Siemens Ltd. &
another Vs. Siemens Employees Union & another
J U D G M E N T
appeal has been preferred from the order dated 12th March, 2010 of the Division
Bench of the Bombay High Court in Letters Patent Appeal No. 30/2010.
appellant no. 1 is a public limited company having its registered office at 130,
Pandurang Budhkar Marg, Dr. Annie Besant Road, Worli, Mumbai and is engaged in the
business of manufacturing switchgears, switchboards, motors, etc., of its many factories,
one is located at Thane-Belapur Road, Kalwe, Thane, and houses the plant that
manufactures switchboards for the company. The appellant employs about 2200 employees.
The appellant no. 2 is the Chief Manager (Personnel) of the said Company.
no. 1, the contesting respondent, is a registered trade union of the workers employed
by the appellant no.1. It is recognized under the provisions of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971
(hereinafter, referred to as the Maharashtra Act). Respondent no. 2, the pro forma
respondent, represents the Switchboard Unit of the company, and is responsible for
the routine functioning of the plant at Kalwe.
2007 the trade union preferred a complaint under Section 28 of the Maharashtra Act
for unfair labour practices, jointly and severally against the company, its Chief
Manager for personnel (appellant no. 2) and its Works Manager (respondent no.2)
before the learned Industrial Court, Thane, Maharashtra. The trade union
impugned a notification dated 3rd May, 2007 issued by the company for its workmen
employed in its factory located in Kalwe, whereby applications were invited to appear
for a selection process to undergo a two year long period as an `Officer Trainee'.
This training was to be in the fields of manufacturing, quality inspection and testing,
logistics and technical sales order execution.
The notification stated
that after the successful completion of the said two years, the trainees were to
be designated as `Junior Executive Officers'. The case of the respondent trade
union is that though the designation of `Junior Executive Officer' was that of an
officer belonging to the management cadre, in fact it was merely a nomenclature,
with negligible content of managerial work. It was urged that the job description
of a Junior Executive Officer was same as that of a workman, with little additional
duties. Resultantly, the Junior Executive Officers of the factory were now to do
the very same work that had always been done by the workmen.
was submitted that such a move was, in effect an alteration in the conditions of
service of the workmen, as some vacancies available for workmen in the switch board
unit were to be reserved for officers from the management cadre. Resultantly there
would have been a reduction in the job opportunities for workers. According to the
trade union, any such change could not have been affected without giving the workmen
a prior notice to such effect in terms of Section 9A of the Industrial Disputes
Act, 1947. In this regard, the trade union referred to an agreement entered
into between itself and the company in 1982. The said agreement, titled `Rationalization
and Transport Settlement' has clause (7). The said clause is as follows:-
That employees or officer or staff categories shall not be asked to do normal production
work."7. The union also referred to clause (12) of the agreement which is
as follows:- "12. That this settlement shall not be utilized for eliminating
the further employment potential or promotional opportunities to the existing
(16) is set out herein below: "16. This agreement shall come into force with
effect from 01.01.1981 except Clause No.14 which shall have effect from 16.11.1982
only and shall remain in operation until it is changed in accordance with the
provisions of law.
(7) ensures that the job opportunities for workers shall not be reduced by the company
by making its managerial staff perform the workmen's job. Clause (16) ensured the
perpetuity of this Settlement until expressly overruled by a subsequent Settlement.
It was submitted by the trade union that the change sought to be brought about
by the company by its notification dated 3rd May, 2007, was in violation of clause
(7). The trade union thus complained that the company and its two officers resorted
to unfair labour practices mentioned in items 9 and 10 of Schedule IV of the Maharashtra
Act, and had thereby violated the mandate of Section 27 of the Maharashtra Act.
was further submitted that even if the said Settlement was said to be non-binding,
the impugned move was in violation of Section 9A of the Industrial Disputes Act
insofar as the affected workmen had not been given any notice as contemplated by
clause (a) of Section 9A read with Entry 11 of the Fourth Schedule of the Industrial
Maharashtra Act was the first enactment of its kind in the country to have been
legislated by a State for the prevention of unfair labour practices and
consequent victimization. It was a comprehensive legislative device to weed out
unfair labour practices, not only on the part of the employers, but also on the
part of trade unions and the workmen. Chapter VI of the Act is titled `Unfair Labour
Practices'. Section 26, the first section of this chapter, defines an unfair labour
practice for the purposes of the Act. It reads as under: "26. Unfair labour
practices: In this Act, unless the context requires otherwise, `unfair labour practices'
mean any of the practices listed in Schedules II, III and IV."
