Godavari Sugar Mills Ltd. Vs.
Kepargaon Taluka Sakhar Kamgarsabha, Sakarwadi [1960] INSC 301 (16 December
1960)
WANCHOO, K.N.
GAJENDRAGADKAR, P.B.
GUPTA, K.C. DAS
CITATION: 1961 AIR 1016 1961 SCR (3) 342
ACT:
Industrial Dispute-System of contract
labour-Abolitions by Industrial Court--Jurisdiction-If violative of employer's
fundamental right to carry on business-Bombay Industrial Relations Act, 1947(11
of 1947), ss. 3(18), 42(2), 73A, Item (2) Sch. 11, Item (6) Sch. III--Constitution
of India, Art. 19(1)(g).
HEADNOTE:
A dispute having arisen between the
appellant-employer and its workmen regarding the employment of contract labour
in the appellant's mills, the union representing the workmen which is the
respondent in the present case after serving notice on the appellant under s.
42(2) of the Bombay Industrial Relations Act made reference to the Industrial
Court under S. 73A of the Act demanding the abolition of the system of
employing contractors' labour and the permanent increment of employees in the
respective departments. The contention of the appellant, inter alia, was that
the Industrial Court had no jurisdiction to decide the dispute which was within
the exclusive jurisdiction of a Labour Court under item (6) of Sch. III of the
Act, and that any award directing the abolition of contract labour would
contravene the appellant's fundamental right to carry on business under Art.
19(1)(g) of the Constitution. The Industrial Court decided that the Industrial Court would have jurisdiction as the matter was covered by item (2) of Sch. 11 of
the Act and that there was no contravention of the fundamental rights of the
appellants. On appeal the Labour Appellate Tribunal, held, that the Industrial Court had jurisdiction to decide the matter although it was not covered by item
(2) of Sch. 11 of the Act. As regards the question of contravention of the
fundamental right it held that the question whether the restriction imposed was
reasonable depended upon the facts of each case and the matter was outside the
powers of a court of appeal.
Eventually it set aside the entire award on
the merits. On appeal 'by the appellant by special leave, Held, that the
Industrial Court had jurisdiction to deal with the matter.
Whatever might be the ambit of the word
"employment" used in item (6) of Sch. III, if a matter was covered by
Sch. 11 it could only be referred to the Industrial Court under s. 73A. A
question relating to the abolition of contract labour inevitably raised a
dispute relating to matters contained in items (2), (9) and (10) of Sch. 11,
namely, permanent increase in the number of 343 persons employed, the
employees' wages, hours of work and rest intervals and could, therefore, be
referred only to an Industrial Court.
The power given to the Industrial Court which
was a quasi-judicial tribunal to decide whether contract labour should be
abolished or not would not make the definition of "industrial "
matter" in so far as it referred to the mode of employment an S.
unreasonable restriction on the fundamental right of the employer to carry on
his trade and as such there was no contravention of his fundamental right by
providing in S. 3(18) that an "industrial matter" included also the
mode of employment of the employees.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 352 of 1958.
Appeal by special leave from the judgment and
order dated July 27, 1956, of the Labour Appellate Tribunal of India, Bombay,
in Appeal (Bom.) No. 72 of 1956.
G....S. Pathak, J. B. Dadachanji, S. N.
Andley and Rameshwar Nath, for the appellant.
D....S. Nargoulkar and K. R. Choudhuri, for
the respondent No. 1.
B. P. Maheshwari, for the Interveners.
1960. December 16. The Judgment of the Court
was delivered by WANCHOO, J.-This is an appeal by special leave in an industrial
matter. The appellant owns two sugar mills.
There was a dispute between the appellant and
its workmen with respect to the employment of contract labour in the two mills.
