Industrial Disputes Act, 1947 - Sections 10(1), 10(2), 12(5), 19(2) and 33A
1. This industrial dispute was referred to me under S. 10(2) of the Industrial Disputes Act, 1947, under No. AJS/14/60, dated 29 April, 1960, of the office of the Deputy Commissioner of Labour (Administration), Bombay. The demands of the workmen are as follows :-
Demand 1 - Permanency. - The total complement of workmen on temporary rolls in each department should not at any time exceed 10 per cent of the average of the total number of workmen (including permanent) during the preceding year. Such exceeding number of temporary workmen should be made permanent immediately form time to time.
Demand 2 - Compensation for weekly off days and other holidays. - Every workmen who has to work on weekly off day or any holiday should get compensation at the rate of double the total wages, in addition to statutory compensatory holiday.
Demand 3 - Uniforms. - Watchmen, welders, painters, fitters, turners and machine operators should get uniforms composing of two pants and two shirts every calendar year on or before 31 January.
Demand 4 - Pay slips. - Every workman should get a pay slip two days in advance of the payment and details of the slip should be decided with the union.
2. The statement of claim gives the history of the dispute as follows :
'The union served certain demands on the company (vide its letter dated 29 October, 1959). Enraged with this, the company victimized a number of workmen. Hence the union had no alteration but to resort to a strike, which it did in February 1960. As a result of the said strike the victimized workers were taken back, were paid certain wages, and an application under S. 10(2) of the Industrial Disputes Act, 1947, was made to the Government in consideration whereof the present reference has been made to this tribunal.'
3. The company's version of this history is in the following terms :-
'The said demands were jointly referred to adjudication under very exceptional circumstances. Since the factory was removed to Chembur and went into production to meet the special contractual obligation of the Standard Vacuum Refining Company of India, Ltd., the workmen started behaving in a very irresponsible manner by resorting to slow-down tactics, periodical strikes and virtually imposing on the company workmen who are neither fitted to do the work nor conscious of their obligation to put in a day's normal work ............. On or about 31 January, 1960 the workmen of the Burmah-Shell Refineries went on strike and overnight the workmen of this company also resorted to a strike and picketing of the gates ............. In any event, with a view to ensure supplies to the Stanvac Refinery the company, although convinced that the strike was unjustified and uncalled for, had to sign an agreement with the union to refer the dispute to adjudication.'
4. One thing is common to the two versions quoted above, namely, that the joint application to Government under S. 10(2) was the result of a strike.
5. I shall now take up demands 1 and 4 together, because a large part of the submissions of the learned advocates was directed towards the maintainability of those two demands. To understand the submissions, we must bear in mind some past events. In the year 1957 the parties to the present dispute had come before me in Reference I.T. No. 3 of 1957. One of the demands was :
'Every worker who has completed three months' service should be made permanent.'
I made an award. It is published in 1957 I.C.R. (Bom) 1429. I directed that workmen who put in six months of continuous service should be made permanent. This award was terminated by the union in 1958 and fresh demands were made on the company. On 24 January, 1959 the parties arrived at a settlement before the conciliation officer (Ex. C. 1). The agreement pertained to the following demands :-
(2) Dearness allowance.
(4) Issue of pay slips.
Then it was agreed as follows :
'This agreement is to supersession of the award in Reference I.T. No. 3 of 1957 published in the Bombay Government Gazette, Part I-L, dated 8 August, 1957, at pp. 3467-3477, and the parties agree that subject to the above amendments regarding the wages and dearness allowance, the said award would continue to be binding on the parties for the period of this agreement. This agreement will remain in force up to the 31 July, 1961, and will continue to remain in force thereafter unless terminated by parties according to law.'
That shows that the award which I had made in Reference I.T. No. 3 of 1957 and which had been terminated by the union was revived by this settlement. And under the settlement the effect of the award was to continue till 31 July, 1961. It is therefore argued on behalf of the company that the demands of permanency and issue of pay slips (Nos. 1 and 4) cannot be raised by the union. As regards demand 4, the position is very simple. Under the settlement, that demand had not been pressed by the union, and since the settlement is to remain in force till 31 July 1961, that demand cannot yet be raised.
