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Eveready Flashlight Co. Vs. Labour Court and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Case NumberCivil Misc. Writ No. 2444 of 1959
Judge
Reported inAIR1962All497; [1961(2)FLR598]; (1961)IILLJ204All
ActsTrade Unions (Amendment) Act, 1947 - Sections 23 and 28; Constitution of India - Article 43; Industrial Disputes Act, 1947 - Sections 15
AppellantEveready Flashlight Co.
RespondentLabour Court and ors.
Appellant AdvocateS.C. Khare, ;Yashodanandan, Advs.
Respondent AdvocateStanding Counsel
DispositionPetition dismissed
Excerpt:
(i) labour and industrial - unfair labour practices - interpretation - industrial dispute - workman made permanent through arbitrary power of employer - act of employer amounts to unfair labour practice  (ii) duty of labour court - section 15 of industrial disputes act, 1947 - framing of issues - decision - remand is not necessary if left undecided. - - 2. the respondent, ram bharose sharma, was an employee of the petitioner-company on the date--21st november, 1958--when his services were terminated allegedly on the ground that he had failed to show any improvement in his work. if the argument of the petitioner-company is accepted, the labour courts would have no power to condemn this type of practice as unfair, for it has nothing to do with restriction of trade union activity, in.....orders.s. dhavan, j. 1. this is a petition under article 226 of the constitution by eveready flash light company limited lucknow against an award of the labour court, bareilly holding that the company wrongfully and unjustifiably terminated, the service of ram bharose sharma, one of their employees. the facts as alleged in the petitioner's affidavit or recorded in the award are these.2. the respondent, ram bharose sharma, was an employee of the petitioner-company on the date--21st november, 1958--when his services were terminated allegedly on the ground that he had failed to show any improvement in his work. the workmen through their trade union raised a dispute over his removal from service and the matter was referred by the government for adjudication by the labour court, bareilly. the.....
Judgment:
ORDER

S.S. Dhavan, J.

1. This is a petition under Article 226 of the Constitution by Eveready Flash Light Company Limited Lucknow against an award of the Labour Court, Bareilly holding that the Company wrongfully and unjustifiably terminated, the service of Ram Bharose Sharma, one of their employees. The facts as alleged in the petitioner's affidavit or recorded in the award are these.

2. The respondent, Ram Bharose Sharma, was an employee of the petitioner-company on the date--21st November, 1958--when his services were terminated allegedly on the ground that he had failed to show any improvement in his work. The workmen through their Trade Union raised a dispute over his removal from service and the matter was referred by the Government for adjudication by the Labour Court, Bareilly. The parties filed their respective statements before that Court and led evidence. The employer alleged that Ram Bharose Sharma was employed by a letter of appointment dated 12th April, 1958, on the express condition that he would be on probation for a period of six months which could be extended from time to time at the discretion of the employer, and that his work was not found satisfactory and he was warned several times. Ultimately, the company was compelled to extend his period of probation by another four weeks. But there was no improvement in the quality of his work and on the 21st November, 1958, the company terminated his probationary appointment by a written notice served on him.

3. The case of the workmen was quite different. He alleged that he was appointed on 8th January, 1958, after a previous trial and at the time of the appointment he was assured that he would be kept as a permanent fitter. But on the 12th April, 1958, he was made to sign a document purporting to be a letter of appointment which virtually put him on an indefinite probation at the discretion of the employer. His case was that he was compelled Owing to economic difficulties to accept these unfair terms but the management, which had contrived to keep a whip-hand over him, became annoyed with him because he had become an active trade-union work rule on the 9th September, 1958, he was elected to the Working Committee of the Union and was declared a 'protected' workman in a pending dispute. On the very, next day he was served with a written notice alleging that his work was not satisfactory. According to the employee, this letter was written deliberately with the object of preparing the ground for his ultimate removal which must have been decided upon by the employer. In furtherance of this design, another written notice was served on him on 11th October, alleging; that his work had not improved and his period of probation was being extended. The final step was taken on 21st November, when the notice terminating his services was issued. The case of the employee was that he had been victimized for his trade union activities and he was not removed because his work was unsatisfactory.

