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Tamilnad Electricity Workers' Fedration and Anr. Vs. Madras State Electricity Board (01.03.1962 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1962)IILLJ136Mad
AppellantTamilnad Electricity Workers' Fedration and Anr.
RespondentMadras State Electricity Board
Excerpt:
.....merger of bulk of the dearness allowance with pay and suggested revised pay structures, dearness allowance, house-rent allowance and madras house allowance, retiring benefits, reduction in the national and festival holidays and casual leave. (2) it is entirely open to the workmen to choose not to avail themselves of the better terms and conditions offered by the impugned proceedings and continue to be governed by the existing terms; further i am not satisfied that the change proposed by the impugned proceedings in the dearness allowance is prejudicial to the workmen. the petitioners have failed to satisfy me that this evaluation of the effect of the introduction of the revised scales of pay is incorrect. nor do i think that when the employer himself offers better terms, the workmen..........sen. iv shall effect such change-(a) without giving to the workman likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or(b) within twenty-one days oil giving such notice.the section contains a proviso which is not material for the present purpose. as pointed out toy the supreme court in north brook jute co. v. their workmen : (1960)illj580sc , this section contemplates three stages, namely,(1) the stage of proposal by the employer to effect a change,(2) the stage of notice, and(3) the stage when the change is brought (?) into effect on the expiry of 21 days from the date of notice.the change does not come into effect before the expiry of the notice period. in order that the section may apply to it, the notice must.....
Judgment:
ORDER

Veeraswami, J.

