C.W.P. No.5624 of 2000 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.5624 of 2000 (O&M) Date of Decision: 07.10.2009 Punjab Ex-Servicemen Corporation .....Petitioner Versus Presiding Officer, Industrial Tribunal, Punjab and another ...Respondents Present: Mr. P.K. Mutneja, Advocate with Mr. S.S. Sudan, Advocate for the petitioner. Mr. Ravi Kant Sharma, Advocate for respondent No.2. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest? Yes -.- K. KANNAN J. I. Scope of enquiry 1. The Punjab Ex-Servicemen Corporation (hereinafter called as PESCO) challenges in the above writ petition the award of the Industrial Tribunal answering a reference in favour of the workmen accepting demand Nos.4 and 10 and rejecting the other demands. Demand No.2 had become infructuous as the workman Iqbal Singh was reinstated. Demand Nos.4 and 10 had been taken together and disposed of. Since the validity of the award of the Industrial Tribunal answering the reference is challenged among other grounds that the Tribunal had exceeded its jurisdiction, it becomes necessary to examine the demand, the subject of reference by the Government and how they have been dealt with by the Industrial Tribunal. C.W.P. No.5624 of 2000 -2- II. The cause for disputes 2. The writ petition confines itself only in so far as the Tribunal has accepted the demands Nos.4 and 10, which are as under:- “Demand No.4: Whether the workmen of the establishment, who have completed 240 days of continuous service, are entitled to be regularized? If so, with what detail? Demand No.10: Whether the management should stop harassment of the workmen employed in the branches as well as in the Head Office of PESCO? The demands essentially spring from the fact that the workmen were for number of years kept on contracts, periodically extended from time to time, although, according to the workmen, the nature of engagement was such that the work was always available and the management was deliberately adopting unfair labour practice by keeping them on tenterhooks and denying to them regular scales of pay with annual increments. The reference by the Government had merely reproduced all the demands of workmen for adjudication and on the basis of the objection taken by the management that the reference itself was bad and not maintainable, the Labour Court had framed an issue relating to the validity of the reference and the jurisdiction of the Tribunal to entertain the reference with regard to the contention that the claims of the workmen had been barred by law. III. Examination by Industrial Tribunal as regards activities of PESCO 3. The Industrial Tribunal had set out in detail the constitution of PESCO and the various activities that it had undertaken to examine the nature of work that had been extracted from the workmen and C.W.P. No.5624 of 2000 -3- whether the management was justified in not having a scheme for regularization of the workmen. PESCO itself is a creature of statute enacted by the Punjab Government, with the general superintendence, direction and management of the affairs and business being vested in the Board of Directors in terms of Section 6 of the PESCO Act. As per Section 7 of the Act, the Board of Directors consisted of Chairman, Managing Director and Directors, Secretary of three connected departments of the Punjab Government, Director of Industries being ex officio and four other Directors being nominated by the Government from amongst the Ex-Servicemen. The Act laid down that the Chairman was required to be an Ex-Servicemen whereas the Managing Director had to be a Class-I Officer of the State or the Central Government but their appointment shall always to be made only by the State Government. The initial capital had been invested in PESCO by the State Government. 4. In terms of Section 51(1) of the Act, the function of PESCO was to provide for the welfare and economic upliftment of the Ex- Servicemen in the State and Sub-Section 2 provided for planning and execution of programmes for agricultural development, marketing, small scale industries, transport and other business, trade or activity as the case may be approved by the Government. Sub-Section 3 provided that the PESCO shall have due regard to public interest, solvency and welfare of Ex-Servicemen. It was brought out through evidence that PESCO had several units, of which auto workshop and stitching centres had been registered separately under the Factories Act. It had undertaken dealership of Eicher Canter Automobiles for C.W.P. No.5624 of 2000 -4- sale of the vehicles and for sale of spare parts. PESCO also had several service stations for vehicles of Maruti Udyog and a workshop for undertaking minor repair works. Apart from the abovesaid units and activities, PESCO was also the sole authorized dealer for the fabrication of bullet proof vehicles for the States of Punjab, Andhra Pradesh and Jammu and Kashmir. It was brought out through the evidence of Sh.Lachhman Dass, the General Manager of PESCO that upto the time of trial, PESCO was running under profit and the balance sheets for the years 1991-92 to 