dismissed, Writ Petition 5615 of 2007
preferred by the Bank is partly allowed. The judgment dated
15.12.2005 rendered by the Labour Court in B.I.R. Case 2 of 2003
is affirmed and the judgment of the Industrial Court in B.I.R.
Appeal 2 of 2003 is set aside. These petitions are disposed of
accordingly with no order as to costs.
JUDGE
NSN