6. But Sri Gadkari on behalf of the union has argued that by agreeing to a joint application under S. 10(2), the company has virtually waived its right to raise a preliminary objection as to the maintainability of the reference. I do not think so. I have shown from the two versions about the history of the dispute that the company was practically forced to make a joint application for a reference in the face of a strike which had been staged by the workmen. The procedure under S. 10(2) is resorted to for a speedy reference. The parties appear before the conciliation officer, make an application that certain demands may be referred to an industrial tribunal for adjudication and the reference is made. And when there is a strike on, the company thinks it wise to bring the strike speedily to an end by agreeing to apply jointly for reference. That does not, however, take away form the company its right to raise such objections as it can raise. In the case of the East Asiatic Company (India) (Private), Ltd., Bombay there was a dispute as regards the reinstatement of one Sri A. A. Daruwalla. A joint application under S. 10(2) was made and the Government made the reference. The company raised a preliminary objection that as Sri Daruwalla was not a workman, the reference was bad. The union contended that in a joint application the company could not raise a contention that the employee did not come within the purview of the Act. Sri I. G. Thakore, the learned industrial tribunal, observed :
Page 384. - 'If it was held, as has been urged before me, that certain preliminary questions like the one raised herein, could not be considered by this tribunal in a dispute under S. 10(2) it would only discourage parties from making a joint application under S. 10(2).'
It is therefore quite clear that an application under S. 10(2) does not deprive a party of the right to raise all preliminary objections which it would have a right to raise if the reference were under S. 10(1)(d) or S. 12(5).
7. Sri Gadkari drew my attention to the case of the Federation of Mica Association, Bihar 1954 L.A.C. 628. There a certain award had been made on 21 August, 1951. Government extended its period up to 19 July, 1953. In the meantime disputes arose between the parties and an agreement was arrived at. It stated :
'The present award (meaning thereby the award dated 21 August 1951), in the mica factories will stand terminated from the 20 July, 1953 in so far as it relates to payment of monthly and quarterly bonuses. It will remain operative in respect of other matters covered by it.'
Thus, part of the award stood terminated by an agreement as from 20 July 1953 the day following the last day of the existence of the award. Thereafter, Government made a reference on 18 September, 1953 as regards the monthly and quarterly bonuses. The tribunal held that the previous award in regard to the monthly and quarterly bonuses to the workmen continued to be operative and was not terminated. On appeal, the Labour Appellate Tribunal observed :
'Issue 2 of the reference which was the only issue that was being considered at the time makes it quite clear that the question of interim relief was to be considered on the basis that the award of Sri H. K. Chowdhury, dated 21 August, 1951, relating to monthly and quarterly bonuses stood terminated from 20 July 1953.'
This, therefore, is a case on a totally different set of facts. The parties agreed that a certain part of the award should be treated as terminated, the same issue was then referred to the tribunal and it had to be decided on the basis that that part of the award stood terminated. This case has no application to the facts of the case before me.
8. Now, under S. 19(2) a
'settlement shall be binding for such period as is agreed upon by the parties ...... and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement.'
Therefore it must be held that the demands which are covered by the settlement, dated 24 January, 1959 and by the award which has been revived by the settlement cannot be raised again until the settlement is duly terminated.
9. It was argued that demand 1 as it is made in this reference is different from the demand for permanency made in Reference I.T. No. 3 of 1957. In the former reference the demand was that all workmen who put in a service of three months should be made permanent. In the present reference the demand is that the company should not keep on its temporary roll more than 10 per cent of its total complement during the preceding year. Although the two demands pertain to making the workmen permanent, the sphere of their effect is different. The demand in the former reference dealt with the question when should a workman be made permanent; the demand in the present reference seeks to prescribe the proportion of the permanent and the temporary complement. I therefore hold that demand 1 made in the present reference is not covered by my award in Reference is not covered by my award in Reference I.T. No. 3 of 1957 and that the union was perfectly at liberty to make it despite the settlement dated 24 January 1959.
10. We therefore proceed to consider demand 1 on merits. Exhibit C. 2 shows that the company had, on 31 July, 1960, 23 temporary and 231 casual workmen on its muster roll. There is no dispute that it has 19 permanent workmen. The business of the company is to manufacture drums and barrels. It has entered into a five-year agreement (confidential Ex. C. 1) with the Standard-Vacuum Refining Company of India, Ltd. The agreement is to continue till 30 June, 1964 subject to the present company abiding by the provisions of the agreement. The statement of claims gives the names of several other concerns for whom this company manufactures drums and barrels. The activity of the company has obviously expanded as can be seen from the increase in the number of workmen given in the statement of claim. The figures are as follows :
Year Number of workmen 1953 ..... 35 1954 ..... 45 1955 ..... 60 1956 ..... 100 1957 ..... 125 1958 ..... 170 1959 ..... 200 1960 ..... 254 (as given by the company in Ex. C. 2 plus the permanent employees).
11. The reason why the company employs a very large number of temporary and casual workmen as against only a handful of permanent workmen is given in Para. 12 of the written statement thus :
'... temporary recruitment of labour has been resorted to in the special circumstances in which the operations of the company are at the moment conducted .... The operations at Chembur are for a limited period and the barrels requirement of Stanvac Refinery also is not fixed .... In the circumstances it would be hazardous and imprudent to shoulder long-term responsibilities of retrenchment compensation, etc.'