1. This petition under Article 226 of the Constitution is directed against the proceedings, dated 28 December 1961, of the respondent, the Madras State Electricity Board by its Chairman. The Tamilnadu Electricity Workers' Federation and the Madras Electricity Workers' Union are the petitioners. They pray for a writ of mandamus restraining the respondent from implementing or enforcing, in any way, its proceedings in so far as they relate to dearness allowance, casual leave and national and festival holidays. The respondent, Board, was constituted with effect from 1 July 1957, under the provisions of the Electricity (Supply) Act, 1948. Prior to this date, its employees were the employees of the Electricity Department of the Government of Madras and after that date they became employees of the board, by virtue of an option exercised by them pursuant to an order of the Government dated 15 February 1958. Acting under Section 79(c) of the Electricity (Supply) Act, 1948, the respondent adopted the conditions of service of these employees applicable to them before July 1957 as transitory regulations. As a result of certain demands and strike notice from the employees of the respondent, a negotiating committee appointed by the Government, by its order dated 28 March 1958, went into the demands and made recommendations on 15 October 1958. Though these recommendations do not appear to have been accepted by the respondent, fresh negotiations and discussions resulted in an agreement dated 3 February 1959 between the Government and the representatives of the employees which was ratified by the respondent on 16 February 1959. This agreement covered a number of items of which the first related to revision of scales of pay and the second to dearness allowance. It was agreed that the scales of pay of posts carrying a pay of less than Rs. 500 would be revised as shown in the appendix to the agreement with effect from 1 January 1959. Nominal muster roll workers, casual labour and contingent staff with over one year of service as on 1 January 1959 and subsequently were to be allowed an increase in wages by 12 nP. per day. In addition to the consequential increase in dear-ness allowance at the then existing rate due to increase in pay or wages, all employees including nominal mater roll workers, casual labour and contingent staff were to get an increase in dearness allowance at a flat rate of Rs. 5 per month with effect from 1 January 1959. The agreement specified no time-limit during which it was to be in operation. The Tamilnad Electricity Workers' Federation resolved to terminate Clause (2) of the agreement relating to dear ness allowance with a view to claim dearness allowance at 25 nP. per point of the cost of the living index over 100. The respondent, by its letter dated 3 October 1960, took the stand that the notice of termination of the agreement dated 3 February 1959, only so far at it related to dearness allowance was not in accordance with Section 19(a) of the Industrial Disputes Act, 1947. On 30 November 1960, the respondent notified to its employees under Section 9A of the Industrial Disputes Act of its intention to out with effect from 1 January 1961 the limit of casual leave from fifteen to twelve days for each year and allow three optional religious holidays during that year. The same notification also proposed to reduce, with effect from 1 January 1961, 26 national and festival holidays to 15 days as detailed therein. On 23 December 1960, there was a further notification of the respondent under Section 9A of its proposal to grant enhanced scales of pay merging bulk of the dearness allowance with pay, revised rates of clearness allowance, house-rent allowance and Madras house allowance to those employees drawing a pay of less than Rs. 500 a month. Evidently, owing to the agitation by the concerned employees of the respondent, the two notifications made under Section 9A became the subject-matter of conciliation proceedings which took place on 9 January 1961. It seems that during these proceedings the respondent accepted the position that the notification under Section 9A regarding the revision of scales of pay and dearness allowance was not in accordance with that provision. The conciliation failed and the relative reports dated 7 January 1861 and 8 March 1961 were sent to the Government. By its order dated 29 April 1961 the Government declined to refer the dispute under Section 10(1)(C) of the Industrial Disputes Act on the issues regarding the reduction in the number of national and festival holidays and casual leave benefits, and payment of dearness allowance at the rates claimed by the employees. The reason for the refusal to refer the first of these issues, as mentioned by the Government, was the pendency in this Court of W.P. No. 727 of 1960. As regards payment of dearness allowance at the enhanced rate demanded, the refusal to refer was based on the ground that the issue was covered by the agreement dated 3 February 1959 which, according to the Government, was still in force. W.P. No. 727 of 1960 related to change of hours and has no direct bearing on the petition now under consideration. By notice under Section 9A of the Industrial Disputes Act dated 2 September 1960, the respondent proposed to change the hours of work from 11 a.m. to 5 p.m. to 10-30 a.m. to 5 p.m. There was a dispute in relation to this too and W.P. No. 727 of 1960 was directed against this notification under Section 9A. Eventually an agreement was effected on 25 October 1960 under Section 12(3) of the Industrial Disputes Act, the workmen agreeing to the change of hours of work. The result was that W.P. No. 727 of 1960 became infructuous and was dismissed as such on 30 November 1961. While that petition was pending, in C.M.P. No. 4630 of 1960 the respondent successfully asked for vacating the stay order on an assurance that it would take steps to give a prior notice under Section 9A to the employees concerned in regard to the proposed change in the hours of work. In C.M.P. No. 8817 of 1961 pending that writ petition, the respondent sought permission of this Court to implement the revised scales of pay and deafness allowance proposed in November-December 1960. But no orders were passed by this Court in view of the dismissal of the writ petition Itself on 30 November 1961.

2. In the meantime it would appear that the respondent in the last week of June 1961 invited representatives of its workmen for informal discussions in the second week of July 1961 regarding the issues of dearness allowance, holidays, casual leave and scales of pay. According to the petitioners the workmen opposed the proposals of the respondent because they did not show whether every employee stood to gain and if so, how much benefit he would get, and because without information from the respondent regarding the financial commitments for the proposals and also details of how much saving it made by reason of change in the hours of work and reduction in holidays, it was not possible to accept or reject the proposals. On 31 October 1981, the Tamilnad Electricity Workers' Federation resolved to terminate the agreement dated 3 February 1959 in its entirety and gave the respondent the required two months' notice which the respondent received on 2 November 1961. It was, in this background, that the respondent decided to implement its earlier proposals, with certain changes and issued the Impugned proceedings dated 28 December 1961. One more fact to be noticed is that on 3 January 1962, the Madras Electricity Workers' Union issued a strike notice under Section 22 of the Industrial Disputes Act. The petitioners claim that by virtue of the strike notice in relation to various demands including the demand for dearness allowance based on the cost of living index at 25 nP. per unit over 100 the conciliation should be deemed to have commenced from 4 January 1962.

