Management Shahdara (Delhi) Saharanpur
Light Railway Co. Ltd. Vs. S.S. Railway Workers' Union [1968] INSC 220 (18
September 1968)
18/09/1968 SHELAT, J.M.
SHELAT, J.M.
BHARGAVA, VISHISHTHA VAIDYIALINGAM, C.A.
CITATION: 1969 AIR 513 1969 SCR (2) 131
CITATOR INFO :
R 1970 SC 82 (7) RF 1970 SC 512 (5,10) RF
1972 SC1210 (14) R 1984 SC 516 (23) R 1984 SC1227 (6,8)
ACT:
Industrial Employment (Standing Orders) Act
(20 of 1946), as amended by Act 36 of 1956, ss. 6 and 10(2)-Modification of
existing Standing Orders-When permitted.
HEADNOTE:
Six months after the, appelIant's Standing
Orders as modified had come into operation, the respondent applied for further
modification of the Standing Orders, under s.
10(2) of the Industrial Employment (Standing
Orders) Act, 1946, 'as amended in 1956. The certifying officer allowed some of
the modifications and on appeal by the respondent, the Appellate Authority
allowed some more modifications.
In appeal, to this Court under Art. 136 of
the Constitution, the appellant objected to four modifications, namely: (i)
that the appellant should give reasons and communicate them to the workmen even
in cases of discharge simpliciter; (ii) that appeals against penalties imposed
should be disposed of within 60 days; (iii) that when a workman is removed on
the ground of inefficiency due to physical unfitness, the appellant should
offer to such workman alternative; employment on reasonable emoluments;
and (iv) that a second show cause notice
should be served on the workman at the stage of taking a decision on the
suitable punishment. The grounds urged were: (1 )The authorities under the Act
can certify modifications of existing Standing Orders under s. 10(2) only when
a change of circumstances is established, because, s. 6 of the Act confers
finality on certified Standing Orders or modifications thereof; (2). On
principles analogous to res Judicata, the authorities had no jurisdiction to
grant the modifications in the present case; and (3) the modifications were not
reasonable or fair.
HELD: (1) [Per Shelat and Vaidialingam, JJ.]:
A change of circumstances is not a condition precedent to the maintainability
of an application for modification under s." 10(2).
Under the Act before its 'amendment in 1956,
a workman could not object that the Standing Orders were not reasonable or
fair. His only remedy was to raise an industrial dispute, but that remedy was
unsatisfactory, since the dispute had to be sponsored by a union or at least a
substantial number of workmen and even then, the process was a protracted one.
Parliament knew that the workmen had the right to raise an industrial dispute
and also the defects in that remedy and so amended ss. 4 and 10 of the Act by
Act 36 of 1956. The amendment conferred on individual workman the right to
object to draft Standing Orders submitted by an employer on the ground that
they are either not fair or not reasonable, and also gave the right to apply
for their modification. Under s. 6, a person aggrieved by the order of the
certifying officer certifying or modifying Standing Orders, may appeal to the
Appellate Authority whose decision shall be final. But the finality only means
that there is no further appeal or revision against the order and that the
order cannot be challenged in 'a civil court. It can, however. be modified
under s.
10(2). The only limitations on the power are,
(a) reasonableness and fairness of the modification and (b) except on agreement
between employer and the workmen six months must have elapsed from the date on
which the Standing Orders or the last modifications thereof, came into
operation, the object being that Standing Orders or the modifications should be
allowed to work for some time to see if they are satisfactory. In an
application for modification the issue before the authority would be not as to
reasonableness or fairness of the existing Standing Orders. but whether the
modification 'applied for is fair and reasonable. Such an application is an
independent application and merely because it could be made on the ground that
the existing Standing Orders are discovered to be unsatisfactory even without
any change in circumstances, it would not amount to a review of an earlier
order. Further, there will not be a multiplicity of applications because the
workmen individually have the right to apply for modifications.
For, unless there is some justification for
the modification, the authorities under the Act would reject the applications.
[139 G-H; 140 C-D; 141 A-C; 142 A-C; G-H; 143 A-C] Bangalore Woollen Cotton
& Silk Co. Ltd. v. The Workmen [1968] l L.L.J. 555, Buckingham and Carnatic
Co. Ltd. v Workmen C.A. No. 674 of 1968 dt. 25th July 1968 and Hindustan Brown
Boveri Ltd. v. The Workmen C.A. No. 1631 of 1966 dt. 31st July 1967, referred
to.
[Per Bhargava, J. dissenting]: When an
application under s. 10(2) is made, the certifying officer can modify Standing
Orders already certified, only if the request is not made on the basis of the
same material which existed at the earlier stage when they were certified. [155
G-H] Before the amendment in 1956 if the workmen had any grievance on the
ground of unfairness or unreasonableness of the Standing Orders, their only
remedy lay under the Industrial Disputes Act. By amendment in 1956, a limited
remedy was provided for them in the Act itself by conferring on the certifying
officer the power of judging the reasonableness and fairness of the Standing
Orders and of modifying them under s. 10(2). Therefore, after 1956 the workmen
have two alternative remedies for seeking alteration in the Standing Orders
proposed or certified. Under s. 10(2) a request for modification can only be
made on the basis of fresh facts or fresh circumstances arising subsequent to
the passing of the order by the Appellate Authority under s.
6 on the limited ground of reasonableness and
fairness.. The Industrial Tribunal, however. can direct the alteration of a
Standing Order held to be reasonable and fair, without any fresh grounds,
material, or change in circumstances if an industrial dispute, in 'relation to
it is raised, and this is the only remedy available if a modification is
desired without a change of circumstances. If it is held that even the
certifying officer can reconsider the reasonableness or fairness of a Standing
Order already certified and confirmed under s. 6 the finality envisaged by the
section would be nullified. After a period of six months had elapsed, the
certifying officer could set aside an order passed earlier by his superior, or
a succeeding Appellate Authority may interfere with his predecessor's order,
merely because the certifying officer or Appellate Authority considers the
modification to be reasonable and fair even though there was no change in the
circumstances. [153 F-G; 154 A-B, D-F;
155 C-F; 156 A-C] (2) [Per Shelat and
VaidiaIingam, JJ.]: It is doubtful whether principles analogous to res judicata
can property be applied to industrial adjudication. [143 H] Burn & Co. v.
Their Employees, [1956] S.C.R. 781, Guest, Keen, Williams (P) Ltd. v. Sterling,
[1960] 1 S.C.R. 348 and Workmen of Balmer Lawrie & Co. v. Balmer Lawrie
& Co.
[1964-] 5 S,C.R. 344, referred to, 133 [Per
Bhargava, J.]: This Court bas expressed conflicting views on the question of
'applying the principle underlying the rule of res judicata to industrial
adjudication. [150 E] Burn & Co.'s case, [1956] S.C.R. 781, Balmer Lawrie
Co.'s case, [1964] 5 S.C.R. 344 and Associated Cement Staff Union v. Associated
Cement Co. [1964] 1 L.L.J. 12. referred to.
(3) [Per Shelat and Vaidialingam, JJ.]: So
far as modifications (ii) and (iii) are concerned, in an appeal under Art. 136,
this Court would not interfere with the conclusion of the authorities under the
Act since no principle is involved. [144 F] As regards modification (iv), the
authorities under the Act held that it was fair and reasonable, and there is no
justification for this Court to interfere with the decision.
In Industrial matters, at present, the
doctrine of hire and fire is completely abrogated, because, security of
employment is one of the necessities for industrial peace and harmony. If
reasons for discharging an employee are furnished to him he not only has the
satisfaction of knowing why his services are dispensed with, but in appropriate
cases he can challenge it, as even when the services of an employee are
terminated by an order of discharge simpliciter, its legality and propriety can
be challenged before an industrial tribunal. [145 A-E] As regards modification
(iv) the requirement of a second show cause notice is peculiar to cases coming
under Art. 311 of the Constitution and neither the ordinary law nor the
industrial law requires an employer to give such a notice.
