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Aruna Metal Industries Vs. the Labour Court and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 554 of 1958
Reported inAIR1961Mad223; (1960)IILLJ681Mad; (1960)IILLJ681Mad
ActsConstitution of India - Article 226; Factories Act - Sections 67, 68 and 69; Industrial Employment Standing Orders Act, 1946
AppellantAruna Metal Industries
RespondentThe Labour Court and ors.
Appellant AdvocateV. Balasubramaniam, Adv.
Respondent AdvocateT. Ramkrishna, Adv. for Addl. Govt. Pleader and ;Mohan Kumaramangalam, Adv. and ;K.V. Sankaran, Adv.
DispositionPetition dismissed
Cases ReferredC.A. R. Varma v. Mettur Industries Ltd.
.....226 of constitution of india, sections 67, 68 and 69 of factories act and industrial employment standing orders act, 1946 - violation of principles of natural justice would entitle worker to fresh opportunity to show cause against discharge which could be given by labour court - birth certificate of worker produced before court proved that he was adult on material date - employer had no right to discharge worker on ground of not attaining majority - under such circumstances labour court or tribunal at liberty to investigate matter afresh and come to conclusion different from that of employer and afford relief - order of reinstatement by labour court within its jurisdiction and not vitiated by any error apparent on face of record. - - when a worker who had put in a decent period..........was retained in the service as adolescent worker. in the meanwhile the employer submitted draft standing orders for his establishment in accordance with the provisions of the industrial employment standing orders act, 1946, defining the conditions of employment in the factory. the standing orders were certified by the commissioner of labour on 18th january 1957 and they came into force one month thereafter. clause 25 of the standing orders stated:- 'no one who is below 18 years of age shall be allowed to work in the factory.' it is obvious that if ramachandran was below the age of 18 on 18th february 1937, he could not continue in service. besides ramachandran there were other workers who were similarly situated. the management put up a general notice, calling upon the concerned.....

Ramachandra Iyer, J.

1. This is a petition under Article 226 of the Constitution praying for the issue of a writ of certiorari, calling for the records in I.D. No. 1 of 1958, on the file of the Labour Court, Madras, and quashing the award dated 30th June 195S passed therein, in so far as it directed the reinstatement of Ramachandran in the petitioner's services.

2. The petitioner, Aruna Metal Industries, is a firm carrying on business in the manufacture and sale of barss and copper utensils. On 1st November 1955, the petitioner entertained one Ramachandran to work in the factory as a cooly. Sometime thereafter, the Inspector of Factories, evidently in the course of the inspection of petitioner's factory saw the worker and felt a doubt as to whether he was an adult, adolescent or a child.

Section 67 of the Factories Act prohibits the employment of young children in the factories. Section 68, however, permits a child who has completed 14 years of age or an adolescent to work therein, if a certificate of fitness has been granted to him under Section 69; Section 69 provides for the issue of a certificate of fitness to a young person. If in the opinion of the surgeon the young person had completed his fourteenth year and is also physically fit he should certify him as fit for work in the factory as a child.

If he has completed 15 years and fit for a full day's work he could issue a certificate of fitness to work as an adult. Ramachandran did not possess any proof of age. The manager of the factory therefore sent him to the Stanley hospital, Madras for ascertaining his age. On 26th March 1958, the certifying surgeon issued a certificate, stating that, in his opinion, the age of Ramchandran, as nearly as could be ascertained from his examination, was 16 years, and that he was fit for employment in the factory as an adult.

On the strength of the certificate, Ramachandran was retained in the service as adolescent worker. In the meanwhile the employer submitted draft standing orders for his establishment in accordance with the provisions of the Industrial Employment Standing Orders Act, 1946, defining the conditions of employment in the factory. The Standing Orders were certified by the Commissioner of Labour on 18th January 1957 and they came into force one month thereafter. Clause 25 of the Standing Orders stated:-

'No one who is below 18 years of age shall be allowed to work in the factory.'

It is obvious that if Ramachandran was below the age of 18 on 18th February 1937, he could not continue in service. Besides Ramachandran there were other workers who were similarly situated. The management put up a general notice, calling upon the concerned workers to prove their respective ages, to find out whether they could be retained consistently with the Standing Orders. No individual notices however were issued to the workers; there was no response from the workers for the general notice.

Thereupon, the management sent 15 workers, including Ramachandran, to the surgeon, Stanley Hospital, Madras for medical examination and for certificate as to the correct age of each worker. The surgeon sent a report only with regard to two of the fifteen workers, staling that they were 18 years old but there was no mention in the Communication about Ramachandran. The report how ever contained a note that only young person who had completed 14th year, but not 18th year, stood m need of certificate, and that adults need not be sent for medical examination.

Presumably the surgeon was of the opinion that the workers other than the two mentioned by him were adults. It however appears that the employer did not understand the implication of the communication in that light. The worker stated that he was actually running his 20th year but no proof was forthcoming. The management proceeded on the footing that he was loss than 18 years of age and on 21st February 1957, terminated his services under, Clause 25 of the Standing Orders. One month's wages plus gratuity and other benefits earned, were paid to him.

