Case BriefsHigh Courts

Bombay High Court: S.C. Gupte, J., addressed a group of petitions that challenged four sets of identical awards passed by Labour Courts under the Industrial Disputes Act, 1947.

What led to Industrial Disputes and Complaints of Unfair Labour Practice?

Workmen’s case was that though the work in the factory was of perennial nature, it was performed through temporaries from a pool of workers by a rotational system, seeing it that throughout the relevant period none could complete 240 days of continuous service and thus keeping them away from secure permanent jobs.

700 workmen approached the Industrial Court with complaints of unfair labour practice invoking items 5, 6 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

A group of 300 workmen chose to initiate conciliation proceedings under the Industrial Disputes Act, 1947 upon failure of which, the State Government referred the matters to Labour Courts for adjudication.

Issues for Consideration:

Precise issues, which arise for the consideration of this Court are as follows:

(I) Whether the termination of services of temporary workmen in the present case could be termed as termination as a result of non-renewal of the contract of employment on its expiry or under a stipulation in that behalf contained in the contract and thus, amounting to an exception to the definition of ‘retrenchment’ contained in Clause (oo) of Section 2 of the ID Act? Or whether the rotational arrangement, such as the one in the present case, where there are continuous temporary engagements of the same workmen over long periods of time (adopted as a strategy to deny benefits of permanency to the concerned workmen), does not amount to an engagement on a fixed period contract so as to form an exception under sub-clause (bb) of Clause (oo) of Section 2 of the ID Act?

(II) Whether,

(a) Sundays and holidays during the period of service could be counted within 240 days as per the applicable Standing Orders so as to make up aggregate service of 240 days in a year within the meaning of the Standing Orders and

(b) such 240 days should be reckoned as forming part of the calendar year of 12 months immediately preceding the dates of termination?

(III) Should a Labour Court dealing with terminations of workmen in a reference under the ID Act refuse to consider their claim of permanency?

The two factual aspects here are as follows:

  • Whether for inquiry Court can simply focus on the last termination of each of these workmen and disregard their earlier engagements and terminations?
  • Rotational Pattern said to have been adopted for engagement of these workmen – whether such pattern exists, for if it does, the legal question as to whether the terminations, including the last, come within the definition of retrenchment under Section 2(oo) and not within the excepting clause, namely, clause (bb) thereof

Analysis, Law and Decision

Clause (bb) as referred above applies to two situations:

  • where the termination is a result of non-renewal of the contract of employment between the employer and the concerned workman upon its expiry; and
  • where such termination is the result of a contractual stipulation contained in the contract of employment.

In the present case, the company’s is with regard to the contract made for a specific period and its non-renewal upon expiry.

The respondent company employed a rotational scheme for more than 13 years.

A pool of temporaries is maintained and anywhere between four to eight thousand temporaries from out of this pool are employed in rotation, some of them on 8 to 14 times, each time for a duration not exceeding seven months.

The classical idea behind retrenchment has been surplusage. A fixed period contract, on the other hand, implies either that for some particular work or project or due to a spurt in the demand and the resultant need for increased activity, there is a special need for a certain employee or number of employees and accordingly, need for a contract of employment for the particular work or project, or for the particular fixed period.

Court notes in the present case to be perennial work, work which is no different from what is performed by the permanent workmen of the company, for which temporaries were engaged. The said engagement was found to be over 13 years.

Bench found that the employment of the workmen in the present case was neither for any particular work or project nor was brought to an end after a fixed period due to wanting of work upon expiry of the period of contract.

The engagements were brought to an end purportedly at the expiry of the stipulated period of contract only to see that they get an artificial break (during which others from the waiting list were employed) only to be re-employed and this went on – again and again.

High Court in view of the above discussion stated that the above pattern appeared to have been designed with a view to avoiding any legitimate claim of permanency of tenure on the part of workmen concerned. 

Deprivation of Status and Privileges of Permanent Employees

Clear recipe of an unfair labour practice, notorious in the industry, of employing ‘badlis’, casuals or temporaries and continuing them as such for years, with the object of depriving them of the status and privileges of permanent employees.

