*THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO +WRIT PETITION NO.17269 OF 2008 %Dated 21.07.2009 # P. Nani, (late) Ramachandra Rao, Kavadiguda, Hyderabad and another ..... PETITIONERS VERSUS $ Certifying Officer-cum-Deputy Commissioner of Labour (Twin Cities), T. Anjaiah Bhavan, Musheerabad, Hyderabad and another. ...RESPONDENTS ! Counsel for Petitioner: Sri K. Balagopal ^ Counsel for Respondent No.1 : GP for Labour Counsel for respondent No.2 : Sri M. Radhakrishna Murthy < GIST: > HEAD NOTE: ? Cases referred: 1. (1993) 4 SCC 363 2. AIR 1960 SUPREME COURT 650 3. AIR 1966 SUPREME COURT 1471 4. (1977) II LLJ503 All 5. (1994) I LLJ 1004 All 6. (1959) I LLJ 531 7. 1996 II LLJ 573 THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WP No. 17269 of 2008 ORDER: This writ petition has been instituted seeking a writ of mandamus for declaring the Standing Orders certified by the 1st respondent for the 2nd respondent establishment as ultra vires and illegal and for setting aside the order passed by the 2nd respondent on 25.6.2008 transferring the 1st petitioner in terms of such Standing Orders. The 2nd respondent is a Star Hotel located at Hyderabad wherein the 1st petitioner was initially employed in the Housekeeping department. He was subsequently shifted to Horticulture wing. By an order passed on 25.6.2008, the 1st petitioner has been transferred to one of it’s units coming up at Chennai. This gave rise to the present writ petition. It is the case of the petitioners that prior to the year 2003, there was no trade union in the 2nd respondent establishment and the 2nd petitioner is a trade union which was registered on 3.1.2003 for which the 1st petitioner was one of the two Organising Secretaries. Because, the 2nd petitioner – trade union has been espousing the causes of the workmen employed in the 2nd respondent – establishment and that the 1st petitioner has been very actively involved in the affairs of the said union, he has been subjected to victimization by transferring him to the Chennai unit. Since the order of transfer has referred to the Standing Orders, as the source of power for affecting such a transfer, the present writ petition has been instituted questioning the validity of the certification accorded to the Standing Orders by the 1st respondent. It is contended that the 2nd respondent being a Hotel, falls within the definition of “industry” as defined under Section 2(s) of the Industrial Disputes Act. But, it is not an industrial establishment to fall within the ambit and scope of Section 2(e) of the Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as the `Act’). It should be noted that that the 1st petitioner has carried out the orders of transfer by joining duty at Chennai, though he protested about the lack of bona fides of issuing such an order. The respondents have entered appearance and contested the writ petition. The 1st respondent – Deputy Commissioner of Labour and the Competent Authority to certify the Standing Orders under the Act, has pointed out that even a Hotel answers the definition of the expression `industrial establishment’ as elaborately defined under Section 2(e)(i)(ii) of the Act. It was also further pointed out that the Standing Orders for the 2nd respondent establishment have been certified duly following the procedure spelt out under Section 5 of the Act as of 19th November 1994. The 1st respondent has also pointed out that in somewhat similar circumstances, the Supreme Court in GL HOTELS LIMITED AND OTHERS V. TC SARIN AND ANOTHER[1] held that a `hotel’ is also a ‘factory’ as spelt out under Section 2(m) of the Factories Act, 1948. If a hotel can be a factory, then it automatically falls within the definition of an `industrial establishment’ as defined under Section 2(e) of the Act. It must be stated, at this stage, that Sri K.Bala Gopal, learned counsel for the petitioner has fairly conceded that the provisions of the Act would get attracted to the establishment of the 2nd respondent and in view of the fact that it would be more beneficial for the workmen employed in the 2nd respondent establishment, he did not press the contention about the competence of the 1st respondent in certifying the Standing Orders for the 2nd respondent establishment on 19.11.1994, any further. But, however, what Sri Bala Gopal submits is that ‘transferability of an employee’ not being a condition of service, for which no provision need be made in the Standing Orders and hence to the extent that the Certified Standing Orders 7(h) has provided for matters relating to the power to effect transfers of employees of 2nd respondent unit, shall be declared as ultra vires. The 2nd respondent while reiterating that a `hotel’ also is an industrial establishment and hence the Standing Orders can be certified by the 1st respondent to such an industrial establishment, has pleaded that the 1st petitioner has been employed initially in the Housekeeping department of the 2nd respondent and subsequently, he has been shifted to the Horticulture Department and that a new unit is coming up at Chennai and for the purpose of supervising the horticulture work at the new unit, the 1st petitioner has been shifted and that apart, the contract of service provided for transferring the 1st petitioner to any other unit and hence, it has also been taken care of by the Certified Standing Orders and hence no exception need be taken to the order of transfer passed on 25.6.2008 insofar as the 1st petitioner is concerned. It was further contended that transferability of the employees being purely an incidence of service and the conditions of service of the 1st petitioner upon transfer having not been varied to the disadvantage of such an employee, no exception need be taken thereto. It was also contended that the 2nd respondent being a purely private employer and the contract of service entered into by and between the 1st petitioner and the 2nd respondent having provided for the transferability of the 1st petitioner to any other unit at any other