Even in Art. 311, the requirement is now
removed and so, it is not necessary to import it into industrial matters. [145
E-F] [Per Bhargava J. dissenting]: The order must be set aside because the four
modifications were not based on any fresh facts, material or change of
circumstances. In fact, modification (i) was, specifically disallowed by the
Appellate Authority at an earlier stage and merely because his successor
considered it reasonable and fair it was permitted without any change in the
circumstances. [156 E-F, H]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 27 of 1968.
Appeal by special leave from the order dated
October 27, 1967 of the Chief Labour Commissioner (Central) and Appellate
Authority, New Delhi in No. I.E. 1 ( 11 )/7/66H.R. Gokhale, B. Parthasarathy:
O.C. Mathut, J.B.
Dadachanji and Ravinder Narain, for the
appellant.
R.K. Garg, S.C. Agarwala and Anil Kumar
Gupta, for the respondent.
The Judgment of J.M. SHELAT and C.A.
VAIDIALINGAM, JJ., was delivered by SHELAT, J. BHARGAVA, J. delivered a
dissenting Opinion.
Shelat, J. This appeal, by special leave, is
by the employer and raises the question as to the scope of sec.
10(2) of the Industrial Employment (Standing
Orders) Act, 20 of 1946, as amended by Act 36 of 1956 (referred to hereinafter
as the Act).
134 The Standing Orders of the
Appellant-company were certified on August 7, 1962 by the Regional Labour
Commissioner, Central, under s. 4 of the Act. Both the company and the workmen
filed appeals against the said order which were disposed of by the Appellate
authority under s.
6. Sometime thereafter the respondent-union
applied for certain modifications, some of' which were certified by the
Regional Labour Commissioner by his order dated December 28, 1963. The
Appellant-company filed an appeal against the said order which was disposed of
by the Chief Labour Commissioner in April 1964. On April 25, 1965 the
respondent union made a further application for modifications. The Regional
Labour Commissioner by his order dated September 2, 1965 allowed certain
modifications but rejected the rest.
The union thereupon appealed against the said
order. After hearing the parties the Chief Labour Commissioner passed his
impugned order dated October 27, 1967 ordering certification of certain
modifications. Though the Appellant-company objected at first to all the
modifications, counsel pressed the appeal in respect of four modifications
only. The first modification challenged is in Standing Order 9, clause
(a)which, as un-amended, read as follows:
"The railway under the terms of
employment has the right to terminate the services of a permanent Workman on
giving him one month's notice in writing or one month's pay may be paid in lieu
of notice." The union claimed that the management should give reasons even
when they terminated the services of an employee by a discharge simpliciter.
The modification allowed directed reasons to be recorded in writing and
communicated to the workman if he so desires at the time of discharge but not
if the management considers it inadvisable. The second modification is in
Standing Order 12, clause (A), which, in its un-amended form, read as follows:
"When any of the penalties specified in
Order 9 is imposed upon a workman an appeal shall lie to the authority next
above that imposing the penalty. An appeal shall lie to the Managing Agents
only on original orders passed by the General Manager ..... " The union's
plea was that some time limit was necessary for the disposal of the appeals as
the managing agents who are the appellate authority against the orders of the
General Manager took months to dispose of such appeals thereby delaying the
workman from raising an industrial dispute in time and seek timely relief. The
modification allowed was that every such appeal shall be disposed, of by the
appellate authority within 60 days from the date of its receipt. The third
modification is in Standing Order 11 ('vii) which read as follows:
135 "Removal from service: A workman
shall be liable to be removed from service in the following circumstances:
(a) Inefficiency.
The modification allowed was as follows:
"In case of inefficiency due to physical
unfitness the workman whom the management considers suitable for some
alternative employment shall be offered the same on reasonable emoluments
having regard to his former emoluments." The modification contains, it
will be noticed, four limitations: (1 ) it applies only to cases of removal on
the ground of physical unfitness, (2) the consideration of suitability for an
alternate employment is left to the management, (3 ) the existence of
alternative post, and (4) the question as to what reasonable emoluments should
be is left to the management. The fourth modification is in Standing Order 11
(vii) (c) which, in its un-amended form, was as follows.
"Every person against whom departmental
enquiry is being made shall be supplied with a copy of the findings in
connection with his dismissal and removal from service. The workman shall also
be supplied with a copy of the proceedings of the enquiry committee as soon as
possible after the conclusion of the enquiry proceedings in his case and be
allowed to defend his case through union's representative." The
modification allowed was as follows:
"In case the management propose to
remove the workman from service they shall serve on the workmen separate show
cause notice to that effect." Counsel for the company challenged the
impugned order in its two facets: the scope of the power of modification under
s. 10(2), and on merits on the ground that the modifications did not stand the
test of reasonableness and fairness. On the first question his contention was
that the jurisdiction and powers of the authorities under the Act to certify modifications
of the existing standing orders are limited to cases where a change of
circumstances is established. In the course of his argument, counsel, however,
qualified the contention by conceding that if at the time of the last
certification certain circumstances were, for one reason 136 or the other,
omitted from consideration they would constitute a Valid reason for
modification and the modification would be granted even though in such a case a
change of circumstances has not occurred. He next contended that in any case
though s. 11 of the Code of Civil Procedure did not apply, principles analogous
to res judicator would apply to an application for modification unless such
application is occasioned by new circumstances having arisen or is based on new
facts. Briefly, the argument was that the object of the Act is to have
conditions of service of workmen in an establishment defined with precision,
and therefore, to have standing orders dealing with such conditions certified.
For industrial harmony and peace it is necessary that those conditions are
stable and do not remain undefined or fluctuating. In pursuance of this object
the Act confers finality to such certified standing orders or modifications
thereof under s. 6. The contention was that if modifications were allowed
without any restraint, there would be multiple applications specially as
individual workman have been given the right to apply for modifications.
Therefore, the word 'final' in s. 6, it' was argued, must be so read as to mean
that an application for modification under s, 10(2) can only be maintainable if
it is justified on the ground of a change of circumstances having occurred
after the fast certification, which of course, according to the concession made
by counsel, also would include cases where certain circumstances were not taken
into account at the time of the last certification.
The relevant provisions of the Act requiring
consideration in this appeal are ss. 4, 6, 10, 11 and 12.
Section 4 provides that standing orders shall
be certified under the Act if (a) a provision is made therein for every matter
set out in the Schedule, and (b) they are otherwise in conformity with the
provisions of the Act. The section further provides that it shall be the
function of the certifying officer or the appellate authority to adjudicate
upon the fairness or reasonableness 'of the' provisions of the standing orders.
Section 6 provides that any person aggrieved by the order of the certifying
officer passed under s. 5(2) may appeal to the appellate authority and the
appellate authority, "whose decision shall be final", shall by an
order confirm the standing orders in the form certified under s. 5 (2) or amend
or add thereto to render them certifiable under the Act. Section 10, whose
interpretation is in question, provides by sub-s. 1 as follows:
"Standing orders finally certified under
this Act shall not, except on agreement between the employer and the workmen,
be liable to modification until the expiry of 6 months from the date on which
the standing orders or the last modifications thereof came into
operation." 137 Sub-s. 2 runs as follows:
"Subject to the provisions of
sub-section (1), an employer or workman may apply to the certifying officer to
have the standing orders modified .....
Sub-s. 3 provides that the foregoing provisions
of the Act shall apply in respect of an application for modification as they
apply to the certification of the first standing orders. Section 11 empowers
the certifying officer and the appellate authority to correct clerical or
arithmetical mistakes in an order passed by them or errors arising from any
accidental slip or omission. Lastly, s. 12 provides that no oral evidence
having the effect of adding to or otherwise varying or contradicting standing
orders as finally certified under the Act shall be admitted in any court.
