Union of India and Others Vs M.E.S. Contract Workers Union Subathu and Others

Whether approved for reporting?¹ Yes. For the petitioners : Mr. Balram Sharma, DSGI. For the respondents : Mr. J. L. Bhardwaj, Sr. Advocate with Mr. Sanjay Bhardwaj, Advocate, for respondents No. 1 to 17 and 19 to 23.

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Satyen Vaidya, Judge):

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By way of the instant petition, petitioners have assailed award dated 4.3.2020, passed by the Central Government Industrial Tribunal-cum-Labour Court-II, Chandigarh (for short ‘the Tribunal’), whereby the termination of respondents has been set aside and they have been directed to be reinstated with permanency of

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1 Whether reporters of Local Papers may be allowed to see the judgment?

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service and half wages payable from the date of termination till reinstatement.

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The respondents raised an industrial dispute and the same was referred to the Tribunal for adjudication by the appropriate government in the following terms:-

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“Whether the action of the management in terminating the services of workmen (list enclosed) and not considering them against the vacant positions is legal, just and valid? If not, to what relief these workmen are entitled to and from which date?”

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For the sake of convenience and clarity, the respondents herein shall be referred to as the workmen and the petitioners as the employers.

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The case as set up by the workmen before the Tribunal was that they were engaged by the employers since long to maintain and provide smooth supply of water and electricity round the clock to all residences, offices and other installations of MES located at Subathu, Dagshai, Jutogh and Kasauli. It was the specific case of the workmen that though they were directly engaged by the employers but were wrongly shown to have been employed by the contractor(s). As per workmen, the officials/officers

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of the employers were directly instructing them to work; the material and equipment required for maintenance work of above said services was also supplied by the employers to the workmen and the workmen were receiving their wages directly from the officials/officers of the employers. The workmen also alleged discrimination on the ground that they were being paid wages less than the wages payable under the Minimum Wages Act. The contracts entered into by the employers with different contractors, under whom the workmen were shown to have been employed, were also alleged to be sham transactions. In this manner, the employers were accused of unfair labour practice.

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The workmen further averred that in 2012, the employers had initiated recruitment process for filling up 1529 posts of skilled category in different trades. The candidatures of workmen were rejected on the grounds either of lacking requisite qualification or having become overage.

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The workmen had further pleaded before the Tribunal that they had requested the employers to consider

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their candidatures on the basis of experience, but the employers had not taken any decision, which had forced the workmen to approach the Central Administrative Tribunal, where they remained unsuccessful. The original application number 947/HP/2012 was dismissed by the Central Administrative Tribunal vide order dated 7.8.2013. 7. Thereafter the workmen faced retrenchment as they allegedly were not allowed to work further. In above circumstances, the workmen approached the appropriate authority under the Industrial Disputes Act.

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The workmen alleged their retrenchment to be illegal and in violation of Section 25 (F) of Industrial Disputes Act on the ground that neither any notice was served upon them before retrenchment, nor the compensation in lieu thereof was paid. An averment with respect to violation of Sections 25 (G) and (H) of the Industrial Disputes Act was also made by alleging that the services of the workmen were terminated by replacing them with fresh recruits.

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The workmen thus prayed for their

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reinstatement in service with full back wages and

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continuity along with consequential reliefs and service benefits.

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The employers filed their reply to the statement of claim and denied the relationship of employer and employee by alleging that the workmen were never employed by the employers directly, rather they were the employees of the contractors to whom work contracts were awarded by the employers from time to time. Questions as to maintainability of claim of the workmen were also raised on the ground that the same was not maintainable by an unregistered union, which was not recognized by the employers.

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The Tribunal afforded the parties opportunities to prove their respective contentions. The workmen examined one Sunder Singh as their witness, who submitted his examination-in-chief by way of an affidavit. Despite opportunities, the employers failed to crossexamine the said witness. The employers also did not produce any other evidence on their behalf.

