1 wp1717-11.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1717 OF 2011 Abbott India Ltd & Ors .. Petitioners versus All India Abbott Employees Union & Anr .. Respondents Mr.K.M.Naik a/w Mr.S.P.Salkar for the petitioners. Mr.R.D.Bhat for respondent No.1. Ms.Jane Cox for the applicant in Chamber Summons No.253 of 2011. CORAM : S.C.DHARMADHIKARI, J. 12th October 2011. ORAL JUDGMENT: 1} Rule. Respondent No.1 waives service. Service on respondent No.2 is not necessary. Even the intervenors waive service and agree that the writ petition be taken up for hearing forthwith. With the consent of the learned advocates, this writ petition is heard finally and disposed off by this judgment and order. 2} The petitioners have challenged, by this writ petition under Article 226 of the Constitution of India, the order dated 8th August 2011 passed by Member, Industrial Court, Mumbai in complaint (ULP NO.114 of 2 wp1717-11.doc 2011). By this order, the learned Member rejected the application dated 19th July 2011 (Exhibit C-13) raising a preliminary objection to its territorial jurisdiction to entertain and try the complaint. 3} The 1st respondent-Union is the original complainant. 4} The complaint alleges unfair labour practices under Item 5 of Schedule II and Item 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971 (for short MRTU and PULP Act). 5} The 1st respondent-original complainant states that it is a trade union functioning in the establishment of the petitioner No.1, which is the original respondent No.1. It is stated that the unfair labour practices have commenced from 5th April 2011. The thrust of the allegations is that the 1st respondent-Union is a registered trade union functioning in the establishment of the of the 1st petitioner since 1966. It is a recognised union under the Code of Discipline under the Industrial Disputes Act, 1947. It has signed several settlements, concerning wage scale and service conditions of sales promotion employees. The 1st petitioner- 3 wp1717-11.doc company is engaged in manufacturing and marketing of pharmaceutical products all over India and is a leading company. The Union consists of Sales Promotion Employees employed by the company with different designations such as Medical Representatives, Territory Business Developer, Territory Executive and other such designations. All of them carry out the same functions i.e to promote the products of the company. 6} The definitions of the term “Sales Promotion Employee” under the Sales Promotion Employees (Conditions and Services) Act, 1976 and under the Industrial Disputes Act, 1947, have been referred to and reproduced and it is then alleged that the grievances of the Sales Promotion Employees had been taken up by the Union. There are about 1000 such employees working all over the country. They are members of the 1st respondent-Union. On their behalf, the Union has been signing the settlement laying down wage scales and service conditions from time to time. It is stated that a Charter of Demand was submitted on 4th August 2010, a copy whereof is annexed as Annexure A to the complaint and thereupon negotiations commenced with the Union sometime on 21st /22nd January 2011. The last discussion was held 4 wp1717-11.doc sometime in April 2011. They remained inconclusive inasmuch as it is alleged that there is a rigid stand adopted by the 1st petitioner. 7} About 250 Sales Promotion Employees designated as Territory Executives in respect of whom the company has not discussed with the Union although they are carrying out identical functions as Medical Representatives, also had certain grievances and they raised a separate Charter of Demand through 1st respondent-Union and the Union raised its separate Charter in relation thereto on 1st July 2002, a copy of which is at Annexure B. There was no response to the said Charter of Demands and, therefore, intervention of Conciliation Officer was sought and the conciliation proceedings are yet to be initiated. 8} It is alleged that while the office bearers of the Union were busy in preparing for negotiations on the Charter of Demand, the Company suddenly took several steps without the prior knowledge of the Union. The steps that are taken are set out in para 3.8 of the complaint and the same reads thus: “3.8 While the office bearers of the Union were busy in 5 wp1717-11.doc preparing for negotiations on the Charter of Demand, the Company has, all of a sudden, taken various steps on the sly and on emergent basis without the prior knowledge of the Union. The Company had earlier booked to and fro air tickets in favour of most of the SPEs working all over India and were required to attend a purported launch of Established Products Division for which a workshop was organised by the Company. In bonafide belief of the case made out by the Company about 800 SPEs attended the purported Workshop at Banglore and at Hyderabad on 6th and 7th April 2011. At the said “Workshop”, however, the Company offered fresh appointment letters identifying them as orders of promotion. The so called promotion order states that the concerned SPE, irrespective of his existing designation, including that of Territory Executive, are designated as “Therapy Business Manager”. The orders of promotion contain 3 annexures. Annexures-I provides for change in remuneration providing for a rise of around Rs.80,000/- to Rs.1,30,000/- per annum. Annexure-II contains “Job Purpose”. In other words the company has used high sounding management jargon though the job content remains the same which is promoting the products of the company. Annexure-III contains purported “other terms and conditions” thereby imposing certain stringent conditions which are not prevalent prior to the issue of 6 wp1717-11.doc such letter. As per the new service conditions the notice period for resignation has been increased from one month to three months. The said Annexure also provides for medical examination as the company may require from time to time. It also provides that the company can deduct from the concerned SPE’s remuneration any money due to the company including outstanding loans or advances given by also provides for transfer including transfer to any other Group Company which is contrary to the law. It also provides for periodic training and certification of code of business conduct as required. The Union submits that all these new stringent conditions of services provide a handle to the Company to terminate the services of the concerned SPEs under one pretext or the other. It also provides for one time deduction of all outstanding dues which is meant to be used for the purpose of force and coercion to the concerned SPEs to succumb to the dictates of the Management.” 