4. The Labour Court framed seven issues which are as follows:-

'1. whether the present dispute is an industrial dispute.

2. Whether the INTUC, U. P., was competent to raise and pursue the present dispute?

3. Whether Sri Ram Bharose Sharma was in the employment of Messrs. Eveready Flashlight Co., as a permanent employee or as a probationer?

4. Why were the services of Sri R.S Sharma terminated from November 21, 1958?

5. Had the employers the right to terminate the services of R.S. Sharma from November 21, 1958.

6. Is the workman a protected workman? How does it affect the present case, and

7. To what relief, if any, is the workman entitled

5. The must important issues were three-

(1) whether Ram Bharose Sharma was a permanent employee or as a probationer;

(2) why were his services terminated on 21st November, 1958; and

(3) had the employer the right to terminate his services on 21st November, 1958.

6. On the question of victimization, the Labour Court did not give any finding and disposed of it in the following single sentence;

''The services of R.B. Sharma were terminated for the alleged reason that his work during the probationary period was not satisfactory.'

The use of the word 'alleged' indicates that the Court left undecided the question Whether the reasons advanced by the employer for the removal of the workman were justified.

7. But the Labour Court held that the employment of Ram Bharose Sharma commenced On the 8th January and not on the 12th April, as alleged by the employer, that there was no justification for putting him on probation after he had already been tried, that the condition in the alleged letter of appointment of 12th April putting him on probation indefinitely was unjustified and 'was done fast to avoid or delay making him a permanent hand'. It further held that the employer was not justified in giving the workman clear terms or conditions of service when he was taken in employment and that this amounted to unfair labour practice on its part, it further held that even according to the various sanding orders, the employer was not justified in keeping him on probation for more than six months at the most, and after the expiry of this period the workman having continued to be employed without being told that this work was unsatisfactory, he acquired the status of a permanent workman from October, 1958--that is, after the expiry of six months from 12th April. Consequently, he was entitled to all the privileges and rights of a permanent workman and his services could not have been terminated except by dismissal for misconduct or by retrenchment. It held the termination of Ram Bharose Sharma to be wrongful and unjustified and directed that the management should be required to reinstate him. But the Court awarded no remuneration for the interim period on the ground that he had done no work and deserved no pay for this period.

8. Aggrieved by this award, the petitioner-company has come to this Court for relief.

9. Mr. S.C. Khare, learned counsel for the petitioner, urged the following points against the legality of the award. First, he contended that the finding that the employee's services commenced on the 8th of January is illegal, being based on no evidence. Secondly, the finding that the petitioner-company was guilty of unfair labour practice is manifestly erroneous and the Labour Court has misinterpreted the law relating to unfair labour practice. Thirdly, the Labour Court exceeded its jurisdiction in creating a new contract between the parties and completely ignoring the terms and conditions contained in Ram Bharose Sharma's letter of appointment dated 12th April, 1958. Fourthly, the Labour Court had created a new case for the employer which he had not taken in his written statement--namely that the employer was guilty of unfair labour practice.

10. It is no doubt true that the Labour Court has given no finding on the grievence of the workman that the management had victimized for his trade union activities. As already stated above, this question was made the subject of a specific issue (Issue No. 4). But the Labour Court did not apply its mind to it presumably because it thought that the dispute could be decided on the question of unfair labour practice without branding the employer with the fault of victimization. I think it desirable that a Labour Court should not leave undecided an issue after framing it nor dispose of it in a summary manner.

11. The question, however, before me is whether I should remand the case to the Labour Court for a decision on this issue or not. I think a remand is not necessary, as the petition can be decided on other grounds.

