IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated:29.11.2006 THE HONOURABLE MR.JUSTICE P.JYOTHIMANI W.P.Nos.34269 & 34270 of 2006 and W.P.M.P.Nos.1 & 2 of 2006 United Labour Federation Rep.by its General Secretary, No.149, IV Floor, C.J.Complex, Thambu Chetty Street, Chennai. 600 001. ... Petitioner in both W.Ps. Vs. The Management of Rickitt Benckiset (India) Ltd., Rep.by its Manufacturing Co-ordinator No.176, Sipcot Industrial complex, Hosur - 635 126. ... Respondent in both W.Ps. PRAYER IN W.P.No.34269 of 2006: This Writ petition is filed under Article 226 of the Constitution of India to issue a writ of Declaration declaring the voluntary retirement scheme of the respondent company called VRS-2006 applicable to the workers in the pest control division of the Hosur factory of the respondent company, as being illegal and violative of Section 9-A of the Industrial Disputes Act and issue. PRAYER IN W.P.No.34270 of 2006: This Writ petition is filed under Article 226 of the Constitution of India to issue a writ of Mandamus forbearing the respondent Management from effecting any further illegal deductions from the wages of the members of the petitioner union working in the pest control division of the Hosur factory of the respondent company including deductions under the guise of paying them 'pro-rata wages' and direct the respondent to appropriately reimburse to the members of the petitioner union the amounts deducted from their wages for the months of April to August 2006. For Petitioner : Mr.V.Prakash, S.C. for Mr.Ramapriya Gopalakrishnan For Respondent : Mr.A.L.Somayajee, S.C. for Mr.T.S.Gopalan https://hcservices.ecourts.gov.in/hcservices/ O R D E R The United Labour Federation represented by its General Secretary has filed these writ petitions for declaration that Voluntary Retirement Scheme called V.R.S.2006 made applicable to the Pest Control Division, Hosur factory of the respondent company as illegal and violative of Section 9(A) of the Industrial Disputes Act, and another Writ Petition forbearing the respondent/Management from effecting any deduction from the wages of the members of the petitioner Union working in the Pest Control Division, Hosur factory including deduction under the guise of paying pro- rata wages and directing the respondent to appropriately reimburse to the members of the petitioner Union, the amounts already deducted for the months of April 2006 to August 2006. 2. According to the petitioner Union, the respondent company is a Multi National Company, operating factories at at Mysore, Hosur, Katla West Bengal, Dadka West Bengal and it is a private company. The Hosur factory is involved in the manufacture of mosquito repellent coils, mats and arousal sprays in the name of MORTEIN under the brand name Haze and the ingredient for another company’s products by name DETTOL. In July 2004, 27 workers joined in the petitioner Union. Thereafter, another 48 persons joined on 30th August 2004, and on 29th September 2004 another 16 more permanent workers joined and totally 91 workers have become the members of the petitioner Union and the petitioner Union has become the majority union. 3. According to the petitioner Union, the respondent has terminated 4 of the 27 workers, who were appointed as Operator Trainees and subsequently, designated as permanent workmen for a period of 15 months and the petitioner Union has raised an Industrial Dispute, which is pending in I.D.No.235 of 2005. Subsequently, in respect of shifting of the manufacturing line outside the factory and claiming permanency of contract workers engaged in manufacturing process in the factory and for payment of incentives, the petitioner Union has also raised an Industrial Disputes pending in I.D.No.24 of 2005. It is due the threat by the management, 6 members of the petitioner Union have left the petitioner Union. The management has dismissed 5 workmen from service namely P.K.Rakesh Babu, R.Tamilarasan, V.Vijayakumar, R.Kumar and R.Yasin Sherif and filed approval petitions in A.P.No.27 to 31 of 2005 under Section 33 (2)(b) of the Industrial Disputes Act, and the same is pending before the Tribunal. 