WA nos.5569-70.2013 & conn.ID Act FINAL...
Transcript of WA nos.5569-70.2013 & conn.ID Act FINAL...
: 1 :
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10th DAY OF JANUARY 2014
PRESENT
THE HON' BLE MR. D.H.WAGHELA, CHIEF JUSTICE
AND
THE HON' BLE MR. JUSTICE S.N. SATYANARAYANA
WA Nos.5569-5570/2013 & WA Nos.5654-77/2013
C/w
WA Nos.5678-5703/2013 (L-RES/L-TER)
WA Nos.5569-5570/2013 & WA Nos.5654-77/2013
BETWEEN 1. BANGALORE ELECTRICITY SUPPLY COMPANY LTD
CORPORATE OFFICE, K R CIRCLE,
BANGALORE-560001 REPRESENTED BY ITS CHIEF GENERAL MANAGER (EL.)
2. KARNATAKA POWER TRANSMISSION CORPORATION LIMITED CORPORATE OFFICE CAUVERY BHAVAN BANGALORE-560009 REPRESENTED BY ITS DIRECTOR (ADMN. & HR)
... COMMON APPELLANTS
(By Sri SRIRANGA S, SUMANA NAGANAND, ADVS. FOR JUST LAW) AND : 1. S.JYOTHI
D/O S SHIVALINGAIAH AGED ABOUT 35 YEARS C/O INDIAN EMPLOYEES UNION
RRRR
: 2 :
# 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
2. R SRINIVASA S/O RAMAKRISHNAIAH AGED ABOUT 44 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
3. H T PUTTACHAMMA
D/O THIMMAPPA AGED ABOUT 44 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
4. SURESHA S S/O SADASHIVAIAH AGED ABOUT 37 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
5. C N SUMATHI D/O C NARASIMHEGOWDA AGED ABOUT 41 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
6. R VENUGOPAL
S/O C RAJU AGED ABOUT 37 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010.
: 3 :
7. D T ARUNA KUMARA
S/O D THIPPESWAMY
AGED ABOUT 38 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR,
BANGALORE-560010
8. N S SHIVAMAHADEVAIAH
S/O SIDDARAMAIAH
AGED ABOUT 42 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR,
BANGALORE-560010
9. A MUNIRAJU
S/O D.ANNAIAPPA
AGED ABOUT 37 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR,
BANGALORE-560010
10. P PRAKASH
S/O L J PUTTAIAH
AGED ABOUT 47 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR,
BANGALORE-560010
11. M C RAJA RAMESH BABU
S/O M CHALAPATHY
AGED ABOUT 35 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR,
BANGALORE-560010
: 4 :
12. ANIL K BIRADAR
S/O KASHINATH
AGED ABOUT 33 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
13. D. SUAJTHA PATIL
D/O DEVIDAS PATIL
AGED ABOUT 35 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40, 54TH CROSS,
3RD BLOCK, RAJAJINAGAR, BANGALORE-560010
... COMMON RESPONDENTS
(By Sri N G PHADKE, ADV.,)
THESE WRIT APPEALS ARE FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET
ASIDE THE ORDER PASSED IN THE WRIT PETITION
3279-91/12 C/W 7359-60/12 & 9731-41/12 DATED
5/2/13.
WA Nos.5678-5703/2013
BETWEEN : 1. BANGALORE ELECTRICITY SUPPLY
COMPANY LTD., CORPORATE OFFICE K R CIRCLE, BANGALORE 560 001 REPRESENTED BY CHIEF GENERAL MANAGER (EL.)
2. KARNATAKA POWER TRANSMISSION
CORPORATION LIMITED CORPORATE OFFICE CAUVERY BHAVAN BANGALORE 560 009 REPRESENTED BY DIRECTOR (ADMIN & HR)
... COMMON APPELLANTS (By Sri SRIRANGA S, JUST LAW)
: 5 :
AND :
1. S JYOTHI
D/O S SHIVALINGAIAH
AGED ABOUT 35 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
2. R SRINIVASA
S/O RAMAKRISHNAIAH
AGED ABOUT 44 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
3. H T PUTTACHAMMA
D/O THIMMAPPA
AGED ABOUT 44 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
4. SURESHA S
S/O SADASHIVAIAH
AGED ABOUT 37 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR, BANGALORE 560 010
5. C N SUMATHI
D/O C NARASIMHEGOWDA
AGED ABOUT 41 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR, BANGALORE 560 010
: 6 :
6. R VENUGOPAL
S/O C RAJU
AGED ABOUT 37 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
7. D T ARUNA KUMARA
S/O D THIPPESWAMY
AGED ABOUT 38 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
8. N S SHIVAMAHADEVAIAH
S/O SIDDARAMAIAH
AGED ABOUT 42 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
9. A MUNIRAJU
S/O ANNAIAPPA
AGED ABOUT 37 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
10. P PRAKASH
S/O L J PUTTAIAH
AGED ABOUT 47 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
: 7 :
11. M C RAJA RAMESH BABU
S/O M CHALAPATHY
AGED ABOUT 35 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
12. ANIL K BIRADAR
S/O KASHINATH
AGED ABOUT 33 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010
13. D. SUJATHA PATIL
D/O DEVIDAS PATIL
AGED ABOUT 35 YEARS
C/O INDIAN EMPLOYEES UNION
# 502/40 54TH CROSS, 3RD BLOCK
RAJAJINAGAR,
BANGALORE 560 010.