9} It is then alleged that the 1st petitioner-Company attempted to issue fresh appointment letters to the aforestated employees only to ensure that they do not continue with the Union. According to the complainant all Sales Promotion Employees who attended the purported workshop were required to accept the order without giving 7 wp1717-11.doc them time to consider or consult the Union or take required advise, legal or otherwise. There was thus a force or pressure which was asserted and the said employees could not even take up the matter with the Union. After alleging that the Charter of Demand was submitted there is a reference made to circular dated 23rd March 2011 of the Union and alleging that the attempt of the Company was to counter the Union and prevent it from asserting its demand under the Charter that the action was initiated. There is a reference to the circular of the Union dated 5th April 2011 and in para 3.12, this is what is alleged: “3.12 Under the circumstances, most of the members of the Union did not accept the offer made by the company excepting very few SPEs who were either on promotion or just joined the company. Most of the members have been in touch with the representatives of the Union and have voiced their apprehension about acceptance of the offer made by the company. The offers were handed over to the SPEs on 6th April 2011 and were forced to accept the same either immediately or on the next day i.e on 7th April 2011. Most of the members of the Union, therefore, did not attend the purported workshop on the 7th April 2011. Most of the members remained in groups so that individual SPE may not be targeted either by the 8 wp1717-11.doc officials of the company or the bouncers employed by the company. There were, however, stop target such as those who were just confirmed or on probation and who were located in one Hotel by name West Inn in Hyderabad. The District Managers/Regional Managers who are immediate superiors of SPEs, went to the Hotel rooms of such members in the unearthly hours in the early morning between 2.00 a.m to 4.00 a.m. In some cases the SPEs were called to the room where the District/Regional Managers were staying. Similar effort was made in the Hotel Taj in Bangalore.” 10} It is in these circumstances, that the complaint proceeds to allege that the 1st respondent is the only Union functioning in the company and has recognition. The company and Union have engaged in discussion for resolving the Charter of Demand. There was a necessity, therefore, of open and bonafide discussions, but the company has failed to abide by the same and imposed certain conditions and this constitutes an unfair labour practice under Item 5 of Schedule II of the MRTU and PULP Act. 11} In paras 3.16 and 3.17 so also in para 3.18, this is what is alleged: 9 wp1717-11.doc “3.16 As stated hereinabove, the wage scales and service conditions of all SPEs were determined on the basis of settlements between the Union and the Company since about last four decades. The members of the Union were, therefore, entitled to continuation of such terms and conditions of service including those which may be accepted by the Union after negotiation and after considering the effect of such changes on its members. The company has, however, proceeded under undue haste in order to impose its own unilateral terms and conditions of service upon the members of the Union by adopting strong arm method and by not permitting the concerned members to even consider the offer taking into account all relevant factors including discussing them collectively under the banner of the Union. Such unilateral change in service conditions which are sought to be implemented by adopting strong arm means, the company has engaged in unfair labour practices under Item 9 of Schedule IV of the MRTU and PULP Act. 3.17 The company has also engaged in use of force and coercion by forcing the members of the Union to attend the purported “Workshop” at Bangalore and at Hyderabad and used police and hired bouncers to spread threats and mental pressure upon the members of the Union with the sole aim of forcing to unfair labour 10 wp1717-11.doc practice under Item 10 of Schedule IV of the Act. 3.18 The Union submits that all matters concerning SPEs are decided by the Head Office in Mumbai. The discussions over Charter of Demand are going on in Mumbai since last several months. The decisions to give such “offer” was taken in Mumbai. Both the registered office and administrative office of the company as well as the Registered Office of the Union is in Mumbai. The appropriate Government for the company is the State of Maharashtra. Hence, this Hon’ble Court has jurisdiction to entertain and try this complaint.” 