Allowed

Employers in Relation to the M v. Their Workmen

Jharkhand HC1 Dec 2025WPC/5023/2003

Case brief

AI extract

What is this about?

This judgment quashes an Industrial Tribunal award and a subsequent Labour Court order regarding wage conversion from piece-rated to time-rated systems. The High Court held that no pay protection applies for lateral voluntary moves, citing negative equality principles and the distinct nature of output-based versus fixed wages, thereby dismissing the workmen's claim for back wages.

What did the court decide?

Award dated 20th November 2002 passed by CGIT quashed; Labour Court order dated 13.06.2013 dated quashed.

Employers in Relation to the M Vs Their… — Pension and Retirement Benefits | Jharkhand HC (2025)

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2025:JHHC:35913

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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W.P. (L) No. 5023 of 2003

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Employers in relation to the management of P.B. Area of M/s. Bharat Coking Coal Limited, P.O. Kusunda, P.S. Kenduadih, district-Dhanbad, through its General Manager, through its Manager Legal, S.K. Sinha, Koyla Bhawan, P.O. Koyla Nagar, District-Dhanbad.

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.... Petitioner

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Versus

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Their Workmen being represented by Vice President, National Coal Workers Congress, Shri S.C. Gaur, Sharma Mansion, Kendua Bridge, P.O. Kenuda, P.S. Kenduadih, district-Dhanbad. .... Respondents

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With

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W.P. (L) No. 1761 of 2014

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Project Officer, Gopalichak Colliery of M/s. Bharat Coking Coal Limited, P.O. Kusunda, P.S. Kendua, DistrictDhanbad through Dr. Harendra Kishore, S/o Liladhar Sharma, Deputy General Manager (Legal), BCCL, Koyla Bhawan, P.O.-Koyla Nagar, P.S. Saraidhella, DistrictDhanbad. .... Petitioner

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Versus

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Md. Mutaja Ahmed @ Murtaza Ahmed, S/o Late Anwar Hussain, resident of quarter No. 97, New Colony, Gopalichak Colliery, P.O. Kusunda, P.S. Kendua, DistrictDhanbad. .... Respondents

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CORAM: HON’BLE MR. JUSTICE DEEPAK ROSHAN

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--------For the Petitioner : Mr. Anoop Kumar Mehta, Adv Mr. Amit Kumar Sinha, Adv For the Resp.-State : Mr. Divyam, A.C. to S.C.-IV For the Respondent :

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C.A.V. ON: 06.11.2025 PRONOUNCED ON:01/12/2025

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1. Heard the learned counsel for the parties.

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2. Both these writ applications have been preferred by the Petitioner-Management praying therein for quashing and setting

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aside the Award dated 20th November 2002, passed by the Central Government Industrial Tribunal (CGIT) No. 1 Dhanbad, in Reference No. 71 of 1996 (in W.P.(L) No. 5023 of 2003). The Petitioner has also assailed the legality and validity of the consequential order dated 13.06.2013 passed by the Learned Presiding Officer, Labour Court, Dhanbad in M.J. Case No. 30 of 2011 (in W.P.(L) No. 1761 of 2014).

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3. Facts of the Case:

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The case strikes at the heart of the wage structure in the Coal Industry and deals with the Industrial Jurisprudence of pay protection when a workman voluntarily transitions from a variable, output-dependent "piece-rated" category to a fixed tenure-based "time-rated" category in the absence of any statutory provision or agreement to that effect.

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In this case, the Trade Union represents four workmen namely Rampat Chouchan, Bal Mukund Pandit, Ram Lakhan Pandit, and Md. Murtaza Ahmad. These individual workmen were initially engaged as miners/loaders and were paid remuneration on a piece-rate basis. They were converted to the time-rated roles of Drill-man and Prop. Mazdoor.