1995-96 had been placed on record. In the light of the evidence placed before it and several activities admittedly carried on by the management, the Industrial Tribunal had examined the claim of the workmen. Evidence had been offered by the workmen that several other workmen had been initially appointed from November 1994 for a period of one year on consolidated wages varying to Rs.1250/- to Rs.3550/- and all of them had completed 240 days of continuous service at the time of demand notice and they had also been continued in service, periodically extending the contracts. The Industrial Tribunal elicited an admission by the General Manager, Sh. Lachhman Dass that the continuous service of the workmen had not been interrupted at any stage for three or four years running. The management had not given even notional breaks while continuing them. Setting forth the evidence and the admission contained in the evidence of the management, the Industrial Tribunal had observed that the business activity was permanent and regular in nature and the services of the workmen concerned were obviously needed on regular basis for execution of its works and the C.W.P. No.5624 of 2000 -5- practice adopted by the management by employing the workmen initially for a term of one year and continuing them from year to year without any break, is to say the least, unfair and amounted to exploitation of workmen. IV. Decisions cited, examined: (a) Length of service, not always relevant for regularisation 5. Assailing the award of the Industrial Tribunal, the petitioner-management relies on the judgment of the Hon'ble Supreme Court in Manager, Reserve Bank of India, Bangalore Vs. S. Mani and others (2005) 5 SCC 100. The case referred to the claim of certain workmen, who had been engaged as Ticca Mazdoors (engaged on contract/hired) between the period of 1980 and 1982 but when some of them were alleged to have produced forged school transfer certificates, complaints had been issued against them. They were rejected to be employed, when a request for re-employment of the workmen was not accepted by the management and an industrial dispute was raised. The Tribunal had found that the workmen had completed 240 days of service and a termination that was brought out without complying with provisions of Section 25-F of the Industrial Disputes Act was bad in law. The plea of regular service had been pressed forth during the hearing and it was on that context that the Hon'ble Supreme Court held that 240 days of continuous service by itself would not give rise to claim for permanence. It also clarified that a direction for reinstatement for non-compliance with the provisions of Section 25-F would restore to the workmen to the same status which they held before and that the workmen would continue to C.W.P. No.5624 of 2000 -6- be Ticca Mazdoors. The Hon'ble Supreme Court was again dealing with the case where the management had maintained two lists. One list comprising of persons who had regular activities and a second list comprising of persons, who had been engaged merely as Ticca Mazdoors. It is not seen how that judgment should have any relevance for, in this case we are not concerned about status of the workmen who had been terminated and who were seeking for reinstatement as well as the regularization of service. The reference itself was for a subject that all the workmen had been engaged as contractual workers and the management was adopting a deliberate unfair labour practice of not providing for any regular service although the nature of activities and the availability of work were such that the engagement could have been on permanent basis. The workmen here are not demanding a regularization only because they have completed 240 days of service. On the other hand, they were showing the instances of the workmen, who completed 240 days and had been continuing in work for more than three or four years but put merely on contract for one year at a time and by the management periodically extending their services. (b) Temporary nature of work, illustration – Question of fact 6. Learned counsel also refers to a judgment of the Hon'ble Supreme Court in Madhyamik Shiksha Parishad, U.P. Vs. Anil Kumar Kishra and others (2005) 5 SCC 122. The said decision arose out of engagement by an educational institution of persons for preparation of certificates which were required to be filled up with details of the names of candidates, the name of the school, date of C.W.P. No.5624 of 2000 -7- birth etc., when there was a backlog of certificates to be cleared and the services had been engaged to clear the backlog. When the backclog had been cleared and the preparation of the certificates in future had been computerized, the services of the workmen were not required any longer. The discontinuance from service was challenged. Repelling a contention for regularisation of the service, the Hon'ble Supreme Court held that completion of 240 days of working would not under law import the right of regularization. This judgment is again inapplicable in a case where the claim of the workmen was on