place, the present writ petition cannot be maintained for judicially reviewing such an act of private employer or the term of a contract between 2 private parties. Hence, the 2nd respondent contended that the writ petition deserves to be dismissed as not maintainable. In view of the rival submissions, the question that needs to be determined is whether the Standing Orders as certified by the 1st respondent on 19.11.1994 for the 2nd respondent establishment could have validly provided for the transferability of it’s employees at all or not. It is important, right at this stage, to peruse various Provisions of the Act, which extends, in its operation, to the whole of India. This Act was made applicable to every industrial establishment, wherein hundred or more workmen are employed. The expression “industrial establishment” has been defined in Section 2(e) of the Act in the following manner: (e) “industrial establishment” means— (i) an industrial establishment as defined in Clause (ii) of Section 2 of the Payment of Wages Act, 1936, or (ii) a factory as defined in clause (m) of section 2 of the Factories Act, 1948, or (iii) a railway as defined in clause (4) of Section2 of the Indian Railways Act, 1890, or (iv) the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen, or;” Insofar as the State of Andhra Pradesh is concerned, a new clause (v) has been added to this definition, which reads as under: (v) such other establishment, as the State Government may, by notification in the Andhra Pradesh Gazette, specify in this behalf, which does not fall within any of sub-clause (i) to (iv), and in respect of which the State Government is the appropriate Government.” The expression “standing orders” has been defined in Section 2(g); as, the rules relating to the matters set out in the Schedule. Section 3 is the all important Provision, which casts an obligation on the employer of every industrial establishment to submit to the certifying officer the draft standing orders proposed by him for adoption in his industrial establishment, within six months from the date on which the Act becomes applicable to such an industrial establishment. Section 13 of the Act recognizes the failure to comply with this obligation as punishable with fine, which may extend to five thousand rupees and in case of a continuing offence, with a further fine, which may extend to two hundred rupees for every day. Sub-section(2) of Section 3 of the Act, has not left any discretion in the hands of the employer of the industrial establishment in the matter of preparation of the standing orders to be adopted by him. Sub-section (2) of Section 3 reads as follows: “(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.” Sub-section (2), therefore, makes it abundantly clear that the standing orders are required to cover every matter set out in the Schedule, which may be applicable to the industrial establishment. Section 4 casts a duty upon the certifying officer to ensure that the proposed standing orders submitted by the employer are;(1) certifiable under the Act; (2) necessary Provision is made therein for every matter set out in the Schedule as applicable to the industrial establishment; and (3) the contents of the standing orders are otherwise in conformity with the Provisions of this Act. By the Amending Act No.36 of 1956, the Parliament has also entrusted a duty upon every certifying officer or the appellate authority to adjudicate upon fairness or reasonableness of the Provisions of any standing orders. Therefore, the standing orders, as proposed by every employer of the industrial establishment, shall be adjudicated upon to ascertain that they conform, as far as is practicable to the model standing orders furnished. As was already noticed supra, sub-section (2) of Section 3 had granted enough freedom for every employer of industrial establishment to depart from the model standing orders, if the exigencies of the employment so warrant. The expression used by the Parliament “as far as practicable” offers the necessary guidance both to the employer as well as the certifying officer or the appellate authority, who were called upon to adjudicate the fairness or reasonableness of the contents of the proposed standing orders. To my mind, it is clear that all fair and reasonable conditions of employment, with an element of specific applicability to the industrial establishment concerned, are liable to be certified. In fact, under sub-section (1) of Section 10 of the Act, it was explicitly made clear that the standing orders are not liable for any modification until expiry of six months period from the date of such certification, while sub- section (2) thereof granted liberty to an employer or a workman or a trade union or any other representative body of the workmen, to apply to the certifying officer to have the standing orders modified and any such request is liable to be dealt with in the same manner as the first standing orders are dealt with Section 10 of the Act, therefore, made it clear that the standing orders, even if they are certified once before, they can still be a subject matter of reconsideration at the request of any of the parties concerned. The only limitation being that a minimum period of six months must expire from the date of original or the last certification, as the case may be. Therefore, in the entire spectrum, enough flexibility has been conceived and contemplated by the Act. It is, at this stage, important also to notice that after Section 12-A has been introduced by the Amending Act No.39 of 1963, it was made clear that till such time the standing orders applicable to industrial establishment are certified, the model standing orders prescribed shall be deemed to have been adopted. That was, to ensure that no hiatus is created in the matter of conditions of employment of workmen in industrial establishments, when once the Act is attracted. It will also be appropriate, at this stage, to notice that Section 15 granted power for the appropriate Government to make rules