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The Union alleges that this conversion has resulted in a financial loss as the management fixed their wages at the initial basic pay of the time-rate category without including the variable component of Special Piece Rate Allowance (SPRA). The workers contend that they were converted from the piece-rate category to the time-rate category sometime in January 1988, but the wage was revised only in 1992. Therefore, there is no dispute that the formal regularization into the time-rate pay scale was undertaken only in June 1992.

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In June 1992, the Management formally fixed the pay of the workmen in the time-rate scale as follows:

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Drill-man basic pay: Rs. 42.18

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Prop. Mazdoor basic pay: Rs. 40.78

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The workmen claim that this has caused a loss of approximately Rs. 13.87 to Rs. 15.27 per day in their wages. This calculation is the bedrock of the dispute between the management and the Trade Union.

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Industrial Dispute:

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The Union raised an Industrial Dispute vide letter dated 16 October 1992. The conciliation proceeding before the Assistant Labour Commissioner (Central, Dhanbad) failed, and consequently, the Central Government vide Order No. L- 20012/265/98-IR (Coal – I) dated 26 September 1996, referred this dispute for adjudication.

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The Reference:

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The terms of reference before the Central Government Industrial Tribunal were:

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“Whether the demand by the Union for protection of wages as per J.B.C.C.I instruction at the time of conversion of piece rate to time rate of Rampat Chouchan, Bal Mukund Pandit, Ram Lakhan Pandit & Md Murtaza Ahmad by the management of P.B. area Patna, Bihar area No. VII of M/s B.C.C.L is justified? If so, to what relief are these workmen entitled?”

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The Pleadings and Evidence:

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4. The parties filed their respective Written Statements.

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i. The Management had submitted that the concept of pay protection is a concept applicable to vertical promotions or involuntary re-deployment and cannot apply to lateral, voluntary conversion where a worker

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gives up high-risk potential earnings for low-risk guaranteed income.

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ii. The Workmen, on the other hand, have filed their Written Statement through the Trade Union asserting their right to pay protection and claim Special Piece Rate Allowance (SPRA) be included while fixing their basic pay in time-rate assignments.

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5. Both the Management and the Union have examined one witness each. Md. Murtaza Ahmad was examined as WW-1. In his deposition, he admits that the workmen worked from 1988 till 1992 in time-rate, but they were given the time-rate scale of pay only in June 1992. He has also admitted that during this period of 4 years, no grievance or dispute was raised. This witness further admits that there is no settlement with the management regarding the transition from piece-rate to time-rate.

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6. The Management examined Nimai Chandra Mitra as its only witness. He has produced a fitment chart (Exhibit-M-4) and states that, as per company rules, only after satisfactory completion of work as a piece-rated worker, is the status converted to a time-rate scale. He has stated that there is no pay protection as there is no similarity between piece-rate and timerate pay.

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The Award:

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The Tribunal passed its award rejecting the testimony of the management on the ground that no material, rule, or policy has been placed to show that the SPRA should not be included in wages while determining basic pay in time-rate. The Tribunal concluded that in the absence of any document, it has to be presumed that there is no bar in including SPRA while fixing the time rate. The award further relies upon clause 3.11.5 of NCWA-IV as the basis for pay protection. This clause mentions that SPRA will not count for the computation of Tub-Rates. This amount will, however, be treated as basic for “all other purposes” . The Tribunal

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presumes the phrase "all other purposes" should include wage fixation during conversion to time rate also. Finally, the Tribunal has decided the reference in favour of the workmen and has also relied upon a similar precedent in Sendra Bansjora Colliery .

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Arguments:

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7. The Management of B.C.C.L refers to Paragraph No. 8 of the award, rejecting the testimony of MW-1 on the ground that there is no material, rule, or policy which has been placed showing that SPRA cannot be included while fixing basic pay in time-rate wages. It has been urged that the burden has been incorrectly shifted on the management to prove a negative fact (that a protection rule does not exist); rather than requiring the Respondent to prove that there is a rule of pay protection while fixing time-rate wages.

