National
Textiles Corporation Ltd. & Ors Vs. N.T.C. Ltd. & Ors [2003] Insc 518 (14 October 2003)
Brijesh
Kumar & Arun Kumar.
WITH W.P(C)No.34/1988,
W.P.(C) No.1073/1989, W.P.(C) No.1074/1989, T.P.(C) No.289/1988, W.P.(C)
No.152/1988, W.P.(C) No.214/1989, W.P.(C) No.218/1988, W.P.(C) No.44/1988,
W.P.(C) No.134/1988, W.P.(C) No.211/1988, W.P.(C) No.161/1987, W.P.(C)
No.579/1989, T.P.(C) No.290/1988. ARUN
KUMAR, J.
Various
textile mills in the country came to be vested in the Central Government by
virtue of the provisions under Section 3 (1) of the Sick Textile Undertakings
(Nationalization) Act, 1974. The Central Government transferred all such mills
to the National Textile Corporation Ltd. (hereinafter referred to as 'NTC')
which was brought into existence for this purpose. Under Section 5 of the said
Act the liability towards wages, salaries and other dues of workers of such
mills after the takeover of management by the Central Government, is that of
the Central Government.
The
issue involved in these cases is regarding the claim of the staff/sub staff
engaged by the various textile mills under the NTC for 'equal pay for equal
work'. The staff working in the mills is claiming pay equal to or in parity
with the pay scales prevailing for the staff working in the corporate offices
of the mills. It is not in dispute that the office staff/sub staff is on the
Central Dearness Allowance pattern (for short CDA) while the staff/sub staff
working in the mills is on the variable Industrial Dearness Allowance pattern
(for short IDA) governed by region: cum : Industry awards. It is to be noted
that there has never been any parity in the pay scales between the staff
working in the corporate offices of the NTC and its subsidiaries and the staff
working in the mills. However, over the years the disparity between the pay
scales of the staff working in the corporate offices and staff working in the
mills has become highly disproportionate. It has been noticed by the Sathyam
Committee, to which reference will be made in detail subsequently, that as
against 159% increase in the emoluments of the staff working in the corporate
offices over the staff working in the mills in the year 1987, the proportion
has increased by the year 2000 to 642%. It is this disproportion between the
pay scales of the staff working in the corporate offices and the staff working
in the mills which has led to tremendous discontent amongst the staff working
in the mills and it is this discontentment which is the root cause of this
entire litigation. The problem is further aggravated by the fact that the NTC
as well as most of its subsidiaries have been constantly incurring losses and
majority of them are sick companies facing proceeding under the Sick Industrial
Companies (Special Provision) Act, 1985 (in short 'SICA').
In
support of their plea of "equal pay for equal work" the staff working
in the mills claimed that the nature of work performed by them is the same as
the staff working in the corporate offices. They have gone to the extent of
saying that there is interchangeability between the staff working at the two
places. The subsidiaries of the NTC are spread over in different parts of the
country. The staff working in some of the subsidiaries through their
associations approached the respective High Courts in the country for relief
regarding revision of pay scales raising the plea of "equal pay for equal
work". Ultimately these cases stood transferred to this Court and were
bunched together. The matter has been pending in this Court for quite some
time. The effort of the Court has been to find an amicable settlement of the
problem. In fact, by an order dated 29th September, 1989, by consent of all the counsel
appearing for the parties, reference was made to the National Industrial
Tribunal in a bid to resolve the controversy. The Tribunal deliberated on the
issues involved over a long period of time. It ultimately submitted its report
on 17th July, 1996. This report did not succeed in
resolving the issues. The report found that the "workmen in the mills are
getting lesser emoluments than those comparable categories of employees serving
in the corporate offices. The workmen have succeeded in showing that there are
some similarities in the work done by two sets of employees but they have
failed to show satisfactorily that employees working in the mills discharge
similar functions when judged on the yardstick of reliability, quality,
responsibility, confidentiality etc." The finding of the Tribunal
regarding absence of equality or parity on working between the staff working in
the corporate offices and the other working in the mills has an important
bearing on the claim of the staff working in the mills. The long time that
elapsed during the pendency of the matter in this Court and before the National
Industrial Tribunal resulted in further prejudice to the claim of the staff in
the mills because the management refused to entertain any request for pay
revision during this period on the plea of matter being subjudice. While the
claim for revision of the pay scale for the staff working in the mills remained
pending, the pay scales of the staff working in the corporate offices continued
to be revised from time to time which resulted in the situation as noticed
earlier that is, from a disparity in pay scales of the two categories being
159% in the year 1987, it became 642% in the year 2000.