3. The respondent's proceedings dated 28 December 1961 were attacked on a number of grounds on which three have been particularly stressed during arguments. They are:

(1) the proceedings are in violation of Section 9A of the Industrial Disputes Act;

(2) they are in violation of the rights of the workmen under the agreement dated 3 February 1959; and

(3) they are contrary to Section 33 of the Industrial Disputes Act.

4. In regard to the ground based on Section 9A, the petitioners state that the respondent had admittedly given notice under that section in respect of substantially the same proposal earlier and that it gave an assurance, at the time of the conciliation, that those proposals would not be proceeded with and that this assurance found a place in the report of the conciliation officer. According to the petitioners, the impugned proceedings effected a change in the conditions of service of the respondent's workmen in respect of matters specified in the Schedule IV to the Industrial Disputes Act and such a change without notice, as required by Section 9A of that Act, is illegal. Section 9A reads thus:

9A. No employer who proposes to effect any change in the conditions of service applicable to any workman in respects of any matter specified in the Sen. IV shall effect such change-

(a) without giving to the workman likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or

(b) within twenty-one days oil giving such notice.

The section contains a proviso which is not material for the present purpose. As pointed out toy the Supreme Court in North Brook Jute Co. v. their workmen : (1960)ILLJ580SC , this section contemplates three stages, namely,

(1) the stage of proposal by the employer to effect a change,

(2) the stage of notice, and

(3) the stage when the change is brought (?) into effect on the expiry of 21 days from the date of notice.

The change does not come into effect before the expiry of the notice period. In order that the section may apply to it, the notice must be in respect of a matter specified in the Schedule IV to the Act. It is also clear from Clause (a) of the main section that the requirement of a notice to workmen will arise only if they are likely to be affected by the proposed change in the conditions of service. They are likely to be affected as I think, only if the proposed change is or is likely to be prejudicial to them. In my opinion, a change in the conditions of service contemplated by the section should be understood in that sense, for it does not appear to me to be its intention that even where the proposal is, for instance, to enhance the pay scales or to better the other terms by a unilateral derision of the employer, he should give notice under Section 9A. The whole object of the section is apparently to prevent a unilateral action on the part of the employer changing the conditions of the service to the prejudice of the workmen.