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The Tribunal on the basis of material on record held that the workmen were illegally retrenched; the

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employers were held guilty of unfair labour practice in the context of Clause-10 of 5^th Schedule of the Industrial Disputes Act and thereafter proceeded to pass the award in the following manner:-

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“In view of the reasons stated above, and in the light of the facts and circumstances of the present case laws, this Tribunal is of the considered opinion that the services of the concerned-workmen are illegally terminated and termination of the workmen by the management against the vacant post is illegal, unjust and invalid. Hence, this Tribunal holds that the services of the workmen are permanent nature since they have worked for more than 240 days in a calendar year from year to year which is clear from the evidence on record. Consequently, the termination of the workmen is set aside and workmen mentioned in the list are awarded the reinstatement with permanency of service and half wages payable from the date of termination till reinstatement. Respondent/management is directed to comply the award within 3 months from the notification of award.”

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Mr. Balram Sharma, learned Deputy Solicitor

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General of India has contended that the findings by the Tribunal, holding the relationship of employer and employee between the parties was perverse; that there were

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no findings to the effect that the employers were an industry; that the Tribunal had travelled beyond the terms of reference; and that the Tribunal had no jurisdiction to grant the relief of permanency in service in favour of the workmen.

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On the other hand, Mr. J. L. Bhardwaj, learned Senior Advocate, representing the workmen has supported the award as being in conformity with the facts of the case and law applicable thereto.

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I have heard the learned counsel for the parties and have also gone through the record carefully.

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Learned Deputy Solicitor General has not been able to rebut that despite opportunity to the employers, no cross-examination was conducted on the witness of the workmen. Admittedly, the deposition of the witness of workmen was on oath. He had deposed the facts that the workmen were directly engaged by the employers and showing their engagement through contractors were sham transactions. In absence of any cross-examination on said witness of workmen and also the failure of employers to lead any evidence, the Tribunal was not unjustified in

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believing the versions of workmen to be correct. In such circumstances, the findings returned by the Tribunal on facts cannot be said to be suffering from illegality or perversity.

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The contours of powers of this Court to interfere with the awards or orders passed by the Labour Court or Industrial Tribunal under the Industrial Disputes Act are limited and well defined. This Court is neither to sit in appeal over the award nor is entitled to enter the arena to re-appreciate or re-access the evidence/material relied upon by the Tribunal except for the purposes of finding absolute illegality or perversity in the award. On this aspect, reference can be made to the judgments passed by the Hon’ble Supreme Court in PGI of Medical Education and Research, Chandigarh vs. Raj Kumar (2001) 2 SCC 54 , Management of Madurantakam Coop. Sugar Mills Ltd. vs. S. Viswanathan (2005) 3 SCC 193 , Harjinder Singh vs. Punjab State Warehousing Corporation (2010) 3 SCC 192 and Iswarlal Mohanlal Thakkar vs. Paschim Gujarat Vij Company Ltd & another, (2014) 6 SCC 434 .

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The employers have also not placed on record any material to show that the workmen were either issued retrenchment notice or were paid the compensation in lieu thereof, therefore, the violation of Section 25 (F) of Industrial Disputes Act was established on facts and on this count also, no fault can be found with the impugned award.

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The award does not reveal that the employers had raised any plea before the Tribunal that they did not fall in the definition of industry. No ground has been raised in the instant petition also that though such plea had been raised but was not considered by the Tribunal. Thus, the contention raised in this behalf by learned Deputy Solicitor General at this stage cannot be countenanced.

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Further, the objection as to the Tribunal having travelled beyond the scope of reference also is without substance. The reference was made requiring the Tribunal to adjudicate on the validity of action of the employers in terminating the services of the workmen without considering them against the vacant position. The

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impugned award reveals that the Tribunal has kept the scope of inquiry within the limits of reference made to it. 21. Lastly, the submission made on behalf of the employers that the Tribunal could not grant the relief of permanency in service needs examination, as it touches upon the question of jurisdiction of the Tribunal.