12. The most Important question raised by counsel for the petitioner centres round the finding of the Labour Court that the employer was guilty of unfair labour practice. Mr. Khare contended that this phrase should be given a restricted meaning. He referred to the definition of 'unfair practice' contained in the Indian Trade Unions (Amendment) Act 1947 (No. XLV of 1947). There is a special chapter in this Act dealing with unfair practice. Section 23 (1) defines unfair practice by recognised trade Unions and Section 28 (k) deals with unfair practice by employers. Very briefly the following have been held in that section to be unfair practice by employers; (a) interference with the right of workman with trade union activities; (b) interference with the formation or administration of any trade union or contribution of financial support to it; (c) discharging any officer of a recognised trade Union because he is such an officer or otherwise discriminating against him; and (d) discharging or otherwise discriminating against any workman because he has given evidence in any enquiry or proceeding relating to any dispute between the employer and the trade union. (The above summary is a paraphrase in my own words of the provisions of Section 28 (k).)

13. Mr. Khare also relied on a few paragraphs in Corpus Juris Secumdum Vol. 56 in which unfair labour practice under the American Law have been discussed, on page 207. He also relied on a discussion of unfair labour practice in Charles O. Gregory Labour Law which is an American Publication.

14. It is conceded that there is no authoritative decision by the Supreme Court of India on the nature of what may be regarded as unfair labour practice. I am not inclined for several reasons to agree with learned counsel's contention that the meaning of this phrase must be restricted to the definition contained in the Indian Trade Union (Amendment) Act of 1947. First, that Act never came into effect. Its first section provided that it would come into force on a date to be appointed by the Central Government by a notification. It appears that no such notification was ever made. Therefore, the definition of 'unfair labour practice' contained in Sections 23 (j) and 28 (k) does not have the force of law.

15. Secondly, even assuming that this definition to some extent reflected the mind of the legislature at the time of the passing of that Act, it was intended to apply only for the purposes of that Act and no further. The purpose was to regulate the relations between the employer and the trade union, and it was provided that in his relations with the trade union the employer must not do anything which was calculated to weaken the trade union. But the definition of 'unfair labour practice' in Section 28 (k) has no application in the matter of the employer's relations with his individual employees. The Act was not intended to regulate the employer's relations with the employees arising out of the terms of employment which is the purpose of the Trade Deputes Act.

16. Furthermore, the weight of authority is against the argument that unfair labour practice should fee limited to any act discouraging trade unions activities. It has been held in several cases that the employer who lays off workers with the object of depriving them of their ligitimate dues, or makes his workman sign on temporary contracts and compels them to work for years on permanent jobs with the object of depriving them of the status and the privileges of permanent workers, is guilty of unfair labour practice. If the argument of the petitioner-company is accepted, the Labour Courts would have no power to condemn this type of practice as unfair, for it has nothing to do with restriction of trade union activity, in L.H. Sugar factories and Oil Mills (Private) Ltd., Pilibhit v. State of U. P., AIR 1962 All 70, I held that it was not possible to give an exhaustive definition of the phrase ''unfair labour practice' and that each question must be considered according to its own circumstances. It is not possible to lay down ally exhaustive test of unfair labour practice, but as a working principle, I would hold that any practice which violates the principles of Article 43 of the Constitution and other articles declaring decent wages and living conditions for workmen and which if allowed to become normal would tend to lead to industrial strife should be condemned as unfair labour practice.

17. I have now to consider whether the action of the petitioner-company in this case can be regarded as unfair labour practice. According to the employee, he was first appointed to the post of a fitter on 3rd January, 1958. For a few days he was kept on trial. On 13th January, the company wrote a letter to Messrs. Gannon Dunkerley and Co., directing them to employ four men, including the petitioner 'On temporary daily rate basis'. In this letter there was a specific reference to employ Ram Bharose Sharma and it was stated that he had been on trial for three days from 3rd January, to 7th January. The petitioner-company, during the hearing before the Labour Court, repudiated this letter completely and alleged that it had been forged. The letter on the face of it was signed by one A.C. Dutt who was a Personal Officer of the company when this letter was issued. But no evidence was produced in support of this serious allegation and Mr. A.C. Dutt did not go into the witnessbox to say that he never wrote it. The Labour Court held that the letter was genuine and this Court will proceed on the assumption that the company's case that it is forged is not true.