Nature of Engagement of Workmen

Whether on a fixed tenure contract or colourable engagement on a fixed term, the real engagement being on a long term basis by adopting a rotational pattern, so as to avoid any claim of permanency.

Bench in view of the evidence recorded, held that the conclusions of the Labour Court, simply rendered as tag-lines, that there was no rotational pattern, or that it could not be said that service of anyone temporary workman was terminated and in his place and category another was employed offended the Wednesbury Principles and could not stand the scrutiny under Articles 226 or 227 of the Constitution of India.

Whether the workmen were illegally retrenched; whether, by reason of their employment (i.e. the last employment) being for a fixed tenure, their retrenchment formed an exception to the main part of Section 2(oo) of the ID Act, by falling within clause (bb) thereof.

High Court expressed that it cannot be gainsaid that both parties, being fully aware of the terms of reference and its scope, made their cases in extenso on the aspects of past engagements of the concerned workman in a rotational pattern and artificial breaks given to them so as to avoid completion of 240 days of continuous service and these were very much part of the trial before the Labour Court. It was thus clearly within the remit of the reference court to decide the issue.

Adding to its observations Court held that neither on principle nor on authority, these workmen were liable to be made permanent under Standing Order 4C by reason of completion of 240 days of continuous service in twelve preceding calendar months within the meaning of Standing Order 4C, therefore, issue no. (II) was decided against the petitioners.

Issues (I) and (III) were decided in favour of the petitioners, in light of which the impugned labour court awards were to be quashed and set aside.

Further, the Bench added that considering that the terminations challenged took place in the year 1997/98, more than twenty long years back, it would not be in the interest of justice to remit the references to the Labour Courts for consideration of monetary relief in lieu of reinstatement.

Therefore, the Court proposed to consider monetary relief in lieu of the reinstatement based on the material produced before the Court.

Bench relied upon the case of  Bajaj Auto Ltd. v. Bhojane Gopinath D, (2004) 9 SCC 488 as a model for determining compensation.[Sunil Pralhad Khomane v. Bajaj Auto Ltd., 2021 SCC OnLine Bom 129, decided on 01-02-2021]

Amendments to existing lawsLegislation Updates

Industrial Relations Code, 2020 received Presidential Assent on 28-09-2020.

The Industrial Relations Code, 2020

Industrial Relations Code has been introduced for amalgamating, simplifying and rationalising the relevant provisions of ––

(a) the Trade Unions Act, 1926;

(b) the Industrial Employment (Standing Orders) Act, 1946; and

(c) the Industrial Disputes Act, 1947.

Purpose and Objective

The said legislation provides a broader framework to protect the rights of workers to form unions, to minimise the friction between the employers and workers and to provide provisions for investigation and settlement of industrial disputes.

The object of the proposed legislation is to achieve industrial peace and harmony as the ultimate pursuit in resolving industrial disputes and to advance the progress of the industry by bringing about the existence of harmony and cordial relationship between the employers and workers.

Salient Features:

(i) to define “workers” which includes the persons in supervisory capacity getting wages up to eighteen thousand rupees per month or an amount as may be notified by the Central Government from time to time;

Fixed-Term Employment

(ii) to provide for fixed-term employment with the objective that the employee gets all the benefits like that of a permanent worker (including gratuity), except for notice period after the conclusion of a fixed period, and retrenchment compensation. The employer has been provided with the flexibility to employ workers on a fixed-term basis on the basis of requirement and without restriction on any sector;

Definition of “Industry” Revised

(iii) to revise the definition of “industry” that any systematic activity carried on by co-operation between the employer and workers for the production, supply or distribution of goods or services with a view to satisfying human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature) with certain exceptions;

Concerted Casual Leave under “STRIKE”

(iv) to bring concerted casual leave within the ambit of the definition of strike;