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Perusal of impugned award reveals that the Tribunal has held the employers guilty of unfair labour practice by making reference to Clause-10 of 5^th Schedule of the Industrial Disputes Act. The Tribunal placed reliance upon the judgment passed by the Hon’ble Supreme Court in Maharashtra State Road Transport Corporation Ltd. vs. Casteribe Rajya Parivahan Karmchari Sanghatana (2009) 8 SCC 556. The Tribunal found the provisions of MRTU and PCLP Acts as applicable in the State of Maharashtra and considered in the said judgment as pari-materia with Clause-10 of 5^th Schedule to the Industrial Disputes Act and thereafter proceeded to hold that since unfair labour practice had been employed by the employers against the workmen, the relief of

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permanency in service could be granted as held in Casteribe (supra).

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Learned Deputy Solicitor General of India has placed reliance on a judgment passed by this Court on 29.9.2023 in CWP No. 6544 of 2021 , titled as, The Director, Doordarshan Kendra & another vs. Jai Chand & others , wherein this Court placing reliance upon the judgment passed by the Hon’ble Supreme Court in Oil and Natural Gas Corporation vs. Krishan Gopal &others (2021) 8 SCC 707 concluded that the observations in Krishan Gopal’s case (supra) has shown leaning on the view that the Labour Court and Industrial Tribunal could not order the regularization in service. He further contended that the relief of permanency in service granted in favour of the workmen by the Tribunal amounted to direction to regularize their services. 24. It will be relevant to reproduce the following view taken by this Court in The Director, Doordarshan Kendra(supra):-

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“22. Recently in Oil and Natural Gas Corporation vs. Krishan Gopal and others, reported in 2020 SCC

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Online SC 150, Hon’ble Supreme Court , after examining the view taken by two Judges Bench of the same court in Oil and Natural Gas Corporation Limited vs. Petroleum Coal Labour Union and Others, (PCLU) (2015) 6 SCC 494 as against the earlier view of the equal strength Benches of Hon’ble Supreme Court in Mahatma Phule Agricultural University and others vs. Nasik Zilla Sheth Kamgar Union and others (2001) 7 SCC 346, Regional Manager, State Bank of India vs. Raja Ram (2004) 8 SCC 164, Regional Manager, SBI vs Rakesh Kumar Tewari (2006) 1 SCC 530 and Oil and Natural Gas Corporation Ltd. vs. Engg. Mazdoor Sangh (2007) 1 SCC 250 has observed as under:-

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“34. The following propositions would emerge upon analyzing the above decisions:

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(i) Wide as they are, the powers of the Labour Court and the Industrial Court cannot extend to a direction to order regularization, where such a direction would in the context of public employment offend the provisions contained in Article 14 of the Constitution;

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(ii) The statutory power of the Labour Court or Industrial Court to grant relief to workmen including the status of permanency continues to exist in circumstances where the employer has indulged in an unfair labour practice by

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(iii)

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not filling up permanent posts even though such posts are available and by continuing to employ workmen as temporary or daily wage employees despite their performing the same work as regular workmen on lower wages; The power to create permanent or sanctioned posts lies outside the judicial domain and where no posts are available, a direction to grant regularization would be impermissible merely on the basis of the number of years of service;

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Where an employer has regularized similarly situated workmen either in a scheme or otherwise, it would be open to workmen who have been deprived of the same benefit at par with the workmen who have been regularized to make a complaint before the Labour or Industrial Court, since the deprivation of the benefit would amount to a violation of Article 14; and

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In order to constitute an unfair labour practice under Section 2 (ra) read with Item 10 of the 5^th Schedule of the ID Act, the employer should be engaging workmen as badlis, temporaries or casuals, and continuing them for years,

