IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI THURSDAY, THE 28TH MAY 2009 / 7TH JYAISHTA 1931 WP(C).No. 18025 of 2006(U) ------------------------------------- PETITIONER(S): ------------------------ SOUTH MALABAR GRAMIN BANK, (A SCHEDULED BANK SPONSERED BY CANARA BANK), HEAD OFFICE, MALAPPURAM-676 505, REP. BY ITS CHAIRMAN). BY ADV. SMT.S.KARTHIKA,SC,SOUTH MALABAR GRAMIN RESPONDENT(S): ------------------------- 1. SOUTH MALABAR GRAMIN BANK DEPOSIT COLLECTORS UNION, REP.BY ITS GENERAL SECRETARY, C/O.SOUTH MALABAR GRAMIN BANK, KIZHISSERY BRANCH, P.O.KUZHIMMANNA, MALAPPURAM DISTRICT. 2. THE LABOUR COURT, KOZHIKODE. BY ADV. MR.DEVAN RAMACHANDRAN , SC ADV. MR.K.SASIKUMAR FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/05/2009, ALONG WITH WPC NO. 25275 OF 2006 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.18025/2006 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE CIRCULAR NO.19/78 DT. 13.2.78 ISSUED BY THE PETITIONER TO ALL BRANCHES UNDER IT. P2:- COPY OF THE CIRCULAR NO.48/78 DT. 3.5.78 ISSUED BY THE PETITIONER. P3:- COPY OF THE AWARD DT. 24.1.98 OF THE 2ND RESPONDENT IN I.D.(C) 2/93. P4:- COPY OF THE JUDGMENT DT. 22.8.05 OF THIS HONOURABLE COURT IN OP. NO.18978/98. P5:- COPY OF THE JUDGMENT OF THE DIVISION BENCH OF THIS HONOURABLE COURT IN WA. 2537/05. P6:- COPY OF THE ADDITIONAL STATEMENT DT. 15.2.06 FILED BY THE IST RESPONDENT IN I.D.(C) 2/93. P7:- COPY OF THE REVISED AWARD DT. 13.3.06 PASSED BY THE 2ND RESPONDENT IN I.D.(C) 2/93 AND PUBLISHED ON 22.4.06. P8:- COPY OF THE LETTER DT. 19.5.06 OF THE GENERAL SECRTARY OF THE IST RESPONDENT UNION TO THE CHAIRMAN OF THE PETITIONER BANK. TRUE COPY P.A. TO JUDGE TSS V.GIRI, J ------------------- W.P.(C)s.18025 & 25275/2006 -------------------- Dated this the 28th day of May, 2009 JUDGMENT The Management and the Union, who were parties to I.D.No.2/1993 on the files of the Labour Court, Kozhikode, have challenged the award in Writ Petition No.18025/2006 and 25275/2006 respectively. I will refer to the contentions in W.P. (C).18025/2006 for the sake of convenience. 2. Petitioner is a Regional Rural Bank constituted under the Regional Rural Banks Act, 1976, with Canara Bank as the sponsor Bank. It introduced 'Nithya Nidhi' deposit schemes with a view to inculcate in people, the habit of thrift and savings and to mobilize deposits. The agents do collection work and the commission agents were known as 'NND Agents'. They were not appointed as regular employees of Bank. They were commission agents and were being paid commission on the daily deposits and by Ext.P1, (marked as W.P.(C).18025 & 25275/2006 2 W10 before the Labour Court) the Union fixed the rate of commission at 3%. By Ext.P2(marked as W11 before the Labour Court), the commission was reduced to 2.5%. The commission agents questioned the same and the following two issues were referred for adjudication to the Labour Court. (i).Whether the demand of South Malabar Gramin Bank Deposit Collectors Union (Regd) to absorb Nithya Nidhi Deposit Collectors as bank employees in South Malabar Gramin Bank is justified ? If so, to what relief's they are entitled to ? (ii).Whether the action of the management of South Malabar Gramin Bank in reducing the commission from 3.5% to 3% in the year 1976 and from 3% to 2.5% w.e.f. 2.5.1978 to NND collectors is justified ? If not, to what relief's they are entitled to.” 3. By Ext.P3 award dated 24.1.1998, the Labour Court proceeded to hold that the commission agents W.P.(C).18025 & 25275/2006 3 therefore, are not entitled to be absorbed as regular employees. Therefore the other issues were not considered. 4. The award was challenged by the Union before this Court in Writ Petition No.18978/98. During the perndency of the said writ petition, Supreme Court in the decision Indian Banks Association v. Workmen of Syndicate Bank and Others (2001 (3) SCC, 36) held that deposit collectors are workmen, but not entitled to regularization. It was further held that the commission paid to them would qualify as wages within the meaning of Section Section 2(rr) of the I.D.Act. Taking note of the declaration of law in Indian Bank's case, this Court proceeded to hold that Ext.P3 award shall stand modified declaring the status of the deposit collectors but denying their claim for regularization. Ext.P4 was challenged by the Union in W.A.2537/05. The Division Bench as per Ext.P5 judgment, accepted the contention of the Union to the effect W.P.(C).18025 & 25275/2006 4 that neither the Labour Court nor the learned single Judge considered issue No.2 which was referred for adjudication. Accordingly by Ext.P5 judgment I.D.2/93 was remitted back to the Labour Court for consideration of issue No.2. 