Adequate Representation of Women Workers

(v) to provide the maximum number of members in the Grievance Redressal Committee up to ten in an industrial establishment employing twenty or more workers. There shall be an adequate representation of the women workers therein in the proportion of the women workers to the total workers employed in the industrial establishment;

Negotiating Union

(vi) to provide for a new feature of recognition of negotiating union and negotiating council in an industrial establishment by an employer for the purpose of negotiations. The criterion for recognition of negotiating union has been fixed at fifty-one per cent. or more workers on a muster roll of that industrial establishment. As regards the negotiating council, a Trade Union having support every twenty percent. of workers will get one seat in the negotiating council and the fraction above twenty per cent. shall be disregarded;

Appeal for Cancellation of Trade Union

(vii) to provide for an appeal against non-registration or cancellation of registration of Trade Union before the Industrial Tribunal;

Recognition of Trade Union

(viii) to empower the Central Government and the State Governments to recognise a Trade Union or a federation of Trade Unions as the Central Trade Union or State Trade Unions, respectively;

Standing Order

(ix) to provide for the applicability of threshold of three hundred or more workers for an industrial establishment to obtain certification of standing orders, if the standing order differ from the model standing order made by the Central Government;

(x) to provide that if the employer prepares and adopts a model standing order of the Central Government with respect to the matters relevant to the employer’s industrial establishment, then the model standing order would be deemed to be certified. Otherwise, the industrial establishment may seek certification of only those clauses which are different from the model standing orders;

Industrial Tribunal

(xi) to set up an Industrial Tribunal consisting of a Judicial Member and an Administrative Member, in place of only Judicial Member who presently presides the Tribunal. For certain specified cases, the matters will be decided by the two-member Tribunal and the remaining shall be decided by a single-member Tribunal as may be provided for in the rules;

(xii) to set up Industrial Tribunals in the place of existing multiple adjudicating bodies like the Court of Inquiry, Board of Conciliation and Labour Courts;

(xiii) to remove the reference system for adjudication of Industrial Disputes, except the reference to the National Industrial Tribunal for adjudication;

Conciliation Proceedings

(xiv) to provide that the commencement of conciliation proceedings shall be deemed to have commenced on the date of the first meeting held by the conciliation officer in an industrial dispute after the receipt of the notice of strike or lock-out by the conciliation officer;

Strikes & Lock-Outs | 14 days notice required

(xv) to prohibit strikes and lock-outs in all industrial establishments without giving notice of fourteen days;

Industrial Establishments Obligation

(xvi) to provide for the obligation on the part of industrial establishments pertaining to mine, factories and plantation having three hundred or more workers to take prior permission of the appropriate Government before lay-off, retrenchment and closure with flexibility to the appropriate Government to increase the threshold to higher numbers, by notification;

Re-skilling fund | Retrenched Workers

(xvii) to set up a re-skilling fund for training of retrenched workers. The fund shall, inter alia, consist of the contribution of the employer of an amount equal to fifteen days wages last drawn by the worker immediately before the retrenchment or such other number of days, as may be notified by the Central Government, in case of retrenchment only. The fund shall be utilised by crediting fifteen days wages last drawn by the worker to his account who is retrenched, within forty-five days of the retrenchment as may be provided by rules;

Compounding Offences

(xviii) to provide for compounding of offences by a Gazetted Officer, as the appropriate Government may, by notification, specify, for a sum of fifty per cent. of the maximum fine provided for such offence punishable with fine only and for a sum of seventy-five per cent. provided for such offence punishable with imprisonment for a term which is not more than one year, or with fine;

Penalties

(xix) to provide for penalties for different types of violations to rationalise with such offences and commensurate with the gravity of the violations;

(xx) to empower the appropriate Government to exempt any industrial establishment from any of the provisions of the Code in the public interest for the specified period.

Read the detailed Act, here: Industrial Relations Code, 2020


Ministry of Law and Justice

Case BriefsHigh Courts

Delhi High Court: J.R. Midha, J., while addressing the present petition observed the principle laid down by the Supreme Court of India with regard to Industrial Disputes.