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The Management’s counsel had further submitted that the award is perverse as there is no question of pay protection when a piece-rated worker is brought to time-rate wages, as these two are absolutely distinct mechanisms for wage fixation. Piece-rated workers are paid on an output basis and not on any fixed wages. It is a variable pay structure; therefore, the concept of pay protection does not arise when a worker is converted to time-rate wages on fixed wages.

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8. The Respondent-Trade Union has fully supported the award and has submitted that there is no illegality or perversity in the award of the Tribunal and, therefore, the Writ Petition should be dismissed. It was further submitted that the award is a wellreasoned award and calls for no interference. The case of Sendra Bansjora Colliery has been considered and the Management cannot be permitted to change their stance as they have already given this benefit to the workers in Sendra Bansjora Colliery.

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Analysis of the Law & Findings:

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9. The award, pleadings and evidence both, oral and documentary, have been examined. The award calls for interference for the following reasons:

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10. This Court is conscious that the law of evidence per se does not apply to industrial adjudication. Nevertheless, the general principles do apply. In any event, in industrial adjudication, principles of natural justice have to be complied with. Fairness in procedure has developed as an additional limb of

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natural justice. M/s. Bareilly Electricity Supply Company Limited v. The Workmen and Others (1971) 2 SCC 617 is a decision arising from an award under the Industrial Disputes Act, 1947. Law has been laid down therein as follows:

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14. An attempt is however made by the learned Advocate for the appellant to persuade us that as the Evidence Act does not strictly apply the calling for of the several documents particularly after the employees were given inspection and the reference to these by the witness Ghosh in his evidence should be taken as proof thereof. The observations of Venkatrama lyer, J., in Union of India v. Varma [AIR 1957 SC 882 : (1958) 2 LLJ 259 and 263-264 : 1958 SCR 499] to which our attention was invited do not justify the submission that in labour matters where issues are seriously contested and have to be established and proved the requirements relating to proof can be dispensed with. The case referred to above was dealing with an enquiry into the misconduct of the public servant in which he complained he was not permitted to be cross-examined. It however turned out that lie was allowed to put questions and that the evidence was recorded in his presence. No doubt the procedure prescribed in the Evidence Act by first requiring his chiefexamination and then to allow the delinquent to exercise his right to crossexamine him was not followed, but that the Enquiry Officer, took upon himself to cross-examine the witnesses from the very start. It was contended that this method would violate the well recognised rules of procedure. In these circumstances it was observed at p. 264:

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“Now it is no doubt true that the evidence of the respondent and his witnesses was not taken in the mode prescribed in the Evidence Act; but that Act has no application to enquiries conducted by Tribunal even though they may be judicial in character. The law requires that such Tribunals should observe rules of natural justice in the conduct of the enquiry and if they do so their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that which obtains in a court of law.”

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But the application of principal of natural justice does not imply that what is not evidence can be acted upon. On the other hand what it means is that no materials can be relied upon to establish a contested fact which are not spoken to by persons who are competent to speak about them and are subjected to cross-examination by the party against whom they are sought to be used. When a document is produced in a Court or a Tribunal the questions that naturally arise is, is it a genuine document, what are its contents and are the statements contained therein true. When the appellant produced the balancesheet and profit and loss account of the company, it does not by its mere production amount to a proof of it or of the truth of the entries therein. If these entries are challenged the appellant must prove each of such entries by producing the books and speaking from the entries made therein. If a letter or other document is produced to establish some fact which is relevant to the

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enquiry the writer must be produced or his affidavit in respect thereof be filed and opportunity afforded to the opposite party who challenges this fact. This is both in accord with principles of natural justice as also according to the procedure under Order 19 of the Civil Procedure Code and the Evidence Act both of which incorporate these general principles. Even if all technicalities of the Evidence Act are not strictly applicable except insofar as Section 11 of the Industrial Disputes Act, 1947 and the rules prescribed therein permit it, it is inconceivable that the Tribunal can act on what is not evidence such as hearsay, nor can it justify the Tribunal in basing its award on copies of documents when the originals which are in existence are not produced and proved by one of the methods either by affidavit or by witness who have executed them, if they are alive and can be produced. Again if a party wants an inspection, it is incumbent on the Tribunal to give inspection insofar as that is relevant to the enquiry. The applicability of these principles are well recognised and admit of no doubt.