4. It is also the case of the petitioner Union that since unfair labour practice have been committed, threatening and discouraging the workers from joining the petitioner Union and abuse of disciplinary powers, W.P.No.4378 of 2005 was filed to prosecute the concerned officer of the respondent management and the same is pending. https://hcservices.ecourts.gov.in/hcservices/ 5. In respect of the using of stamping machines for punching at the speed of 18 strokes per minute, when the same was increased to 25 strokes per minute, which is abnormal, the petitioner Union has raised an Industrial Disputes which is also pending before the Industrial Tribunal, Chennai in I.D.No.4 of 2006. Regarding the safety and protection of the employees in the Pest Control Division, the petitioner Union filed W.P.No.34748 of 2004 and the same is pending. That apart, it is the case of the petitioner Union that when one Balaji was terminated, an Industrial Disputes under Section 2(A) was raised and the same is pending before the Labour Court, Salem. In June 2005, when the management has adopted the policy of "no work no pay", in spite of the fact that the workers have attended but they were not provided necessary equipments, W.P.No.1563 of 2006 was filed seeking for adjudication and there has been a direction by this Court and the matter was ultimately referred to the Labour Court, Salem in I.D.No.124 of 2006. When 7 workers in the coil manufacturing operation were sought to be deputed to another employer M/s.Icome house at Gowahathi which was not permissible under the standing orders, an Industrial Disputes was raised on the basis of unfair labour practice and the same is pending in W.P.No.23291 of 2006. It is under the threat of such deputation, 8 members of the petitioner Union were forced to resign from the Union. In another instance, one of the members of the petitioner Union, one Munivel was kept under suspension, against the standing order and an Industrial Disputes was raised, which is pending in I.D.No.122 of 2006. Similarly, in respect of one K.Sreedhar who is the member of the petitioner Union, when he was imposed with a punishment of suspension for 3 days in violation of the standing order, I.D.No.123 of 2006 was raised and the same is pending. In respect of the charter of demands, the petitioner Union has raised I.D.No.15 of 2006 which is pending. Therefore, according to the petitioner Union, by the conduct of the respondent Management, the members of the petitioner Union were forced to go out of the Union and by threat directed the others to approach the Labour Court and with a view of indirectly forcing the closure of the Union as such. 6. It is also the case of the petitioner Union that originally, when 450 contract workers were employed in the Pest Control Division, Hosur factory, in 2005 the contract workers have been removed, with the result the work done by all the said contract workers, have been entrusted to the regular employees who are compelled to do the work done by the contract workers, apart from the regular work allotted to them. That apart, the management is also wilfully stopping the production of mats in the Hosur factor. The management has also been keeping the machines idle, since December 2005, without prior notice, but at the same time sub contract, the production work to other private establishments and arbitrarily deducted the produced linked allowance payable to the workers for the month of December 2005 and January 2005 on the ground that the production has come down below the agreed norms and it is in contravention of the wage settlement dated 27.12.2002. In respect of keeping the coil punching machine idle except one or two, industrial dispute has been raised https://hcservices.ecourts.gov.in/hcservices/ consequence on the failure report. Finally, it was on 26.04.2006, the respondent management has put up in the notice board falsely alleging that there has been "go slow" by the workers and also giving individual notice to workers stating that the normal production has come down and therefore, directing that the wages should be paid only on pro-rata basis linked to the production. It was based on that there has been massive deduction from the wages of all the workers in the factory from April 2006 on wards. 7. According to the petitioner Union, for the month of April, May, June, July and August 2006, the management has deducted 52%, 34%, 39%, 41% and 63% of workers’ wages, with the result the wages earned by the workers for the month of August 2006 have come down remarkably to the average of Rs.1500 per month. According to the petitioner Union, the massive deduction from the wages of the workers working in the Hosur factory is arbitrary and malafide, for, according to the petitioner Union, the production has come down not due to the "slow down" but because of keeping idle the machines of the factory, contracting out of factory works to third parties and reducing the work force in the factory. The deduction have been effected in violation of Industrial Disputes Act, and payment of Wages Act, and the action is contrary to the terms of settlement and also it would amount to unfair labour practice under the provisions of the Industrial Disputes Act. 8. It is also the case of the petitioner Union that the management, on 11.09.2006 has put up a notice in the notice board notifying the voluntary retirement scheme of V.R.S.2006, calling upon the workers in Hosur Pest Control Division to exercise their option before 11.09.2006 and 23.09.2006, offering gold coin for the first 25 