... COMMON RESPONDENTS (By Sri N G PHADKE, ADV.,) THESE WRIT APPEALS ARE FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET
ASIDE THE ORDER PASSED IN THE WRIT PETITION
3279-91/12 C/W 7359-60/12 & 9731-41/12 DATED
24/4/13.
THESE APPEALS HAVING BEEN RESERVED,
COMING ON FOR PRONOUNCEMENT THIS DAY,
THIS DAY, CHIEF JUSTICE DELIVERED THE
FOLLOWING:
: 8 :
C.A.V. JUDGMENT
1. These writ appeals under section 4 of the Karnataka
High Court Act, 1961 arise from three batches of
petitions which were directed against the common award
and order dated 19.8.2011 of the Industrial Tribunal,
Bangalore in Industrial Dispute No.145/2010. For the
sake of convenience, the appellants herein are
hereinafter described as ‘the employers’ or “BESCOM’’
and 13 workmen concerned are described as ‘the
workmen’. All the parties having been duly
represented, delay in filing of the appeals having been
condoned and learned Advocates appearing on either
side having requested for and agreed to hearing of the
appeals for final disposal, they are heard in extenso at
the admission stage.
2. The industrial dispute regarding termination of
service of the workmen by the employers from
01.03.2010 was referred to the Tribunal by the
Government, specifying the dispute to be as to whether
it was lawful for the management to terminate the
: 9 :
services of the workmen, while the conciliation
proceedings were pending.
By the award dated 19.08.2011, impugned before
learned single Judge of this Court, the order as under
was made by the Industrial Tribunal.
“The Reference is disposed off with a
direction to the second party No.1/BESCOM
to provide future employment of the grade of
Assistants, whenever vacancy arises, in the
event the first party workmen applying for
the said post/vacancies in terms of the
Notification. This order shall be complied by
adhering to the reservation policy of the
Government of India and by relaxing age
restriction.
The seniority list of the first party
workmen shall be maintained while
providing them regular employment. The
date of their entry into service on ad hoc
basis shall be considered only for the
purpose of calculating terminal benefits.
They are not entitled for any back
wages.”
3. The challenge to above award and order of the
Tribunal by the employers as well as the workmen was
: 10 :
resolved by the impugned order dated 05.02.2013 of
learned single Judge on the basis of a joint memo of
settlement dated 02.02.2013, which read as under:
“The respondents humbly submit that, in
the background of the orders of the Hon’ble
Industrial Tribunal, and the directions of
this Hon’ble Court to explore a compromise
before the ‘Lok Adalat’, we are positively
inclined to absorb the petitioners, in the
permanent cadre, but for the fact that the
existing rules do not provide for such
absorption.
However, if that difficultly is removed by
an order of this Court to absorb them
notwithstanding anything we are ready to
obey such orders readily as Assistant/Junior
Meter Reader irrespective of the petitioners
qualification without any consequential
benefits, and continuity of service in the
interest of justice.
The petitioners and respondents are
agreed to withdraw the cases”.
On the basis of the above memo, learned single Judge
directed that, as a one time measure, the workmen shall
be absorbed as Assistant/Junior Meter Reader without
: 11 :
consequential benefits, continuity of service and back
wages within six weeks, without it being a precedent in
other cases.
4. The appellants-employers have now called into
question the above order of learned single Judge on the
plea that no mandamus could have been issued to
absorb the workmen in service in contravention of the
Regulations and in view of the law declared by the
Hon’ble Supreme Court in a series of decisions. It is
pleaded that, even if the parties have agreed upon the
terms of compromise, the Court could not have accepted
such terms and issued mandamus to perpetuate an
illegality. The appellants are also stated to have filed
applications (I.A. I & II of 2013) seeking recalling of the
impugned order dated 05.02.2013, but learned single
Judge was pleased to dismiss the applications on
24.04.2013. That Order dated 24.04.2013, holding that
the Chief General Manager of the BESCOM had signed
the joint memo with a bona fide intention to settle the
dispute and had not committed any illegality or
misconduct or violation of any Regulations of the
: 12 :
BESCOM, is also challenged in the other set of writ
appeals [Nos.5678 to 5703/2013]. The main ground in
those appeals is that learned single Judge ignored the
affidavit of the Chief General Manager stating that he did
not place the matter before the Board of Directors, prior
to signing the joint memo and the signing was an
inadvertent mistake. It is contended that if officers of
the company were allowed to take decision or enter into
contract that binds the company without prior approval
of its Board of Directors, it will violate Section 291 of the
Companies Act, 1956 and would seriously affect the
functioning of the company.