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(Emphasis added)

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11. The burden of proof in this case has erroneously been placed on the Management. The fundamental maxim of evidence law, 'onus probandi' , dictates that the burden of proof lies on the person who asserts a fact. In this case, the Union has asserted the existence of JBCC instruction mandating pay protection. However, the Union did not produce any such instruction. They have also failed to show any particular clause in the NCWA that explicitly mentions that piece-rate earnings will be protected upon conversion to time-rate.

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Instead of dismissing the claim for lack of evidence, the Tribunal shifted the burden upon the management for not producing any rule that forbids protection. This leads to a presumption of the existence of the right to pay protection when there is no statute, contract, rule, or regulation. The finding is, therefore, presumptuous and perverse.

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12. It is further noticed that the Union relied on clause 3.11.5 of NCWA-IV. However, this clause only mentions that SPRA will be treated as basic for all other purposes. The phrase "all other purposes" should refer to the calculation of salary benefits such as Provident Fund, gratuity, overtime, leave encashment, etc. All these other benefits will include SPRA while the workmen remain in that category. However, it does not imply portability into a completely different job cadre.

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The piece rate is an output-based wage structure that can never be constant. When a worker is engaged on a time-rate basis, he is paid a fixed wage for working for a certain number of hours. The hours are fixed, and the wages are also fixed for timerated workers. There can be no concept of pay protection as the piece rate by its very nature is a variable wage, and it is not possible to compare such fluctuating wages (output based) with basic time rate (fixed wages). The SPRA is also an allowance meant only for piece-rated workers; therefore, including it in the time rate will be contrary to the very purpose and basis of such an allowance. This aspect has been completely ignored by the Tribunal. The conceptual difference in the two forms of wages has not been examined at all by the Tribunal.

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13. The Tribunal has also failed to examine the concept of estoppel which applies to Industrial adjudication. The workmen had the option not to accept time-rate wages or group wages, but they accepted the time rate which they found to be more beneficial. Even otherwise, the time rate is only offered as a regularization measure to those who work satisfactorily as piecerated workers. There is no denial that piece rate work is more arduous and as workmen grow with age their efficiency in manual hard labour jobs will decrease and will result in lower wages.

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The conversion to time rate offers security of wages to workmen. Even if there is a lower pay package today, time rated workmen have the advantage of fixed rate of wages throughout their service tenure.

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14. It further transpires that the Tribunal has heavily relied on Exhibit W-2 & W-3, which are documents to show that workmen in Sendra Bansjora Colliery had been given SPRA through a settlement in that case. This settlement was in relation to one industrial dispute and cannot be treated as a concession on behalf of the management. The Hon’ble Supreme Court has

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repeatedly held that Article 14 (right to equality) does not include negative equality, and the workmen cannot claim any right on the basis of negative equality.

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Apart from this one isolated instance, the Union has not shown that there is pay protection claimed by them in the entire coal industry. In the case of R. Muthukumar and Others Versus Chairman and Managing Director TANGEDCO and Others 2022 SCC Online SC 151 following observation of the Hon’ble Apex Court explain the principle in following words:-

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27. It is thus, evident that in Aravind Kumar Srivastava (supra) the previous orders of the tribunal and the court were based on merits adjudication, and not based on concession; certainly not based on compromise. It was in the background of such facts that denial of relief to similarly situated claims, was held to be unjustified. Most importantly, for the purpose of this case, the court carved out an exception : that subsequent litigants, wishing to benefit from orders made in others' cases, had to approach the courts in time, without delay or laches. In the facts of this case, there is no question of any finality to the compromise order : it cannot be treated, by any stretch of the imagination, as an order in rem, or as a binding precedent. Also, the aggrieved appellants, and the contesting candidates (in TANGEDCO's appeal) did not approach the court in time. They woke up after the compromise order, claiming parity, and filed petitions in the court. Clearly, therefore, they cannot claim any benefit from the compromise order.