workers who opt for the scheme etc. The action of the respondent is unilateral and made without consulting the petitioner Union, which is a majority Union. There is also a threat from the management that if they don’t opt for the scheme, the workers will be transferred to Jammu and in fact 73 workers so far have opted for the scheme and affixed their signatures, leaving only 26 workers remain in the Pest Control Plant, Hosur factory who are the members of the petitioner Union. It is also apprehended that pressure will be exercised on the remaining members of the Union also. 9. According to the petitioner Union, the said voluntary retirement scheme which amounts to change in the condition of service has been effected in violation of Section 9(A) of the Industrial Disputes Act. According to the petitioner Union, this will amount to closure of the factory, since the strength of the permanent workers will be reduced to 75% and without following the provisions of Section 25(o) of the Industrial Disputes Act, the closure is done in an indirect manner. 10. It is also the specific case of the petitioner Union in the affidavit that the mode of redressal under the Industrial Disputes Act, does not allow for any immediate check to the conduct of the respondent management. It is also stated that despite the various Industrial Disputes raised by the Union, the conduct of the management has become https://hcservices.ecourts.gov.in/hcservices/ unchecked. The respondents are taking advantage of the delay inherent in the redressal process under the Industrial Disputes Act, and therefore, according to the petitioner Union, the writ petitions are filed challenging the V.R.S.2006 scheme by way of declaration and also forbearing the respondent management from paying pro-rata wages which according to the petitioner Union is an unfair labour practice. 11. The respondent management has filed a counter affidavit. At the out set, the respondent has raised preliminary objection that since the respondent is a private company and not amenable to writ jurisdiction and therefore, the writ petition is not maintainable. It is also the case of the respondent that the petitioner Union does not represent all the workers of the respondent factory at Hosur. According to the respondent, the workers of the Pest Control Plant, Hosur have formed a trade Union called Hosur Rekit Solmen India Employees Union, which is recognized by the respondent. It was based on the charter of demands made by the said majority union on 09.07.1998 and 21.01.1999, a long term settlement was arrived at under Section 12(B) of the Industrial Disputes Act, determining the wages, allowances, productivity and other allied matters for the period ended 31.07.2002. At the expiry of the said settlement, the recognized union submitted another charter of demand on 20.05.2002. The Hosur Rekit Benefisar (India Employees Union), which is the successor of the Hosure Rekit Solmen (India Employees Union), while appreciating the stand of the management that for the continuation of the existing pay scale, there should be commitment from the workmen to given minimum output, a proposal was made by the respondent management for commitment from the workmen including the one that they should maintain minimum output of 116 cases of red coil per machine per shift in a month corresponding output for other types of coils. It was after the workmen agreed to this output, the management agreed to continue the payment of existing emoluments and accordingly the settlement was incorporated on 27.12.2002, which was to remain upto 31.07.2005. It was in August 2004, when there was a rival fraction among the workers the petitioner union came and took up the sundry issues. It was only after the settlement was reached, the members of the petitioner Union have started, adopting go- slow method from December 2005. Since as per the settlement dated 27.12.2002, the workmen have agreed to give minimum output of 116 cases of red coils per machine per shift, the monthly average productivity per machine per shift was reckoned by dividing total output which would show that the normal manpower of the factory will not be affected. When the output per month was 116 cases of red coils per machine per shift, every workmen would be entitled for the productivity linked performance allowance of Rs.1350/- and in respect of the productivity above 116 cases for every additional case, there will be an increase of Rs.22.50 per month and the production upto 116 cases will cover normal wages and allowances. Therefore, according to the respondent, as per the agreement, if the workmen do not achieve 116 cases, they will not be entitled for incentives and if they achieve only 116 cases they will be getting the productivity linked performance of Rs.1350/- and in cases where the workmen do not