18. The next date is 12th April, 1958, when the so called letter of probationary appointment was issued to Ram Bharose Sharma. It stated that his appointment would commence from the date of the letter and he would be on probation for a period of six months to be 'extended from time to time in our discretion.' He was told that if his work was found satisfactory at the end of the period of probation, he would be confirmed in writing in his appointment. It was expressly stated that during the period of probation his services were liable to be terminated at any time without assigning any reasons or without any notice.

19. What happened between 12th April, and 9th September, 1958, is a matter of controversy. The company alleged that during this period his work was not found to be satisfactory and he was given several warnings. The employee, on the other hand, stated that the story about previous warnings was false and that he got no warning before the 10th of September. It is common ground that on the 9th September he was declared a protected workman and became the member of the Working Committee of his Union. On the next day, 10th September, he received a written warning from the Company that it had been reported that he had not been performing his duties satisfactorily, that he had been asked to improve his work and that the warnings had no effect. , This letter was subject of acute controversy. During the hearing of this petition, the Company claimed that it was not more than a routine warning to a workman who was showing no improvement and the employee alleged that it was the first deliberate step in the manufacture of a false case against him. On 11th October, a second warning was issued to him that his work was still unsatisfactory and that therefore his period of probation was being extended by four weeks. The motive of the Company in issuing tins letter is in dispute. On the 21st of November, the final letter terminating his services was issued. It said that in spite of opportunities given to him, he had failed to show any improvement in his work and it had been decided not to confirm him and to terminate his probationary appointment with immediate effect.

20. On these facts, the Labour Court had to decide the question whether the employer had the right to terminate the services of Ram Bharose Sharma on 21st November, 1958. The decision of this issue involved a decision on several subsidiary issues. The employer claimed the right to terminate Ram Bharose Sharma's services under the contract of employment contained, in the letter of 12th April, 1958, whereas the employee alleged that the letter was a fictitious document, which conferred On the employer no rights. It was, therefore, necessary for the Labour Court to decide what rights that letter conferred on the parties and whether the alleged terms of employment contained in that letter were unfair. The Labour Court has held that the terms of employment contained in this letter were not a fair deal between the parties and further that the letter was issued with the motive of delaying or abiding his permanent appointment, so as to keep him 'on tender-hooks indefinitely'. After seeing the material placed before, me, I am not inclined to differ from the Labour Courts decision.

21. The most significant feature of the alleged letter of appointment of 12th April, is the complete absence of any reference to the service rendered by Ram Bharose Sharma for the previous three months. In the earlier letter of 13th January, the Company had written to Messrs Gannon Dunkerley and Co., that Ram Bharose Sharma had been on trial for three days. Presumably he was appointed as a result of this trial. There is no explanation by the Company why it was considered necessary to place Ram Bharose Sharma on a further probation of six months (which could be extended indefinitely) when he had already been tried and had been working with the company for more than three mouths. The terms of employment included In the letter of April 12, are unfair. The employee was placed on probation which could be extended indefinitely at the will of the employer. In other words, it gave the employer the right never to make him permanent even though he was doing a job of a permanent nature. Learned counsel for the petitioner explained that the letter of April 12, probably contains the usual terms of employment which were signed by every workman at the time of his employment. This explanation does not improve the case of the Company but makes it worse. It means that the Company made a systematic habit of compelling its workman to execute an agreement under which he was to be kept on indefinite probation at the will of the employer so that he could never have the status and privileges of the permanent employees who cannot be dismissed except by way of dismissal for misconduct or retirement.