5. The impugned proceedings of the respondent, as already mentioned by me, are confined to the revision of scales of pay and reducing the limits of casual leave and national and festival holidays. The revision of scales of pay, as appears from the proceedings, is by merging the bulk of the dearness allowance with pay. The petitioners say that clearness allowance payable to an employee drawing less than Rs. 150 per mensem as pay, ranges from Rs. 36 to 61 Inclusive of additional Rs. 5 agreed to be paid under the agreement dated 3 February 1959 and that dearness allowance payable to employees whose pay is Rs. 150 and above ranges from Rs. 51 and upwards but that under the Impugned proceedings the dearness allowance has been reduced to Rs. 10 for those whose pay is less than Rs. 150 a month and to Rs. 20 for employees whose pay ranges from Rs. 150 to Rs. 300 and for employees whose pay is more than Rs. 300, no dearness allowance is payable. The petitioners, therefore, assert that the revision of the dearness allowance is prejudicial to the workmen. On the other hand, the respondent denies that the revision of scales of pay has reduced the quantum of dearness allowance and states that the bulk of the dearness allowance is already merged with pay and the total emoluments, consequent on the introduction of the revised scales of pay, are more than the existing pay and allowances including the dearness allowance, and in addition, the respondent has also allowed in the case of non-gazetted staff a minimum increase of Rb. 5 per month. What led to the revision of the pay scales merging therein the bulk of the dearness allowance, was the recommendations of the Pay Commission In relation to Government servants. The Commission recommended, it is stated, merger of bulk of the dearness allowance with pay and suggested revised pay structures, dearness allowance, house-rent allowance and Madras house allowance, retiring benefits, reduction in the national and festival holidays and casual leave. Although the scales of pay of its workmen were revised in terms of the agreement dated 3 February 1959, it proposed, in view of the representation made by some of the unions and associations of its workmen, to revise the scales of pay, so as to bring them in line with the orders of the State Government in regard to Government servants. Therefore, it was that the respondents gave notice under Section 9A dated 2 September 1960,30 November 1960 and 23 December 1960, the first of the notices relating to the increase in working hours, the second to out in national and festival holidays and casual leave, and the last to the revision of the scales of pay. These notices were issued without prejudice to the question whether certain classes of employees would be governed by the Industrial Disputes Act or not. The respondent convened an Informal meeting on 13 July 1661, and as many as 25 unions and service associations were invited for the conference. The majority of the representatives of the union who attended the meeting were generally in favour of the revision of pay scales and other benefits. A substantial number of employees were in favour of the new scheme contained in the Impugned proceedings, which ensured the grant of higher emoluments, retiring benefits, loan facilities for housing ; and the respondent was willing to extend them to those who actually wanted them and who agreed to the small reduction In casual leave and holiday benefits. The respondent also decided to give option to the employees either to come under the revised scales of pay, etc, or to continue under existing conditions. The implementation of the new scheme was, however, delayed due to the pendency of W.P. No. 727 of 1960 and after its disposal on 30 November 1961, the Impugned proceedings were issued. In addition to these facts, the respondent further states that out of about 27,080 monthly paid employees, 25,580 employees would be eligible to opt to the conditions contained in the impugned proceedings, that out of these 25,580 employees 18,896 persons exercised their option in favour of the reviBed scales of pay, that it is open to the existing employees to remain in the old scales of pay if they so choose and in that case they would not in the least be affected by the impugned proceedings. The respondent adds that the terms contained in the Impugned proceedings are not the same as were covered by the notice issued under Section 9A in November and December 1960 and that in the impugned proceedings option has been allowed with a time-limit of three weeks to come into the new scheme; and the date of the effect to the benefits has been specified as 1 January 1960, and details of fixation have been specified in the annexure to the impugned proceedings. In these circumstances, submits the respondent

(1) there is no change in the conditions of service by a unilateral action of the respondent;

(2) It is entirely open to the workmen to choose not to avail themselves of the better terms and conditions offered by the impugned proceedings and continue to be governed by the existing terms; and

(3) the terms of the impugned proceedings are, on the whole, to the advantage of the workmen who may opt in favour of and in that sense there is no change in the conditions of service so as to affect the workmen who prefer the change.

The respondent contends, therefore, that Section 9A has no application and that the impugned proceedings are not in violation of its provisions.

6. It seems to me that the arguments so presented by the respondent have considerable force. The impugned proceedings make it quite explicit that it is entirely open to the workmen to opt to the new scales of pay and cut in the number of holidays and casual leave benefits, or to remain to be governed by the existing conditions of service. Clause (3) of the proceedings specifically states that the existing employees who are holders of the posts mentioned in the annexure thereto in a regular capacity will be allowed the option of coming over to the scales of pay on furnishing a declaration in writing signifying such option within 21 days from the date of the notice and that the employees who so opt will be allowed the benefits of the revised scales of pay, revised rates of dearness allowance, house-rent allowance and Madras house allowance with the retrospective effect from 1 June 1960 in case the employees were in service prior 1 June 1960 and continue in service thereafter and with effect from the date of appointment or promotion to the posts, in oases where such appointment or promotion was made on or after that date. Clause (5) adds that the pay of the existing employees, who were appointed or promoted to posts on or after 1 June 1960 and who opt for the revised scales of pay, will be fixed in the revised scales of pay in accordance with rules now in force. Clause (8) reads:

The existing employees who do not opt out for the revised scales of pay, dearness allowance, house-rent allowance and Madras house allowance will continue to remain under the existing scales of pay, existing rates of dearness allowance, house-rent allowance and Madras house allowance. They will not also be eligible for the benefits of the new contributory provident fund scheme or the liberalized pension scheme, as the case may be, and for the benefit of loans for construction of houses.