The
fond hope of this Court that the matter will be settled equitably before the
National Industrial Tribunal did not fructify. This Court continued its effort
to see that some amicable settlement to the issue is found. The Central
Government was persuaded to make positive efforts in this direction. As a
result by a notification dated 27th October, 1999 the Government of India
appointed a one man Committee of Shri S.R. Sathyam, a retired IAS officer and a
former Secretary in the Ministry of Textile to look into the grievances of the
staff and sub staff of the NTC mills regarding their pay structure. As per the
notification the findings of the Committee were to be of a recommendatory nature.
The Committee was expected to keep in view:
I. The
capacity of NTC to pay wages and salaries;
II.
The pay structure of other employees in the mills;
III.
The pay structure of NTC Headquarters;
IV.
The pay structure of similarly placed private mills;
V. The
observations of the National Industrial Tribunal and of this Court.
The Sathyam
Committee gave its report on 31st October, 2000.
The
Committee found that the different identity of workers working in the corporate
offices and workers working in the mills has always been maintained. The pay
structures in the two cadres had been different. The pay scales for the staff
in the corporate offices were substantially better as compared to the pay
scales of the staff working in the mills. Most importantly the Sathyam
Committee endorsed the finding of the National Industrial Tribunal that the two
categories of employees were not performing equal work. When there was no equal
work, there was no question of equal pay. However, the Committee found that the
staff working in the mills cannot be legitimately denied some relief on account
of delay in settlement of the dispute. Some of the recommendations of the
Committee are as under:
"23.10
The relief to be provided can be called 'special relief'. It must count for all
pay-related benefits although it can formally be merged with pay only at the
time of the next pay revision [Paragraph 15.4] 23.11 The 'special relief' must
also count for VRS. The Guidelines issued by the DPE for implementation of the
VRS may be amended to accommodate this provision [Paragraph 16.1] 23.12 The VRS
itself will have to be implemented in a time- bound manner. Otherwise, the
purpose of counting the 'special relief' for VRS so as to make it more
attractive may not be (fully) realized.[Paragraph 16.2.1] 23.13 For purposes of
computation of VRS benefits, the Gujarat model may be adopted. [Paragraph 16.2.2.] 23.14 In the context of
voluntary retirements, it will be a thoughtful gesture to allow some flelxibility
regarding transfer of Staff/sub-Staff between 'closure' and 'revival' mills. [Paragraph
16.2.3.] 23.15 For the purpose of providing 'special relief', the mills of the
NTC may be divided into two categories:
(i)
'Revival Mills' i.e., sick mills identified by the BIFR to be revivable.
(ii)
'Closure Mills' i.e., sick mills ordered by the BIFR to be closed. [Paragraph
17.1] 23.16 The approach towards providing 'special relief' in respect of these
three categories can be as follows:
(i)
For 'Good Mill', payment shall made with immediate effect with reference to a
'cut-off date'
(ii)
(a). For 'Revival Mills', the benefit of the 'special relief' shall be
available immediately for purposes of VRS.
(b) If
the Staff/sub-Staff chooses to stay with the Mill, then, the 'special relief'
will be available with effect from the 'cut-off date', but only after the Mill
is revived.
(c) In
case, the rehabilitation plan fails and the Mill cannot be revived, the
staff/sub-staff can, at that stage, opt for VRS and claim the benefit of the
special relief. Only, there can not be any claim for arrears.
