IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.389/2006 Reserved on.9.5.2006 Decided on. June 22, 2007 Gabriel Employees Union …Petitioner. Versus M/s Gabriel India Limited and others. …Respondents Coram The Hon’ble Mr. Rajiv Sharma, J. Whether approved for reporting ?1.yes. For the petitioner : Mr. V.D. Khidta, Advocate For the respondent No.1 Mr. Dushyant Dadwal, Advocate. For the respondents No.2&3:Mr. M.S. Chandel, Advocate General with Mr.M.A. Khan Dy. Advocate General. Rajiv Sharma, J. This petition is directed against the order dated 5.4.2006 passed by the appellate authority in appeal No. 86 of 2005. The brief facts necessary for the adjudication of this petition are that the respondent No.1-company had submitted a draft proposal for the modification of standing orders for certification on 18th June, 2005. The copy of draft proposal for modification of standing orders is at page 74 of the paper book of this petition. Paragraph 29 of the draft standing orders is reproduced below for better appreciation of the facts: 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes. 2 “The age of retirement on superannuation of a workman shall be as may be agreed upon between the Management and the Workman through a contract or as specified in a settlement or award of both the workmen and the management. The employee shall automatically retire from the service of the Company on attaining the age as provided herein before to be calculated in accordance with the date of birth given by him at the time of appointment and as appearing in the Company’s record. The Management may at the discretion extend the services of any employee for a period not exceeding one year at a time subject to a maximum of three years.” In sequel to the draft standing orders submitted by respondent No.-1 Company, the Joint Labour Commissioner-cum-Certifying Officer i.e. respondent No.2 had sent letter to the petitioner-union dated 4th July, 2005. The petitioner-union had filed detailed objections to the draft standing orders of modification of standing orders and had made the following averments to para 29 of the draft proposal: “That the clause 29 of the proposed Standing orders is regarding the age of the superannuation/retirement but in this clause the Company has not mentioned the age of retirement whereas it is mandatory and necessary for the Company to mention the age of retirement. The company has not intentionally mentioned the age of retirement which clearly shows that the present proposed standing 3 order submitted by them before this Ld. Authority is nothing but just eye wash and their intention is not to get the dispute settled once for all. It is important to mention here that the worker has submitted the amended standing orders as per the provisions of the Law and the same was certified by this Ld. Authority dated 9.11.1998 whereby the age of retirement has been fixed as 60 years by this Ld. Authority in place of 55 years. The Company went into the appeal the order passed by this Ld. Authority was upheld and thereafter the Company filed CWP No. 263/2003 before the Hon’ble High Court of Himachal Pradesh, however the Company has withdrawn the petition with this prayer they want to submit the draft standing orders with respect to the items contained therein including the item relating to the retirement age of the Employee/Workman with the petitioners. The Hon’ble High Court while allowing the prayer of the Company has made clear that the Company shall include the item relating to the retirement age of the Employees/Workmen working with the Company. However, the Company has not mentioned the age of retirement hence the order passed by this Ld. Authority earlier stand revised and deemed to be fully operative in all respect. The whole dispute between the Company and the worker is regarding superannuation/retirement age which as per the Industrial Employment (Standing Orders) H.P. Rules, 1973 4 and amended Rules 1991 is 60 years and same is binding on the Company also. No only this the workers can get the maximum benefit of the Employees Pension Scheme 1995 in case they work till the age of attaining 58 years or more than that. Hence in these circumstances the age of superannuation/retirement must be 60 years as already certified by this Ld. authority.” The respondent-Company had filed counter to the objections filed on behalf of the petitioner-Union. Respondent No.2 vide order dated 29th August, 2005 after hearing the parties had certified that the age of retirement of workmen/employees on attaining the age of superannuation shall be on the completion of 60 years by the workmen/employees in conformity with the provisions of age of retirement as prescribed in sub- item (3) of item No. 10 of Schedule 1-A of Model Standing Orders under rule 3 of the Industrial Employment (Standing Order) Himachal Pradesh Rules, 1973 as amended up to 1991 framed under Industrial Employment (Standing Order) Act, 1946 (hereinafter referred to as the Rules and Act) The respondent No.1 feeling aggrieved by the order dated 29th August, 2005 filed an appeal before the appellate authority prescribed under the Industrial Employment (Standing Order) Act, 1946. The appellate authority had accepted the appeal on 5.4.2006 and set aside the order passed by respondent No.2. Before considering the rival submissions of the learned counsel appearing on behalf of the parties, it will be apposite if some 5 relevant provisions of the Act and the Rules are analyzed. Sections 3, 4 and 5 of the Act are reproduced as under: “3. Submissions of draft standing orders.