The impugned proceedings also prescribe the form in which the option should be expressed and declare that any employee who does not express his option within the specified time will be presumed not to desire to opt to the revised scales of pay, etc. Any proposed alteration by an employer in the conditions of service which does not automatically come into effect after 21 days, does not in my opinion fall within the ambit of Section 9A. What it prohibits is the unilateral action on the part of the employer changing the conditions of service affecting the workmen concerned. That is not the position here. Far from any change in the conditions of service being imposed upon the workmen by the employer, the impugned proceedings leave the option to the workmen whether to accept the change or to continue under the existing terms. Further I am not satisfied that the change proposed by the impugned proceedings in the dearness allowance is prejudicial to the workmen. As a matter of fact, the respondent, as already mentioned, has asserted in the counter-affidavit that the employments of the workmen, consequent on the introduction of the revised scales of pay, are more than the existing pay and allowance, including the dearness allowance, not overlooking the flat minimum increase of Rs. 5 per mensem to all non-gazetted staff. The petitioners have failed to satisfy me that this evaluation of the effect of the introduction of the revised scales of pay is incorrect. I am of opinion that the proposed change will not prejudically affect the workmen and that Section 9A will have no application.

7. But it is strenuously contended for the petitioners that whether consent or no consent on the part of the workmen, and whether the proposed change is prejudicial or not, Section 9A is mandatory that whenever a change in the conditions of service is proposed, the procedure prescribed therein must be followed. I am unable to accept this construction of the section. Section 9A is of course conceived for the protection of workmen but, I think, only against the unilateral alteration proposed and effected by the employer. Nor do I think that when the employer himself offers better terms, the workmen cannot validly accept the same without going through the procedure prescribed by Section 9A. I hold that where the proposed change in the conditions of service is made optional, and is dependent on the option of the workmen concerned, as in the case of the impugned proceedings, Section 9A is not attracted. In addition, so far as the cut in the number of holidays and casual leave facilities is concerned, there was already a notice under Section 9A issued on 3d November 1960. Whatever happened in the conciliation proceedings in February 1961 in regard to the validity or otherwise of Section 9A notice relating to revision in the scales of pay, I am not able to see why the notice under Section 9A issued on 30 November 1960 is not a valid one. The petitioners urge that the option given in the impugned proceedings is not a real one and that the workmen have been coerced to adopt the revised conditions contained therein. But there is nothing in proof of this claim beyond the assertion in the affidavit in support of the petition. The ground based on Section 9A is therefore rejected.

8. The next argument for the petitioner is that the proceedings in question violated Section 19(2) of the Industrial Disputes Act. The sub-section enjoins that a settlement shall be binding upon an employer and his employees for the period specified therein and if no period is specified, it shall be binding on them for a period of six months from the date on which it was signed by them. The sub-section further directs that the settlement shall even after the expiry of this period be binding on the parties thereto, 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. A settlement for the purpose of the Industrial Disputes Act includes also a written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceedings. Such an agreement to be a settlement should also be in the manner prescribed and a copy thereof sent to the appropriate Government and the conciliation officer. The agreement dated 3 February 1959 may, therefore, be taken to continue to bind the parties thereto as provided by Section 19(2) of the Act. The petitioners contend that in view of the notice of termination of this agreement received by the respondent on 2 November 1961, the agreement would cease to operate after expiry of two months thereafter and that, therefore, the agreement was still binding on the parties thereto when on 28 December 1961 the respondent issued the impugned proceedings. If the terms of the proceedings involving change in the conditions of service as embodied in the agreement took effect on and from the date when the respondent issued the proceedings that would of course be in violation of the agreement. But, as I already observed, the fresh terms and conditions contemplated by the proceedings of the respondent could take effect in regard to consenting employees only on and from the date when they expressed their option to adopt them for which a period of 21 days was allowed in the proceedings. In that sense, it cannot be said that the proceedings were in violation of the agreement which ceased to be binding on and from 2 January 1962. I think, therefore, that the proceedings did not violate the agreement. But the petitioners urge that the agreement would continue to be binding on the respondent so long as it did not by a proper notice terminate it and the notice of termination issued on 31 October 1961 and received by the respondent on 2 November 1961, would have the effect of terminating the agreement after the expiry of the notice period so far as the employees were concerned. If the respondent wanted to introduce any change in the terms of the agreement, so is the argument, the respondent should have validly terminated the agreement by a notice of its intention to that effect before effecting a change in the agreed conditions. I have no hesitation in rejecting this view of the effect of the notice of termination served by one of the parties to the agreement. If by reason of such a notice of termination, the agreement stands terminated, it cannot be said that it stands go terminated and ceases to be binding only on the party issuing the notice. The termination irrespective of which of the parties have notice to terminate is effective in respect of all the parties to the agreement.

