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Escorts Limited Vs. the Industrial Tribunal, Delhi and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 963 of 1968
Judge
Reported in6(1970)DLT323
ActsIndustrial Disputes Act, 1947 - Sections 25G
AppellantEscorts Limited
RespondentThe Industrial Tribunal, Delhi and anr.
Advocates: Jitendra Sharma and; S.K. Mahajan, Advs
Cases ReferredDhulabhai v. State Maddya Pradesh
Excerpt:
labour and industrial - workmen - section 25g of industrial disputes act, 1947 - settlement between employer and workmen that typists of grade a and b formed two categories of workmen - recruitment of grade b bound to be separate from recruitment of grade a - no transferability between grade a and b - separate scale of pay for grade b and a - no conception of seniority of grade b vis-a-vis working in grade a - held, grade b typists form 'particular category of workmen' within meaning of section 25g. - - 2 cams to be employed by the petitioner-company and that they were junior to the respondent no, 2. he, thereforee, complained that the order of retrenchment contravened the provisions of section 25-g of the act......agreed that the work done by the two grades of typists was not the same. the work done by grade a typists was to be remunerated at a higher scale of pay while the work done by grade b typists was to be paid for at a lower rate of pay thereforee, though broadly or horizontally speaking typists as a whole can form one class of workmen, vertically or more particularly speaking, the typists of grade a and grade b form two different classes. it is necessary, thereforee, to find out if each of these two classes is a 'category' within the meaning of section 25-g.(11) this finding is helped by coisideration of the object of section 25-g and the context in which the word 'category' is used therein. that object of section 25-g is to ensure that when the employer finds that there is a.....
Judgment:

Dashpande, J.

(1) A question of first impression as to the meaning of the expression 'a particular category of workmen' used in section 25-G of the Industrial Disputes Act, 1947 (hereinafter called the Act) has arisen in this case.

(2) The respondent No. 2 was employed as a typist by the Petitioner-company According to a settlement between the petitioner company and its workmen in 1964, the typists employed by the petitioner were classified into two grades, namely, Grade A with the scale of Rs 140-8-'226-EB-11- 324 and Grade b with the seals of Rs. 110-6-172- EB- 8- 236 The respondent No. 2 was in Grade B. As the Spare Parts Division of the petitioner company located at Delhi was closed and reopened at Furidabad, the workmen employed there in were given the option by the petitioner-company of going to Faridabad. The respondent No 2 however, declined to go there.

(3) According to the petitioner-company, the respondent No. 2 was the junior most in the Grade B of typists in the whole establishment of the petitioner-company at Delhi and he was, thereforee, retrenched under section 25-G of the Act.

(4) The respondent No. 2 challenged the order of retrenchment on the ground that in Grade A of typists, there were two ladies who were employed after the respondent No. 2 cams to be employed by the petitioner-company and that they were junior to the respondent No, 2. He, thereforee, complained that the order of retrenchment contravened the provisions of section 25-G of the Act.

(5) The dispute was decided by the Labour Tribunal, Delhi, in favor of the respondent No. 2 by an award dated 20th August, 1968, Annexure S to the writ petition, on the following grounds. The learned Tribunal pointed out that in 1965, a common list of seniority of all the typists whether working in Grade A or Grade B was prepared by the petitioner-company and in this list the respondent No. 2 was shown as No. 18 while the two ladies working in Grade A were shown below him in order of seniority. The typists as a whole form 'a particular category of workmen' within the meaning of section 25-G of the Act. Grade B of typists did not form a separate category. The separate seniority list of typists working in Grade B was prepared by the petitioner-company on 13th January, 1967 to injure the interest of the workmen including the respondent No. 2. As no reasons were recorded for not following the principle of 'last come first go' by the petitioner-company as required by section 25-G, the order of retrenchment was held to be unjustified and illegal.

(6) The award of the Tribunal at Annexure S is impugned by the petitioner-company on the ground that the Grade B of typists constituted ' a particular category of workmen' within the meaning of section 25-G of the Act, and, thereforee, the retrenchment of the respondent No. 2 was in order as he was admittedly the junior-most in the said category. The petition is resisted by the respondent No. 2 on the ground that Grade B of typists did not form 'a particular category of workmen' within the meaning of section 25-G but that the typists as a whole constituted such a category and, thereforee, the respondent No. 2 was not the junior-most workman in the said category and, thereforee, could not be retrenched.