- (1) Within six months from the date on which this Act becomes applicable to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in this industrial establishment. (2) Provision shall be made in such draft for every matter set out in the Schedule which may be applicable to the industrial establishment, and where model standing orders have been prescribed, shall be, so far as is practicable, in conformity with such model. (3) The draft standing orders submitted under this section shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment including the name of the trade union, if any, to which they belong. (4) Subject to such conditions as may be prescribed, a group of employers in similar industrial establishments may submit a joint draft of standing orders under this section. 4. Conditions for certification of standing orders.- shall be certifiable under this Act if- 6 (a) provision is made therein for every matter set out in the Schedule which is applicable to the industrial establishment, and (b) the standing orders are otherwise in conformity with the provisions of this Act; and it (shall be the function) of the Certifying Officer or appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders. 5. Certification of standing orders.- (1) On receipt of the draft under section 3, the Certifying Officer shall forward a copy thereof to the trade union, if any, of the workmen, or where there is no such trade union, to the workmen in such manner as may be prescribed, together with a notice in the prescribed form requiring objections, if any, which the workmen may desire to make to the draft standing orders to be submitted to him within fifteen days from the receipt of the notice. (2) After giving the employer and the trade union or such other representatives of the workmen as may be prescribed an opportunity of being heard, the Certifying Officer shall decide whether or not any modification of or addition to the draft submitted by the employer is necessary to tender the draft standing orders certifiable under this Act, and shall make an order in writing accordingly. 7 (3) The Certifying Officer shall thereupon certify the draft standing orders, after making any modifications therein which his order under sub-section (2) may require, and shall within seven days thereafter send copies of the certified standing orders authenticated in the prescribed manner and of his order under sub-section (2) to the employer and to the trade union or other prescribed representatives of the workmen. It is prescribed under Rule 4 of the Rules that an application for certification of standing order shall be made in Form-I. Rule 6 prescribes that as soon as may be after the authority receives the application under Rule 4 in respect of industrial establishment, the Certifying Officer shall where there is a trade union of the workmen, forward a copy of the draft standing orders to the trade union together with a notice in form II and where there is no such trade union, call a meeting of the workmen to elect three representatives, to whom he shall, upon their election, forward a copy of the draft standing orders together with a notice in form-II. Vide Industrial Employment (Standing Order) Himachal Pradesh Amendment Rules, 1991 after item No.10 of the Schedule of the Industrial Employment (Standing Order) Act, 1946 the following item has been inserted, namely: “10-A. (i) Service record-matters relating to service card; token tickets, certification of service; change of residential address of the workers and record of age; 8 (ii) Confirmation; (iii) Age of retirement; (iv) Transfer; (v) Medical aid in case of accidents; (vi) Medical examination; (vii) Secrecy; (viii) Exclusive Service.” The State has also framed Model Standing Orders governing service record (Schedule 1-A). Para 3 of the same which deals with the age of retirement is reproduced below: “(3) Age of retirement.- The age of retirement or superannuation of a workman shall be as may be agreed upon between the employer and the workman under an agreement or a specified in a settlement or award which is binding on both the workman and the employer where there is no such agreed age, retirement of superannuation shall be on completion of 60 years of age by the workman.” Mr. V.D. Khidta, Advocate appearing on behalf of the petitioner-union had strenuously argued that the order passed by respondent No.2 was in accordance with law and the appellate order dated 5.4.2006 is not sustainable in the eyes of law. Mr. Dushyant Dadwal, Advocate appearing on behalf of respondent No.1-company had supported the appellate order dated 5.4.2006. 9 What had been proposed in para 29 of the draft standing orders was that the age of retirement on superannuation of a workman shall be as may be agreed upon between the management and the workmen through a contract or as specified in settlement or award of both the workmen and the management and the employee shall automatically retire from the service of company on attaining the age as provided herein before to be calculated in accordance with the date of birth given by him at the time of appointment as per the company record. One thing is very clear from the bare reading of the draft standing orders that no age of retirement at all had been prescribed. Paragraph 29 of the draft proposal is just verbatim reproduction of para 3 of the Model Standing Orders concerning service record as quoted herein above. What has been stated in para 3 of the Model Standing order is that the age of retirement on superannuation of a workman shall be as may be agreed upon between the employer and workman under an agreement or as specified in a settlement or award which is agreed upon by both the employer and workman. Where no such age is prescribed, it shall be 60 years of completion by the workman. No material has been placed on record by the respondent-Company i.e. Management that at any given time any agreement had been arrived at between the employer and the workmen. Neither any settlement nor award has been placed on record on the basis of which any age had been prescribed for retirement/superannuation. What is the intention of the Model Standing Order is that there has to be some