Counsel conceded, and did so rightly, that
there is no express provision in any one of these sections restricting the
right to apply for modification or the power of the authorities to allow
modification only on proof of a change of circumstances. The only limitations
to the power are the reasonableness or fairness which of course must be
established and the expiry of six months after the date of the standing orders
or their last modifications coming into operation. In the absence of any such
express restriction we should then ask ourselves whether there is in any of
these sections anything which would indicate such a restriction by necessary
implication. In that connection the only word which can point to such a
restriction, according to. counsel, is the word 'final' in sec. 6, so that the
contention reduces itself to this that by making the order of the appellate
authority final under sec. 6, Parliament intended by necessary implication that
the bar of finality can only be removed if new circumstances arise which
necessitate or justify modification.
But the intention of the legislature, as
observed by Lord Watson in Salomon V.A. Salomon & Co. Ltd.(1) "is a
common but very slippery phrase, which popularly understood, may signify
anything from intention embodied in positive enactment to speculative opinion
as to what the legislature probably would have meant, although there has been
an omission to enact". It is well settled that the meaning which words ought
to be understood to bear is not to be ascertained by any process akin to
speculation and the primary duty of a court is to find the natural meaning of
the words used in the context in which they occur, that context including any
other phrase in the Act which may throw light on the sense in which the makers
of the Act used the words in dispute. In R.v. Wimbledon Justices(2) Lord
Goddard said: "Although in construing an Act of Parliament the court must
always try to give effect to the intention of the Act and must look (1) [1897]
A.C. 22, 38. (2) [1953] 1 Q.B. 380.
2 Sup. C.l./69--10 138 not only at the remedy
provided but also at the mischief aimed at, it cannot add words to a statute or
read words into it which are not there .... "Similarly, in R.v. Mansel
Jones(1) Lord Coleridge said that it was me business of the courts to see what
Parliament had said, instead of reading into an Act what ought to have been
said. So too, in Latham v. Lafone(2), Martin B. said: "I think the proper
rule for construing this statute is to adhere to its words strictly; and it is
my strong belief that, by reasoning on long-drawn inferences and remote
consequences, the courts have pronounced many judgments affecting debts and
actions in a manner that the persons who originated and prepared the Act never
dreamed of." In the light of these principles we ought, therefore, to give
a literal meaning to the language used by Parliament unless the language is
ambiguous or its literal sense gives rise to an anomaly or results in something
which would defeat the purpose of the Act.
The Act was passed because the legislature
thought that in many industrial establishments the conditions of service were
not uniform and sometimes were not even reduced to writing. This led to
conflicts resulting in unnecessary industrial disputes. The object of passing
the Act was thus to require employers to define with certainty the conditions
of service in their establishments and to require them to reduce them to
writing and to get them compulsorily certified. The matters in respect of which
the conditions of employment had to be certified were specified in the schedule
to the Act. As the Act stood prior to its amendment in 1956, sec. 3 required
the employer to submit to the certifying. officer draft standing orders
proposed by him for adoption in his establishment. Section 4 provided that
standing orders shall be certifiable if (a) provision is made therein for every
matter set out in the Schedule, and (b) that they were otherwise in conformity
with the provisions of the Act.. The section, however, expressly provided that
it shall not be the function of the certifying officer or the appellate
authority to adjudicate upon the fairness or reasonableness of the standing
orders. Under s. 5, the certifying officer was required to send a copy of the
draft standing orders to the union, if any, or in its absence to the workmen in
the manner prescribed together with a notice calling for objections by them, if
any, and to give opportunity to the employer and the workmen of being heard and
then to decide whether or not any modification of or addition to the draft
standing orders was necessary to render them certifiable under the Act. Section
6 provided for an appeal by any person aggrieved by the order passed under s.
5. The appellate authority, whose decision was made final, had the power to
confirm or amend or add to the standing orders passed by the certifying officer
to render them certifiable under the Act. Though the [1889] 23Q.B.D. 29,32. (2)
[1867] L.R. 2 Ex. 115,121.
139 order passed by the appellate authority
was made final under s. 6, sec. 10 provided for modification. Sub-s. 1 of s. 10
provided that standing orders finally certified under this Act shall not,
except on agreement between the employer and the workmen, be liable to
modification until expiry of six months from the date on which they or the last
modification thereof came into operation. Sub-s. 2 read as follows:
"An employer desiring to modify his
standing orders shall apply to the Certifying Officer in that behalf Sub-s. 3
provided that the foregoing provisions of the Act shall apply in respect of an
application under sub-sec. 2 as they apply to the certification of the first
standing orders.
As the Act stood prior to 1956, there was
thus a prohibition against the certifying officer going into the question of
reasonableness or fairness of the draft standing orders submitted to him by the
employer. His only function was to see that the draft made provisions for all
matters contained in the Schedule and that it D was otherwise certifiable under
the Act. Therefore though the workmen through the union or otherwise were
served with the copy of the draft and had the right to raise objections, the
objections could be of a limited character, namely, that the draft did not
provide for all matters in the Schedule or that it was not otherwise
certifiable under the Act. Even in an appeal under s. 6, the E only objections
they could raise were limited to the two aforesaid questions. The workmen thus
could not object that the draft standing orders were not reasonable or fair.
Under s. 10, the right to apply for modification was conferred on the employer
alone and in view of sub-s. 3 the only consideration which the certifying
authority could apply to such modification was the one which he F could apply
under ss. 4 and 6.
Therefore, no question whether the
modification was fair or reasonable could be raised. It is thus clear that the
workman had very little say in the matter even if he felt that the standing
orders or their modifications were either not reasonable or fair. They could,
of course, raise an industrial dispute. But that remedy was hardly
satisfactory. Such a dispute had to be first sponsored by a union or at least a
substantial number of workmen; it bad next to go through the process of
conciliation and lastly the appropriate Government may or may not be prepared
to refer such a dispute to industrial adjudication.
Even if it did, the entire process was a
protracted one.
In 1956, parliament effected radical changes
in the Act widening its scope and altering its very complexion. Section 4, as
amended by Act 36 of 1956, entrusted the authorities under the Act with the
duty to adjudicate upon fairness and reasonableness of the standing orders. The
enquiry when such-standing' orders 140 are submitted for certification is now
two-fold: (1 ) whether the standig orders are in consonance with the model
standing orders, and (2) whether they are fair and reasonable. The workmen,
therefore, can raise an objection as to the reasonableness or fairness of the
draft standing orders submitted for certification. By amending s. 10(2) both
.the workmen and the employer are given the right to apply for modification and
by reason of the change made in s. 4 a modification has also now to be tested
by the yardstick of fairness and reasonableness. The Act provides a speedy and
cheap remedy available to the individual workman to have his conditions of
service determined and also for their modifications. By amending ss. 4 and 1 O,
Parliament not only broadened the. scope of the Act but also. gave a clear
expression to the change in its legislative policy. Parliament knew that the
workmen, even as the unamended Act stood, had the right to raise an industrial
dispute, yet, not satisfied with such a remedy, it conferred by amending ss. 4
and 10 the right to individual workmen to contest the draft standing orders
submitted by the employer for certification on the ground that they are either
not fair or reasonable, and more important still, the right to apply for their
modification despite the finality of the order of the appellate authority under
s. 6. Parliament thus deliberately gave a dual remedy to the workmen both under
this Act and under the Industrial Disputes Act. This fact has in recent
decisions been recognised by this Court. (of Bangalore Woollen, Cotton &
Silk Co. Ltd. v. Their Workmen(1), Buckingham & Carnatic Co. Ltd. v.
Workmen(2) and Hindustan Brown Boveri Ltd. v. The Workmen(a).
It will be pertinent, while examining the
question whether there is a restriction, as suggested by counsel, to the right
to apply for modifications, to bear in mind the change in the legislative
policy reflected in the amendments of ss. 4 and 10. It will be noticed that s.
