Coming now to the last submission of Mr. Anturkar, it is clear
that the agreement between the sugar factory and the union did
acknowledge that considering the financial circumstances of the sugar factory, it was problematic for the factory to implement the agreement according permanent status to the complainants immediately; it provided for implementation by the management by written orders as soon as possible and, at any rate, before 24 November 2015. This does not comprehend a resolution on the part of the board of directors of the sugar factory for implementing the agreement. What the agreement envisages is a written order of the management for implementing the agreement. This written order admittedly was passed on 5 November 2015, that is to say, before the last date of implementation, i.e. 30 November 2015. Mr. Anturkar tried to show some other provisions of the agreement in support of his contention that the word 'management' used in clause-7 of the agreement comprehends the board of directors of the sugar factory and not its executive authority. An agreement made between two individuals or entities cannot be construed like a statute. The meaning to be accorded to individual terms and conditions of the agreement has to be from a common sense and business point of view. When the agreement requires a written order of the management of the factory for its implementation, the written order passed by the Managing Director could very well be subsumed within it. In any event, assessment of this issue by the industrial court cannot be termed as unreasonable or perverse on the basis of submissions advanced by Mr. Anbturkar.
{Para 11}
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.10372 OF 2018
Shri Bhogawati Sahakari Sakhar Karkhana, Vs Shri Ananda Ishwara Kumbhar
CORAM : S.C. GUPTE, J.
DATE : 9 JANUARY 2020
Citation: 2020 (6) MHLJ 493
This writ petition challenges an order passed by the Industrial
Court at Kolhapur on a complaint of unfair labour practice filed by
the Respondents herein (original complainants).
2 The complainants claimed to be in service of the Petitioner
herein (original respondent No.1.), who is a Sugar Factory. The
complainants, who were initially appointed as daily wage workers,
claimed to be working continuously in the sugar factory of Respondent
No.1. According to the complainants, the crushing capacity of the
sugar factory was 4000 M.T. of sugarcane per day (the actual
capacity being more than 5000 M.T. per day). The staff schedule or
staff pattern adopted by the sugar factory in 1993, commensurate this
capacity, envisaged regular and seasonal permanent staff of 1521
workmen. It was submitted that due to superannuation, death,
resignation or other reasons, many posts were lying vacant in the
Respondent-sugar factory for the last many years; the work of these
vacant posts was being performed by the complainants. It was
submitted that the complainants were working practically as regular
permanent employees or seasonal permanent employees of the sugar
factory since 2011-12. A letter of demand was issued, in the premises,
by the representative union of the complainants demanding status of
permanency to various employees working on daily wages
continuously for the sugar factory. In pursuance of this demand and
negotiations between the union and the management as well as
intervention of Labour and Welfare Department of the State, a draft
agreement came to be prepared in this behalf and was placed, along
with an office note of recommendations, by the welfare officer for
approval of the managing director of the sugar factory, who placed
the same for sanction before the Executive Committee. The demands
were accepted and the draft agreement was sanctioned vide resolution
dated 27 November 2015 duly passed by the executive committee of
the sugar factory. The decision of the executive committee was
thereafter approved by the Board of Directors of the sugar factory,
who, by their resolution dated 30 January 2015, sanctioned the
resolution passed by the executive committee in that behalf. In
pursuance of this sanction, an amicable settlement was arrived at on
16 February 2015 between the union and the management of the
sugar factory, under which status of permanency was granted to the
employees, whose names were listed in Annexures-A, B, and C to the
agreement. These included the names of the complainants. It appears
that thereafter office orders dated 5 November 2015, under the
signature of Managing Director of the sugary factory, were issued to
the complainants, according each one the status of 'regular permanent'
or 'seasonal permanent' employees, as specified in the orders, along
with applicable wages and consequential benefits. It appears that
sometime later complaints were received by the sugar factory at the
instance of rival outfits in relation to the permanent status of the
complainants. On account of these, the complainants bona fide
apprehended that Respondent No.1 (who by then was being managed
by another board of directors), under the directions of Commissioner
of Sugar and Registrar of Co-operative Societies, State of Maharashtra,
might terminate the services of the complainants or deprive them of
the status and privileges of permanency by committing a breach of the
agreement of 16 February 2015.