5. After reference to decision of the Apex Court in
Secretary, State of Karnataka Vs. Umadevi [2006(3)
SCC 1], it is further contended for the appellants that
when a compromise goes against public policy,
prescription of a statute or a mandatory direction of the
Court, it would be ineffective and no mandamus or
direction could have been issued to perpetuate an
illegality. As against that, learned counsel appearing for
the workmen submitted that, as the workmen had
: 13 :
signed the joint memo dated 02.02.2013 for settlement
and did not propose to renege on agreed terms, they
have not filed their appeals; but in case the appeals were
to be entertained by taking into consideration the other
contentions of the employers, the grounds taken by the
workmen in their original petitions may also be
considered and appropriate final orders may be made in
these appeals. Parties on both sides having agreed on
such course of action, the appeals are heard on all the
grounds agitated before this Court, as regards legality
and justifiability of the original orders of termination of
service and relief, if any, required to be granted to the
workmen concerned.
6. There is no dispute about the facts that the
appellant-BESCOM is a Government Company engaged
in distribution and supply of power in the designated
area within the State of Karnataka; and the respondent-
workmen were engaged on contract basis for working in
“Soujanya Counters” opened for better services to
consumers. Such employees were initially engaged in
service of the appellant during the first half of the year
: 14 :
2003 after issuing notification in that regard, inviting
applications from eligible candidates. Even as the service
of such employees, including the respondent-workmen
was proposed to be terminated upon expiry of the period
of contract in the year 2004, the workmen approached
this Court by way of WP No.15333/2004 and
26044/2004 on 31.03.2004, with a prayer to absorb
them in service as permanent employees. This Court
issued an interim order to maintain status quo on
07.04.2004. Those petitions were disposed by order
dated 03.07.2009 with an order directing the appellant-
employer to consider representation of the workmen
regarding absorption in service. Pursuant to that order,
the appellant decided the representation by order dated
28.01.2010, rejecting the representation and
simultaneously terminating their services with effect
from 01.03.2010.
7. Therefore, the workmen raised an industrial dispute
before the Additional Labour Commissioner and
Conciliation Officer on 04.02.2010, demanding
engagement of the workmen in the running of Soujanya
: 15 :
Counters. Their services were, however, dispensed with
on 01.03.2010. Thereafter, the work carried on in
Soujanya Counters was awarded to another institution
on contract basis and a tender-notice was also published
for award of the contract on 06.03.2010, pursuant to
which the contract was awarded to Golden Detective
Services for the period from 01.04.2010 to 28.02.2011.
The failure report of the conciliation proceeding was
submitted on 22.06.2010 and the Industrial Dispute in
the following terms was referred on 09.07.2010 to the
Industrial Tribunal for adjudication.
The agreed true translation of the terms of
reference of the industrial dispute read as under:
“ The managements of KPTCL, Corporate
Office, Cauvery Bhavan, Bangalore-9 and
Bangalore Electricity Supply Company,
Corporate Office, K.R.Circle, Bangalore-1
have, inspite of obtaining from S.Jyothi,
R.Srinivasa, H.T.Puttachamma, S.Suresh,
C.N.Sumathi, R.Venugopal, D.T.Arun
Kumar, N.S.Shivamahadevaiah, A.Muniraju,
P.Prakash, M.C.Raja Ramesh Babu, Anil
K.Biradar, Sujatha Patil, continuous service
without providing facilities applicable to
permanent employees during the pendency
: 16 :
of conciliation proceedings, terminated them
from employment from 01.03.2010. Is this
lawful?
2. If it is not so, what relief are the workmen
entitled to?”
8. Upon the dispute in the above terms being referred
to the Industrial Tribunal, Bangalore, and being
registered therein as ID No.145/2010, the Tribunal
adjudicated on the basis of pleadings and evidence of the
parties and culled out the following three issues, besides
the main points of reference;
“1. Whether this reference is invalid by the
reason of the dispute relating to discharge,
termination or dismissal and the grant of
relief to such workmen having been referred
to this Industrial Tribunal, despite, such
subject being not included in III Schedule
which bestows jurisdiction on the Industrial
Tribunal?
2. Whether the Management of the
second party proves that non-existing
dispute has been referred to this Tribunal for
adjudication?
3. In addition to the points of dispute
whether the first party workmen are entitled
: 17 :
to reliefs claimed for in the statement of
demands submitted before this Tribunal ? ”
9. The Tribunal has, in its award dated 19.08.2011
decided the above issue No.1 with the finding that the
reference had not become invalid only for the reason that
the nature of the dispute did not fall under any category
enumerated from Sl. Nos.1 to 10 of the III Schedule.
The second issue is also decided in the negative with the
opinion that the dispute took the character of an
industrial dispute and could not be thrown away only for
the reason that it was not espoused by a trade union.
The third issue was also decided in the negative on the
basis that the case of the workmen fell under the
exception clause (bb) of sub-section (oo) of section 2 of
the Industrial Disputes Act, 1947. Then, on
appreciation of the facts of the case, the Tribunal held
that there was no element of illegality in the action of the
employer, but granted the relief of direction to BESCOM
to provide future employment of the grade of Assistants
to the workmen whenever vacancy arises and the
workmen applies in terms of the notification notifying
the vacancies. The BESCOM was also directed to
: 18 :
maintain seniority list of the workmen and the date of
their entry into service on ad hoc basis was directed to
be considered only for the purpose of calculating
terminal benefits. The award made in these terms was
called into question by parties on either side, and the
petitions in that regard were disposed by the order dated
05.02.2013, based on written consent terms dated
02.02.2013, and that order as well as the order dated
24.04.2013 dismissing the applications to recall that
order are impugned in these appeals.