10 does not state that once a standing order is modified and the modification
is certified, no further modification is permissible except upon proof that new
circumstances have arisen since the last modification. As a matter of fact the
legislature has not incorporated any words in the sub-sec.
restricting the right to apply for
modification except of course the time limit of six months in sub-s. 1. Section
6 no doubt lays down that the order of the appellate authority in an appeal
against the order of the certifying officer under s. 5 is final but that
finality is itself subject to the right to apply for modification under s.
10(2). Even so, it was urged that the finality of the order under s. 6 was
indicative of a condition precedent to the jurisdiction under sec. 10(2) to entertain
an application for modification on a new set (1) [1968] 1 L.LJ. 555.
(2) C.A. No. 674 of 1968 decided oft 25th
July, 1968.
(3) C.A. No. l631 ofl966 decided on 31st
July, 1967.
141 circumstances having arisen in the
meantime. The question is whether such is the position.
The finality to the order passed under s. 6
really means that there is no further appeal or revision against that order and
no more. This view finds support from s. 12 which lays down that once the
standing orders are finally certified, no oral evidence can be led in any court
which has the effect of adding to or otherwise varying or contradicting such
standing orders. Section 6, when read with s. 12, indicates that the finality
given to the certification by the appellate authority is against a, challenge
thereof in a civil court. But the finality given to the appellate authority's
order is subject to the modification of those very standing orders certified by
him.
As already stated, s. 10 itself does not lay
down any restriction to the right to apply for modification Apart from the
right to apply for modification under the Act, the workmen ,can raise an
industrial dispute with regard to the standing orders. There is nothing in the
Industrial Disputes Act restricting the right to raise such a dispute only when
a new set of circumstances has arisen. If that right is unrestricted, can it be
possible that the very_ legislature which passed both the Acts could have,
while conferring the right on the workmen individually, restricted that right
as suggested by counsel ? To illustrate, a new industrial establishment is set
up and workmen are engaged therein.
Either there is no union or if there is one
it is not yet properly organised. The standing orders of the establishment are
certified under the Act. At the time of certification, the union or the
workmen's representatives had raised either no objections or only certain
objections. If subsequently the workmen feel that further objections could have
been raised and if so raised the authority under the Act would have taken them
into consideration, does it mean that because new circumstances have since then
not arisen, the workmen would be barred from applying for modification ? Let us
take another illustration. Where, after the standing orders or their
modifications are certified, it strikes a workman after they have been in
operation for some time that a further improvement in his conditions of service
is desirable, would he be debarred from applying for a further modification on
the ground that no change of circumstances in the meantime has taken place?
Where the standing orders provide 10 festival holidays, if counsel were right,
the workmen can never apply for an addition in their number as they would be
faced with the contention that the festivals existed at the time of the last
certification and there was therefore no change of circumstances.
The Act is a beneficent piece of legislation
and therefore unless compelled by any words in it we would not be justified in
importing in s. 10 through inference only a restriction to the right conferred
by. it on account of a supposed danger of multiplicity 153 for the purpose of
ensuring that conditions of service, which the employer laid down, became known
to the workmen and the liberty of the employer in prescribing the conditions of
service was only limited to the extent that the Standing Orders had to be in
conformity with the provisions of the Act and, as far as practicable, in
conformity with Model Standing Orders. The Certifying Officer or the Appellate
Authority were debarred from adjudicating upon the fairness or the
reasonableness of the provisions of the Standing Orders. Then, as noticed in
the case of Rohtak Hissar District Electricity Supply Co.
Ltd.(1), the Legislature made a drastic change
in the policy of the Act by amending section 4 and laying upon the Certifying
Officer the duty of deciding whether the Standing Orders proposed by the
employer were reasonable and fair, and also by amending section 10(2) so as to
permit even a workman to apply for modification of the certified Standing
Orders, while, in the original Act, the employer alone had the right to make
such an application. It is, however, to be noticed that the preamble of the Act
was not altered, so that the purpose of the Act remained as before.
While the Act was in its un-amended form, if
the workmen had a grievance, they could not apply for modification of certified
Standing Orders and, even at the time of initial certification, they could only
object to a Standing Order on the ground that it was not in conformity with the
provisions of the Act or Model Standing Orders. After amendment, the workmen
were given the right to object to the draft Standing Orders at the time of
first certification on the ground that the Standing Orders were not fair and
reasonable and, even subsequently, to apply for modification of the certified
Standing Orders after expiry of the period of six months prescribed under s.
10( 1 ) of the Act. These rights granted to the workmen and the powers conferred
on the Certifying Officer and the Appellate Authority, however, ,still had to
be exercised for the purpose of giving effect to the object of the Act as it
continued to remain in the preamble, which was not altered. Before the
amendment of the Act, if the workmen had any grievance on the ground of
unfairness or unreasonableness of the Standing Orders proposed by the employer,
their only remedy lay under the Industrial Disputes Act. By amendment in 1956,
a limited remedy was provided for them in the Act itself by conferring on the
Certifying Officer the function of judging the reasonableness and fairness of
the proposed Standing Orders.
These amendments cannot, however, affect the
alternative remedy which the workmen had of seeking redress under the Industrial
Disputes Act if they had grievance against any of the Standing Orders certified
by the Certifying Officer [See Bangalore Woollen, Cotton and Silk Mills Company
Ltd.
v. Their Workmen and Another(2), and the (1)
[1966] 2 S.C.R, 863. (2) [1968] 1 L,L.J. 555.
2 Sup. C1169--11 143 of applications. The
policy of s. 10 is clear that a modification should not be allowed within six
months from the date when the standing orders or the last modifications thereof
came into operation. The object of providing the time limit was that the
standing orders .or their modifications should be allowed to work for
sufficiently long time to see whether they work properly or not. Even that time
limit is not rigid because a modification even before six months is permissible
if there is an agreement between the parties.
The ground for urging that a restriction
should be read in s. 10 was the apprehension that since workmen individually
have the right to apply for modifications there would be multiple applications
which an employer would have to face. Secondly, that an application without a
change of circumstances would be tantamount to a review by the same authority
of his previous order of certification. It was said that if no restriction is
read in s. 10 it would mean that the same authority. who. on satisfaction of
the fairness and reasonableness of a standing order or its last modification
had certified it would be called upon to review his previous decision on
reasonableness and fairness. Such a review, it was argued, is permissible only
on well-recognised grounds, namely, discovery of new and important matter or
evidence, a mistake or an error apparent on the face of the record or any other
sufficient reason.
An application for modification would
ordinarily be made where (1) a change of circumstances has occurred, or (2)
where experience of the working of the standing orders last certified results
in inconvenience bardship anomaly etc. or (3) where some fact was lost sight of
at the time of certification, or (4) where the applicant feels that a
modification will be more beneficial. In category (1) there would be no
difficulty as a change of circumstances has taken place. But in cases falling,
under the rest of the categories there will be no change of circumstances. Doesit
mean that though the implementation of the standing orders has resulted. in
hardship. inconvenience or anomaly no modification can be asked for because
there is no change of circumstances ? As to multiplicity of applications we
think that there is no justification for any such apprehension. for. unless
there in a justification for modification the authorities under the Act would
reject them on the ground that they are frivolous and therefore neither fair
nor reasonable. Lastly as to such an application being a review of the last
certifying order an application under s. 10 is not a review. An application for
review would be made in the proceedings in 'which the' judgment or order sought
to be reviewed is passed That would not be s0 in the case of an application
under s. '10(2); Such an application is independent of the proceedings in which
the' last.certifying order was passed and. is made in 'the 143 exercise of an
independent right conferred upon the applicant by s. ]0(2). In an application
for modification, the issue before the authority would be not as to the
reasonableness or fairness of the standing orders or their last modification,
but whether the modification now applied for is fair and reasonable. Therefore,
the contention that a change of circumstances is a condition precedent to the
maintainability of an application under s. 10(2) or that an application for
modification without proof of such a change amounts to review by the same
authority of its previous order is not correct .