(7) The question whether the Grade B of typists in which the respondent No. 2 was the junior-most workman was 'a particular category of workmen' within the meaning of section 25-G depends primarily on the meaning to be attached to the word 'category'. This meaning is to be derived Ob the one hand from the ordinary dictionary meaning of the word 'category and on the other hand from the object of section 25-G and of the related provisions of the Act and in the context in which 'category' is used.

(8) As pointed out by the learned Tribunal, the word 'category' is defined in Shorter Oxford English Dictionary to mean 'a class, or division, in a scheme of classification'. What is the scheme of classification , by the petitioner-company regarding the typists According to the petitioner-company, the scheme of classification includes two classes of typists namely Grade A and Grade B. This is controverter by the Respondent No. 2 according to him the typists as a whole including Grade A and Grade B of typist form one class in the scheme of classification. The decision of the learned Tribunal as to the meaning of the word 'category' is based entirely on the dictionary meaning of the said word. This is why the learned Tribunal contrasted with it the meaning of 'grade' which in the Shorter Oxford Dictionary is defined as 'a degree in the scale of rank. a position in the scale'. Briefly, in the dictionary sense, a category may be said to be a horizontal classification while a grade may be. said to be a vertical classification. Unfortunately, the learned Tribunal has not paid any attention whatever to the object of section 25-G and the context in which the word 'category' is used therein.

(9) As section 25-G deals with the procedure to be followed by the employer in making retrenchment, let us first see what the word 'retrenchment' means. The relevant part of its definition in section 2(oo) of the Act is that it is a 'termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment' In the Concise Oxford Dictionary, the word 'retrench' means 'to cut down or to reduce' something apparently because it has become unnecessary or surplus. The word was so interpreted by the Supreme Court in Piptratch Sugar Mills. Ltd. v. Pipraich Sugar Mills, Mazdoor Union when their Lordships of the Supreme Court observed that 'retrenchment connotes in its ordinary acceptation that the business itself is being continued but a portion of the staff or the labour force is discharged as surplusage'. An employer thus retrenches a workman who is not needed by him and who has become surplus It is in this sense that the word 'retrenchment' is used in section 25-F which provides for compensation to be paid to a retrenched workman and it is in the same sense that it is used in section 25G.

(10) The basis of retrenchment, thereforee, is the fact that the particular workman has become surplus or unnecessary to the needs of the employer. The need of the employer is, thereforee, the test of his power of retrenchment. What is signified by such need? The need is for the work which is done by the concerned workman. When the employer does not any longer need that a particular piece of work be done for him. the workman doing that work is retrenched. The need of the employer is, thereforee, to be considered strictly with respect to the work which the particular workman was doing. What was the work which the respondent No. 2 was doing? Of course, he was doing the work of a typist, namely, typing of papers on a typewriter. The argument for the respondent No. 2 is that, all typists, whether in Grade A or Grade B, are doing the typing work, and, thereforee, they form one category. Unfortunately for the respondent No 2, however, this is not bow the employer and the employees in the settlement arrived at between them in 1964 looked at the nature of the typing work. If they had regarded all typing work as the same, they would have formed all the typists into one category of workmen. But they agreed that typist's should be divided into two grades, namely Grade A and Grade B, with a higher scale of pay for Grade A and a lower scale of pay for Grade 13. they, thereforee, agreed that the work done by the two grades of typists was not the same. The work done by Grade A typists was to be remunerated at a higher scale of pay while the work done by Grade B typists was to be paid for at a lower rate of pay thereforee, though broadly or horizontally speaking typists as a whole can form one class of workmen, vertically or more particularly speaking, the typists of Grade A and Grade B form two different classes. It is necessary, thereforee, to find out if each of these two classes is a 'category' within the meaning of section 25-G.