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28. A principle, axiomatic in this country's constitutional lore is that there is no negative equality. In other words, if there has been a benefit or advantage conferred on one or a set of people, without legal basis or justification, that benefit cannot multiply, or be relied upon as a principle of parity or equality. In Basawaraj v. Special Land Acquisition Officer14, this court ruled that:

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“8. It is a settled legal proposition that Article 14 of the Constitution is not meant to perpetuate illegality or fraud, even by extending the wrong decisions made in other cases. The said provision does not envisage negative equality but has only a positive aspect. Thus, if some other similarly situated persons have been granted some relief/benefit inadvertently or by mistake, such an order does not confer any legal right on others to get the same relief as well. If a wrong is committed in an earlier case, it cannot be perpetuated.”

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15. This case also deals with a similar situation where one

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settlement in one of the collieries has been made the basis for similar treatment. This settlement was not a settlement under Section 18(3) of the Industrial Disputes Act, 1947 and cannot bind the Management when no rule or contract is in existence. Moreover, including SPRA for those who are converted from piece

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rate will discriminate against the other time rated workmen. In case of direct recruitment of time rated workers, they will not be entitled to SPRA and will allege discrimination vis a vis those who converted from piece rate to time rate. This is the reason that it has been held that there can be no negative equality.

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16. It is, therefore, clearly established that the Tribunal has committed a failure in recognizing the structural distinction between the variable pay piece-rated system and the fixed pay time-rated system. The management acted in good faith, allowing the workmen to exercise the option for fixed wages on time-rate, and the workmen accepted this benefit. The workmen have completely misconstrued the concept of pay fixation and wage administration.

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The Learned Tribunal has erred by recording a presumptuous finding that in the absence of a rule prohibiting pay protection, it has to be presumed that the concept of pay protection will apply without examining the basis or structure of wages. The learned Tribunal has also erred in failing to observe that pay protection is essentially a vertical concept applicable during promotions and would not be applicable in a lateral wage structure.

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Moreover, when the workmen acquiesce in time-rate wages, they cannot claim that they have been put to a loss of earning. The loss of earning claim is also purely hypothetical. This is for the reason that a piece-rated workman does not earn any fixed wages, and their wages keep varying on the basis of the volume of output. If the workmen do not deliver sufficient output, their piece-rate wages may even go below the time-rate wages paid by the management.

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17. Having regard to the above discussions, this Court holds that the Award dated 20.11.2002 suffers from perversity and calls for interference and accordingly; the same is quashed and set aside.

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W.P. (L) No. 1761 of 2014

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18. By an order dated 30.09.2003, this Court admitted the writ petition and specifically ordered: "Till appearance of the sole respondent, the operative effect of the impugned Award shall remain stayed" . Despite the operation of the stay order, the Respondent workman filed an application under Section 33C (2) of the Industrial Disputes Act, 1947, registered as M.J. Case No. 30 of 2011, claiming computation of monetary benefits arising from the very Award that was stayed.

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The Labour Court, Dhanbad, ignoring the specific stay order passed the order on 13.06.2013, directed the Petitioner to pay Rs. 89,533/- to the Respondents.

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19. It is a settled principle of law that proceedings under Section 33C(2) are in the nature of execution proceedings. They presuppose an existing right or benefit that has already been adjudicated and crystallized. Since the Award (which formed the basis of the right), is hereby, set aside, there is no "existing right" available to the workman that could be computed or executed by the Labour Court. Consequently, W.P. (L) No. 1761 of 2014 is also fit to be, and, is hereby, allowed and accordingly, the order dated 13.06.2013 in M.J. Case No. 30 of 2011 is also quashed.

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20. As a result, both these writ applications stand allowed. Pending I.As, if any, also stands closed.

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(Deepak Roshan, J.)

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December 01, 2025

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Amardeep/A . F . R .

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Uploaded

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02/12/2025