10. The above backdrop of facts and the course of
litigation clearly indicate that, while the original terms of
reference were about legality of termination of service of
the workmen after continuous service and during
pendency of conciliation proceedings, the Tribunal
deviated from proper adjudication thereof and granted
relief which was meaningless and uncalled for, while
justifying and legalizing the termination of service in
issue. As seen earlier, although the original
appointments of the workmen were purely on contract
basis and for the purpose limited by the express terms of
: 19 :
the contracts, the workmen had in fact continued in
service by series of successive back to back orders. The
total period of such service of each of the workmen
concerned, till 31.03.2004 was as under:
Sl.No.
Name of the Workman
Period of Service from
(upto 31.03.2004)
No. of Orders/ Contracts
Total Period of Service
(in Months/Days)
1 S.A.Jyothi
B.A.,
13.01.20
00
10 48 months, 13 days
2 R.Srinivasa
B.E.,
13.01.20
00
10 48 months, 13
days
3 H.T.Puttuchamma B.A.,
13.01.20
00
10 48 months, 13
days
4 S.Suresh
B.Com.,
13.01.20
00
10 48 months, 13
days
5 C.N.Sumathi 13.01.20
00
10 48 months 13
days
6 R.Venugopal B.Com.,
13.01.20
00
10 48 months, 13
days
7 D.T.Arun Kumar B.A.,
13.01.20
00
10 48 months, 13
days
: 20 :
8 N.S.Shiva
Madaiah B.A.,
01.03.20
01
8 35 months 10
days
9 A. Muniraju
B.A.,
21.01.20
03
3 13 months, 10
days
10 P.Prakash
M.A.,
21.01.20
03
3 13 months, 10
days
11 M.C.Raja Ramesh Babu B.Com.,
20.05.20
02
5 29 months 22
days
12 Anil K.Biradar 12.06.20
02
5 28 months, 29
days
13 D.Sujatha
Patil
21.02.20
03
3 12 months 7
days
The above details are provided on a memo submitted by
BESCOM before this Court and the common format of
the contract, similarly provided by BESCOM, clearly
stipulated in Clause (5) of the contract as under:
“5. That the said candidate of the Soujanya
counter shall not have any claim or right for
continuation in the service or for
permanency or for any preference in the
KPTCL Service.”
: 21 :
As seen earlier in paragraph 6 hereinabove, the
workman continued in the service of BESCOM from
01.04.2004 till the decision in W.P.Nos.15333/2004
and 26044/2004, and thereafter till 01.03.2010, under
the interim order to maintain status quo and without
any express contract stipulating the conditions of
service. It is not the case of any of the parties that
during the pendency of the aforesaid proceedings before
this Court and operation of the interim relief to
maintain status quo, any attempt was made either to
improve or change the conditions of service or to
terminate the services continued at the fixed salary of
Rs.3,000/- to Rs.3,500/- per month. Therefore it could
be inferred that the conditions of service and the status
of the workmen remained frozen for the period of last
six years of their service, which was otherwise
continued. The issue that necessarily arises for
deciding legality of the termination would be as to
whether the termination was ‘retrenchment’ and
whether the provisions of Section 25F of the Industrial
Disputes Act, 1947 (for short ‘the Act’) applied in the
above facts. The other major issue arising from the
: 22 :
terms of reference itself was as to whether the
termination was legal during pendency of the
conciliation proceedings.
11. Although the Tribunal touched upon these issues
and alluded to the case law cited before it, it held in the
impugned award that it was not the case of termination
but of non-renewal of contract, and that the discharge
of the workmen pursuant to letter dated 28.01.2010
was anterior to the conciliation proceedings and hence
no illegality was committed. These conclusions have to
be examined on the touch-stone of relevant provisions
of the I.D. Act which may be quoted for easy reference
as under:
“Section 2. Definitions – In this Act, unless there is anything repugnant in the subject or context, - (g) “employer” means –
(i) in relation to any industry carried on
by or under the authority of any department of the Central Government or a State Government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department; (ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority;
: 23 :
(j) “industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen; (ka) “Industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on:
Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then, - (a) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be
deemed to be a separate industrial establishment or undertaking;
(b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the
purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be
: 24 :
an industrial establishment or undertaking;
(oo) “retrenchment” means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include –
(a) voluntary retirement of the
workman; or
(b) retirement of the workman on
reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(bb) termination of the service of
the workman as a result of the non-renewal of the contract of
employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) termination of the service of a
workman on the ground of continued ill-health;
CHAPTER V A
LAY-OFF AND RETRENCHMENT 25A. Application of sections 25C to 25E.–
: 25 :
(1) Sections 25C to 25E inclusive shall not apply to Industrial Establishments to which Chapter VB applies, or – a) to industrial establishments in which less than fifty workmen on an average per working day have been employed in the preceding calendar month; or
b) to industrial establishments which are of a seasonal character or in which work is performed only intermittently.
(2) ……. Explanation.- In this section and in sections 25C, 25D and 25E, “industrial establishment” means-
(i) a factory as defined in clause (m) of
section 2 of the Factories Act, 1948 (63 of 1948); or
(ii) a mine as defined in clause (j) of section 2 of the Mines Act, 1952 (35 of 1952); or
(iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951).