It was then argued that assuming that a
modification without a change of circumstances is permissible though s. 11 of
the Code of Civil Procedure does not apply to industry matters, sound policy
dictates that principles analogous to res judicata must be applied and it must
be held that unless circumstances have changed an application for modification
would be ,barred. For this, counsel relied on Burn & Co. v. Their
Employees(x). There the demand was for wage scales fixed in an award by the
Mercantile Tribunal instead of the scales in accordance with the scheme of the
Bengal Chamber of Commerce. In a dispute previously raised by labour an award
was made in 1950 which accepted the wage scales according to the scheme of the
Bengal Chamber of Commerce and rejected the demand for the scales according to
those awarded by the Mercantile Tribunal which were more favourable. It was in
these circumstances that this Court expressed the view that an award fixing
wage scales should have fairly long range operation and should not be unsettled
unless a change of circumstances has occurred justifying fresh adjudication.
But with the constant spiralling of prices the principle would appear to have
lost much of its efficacy. The trend in recent decisions is that application of
technical rules such as res judicata. acquiescence, estoppel etc. are not
appropriate to industrial adjudication. In Guest, Keen, Williams Private Ltd.
v.P.J.
Sterling(2) a modification of a standing
order relating to the age of superannuation was sought by raising an industrial
dispute. It was contended that the reference of that dispute was barred by
acquiescence and laches. That contention was rejected, the Court observing that
industrial tribunal should be slow and circumspect in applying technical
principles such as acquiescence and estoppel. In Workmen of Balmer Lawrie &
Co. v. Balmer Lawrie & Co.(3) also it was observed that the question as to
revision of wage scales must be examined on the merits of each individual case
and technical considerations of res judicata should not be allowed to hamper
the discretion of industrial adjudication therefore. Doubtful whether
principles analogous to res judicata can properly be applied to industrial
adjudication.
(1) S.C.R.781, 789. (2) [1960] l S.C.R. 348.
(2) [1964] 5 S.C.R. 344.
144 On merits, Mr. Gokhale argued that the
four modifications to which he objected were neither fair nor reasonable and
that therefore we should set them aside, The ,question is, whether in an appeal
under Art. 136 we would be justified in interfering with conclusions as to
reasonableness and fairness by authorities empowered by the Act to arrive at
such conclusions. In Rohtak Hissar District Electricity Supply Co. Ltd. v.
State of Uttar Pradesh & Ors.(1) this Court prevented counsel for the employer
from canvassing such a question on the Found that the matter of fairness and
reasonableness was left by the legislature to the authorities constituted under
the Act.
In Hindustan Antibiotics Ltd. v. The Workmen
& Ors.(2) this Court repeated what it had earlier stated in Bengal Chemical
& Pharmaceutical Workers v. Their Workmen(3) that though Art., 136 is
couched in widest terms, it is necessary to, exercise discretionary
jurisdiction of this Court only in cases where awards are made in violation of
the principles of natural justice or axe made in a manner causing grave
injustice to parties or raise an important principle of industrial law
requiring elucidation by this Court or disclose exceptional or Special
circumstances which merit consideration by this Court.
As aforesaid, the modifications objected by
the appellant company are: (1 ) giving reasons and communicating them to the
workman concerned even in eases of discharge simpliciter, (2) insertion of lime
limit of 60 days in the disposal of appeals, (3) insertion in standing order 11
of a clause that where a workman is re. moved on the ground of inefficiency due
to physical unfitness, the management should offer to such a workman
alternative employment on reasonable emoluments and (4) insertion of the clause
requiring a_ second show cause notice at time stage when the decision of
suitable punishment is to be made. So far as modifications (2), and (3) are
concerned, clearly no principle is involved and there would be no justification
for us to interfere with the conclusion of the appellate authority on the
question of their being fair and reasonable. As regards the first modification,
the contention was that an employer has under the law of master and servant the
right to terminate the service`s of his:
employee by a discharge simpliciter after
giving a month's notice or a month's wages in. lieu thereof, and is not
required to give reasons for such an order. The Industrial Disputes Act also
does not lay down any fetter to that right by requiring him to give reasons to
the employee concerned and industrial adjudication has so far recognized such a
right. To impose such a fetter by a change in orders is therefore not warranted
by any statute, and, therefore, cannot be said to be either fair or reasonable.
It must, however, be borne. in mind that the
right to contract in industrial S.C.R. 863. (2) [1967] 1 S.C.R. 652, supp. 2
S.C.R. 136, 140.
145 matters is no longer an absolute right
and statutes dealing with industrial matters abound with restrictions on the
absolute fight to contract. The doctrine of hire and fire, for instance, is now
completely abrogated both by statutes and by industrial adjudication, and even
where the services of an employee are terminated by an order of discharge
simpliciter the legality and propriety of such an order can be challenged in
industrial tribunals. These restrictions on the absolute right to contract are
imposed evidently because security of employment is. more and more regarded as
one of the necessities for industrial peace and harmony and the contentment it
brings about a prerequisite of social justice. During the last decade or so
statutes have been passed such as the Bihar Shops and Establishments Act, 1953
which require a reasonable cause for dispensing with the services of an
employee by an order of discharge simpliciter. If reasons for discharging an
employee are furnished to the employee concerned, he not only has the
satisfaction of knowing why his services are dispensed with but it becomes easy
for him in appropriate cases to challenge the order on. the ground that it is
either not legal or proper which in the absence of knowledge of those reasons
it may be difficult, if not impossible for him to do. In these circumstances,
if the authorities under the Act have come to the conclusion that such a
modification is fair and reasonable we would hardly be justified in interfering
with such a decision.
As regards the modification requiting a
second show cause notice, neither the ordinary law of the land nor the
industrial law requires an employer to give such a notice.
In none of the decisions given by courts or
the tribunals such a second show cause notice m case of removal has ever been
demanded or considered necessary. The only class of cases where such a notice
has been held to be necessary are those arising under Art. 311. Even that has
now been removed by the recent amendment of that Article. To import such a
requirement from Art. 311 in industrial matters does not appear to be either
necessary. or proper and would be equating industrial employees with civil
servants. In our view, there is no justification on any principle for such
equation, Besides, such a requirement would unnecessarily prolong disciplinary
enquiries which in the interest of industrial peace should be disposed of in as
short a time as possible. In our view it is not possible to consider this
modification as justifiable either on the ground of reasonableness or fairness
and should therefore be set aside.
The appeal, therefore, is partly allowed to
the extent aforesaid and the impugned order to that extent is set aside. There
v,ill be Bhargava, J. The management of the Shahdara (Delhi) Saharnpur Light
Railway Co., Ltd. (hereinafter referred to as 146 "the Company") has
riffled this appeal, by special leave, against an order passed by the Chief
Labour Commissioner (Central) under section 6 ,of the Industrial Employment
(Standing Orders) Act, 1946 (hereinafter referred to as "the Act") as
an appellate authority, granting partially an application made under section 10
of the Act presented on behalf of the respondent, ShahdaraSaharanpur Railway
Workers' Union. The first draft Standing Orders submitted by the Company to the
Certifying Officer under s. 4 of the Act were certified by him on 7/8-8-1962,
after deciding objections that had been filed on behalf of the workmen In
appeal, the Chief Labour Commissioner (Central), New Delhi, modified those
Standing Orders to some extent by his order dated 12th February, 1963.