12} It is upon these allegations that the Union prayed that the Industrial Court should hold and declare that the petitioners have engaged in unfair labour practice in terms of Item 5 of Schedule II and Items 9 and 10 of Schedule IV of the MRTU and PULP Act and further directions and reliefs have been claimed. This complaint was filed on 13th April 2011. It is common ground that the 1st respondent-Union made an application for interim reliefs and on 13th April 2011, after hearing both sides, an ad-interim order was passed directing the petitioners not to force the Sale Promotion Employees to accept the offers of promotion. In reply to the application for interim relief, the petitioners 11 wp1717-11.doc filed a reply of Mr.Sachin Amdekar, Head- Business Human Resources of the Abbott India Ltd. In this affidavit what has been alleged is, that the 1st respondent-Union has no locus standi to file the complaint in relation to any erstwhile field employees who are operating beyond the territorial jurisdiction of the Industrial Court. It is germane to state that the promotion letters were issued to the concerned field employees on 6th April 2011 and thereafter, the concerned Regional Managers/Business Managers of respective regions were reporting authority. These promotion letters were issued to the field employees and some of them may be posted in the western region including Mumbai. However, the purported complaint relating to the field employees and Therapy Business Managers who are placed outside Mumbai region, cannot be entertained by the Industrial Court. It would be beyond its territorial jurisdiction. Therefore, in so far as these employees are concerned, the Industrial Court lacks territorial jurisdiction. However, it must at once be stated that Mr.Naik, learned senior counsel appearing on behalf of the petitioner concedes that as far as the employees who are posted at Mumbai are concerned, their grievances could be raised before the Industrial Court at Mumbai and the said Court has territorial jurisdiction to entertain and take cognizance thereof. However, since some 12 wp1717-11.doc employees are not posted in Mumbai, but were always posted outside Mumbai and on promotion have been given posting outside the State of Maharashtra, in relation to such employees the Industrial Court lacks territorial jurisdiction and that is how the matter must be seen, as far as these employees are concerned. It is, therefore, clear that the complainant-Union cannot take up the cause of such employees. In these circumstances, the contention raised by the petitioners was that there is no cause of action for filing the complaint before the Court in Mumbai, as admittedly the promotions took place in Banglore and Hyderabad, which is beyond the territorial jurisdiction of the Industrial Court. 13} All other allegations in the complaint have been denied by the petitioners, but it must be stated that I am not concerned with the allegations in the complaint as far as the merits of the matter are concerned and, therefore, it is not necessary to advert to the reply of the petitioners in further details insofar as the merits are concerned. Suffice it to state that as far as the pleas of both sides on the merits of the complaint and on the merits of the interim application are concerned, they are specifically kept open for being raised at an appropriate stage. 13 wp1717-11.doc 14} The petition concerns principally the relief that was sought by the petitioners of dismissal of the complaint on the ground that the Industrial Court, Mumbai, lacked the territorial jurisdiction to entertain and try the complaint. 15} On such objections, the Industrial Court appears to have taken note of the rival contentions and in the light of the request made, it has rendered the conclusion as set out in the impugned order. 16} Based on the rival contentions, the issue of territorial jurisdiction of the Industrial Court was framed. The Industrial Court proceeded on the basis that as far as the title of the complaint goes, both parties are based in Mumbai. As far as the reliefs are concerned, they have been referred to including the pleading in para 3.18 in relation to the territorial jurisdiction of the Industrial Court. 17} It appears that the Court proceeded on the basis of the allegations in the complaint and the stand taken in the affidavits. The Court proceeded on the basis that the allegations in the complaint alone will 14 wp1717-11.doc have a bearing and the Court must presume that they are true for the purpose of the issue of territorial jurisdiction. The Court proceeded on the basis that the issue of territorial jurisdiction is a legal issue. According to the Industrial Court, the Union has raised a plea that the Charter of Demands was submitted. The last settlement was arrived on 27th July 2007. That was at Mumbai. The service conditions of the employees are determined at Mumbai. The company has filed a reference and sought certain reliefs from Industrial Court at Mumbai. The company cannot now object to the territorial jurisdiction of the Industrial Court as that would be blowing hot and cold at the same time. As the dispute is in relation to the service conditions and between the company and the Union, both of whom have their offices at Mumbai so also all policy decisions are taken at Mumbai, therefore, the Industrial Court concluded that it has territorial jurisdiction. Further, if the matter is tried at Mumbai, that would cause no prejudice to the company inasmuch as the previous settlement, a copy of which was placed on record below Exhibit 19, was also arrived at Mumbai. For all these reasons and considering the complaint allegations, the Industrial Court concluded that it has territorial jurisdiction to entertain and try the complaint. That is how the conclusions in paras 14 to 16 of the 15 wp1717-11.doc impugned order would read: “14 If the nature of duties which the Medical Representative has to perform is considered then he has to maintain the rapo with the Doctors or Medical Practitioners or chemist. It requires continuous interaction. There shall not be communication gap due to language problem. So change in services conditions is a common collective issue which has been raised by the Union with the Company and as its office is at Mumbai so they got right to do so. It is in exist once since 40 years. Last settlement was derived on 27.07.2007. The service