The worker was also informed that his claim for re-employment would be considered after he completed 18 years of age. Sometime after the termination, of his service, Ramachandran was able to obtain from the Corporation of Madras an extract from the birth register stating that a male child was born on 6th March 1936 to Veerappan, his father. The Labour Court has held and that finding is not disputed, that the certificate relates to the birth of Ramachandran. It may, therefore, be taken as proved that the worker had completed the age of 18 when he was discharged from service.

3. The cause of the worker was taken up by the Aruna Metal Industries Workers Union. The employer was requested to reconsider the order in the light of the proof of age available but that met with no response. Efforts at conciliation proved futile. An industrial dispute was, thereupon, raised, and by G. O. Ms. No. 8 Department of Industries, Labour and Co-operation, dated 2nd January 1958, the State Government referred to the Labour Court, Madras, the question whether the discharge of the three workers (among Ramachandran was one) was justified and if not the computation of the relief to which they would be entitled.

4. As stated earlier, the Labour Court held that, at the time of discharge, the worker was more than 18 years of age. It also held that the general notice calling upon the worker to submit proof of his age was not sufficient and that the management should have given further opportunity to the worker before discharging him, particularly when the certificates granted by the surgeon were not decisive.

These findings would have been sufficient to adjudicate on the reference. But the Labour Court proceeded further and stated that the management could not be said Jo have acted mala fide or with ulterior motives in discharging the worker. On these findings, the Labour Court directed the management to reinstate Ramachandran in service but without back wages as the employer acted bona fide.

5. It cannot be said that the reasoning of the Labour Court is, either clear or free from ambiguity. In one portion, the award stated that it cannot be said that the management was not quite justified in sending away Ramachandran. But immediately following that statement, the award proceeded to state thus:-

'Though the management's case that a notice was put up on the notice board remains uncontra-dicted, there is no certainty that Ramachandran would have acquainted himself with all the contents of all notices published on the board. It is only very few workers that pay particular attention to such notices published from time to time. When a worker who had put in a decent period of service is to be discharged not for any misconduct but on account of the operation of a standing order, I think it is but fair and proper that the management should have given him an opportunity to establish his age without summarily discharging him on the strength of an ambiguous document like Ex. M. 12, which does not clearly slate that all the workers other than Ambikapathi and Mani were below 18 years .....Anyhow, Ex. M. 12 does not prove definitely that Ramachandran was below 18 years old. The management was not completely justified in placing implicit faith on the age mentioned in Ex. M. 10, as the main object of giving that certificate was only about his fitness to work and not about his age. Evidently the age is mentioned in the printed form for the purpose of ascertaining whether he came under the description of a young worker namely persons between 14 and 18..... Though the management appears to have acted bona fide in relying upon Exs. M. 10 and M. 12, I think what they did was not quite Correct and proper. When it affected his service and his future, the management should have given him a personal letter calling upon him to produce evidence of his age but they have not done so. On the other hand, though in a bona fide manner they acted under Exs. M. 10 and M. 22 and discharged him.'

If the worker has not been given a fair Opportunity, and if the management purported to act on the basis of the two medical reports, Exs. M. 10 and M. 12, which could not be said to be decisive on the matter as to proof of age, I fail to see how any question of bona fides at all can arise. The finding is that there has been a non-observance of the principles of natural justice in the workers not having been given adequate opportunity to show cause against the discharge. The finding as to the bona fides of the management was given by the Labour Court evidently to justify its conclusion that the worker would not be entitled to back wages. AS the worker himself has not challenged the award on the ground that the denial of back wages was unwarranted, it is not necessary to refer to that aspect of the matter further. This however docs not conclude the question. The Labour Court proceeded to state:-

'An industrial dispute is not adjudicated upon by a Labour Court by a strict adherence to the legal rights of the parties in civil law just as it is done in a civil court. It only settles a dispute in the best interests of both the parties and in the interest of the country's production and the general public. Having regard to this principle, I think the best solution with regard to Ramachandra's case is to direct the management to reinstate him in service without back wages.'

The learned counsel for the petitioner contends that what the Labour Court avowedly did was to effect a settlement and not to decide the dispute, and that it had no jurisdiction to do so. I am, however, of opinion that that is not what the Court intended to do. A settlement implies the consent of the contending parties thereto. There has been no such agreement. But the Labour Court did adjudicate the dispute. As I understand the award what the court intended by the passage extracted above is nothing more than this: viz., that the Labour Court in adjudicating an industrial dispute was not bound by the contractual rights of the parties as a civil court would be, but would be entitled to go beyond them in the interests ot industrial peace, e.g., it could set aside in a proper case the discharge of a worker even though such discharge was effect-ed in accordance with the Standing Orders.

