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The Management of Addison and Co. Vs. the Presiding Officer, Labour Court and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1979)ILLJ465Mad
AppellantThe Management of Addison and Co.
RespondentThe Presiding Officer, Labour Court and ors.
Cases ReferredSri Ranga Vilas Motors v. S.R.V. Motors
Excerpt:
- .....closure itself. the dispute relates to the non-employment in the company as such and not in the foundry or tools section. as laid down in parry and co. ltd. v. p.c. lal 1970-ii l.l.j. 429, a scheme of reorganisation may result in retranchment or termination, but that does not mean the court is entitled to interfere. these general observations cannot fit in as far as the present case is concerned. it is true that the workmen have stated in their oral testimony before the labour court that they never thought that the foundry sections would be closed. but such a statement must be read in the context of the various events that happened. no doubt the plea regarding mala fides has to be established clearly and the finding relating to mala fides cannot be made in a light-hearted fashion as.....
Judgment:

Mohan, J.

1. This petition is for the issue of a writ in the nature of certiorari to quash the award made in I.D. No. 5 of 1975 and the management is the petitioner before us.

2. The facts leading to the writ petition may be stated thus:

The workmen, two in number by name Kannahsha and Raman, were employed in the tools department of the petitioner-company. On 30-8-1972, Kannahsha was transferred to the foundry department. On 5-9-1972 a similar order of transfer was made as far as Raman was concerned. On 13-11-1972, as evidenced by W. 1, Kannahsha protested against his transfer and requested that he be retained in the tools department. It was also alleged by him that by reason of his transfer, he stood to lose a sum of Rs. 100 per month. This being so, on 19-1-1973 there was a strike in the foundry department. On 25-1-1973, a notice was put up for lock-out of the entire establishment. On 18-4-1973 the lock-out was lifted for the tools department. In March-June, 1973 persons working in the foundry department were called upon to express their willingness for their voluntary retirement. Forty out of 325 workmen expressed their willingness. On 4-7-1973, the foundry section was closed with effect from 11-7-1973. Thereupon notices were issued to the individual workmen offering closure compensation. As a result of the closure, if it was not attended by other circumstances, the services of Kannahsha and Raman would stand terminated. On 7-9-1973 there was a reply to this notice by the workmen concerned and thereafter an industrial dispute arose.

3. This dispute was taken up to the Government and they passed G.O. (Rt.) No. 89 dated 10-1-1975, the operative portion of which is to the following effect:

NOTIFICATION

Whereas the Government are of the opinion that an industrial dispute has arisen between the workmen Thiruvalargal D. Raman and K. Kannahsha and the Management of Addison and Company, Madras in respect of matters mentioned in the annexture to this order:

And whereas in the opinion of the Government of Tamil Nadu, it is necessary to refer the said dispute for adjudication;

Now, therefore, in exercise of the powers conferred by Section 10(1)(c) of the Industrial Disputes Act ..1947, (Central Act XIV of 1947), the Government of Tamil Nadu hereby directs that the said dispute be referred for adjudication to the Labour Court, Madras.

R. Pasupathi,

Secretary to Government

Annexure:

Whether the demand of the workmen for retransfer of Thirvalargal D. Raman and K. Kannahsha to the tools section consequent on the closure of the foundry section is justified : if so, to what relief they would be entitled.

Then again on the same day, they passed another order in G.O. (Rt.) No. 90 which has been marked as W. 15. As a result of G.O. (Rt.) No. 89 dated 10-1-1975, the demand of the workmen that the two workmen, namely, Kannahsha and Raman, should be re-transferred to the tools section came up for adjudication.