9. The petitioners then urge that the proceedings are in violation of Section 33 of the Industrial Disputes Act because of the strike notice given on 3 January 1962 under Section 22 of the Act in respect of various demands including the issue of dearness allowance. It is stated that as a result of the strike notice, the conciliation must be deemed to have commenced from the date of the strike notice. Assuming that this is the effect of the strike notice with reference to Section 12(1), for the petitioners to succeed in their contention based on Section 33 they must show that during the pendency of any conciliation proceeding, the employer has, in regard to any matter connected with the dispute, altered to the prejudice of the workmen concerned in such dispute the conditions of service applicable to them Immediately before the commencement of such proceeding. This, I think, they have failed to do. The impugned proceedings were issued prior to the date of the strike notice and the alteration, if any, subsequent to that date in the conditions of service is not by any step taken or act done by the respondent for the first time after that date and during the pendency of a conciliation proceeding. Such an alteration can only be regarded, in my opinion, as a consequence of the proceedings, issued anterior to the date of the strike notice and it is not within the purview of Section 33. This apart, it is not any alteration in the conditions of service during the pendency of a conciliation proceeding that comes within the ambit of this section. It is explicit from its terms that the alteration should be prejudicial to the workmen. As I have indicated before, I am not satisfied that the impugned proceedings involve any such alteration to the prejudice of the workmen. Moreover the alteration, if any, is not imposed upon the workmen but will come into operation only by and with the consent of the workmen concerned, if they chose not to opt to the scheme envisaged in the proceedings, they could have nothing to complain against, for, in that event they would continue to be governed by the existing conditions of service without any alteration. It appears that such a situation is not within the scope of Section 33. The contention based on Section 33 of the Act should therefore fall.

10. Though in the affidavit in support of the petition various other points have been taken, they have not been argued before me. It is, therefore, not necessary to deal with the points based on Section 50 of the Madras Shops and Establishments Act, Section 11 of the Madras National and Festival Holidays Act and Section 78 of the Factories Act. It was faintly suggested during the arguments by the petitioners that the impugned proceedings applied only to certain types of employees under the respondent and not the rest employed under it and hence the proceedings, if they are deemed to benefit the workmen, are discriminatory in as far as quite a number of the employees are deprived of such benefits purported to be given to the other employees. I am unable to appreciate this argument. It appears from the counter-affidavit that out of 27,080 monthly paid employees to whom the Impugned proceedings would apply, the question of exercising the option would not arise in respect of certain categories of staff like high grade officers like divisional engineers, executive engineers, and accounts officers, persons borne on contingent establishment and work-charged establishment on fixed pay, that the employees who would come under these categories, would number about 1,500, and that including them there would be about 25,580 employees eligible to exercise their option. It cannot, therefore, be said that there was any question of discrimination made by the respondent. The petitioners suggested that the impugned proceedings amounted to unfair labour practice. But I have not been able to see any warrant for this contention.

11. I may add that though the respondent in the counter-affidavit has raised certain preliminary points that no writ of mandamus can be issued in this case, that the petitioners are not aggrieved persons to invoke Article 226 of the Constitution and that the impugned proceedings are an administrative order, no argument was advanced in relation to them.

12. The petition fails and is dismissed but with no order as to costs.


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