https://hcservices.ecourts.gov.in/hcservices/ reach 116 cases per machine per shift, their earnings will be calculated in proportion to the output of number of cases per machine per shift. It was from December 2005 based on charter demands, the workmen belong to both union have resorted to "slow down" resulting in the production going below 116 cases per machine per shift and consequently, the average monthly wages were calculated and it was found that the output during the first 20 days of December 2005 was 86 cases as against the minimum requirement of 116 cases and this was notified in the notice board by the respondent on 21.12.2005. There was a further notice on 29.12.2005 placing on record the output recorded on December 2005 below the minimum requirement of 116 cases stating that the respondent will be justified in recovering excess wages paid from December 2005 for the short fall in production. 12. According to the respondent, in spite of the notice there was no improvement in January 2006 and again there was a notice on 19.01.2006, apart from another notice followed on 20.04.2006. In February and March 2006, the workers have given up go-slow and minimum output of 116 was shown. Again they resorted to go-slow from April 2006. During April 2006 the production was only 55 cases. The management has put up another notice on 24.04.2006 and in spite of that the go slow continued and there was a failure to give minimum out put of 116 cases, with the result from April 2006 on wards the workmen were paid wages in proportion to the out put given by them. The members of the majority union having accepted their faults that they have not given production as agreed as per the agreement, they kept quite and accepted the wages for April, May, June, July and August 2006 on pro-rata basis. 13. It is also the case of the respondent that from April 2006 to 15.09.2006, the petitioner Union has also not raised Industrial Disputes. It is also the case of the respondent that the business in the Hosur factory of the respondent management has come down remarkably. The recognized union and its members have been pleading with the management for the voluntary retirement scheme. When a liberal financial assistance under the voluntary retirement scheme was provided, out of 108 workers who were on the roles of Pest Control Plant, Hosur as on 11.09.2006, 73 workers have given letters opting for V.R.S. and left the services and they have also received the V.R.S. compensation and other settlements. It is also the case of the respondent that the matters raised in these writ petitions, apart from being not maintainable can be raised in the Industrial Disputes. Especially, in the circumstance that the petitioner Union has raised innumerable disputes on various issues, there is no reason why an Industrial Disputes could not be raised in this issue also. No writ can be issued in respect of the contracts entered under Section12 (3) of the Industrial Disputes Act. According to the respondent, there is no monstrous situation, since the members of the petitioner Union who are bound by the settlement have not given the agreed production, with the result, it is as per the agreement, the pro-rata wages were sought to be paid and that was after giving many notices informing the workers and in https://hcservices.ecourts.gov.in/hcservices/ spite of that the members of the petitioner Union has resorted to slow- down. The strength of the workmen as on 11.09.2006, which was 108, is now only 35. At the time of filing of the affidavit by the writ petitioner Union, and from 01.04.2006, the petitioner Union has never disputed that there is a fall in the production. For the purpose of implementing the V.R.S., there was no provision that the union should be consulted. Even though, the V.R.S.scheme has been put up and for a period more than a months time, there is no complaints from any one of the workers that they have been threatened by the officials of the respondent management to opt for V.R.S. The respondent is entitled to work out its right within the frame of the Industrial Disputes Act. It is in those circumstances, the respondent management has also prayed for the vacating of order of injunction granted by this Court on 22.09.2006. 