(iii)
For 'Closure Mills', the benefit of the 'special relief' shall be available
immediately to staff/sub-staff opting for VRS. The benefit shall not be
available to staff not proceeding on VRS. [Paragraph 17.2] 23.17 It will be
necessary to define the 'cut-off date' without any ambiguity. It will be
reasonable to identify the date of the meeting in the Ministry of Textiles in
which an ad hoc relief was proposed as the 'cut-off date'.
[Paragraph
18.1. and 18.2] 23.18 It will be more convenient to exclude the retired
employees from the scope of the benefit proposed.[Paragraph 19.1] 23.19 The
'benefit order' must incorporate revised work norms.
[Paragraph
19.2] 23.20 The 'special relief' to be given can only partially neutralize the
gap in emoluments.[Paragraph 20.1] 23.21 The prescription of partial
neutralization need not necessarily apply equally at all levels. It will be
more equitable to apply the 'special relief' in a graded manner.
Towards
this end, the staff/sub-staff in Mills can be divided into four categories. [Paragraphs
20.2.1., 20.2.2, and 20.2.3.] 23.22 The graded relief to be provided can be as
follows:
(i)
Rs.1,500/- per month for category (i);
(ii)
Rs.1,250/- per month for category (ii);
(iii)
Rs.1,000/- per month for category (iii); and (iv) Rs.750/- per month for
category (v).
[Paragraph
20.2.4.]" The learned counsel for the Union of India submitted that the
recommendations of the Sathyam Committee have been implemented and nothing
further survives. The learned counsel appearing for the Union of India further
pointed out that various sick mills were declared as sick under the SICA and
proceedings before the Board of Industrial and Financial Reconstruction
(hereinafter referred to as 'BIFR') for rehabilitation of the concerned mills
are pending. In fact, it appears that the BIFR has already formulated and
sanctioned schemes in relation to some of the sick mills and the sanctioned
schemes are being implemented. In view of this, the submission is that any
financial burden placed on the management by virtue of any financial relief
granted to the workers at this stage would upset the rehabilitation scheme.
Further financial burden which is not under consideration of the rehabilitation
package cannot be foisted on the mills. Such a burden would result in, the
entire scheme falling through. For this reason it is contended that this Court
should not grant any relief to the workers.
The
plea of discrimination in the matter of revision of pay scales between staff
working in the corporate offices/headquarters and the staff working in the
Mills is sought to be met by contending that office staff is governed by the
CDA pattern while Mills staff is governed by the IDA pattern.
On the
other hand, the argument on behalf of the staff/sub staff of the Mills is that
great injustice has been done to the workers working in the Mills. While their
counterparts working in the corporate offices have been getting pay revisions
in normal course as and when it is allowed to other Government servants, the
staff working in the mills has been deprived of the said benefit. As a result
of this, it is submitted that during the last two decades while the cost of
living has gone up several times the salary and allowances of the workers
working in the Mills have remained constant. The emphasis on behalf of the
workers has been that there is equality and parity in the work and working
conditions of the workers of the corporate offices and the workers working in
the Mills. Therefore, it is a case for equal pay. On this aspect however, as
noticed earlier, the National Industrial Tribunal found against staff of the
Mills. The finding of the Tribunal was endorsed by the Sathyam Committee. In
the face of the findings of the two fact finding bodies we find ourselves
unable to take a different view on this issue. Neither necessary facts have
been placed before us nor we would like to go into such a question of fact. We
have no reason to differ with the finding of fact on this issue arrived at by
the two independent bodies. So far as the claim of the staff based on the
principle of equal pay for equal work is concerned, it is therefore, not
tenable. When the work is not equal, the question of equal pay does not arise.
But we cannot ignore the fact that the staff/sub staff working in the Mills has
unfortunately received a step motherly treatment. They have not had a pay
revision for years. The litigation has been pending for more than a decade.