3 The complainants, in the premises, approached the Industrial
Court alleging unfair labour practices under Section 28 read with
Items 5, 9 and 10 of Schedule IV of the Maharashtra Regulation of
Trade Unions & Prevention of Unfair Labour Practices Act, 1971
(“Act”). The complaint was resisted by the sugar factory. It was
submitted by the sugar factory that its earlier management had
wrongly conferred the status of permanency on the complainants, who
did not qualify for, or deserve, the same. It was submitted that
original appointments of the complainants as also according of
permanent status, was an illegal act, made hand-in- glove with the
workers and the union. It was submitted that the appointments were
against the norms comprised in the staffing pattern determined in the
year 2004. It was submitted that legitimate considerations such as
educational qualifications, age and other factors were not taken into
account whilst making these appointments. It was submitted that the
appointments were made without regard to the financial position or
needs of the sugar factory.
4 The Industrial Court, whilst considering the complaint, went into
its maintainability as well as proof of the purported unfair labour
practices under Items 5, 9 and 10 of Schedule IV of the Act as well
as the aspect of relief based on such consideration. The Industrial
Court held the complaint to be maintainable; it rejected the sugar
factory's objection that the relief, in effect, sought directions not to
terminate the services of the complainants and that such relief could
be granted only by the Labour Court under Item 1 of Schedule IV.
The court was of the view that the complaint basically involved
apprehended withdrawal of office orders and breach of statutory
provisions and service conditions and the protection sought against
termination of their services by complainants, was in the nature of an
incidental relief. The Industrial Court also rejected the sugar factory's
objection about the challenge to apprehended withdrawal of office
orders being premature and thus, not not maintainable. On the crucial
issue of staffing pattern, the Industrial Court came to a conclusion
that as per the applicable staffing pattern, i.e. the staffing pattern of
the year 1993, the appointments were in order and not in excess.
The Industrial Court accepted the complainants' grievance under Item
9 of Schedule IV of the Act, whilst not countenancing the grievances
under Items 5 or 10 of Schedule IV. The Industrial Court observed
that, in a broad sense, the sugar factory had not denied initial
appointments of the complainants on daily wages; and without any
material, it was futile to raise any objection to such appointments
either as back door entries or otherwise. The Court noted that there
was a duly passed resolution of the executive committee of the sugar
factory in consideration of the demand of the union for according the
status of permanency to the complainants, followed by the resolution
of the board of directors of the Karkhana. The court did not
countenance any challenge to the resolution passed by the earlier
board of directors of the sugar factory. The court was of the view
that a resolution of a co-operative society could be subjected to
challenge only within the ambit of the Maharashtra Co-operative
Societies Act and not before an industrial adjudicator. The court was
of the view that considering the agreement entered into between the
union and the sugar factory, which was placed on record before the
court, and which was duly signed by the Managing Director of the
sugar factory and the office bearers of the union, granting permanent
status to the daily wagers, there were consequences under the
Industrial Disputes Act and that the agreement could not be resiled
from without following due procedure under Section 42 of the
Maharashtra Industrial Relations Act, 1946 (“MIR Act”). The court
held the agreement to be binding on the parties and any action of the
sugary factory in breach of the agreement (as well as in breach of
law), would amount to an unfair labour practice under Item 9 of
Schedule IV of the Act.
5 The Industrial Court, accordingly, partly allowed the complaint
and directed the sugar factory to cease and desist from engaging in
the unfair labour practice and not to withdraw the office orders dated
5 November 2015 or terminate the services of the complainants
without following due procedure of law. The sugar factory was
directed to accord all benefits to the complainants as per office orders
dated 5 November 2015 and also pay the difference in wages
accordingly, by restoring the office orders, which were sought to be
kept in abeyance by the sugar factory.
6 The impugned order of the Industrial Court is challenged by the
Petitioner-sugar factory on several grounds. Mr. Anturkar, learned
Senior Advocate appearing for the Petitioner, however, presses only
four submissions. Learned Counsel does not dispute the
maintainability of the original complaint before the Industrial Court.
Learned Counsel, firstly, submits that the initial appointments of the
complainants (the Respondents herein) were themselves suspect; they
were made without following due procedure; and were by way of a
back door entry. It is submitted that in accordance with the standing
orders, no permanent appointment could be made except after initial
appointment on probation. Learned Counsel, secondly, submits that
these appointments, including grant of permanent status to the
appointees, amounted to breach of the staffing pattern of the sugar
factory duly sanctioned under Section 79AA of the Maharashtra Cooperative
Societies Act (“MCS Act”). It is submitted that with the
complainants being made permanent, i.e. either as permanent
employees or permanent seasonal employees, the number of staff
would far exceed the sanctioned number. It is submitted that it would
be unmanageable for the sugar factory and would have disastrous
consequences for its financial health, if these appointments, far in
excess of the staffing pattern, were to be countenanced. Thirdly, it is
submitted that the original change by means of the resolution of the
executive committee, followed by the resolution of the board of
directors and the agreements and office orders purportedly issued in
pursuance thereof, was itself a change, which necessitated a notice
under Section 42(1) of the MIR Act, and want of such notice has
rendered it illegal. Fourthly, learned Counsel submits that the
agreement between the Petitioner-sugar factory and union, based on
the resolution of the board of directors of the factory, was not to be
implemented without due resolution to be passed and an order made
in that behalf by the board of directors of the sugar factory.