4. It was argued on behalf of the management that when once there is a valid closure as found in G.O. (Rt.) No. 90 dated 10-1-1975, the services of these two workmen would stand automatically terminated and if that be so, there is no question of re-transferring them to the tools department, since such a retransfer postulates continuance in service. In any event, their transfer was not the subject-matter or reference and there was no possibility of widening the scope of the dispute by seeking to adjudicate the validity of the orders of transfer. These contentions of the management did not find favour with the Labour Court and, therefore, the Court on a discussion of the entire matter, passed an award to the following effect:

In the result, therefore, award is passed that the workmen Thiruvalargal D. Raman and K. Kannahsha are declared entitled to be retransferred from the foundry section to the tools section of the management consequent on the closure of the foundry section, and that they shall be reinstated in service in the tools section with backwages from the date of non-employment till the date of reinstatement in service.

It is the correctness of this award that is challenged by the management in this writ petition.

5. Mr. M. R. Narayanaswamy, appearing for the management, stresses on two fundamental aspects. He submits that the jurisdiction of the Labour Court springs only from an order of reference. By reason of Section 10(4) of the Industrial Disputes Act, 1947 (Central Act 14 of 1947--Hereinafter referred to as the Act), the industrial dispute ought to have been confined only to the point of reference and not on matters incidental thereto. The dispute in this case was whether there was a valid closure or not. The question of re-transfer could never arise at all. He submitted that on a proper construction of the reference made in G. O. (Rt.) No. 89 dated 10-1-1975, it can never be understood that a retransfer was the subject-matter in issue. It is not how the parties understood the reference that mattered as laid down in Delhi Cloth and General Mills Co. v. Their Workers 1967-I L.L.J. 423. The Court must go only by the terms of the reference. If so understood, in so far as G.O. (Rt.) No. 90 dated 10-1-1975 had held that there was a valid closure, nothing remained for adjudication. On the contrary, the Labour Court goes fully into the question and-finds as if the two workmen in this case were entitled to remain in the tools section for all time to come and further it goes on to hold that the transfer was actuated by mala fides. He submitted that the Labour Court has gone very much astray and even in a civil Court, such a thing is not permissible. In fact, paragraph 3 of the counter-affidavit of the management clearly says that the question of re-transfer was never the subject-matter of adjudication and it has specifically stated that ' having regard to the issue referred to this Honourable Court, it would not be open to the petitioner to canvass the validity of the order of termination and unless their orders of termination are set aside the petitioner cannot raise any dispute for retransfer of the workmen to the tools section'. Even assuming that the question of retransfer could be adjudicated upon, on merits, he submitted that the following questions would arise. (1) The right to transfer is not disputed. (2) There is no evidence regarding the mala fide nature of the transfer. (3) The validity of such an order of transfer cannot be raised after the employee had ceased to be in employment. In other words, the relationship of master and servant stood terminated by the valid closure. (4) There is no obligation on the part of the management to retransfer.

6. In support of these submissions, the learned Counsel relied on the ratio in Ananda Bazaar Patrika v. Their Employee 1963-II L.L.J. 429 and also the decision of the Supreme Court in Bharat Iron Works v. Bhagubhai : [1976]2SCR280 and contends that finding relating to mala fides should not be made in a light hearted fashion. As a matter of fact, there was no specific pleading in the evidence regarding mala fides. Even W.W.1 and W.W.2, the two workmen concerned, did not say anything about mala fides and mala fides has not been established. Therefore, the contrary finding of the Labour Court is perverse. He further submitted that it is well-settled law as laid down in J.K. Iron and Steel Co, Ltd. v. Iron and Steel Mazdoor Union 1956-I L.L.J. 227, which Labour Court cannot act as a benevolent despot. In this case, it has so acted. The scheme of re-organisation of a business may involve retrenchment or termination. It may be unfortunate; but nevertheless the Labour Court cannot interfere as laid down in Macropollo and Co. v. Their Employees' Union 1958-II L.L.J. 482; Pary and Co. v. P.C. Lal 1970-II L.L.J. 429. In fact, the evidence let in on the side of the workmen would clearly establish that at no point of time, they thought that there would be a closure of the foundry section. From the point of view of relief also, the effect of the award is to put the workmen back in the foundry section which section has been validly closed even as per the order of the Government made in G.O. (Rt.) No. 90 dated 10-1-1975. Therefore, from any point of view, the award is liable to be set aside.