age prescribed in any of the modes mentioned therein and if there is no 10 date as in the present case, the retirement/superannuation shall be on completion of 60 years of age by the workman. In view of this position this Court is to see whether the Certifying Officer had passed the order dated 29.8.2005 in accordance with law or not. The respondent No.2 had come to the right conclusion that by not prescribing the age of retirement as required in sub-item (3) of item 10 Schedule 1-A of the Rules and Amendment Rules, 1991, the same was in violation of Clause (A) of section 4 of the Act. Accordingly he had certified the Standing Orders by prescribing the age of retirement on the completion of 60 years by the workmen/employees. Now, this court has to consider whether the appellate order dated 5.4.2006 is in accordance with law or not. The appellate authority had only considered the phraseology employed in clause 29 of draft standing orders. The agreement, if any, is to be entered into between the parties separately giving therein a specific age which cannot be less than 60 yeas as mentioned in para 3 of Schedule 1-A. The legislature in its wisdom had prescribed 60 years of age for the workman and the same is to be a bench-mark for determining the age of all the workmen employed in establishments to which the provisions of the Act are applicable. The management in no case can be permitted to take advantage of its superior bargaining power by prescribing age of superannuation less than 60 yeas in any agreement and if it does, it will be against the public policy besides being unconstitutional under Article 14 of the Constitution of India. It is the duty cast upon the Certifying Officer to 11 see that what has been prescribed in its wisdom by the legislature is not diluted by any employer having superior bargaining power. In the present case, the Certifying officer in the totality of the circumstances had certified 60 years of age of superannuation/retirement, but the appellate authority without any cogent and convincing reasoning had set aside the same. The appellate authority was required to look into the entire gamut and contours of the Act and Rules more particularly after the amendment has been carried whereby item No.10-A has been inserted after item No.10 of the Act. The appellate authority had only taken into consideration the draft standing orders without taking into consideration the pleas raised by the petitioner-union. The appellate authority had not even taken into consideration the law cited before him by the petitioner-union which he was bound to consider. The appellate authority had also erred in coming to the conclusion that the petitioner-union was debarred from agitating the demand for fixing date of retirement on the basis of settlement dated 31.10.2003. Mr. V.D. Khidta, Advocate has drawn the attention of this Court towards settlement dated 31.10.2003 which is at page 1146 of the paper book and more particularly to para 9 of the agreement, which is reproduced as under: “The union and the workmen hereby give an undertaking that during the tenure of this settlement they shall not raise any demand/dispute relating to wage or having any financial implications for the company either directly or indirectly and/or any of the specific clauses of the 12 settlement and/or other terms and conditions of the service of whatsoever nature whether or not involving any additional financial burden on the company during the currency of this settlement. It is evident from the language employed in this clause as reproduced above that at no given time the petitioner-union had given up this right to agitate the age of retirement. The undertaking had been given only to the effect that during the tenure of the settlement, they shall not raise any demand/dispute relating to wage or having any financial implications for the company either directly or indirectly. Thus the finding recorded by the learned appellate authority below to the effect that the petitioner-union was debarred from raising the dispute qua age of retirement is palpably wrong. The learned appellate authority below had misdirected himself on the question of law as well as facts. The order suffers from non- application of mind. The appellate authority had failed to exercise the jurisdiction vested in him by drawing inference not warranted under the law. The appellate authority was required to take into consideration the points raised by both the parties. The appellate authority had only considered the plea raised by the management and the points raised by the petitioner-union have been brushed aside. The judgments cited before him including of the Hon’ble Supreme Court have not been given due respect which they command from all the authorities including the appellate authority. The appellate authority had come to an abrupt conclusion that the age of retirement had already been decided by the workman and the 13 management as mentioned in the appointment letter. In which appointment letter the age has been prescribed has not been mentioned. The Hon’ble Supreme Court had discussed the scope of section 4 of the Industrial Employment (Standing Order) Act, 1946 in Bagalkot Cement Co. Ltd. V. R.K. Pathan and others, AIR 1963 SC page 439 as under: “The Act applies to every industrial establishment wherein one hundred or more workmen are employed or were employed on any day of the preceding twelve months. It can be extended even to establishments whose complement of labour is less than one hundred and it does not apply to any industry to which Chapter VII of the Bombay Industrial Relations Act, 1946, applies or to any industrial establishment to which the provisions of the Madhya Pradesh Industrial Workman (Standing Orders) Act, 1959, apply. In other words, normally, Standing Orders have to be drafted by the employer and their certification obtained under the Act