6. Mr. V. Balasubramaniam, who argued the case of the management with great ability, next contended that, on the finding that the management acted bonafide and that the management did not intend to victimise the worker with any ulterior object in view, the Labour Court Would cease to have jurisdiction to set aside the discharge of the worker. The learned counsel placed considerable reliance upon the following observations of the Supreme Court in Indian Iron and Steel Co. v. Their Workmen, : (1958)ILLJ260SC :

'Undoubtedly, the management of a concern has power to direct its own internal administration and discipline but the power is not unlimited and when a dispute arises industrial tribunals have! been given the power to see whether the termination of service of a workman is Justified and to give appropriate relief. In cases of dismissal on misconduct, the Tribunal does not, however, act as a court of appeal and substitute its own judgment for that of the management. It will interfere

(i) when there is a want of good faith,

(ii) when there is victimisation or unfair labour parctice,

(iii) when the management has been guilty of a basic error or violation of a principle of natural justice, and

(iv) when on the materials, the finding is completely baseless or perverse.'

7. It may be noticed that the Supreme Court recognises the power of the Industrial Tribunal (or Labour Court) to interfere in a case of disciplinary action taken by the employer against an employee when in so doing the former was guilty of a basic error or violation of principles of natural justice. As stated earlier, the finding of the Labour Court is that there was such error in what the employer did in the instant case.

8. But then Mr. Balasubramanian contended that the power of the Industrial Tribunal (or Labour Court) recognised in Indian Iron Steel Co., case, : (1958)ILLJ260SC would exist only in cases where the management took disciplinary action against the worker for misconduct and not in those Cases where it took action while enforcing the Standing Orders. The reason urged in support of the contention was that, as the Standing Orders, validly framed in conformity with the provisions of the Industrial Employment Standing Orders Act of 1946, would govern the rights ot the workers and the management, an enforcement of the same by the employer could not properly form the subject of an industrial dispute or confer jurisdiction in the Labour Court to go behind the Standing Orders to give relief to the worker.

According to the learned counsel as the Standing Order provided for the termination of services of an employee on the ground that his age did not qualify him for being retained in service, the employer would be entitled to terminate his services, in accordance therewith. The contention cannot be accepted. The jurisdiction of the Tribunal Or Labour Court is by virtue of the reference under Section 10 of the Act, and the power of the State Government to make such a reference is dependent on the existence of an industrial dispute. An industrial dispute is one between the employer and the worker in connection with the employment or nOn-employment.

Therefore, whenever a dispute is raised between the employer and workmen on a matter concerned with the employment or non-employment whatever may be the reason which occasioned the employment or non-employment (other conditions being satisfied) that is, whether for misconduct or under the powers reserved to the employer under the Standing Orders, the State Government would have the authority to refer the question for adjudication and the Tribunal would have jurisdiction to- decide the question referred. The limits of the powers of the Tribunal to interfere will be the same, whether action was taken on the misconduct of the worker or under the Standing Orders. In Assam Oil Co. v. Its Workmen, : (1960)ILLJ587SC the Supreme Court made the following observations at pages 590 and 591 (of Lab LJ) : (at p. 1267 of AIR):

'If the contract gives the employer the power to terminate the services of his employee after a month's notice or subject to some other condition, It would be open to him to take recourse to the said term or condition and terminate the services of his employee; but when the validity of such termination is challenged in industrial adjudication, it would be competent to the Industrial Tribunal to enquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract. If the discharge has been ordered by the employer in bona fide exercise of his power, then the industrial tribunal may not interfere with it; but the words used in the order of discharge and the form which it may have taken are not conclusive in the matter and the industrial Tribunal would' be entitled to go behind the words and the form and decide whether the discharge is a discharge simpliciter or not ..... The exercise of the power in question to be valid must always be bona fide. If the bona fides of the said exercise of power are successfully challenged, then the Industrial Tribunal would be entitled to interfere with the order in question. It is in this context that the industrial tribunal must consider whether the discharge is mala fide or whether it amounts to victimisation or an unfair labour practice, or is so capricious or unreasonable as would lead to the' inference that it has been passed for ulterior motives and not in bona fide exercise of the power conferred by the contract.....In this connection it is important to remember that just as the employer's right to exercise his option in terms of the contract has to be recognised so is the employee's right to expect security of tenure to be taken into account.'

9. In a recent unreported case, W. A. No. 115 of 1959 C.A. R. Varma v. Mettur Industries Ltd., a Bench of this Court rejected a similar contention advanced on behalf of the management, namely, that the labour court would have no jurisdiction to interfere with an action taken under the Standing Orders governing the rights of the workers and management except where such action was taken as a punishment for misconduct of the worker. It follows from the principle laid down in the cases referred to above, the Labour Court could direct a reinstatement, if the employer's action was vitiated by a basic error or otherwise contrary to the rules of natural justice.

A violation of the principles of natural justice would entitle the worker to a fresh opportunity to show cause against discharge; that opportunity could be given by the labour court. The birth certificate was produced before that court, arid it proved that Ramchandran was an adult on the material date. The employer would therefore have no right to discharge him on the ground that he was not an adult Further the order of the management could also be said to be vitiated by a basic error in regard to the age of the concerned worker.It would be open to the Labour Court or Tribunal in such cases to investigate the matter afresh and come to a conclusion different from that of the employer and afford relief. I am, therefore, of opinion that the order of reinstatement passed by the Labour Court is within its jurisdiction and is not vitiated by any error apparent on the face of the record.

10. Rule nisi is discharged. The writ petition is dismissed with costs. Advocate's fee RS. 100/-.

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