These are the only reasons why the company keeps a large number of workmen on its non-permanent roll. Now, as regards the first reason, namely, that the work is of fluctuating nature, it must be noted that the work of several manufacturing concerns depend upon receipt of orders from customers. But that does not necessarily mean that one cannot say when the company would have to close down for want of orders. It is but fair to expect that with usual advertising and canvassing orders dare usually secured and the business goes on. The union has given the names of ten very well-known concerns which place orders with this company. In reply, all that the company says is that the list is incorrect (Para. 5 of the written statement). In view of such vague denial it should be easy to infer that the Stanvac Refinery is not the only concern which places its orders with the company. At Ex. U. 3 the union has union has given a list of machines which are in operation in the company's factory. They number 34. The factory admittedly works in three shifts. How then could the company work all these machines with only 19 permanent workmen That would roughly work to 6 permanent, workmen per shift. It is absolutely clear that the company could very easily maintain a much larger number of permanent workmen.
12. But Sir John has argued that the matter making workmen permanent is to be decide as per the standing as per standing orders. The model standing orders, which are applicable to the workmen of this company, only deal with probationers and not with temporary of casual workmen. That does not however mean that because the standing orders do not lay down any rule for making temporary or casual workmen permanent, therefore industrial tribunals cannot give any directions as regard that matter. As their lordships of the Supreme Court observed in the case of Niemla Textile Finishing Mills, Ltd. , industrial courts are to adjudicate on the disputes between employers and their workmen, etc., and in the course of such adjudication they must determine the 'rights' and 'wrongs' of the claims made, and in so doing they are undoubtedly free to apply the principles of justice, equity and good conscience keeping in the view the further principle that their jurisdiction is invoked not for the enforcement of mere contractual rights but for preventing labour practices regarded as unfair and for restoring industrial peace on the basis of collective bargaining. Therefore, even apart from contracts entered into by the management with its employees industrial tribunals must see if the management is taking undue advantage of the weakness, ignorance, poverty, of the person who seeks employment.
13. It has been the company's practice to employ workmen on short-term contracts. Sri Gadkari stated that to circumvent my directions regarding making workmen permanent after a service of six month, the company started taking on workmen for about three months, discharging item for a few days and reemploying them again for about three months and so on. Ten or eleven such workmen filed before me complaints under S. 33A and urged that their discharged was wrongful. The company admits that it engaged labour for short periods because it does not know when its contract with the Stanvac Refinery might be terminated and because it does not wish to pay retrenchment compensation to persons who might have to be retrenched. I am not impressed by this argument. The company has not been able to show if during the seven years that it has been in existence it ever suffered from want of orders and had to retrench or discharge its labour force because there was no work. And even if such a contingency arises, which, let us hope, will never arise, it would be better to retrench an adequate number rather than continue workmen on temporary or casual roll. Security of service, exercise of rights to enjoy paid leave, paid festival holidays, retirement benefits, etc., keep a workmen in a contented frame of mind and enable him to put in a normal day's workman with a reasonable amount of zeal. The second reason given by the company for keeping a large number of workmen on the temporary or casual roll is to avoid payment of retrenchment compensation. This is an improper reason and should not be allowed to be advocated. An employer may certainly engage extra hands if there is unusual increase in work; but when the work consists of manufacturing drums and barrels in thousands every day and supplying them to concerns like Stanvac Refinery, one cannot say that the nature of work is of a very fluctuating character and that it could be done by hundreds of temporary and causal labourers.
14. I stated that the company's practice was to engage temporary hands for short periods, discharge them and again reemploy them. Now, here is a sample given by the union in Ex. U. 1. The company has admitted that Ex. U. 1 has been prepared from its own records.
Name Discharge Reemployedon on 1959 1960(1) Mohamedalli Hasnu. ... 31 December 1 January(2) Ramdas Narsingh Kamat. ... Do. Do. (3) Shripat Rameshchandra. ... Do. Do. (4) M. S. Divadkar. ... Do. Do. (5) Anand Hari Kharat. ... Do. Do. (6) D. S. Shinde. ... Do. Do.(7) Laxman Damodar. ... 14 October Do. (8) Shankar Laxman. ... 31 December 1 January
These are revealing facts and the company took pains to show that the dates were incorrect. It has stated in Ex. C. 3 :
'With reference to Ex. U. 1 filed by the union, the company submits that the list is drawn by the union from the records of the company. By a clerical mistake, in the 'remarks' column workmen (1) to (8) were shown as having been discharged on 31 December, 1959. As a matter of fact, they were not discharged on 31 December, 1959, but were continued against in service till the date shown against each hereunder.'