wherever the employer employs more than one hundred industrial workmen: S. 1 (3). The certifying authority under the Act means a Labour Commissioner or a Regional Labour Commissioner and includes any officer appointed by the appropriate Government by notification in the Official Gazette to perform all or any of the functions of a Certifying Officer under the Act: S. 2 (c). The Act 14 provides for an appeal against the order passed by the Certifying Officer and the “appellate authority” means an Industrial Court, wherever it exists or in its absence an authority appointed by the appropriate Government by notification in the Official Gazette to exercise in such area as may be specified in the notification the functions of an appellate authority under the Act: S. 2(a). “Standing Orders” are defined to mean rules relating to matters set out in the Schedule: S. 2 (g). Thus, the matters which have to be covered by the Standing orders and in respect of which the employer has to make a draft for submission to the Certifying Officer are matters specified in the Schedule. Section 3 requires the submission of the draft of Standing Orders within six months from the date on which the Act becomes applicable to an industrial establishment. Under S. 4, the Standing orders become certifiable if provisions are made therein for every matter set out in the Schedule and they are found to be otherwise in conformity with the provisions of the Act. After the amendment of this section made in 1956, the Legislature has imposed upon the Certifying Officer and the appellate authority the duty to adjudicate upon the fairness or reasonableness of the provisions of any standing orders. Prior to the amendment, it was not open to the said authorities to examine the fairness of the Standing orders submitted by the employer. The result of 15 S. 4, therefore, is that the Standing Orders have to provide for all the topics specified in the Schedule and they have to be in conformity with the Act. Their reasonableness can be examined by the appropriate authorities and suitable modifications can be made by them in accordance with their decision. Section 5 provides for the procedure which has to be followed by the Certifying Officer before certifying the Standing Orders. The procedure is intended to have an opportunity to both the parties to be heard before the final order is passed. Section 6 provides for an appeal and S. 7 lays down that the Standing Orders shall come into operation on the expiry of 30 days from the date on which authenticated copies thereof are sent as required by S. 5, sub-sec. (3), or where an appeal is preferred, on the expiry of seven days from the date on which the copies of the appellate order are sent under S. 6 (2). Section 8 requires the Certifying Officer to keep a register of standing orders under S. 9, the said Standing orders have to be prominently posted by the employer in English and in the language understood by the majority of the workmen on special boards. Section 10 deals with the duration and modification of standing orders. It provides that except by agreement, the standing orders, after they are certified, shall not be liable to modification until the expiry of six months from the date on which they came 16 into operation. Section 10 (2) empowers both the employer or the workman to apply for a modification in the said Standing Orders. It would thus be clear that after they are certified, the standing orders have to remain in force for six months unless, of course, they are modified in the meanwhile by consent. After six months are over, an application for modification in the standing orders can be made either by the employer or the employees and the problem would be considered after following the procedure prescribed by the Act for certifying the original standing orders. Section 11 confers the necessary powers of a Civil Court on the Certifying Officer & the appellate authority and S. 12 prohibits the admission of oral evidence which has the effect of adding or otherwise varying or contradicting standing orders, as finally certified under the Act, in any Court. Section 13 provides for penalties and the procedure to enforce them. Section 13A deals with the problem of interpretation of the standing orders and S. 13B provides for exemption of Industrial establishment therein specified. Section 14 confers on the appropriate Government power to exempt conditionally or unconditionally, any industrial establishment, and S. 15 confers on the appropriate Government the power to make rules to carry out the purpose of the Act, and in particular, to provide for the matters covered by cls. (a) to (e) of sub-cl. (2). Section 15 17 (3) contains the salutary provision that every rule made by the Central Government under S. 15 has to be placed before the house in the manner prescribed by it. The Schedule to the Act contains 11 clauses. Clauses 1 to 10 deal with the several topics in respect of which standing orders have to make a provision and Cl. 11 refers to any other matter which may be prescribed. This last clause shows that an addition may be made by the appropriate Government if it is thought necessary to do so. That, in brief, is the scheme of the Act. The Apex Court in Associated Cement Co. Ltd., v. P.D. Vyas and others, AIR 1960 SC 665 has held that it is the duty of the Certifying Officer to inquire whether the draft standing orders should or should not conform to model standing orders. Their Lordships have held as under: “Then, the next relevant provision of the Act is contained in S. 4 which provides that standing orders shall be certifiable under this Act if (a) provision is made therein for every matter set out in the Schedule which is applicable to the industrial establishment, and (b) the standing orders are otherwise in conformity with the provisions of this Act. The rest of the provision of S. 4 has already been