14. Mr.V.Prakash learned Senior Counsel appearing for the petitioner Union while dealing with the maintainability of the writ petitions, which is raised as one of the main point in this case, since admittedly the respondent is a private company, governed by the provisions of the Indian Companies Act, would submit that there is absolutely no justification on the part of the respondent management in arbitrarily deducting from the wages on the basis that the minimum output stated to have been agreed by the workers by way of production upto 116 cases has not been given. This will amount to massive reduction affecting the very right of livelihood of the members of the petitioner Union. Therefore, according to the learned Senior Counsel, on the facts of the case, there is monstrous situation in existence warranting interference by this Court under Article 226 of the Constitution of India, even though, admittedly, the respondent management is a private company and the remedy is available under the Industrial Disputes Act. It is the further argument of the learned Senior Counsel that while respondent have admitted the reduction of workers which has come down from 108 to 35 in the Hosur factory and also it is not denied that 450 contract labourers employed, have been dispensed with, with the result the entire work done by the said 450 workers have also been entrusted upon the regular employees, with the result, even assuming otherwise, what was in existence at the time when 12(3) Settlement was entered, was not in existence as on said date and therefore, the respondent cannot illegally draw a conclusion that there has been a reduction in the output. When the minimum members who remain in the factory have to do all the works of the erstwhile contract labourers as also that of the maximum number of permanent workers who have left, it is absolutely impossible for the management to expect that the minimum number of workers should give the same output. It is the case of the learned Senior Counsel for the petitioner, that when there is a frustration of the object of the earlier settlement, the question of the reduction in output and consequential reduction of salary of the workers of the petitioner Union on pro-rata basis can only be termed as illegal. The learned counsel would further submit that in cases where an employee used to get salary upto Rs.8,000 or Rs.9,000 per month was paid Rs.1,500 per month as a paltry amount on the premise of pro-rata payment. It is certainly a https://hcservices.ecourts.gov.in/hcservices/ monstrous situation and the court should interfere since there is a breach of public duty resulting in the very right of livelihood on the workers and their family members who will be virtually rendered without the basic requirements of food, shelter and amenities with the said paltry amounts. 15. The learned Senior Counsel would also submit that by virtue of the present pro-rata payment, the permanent workers of the petitioner Union who have been earning monthly wages have been driven to the level of the daily wageworkers. Especially in the circumstance that when the reduction of manpower is not disputed, this alteration of service condition is not merely in violation of Section 9(A) of the Industrial Disputes Act, but it is against the human norms. At the same time, the learned Senior Counsel would fairly submit that in cases of any difficulty in interpretation of any settlement entered under Section 12(3) of the Industrial Disputes Act, certainly Section 36(A) of the Industrial Disputes Act, provides a remedy for the purpose of interpretation by approaching the appropriate forum. It is also specifically admitted by the learned Senior Counsel that even if there is a breach of settlement, there can be a prosecution and penalty imposed under Section 29 of the Industrial Disputes Act. He would also specifically admit that under Section 33(c)(2) of the Industrial Disputes Act, any benefit a workmen is entitled under a settlement, he can always approach the Labour Court. Further, there can be a reference of the Industrial Dispute under Section 10 of the Act, or even an individual worker can raise Industrial Disputes under Section 2(A) of the Act. It is also not in dispute that a dispute can be referred under Section 10 of the Industrial Disputes Act, even in respect of the "unfair labour practice" as defined under Section 2(r)(a) of the Industrial Disputes Act, since under Schedule-V serial number 13, even a failure to implement the award, will amount to an unfair labour practice and the unfair labour practice is prohibited under Section 25(T) of the Industrial Disputes Act, for which the penalty is imposed under Section 25(U) of the Industrial Disputes Act, and in fact after the amendment of 1984, for unfair labour practice a prosecution can be launched under Section 29, apart from prohibition under Section 25(T) of the Act, since the breach of award is also an unfair labour practice. 16. The learned Senior Counsel would rely upon the judgement of a Division Bench of this Court rendered in Chemplast Sanmar Ltd., Vs. Mettur Chemicals Pothu Tholilar Sangam and another reported in 2000 (1) LLJ 1335 to substantiate his contention that a writ petition can be entertained under Article 226 of the Constitution of India by this Court, even in cases where there is a violation of the provisions of the Industrial Disputes Act which would amount to unfair labour practice and alteration of condition of service