7 Coming to the initial appointments of the complainants, as
rightly observed by the Industrial Court, there was hardly any
material before the court to show that these were illegal. Mr.
Anturkar submits that the appointments were not made by the
Managing Director. The appointment letters, which are in the form of
'chits', were signed by P.A. to the Chairman. The method, in which
appointments are made, is an internal matter of the sugar factory; its
employees are not concerned with the particular method adopted.
What is important is that it cannot be disputed that, as a matter of
fact, the complainants were employed with the sugar factory and they
were working from 2011-12 onwards. The assessment of the
Industrial Court in this behalf cannot be termed as unreasonable or
perverse. The relevant standing orders, referred to in this behalf by
Mr. Anturkar, namely, Standing Orders 2A and B, applicable to the
sugar factory, deal with permanent employees, who need to complete
a probationary period of three months, whereas seasonal employees
are those, who are appointed by the managing director, mainly for
seasonal work and in writing. As we have noted above, merely
because the managing director has not himself signed appointment
letters issued to the complainants, it cannot be said that they were
not seasonal employees. In any event, as we have noted above, there
were written appointment letters in the form of chits, which were
signed by P.A. to the Chairman of the sugar factory and in the facts
of the case, it is impossible to say that these appointments did not
have the sanction of the Managing Director of the factory. As far as
the alleged probationary period of three months for according
permanent status to the employees is concerned, the explanation to
Standing Order 2A itself makes it clear that if seasonal workers had
continuously worked with the factory for three consecutive seasons,
they could be treated as permanent employees or permanent seasonal
employees of the sugar factory.
8 So far as the argument under Section 79AA of the MCS Act is
concerned, it is pertinent to note that the Registrar, under sub-section
(1), has power to direct the sugar factory, i.e. the society, to make
regulations in that behalf and forward the same to him for his
approval. Under sub-section (2), on receipt of regulations made by
the society, the Registrar may approve the same with or without
modifications and upon such approval, the society is required to carry
on its business in accordance with such regulations. Under sub-section
(3), if the society fails to forward such resolution to the Registrar,
when directed by him to do so under sub-section (1), within a period
of three months from the date of such direction, the Registrar may
himself make, or cause to be made, such regulations and require the
society to carry on its business in accordance with such regulations
and it is only thereupon that the society is bound to comply with
such regualtions. In the present case, the original staffing pattern was
already made in the year 1993. What happened in year 2004 was
that the Registrar had issued a letter to the sugar factory for
implementation of a new staffing pattern, which was proposed by a
committee appointed in that behalf. This direction of the Registrar
cannot be treated as regulations framed by the Registrar himself under
sub-section (3) of Section 79AA. The direction of the Registrar was
rather a direction under sub-section (1) of Section 79AA requiring the
society to make regulations in this behalf. After the society makes
such regulations and they are forwarded to the Registrar and after
they are thereafter approved by the Registrar, they become binding
regulations for the society to follow or conduct its business
accordingly. This never happened in the present case. The society
never made its regulations based on the Registrar's direction or sent
them for approval to the Registrar and the latter never acted under
sub-section (3) and made the regulations himself. It is not possible to
accept Mr.Anturkar's submission that if the society does not make such
regulations, despite directions of the Registrar under sub-section (1),
the original directions of the Registrar themselves become regulations
under sub-section (3) of Section 79AA. If the society fails or neglects
to make regulations despite directions issued to it under sub-section
(1) by the Registrar, the Registrar has himself to make or caused to
be made such regulations and require the society to carry on its
business in accordance with such regulations. This calls for a separate
order on the part of the Registrar and only when such order is
passed by the Registrar, under sub-section (3) of Section 79AA, that
the regulations become binding on the society. There was, in the
premises, no applicable staffing pattern as of 2004 ; what was
applicable was the pattern sanctioned in 1993. The Industrial Court
accordingly assessed the matter and its assessment does not exhibit
any infirmity or call for any interference. Incidentally, it is nobody's
case that the appointments of the complainants were not in
accordance with the staffing pattern of 1993.