27 prohibits `unfair trade practices'. The said Section is as follows:- "27.
Prohibition on engaging in unfair labour practices: No employer or union and no
employees shall engage in any unfair labour practice."
28 deals with the procedure for preferring a complaint against an unfair labour
practice. Clause (1) of this section reads as follows: "28. Procedure for dealing
with complaints relating to unfair labour practices: (1) Where any person has engaged
in or is engaging in any unfair labour practice, then any union or any employee
or any employer or any Investigating Officer may, within ninety days of the
occurrence of such unfair labour practice, file a complaint before the Court competent
to deal with such complaint either under section 5, or as the case may be, under
section 7, of this Act: Provided that, the Court may entertain a complaint
after the period of ninety days from the date of the alleged occurrence, if good
and sufficient reasons are shown by the complainant for the late filing of the complaint."
the instant case the complaint has been filed under Section 28 read with Section
30(2) of the Maharashtra Act by the respondent-union and in the instant complaint
the respondent-union alleged that the management is indulging in unfair labour practices
under item Nos.9 and 10 of Schedule IV of the Maharashtra Act (para 3(a) of the
complaint). Schedule IV of the Maharashtra Act categorizes the general unfair labour
practices on the part of the employers. Under Schedule IV, item Nos.9 and 10, in
respect of which unfair labour practices have been alleged, provide as follows:
"9. Failure to implement award, settlement or agreement. 10. To indulge in
act of force or violence."
paragraph 3 (b) of the complaint it has been alleged that the respondent-union is
anticipating that the management is likely to reduce the work of the workmen category
and give it to the newly recruited officer trainees. It has also been alleged that
by doing so the management is acting in violation of Section 9(A) of Industrial
Disputes Act, 1947 by bringing about a change in service condition without giving
any notice. In so far as this allegation in the complaint is concerned, the order
of Industrial Court, Thane, shows that it did not find that the management was in
any way trying to change the condition of the service or it was acting in violation
of the provisions of Section 9(A).
precise findings of the Labour Court, Thane while dealing with the complaint of
the Union about change of condition of service under Section 9(A) of the
Industrial Disputes Act are as under: "......Considering the evidence that
even earlier also, the company has reduced the strength of the employees in various
departments, they were transferred from one section to other section, the
promotions are given from the category of workmen to the category of officers and
therefore, it cannot be said that there's any breach under S.9A of the
Industrial Dispute Act, 1947."
the complaint of the respondent-union, which ultimately found favour with Industrial
Court as unfair labour practice, is the attempt made by the management in not implementing
clause 7 of settlement.
this aspect the exact finding of the Labour Court is as follow: "......Considering
the nature of work to be performed by these Officer's Trainee, certainly it shows
that there's breach of clause 7 of the Settlement dated 16.11.1982. As such,
the Complainant Union has succeeded to prove the unfair labour practice under Item
9 of Schedule IV of the Act."
proceeding further in this matter, this Court proposes to examine the concept of
unfair labour practice and the way it has been dealt with under the Maharashtra
Act and also under the ID Act. Any unfair labour practice within its very concept
must have some elements of arbitrariness and unreasonableness and if unfair labour
practice is established the same would bring about a violation of guarantee under
Article 14 of the Constitution.
Therefore, it is axiomatic
that anyone who alleges unfair labour practice must plead it specifically and such
allegations must be established properly before any forum can pronounce on the same.
It is also to be kept in mind that in the changed economic scenario, the concept
of unfair labour practice is also required to be understood in the changed context.
Today every State, which has to don the mantle of a welfare state, must keep in
mind that twin objectives of industrial peace and economic justice and the courts
and statutory bodies while deciding what unfair labour practice is must also be
cognizant of the aforesaid twin objects.
labour practice, for the first time, was defined and codified in the
Maharashtra Act referred to hereinabove. But in so far as the Industrial Disputes
Act, Central Law, is concerned, unfair labour practice was codified and brought
into force by the Amending Act, 46 of 1982 with effect from 21st August 1984.
(ra) of Section 2 of Industrial Disputes Act defines unfair labour practice to
mean the practices specified in the fifth schedule and the fifth schedule was
also inserted by the said Amending Act. The fifth schedule has two parts. The first
part refers to unfair labour practices on the part of the employers and trade union
of employers and the second part refers to unfair labour practices on the part of
the workmen and trade union of workmen. However, there is some difference between
the provisions relating to unfair labour practices in the Maharashtra Act and those
in Central Act i.e. Industrial Disputes Act.