25B. Definition of continuous service.–
For the purposes of this Chapter,-
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or
an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;
(2) where a workman is not in continuous
service within the meaning of clause (1) for a
: 26 :
period of one year or six months, he shall be deemed to be in continuous service under an employer-
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-
(i) one hundred and ninety days in
the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six
calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-
(i) ninety-five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case.
Explanation: For the purposes of clause (2), the number of days on which workman has
actually worked under an employer shall include the days on which-
(i) to (iv) ……………
25F. Conditions precedent to retrenchment of workmen
No workman employed in any industry who has been in continuous service for not less
: 27 :
than one year under an employer shall be retrenched by that employer until-
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate government for such authority as may be specified by the appropriate government by notification in the Official Gazette.
25H. Re-employment of retrenched workmen.– Where any workman are retrenched, and the employer proposes to take into his employ any persons, he shall, in such
manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen who offer themselves for re-employment shall have preference over other persons. 25J. Effect of Laws inconsistent with this Chapter.–
(1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent
: 28 :
therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946): Provided that where under the provisions of any other Act or rules, orders or notifications issued thereunder or under any standing orders or any award, contract of service or otherwise, a workman is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this Act,
the workman shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act.
(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial
disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this Chapter.
CHAPTER V C
UNFAIR LABOUR PRACTICES
25T. Prohibition of unfair labor practice
No employer or workman or a trade union, whether registered under the Trade Unions Act, 1926 (16 of 1926), or not, shall commit any unfair labor practice.
: 29 :
25U. Penalty for committing unfair labor practices
Any person who commits any unfair labor
practice shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both.]
CHAPTER VI
PENALTIES
26 to 30A …..
31. Penalty for other offences.– (1) Any employer who contravenes the provisions of section 33 shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. (2) Whoever contravenes any of the provisions of this Act or any rule made
thereunder shall, if no other penalty is elsewhere provided by or under this Act for such contravention, be punishable with fine which may extend to one hundred rupees.
CHAPTER VII
MISCELLANEOUS
33. Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings
(1) During the pendency of any conciliation
proceeding before a conciliation officer or a Board or of any proceeding before an arbitrator or a Labor Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall -
: 30 :
(a) in regard to any matter connected
with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or
(b) for any misconduct connected with
the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute,
save with the express permission in writing of the authority before which the proceeding is pending;
(2) ……….
(3) ………..
(4) …………
(5) ………..
THE FIFTH SCHEDULE
UNFAIR LABOUR PRACTICES
I- On the part of employers and trade unions of employers
1 to 9. ……
10. To employ workmen as “badlis”, casuals
or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen.
11 to 16. …….
12. Before deciding upon applicability of the above
statutory provisions in the facts of the present case, it
: 31 :
may be noted that the Tribunal has, in the impugned
Award relied upon a decision of this Court in Ms. S.
Pushpa and others Vs. Government of Karnataka and
others, 2004 (4) Kar. L.J. 594 for excluding the present
case from the definition of ‘retrenchment’ by virtue of
the provisions of Section 2 (oo) (bb). In the facts of that
case before the learned single Judge, it was found that
the workmen concerned were engaged to work for a
period of six months, on ad hoc and contract basis by
the same company i.e., BESCOM and the workmen had
worked on similar successive contracts from the year
1998 till the end of the year 2003. They had to be
discharged on computerization of the work which the
workmen were employed to do. The Tribunal found
that the workmen were not appointed against any
sanctioned or vacant posts and their appointments were
not regular for being de hors the Regulations, as
applicable. The Court further found that it was a case
of nothing but non-renewal of the contract of
employment. The material on record showed that there
existed no job and no vacancy on account of
computerization, and therefore, it was not possible for
: 32 :
the Court to provide relief, as pleaded by the workmen.
The Court further found, on the basis of the material on
record, that the workmen were not working in a factory
and the place of their work could not be termed as ‘an
industrial establishment’, warranting compliance of
Section 25N of the Act. It was held that, if illegal
appointments were made or illegal entries were created,
such appointees could not be regularized by the Court,
and hence directions were issued only to draw a scheme
for giving to the workmen an opportunity of applying for
employment, as and when vacancy would arise in future.
It needs to be noted that in the judgment as
aforesaid, the argument that if the workmen were having
record of successive appointments on contract basis, it
amounted to unfair labour practice, was not addressed
or dealt with and the provisions of Section 25J, 25T and
25U were not noticed.