(11) This finding is helped by coisideration of the object of section 25-G and the context in which the word 'category' is used therein. That object of section 25-G is to ensure that when the employer finds that there is a surplusage in a certain category of workmen then the first to go out by way of retrenchment among these workmen should be the person who had been last to come in. This principle embodies the universal rule of seniority which is an important principle of the law and administration of services whether in the sphere of industry or in the sphere of government service. Just as in the sphere of government service, the principle of seniority creates expectations among the government servants for eligibility to promotion, similarly under section 25-G, the principle of seniority gives the workmen a right to insist that the junior-most should go out first in case of redundancy. The basis of this principle is that the workmen in the particular category are interchangeable. That is to say, the place of the junior-most workman who is retrenched can be taken normally by the workman next above him and so on. Without such an inter change ability, the principle of seniority has no application. A wurkmin can be senior or junior to another workman only when he is in one category. thereforee, we may say that unless a person can become senior or junior to another, he does not form a category with such other workmen. This is why the principle of seniority or interchangeability governs the meaning of 'category'.

(12) Applying this principle to the typists in the employment of the petitioner-company, it becomes clear that a Grade B typist is not interchangeable with a Grade typist. For, the seniority inter se can have a meaning only among the Grade B typists inter se and among the Grade A typists inter se. Even if the aspect of promotion is to be taken into account, all Grade A typists would be deemed to be senior to all Grade B typists Otherwise, the seniority of a Grade B typist can be determined only vis a vis other Grade B typists. It can never be said that a Grade B typist is senior to a Grade A typist.

(13) In Indian Cable Co Ltd. v Its workmen', the Supreme Court pointed out that section 25-G operated only (1) within the establishment in which the retrenchment is to be made and (2) to the category to which the retrenched workmen belong. For the purposes of the present case, the petitioner-company does not take the stand that its spare parts division was a separate industrial establishment. But it has taken the position that the typists form two categories divided into Grade A and Grade B. As to the meaning of 'category' in this context, the following observation of the Supreme Court at page 471 column (1) of the report is important.

THENagain on the terms of section 25-G, the- relief provided therein is to be granted within the category of workmen who are proposed to be discharged. This posits that there is one code governing the grades of workmen and their scales of wages and that is ordinarily possible only whin the establishment is functioning at a given place. If there are different branches in different places and there are diffrent scales of wages, the rule laid down in section 25G would be incapable of compliance unless all the branches have one scale of wages and the rules provide for automatic transfer from place to place having regard to the seniority and grades. Thus whether we have regard to the: popular sense of the words 'industrial establishment ' or to the limitation of relief under section 25-G to workmen in the same category, the conclusion would appear to be inescapable that each branch of acompany should normally be regarded as a distinct industrial establishment.

(14) It will be seen that the Supreme Court has applied the sane test to determine whit is an establishsment and what is a category of workmen, namely, the identity of the scale of wages and autamatic trans Jerability. By both these tests, the category relevant in the present case would be Grade B of the typists and not typists as a whole. For, it is only in Grade B that one scale of Wages obtains and it is only inside the grade that one workman can be interchanged for the other.

(15) In Tulsidas Khimji v. Jeejeebhoy the' Bombay High Court had to consider if the different branches or departments of a company were different industrial establishments or one establishment so that the seniority of the clerks working in each of them was to be treated separately for each department or in common for all the departments. The following tests were suggested by their Lordships for determinging title question. Firstly, whether the recruitment of the clerks of the lour different departments was made as an integrated class or was the recruitment made on the basis of a category of clerks belonging to each department as a class separately. Are the four departments functionally integrated or by reason of the conditions of the transferability or seniority among the clerical cadre, can the four departments be treated as forming a single integrated establishment? It was found that the recruitment for each department was made separately and was governed by the requirements of that department alone, the recruitment was not made on the basis that all the recruited clerks belonged to one single category of clerks belonging to the four departments. Though there was a common head-office in charge of all the different departments, this fact did not institute the clerks employed in the different departments into a single category for the whole of the business of the four departments taken to gether. For, each department had its own separate clerical staff. It the recruitment of the clerks was depaitment wise then their seniority also was department wise and there was no transferability as a rule excepting stray cases of clerks between different departments Each department was, thereforee.held to constitute a separate industrial establishment for the purpose of section 25-G. In the present case interchangeability or transferability obtains only among the Grade B typists inter se, but not between Grade B typists and Grade A typists. It may be said, thereforee, that it is only the Grade B typists inter se who are functionally integrated and formed one category of workmen while Grade A typists formed a separate category of workmen.