to carry out the purposes of this Act. Sub-section (2)(a) thereof made it abundantly clear that such rules may prescribe “additional matters” to be included in the Schedule and the procedure to be followed in modifying the standing orders once certified under the Act, to bring them in accord and confirmity with any such modifications or additions made to the Schedule. The expression “appropriate Government” has been defined in Section 2(b) in the following terms: (b) “appropriate Government” means in respect of industrial establishments under the control of the Central Government or a [Railway administration] or in a major port, mine or oilfield, the Central Government, and in all other cases the State Government.” It will also be relevant, at this stage, to notice what are all the areas chartered out in the Act for the State Governments. The Proviso to sub-section (3) of Section 1 conferred power upon an appropriate Government to apply the Provisions of the Act to any industrial establishment where even less than hundred persons may be employed. Therefore, power has been conferred upon the appropriate Government to widen the net of the applicability of the Provisions of the Act to larger number of industrial establishments, even though they may not employ hundred persons. As was already noticed supra, the State Government of Andhra Pradesh has added clause (v) to the definition of “industrial establishment” found in Section 2 (e). Similarly, under Section 14, power has been granted to the appropriate Government, by notification, either conditionally or unconditionally, to exempt any industrial establishment or class of industrial establishments from all or any of the Provisions of the Act. Apart from the above, as was already noticed supra, rule making power has also been conferred upon the appropriate Governments, but, at the same time, it will be relevant to bear in mind that sub-section (3) has been added to Section 15 by the Amending Act No.16 of 1961 making it obligatory upon the Central Government to lay before each House of the Parliament every rule made by it and if both the Houses of Parliament agree in making any modifications in the rules, the rules shall, thereafter, have the effect only in such modified form. Therefore, by introducing sub-section (3) to Section 15, it is intended to ensure that the rules made by the Central Government, under sub-section (2)(a) of Section 15 prescribing “additional matters” to be included in the Schedule, is placed before both the Houses of the Parliament for consideration and approval. The significance being that if the Central Government amends the Schedule by including additional matters therein, such additional matters can get attracted for adoption in the standing orders already certified or liable to be certified thereafter. The Central Government has framed the Industrial Employment (Standing Orders) Central Rules, 1946, in terms of clause (b) of sub-section (2) of Section 15 of the Act. Rule 2(a) has been inserted therein on 17-01-1983 providing for certain additional matters in the Schedule to the Act after Item No.10. In particular, Item No.10-B, which is, thus, introduced, reads as under: “10-B. Additional matters to be provided in the Standing Orders relating to all industrial establishments,- (1) Service Record-matters relating to service card, token tickets, certification of service, change of residential address of workers and record of age ; (2) Confirmation ; (3) Age of retirement ; (4) Transfer ; (5) Medical aid in case of accidents ; (6) Medical examination ; (7) Secrecy ; (8) Exclusive Service.” Therefore, on and from 17-01-1983, the items provided for in Entry 10-B are required to be provided for and taken care of in the standing orders relating to all industrial establishments. Item No.4, thereof, specifically deals with the subject matter of ‘transfer’. Consequently, in the model standing orders prescribed in the Schedule to these rules, the model standing orders on additional items applicable to all industries have also been included therein as Schedule 1-B and as is required, they dealt with the subject matter of transfer of the employees. Further, when once the Central Government adds additional items to the Schedule of the Act, either they may be rendered 0applicable only to certain industrial establishments or a class of industrial establishments, such as, Railways, Shipping and Transport, Posts and Telegraphs, etcetera, or if the Government adds additional matters to the Schedule with an intent to cover all the establishments, they become applicable across the board to all industrial establishments. Similarly, the power available to the appropriate State Government to add additional items to the Schedule of the Act, is intended to enable it to take care of the special or peculiar local requirements of the industries or they can also be specific in their applicability to a class of industries, where particular items relating to the conditions of service are needed in the opinion of the appropriate State Government to be provided for compulsorily in the Standing Orders. Therefore, the most appropriate way to understand the power available to both the Central as well as the appropriate State Governments in the matter of making additions to the Schedule of the Act, is only to serve the needs of the industry by rendering precise conditions of service for workmen therein. After all, by compulsion of making the Standing Orders, what is attempted is only to make known to the workmen in clear and unambiguous terms with necessary degree of precision the conditions of service by which they are bound. As was noted supra, the Statute has provided for deletion or modification of any particular Standing Order, which warrants such modification or deletion. Therefore, to my mind, the additional items incorporated as Entry 10-B of the Schedule of the Act by the Central Government would get attracted to the 2nd respondent industry also. Since, transfer of the employees is one of the subject