Disputes Act prohibits an employer or workmen or a trade union from committing
any unfair labour practice while the Maharashtra Act prohibits an employer or union
or an employee from engaging in any unfair labour practice. The prohibition under
the Industrial Disputes Act is aimed at preventing the commission of an unfair labour
practice while the Maharashtra Act mandates that the concerned parties cannot be
engaged in any unfair labour practice. The word `engage' is more comprehensive
in nature as compared to the word `commit' [See Hindustan Lever Ltd. v. Ashok Vishnu
Kate & others reported in 1995 (6) SCC 326 at para 37, page 345 of the
the instant case no allegation of victimization has been made by the respondent-union
in its complaint. In the absence of any allegation of victimization it is rather
difficult to find out a case of unfair labour practice against the management in
the context of the allegations in the complaint. It is nobody's case that the management
is punishing any workmen in any manner. It may be also mentioned here that no workmen
of the appellant-company has made any complaint either to the management or to the
union that the management is indulging in any act of unfair labour practice.
then the Labour Court, Thane, has come to certain findings of unfair labour practice
against the management and which have been referred to above.
appellant-company challenged the finding of the Labour Court before the High Court
by filing a writ petition. The learned Single Judge in his judgment noted that the
main grievance of the respondent-union was that in the process of reorganizing its
work pattern the management of the appellant-company was reducing the number of
posts of workmen and some of the work which were done by the workmen are to be
done by the officers and the grievance of the respondent-union was that this was
contrary to clause 7 of settlement dated 16th November, 1982 (hereinafter `the said
Ultimately, the learned
Single Judge came to a finding that though the post which is introduced by the
management is named Junior Executive, the said post was different from the post
of Junior Executive which was in existence and after saying so the learned
Single Judge held, "the Tribunal has rightly held that this amounted to unfair
labour practice under item 9 of Schedule IV of the said Act" (para 9). The
learned Single Judge also noted that even though promoted as Junior Executive the
present workers will be expected to do a part of the work of the workman along with
some additional work. This, according to the learned Single Judge, was in
breach of clause 7 of the said settlement.
appellant-company also challenged the said order of the learned Single Judge before
the Division Bench. The Division Bench came to a finding that whatever work is given
to the officers/trainees in addition to the present work was the work of a workman.
So even if the workmen are promoted they will be doing the job of a workman with
some additional work and the Division Bench also came to the same finding that this
will be in violation of clause 7 of the agreement and thus considered it unfair
labour practice. With these findings, the Division Bench affirmed the finding
of the learned Single Judge.
K.K. Venugopal, learned Senior Counsel appearing on behalf of the respondent-union
urged that in exercise of its powers under Article 136 this Court normally does
not interfere with concurrent finding and, therefore, should not interfere
with the concurrent finding in the instant case.
is true that this Court normally does not upset a concurrent finding but there
is no such inflexible rule. The jurisdiction of this Court under Article 136 is
a special jurisdiction. This is clear from the text of the Article itself which
starts with a non-obstante clause. This is a jurisdiction conferring residual power
on this Court to do justice and is to be exercised solely on discretion to be used
by this Court to advance the cause of justice. This Article does not confer any
right of appeal on any litigant.
But it simply clothes
this Court with discretion which is to be exercised in an appropriate case for ends
of justice. Therefore, there can be no hard and fast rule in the exercise of this
jurisdiction. Just because the findings which are assailed in a special leave petition
are concurrent cannot debar this Court from exercising its jurisdiction if the
demands of justice require its interference. In a case where the Court finds that
the concurrent finding is based on patently erroneous appreciation of basic issues
involved in an adjudication, the Court may interfere. In the instant case the Court
proposes to interfere with the concurrent finding for the reasons discussed hereinbelow.
the finding of unfair labour practice against the appellant-company by the High
Court and the Labour Court is based on the premise that the appellant-company
acted in breach of clause 7 of the agreement. It is well known that an industrial
settlement is entered into between the management and labour for maintaining industrial
peace and harmony. Therefore, any attempt by either the management or the workmen
to violate such a settlement may lead to industrial unrest and amounts to an unfair
labour practice. Here the charge of unfair labour practice against the appellant-company
is that it has violated item 9 of Schedule IV of the Maharashtra Act.