Challenge in the Present petition

Trade Union of PTI Employees and Federation of four PTI Employees’ Unions have challenged the retrenchment of 297 employees by the Press Trust of India.

Permanent and regular workmen have been retrenched while contractual workers have been retained. The principle of ‘last come first go’  has not been followed.

Reasons why retrenchment is violative of certain provisions of the Industrial Disputes Act

Further, it has been stated that retrenchment is violative of Section 25-N of the Industrial Disputes Act as PTI employs more than 100 employees and has not taken the prior permission from the State Government before retrenchment;

retrenchment is violative of Section 25-N of Industrial Disputes Act as three months notice/three months wages in lieu of notice has not been given;

retrenchment is violative of Sections 25-F and 25-G of the Industrial Disputes Act as one month notice indicating the reasons for retrenchment and the retrenchment compensation has not been given;

retrenchment is violative of Section 9A of the Industrial Disputes Act read with Clauses 10 and 11 of the Fourth Schedule as the service conditions of the employees relating to rationalization/technique were altered without notice;

the retrenchment is violative of Section 16A of the Working Journalists Act, 1955 as the reason for retrenchment was the liability for payment of wages and mandating promotional grades as per Clause 18(f) of Majithia Award;

the retrenchment is violative of Section 25-G of the Industrial Disputes Act as there is the substantial short payment of retrenchment compensation to the employees;

closure of Attendees, Transmission and Engineering departments is violative of Section 25-O of the Industrial Disputes Act as the closure was without permission and the retrenchment is illegal and mala fide to sabotage the continued disbursement of Majithia Award benefits and to discourage the employees to pursue their remedies under the Wage Board.

retrenchment constitutes an unfair trade practice as set out in clauses 5(a), (b) and (d) of the Fifth Schedule of the Industrial Disputes Act;

large number of employees have not yet received individual notice of their retrenchment; and the plea of “No work” of PTI is false and contrary to PTI work registers.

Analysis and Decision

Whether the writ petitions should be entertained in view of the statutory remedy available to the retrenched employees under the Industrial Disputes Act?

Bench while deciding the present matter observed that,

The law is well settled by the Supreme Court that a writ petition should not be entertained in respect of industrial disputes for which a statutory remedy is available under the Industrial Disputes Act unless ‘Exceptional circumstances’ are made out.

Writ jurisdiction is a discretionary jurisdiction and the discretion should not ordinarily be exercised if there is an alternative remedy available to the petitioner.

Sum and Substance:

  • If the writ petition discloses ‘Exceptional circumstances’ and does not involve disputed questions of fact, the writ petition in respect of an industrial dispute may be entertained.
  • If the writ petition discloses ‘Exceptional circumstances’ but the facts are disputed, the writ petition should not be entertained and the petitioner has to invoke the statutory remedies available as per law.
  • If the writ petition does not disclose ‘Exceptional circumstances’, the writ petition should not be entertained irrespective of whether the facts are disputed or not.
  • Writ jurisdiction is a discretionary jurisdiction and the discretion is ordinarily not exercised, if an alternative remedy is available to the petitioner. The powers conferred under Article 226 of the Court are very wide but these are extraordinary remedies subject to self-imposed restrictions.

With regard to ‘exceptional circumstances’ Court referred to the decision of Delhi High Court, Hajara v. Govt. of India, 2017 SCC OnLine Del 7982.

In the present matter, there are no exceptional circumstances for the exercise of the writ jurisdiction under Article 226 of the Constitution.

Bench stated that the present matter is squarely covered by the principles laid down by the Supreme Court in U.P. State Bridge Corporation Ltd. v. U.P. Rajya Setu Nigam Karamchari Sangh,2004 (2) L.L.N. 93 wherein the Court held that,

“We are of the firm opinion that the High Court erred in entertaining the writ petition of the respondent Union at all. The dispute was an industrial dispute both within the meaning of the Industrial Disputes Act, 1947 as well as U.P. IDA, 1947. The rights and obligations sought to be enforced by the respondent Union in the writ petition are those created by the Industrial Disputes Act.”