At a later stage, learned counsel went back on this explanation and said that he was not sure whether this letter represented the terms of employment for every workman Learned counsel abandoned his explanation because he thought it would prove a boomrang for the Company's case. But even without this explanation, and assuming that Ram Bharose Sharma alone was made to sign this contract, I am inclined to agree with the finding of the Labour Court that it was imposed on him not with the bona fide object of testing his merit but 'just to avoid or delay making him a permanent hand'.

22. Learned counsel urged that there was no material for this finding of the Labour Court. I do not agree. The conduct of the Company, both before and alter the execution of the document of 12th April, indicates that they had no intention of giving Ram Sharma a fair deal. I have already stated that he had worked for three months when his quality as a fitter could have been tested. This period appears to have been ignored and he was subjected to a fresh period of probation which was to last indefinitely if the employer so desired.

23. But it is the treatment of the employee after 12th April which reveals that the terms of the document of that date were intended to give the employer a whip-hand. On the 9th Sept. Ram Bharose Sharma was elected to the working Committee of the trade union in other words, became what is commonly known as a permanent trade union worker. On the next day he received the warning that his work was not satisfactory. That the warning should have been given within 24 hours of his being elected to the Working Committee of his Union is a remarkable coincidence, to say the least. But the contents of the warning letter make it a suspicious document. The Company's Case is that it was a routine warning to an employee who was showing no improvement in his work. But the language of the letter is against this explanation. It begins with the formal address 'Dear Sir.' It is not common for an employer when warning an employee for inefficiency to address him in this formal fashion. It is more likely that the warning would have been 'Ram Bharose Sharma is warned that his work is not satisfactory and he is asked to improve it,' or in similar language.

24. But the most significant feature of this letter is that it refers to previous warnings--''many times you have been advised and asked to attend your duties properly'. This allegation is also contained in paragraph 8 of the Company's affidavit which says that 'he was several times directed to improve his work'. This allegation was defied by Ram Bharose Sharma in his counter-affidavit and has as erred that he received no warning prior to 10th September, Thus the petitioner company was put to the proof of the fact that they had issued several warnings before 10th September. But in their rejoinder affidavit the Company did not accept this challenge and gave no particulars and dates of the previous warnings, and confined themselves to a bare statement that the Company's version was correct and that of the employee untrue. In my opinion, the question whether the Company issued any warning prior to Ram Bharose Sharma's election to the Working Committee of his Union is vital in this case, for if they did, it could not be said that Ram Bharose Sharma was victimized on account of his trade union activities.

The Company could have legitimately argued that Ram Bharose Sharma had been warned several timers before he acquired prominence as a trade union worker. But there is not the slightest evidence of any warning before 10th September. Even during the hearing of this petition learned counsel for the Company, was unable to give any particulars or dates of these warnings, in spite of repeated questions by the Court. It is significant that the warning of 10th September was in writing. Act one stage of his argument learned counsel explained that such warning are useally given in writing. If that be so, there should be a written record of the alleged previous several warnings which the Company claims to have given him. But though the warning of September 10, has been annexed as an annexure, there is no attempt to prove any previous warning in spite of an express challenge by the workman in his counter-affidavit. I must, the before, hold that the story of previous warnings appears to be a fiction, and the alleged warning of 10th September was the only one served on Ram Bharose Sharma.

25. Summing up the conduct of the petitioner-company in its treatment of Ram Bharose Sharma, it is proved that he was employed in the first week of January, on trial, that he worked for more than three months till 18th April, that he was made to sign a contract of employment on that date by which he conceded the right of the employer to keep him indefinitely on probation, that he became a prominent trade union worker and was elected to the Working committee of his Union on 9th September, that on the next day he was warned that his work was not satisfactory, that this warning was repeated on 11th October, and finally his services were summarily terminated on 21st November, 1958. There is no evidence that Ram Bharose Sharma's work was unsatisfactory within 24 hours of his election to the Working Committee of his Union. The conduct of the petitioner-company, both before and after the 12th of April, justifies the finding of the Labour Court that the terms of 12th April, were imposed on him to avoid him a permanent hand. I would add that the object was to give the employer a whip-hand over him which is amply proved by the fact that the whip was effectively used after he became a prominent trade union worker. A condition of employment which is designed to invest the employer with arbitrary power to keep the workman at his mercy as regards his chance of being made permanent and is eventually used to deprive him of the chance is unfair labour practice.