Item 9 has been set out
hereinabove and the purport of item 9 is that any failure to implement an award
or settlement or agreement would be an unfair labour practice. In the instant case
while considering clause 7 of the said settlement the Courts have not taken into
consideration clause 12. Both clauses 7 and 12 have been set out hereinabove. If
a harmonious reading is made of clauses 7 and 12 it will be clear that clause 7
cannot be given an interpretation which makes clause 12 totally redundant. Clause
7 contains a prohibition against the employees or officers or members of the staff
of the appellant-company from doing normal production work. But that cannot be read
in such a manner as to nullify the purport of clause 12 which reserves the promotional
employment potential of existing workmen.
So in the instant
case if by way of rearrangement of work, the management of the appellant-company
gives promotional opportunity to the existing worker that does not bring about any
violation of clause 7 of the said settlement rather such a rearrangement of work
will be in terms of clause 12. At the same time if some of job of executive officers
are the same as is done by the existing worker that does not bring about such a
violation of clause 7 as to constitute unfair labour practice.
is restricted under clause 7 is asking the officers to do the normal production
work. There is no blanket ban in asking the officers from doing any production work.
Therefore, both clause 7 and clause 12 of the said settlement must be reasonably
and harmoniously construed to make it workable with the evolving work culture of
the appellant-company in facing the new challenge in the emerging economic order
which has changed considerably from 1982.
Even if we assume
that 1982 agreement still subsists even then when a challenge is made of unfair
labour practice on the basis of violation of a clause of 1982 agreement on the basis
of a complaint filed in 2007, the Labour Court and the High Court must consider
the said agreement reasonably and harmoniously keeping in mind the vast changes
in economic and industrial scenario and the new challenges which the appellant-company
has to face in the matter of reorganizing work in order to keep pace with the
changed work culture in the context of scientific and technological development.
This Court also finds
that while adjudicating on the complaint of the union both the Labour Court and
the High Court should have taken into consideration all subsequent settlements
between the management of the said company and the union in 1985, 1988, 1992,
1997 and 2004. Both the Labour Court and the High Court failed to notice that
in its complaint the union has accepted that they are not objecting to the
promotion being granted to the workers. However, the said stand of the workers union
is not consistent with the nature of the complaint filed before the Labour
admitted facts are, there are 89 vacancies in the category of officers and 154 workers
have applied. Therefore, everybody who has applied cannot be promoted, only a certain
percentage of the workers applying can be promoted. Both the Labour Court and the
High court failed to take into consideration that the workers voluntarily applied
for the promotion scheme pursuant to its introduction. Nowhere has it been alleged
by the workers that any force or pressure was brought upon them to apply.
In the background of
these facts the question is when the workers applied on their own to a scheme of
promotion introduced by the management and they do not make any complaint either
to the union or to the management in respect of the introduction of the scheme,
can it be said that by introducing a promotional scheme the management is indulging
in unfair labour practice? The union is supposed to represent the interests of the
workers. When the workers themselves do not consider the scheme as unfair to them,
can the union take upon them the burden of saying that the scheme is unfair?
In the instant case the
respondent-union is unfortunately seeking to do that. Both the Labour Court and
the High Court have failed to appreciate this basic fundamental issue in their adjudication
and have, therefore, come to an obviously erroneous finding. Apart from the aforesaid
clear factual position legally also the management of the company is not prevented
from rearranging its business in the manner it considers it best, if in the process
it does not indulge in victimisation.
in this connection may be made to a decision of this Court in Parry & Co. Ltd.
v. P.C. Pal & ors., reported in AIR 1970 SC 1334, a three-Judge Bench of
this Court held as follows:- "It is well established that it is within the
managerial discretion of an employer to organize and arrange his business in the
manner he considers best. So long as that is done bona fide it is not competent
of a tribunal to question its propriety. If a scheme for such reorganization results
in surplusage of employees no employer is expected to carry the burden of such
economic dead weight and retrenchment has to be accepted as inevitable, however
unfortunate it is..." (para 14, page 1341 of the report)
the instant case no malafide has been alleged against the appellant-company. Nor
it is anybody's case that as a result of reorganization of its working pattern by
introducing the scheme of promotion any person is either retrenched or is rendered
the given situation, this Court cannot appreciate how by introducing the scheme
of promotion to which the workers overwhelmingly responded on their own can it be
said that the management has indulged in unfair labour practice.