Then the company has proceeded to give the following dates :-
Name Discharged Reemployedon on 1960 1960(1) Mohamadalli Hasnu 18 January 17 February (2) Ramdas Narsingh Kamat. 1 February 16 February (3) Shripat Ramachandra More. 18 January 15 February (4) M. S. Divedkar Do. 7 February (5) Anand Hari Kharat. Do. Do. (6) D. S. Shinde Do. 15 February (7) Laxman Damodar. 1 February 16 February (8) Shankar Laxman. 18 January 8 February
There is neither an affidavit nor other evidence to show that the dates taken down by the union from the company's records were a 'clerical mistake' and that the dates given in Ex. C. 3 are the correct dates. And even if we assume that the dates in Ex. C. 3 are correct, they do not improve matters. In fact I would way that they worsen matters. If we hold that the dates in Ex. U. 1 are correct, there is at least one redeeming feature, namely, that there was no unemployment though an artificial break in service. If the dates in Ex. C. 3 are held to be correct, there was forced unemployment for a fortnight or more during which period the workmen must have stood at the gates of the factory hoping to be called in. During this period they earned nothing and spent their days in anxiety. It is difficult to imagine that they could work elsewhere and earn a wage. Sri John had argued that the company did not know if its contract with the Stanvac Refinery would be renewed in 1964. It is true that one could never say what might happen four years hence. Bit it should be reasonable to suppose that if the company were to execute its work to the entire satisfaction of its customers there should be every likelihood of the contracts being renewed. And Satisfactory work would depend upon a satisfied labour force. I am therefore of the opinion that in this company where the work is of a permanent nature, where there are not great ups and downs in the volume of work day after day, where there are as many as 34 machines working almost round the clock, there must be a must larger permanent labour force than the handful that exists today.
15. How then should we determine the strength of the permanent Labour force of this company In this, we get guidance from an award which Sri S. T. Bilgrami made in terms of an award made by two eminent advocates Sarvasri B. Narayanaswami and K. T. Sule in the case of McKenzies, Ltd., Bombay. A copy of the said award is filed by the union at Ex. U. 4. Mckenzies, Ltd., used to have a large number of workmen on their temporary roll. About that practice the learned arbitrators observed :
'We have noticed at present, according to the statement filed by the management, that the company on its musters has a complement of 198 workers and a temporary complement of 235 workers. The company seeks to justify the existence of this large complement of temporary workmen on the nature of their business. We cannot accept, whatever may be the nature of business that such a large number of temporary employees who have put in services of more than several years should be treated as temporary. There is no justification for the same.'
The learned arbitrators then proceeded to give the following directions :-
'We award that all workmen who have been in temporary service in the company and who have put in six months' actual work in the aggregate within a period of eighteen continuous months, shall be made permanently with effect from 8 May, 1956, or from any later date they become entitled to be made permanent under this clause.'
In my opinion the directions given by the learned arbitrators are very salutary. They put a healthy check on a practice which must be regarded as unfair of causing artificial break in service and of treating reemployed persons as fresh recruits. Now, the Standing orders define permanent, temporary, casual and badli workers. If I were to give directions in regard to 'temporary' workmen the company might state calling these reemployed workers as casual and might urge that my award did not apply to them. I sincerely trust that the company would not take up such a stand. But to avoid any such move, I would give the following directions :
All workmen who have been in the nonpermanent service of the company and who have put in six months of actual work in the aggregate (in broken periods or continuously) within a period of eighteen continuous months from the dates of their very first employment shall be made permanent with effect from 1 May, 1960, or from any later date from which they become entitled to be made permanent; and such workmen shall then become entitled to all the benefits available to the permanent workmen of the company. If any amount become payable by reason of this award, it shall be paid to those entitled to it within two months of the date of the publication of this award.
16. Demand 2. - The Factories Act makes provision for a compensatory holiday if a workman is called to work on a weekly holiday. In this company all the workmen in the factory do not get the weekly holiday on one and the same day. Exhibit C. 4 shows that the labour force is divided into groups and each group in each shift gets a weekly holiday on some particular day of the week. Some get a weekly holiday on Sundays, some on Mondays, some on Tuesdays and so on. Now if a workman is called to work on a day which is his weekly holiday as notified by the company, he shall be paid his daily basic wage plus 50 per cent of the same. He shall also get a statutory compensatory holiday. And if he is called to work on a paid festival holiday declared by the company, he shall be paid his daily basic wage and dearness allowance plus 100 percent of the same. These directions shall not apply to watchmen and workmen in the maintenance section. These directions shall come into force as from 1 December 1960.
17. Demand 3 pertains to uniforms. - The Factories Act makes provision for protective clothing for carrying on certain operations. In my opinion the provision is adequate and I do not therefore prescribe uniforms for any other categories. The demand is rejected.
18. As regards demand 4 I have already stated that the demand could not be made so long as the settlement dated 24 January 1959 is in force. It is therefore rejected.