5. Thereafter, Ext.P6 additional statement was filed by the Union expatiating on their claim that the reduction in the rate of commission payable to the deposit collectors is in contravention of Section 9A of the Act and was done without notice to the workmen. Labour Court proceeded to pass a revised order as per Ext.P7. Paragraph 9 and 10 of the same reads as follows:- “There is no evidence to show that any of the workers were working as collection agents at the time of Ext.W10. Irrespective of th date, the service condition applicable and enjoyed could be altered to the detriment of workers only in accordance with S.9A. So I find that the reduction W.P.(C).18025 & 25275/2006 5 of maximum rate or commission from 3% to 2.5% is illegal and unjustified and the action is only to be set aside. In the result, an award is passed holding that the action of the management of S.M.G Bank in reducing the commission from 3 to 2.5% w.e.f 2.5.1978 to NND collectors is unjustified.” 6. Revised award Ext.P7, has been challenged both by the management as well as the Union. The former challenges it on the ground that none of the deposit collectors who could be the beneficiaries of the Award were workmen on the date of W11 (Ext.P2 dated 3.5.1978) and that therefore, there could not have been an award in their favour. It is also contended that Ext.P6 which is in the form of an additional statement was filed at the last moment and that the management did not get an opportunity to place on record any materials to the contra. The Union challenges the award on the ground that the Tribunal should have passed an W.P.(C).18025 & 25275/2006 6 award in relation to W10 as well and should have therefore, held that the reduction of commission to 3% itself was illegal. 7. I heard Mr.Devan Ramachandran, learned counsel for the petitioner in W.P.(C).18025/2006 and Mr.K.Sasikumar learned counsel for the petitioner in W.P.(C).25275/2006. 8. Section 9A of the I.D.Act reads as follows:- Notice of change No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change - (a). without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected, or (b). within twenty-one days of W.P.(C).18025 & 25275/2006 7 giving such notice: Provided that no notice shall be required for effecting any such change - (a). where the change is effected in pursuance of any settlement or award or (b).where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Services, Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply 9. It is pointed out that the wages is included in the 4th schedule to the I.D.Act and therefore, there W.P.(C).18025 & 25275/2006 8 cannot be reduction of wages without notice. It is also contended that the Supreme Court has in the Indian Bank's case held that the deposit collectors are workmen within the meaning of the I.D.Act and the commission drawn by them has the character of wages within the meaning of Section 2 (rr) of the Act. Thus there cannot have been a reduction of commission payable to the workmen in contravention of Section 9A of the Act. The finding of the Labour Court in Ext.P7 award that the management could not have unilaterally reduced the commission payable to the deposit collectors, as such reduction was in contravention of Section 9A of the Act does not warrant any interference. 10. But when it came to W10/Ext.P1, the Labour Court proceeded to hold that there is no evidence to show that any other workmen sought to be represented by the Union were in the service of the Bank. Therefore, there was a denial of relief in W.P.(C).18025 & 25275/2006 9 relation to the reduction brought about by Ext.P1, i.e., W10. There is substance in the contention raised by the management that if that be so, on a parity of reasoning same reasoning should have followed in relation to W11 also. But on a perusal of the award, I find that the Tribunal has not really gone into the aspect as to how many of the deposit collectors were in the service of the Bank either on the date of Ext.P1 or on the date of Ext.P2. 11. Thus, while affirming the award to the extent to which the Labour Court has found that there should not have been a reduction of the commission payable to the deposit collectors/workmen unilaterally without notice, I am of the view that the Labour Court should again consider how many deposit collectors were in the service of the Bank on the date of W10 and W11. Award should therefore, be passed with specific reference to the said aspect. 12. Accordingly, I.D.No.2/93 shall be W.P.(C).18025 & 25275/2006 10 reconsidered by the Labour Court, Kozhikode, to the limited extent as indicated above. The Management and the Union shall be entitled to adduce evidence to show how many deposit collectors were in the service of the Bank on the date of W10 and W11. Labour Court shall pass an award with specific reference to the said workmen, taking note of the observations already made above. Such revised award shall be passed within six months from the date of receipt of a copy of the judgment. V.GIRI, Judge mrcs