in the case of Hindustan Lever Ltd. v. Ram Mohan Ray and others reported in 1973
(4) SCC 141, another three-Judge Bench of this Court held that nationalization and
standardization of work by the management by itself would not fall under item 10
of Schedule IV of Industrial Disputes Act unless it is likely to lead to retrenchment
of workers. Relying on the decision in Parry (supra) this Court held in Hindustan
Liver (supra) that since the reorganization has not brought about any change adversely
affecting the workers and there has been no retrenchment, similar principles are
K.K. Venugopal, learned Senior Counsel appearing for the union in support of
his submission relied on a decision of this Court in the case of Arkal Govind Raj
Rao v. Ciba Geigy of India Ltd., Bombay reported in 1985 (3) SCC 371. In that case
the question which was considered by this Court was where an employee was performing
multifarious duties and the issue is whether he is a workman or not the test to
be applied is what was the primary, basic or dominant nature of the duties for which
the workman was employed. This Court came to the conclusion that when the primary
and basic duties of an employee are clerical but certain stray assignments are given
to him to create confusion, the Court may remove the gloss to find out the
Arkal Govind Raj (supra) the aforesaid question arose out of the termination of
service of the appellant Govind Raj as his termination led to an industrial dispute.
In that dispute numerous primary objections were raised by Ciba Geigy and one of
them was that Govind Raj was not a workman within the meaning of Section 2(s) of
the Industrial Disputes Act. In that context, this Court, after analyzing the evidence,
came to a finding that Govind Raj was a workman within the meaning of the Act and
held that neither the Labour Court nor the High Court came to a correct finding.
With that finding this Court remanded the matter to the Labour Court for deciding
the dispute in accordance with its judgment. The said decision has no bearing on
the issues with which we are concerned in this case. It is well known that the
ratio of a decision has to be appreciated in its context. Going by that principle,
we do not find that the decision in Arkal Govind Raj (supra) is of any assistance
to the respondents.
Venugopal also relied on the commentary of K.D. Srivastava on Law Relating to Trade
Unions and Unfair Labour Practices in India (Fourth Edition). The learned counsel
relied on a decision of the Allahabad High Court in the case of L.H. Sugar Factories
and Oil Mills (P) Ltd., v. State of U.P., (1961) 1 LLJ 686 (HC All). Some of
the observations made in the said judgment which have been quoted in the
commentary of K.D. Srivastava are as follows:- "...If an employer
deliberately uses his power of promoting employees in a manner calculated to
sow discord among his workmen, or to undermine the strength of their union, he
is guilty of unfair labour practice." (page 402)
the instant case no malafide has been alleged by the union against the appellant-company
in the matter of reorganization of its work. It is also nobody's case that as a
result of the reorganization of the work any attempt is made by the appellant- company
to create discord amongst the workmen so as to undermine the strength of the union.
Apart from that the facts in the case of L.H. Sugar Factories (supra) are totally
different. In L.H. Sugar Factories (supra) the company wrongfully deprived ten workers
of their promotion to the post of driver-cum-assistant fitter while preferring eleven
other workmen over them. This led to an industrial dispute. Therefore, those observations
of Allahabad High Court in a totally different fact situation are not attracted
in the present case to make out a case of unfair labour practice. We fail to appreciate
the relevance of the aforesaid decision to the facts of the present case.
the same time it is not the case of the respondent-union that its recognition is
in any way being withdrawn or tinkered with. Nor is it the case of the respondent-union
that it is losing its power of collective bargaining. It may be that the number
of workmen is reduced to some extent pursuant to a promotional scheme to which
the workmen readily responded. But no union can insist that all the workmen
must remain workmen perpetually otherwise it would be an unfair labour practice.
Workmen have a right to get promotion and improve their lot if the management
offers them with a bona fide chance to do so. In fact if the order of the High Court
is upheld, the same will go against the interest of erstwhile workmen of the appellant-company
who have responded to the scheme of promotion.
the reasons aforesaid, we are of the view that the High court failed to have a correct
perspective of the questions involved in this case and obviously came to an
allow the appeal and set aside the order of the High Court in which has merged the
order of the Labour Court. However, we make it clear that in implementing the scheme
the management of the appellant-company must not bring about any retrenchment of
the workmen nor should the workmen be rendered surplus in any way.
appeal is, thus, allowed. There will be no order as to cost.
(ASOK KUMAR GANGULY)