High Court observed that,

“The principles of uniformity and predictability are very important principles of jurisprudence.”

Most of the retrenchment cases are simpler than the present case but the writ jurisdiction is not exercised as the law is clear and well settled that the rights under the Industrial Disputes Act have to be agitated before the Industrial Tribunal.

In the present matter, Court declines to exercise the writ jurisdiction in view of the statutory remedy available to the retrenched employees under the Industrial Disputes Act.

Court noted there is no averment in that in any of the retrenched employees authorized the petitioners to espouse their cause. There is no averment that shows the authority of the petitioners to file the petitions.

Held

Bench held that the petitions are being dismissed on the ground that the retrenched employees have a statutory remedy under the Industrial Disputes Act and no ‘Exceptional circumstances’ have been made out by the petitioners.

Post Script

In view of the well-settled law by the Supreme Court that the writ petition relating to an industrial dispute can be entertained only if there are ‘Exceptional circumstances’, it is mandatory for the writ petitioner to disclose the ‘Exceptional circumstances’ in the Synopsis as well as in the opening paras of the writ petition.

Hence, if the writ petitioner does not disclose the “Exceptional circumstances” in the writ petition, the Registry shall return the writ petition under objections to enable the writ petitioner to disclose the “Exceptional circumstances” in the Synopsis as well as in the opening paras of the writ petition.[PTI Employees Union v. Press Trust of India Ltd., 2020 SCC OnLine Del 1216, decided on 18-09-2020]

Hot Off The PressNews

The Press Council of India Chairman Justice C.K Prasad has noted with concern that a number of journalists working for Business Standard of the Business Standard Pvt. Ltd. have been terminated from its Kolkata, Bengaluru, Chennai, Hyderabad and Bhubaneswar bureaus.

While taking Suo-Motu cognizance of the case, Comments have been called for from the Management of the newspaper in this regard.


Press Council of India

[Press Release dt. 30-07-2020]

Case BriefsSupreme Court

Supreme Court: In the matter where an illegally terminated workman had sought reinstatement claiming preference over other persons being a “retrenched workman” as per Section 25(H) of the Industrial Disputes Act, 1947 (ID Act), the bench of Abhay Manohar Sapre and Indu Malhotra, JJ held that it was not a case of a retrenchment of the respondent from service as contemplated under Section 25(H) of the ID Act as the workman had already accepted the compensation awarded to him in lieu of his illegal termination.

In the present case, the respondent had claimed that since the appellant company had regularised the services of 2 peons, he become entitled to claim re­employment in terms of Section 25 (H) of ID Act.  The Court, however, rejected the claim and held that the respondent was not entitled to invoke the provisions of   Section   25(H) of   the ID Act and seek reemployment by citing the case of another employee (Peon) who was already in employment and whose services were only regularized by the appellant on the basis of his service record in terms of the Rules.

The Bench said:

“the regularization of an employee already in service does not give any right to retrenched employee so as to enable him to invoke Section 25(H) of the ID Act for claiming reemployment in the services. The reason is that by such act the employers do not offer any fresh employment to any person to fill any vacancy in their set up but they simply regularize the services of an employee already in service.  Such act does not amount to filling any vacancy.”

It was explained that in order to attract the provisions of Section 25(H) of the ID Act, the workman needs to prove that:

  • he was the “retrenched employee”
  • his ex­employer has decided to fill up the vacancies in their set up and, therefore, he is entitled to claim preference over those persons, who have applied against such vacancies for a job while seeking re­employment in the services.

Explaining the difference between the terms ‘employment’ and ‘regularization of the service”, the Bench said:

“the   expression ‘employment’   signifies   a fresh employment to fill the vacancies whereas the expression ‘regularization of the service’ signifies that the employee, who is already in service, his services are regularized as per service regulations.”

[Management of the Barara Cooperative Marketing­cum Processing Society Ltd v. Workman Pratap Singh, 2019 SCC OnLine SC 1, decided on 02.01.2019]