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with the object of depriving them of the benefits payable to permanent workmen.” 23. Having observed as above, the Hon’ble Supreme Court has expressed the need to revisit the decision in PCLU (supra) to set the position in law in conformity with the principles emerging from the earlier line of precedent and for such purpose, it has been observed as under:

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“35. The decision in PCLU needs to be revisited in order to set the position in law which it adopts in conformity with the principles emerging from the earlier line of precedent. More specifically, the areas on which PCLU needs reconsideration are:

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(i) The interpretation placed on the provisions of clause 2(ii) of the Certified Standing Orders;

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(ii) The meaning and content of an unfair labour practice under Section 2 (ra) read with Item 10 of the Vth Schedule of the ID Act; and

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(iii) The limitations, if any, on the power of the Labour and Industrial Courts to order regularisation in the absence of sanctioned posts. The decision in PCLU would, in our view, require reconsideration in view of theabove decisions of this Court and for the reasons which we have noted above.

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36. We accordingly request the Registry to place the proceedings before the Hon‟ble Chief Justice of India so as to enable His Lordship to consider placing this batch of appeals before an appropriate Bench.”

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24. In Oil and Natural Gas Corporation Limited vs. Petroleum Coal Labour Union and Others, (2015) 6 SCC 494, it was concluded that workmen were entitled to regularization in services and the Labour Court and Industrial Tribunal had jurisdiction to order the same. However, the earlier view in Mahatma Phule Agricultural University, Raja Ram, Rakesh Kumar Tewari and Engg. Mazdoor Sangh (supra), was to the contrary. The observations in Krishan Gopal (supra) also points towards the leaning on the view prevailing earlier to the judgment in PCLU.”

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In the facts of the case in hand, the workmen in their statement of claim had not laid factual foundation in the milieu of Clause-10 of 5^th Schedule to the ID Act. It was not the pleaded case of the workmen that they had faced unfair labour practice in the context of aforesaid provision. In absence of such factual background, the Tribunal could not have proceeded to determine an issue, which was non-existent and the other side was taken unaware. Though, the Tribunal also made reference to the judgment on the Krishan Gopal (supra)

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but only selective extractions from the observation made by the Hon’ble Supreme Court were noticed.

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One of the observations in Krishan Gopal (supra) was that the statutory power of the Labour Court or Industrial Tribunal to grant relief to workmen including the status of permanency continued to exist in instances where the employer has entered in an unfair labour practice by not filling up permanent posts even though the said posts are available and by continuing the employees/ workmen as temporary or daily wage employees despite their performing the same work as regular workmen on lower wages. In Krishan Gopal the judgment passed in Casteribe (supra) has also been considered.

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In the instant case, as per the averments made by the workmen themselves, the employers had initiated process for recruitment of 1529 skilled workers. The workmen had also set their claim for being considered against the said posts but could not succeed for want of qualification or having become overage. The workmen had nowhere pleaded that the employers had kept permanent posts unfilledand as against such unfilled posts the workmen were being made to work on lower wages. The fact remains that the workmen had raised

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the industrial dispute by challenging the retrenchment to be in violation of Sections 25 (F) (G) and (H) of the ID Actonly that too after the employers had employed the skilled workers in terms of the applicable rules. As the workmen were not holding requisite qualification or had become overage, the denial of appointments to them against permanent posts was justified.

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In light of above discussions, the impugned award is quashed and set aside to the extent it holds the employers liable to reinstate the workmen with permanency in service. Accordingly, the relief granted to the workmen vide impugned award is modified to the extent that the workmen will not be entitled to permanency in service in existing circumstances, as directed by the Tribunal. The rest of the award is upheld. 29. The writ petition is disposed of. The pending applications, if any, also stand disposed of.

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(Satyen Vaidya) 13^th September, 2024. Judge (kck)

Union of India and Others v. M.E.S. Contract Workers Union Subathu and Others

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Union of India and Others v. M.E.S. Contract Workers Union Subathu and Others

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