Consequently, a notice of change under S. 42 (2) of the Bombay Industrial Relations
Act, No. XI of 1947, (hereinafter called the Act) was given to the appellant by
the union re. presenting the workmen. Thereafter the union, which is the
respondent in the present appeal, made two references to the industrial court,
one with respect to each mill, under s. 73A of the Act, and the main demand in
the references was that "the system of employing contractors' labour
should be abolished and the strength of the employees of the respective
departments should be permanently increased sufficiently 344 and
accordingly". The appellant raised two main contentions before the
industrial court, namely, (i) that the industrial court had no jurisdiction to
decide the dispute as the matter was covered by item (6) of Sch. III of the
Act, which is within the exclusive jurisdiction of a labour court; and (ii)
that any award directing abolition of contract labour would contravene the
fundamental right of the appellant to carry on business under Art. 19(1)(g) of
the Constitution.
The industrial court decided both the points
against the appellant; on the question of jurisdiction it held that the matter
was covered by item (2) of Sch. 11 of the Act and therefore the industrial
court would have jurisdiction, and on the second point it held that there was
no contravention of the fundamental right conferred on the appellant under Art.
19(1)(g). It may be mentioned that the second point arose on the stand taken by
the appellant that the workmen of the contractors were not the workmen of the
appellant.
The industrial court then dealt with the
merits of the case and passed certain orders, with which we are however not
concerned in the present appeal.
It may be mentioned that there were cases
relating to a number of other sugar mills raising the same points, which were decided
at the same time by the industrial court. In consequence, there were a number
of appeals to the Labour Appellate Tribunal by the mills and one by one of the
unions (though not by the respondent-union). All these appeals were heard
together by the appellate tribunal, where also the same two points relating to
jurisdiction and contravention of the fundamental right guaranteed by Art.
19(1)(g) were raised. The Appellate Tribunal did not agree with the industrial
court that the references were covered by item (2) of Sch. 11 to the Act. It,
however, held that the word "employment" in item (6) of Sch. III to
the Act had to be given a restricted meaning. It pointed out that the three
Schedules did not exhaust the comprehensive provisions of s. 42(2) and the
subject-matter of dispute, namely, the abolition of contract labour was a
question of far reaching and important change which could not have 345 been
intended to be dealt with in a summary way by a labour court, which is the
lowest in the hierarchy of courts established under the Act. It therefore held
that the industrial court had jurisdiction to decide the matter. On the
question of contravention of the, fundamental right, the appellate tribunal
took the view that the question whether the restriction imposed was reasonable
depended upon the facts of each case and therefore was a matter outside its
power as a court of appeal It then considered the merits of the matter and came
to the conclusion that the approach of the industrial court to the questions raised
before it was not correct and therefore it found it difficult to support the
award. Eventually it set aside the award and remanded the matter for early
hearing in the light of the observations made by it. Further, it decided that
in the interest of justice the entire award should be set aside, even though
there was no appeal before it by the unions in most of the cases. The appellant
then came to this Court and was granted special leave; and that is how the
matter has come up before us.
Mr. Pathak on behalf of the appellant has
raised the same two points before us. We shall first deal with the question of
jurisdiction. Reliance in this connection is placed on item (6) of Sch. III of
the Act, which is in these terms:"Employment including(i) reinstatement
and recruitment;
(ii) unemployment of persons previously
employed in the industry concerned." It is not in dispute that matters
contained in Sch. III are within the jurisdiction of a labour court and an
industrial court has no jurisdiction to decide any matter in a reference under
s. 73A of the Act which is within the jurisdiction of a labour court. Mr.
Pathak contends that item (6) of Sch. III speaks of "employment" and
includes in it two matters which might otherwise not have been thought to be included
in it. Therefore, according to him, employment as used in item (6) is wider
than the two matters included in it 44 346 and the question whether contract
labour should be employed or not would be a matter of employment within the
meaning of that word in item (6) of Sch. 111. We do not think it necessary for
purposes of this appeal to consider what would be the ambit of employment as
used in item (6) of Sch. 111.