Subsequently, these certified Standing Orders were modified by the order dated
28th December, 1963 passed by the Certifying Officer, and the appeal against
his orders of modification was dismissed on the 23rd April, 1964. Then, on 25th
April, 1965, an application was presented under s. 10(2) of the Act on behalf
of the respondent seeking modifications in a number of Standing Orders as they
stood after original certification and first modification. The Certifying
Officer passed his orders on this application and, against those orders, the
respondent filed an appeal before the Chief Labour Commissioner (Central), New
Delhi. The Chief Labour Commissioner, by his order dated 27th October, 1967,
allowed modifications in a number of Standing Orders. The present appeal is
directed against this order and challenges the modifications granted in
Standing Orders Nos. 9(a), 12(A), 11(ix), 11(vii) and 13. The main ground urged
by the Company before this Court in support of this appeal was that the Chief
Labour Commissioner was not justified in directing modifications in the
Standing Orders, already certified, in the absence of fresh material or fresh
facts on the basis of which alone he was entitled to grant modifications under
s. 10 of the Act.
Learned counsel appearing on behalf of the
Company in the alternative, also put forward the plea that on principles
analogous to the rule of res judicata it should be held that the Chief Labour
Commissioner had no jurisdiction to grant these modifications under s. 10 in
view of the previous decisions given when the Standing Orders were originally
certified and modified for the first time.
So far as the argument of learned counsel
based on the applicability of principles analogous to the rule of res judicata
is concerned, learned counsel conceded that there is no direct ruling of any
Court laying down that such principles are applicable when a Certifying Officer
is dealing with an application for modification of Standing Orders under s. 10
of the Act, or when an appeal against such an order is being heard by the
Appellate Authority under s. 6 of the Act. Reliance was, however, placed on the
decision of this Court in Burn & Co., Calcutta v.. Their Emplo 147 yees(1),
where this Court was dealing with the applicability of the principle analogous
to the rule of res judicata to proceedings before an Industrial Tribunal
dealing with a reference under the Industrial Disputes Act. In that case, an
earlier award had been given in an industrial dispute and the question arose
whether, in the subsequent dispute for adjudication, the decisions given in the
earlier award should be held as binding, unless it was shown that there had
been a change of circumstances. In the appeal before this Court, it was urged
that the Appellate Tribunal was in error in brushing aside the earlier award
and in deciding the matter afresh as if it arose for the first time for
determination; and it was argued that, when once a dispute is referred to a
Tribunal and that results in an adjudication, that must be taken as binding on
the parties thereto, unless there was a change of circumstances, and, as none
such had been alleged or proved, the earlier award should have been accepted,
as indeed it was accepted by the Adjudicator. This Court held: ' "In the
instant case, the Labour Appellate Tribunal dismissed this argument with the
observation that that was 'a rule of prudence and not of law'. If the Tribunal
meant by this observation that the statute does not enact that an award should
not be re-opened except on the ground of change of circumstances, that would be
quite correct.
But that is not decisive of the question,
because there is no provision in the statute prescribing when and under what
circumstances an award could be re-opened. Section 19(4) authorises the
Government to move the Tribunal for shortening the period during which the
award would operate, if 'there has been a material change in the circumstances
on which it was based'. But this has reference to the period of one year fixed
under section 19 (3) and if that indicates anything, it is that that would be the
proper ground on which the award could be re-opened under section 19(6), and
that is what the learned Attorney General contends. But we propose to consider
the question on the footing that there is nothing in the statute to indicate
the grounds on which an award could be reopened. What then is the position ?
Are we to hold that an award given on 'a matter in controversy between the
parties after full hearing ceases to have any force if either of them
repudiates it under section 19(6), and that the Tribunal has no option. when
the matter is again referred to it for adjudication, but to proceed to try it
de novo, traverse the entire ground once again, land come to a fresh decision.
That would be contrary (1) [1956]S.C.R 781 148 to the well-recognised principle
that a decision once rendered by a competent authority on a matter in issue
between the parties after a full enquiry should not be permitted to be
re-agitated. It is on this principle that the rule of res judicata enacted in
section 11 of the Civil Procedure Code is based. That section is, no doubt, in
terms inapplicable to the present matter, but the principle underlying it,
expressed in the maxim 'interest rei publica ut sit finis litium', is rounded
on sound public policy and is of universal application. 'The rule of res
judicata is dictated', observed Sir Lawrence Jenkins, C.J., in Sheoparsan Singh
v. Ramnandan Prasad Singh(1), 'by a wisdom which is for all time.' And there
are good reasons why this principle should be applicable to decisions of Industrial
Tribunals also. Legislation regulating the relation between Capital and Labour
has two objects in view. It seeks to ensure to the workmen, who have not the
capacity to treat with capital on equal terms, fair returns for their labour.
It also seeks to prevent disputes between employer and employees, so that
production might not be adversely affected and the larger interests of the
society might not suffer. Now, if we are to hold that an adjudication loses its
force when it is repudiated under section 19(6) and that the whole controversy
is at large, then the result would be that far from reconciling themselves to
the award and settling down to work it, either party will treat it as a mere
stage in the prosecution of a prolonged struggle, and far from bringing
industrial peace, the awards would turn out to be but truces giving the parties
breathing time before resuming hostile action with renewed vigour. On the other
hand, if we are, to regard them as intended to have long term operation and at
the same time hold that they are liable to be modified by change in the
circumstances on which they were based, both the purposes of the legislature
would be served. That is the view taken by the Tribunals themselves in The Army
& Navy Stores Ltd., Bombay v. Their Workmen(2), and Ford Motor Co. o] India
Ltd. v. Their Workmen(a) and we are of opinion that they lay down the correct
principle, and that there were no grounds for the Appellate Tribunal for not
following them".
As against this view expressed by this Court,
learned counsel for the respondent relied on the remarks made by this Court in
(1) [1916]. L.R. 43 I.A., 91. (2) 119511 2 L.L.J. 31, (3) [1951] 2 L.L.J. 231,
149 a subsequent case Workmen of Balmer Lawrie and Co. v.
Balmer Lawrie and Co. (1). In that case, the
Court was dealing with the question of alteration in wage structure and had to
consider the effect of an earlier award. The Court held:
"When a wage structure is framed, all
relevant factors are taken into account and normally it should remain in
operation for a fairly long period; but it would be unreasonable to introduce
considerations of res judicata as such, because for various reasons which
constitute the special characteristics of industrial adjudication, the said
technical considerations would be in admissible. As the Labour Appellate
Tribunal itself has observed, the principle of gradual advance towards the
living wage which industrial adjudication can never ignore, itself constitutes
such a special feature of industrial adjudication that it renders the
application of the technical rule of res judicata singularly inappropriate. If
the paying capacity of the employer increases or the cost of living shows an
upward trend, or there are other anomalies, mistakes or errors in the award
fixing wage structure, Or there has. been a rise in the wage structure in
comparable industries in the region, industrial employees would be justified in
making a claim for the re-examination of the wage structure and if such a claim
is referred for industrial adjudication, the Adjudicator would not normally be
justified in rejecting it solely on the ground that enough time has not passed
after the making of the award, or that material change in relevant
circumstances had not been proved. It is, of course, not possible to lay down
any hard and fast rule in the matter. The questio n as to revision must be
examined on the merits in each individual case that is brought before an
adjudicator for his adjudication." Further support was sought by learned
counsel from the remarks made by this Court in Associated Cement Staff Union
and Another v.Associated Cement Company and. Others(a). The judgment in this
case was given only about a month after the judgment in the case of Workmen of
Balmer Lawrie & Co. (1) by the same Bench of this Court which held:
"It is true that too frequent
alterations of conditions of service by industrial adjudication have been
generally deprecated by this Court for the reason that it is likely to disturb
industrial peace and equilibrium. At the same time, the Court has more than
once pointed (1) [1964] 5 S.C.R. 344. (2) [1964] 1 L.L.J. 12.