7. Mr. B. R. Doha, learned Counsel for the workmen submitted that an order of reference Cannot be construed in a mere academic or pedantic way. Then again it cannot be construed in a technical fashion and the substance of the matter alone must weigh. How the parties understood the order of reference and how they went about with the case are matters which are to be borne in mind. Whatever may be the old law, it has come to be laid down in Indian Express v. Employees Union 1978-II L.L.J. 11, that such a pedantic approach should not be made and social justice alone must be done. The counsel also referred to the decisions in Express Newspapers v. Their Workers and Staff 1962-II L.L.J. 227 and Workmen of Sri Ranga Vilas Motors v. Sri Ranga Vilas Motors (P) Ltd. 1967-II L.L.J. 12. Citing the decision in Varma (A.R.) v. Mettur Industries Ltd. 1961-I L.L.J. 456, the learned Counsel proceeds with the argument that the cumulative effect of the following facts lead to the conclusion that the transfer was for a collateral purpose of putting an end to the service of the workmen. (1) There was no reason for transfer of these two workmen alone. (2) Along with two, and Govindan was transferred to the foundry section, but immediately he was retransferred. (3) It is also in evidence that workers junior to the workmen involved in the dispute are still working in the tools section. (4) For the past twelve years, both the workmen have rendered blemishless service. (5) They are not skilled workmen and one is a fitter and the other is a mazdoor. Why the transfer had become necessary is not explained by the management. What they have been agitating throughout was their re-employment not reemployment in the foundry section, but their re-employment in the company. Under those circumstances, when a transfer is attacked as being effected for a collateral purpose, the management should have let in evidence to justify the action of transfer. It cannot be contended in this case that the foundry section is one establishment and the tools section is another establishment. They are departments of the same company. Under those circumstances, if the original order of transfer itself is invalid, the award as passed, namely, directing reinstatement in the tools section with back wages from the date of non-employment would be perfectly valid.

8. On the above arguments, two questions arise for our determination. (1) Has the Labour Court gone beyond the scope of reference in directing reinstatement of the workmen concerned in the tools section with back wages from the date of their non-employment? (2) Is the order of transfer supportable in the circumstances stated?

9. The facts narrated above will clearly show that originally these two workmen were employed in the tools section. It is common case that they had served in the tools section for more than 12 years. It is the further agreed case that they had blemishless record of service. It is these two workmen alone who came to be transferred to the foundry section. No doubt, one Govindan was also transferred along with these two workmen, but because he was transferred back to the tools section, we do not propose to consider that case. Immediately on transfer, as evidenced by W. No. 1, Kannahsha protested against the transfer and prayed that he may be retained in the tools section itself, lest, it would cause a monthly loss of Rs. 100 to him. This protest was of no avail. Then comes W. No. 5 dated 22-11-1972 whereunder Raman makes a clear protest. This protest was also of no avail, certainly it cannot be lost sight of that the foundry department was almost dwindling and for economic reasons, that section came to be closed with effect from 11-7-1973. Under these circumstances, if the order of transfer was made we cannot turn our Wilson's eye and hold that it is an order of transfer simpliciter. When those two workmen raised the dispute, they stated in their application to the Labour Court in paragraph 20, as follows:

Like Thiru Raman, he (Kannaha sha) was a leading member of the union, and took active part in the strike in the tool works from 7-8-1972. The strike was due to the victimisation of six leading members of the union in the tool works section. When he resumed duty on 31-8-1972 in the tool works section, he was not provided with work, but was asked to go to the Foundry.

To this, the management replied in this counter as follows:

The workmen of the company in the foundry department and the operations in the foundry have been uneconomical and, therefore, the management contemplated reorganisation of the foundry as from November, 1972. The management was having periodical discussion with the recognised union with regard to the steps to be taken to reorganise the foundry.