The scheme of the Act shows that under ss. 71
and 72 the jurisdiction of a labour court and an industrial court is concurrent
with respect to any matters which the State Government may deem fit to refer to
them; but under s. 73A reference by a registered union which is a
representative of employees and which is also an approved union, can only be
made to an industrial court, subject to the proviso that no such dispute can be
referred to an industrial court where under the provisions of the Act it is
required to be referred to the labour court for its decision. Sec. 78 of the
Act provides for jurisdiction of labour courts and matters specified in Sch. 11
are not within their ordinary jurisdiction. Therefore, when a registered union
wishes to refer any matter which is contained in Sch. 11 of the Act such
reference can be made by it only to the industrial court. It follows in
consequence that whatever may be the ambit of the word "employment"
used in item (6) of Sch. III, if any matter is covered by Sch. 11 it can only
be referred to the industrial court under s. 73A. Now the question whether contract
labour should be abolished (on the assumption that contract labour is not in
the employ of the mills) immediately raises questions relating to permanent
increase in the number of persons employed, their wages including the period
and mode of payment, hours of work and rest intervals, which are items (2), (9)
and (10) of Sch.
11. Therefore, a question relating to
abolition of contract labour is so inextricably mixed up with the question of
permanent increase in the number of persons employed, their wages, hours of
work and rest intervals that any dispute relating to contract labour would
inevitably raise questions covered by Sch. 11. Therefore, a dispute relating to
contract labour if it is to be referred under s. 73A by a registered union can
only be referred to an industrial court as it immediately 347 raises matters
contained in items (2), (9) and (10) of Sch.
11. Mr. Pathak urges however that matters
relating to permanent increase in the number of persons employed due to the
abolition of contract labour, their wages, hours of work and rest intervals
were not really disputed at all by the appellant. It appears that in the
written-statements of the appellant, these points were not raised; but the
decision of the appellate tribunal shows that one of the contentions raised
before it by the sugar-mills was that the workmen concerned were not employees
of the sugar mills. Therefore, as soon as this contention is raised a dispute
as to permanent increase in the number of persons employed, their wages, hours of
work and rest intervals would immediately arise. It must therefore be held that
a question relating to the abolition of contract labour inevitably raises a
dispute with respect to these three items contained in Sch. 11. In the
circumstances we are of opinion that the industrial court had jurisdiction to
deal with the matter.
In particular, we may point out that in their
petitions the unions had raised at least the question as to the permanent
increase in the number of persons employed and that would immediately bring in
item (2) of Sch. 11. It is true that the question of permanent increase in the
number of persons employed, their wages, hours of work and rest intervals would
only arise if contract labour is to be abolished; but in our opinion these are
matters so inextricably mixed up with the question relating to abolition of
contract labour that they must be held to be in dispute as soon as the dispute
is raised about the abolition of contract labour, (assuming always that the
employer does not accept contract labour as part of its labour force). The
contention about jurisdiction must therefore be rejected.
This brings us to the second contention
raised by Mr. Pathak. He bases his argument in this behalf on s. 3(18), which
defines an " industrial matter " as meaning any matter relating to
employment, work, wages, hours of work, privileges, rights or duties of
employers or employees, or the mode, terms and 348 conditions of employment.
Mr. Pathak urges that the definition of " industrial matter " contravenes
the fundamental right guaranteed under Art. 19(1)(g), when it provides that the
mode of employment is also included within it. Reference is also made to s.
3(17) which defines an "industrial dispute" as any dispute or
difference which is connected with any industrial matter. Mr. Pathak therefore
urges that reading the two definitions together the industrial court is given
the power to decide disputes as to the mode of employment and that contravenes
the fundamental right guaranteed under Art. 19(1)(g), for it enables an
industrial court to adjudicate on the mode of employment and thus interfere
with the right of the employer to carry on his trade as he likes subject to
reasonable restrictions.