matters covered by Entry 10-B of the Schedule, the power exercised by the certifying officer under Section5 of the Act, duly certifying the Standing Order 7(h) for the 2nd respondent industrial establishment is perfectly legitimate and valid. It does not call for or warrant any interference. The Act has been ushered in for the purpose of standardizing the conditions of service/employment in industrial establishments and for purpose of ensuring that such conditions of service are clear, unambiguous and precise and importantly be made known to the workman employed herein and hence, the certification of the Standing Orders has been rendered compulsory. This measure is intended by the Act to prevent any vague or improper and otherwise unjust conditions being prescribed unilaterally by the employers against their workmen in industrial establishments, taking advantage of superior position and power as employers. Prescription of the conditions of service with necessary precision and clarity is a measure intended to secure industrial tranquility and peace. There will be fairness in the matter of dealing with the work force in every establishment and on a uniform basis. Such standardization would prevent preferential or adverse treatment of select workmen by the employers. Standardization across the board would help in uniform conditions prevailing in the industrial establishments all over. Harmonious industrial relations would not only contribute directly to the productivity of the unit concerned but would help in achieving stability in industrial growth. The Act intended to ensure that fair conditions of employment alone would get prescribed and followed which will secure industrial progress and prosperity. The Act has never contemplated that different conditions of employment, than those prescribed in the model standing orders, cannot be prescribed at all. Adaptation of “workmen specific requirements” as conditions of employment is not impermissible. However, they should not be left confined to unspecific charter of imagination of the employer. When conditions of employment get specified, they leave no room thereafter for elements of speculation. Adherence and their uniform application would become the order. Therefore, conditions of employment considered as ideally suitable or more adaptable keeping in view the requirements of a specific industry so long as they do not visit the work force with a totally unfair or unreasonable conditions of employment need not be viewed with disfavour or as impermissible. For instance, the Standing Orders can provide for certain specific or peculiar requirements for employability in a particular industrial establishment. Such conditions can be in the form of educational or technical qualifications or be in the form of additional man hours to be put in even on paid holidays, provided they are paid or compensated for appropriately. Similarly, the age of superannuation can also be a factor for variation in certain industrial establishments. Depending upon physical and intellectual contribution required to be put in, the age of superannuation can be 60 years in one industrial establishment while in the others it could be 58 years. But, what is necessary is that the precise specification of the condition in that regard before hand, leaving no room for vagaries or whims or fancies to play any role thereafter. Therefore, I am not able to agree with the contention of Sri K.Bala Gopal that transferability not being a condition of service, no provision can be made in the Standing Orders in that regard and that the Standing Orders having made such a provision, Standing Order 7(h) as certified by the 2nd respondent is illegal. The learned counsel for the Petitioner has placed reliance upon the judgment rendered by the Supreme Court in KUNDAN SUGAR MILLS v, ZIYA UDDIN AND OTHERS[2], ROHTAK AND HISSAR DISTRICTS ELECTRIC SUPPLY COMPANY LIMITED AND ANOTHER v. STATE OF UTTAR PRADESH AND OTHERS[3] and also a judgment rendered by the Division Bench of the Allahabad High Court in AIR GASES MAZDOOR SANGH, VARANASI v. INDIAN AIR GASES LIMITED AND OTHERS[4], and contended that it is impermissible for an employer to transfer an employee from one unit to another unit, particularly when the new unit was acquired after the employee has been engaged in the service of the former unit. Learned counsel would submit that since the 2nd respondent is now putting up a new unit at Chennai, which is a subsequent development to the date of employment of the petitioner and hence, he could not have been transferred to the new unit at Chennai. Before we analyse the principle enunciated by the Supreme Court in KUNDAN SUGAR MILLS case cited (2 supra), it will be important to notice that transfer of an employee from one unit to another unit can be a matter of an express term of the contract of employment itself. In certain given circumstances, such a term can also be implied. But, in the instant case, learned counsel for the 2nd respondent has placed reliance on the order of appointment dated 1.12.2001 of the 1st petitioner wherein it has been unmistakably made clear to the 1st petitioner about his transferability in the following manner: “8. You are liable to be transferred from on post to another, from one job to another, from one department to another and your services are liable to be transferred to any of our units, and you will automatically be governed by the service conditions and other terms applicable at the new unit. 9. xxxxxxxxxxxxxxxxxxx. 10. You shall be governed by the standing orders, company rules and regulations applicable to your category and are in force time to time.” This apart the Standing Orders as certified on 19.11.1994 for the 2nd respondent establishment in Clauses 7(e) and (h) provided for the same in the following manner: “(f) The Management has the sole right to direct and control the employees including the right to lay off, promotions, transfer, and to determine the strength of the employees required for manning the Hotel.