They have been told that the matter is subjudice. The Sathyam Committee noticed
this sorry plight of the workers. The Committee gave some ad hoc relief to the
workers. But that is not enough. The Sathyam Committee noticed disparity in the
pay scales of the two categories of workers which was 159% in 1987 and had
risen to 642% in the year 2000. This is highly unjust and unfair. So far as the
staff working in the mills is concerned we are told that all the mills are
incurring losses and that does not justify any increase in the pay package of
the workers. But the staff working in the corporate offices of the Mills is
also staff of the parent body. If the mill is incurring losses the impact has
to be on everyone connected with the mill, in whatever capacity. You cannot
have double standards. When you give revised pay scales to office staff is
there no financial burden? In view of the fact that the nature of duties of the
staff in the two categories has been found to be not at par, parity in pay
scales may not be possible. Yet there can be no case for total denial of
revision of pay to the staff/sub staff working in the mills.
Discrimination
between the two categories of staff cannot be justified on the basis of
applicability of the CDA pattern and the IDA pattern to the respective
categories of staff. The IDA pattern cannot be taken to debar any revision of
pay scales. The Central Government has to act as a model employer and such
specious pleas on its part are highly improper and unjustified.
In our
view, a case for relief to the staff/sub staff working in the Mills is
definitely made out. The workers deserve some relief though not parity of pay
scales with staff/sub-staff working in corporate offices, but certainly on
account of revision of pay scales/increase of D.A. or emoluments from time to
time as and when fell due during period of nearly three decades since when, no
revision of their pay scale has been made.
Relief
to what extent is the next question? Nothing has been placed before us nor has
been brought to our notice which may enable us to spell out the extent of
relief. Even on behalf of the workers the emphasis has been on the fact that
they are entitled to revision of pay scales as in the case of staff in the
headquarters or corporate offices. Nothing more has been urged. Even otherwise
we feel we are ill-equipped to work out the extent of relief which can be
granted to the workers in the mills. Therefore, we direct the Central
Government to take appropriate steps which if so required may include
appointment of an expert to work out the extent of relief which ought to be
granted to the workers in the mills. Some consideration may be had about the
financial constraints, if any, but it cannot be to the extent of virtual denial
of any benefit. Before taking a final decision in the matter, an opportunity of
hearing be allowed to the management as well as to the workers to enable them
to place their respective stands before the decision making authority. The
decision should be taken within four months from the date of this judgment and
the same should be implemented within two months thereafter.
The
learned counsel for the Union of India relied on a recent judgment of this
Court in A.K. Bindal and another vs. Union of India [(2003) 5 SCC 163] in
support of his contention that pay revision should not be allowed. This was a
case of public sector company employees seeking revision of their pay scales.
It was held that employees could not claim such a right and such additional
financial burden could not be placed on the Government in the absence of
material placed before Court justifying the same. This case pertains to public
sector undertaking namely Fertilizer Corporation of India. This case is not attracted in the
facts of the present case. First, here the Government has a statutory liability
for the wages, salaries and dues of the workers. Second, pay revision was being
allowed in case of one category of workers within the same organisation, while
it was being denied to another category of workers, giving rise to
discrimination. Therefore, Bindal's case has no relevance so far as the present
case is concerned.
So far
as the argument regarding no relief being admissible to the workers in the
Mills in view of rehabilitation schemes being worked out before the BIFR, we
have to note that the proceedings have been pending since 1993, i.e. for more
than ten years. The management was all along fully aware of the demand of the
workers of the Mills in this behalf. Their cases have been pending in courts
since much before the rehabilitation schemes were conceived of.
How
long shall the concerned workers be continued to be denied their legitimate
claims? In the various deliberations with the workers it has been noted that
rehabilitation schemes are independent of any orders that may be passed by this
Court. Therefore, pendency of the rehabilitation schemes before the BIFR is not
a sufficient ground for us to deny relief to the staff/sub staff working in the
Mills. As per the provisions of Section 5 (2) (c) of the Sick Textile
Undertakings (Nationalisaion) Act, 1974, the wages, salaries and other dues of
the employees of the sick textile undertakings after the takeover of their
managements by the Central Government are the responsibility of the Central
Government. The Central Government has failed to discharge its responsibility
for all these years by raising such specious pleas. The Central Government has
to discharge its responsibility de hors the BIFR schemes. The argument
therefore, is rejected.
The
appeal as well as the various writ petitions and transfer petitions are
disposed of in above terms.
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