The management further contended thus:

Having regard to the issue referred to this Honourable Court, it would not be open to the petitioner to canvass the validity of the order of termination and until and unless their orders or termination are set aside, the petitioner cannot raise any dispute for re-transfer of the workmen to the tool section.

10. Divorced from all these facts, if we are to go merely by the language employed in the annexure from which the reference springs, we will be doing great injustice. As a matter of fact, a reading of the entire award leaves us with the impression that what was fought tooth and nail was the order of transfer from the tools section to the foundry section and concerning that, the workmen wanted a reference. The order of reference is couched clumsily. But that does not mean that the workmen did not agitate for the non-employment. The very Government order in its heading makes pointed reference to non-employment of the workmen. No doubt in G.O.(Rt.) No. 90 dated 10-1-1975 marked as W. No. 15, it was held that the closure of the foundry department was real and final. These two workmen were hardly concerned with that closure because they only wanted reinstatement in the tools section. In the circumstances, we are concerned with how the order of reference should be construed.

Section 10(4) of the Act runs as follows;

Where in an order referring an industrial dispute to a Labour Court, Tribunal or the National Tribunal under this section or in subsequent order, appropriate Government has specified the points of dispute for adjudication, the Labour Court or the Tribunal or the National Tribunal as the case may be, shall confine its adjudication to these points and matters incidental thereto.

We are aware that the jursidiction of a Tribunal springs from the reference, Does it mean that it should be construed in a rigid fashion so as to deny justice to parties or in the alternative does it mean that it should be construed in a broad sense to meet the ends of justice? We should prefer the latter. In fact, this is what their Lordships of the Supreme Court say in Indian Express v. Employees Union 1978-II L.L.J. 11. The order of reference in that case as seen from paragraph 4 was as follows:

Whether the recommendations of the Wage Board for non-journalist employees as accepted by Government by its Resolution No. W.B.-17(7)/67, dated the 18th November, 1967 are unfair or unreasonable and if so, what notifications are required therein to ensure a fair and just wage structure for the non-journalists, having due regard to the paying capacity of the respective newspaper establishments, the employer's agreement and the emoluments of employees engaged in comparable establishments.

On this it was held as follows:

Mr. G.P. Pai in his very pursuasive and pointed submission rightly stressed that the Tribunal had only a limited jurisdiction, trammelled by the terms of reference not beyond, and in his view the question of gratuity was outside the reference altogether. Were it so, that part of the award was an exercise in gratuitous futility, being an ultra-jurisdictional generosity. Notwithstanding Sri N. K. Ramamurthy's assertion that this Court shall not go back upon that was throughout understood by all before the Tribunal, we have to find jurisdictional justification in the reference itself, not in the brooding, perhaps blundering, consciousness of litigants. But we agree with Sri Ramamurthy that liberality not pedantry must guide the construction of the languages of the reference (vide 1963 (3) S.C.P. P. 540. Once the real controversy is clear, the verbal walls cannot narrow the natural ambit of the subject-matters; especially in an equitable jurisdiction unbound by precedural blinkers and niceties of pleading.

Again in paragraph 13 it has been observed as follows:

This longish discussion on gratuity could not have been a fruitless excursion and proves beyond reasonable doubt that the parties on both sides, at the level of pleadings, at the stage of argument 'and in the rival processes of contest, desiderated a decision on a gratuity scheme for non-journalists. This bone of contention was included in the terms of reference (item 1). The long submissions by many counsel on behalf, of the employers and employees were not idle debate. The plea for a full scheme of gratuity by the advocate for the workmen under the various other newspaper establishments was not submission in supererogation. There is no hint in the Tribunal proceedings that a scheme of gratuity was outside the pale of the Tribunal. No such objection was over raised. Indeed, a tried Tribunal, confronted by enormous evidence and marathon arguments, would not have painstakingly sifted the grounds, sorted the evidence, cited the rulings and recorded the verdicts without being sure that all parties concerned and he himself understood the reference to include the matters contested before him discussed by him and decided in his award. The gratuity schemes for non-journalist workmen was one such and it is bafflement to accept the submission that the learned Tribunal, a retired Judge of the High Court had ventured into an irrelevant terrain.