9 Coming now to the aspect of applicability of Section 42(1) of
the MIR Act, as the Industrial Court rightly noted, the reduction of
workmen or keeping office orders of 5 November 2015 in abeyance or
resiling from the same, clearly amounted to a change in respect of the
industrial matters specified in Schedule II. Item 1 of Schedule II,
includes reduction intended to be of permanent or semi-permanent
character in the number of persons employed or to be employed in
any occupation or process. Item 2 includes permanent or semipermanent
increase in the number of persons employed or to be
employed in any occupation or process. Item 3 includes dismissal of
any employee, except as provided for in the standing orders applicable
under the MIR Act. After passing of a resolution and agreeing to
accord permanent status to the complainants and after entering into
an agreement in that behalf with the union and after issuing office
orders in case of individual employees, it was not permissible to the
sugar factory to either reduce the number of persons employed or to
dismiss any employee except in accordance with the standing orders.
If any such change was to be effected, a notice of such change, would
have to be given under sub-section (1) of Section 42 of the MIR Act
and this not being done, the proposed dismissal or withdrawal of
office orders, was clearly illegal.
10. Mr. Anturkar submits that even an increase of permanent or
semi-permanent nature in the number of persons employed or to be
employed in an occupation or process, is a change coming within
Section 42. Learned counsel submits that when the original resolution
was passed or agreement made or office orders issued, there was no
notice under sub-section (1) of Section 42 of the change proposed and
that the original orders issued by the sugar factory according
permanent status to the complainants were themselves illegal. The
Industrial Court has duly considered this issue. It has noted in its
impugned order (paragraph -63) that an agreement was entered into
between the union and the sugar factory for according permanent
status to the complainants on the basis of resolutions duly passed by
the board of directors of the Petitioner; the agreement was duly
signed by the Managing Director of the sugar factory and the office
bearers of the union. The court held that this being an agreement
entered into under Section 2(5) of the Industrial Disputes Act, it was
not by itself covered under the industrial matters specified in Schedule
II of the MIR Act and, therefore, the mandatory provisions of Section
42 were not applicable to such agreement and that there was
accordingly no illegality. Besides, any illegal change has to be
declared illegal by the Labour Court under section 78(1) of the MIR
Act. There was no application by any party for declaring such change
to be illegal and it was not impermissible, in the premises, to the
industrial court to proceed on the basis that the initial change itself
was illegal on a complaint made by the employees in respect of
permanent status to be accorded to them on the basis of such change.
11 Coming now to the last submission of Mr. Anturkar, it is clear
that the agreement between the sugar factory and the union did
acknowledge that considering the financial circumstances of the sugar factory, it was problematic for the factory to implement the agreement according permanent status to the complainants immediately; it provided for implementation by the management by written orders as soon as possible and, at any rate, before 24 November 2015. This does not comprehend a resolution on the part of the board of directors of the sugar factory for implementing the agreement. What the agreement envisages is a written order of the management for implementing the agreement. This written order admittedly was passed on 5 November 2015, that is to say, before the last date of implementation, i.e. 30 November 2015. Mr. Anturkar tried to show some other provisions of the agreement in support of his contention that the word 'management' used in clause-7 of the agreement comprehends the board of directors of the sugar factory and not its executive authority. An agreement made between two individuals or entities cannot be construed like a statute. The meaning to be accorded to individual terms and conditions of the agreement has to be from a common sense and business point of view. When the agreement requires a written order of the management of the factory for its implementation, the written order passed by the Managing Director could very well be subsumed within it. In any event, assessment of this issue by the industrial court cannot be termed as unreasonable or perverse on the basis of submissions advanced by Mr. Anbturkar. It is clearly a possible view; it is supported by some
evidence; it takes into account all relevant and germane circumstances
and materials; and it does not take into account any irrelevant or
non-germane material or circumstance. It accordingly passes muster
from the standpoint of this court's scrutiny under Articles 226 or 227
of the Constitution of India.
12 There is, thus, no merit in the writ petition. The petition is
dismissed.
13 At the request of learned Counsel for the Petitioner, it is
ordered that no coercive steps shall be taken against the Petitioner sugar factory for a period of eight weeks from today, subject to
condition that the Petitioner pays at least minimum wages payable
under law to the complainants in whose favour the impugned order is
passed.
(S.C. GUPTE, J.)
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