13. As seen earlier, in the facts of the present case the
workmen had put in continuous service under different
appointment orders or the contracts of service upto
31.03.2004 under the express stipulation that the
: 33 :
workmen shall not have any claim or right for
continuation in the service and on that basis it was
contended, and accepted by the Tribunal, that it was a
case of non-extension or non-renewal of the contract of
service under a stipulation in that behalf. However for
the same period of service, it is argued for the workmen
that, such continuation in service under separate orders
and contracts of a fixed term amounted to an unfair
labour practice punishable under Section 25U, in view of
the intention, expressed in the stipulation itself, of
depriving the workmen of the status and privileges of
permanent workmen. Although in a given case such
argument may be accepted, but in the facts of the
present case, that issue was neither agitated nor
examined by the Tribunal, nor was there the opportunity
to agitate that issue before learned single Judge. It may
yet be observed that, in view of the scheme of the related
provisions of the Act viz., sections 2 (oo) (bb), 25F, 25J,
25T, 25U and the entry No.10 in the Fifth Schedule of
the Act, the stipulation in a contract of service to deprive
a person of his right to be permanent and successive
issuance of such orders or contracts may not be held to
: 34 :
be legal on account of being an offence. However, in the
present case, it is a matter of fact on record that even
after 31.03.2004 the workmen had been continued in
service without issuing any fresh orders of appointment
or execution of any contract for the subsequent term.
Therefore, it is difficult to conclude that the stipulation
in respect of the term of contract continued to operate.
And even assuming for the sake of argument that the
employer continued to have the right to terminate the
contract of service at any time without notice, they never
even attempted to exercise that right by resolving to
terminate the service of the workmen or making an
application to the Court to modify the interim relief and
permit termination of service of the workmen. Therefore,
there is no reason to assume that the workmen
continued in service only on account of the order of
interim relief to maintain status quo, or that, even after
continuous service of six years subsequent to
01.04.2004, the last contract of service, which expired
on 31.03.2004 continued to operate and it was a case of
non-renewal of contract or expiry of such contract. The
conclusion of the Tribunal in that regard in its award is
: 35 :
patently wrong and perverse. Accordingly, continuation
in service of the workmen during the six years preceding
the date of termination was continuous service as
envisaged in Section 25B of the Act and the provisions of
Section 25F of the Act were attracted at the time of
termination of service.
14. Chapter VA of the Act was amended by Act No.32
of 1976 with effect from 05.03.1976 with the effect that
the provisions of sections 25C to 25E shall not apply to
industrial establishments to which Chapter VB applies
and the phrase “industrial establishment” is defined for
that purpose. The result is that, in any case the
provisions of sections 25F to 25J continue to apply to all
the industrial establishments or undertakings as defined
in Section 2(ka). The provisions of Section 25F are titled
as ‘Conditions precedent to retrenchment of workmen’,
indicating that, without compliance with those
conditions, there can be no termination of service for any
reason whatsoever, in the eye of law. The exceptions
carved out from the definition of ‘retrenchment’ in
Section 2 (oo) have to be strictly interpreted for being
exceptions to the general rule and the wider definition of
: 36 :
‘retrenchment’. As seen earlier, the termination of
service in the facts of the present case being not covered
by the exception clause prescribed in Section 2 (oo) (bb),
in absence of any continuing contract with the specific
stipulation, it amounted to retrenchment, which could
not take effect unless and until the conditions contained
in Section 25F were complied with. In absence of even
an attempt to comply with those conditions or even a
plea in that regard, the termination of service in question
was outright illegal and non est. Consequently, the
workmen continued in service in the eye of law. The
provisions of Section 25J giving an over-riding effect to
the provisions of Chapter VA of the Act must be given its
full effect and hence the pleas that there was no post or
work for the workmen or that the workmen continued
only on account of an interim order of the Court cannot
be countenanced to defeat the provisions of Section 25F
and Section 25J of the Act. Similarly, the pleas that the
workmen were employed on specific jobs in Soujanya
counters and that the services in those counters were
decided to be outsourced could also not defeat the said
statutory and mandatory provisions of the Act. As held
: 37 :
in Pramod Jha and Others Vs. State of Bihar [ (2003) 4
SCC 619 para 10] even payment or tender of
compensation after the time when the retrenchment has
taken effect would vitiate the retrenchment and non-
compliance with the mandatory provision which has a
beneficial purpose and a public policy behind it would
result in nullifying the retrenchment.
15. The other aspect touching on the legality of
termination, as distinguished from justifiability of the
termination relates, by the terms of reference itself, to
the termination of service during pendency of
conciliation proceedings. In the facts of the present
case, the termination of service was effected on
01.03.2010 by order dated 28.01.2010, rejecting the
representation of the workmen. According to the
provisions of Section 20 read with Rules 9 and 10 of the
Industrial Disputes (Karnataka) Rules, 1957, where the
Conciliation Officer received any information about an
existing or apprehended industrial dispute, which does
not relate to public utility service, and he considers it
: 38 :
necessary to intervene in the dispute, he shall give
formal intimation in writing to the parties concerned,
declaring his intention to commence conciliation
proceedings with effect from such date as may be
specified. In the facts of the present case, the industrial
dispute was raised before the Conciliation Officer on
04.02.2010 and the notice for holding the conciliation
proceeding was issued to the employer on 23.02.2010,
holding the first meeting for conciliation on 26.02.2010.
Thus admittedly and in view of the express terms of
reference, as on 01.03.2010 the conciliation proceedings
were pending in respect of the service conditions of the
workmen and the termination of service during pendency
of such proceeding was in violation of the provisions of
Section 33 of the Act, and in fact it was an offence
punishable under Section 31 of the Act. For the purpose
of application of Section 33, the date of alteration of the
conditions of service, during the pendency of conciliation
proceedings, is material, and the date on which decision
to effect such alteration is irrelevant. As held in M/s.