150 out the importance of remembering the
dynamic nature , of industrial relations. That is why the Court has, especially
in the more recent decisions, refused to apply to industrial adjudications
principles of res judicata that are meant and suited for ordinary civil
litigations. Even where conditions of service have been changed only a few
years before, industrial adjudication has allowed fresh changes if convinced of
the necessity and justification of these by the existing conditions and
circumstances. Where, as in the present case, in a previous reference the
tribunal has refused the demand for change., there is even less reason for
saying that that refusal should have any such binding effect. It is important
to remember in this connection that working hours remained unchanged for many
years in this concern and during these years, considerable changes have taken
place in the country's economic position and expectations. With the growing
realization of need for better distribution of national wealth has also come an
understanding of the need for increase in production as an essential
prerequisite of which greater efforts on the part of the labour force are
necessary. That itself is sufficient reason against accepting the argument
against any change in working hours if found justified on relevant
considerations that have been indicated above." These three decisions,
which have been brought to our notice prima facie indicate that the Court has
expressed conflicting views' on the question of applying the principle
underlying the rule of res judicata to proceedings for adjudication of
industrial disputes by an Industrial Tribunal under the Industrial Disputes
Act. In the circumstances, I have felt some hesitation in applying this
principle in the present case as urged on behalf of the Company consider that,
in the present case, it would be much more appropriate to examine the scheme of
the Act itself to find out the intention of the legislature and to arrive at a
decision on thin basis on the question whether a modification on an application
under s. 10 of the Act should only be allowed on the basis of facts or
circumstances appearing subsequent to the previous certification of the
Standing Orders, or whether, in dealing with the application for modification,
the Certifying Officer and the Appel late Authority can re-examine the entire
position even as it existed at the time of the previous orders and arrive at a
differed decision.
The scheme of the Act was examined by this
Court in Rohtak Hissar District Electricity Supply Co. Ltd. v. State of Uttar
Pradesh and Others(1), where this, Court held:
.
(1) [1966] 2 S.C.R. 863. ' "The Act was
passed on the 23rd April, 1946, and the Standing Orders framed by the U.P.
Government under section 15 of the Act were
published on the 14th May, 1947. The Central Act (the Industrial Disputes Act
No. 14 of 1947 ) came into force on the I st April, 1947, whereas the U.P. Act
(U.P. Industrial Disputes Act No. 28 of 1947) came into force on the 1st
February, 1948. It will thus be seen that the Act came into force before either
the Central Act or the U.P. Act was passed. The scheme of the Act originally
was to require employers in industrial establishment to define with sufficient
precision the conditions of employment under them and to make the said
conditions known to the workmen employed by them. The Legislature thought that,
in many industrial establishments, the conditions of employment were not always
uniform, and sometimes, were not even reduced to writing, and that led to
considerable confusion which ultimately resulted in industrial disputes. That
is why the Legislature passed the Act making it compulsory for the
establishments, to which the Act applied, to reduce to writing conditions of
employment and get them certified as provided by the Act. The matters in
respect of which conditions of employment had to be certified were specified
'in the schedule appended to the Act. This Schedule contains 11 matters in
respect of which Standing orders had to be made. In fact, the words
"Standing orders" are defined by s. 2(g) as meaning rules relating to
matters set out in the Schedule. The "Certifying officer" appointed
under the Act is defined by s. 2(c), whereas "Appellate Authority" is
defined by s. 2(a).
Originally, the jurisdiction of the
Certifying officer and the Appellate Authority was very limited; they were
called upon to consider whether the Standing orders submitted for certification
conformed to the Model Standing orders or not. Section 3(2) provides that these
Standing orders shall be, as far as practicable, in conformity with such Model
Standing orders. Section 15, which deals with the powers of the appropriate
Government to make rules, authorises, by cl. (2)(b), the appropriate Government
to set out Model Standing Orders for the purposes of this Act. That is how the
original jurisdiction of the certifying authorities was limited to. examine the
draft Standing Orders submitted for certification and compare them with the
Model.. Standing Orders.
152 In 1956, however, a radical change was
made in the provisions of the Act. Section 4, as amesded by Act 36 of 1956, has
imposed upon the Certifying Officer or the Appellate Authority the duty to
adjudicate upon the fairness or the reasonableness of the provisions of any
Standing Orders. In other words, after the amendment was made in 1956, the
jurisdiction of the certifying authorities has become very much wider and the
scope of the enquiry also has become correspondingly wider. When draft Standing
Orders are submitted for certification, the enquiry now has to be two-fold; are
the said Standing Orders in conformity with Model Standing Orders; and are they
reasonable or fair ? In dealing with this latter question, the Certifying
Officer and the Appellate Authority have been given powers of a Civil Court by
s. 11 (1 ). The decision of the Certifying Officer is made appealable to the
Appellate Authority under s. 6 at the instance of either party. Similatly, by
an amendment made in 1956 in s. 10(2), both the employer and the workmen are
permitted to apply for the modification of the said Standing Orders after the
expiration of 6 months from the date of their coming into operation. It will
thus be seen that when certification proceedings are held before the certifying
authorities, the reasonableness or the fairness of the provisions contained in
the draft Standing Orders falls to be examined." It is in the fight of
this scheme of the Act explained by this Court that the decision has to be
arrived at as to how, in what manner, and under what circumstances the
Certifying Officer or the Appellate Authority should grant modifications when
an application under s. 10(2) of the Act is validly made after the expiry of
the period of six months laid down in s. 10 (1 ) of the Act.
The purpose of the Act, as it was originally
passed in 1946, was merely to require employers in industrial establishments to
define with sufficient precision the conditions of employment under them and to
make the said conditions known to the workmen employed by them. To. give effect
to this purpose, s. 3 of the Act gave the power exclusively to the employers to
submit draft Standing Orders for certification. The Certifying Officer had to
certify the Standing Orders, if provision was made in them for every matter set
out in the Schedule and the Standing Orders were otherwise in conformity with
the provisions of the Act. In addition, sub-s. (2) of section 3 also laid down
that the provision to be made was to. be, as far as practicable, in conformity
with Model Standing Orders prescribed by the appropriate State Government.
Thus, the Act, in its original form, was designed only 153 for the purpose of
ensuring that conditions (A service, which the employer laid down, became known
to the workmen and the liberty of the employer in prescribing the conditions of
service was only limited to the extent that the Standing Orders had to be in
conformity with the provisions of the Act and, as far as practicable, in
conformity with Model Standing Orders. The Certifying Officer or the Appellate
Authority were debarred from adjudicating upon the fairness or the
reasonableness of the provisions of the Standing Orders. Then, as noticed in
the case of Rohtak Hissar District Electricity Supply Co. Ltd.(1), the
Legislature made a drastic change in the policy of the Act by amending section
4 and laying upon the Certifying Officer the duty of deciding whether the
Standing Orders proposed by the employer were reasonable and fair, and also by
amending section 10(2) so as to permit even a workman to apply for modification
of the certified Standing Orders, while, in the original Act, the employer
alone had the right to make such an application. It is, however, to be noticed
that the preamble of the Act was not altered, so that the purpose of the Act
remained as before. While the Act was in its un-amended form, if the workmen
had a grievance, they could not apply for modification of certified Standing
Orders and, even at the time of initial certification, they could only object
to a Standing Order on the ground that it was not in conformity with the
provisions of the Act or Model Standing Orders. After amendment, the workmen
were given the right to object to the draft Standing Orders at the time of
first certification on the ground that the Standing Orders were not fair and
reasonable and, even subsequently, to apply for modification of the certified
Standing Orders after expiry of the period of six months prescribed under s.
10(1) of the Act. These rights granted to the workmen and the powers conferred
on the Certifying Officer and the Appellate Authority, however, still had to be
exercised for the, purpose of giving effect to the object of the Act as it
continued to remain in the preamble, which was not altered. Before the
amendment of the Act, if the workmen had any grievance on the ground of
unfairness or unreasonableness of the Standing Orders proposed by the employer,
their only remedy lay under the Industrial Disputes Act. By amendment in 1956,
a limited remedy was provided for them in the Act itself by conferring on the,
Certifying Officer the function of judging the reasonableness and fairness of
the proposed Standing Orders.