Similar is the ration in Express Newspapers v. Their Workers and Staff 1962-II L.L.J. 227. On a reading of the above decisions, it is clear that no reference should be read in a pedantic manner. Construed in this fashion, we find that no injustice has been done to the parties to the dispute and this is how they understood and went about the case. No doubt as laid down in Delhi Cloth and General Mills Co. v. Their Workers 1967-I L.LJ. 423, dispute is the main thing and what is incidental as spoken to in Section 10(4) of the Act is an adjunct to the dispute. Applying the name ration, in this case, the dispute was the non-employment in the tools section which non-employment was the results of their transfer to the foundry section. We are unable to agree with the contention of the management that the Labour Court has gone astray in this case. We are also not inclined to accept the argument on behalf of the management that because the Government had not made a pointed reference relating to their non-employment in the tools section, the Tribunal cannot go into that question. What the Labour Court has done is pure social justice which alone should prevail because industrial law aims at such social justice from every point of view.

11. Turning to the merits of transfer, the following facts remain uncontroverted. When they are other juniors to the two workmen concerned available in the tools section, only these workmen were transferred from the tools section to the foundry. No doubt it is open to the management so transfer. But when called upon to justify this action, they must give some plausible explanation worthy of acceptance. In this case, the management has not chosen to let in evidence in this regard. We have already adverted to the fact that along with these two workmen, one Govindan was also transferred to the foundry, but he was re-transferred. It is also in evidence that there are juniors to these two workmen working in the tools section. Why these two workmen were subjected to this hostile treatment is not explained before us. It is not the case of the management that foundry section is one independent unit. We have not been provided with any material to conclude that both the sections are independent units. If the management was contemplating reorganising the foundry section from November, 1972 itself as stated in the counter, the object of transfer was only to see that their services are put an end to under a legal garb of closure. We cannot accept the argument of the management that on closure of the foundry section, the services of these workmen stood terminated and, therefore, re-employment in the tools section would mean adjudicating upon the validity of the closure itself. The dispute relates to the non-employment in the company as such and not in the foundry or tools section. As laid down in Parry and Co. Ltd. v. P.C. Lal 1970-II L.L.J. 429, a scheme of reorganisation may result in retranchment or termination, but that does not mean the Court is entitled to interfere. These general observations cannot fit in as far as the present case is concerned. It is true that the workmen have stated in their oral testimony before the Labour Court that they never thought that the foundry sections would be closed. But such a statement must be read in the context of the various events that happened. No doubt the plea regarding mala fides has to be established clearly and the finding relating to mala fides cannot be made in a light-hearted fashion as held in Ananda Bazaar Patrika v. Their Employees 1963-II L.L.J. 429 and Bharat Iron Works v. Bhagubhai : [1976]2SCR280 . But the cumulative effect of all the facts narrated above will lead to the conclusion that the order of transfer was only with a view to cause termination of service of these two workmen, Therefore, we are unable to agree with the argument on behalf of the management that the Labour Court in this case has acted as a benevolent despot.

12. Learned Counsel for the respondents cites before us the decision in R.S. Madho Ram and Sons (Agencies) v. Its Workmen 1964-I L.L.J. 366. That clearly emphasises the need for keeping a common muster roll. Such a mustor roll has not been produced in this case. Applying the ratio in workmen of Sri Ranga Vilas Motors v. S.R.V. Motors 1967-II L.L.J. 12 we are in agreement with the award directing the reinstatement of the workmen. On the question of relief also, when once the Labour Court has come to the conclusion that the transfer could not be supported, the workmen, having regard to their 12 years' of unblemished service, would be entitled to reinstatement in the tools section and, therefore, no valid objection could be maintained to the reliief part of the award.

13. In the result, we dismiss the writ petition with costs. Counsel's fee Rs. 200.


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