conditions of the employees are determined at Mumbai. The company by filing the Reference (IT) has sought the reliefs from this Court only. When the company has objected the jurisdiction in request of the same issue then they cannot go hot and cold at the same time. As the dispute occurs between the Union and the company in respect of service conditions and both have their offices at Mumbai and policy decisions are required to be taken at Mumbai. So this Court has got jurisdiction to try and decide the complaint. If the matter is tried at Mumbai then no prejudice would be caused to the company. It was claimed that as the parties to the litigation who resides at Mumbai and the Union who has agitated the matter has office at Mumbai, the policy decision in 16 wp1717-11.doc respect of the service conditions are to be taken at Mumbai, and therefore, previous settlement a copy of which is placed on record below Exhibit U-19 was also derived at Mumbai, and consequently this Court will have jurisdiction to try and decide the complaint. If the nature of complaint which is filed is considered then it is filed in terms of Item 5 of Schedule II and Items 9 and 10 of Schedule IV of the MRTU and PULP Act. 15 While considering the question of jurisdiction as appears in pleading I find that all the prayers are required to be considered together. If the pleading of the parties and the prayers made in the application are considered together then it shows that the triable issues are raised into the pleadings in respect of change in service conditions. One of the prayer pleaded into the main petition is in respect of the transfer. It looks that the general issue has been raised by the Union in respect of unilateral change of service conditions and in respect of force said to have been applied to the category of sales promotions employees to accept the promotions. The complainants has claimed the reliefs by alleging breach of Item No.5 of Schedule II and Item Nos.9 and 10 of Schedule IV of the MRTU and PULP Act. When certain allegations are made into the pleadings claiming the breach of service conditions then those require to be 17 wp1717-11.doc enquired by giving an opportunity to the parties putting such grievances. The complainant Union amongst other documents have relied in the Memorandum of Settlement placed on record below Exhibit U-19. The said settlement looks to have derived between Abbott India Limited and All India Abbott Employees Union at Mumbai on 27th July 2007. It is claimed by the complainant that there is a unilateral change of service conditions. 16 The Office of the company is located at Mumbai. As per nomenclature the office of the Union is also located at Mumbai. The main grievances has been put forth by the Union in general in respect of violation of service conditions including applicability to the workers working at Mumbai is considered then without giving an opportunity to prove their claim it cannot be parted away on the point of jurisdiction. In the present case in respect of claim put forth by the Union in respect of change in service conditions, it needs to be resolved after hearing the parties at length and considering the evidence placed on record supporting the claim. At this juncture concluded decision in that regard cannot be recorded. The grievances has been put forth by the Union in respect of unfair labour practices as stated above and the decision in that regard can be taken only by considering the evidence placed on record.” 18 wp1717-11.doc 18} It is this order which is challenged before this Court in the instant writ petition. 19} Mr.Naik, learned senior counsel appearing on behalf of the petitioners would submit that the impugned order suffers from serious error of law apparent on the face of record. The impugned order overlooks the essential and fundamental allegations in the complaint. The allegations in the complaint relate to a promotion and the policy of promotion of the subject employees. 20} The employees were invited for a conference which they attended voluntarily and at that conference after certain decisions were made known to them, appointment/promotion orders were handed over. These promotion orders were handed over at a conference which took place outside Maharashtra. The promotions and/or posting or promotion of the said employees is outside Maharashtra. The cause of action for making grievance in relation to the action taken in April 2011 having arisen outside the territorial jurisdiction of the Industrial Court, then, the complaint of alleged unfair labour practices and that too under State Act, 19 wp1717-11.doc could not have been filed in Industrial Court at Mumbai. It is immaterial whether the Union is based at Mumbai. It is immaterial whether the petitioners are based at Mumbai. The allegations project the alleged unfair labour practices which occurred beyond the territorial limits of the Industrial Court, then, the cognizance of the same could not have been taken by a Court functioning under the MRTU and PULP Act. His submission is that the Act has no extra-territorial operation. It cannot extend beyond the territorial limits of the State of Maharashtra. It is not as if the Union and the members, who are allegedly aggrieved by the acts of the company and the said conference are remediless. Each one of the unfair labour practices that have been alleged in the complaint can be made subject matter of proceedings under the Industrial Disputes Act, 1947. That act itself enlists several unfair labour practices and the Schedule to the same would enable the aggrieved employees to approach the competent Courts under that act. 21} Therefore, the complaint of alleged unfair labour practices under the MRTU and PULP Act, could not have been instituted by the Union at Mumbai. For all these reasons, it is clear that the Industrial Court, Mumbai lacked the territorial jurisdiction. Mr.Naik submits that the 20 wp1717-11.doc conclusions which have been