North Brook Jute Co. Ltd., and Another Vs. Their
Workmen (AIR 1960 SC 879), the conditions of service
: 39 :
do not stand changed, either when the proposal is made
or the notice is given but only when the change is
actually effected. Therefore, the reasoning and finding
of the Tribunal based on the date of decision dated
28.01.2010 and not the date of alteration of condition of
service which was 01.03.2010, was obviously incorrect
and illegal.
As held by the Bombay High Court in Dalanvalan
Imarat Bandhkam & Patbandhare Kamgar Union Vs.
The State of Maharashtra & Ors. [1993 (3) LLJ 744],
after reference to judgment of the Apex Court in the
Bhavnagar Municipality Vs. Alibhai Karimbhai &
others (AIR 1977 SC 1229), once the conclusion is
reached that there was breach of Sec.33(1)(a), it is only a
short hop therefrom to the conclusion that there is an
unfair labour practice within the meaning of Item 9 of
Schedule IV of the Act in view of the judgment of the
Supreme Court in S.G. Chemicals and Dyes Trading
Employee’s Union Vs. S.G. Chemicals and Dyes
Trading Ltd. & Anr. (1986 I CLR 360). Therefore, the
workmen were held to be entitled to the consequential
reliefs of reinstatement and back wages for the period of
: 40 :
their unemployment. In Bhavnagar Municipality (supra),
daily rated workmen had raised an industrial dispute
and the subject matter of the dispute was connected
with the conversion of temporary workmen into
permanent workmen. During the pendency of that
dispute, the municipality had removed the concerned
workmen from service, and the Supreme Court opined
that such tampering with status quo ante of those
workers was a clear alteration of the conditions of their
service and the alteration was in regard to a matter
connected with the pending industrial dispute and thus
there was contravention of Section 33(1)(a) of the
Industrial Disputes Act. As held by the Constitution
Bench of the Apex Court in Jaipur Zila Sahakari
Bhoomi Vikas Bank Ltd. Vs. Ram Gopal Sharma and
others [ (2002) 2 SCC 244], in the context of Section
33(2)(b) of the Act, an order discharging the workmen
remains inchoate till an approval of the authority under
the said provision is granted. In other words, the
relationship comes to an end de jure only when the
authority grants approval. If approval is not given,
nothing more is required to be done by the employee, as
: 41 :
it will have to be deemed that the order of discharge or
dismissal had never been passed. Consequently the
employee would be deemed to have continued in service
entitling him to all the benefits available. That being the
legal position, there would be no need of a separate or
specific order for his reinstatement. These observations
made in the context of the provisions of Section 33 (2)
(b), wherein ex post facto approval is required, may apply
with greater force in the cases falling under the
provisions of Section 33 (1) (a) and (b) of the Act, where
prior and express permission in writing of the authority
before which the proceedings are pending is prescribed.
Thus, the termination of service of the workmen was
illegal and non est on the second count as well.
16. In view of the clear finding and conclusion that
termination of services of the workmen was not only
illegal on two counts, but it was void and non est and
even amounted to punishable offences, the issue as to
whether the termination was justifiable, pales into
insignificance. Then the third issue which has to be
: 42 :
addressed is as to what relief the workmen were entitled
to.
17. It was argued for the employer, on the basis of the
observations of the Apex Court in Incharge Officer and
another Vs. Shankar Shetty [ (2010) 9 SCC 126], that
relief by way of reinstatement with back wages is not
automatic and may be wholly inappropriate in a given
fact-situation even though the termination of an
employee is in contravention of the prescribed
procedure, and compensation instead of reinstatement
would meet the ends of justice in the given facts of the
case. Peculiar facts obtaining in the present case ought
to be considered for obviating further complications,
disputes and litigations. Learned counsel for BESCOM
also submitted that, since 2004, BESCOM was planning
and preparing for outsourcing the services rendered at
Soujanya Counters and, as a matter of policy, not to
expand its permanent set-up of workmen where the
workmen concerned herein could be posted and their
services could be regularized for permanent absorption.
On the other hand, it was argued for the workmen that
: 43 :
after more than eight years of continuous service on
fixed wages and apparently exploitative conditions of
service, the workmen were entitled in equity and in law
to be absorbed on permanent basis, so as to be
employed on reasonable conditions of service at par with
the other regular employees of BESCOM. It was also
contended that the workmen were originally inducted
into service on the basis of their qualification and after
following the process of selection. Therefore, they
cannot be treated as back-door entrants with the stigma
of having entered into service in violation of Articles 14
and 16 of the Constitution or in violation of any specific
recruitment Rules.
18. Relying upon Kendriya Vidyalaya Sangathan and
Another Vs. S.C. Sharma [(2005) 2 SCC 363], it was
submitted that as far as the question of determining
entitlement of a person to back wages is concerned, the
employee has to show that he was not gainfully
employed; the initial burden is on him and if he placed
materials in that regard, the employer can bring on
record, the materials to rebut the claim. According to
: 44 :
the three Judge Bench decision of the Apex Court in
General Manager, Haryana Roadways Vs. Rudhan
Singh [ (2005) 5 SCC 591], a host of factors like the
manner and method of selection and appointment, the
nature of appointment namely whether ad hoc, short
term, daily wage, temporary or permanent in character,
any special qualification required for the job and the like
should be weighed and balanced in taking a decision
regarding award of back wages. One of the important
factors, which has to be taken into consideration, is the
length of service, which the workman had rendered with
the employer. If the workman has rendered a
considerable period of service and his services are
wrongfully terminated, he may be awarded full or partial
back wages, keeping in view the fact that at his age and
with the qualification possessed by him, he may not be
in a position to get another employment. Another
important factor, which requires to be taken into
consideration is the nature of employment.