(16) Since the settlement between the employer and the workmen in 1964, Grades A and B of the typists formed two categories of worknnen. The recruitment of Grade B typists is, thereforee, bound to be separate from the recruitment of Grade A typists There is no transferability between Grade A and Grade b But the transterability exists only in Grade B inter se and Grade A inter se. There is a separte scale of pay for Grade B typists and a higher scale of pay separately for Grade A typists. thereforee, a Grade B typists can be claimed to be senior or junior only to his colleagues in Grade B. There can be no conception of seniority of a Grade B typist visa-vis any typist who is working in Grade A On all these tests, thereforee, Grade B typists form a 'particular category of workmen' within the meaning of section '5G.

(17) In 0m Oil and Oilseeds Exchange v. Their Workmen the clerks farmed one cut gory of workmen. Among the clerks, one clerk may be specialised in doing the Court work and another clerk may have been specialised in doing the share work. But one such specialised clerk cannot form : catagory by him-self This is why the seniority list of an individual specialised clerk could not be determined spearately but had to be determined in relation to the other clerks. In view of their common seniority, the employer was bound to record special reasons if he wanted to depart from the rule 'last come first go' embodided in section 25-G in retrenching some of the clerks This decision of the Supreme Court may be sa.id to suggest that one individual workman, even if specialised, cannot form a category of workmen by himself within the meaning of section 25-G if he already has a common seniority with others But in the present case, we are not concerned with this question at all. The category of workmen formed by G ade B typists does not consist of one individual workman.

(18) The learned Tribunal has relied greatly on the fact that in 1965, the petitioner company formulated a common seniority list of typists though they had already been divided in Grads A and B by the settlement of 1964. This comiron seniority list of 1965 can certainly give a handle to the argument that the typists as a whole formed one category of workmen. But the petitioner-compny seams to have realised subsequently that 'on a correct view of section 25G typists in Grade A and Grade B could not have a common seniority at all. This was why on the 13th of January 1967, the petitioner-company formulated a separate seniority list of Grade B typists. The learned Tribunal thought that this was done in order to injure the interest of the workmen and that no valid reason was given why the seniority list of 1965 was brushed aside. But the reasons given by me above would show that there could not be a common seniority between Grades A and B of the typists and. thereforee, the petitioner company was entitled to correct itself by formulating a separate seniority list of Grade B typists. These reasons justify the preparation of a separate seniority list for Grade B typists. They also show that the com'ron seniority list of 1965 was based on a wrong notion as to the meaning of section 25-G. No question, thereforee, arises of the petitioner company wanting to injure the interest of any workman by the preparation of the Grade B typists' seniority list. Rule 77 of the Industrial Disputes (Central) Rules, 1957 also shows that the employer has to publish a seniority list of the workmen in the particular category from which retrenchment is contemplated alteast 7 days before the actual date of retrenchment The rule, thereforee, contemplates that the employer should consider a week before the actual retrenchment whichi work man beloned to the catagory from which retrenchment is to be made and arrange the seniority of workmen inside that category expressly for the purpose of retrenchment and that too only a week before the retrenchment is made. this is a complete answer to the argument that 1965 seniority list should not have been brushed aside by the separate seniority list of Grade B typists made in 1967.

(19) The question whether the 'particular category of workmen' was formed by Grade B typists alone or by all the typists of both Grades A and B went to the very root of the Jurisdiction of the Industrial Tribunal. The view expressed by the learned Tribunal was contrary to such fundamental provisions of section 25-G and has made the entire procedings before the Tribunal illegal and without Jurisdiction as was recognised by the Privy Council in Secretary of State v Mark and Co., approved by the Supreme Court in the Firm of llluri Subhhayya Chetiy and Sons v. State of Andhra Pradssh' and in Dhulabhai v. State Maddya Pradesh,'.

(20) The writ petition is, thereforee, allowed and the impugned award of the Industrial Tribunal is set aside. There will by no order aa to costs.


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