26. Learned counsel for the petitioner then argued that an employer cannot, be held guilty of unfair labour practice simply on the basis of one contract of employment. He contended that there must be a number of transactions to constitute an unfair practice. I do not agree. The Dictionary meaning of the word 'practice' includes a single transaction. A single transaction of cheating may he condemned as what is known a shady practice. Moreover, the argument that an employer must have committed a series of unfair transactions before he could be held guilty of unfair labour practice will lead to peculiar results. It would mean that he must be permitted to victimize several workmen before he can be stopped. In my view unfair labour practice may arise even out of a single transaction and a Labour Court has power to give a finding even on the basis of one act of the employer. The purpose of the Industrial Disputes Act is to prevent industrial strife in other words, to prevent any thins from happening which would lead to industrial disputes. Its function is to prevent unfair labour practice and not merely to punish it after it has been practised. It is in the public interest, in my opinion that even a single act of an employer should be condemned if it amounts to an unfair labour practice for the policy of the legislature is to weed out any such practice before it has spread and become a danger to the industrial peace.

27. Learned counsellor the petitioner also argued that the Labour Court had no power to change the case of the workman who had pleaded, that he had been victimised but not alleged that he was subjected to unfair labour practice. I am not impressed by this argument. The dividing line between victimization and Unfair labour practice is very thin and what is unfair labour practice may also be a victimization and vice versa. In this case the workman did plead that the letter of 12th April, was signed by him under the circumstances which were not fair. On the other hand, the employer claimed that he had a right under the letter of 12th April, to keep the workman on probation, to extend the period of probation, and to discharge him if his work was unsatisfactory. Therefore, the employer, by claiming the rights under this letter, put it in issue. The employer's case was that the letter contained the terms of employment and gave him the right to terminate Ram Bharose Sharma's services. The employee, on the otherhand, pleaded that he was made to sign on a blank paper and the letter is in fact a fictitious document. The Labour Court's finding is against the employee on the question of the genuineness of the document and against the employer on the question of the rights which the employer claimed under it. It held that the letter was not executed by the employer with the honest motive of testing the employee's work, but to retain a whip-hand ever him. After taking into consideration all the materials before it, the Labour Courts concluded that the workman had not been fairly treated and that it is not fair for any employer to keep a workman on indefinite probation.

28. The question is whether this Court should disagree with the verdict of the Labour Court on the ground that it is manifestly erroneous. In my view the subsequent conduct of the employer justifies the finding of the Labour Court that the document of 12th April, was not intended to give the employee the benefit of a genuine period of probation but only to deprive him indefinitely of the rights of a permanent employee.

29. Counsel for the petitioner finally submitted that the Labour Court was wrong in holding that the workman was entitled to the privilege of a permanent worker on the date when his services were terminated. He relied on several decisions in support of his contention that a workman can never acquire the status of a permanent employee without a formal order of confirmation. This argument cannot be accepted in such broad terms. If a workman cannot become permanent unless and until the employer issues a formal order to this affect, the result would be that an employer could by the simple device of not issuing formal Orders keep every employee as temporary. The Labour Court have been given the power to interfere with any such unfair practice by the employer. In this case the finding is that the employer used this device to deprive the workman of his permanent status. On the material before it, it was entitled to reach that conclusion. Its award is very fair, for though it had directed the reinstatement of the workman it has not allowed him any wages for the interim period when he did not work for the Company.

30. In the result the petition fails and isdismissed with costs to the third respondentRam Bharose Sharma which I assess at Rs. 200/-The State shall get its ordinary costs from thepetitioner.


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