It is recently held in Deepali Gundu Survase Vs.
Kranti Junior Adhyapak Mahavidyalaya (2013 AIR
: 45 :
SCW 5330), that the cases in which the competent Court
or Tribunal finds that the employer had acted in gross
violation of the statutory provisions and/or the
principles of natural justice or is guilty of victimizing the
employee or workman, then the concerned Court or
Tribunal will be fully justified in directing payment of full
back wages. The Courts must always keep in view that
in the cases of wrongful/illegal termination of service,
the wrongdoer is the employer and sufferer is the
employee/workman and there is no justification to give
premium to the employer of his wrong doings by
relieving him of the burden to pay to the
employee/workman his dues in the form of full back
wages.
19. Unfortunately, in the facts of the present case,
during the course of proceedings before the Tribunal and
the High Court, the parties have mixed the issue related
to the legality or otherwise of termination of service with
the issue related to absorption and placement of the
workmen in regular employment of BESCOM. Whereas,
adjudication of an industrial dispute has to be confined
: 46 :
to the dispute referred to the Tribunal and the terms of
reference, and in the instant case, as the only dispute
referred for adjudication was regarding legality of
termination of service of the workmen, it was wholly
improper and impermissible to bring into consideration
extraneous pleas, leading the Tribunal and the Court to
grant reliefs which were not within the scope of
adjudication. The provisions of sub-section (4) of
Section 10 of the Act clearly provide that the tribunal
shall confine its adjudication to the points referred and
matters incidental thereto. Therefore, it is necessary to
confine the consideration of grant of relief to the
industrial dispute which was referred and which was
required to be legally adjudicated.
20. In view of the findings and conclusion recorded
hereinabove about the legality of the action of
termination of services of the workmen and the legal
consequences thereof, the workmen have to be held to
have continued in the service of BESCOM, in the
absence of a valid and effective order of termination.
Hence, in the absence of any evidence led by the
: 47 :
BESCOM to disbelieve assertion of the workmen that
they remained unemployed after the admitted and illegal
termination of their service on 01.03.2010, an order of
their reinstatement with full back wages has to follow.
It has to be noted here that the demand and dispute
related to the conditions of service, absorption or parity
in service with the comparable employees who are in
regular employment of BESCOM was not part of the
terms of reference and hence, those claims could not be
adjudicated and no relief could be granted on that basis.
Thereafter, the issue of passage of time, non availability
of post and work for the workmen and policy of the
employer of not running the Soujanya Counters by the
staff employed by it, need to be considered for a just and
proper award of reliefs to the aggrieved parties. It is an
undisputed fact that BESCOM does not have regular
posts or even recruitment Rules for selection and
appointment of employees to be employed in the offices
which were opened as a part of Soujanya scheme.
Therefore, an order to reinstate the workmen on their
original posts or in the regular establishment of
BESCOM would be practically unworkable and may
: 48 :
result into fresh order of termination and successive
rounds of litigation. It is trite and well-settled that the
primary purpose of industrial adjudication is to ensure
industrial peace by settling the dispute on a just and fair
basis, having regard to the prevailing conditions in the
industry, the statutory provisions and the Constitutional
ideology explicit and implied in the preamble of the
Constitution and the Directive Principles of State Policy.
21. In view of the facts, circumstances and
submissions narrated hereinabove and in order to do
complete justice and to bring the litigation to a quietus,
it is found to be necessary and in the interest of justice
to direct appellant-BESCOM to pay to the workmen
concerned full back wages at the rate last drawn by
them and also to pay to them all the terminal benefits
due as on the date of payment as if their services were
then being terminated afresh, in compliance with the
provisions of Section 25-F of the Industrial Dispute Act,
after continuous service from the date of their entry into
service till the date of payment. The workmen shall also
be entitled to any other statutory benefits such as
: 49 :
gratuity or any other terminal benefits to which they may
be entitled under the Rules and Regulations of BESCOM
as may be applicable to the workmen, as on the date of
their termination of service now on payment of all such
compensation and benefits. It is clarified that unless
and until the amounts of terminal benefits as aforesaid
are paid to the workmen, they shall be deemed to be in
continuous service of BESCOM and back wages and
terminal benefits shall be calculated and paid
accordingly. Each of workmen shall also be paid by
BESCOM the sum of Rs.3,000/-, by way of costs. They
shall also be entitled to the statutory benefit accruing to
them under Section 25H of the I.D.Act.
All the appeals stand disposed of with the order in
the aforesaid terms, even as no argument on other
issues and contentions in the appeals are agitated or
pressed.
Sd/- CHIEF JUSTICE
Sd/- JUDGE
SNB/VR