Now assuming that the mode of employment used
in s. 3(18) includes such questions as abolition of contract labour, the
question would still be whether a provision which enables an industrial court
to adjudicate on the question whether contract labour should or should not be
abolished is an unreasonable restriction on the employer's right to carry on
his trade. We cannot see how the fact that power is given to the industrial
court, which is a quasi-judicial tribunal to decide whether contract labour
should be abolished or not would make the definition of "industrial
matter" in so far as it refers to the mode of employment, an unreasonable
restriction on the fundamental, right of the employer to carry on trade. The
matter being entrusted to a quasi judicial tribunal would be decided after
giving both parties full opportunity of presenting their case and after
considering whether in the circumstances of a particular case the restriction
on the mode of employment is a reasonable restriction or not. The tribunal
would always go into the reasonableness of the matter and if it comes to the
conclusion that the mode of employment desired by labour is not reasonable it
will not allow it; it is only when it comes to the conclusion that the mode of
employment desired by labour in a particular case is a reasonable restriction
349 that it will insist on that particular mode of employment being used. Take,
for example, the case of contract labour itself. The tribunal will have to go
into the facts of each case. If it comes to the conclusion that on the facts
the employment of contract labour is reasonable and thus doing away with it
would be an unreasonable restriction on the right of the employer to carry on
trade, it will permit contract labour to be carried on. On the other hand if it
comes to the conclusion that employment of contract labour is unreasonable in
the circumstances of the case before it will hold that it should be abolished,
the reason being that its abolition would be a reasonable restriction in the
circumstances. Therefore the decision whether the mode of employment in a
particular case is a reasonable restriction or unreasonable one is in the hands
of a quasi-judicial tribunal. In the circumstances it cannot be said that by
providing in s. 3(18) that an "industrial matter" includes also the
mode of employment, there is any contravention of the fundamental right of the
employer to carry on trade. If the argument on behalf of the appellant were to
be accepted it would mean that judicial and quasi-judicial decisions could be
unreasonable restrictions on fundamental rights and this the Constitution does
not envisage at all. We are therefore of opinion that this contention also
fails.
Finally, Mr. Pathak draws our attention to
ss. 3(13) and 3(14) of the Act and submits that the appellant never said that
contract labour employed in its mills was not in its employment. Sec. 3(13)
defines the word "employee" and includes in it any person employed by
a contractor to do any work for him in the execution of a contract with an
employer within the meaning of sub-cl. (e) of cl. (14). Sec. 3(14) defines the
word "employer" in an inclusive manner and includes "where the
owner of any undertaking in the course of or for the purpose of conducting the
undertaking contracts with any person for the execution by or under the contractor
of the whole or any part of any work which is ordinarily part of the
undertaking, the owner of the undertaking". It is urged that in view 350
of these definitions, the employees of the contractors are the employees of the
mills and the mills are the employers of these employees of the contractors.
Therefore, Mr. Pathak urges that there is no necessity of abolishing contract
labour and that the industrial court may, if it so chooses, give the same wages
and hours of work and rest intervals and other terms and conditions of
employment to the employees of the contractors as are provided for comparable
direct employees of the appellant and in such circumstances it would not be
necessary to abolish the contract system so long as the employees of contractors
are to be in the same position as the direct employees of the appellant as to
their terms and conditions of service. This was not however the-manner in which
the case was contested before the industrial court or the appellate tribunal.
All that we need therefore say is that when the matter goes back before the
industrial court as directed by the appellate tribunal, the industrial court
may take this submission of the appellant into account and may consider whether
it is necessary to abolish the contract system, provided the appellant is able
to assure the industrial court that employees of the contractors who are deemed
to be its employees within the meaning of s. 3(13) and s. 3(14) would have the
full benefit of the same terms and conditions of service as its comparable
direct employees.
The appeal fails and is hereby dismissed with
costs.
Appeal dismissed.
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