These amendments cannot, however, affect the
alternative remedy which the workmen had of seeking redress under the
Industrial Disputes Act if they had grievance against any of the Standing
Orders certified by the Certifying Officer [See Bangalore Woollen, Cotton and
Silk Mills Company Ltd. v.
Their Workmen and Another(2), and the (1)
[1966] 2 S.C.R. 863.
(2) [1968] 1 L.L.J. 555.
2 Sup. CI/69-11 154 Buckingham and Carnatic
Co. Ltd. v. Their Workmen(1). It is, therefore, clear that, after the amendment
in 1956, the workmen have now two alternative remedies for seeking alterations
in the Standing Orders proposed or ,already certified. They can object to the
proposed Standing Orders at the time of first certification, or can ask for
modification of the certified Standing Orders under s. 10(2) on the limited
ground of fairness or reasonableness. But, for the same purpose, they also have
the alternative remedy of seeking redress under the Industrial Disputes Act, in
which case the scope of their demand would be much wider.
If the proceedings go for adjudication under
the Industrial Disputes Act, the workmen can claim alterations of the Standing
Orders not merely on the ground of fairness or reasonableness, but even on
other grounds, such as further, liberalisation of the terms and conditions of service,
even though the certified Standing Orders may be otherwise fair and reasonable.
The remedy provided by the Act has, therefore, a limited scope only.
In this background, the effect of s. 6, which
lays down that when the Appellate Authority gives its decision confirming the
Standing Orders either in the form certified by the Certifying Officer or after
amending the Standing Orders by making modifications, thereof or additions
thereto, his decision shall be final, has further to be considered. On the face
of it, this provision means that, if the Appellate Authority confirms the
Standing Orders at the time of first certification, that order is not to be
subsequently questioned before any authority.
There is, of course, the provision in s.
10(2) permitting either an employer or a workman to apply for modification of
the Standing Orders after the expiry of six months from the date of
certification. It appears to me that, on the language of s. 6, it must be held
that this request for modification under s. 10(2) can only be made on the basis
of fresh facts or fresh circumstances arising subsequent to the passing of the
order by the Appellate Authority under s. 6 confirming the Standing Orders for
the first time. If, on receiving an application for modification under s. 10(2)
the Certifying Officer is held to be authorised to reconsider the
reasonableness or fairness of a Standing Order already certified and confirmed
under section 6 the finality envisaged under that section in respect of the
decision of the Appellate Authority will be nullified. Cases may arise where,
on first application for certification of the Standing Orders, an objection may
be raised by the workmen and a modification sought on the ground that the
proposed Standing Order is not fair or reasonable. Such an objection may be
dismissed both by the Certifying Officer and the Appellate Authority. Six
months after the certification, a workman may apply for the same modification
of the same Standing Order without any fresh facts or circumstances. If it be
held that the power of the (1) Civil Appeal No.
674 of 1968 decided on 25-7-1968.
155 Certifying Officer on an application for
modification is not limited at all and can be exercised even on the material
which was originally before the Certifying Officer and the Appellate Authority,
the Certifying Officer may, on the same material, come to a conclusion
different from the conclusion arrived at by the Appellate Authority at the
first stage under s. 6 of the Act. In that case, the Certifying Officer may
allow the modification which was previously rejected by the Appellate
Authority. The wide interpretation, urged by learned counsel for the workmen in
this appeal that the power of a Certifying Officer on an application for
modification is not limited at all, can thus result in orders being made which
completely negative the finality of the decision given by an Appellate
Authority under section 6 at an earlier stage. In fact, if tins interpretation
is accepted and it is held that an order of modification can be made on the
identical material which was available to the Appellate Authority at the time
of its earlier order, it would mean that merely because a period of six months
has elapsed,, a Certifying Officer would be competent to reappraise the same
facts and circumstances, take a different view and set aside the order passed
by his superior authority and, thus, in effect, sit in judgment over an order
made by a superior authority. of course, a Certifying Officer, being junior to
the Appellate Authority, may hesitate to do so; but a successor Appellate
Authority may very well hold views different from his predecessor and may come
to a decision on identical material that a Standing Order held to be fair and
reasonable by his predecessor at the stage of appeal under s. 6 was not fair
and reasonable;
and that a modification should be allowed on
the ground of being fair and reasonable, even though that modification was
disallowed by his predecessor. It is also to be noted that the right to apply
for modification is not confined to workmen alone, but that right is granted to
the employers also. There can, therefore, be reverse' cases where the draft
Standing Order submitted by an employer may be modified by the Appellate
Authority under s. 6 and, six months later, the employer may again apply for
modification so as to result in restoration of his original draft in the hope
that the successor Appellate Authority would hold the opinion that the original
draft Standing Order proposed by the employer was fair and reasonable and that
the modification made by his predecessor under s. 6 was not justified.
Considering these circumstances, I am of the view that, when an application
under s. 10(2) of the Act is made, the Certifying Officer can modify Standing
Orders already certified, only if the request is not made on the basis of the
same material which existed at the earlier stage when the Standing Orders were
certified. I am unable to accept an interpretation which will completely do
away with the finality of orders made under s. 6 of the Act by an Appellate
Authority.
156 This interpretation, of course, does not
affect the right of the workmen to seek an amendment of the Standing Orders,
even if certified as reasonable and fair by the Appellate Authority under s. 6
by appropriate proceedings .under the Industrial Disputes Act. In fact, it
appears to me that the power of a Tribunal dealing with an industrial dispute
under that Act relating to a Standing Order will, of course, be wide enough to
permit the Tribunal to direct alteration of a Standing Order held to be
reasonable and fair by the Appellate Authority under s. 6 of the Act, in case a
dispute about it is referred to the Tribunal; and that is the only remedy
available if either the workman or the employer desires to have modification
without any fresh grounds, material or circumstances. The validity of the order
of the Appellate Authority in the present appeal has to be judged on this
basis.
I have already mentioned earlier the various
Standing Orders in respect of which modifications allowed by the Appellate
Authority were sought to be challenged in this appeal. The objections in
respect of some of these modifications, which were originally challenged, were
not pressed by counsel during the hearing of the appeal and, consequently,
those modifications need not be interfered with. At the stage of final hearing,
learned counsel only pressed for setting aside four modifications mentioned by
the Chief Labour Commissioner in his. appellate order as items Nos. 1, 3, 5 and
6 relating to modifications .of Standing. Orders 9(a), 12(A) and 11(vn). It may
be mentioned that items 5 and 6 are both modifications in Standing Order 11
(vii). In each of these cases, the order passed by the Chief Labour
Commissioner now impugned shows that he did not rely on any fresh facts,
material or circumstances which were not available at the earlier stage when
the Standing Orders were first certified or first modified. In effect,
therefore, the present order amounts to passing orders, different from earlier
orders passed by the Appellate Authority, on a reconsideration of the same
material which was available to both the Authorities. In fact, the modification
at item No. 1 in Standing Order 9(a) had been specifically disallowed in appeal
by the Chief Labour Commissioner in his order dated 12th February, 1963, when
he first heard the appeal under s. 6 and confirmed the certification of the
original Standing Orders. Thus, in respect of item No. 1, what the present
Chief Labour Commissioner has done is to permit the modification because he
considered it reasonable and fair, even though, on the same material, his
predecessor had disallowed this very modification on the basis that, in his
opinion, the original. draft Standing Order was fair and reasonable. On the
principle enunciated above, it is clear that the order of the Chief Labour
Commissioner, allowing all these four modifications, which is not based on any
fresh facts, material or circumstances, is liable to be set aside.
As a result, I would partly allow the appeal
and set aside the order of the Chief Labour Commissioner (Central), permitting
modifications mentioned by him in his Order at item Nos. 1, 3, 5 and 6 relating
to Standing Orders 9(a), 12(A) and Il(vii). In the circumstances of this case,
I would direct parties to bear their own costs of this appeal.
V.P.S. Appeal allowed in part.
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