a different basis as explained above namely of the availability of work and the nature of engagement was such that the management could not have kept them merely for short spells through contracts. In yet another judgment of the Hon'ble Supreme Court in Gangadhar Pillai Vs. Siemens Ltd. (2007) 1 SCC 533, the Hon'ble Supreme Court dealt with a typical situation where the workmen had raised a dispute that the management was indulging in practice of engaging casual or temporary workers intermittently for a number of years. Applying the test for determination of the question as to whether an unfair labour practice had been resorted to, the Hon'ble Supreme Court held that it was essentially a question of fact. In that case though there had been breaks in service, the same were found to be not artificial. The Court found that the requirement of persons on temporary basis was writ large on the face of the nature of projects undertaken by the company. The workmen had been employed at each site office of the company which were separate establishments. The Court found the object of temporary employment to be bona fide and not to deprive of the C.W.P. No.5624 of 2000 -8- employees from the benefit of permanent status. The Hon'ble Supreme Court itself had laid down that the issue will have to be taken as a pure question of fact of whether the nature of activity admitted of continuous work or it was purely temporary. In this case, the Industrial Tribunal has examined the profit making propensities of several of the units which PESCO was running, the objects of employing Ex-Servicemen, several activities which the management had been undertaking by registering some of the units as factories under the Factories Act, all of which clearly showed that the manner of engagement indulged by the workmen was a subterfuge to emasculate the workmen and their morale to obtain a fair deal in their employment as regards their security of tenure and their scales of pay. The Industrial Tribunal had on a consideration of all the relevant facts rejected the demand of the workmen for regularization merely for persons who had worked continuously for a period of 240 days during the period of 12 calendar months preceding the demand notice. It however directed to consider the case of each workman for regularization in accordance with the scheme or instruction, if any, made or adopted by it and in the absence thereof in accordance with the guiding principles laid down by the Hon'ble Supreme Court in State of Haryana Vs. Piara Singh AIR 1992 SC 2130. 7. The above decision of the Hon'ble Supreme Court, although not wholly approved of by the Hon'ble Supreme Court in the decision of Constitution Bench in Secretary, State of Karnataka Vs. Uma Devi and others 1996 (4) SCC 1, it was over-ruled to the extent that a Court could not direct regularization merely on completion of certain C.W.P. No.5624 of 2000 -9- number of days. The decision has been rendered in the context of direction for regularisation in public employment. In this case , the Industrial Tribunal had itself rejected the claim of the workmen for regularization only by the fact that some of them had completed 240 days. It had allowed the management a flexibility to prepare a scheme which was just, fair and reasonable for considering the case for regularization who had continuously been in service for a period of four years preceding the date of the award and if no scheme or instructions had been made or not already in existence, it directed that it should do so within a period of six months from the publication of the award and to pay them wages/salary in the time scale of pay admissible to regular employees of PESCO in the category and if no regular employee in the category was there, then in the scale of pay admissible to an employee of the corresponding or similar category of the Punjab Government. . V. Finding: Engagement on contractual basis was an instance of unfair labour practice 8. In order that a particular practice should be characterized as unfair labour practice, the illustrations available through Item No.10 of the 5th Schedule of the Industrial Disputes Act reads “To employ workmen as 'badlis' casuals or temporaries and to continue them as such for years with the object of depriving them of the status and privileges of permanent workmen.” Yet another provision of relevance is Item No.5 of 5th Schedule that sets out through Clauses (a) and (b) that if a workman is discharged or dismissed by way of victimization, or not in good faith, but in colourable exercise of the employer's rights, the same will be an unfair labour practice on the C.W.P. No.5624 of 2000 -10- part of the employer. The provision relating to unfair labour practice was inserted in the Act by the Central Act 46 of 1982 that was brought into force from 21.08.1984. It is not as if a contractual employer only for a particular period is an anathema to the Scheme of the Act. Instances depending on the activities which are purely temporary such as when some projects have to be undertaken, which would be completed within a time frame, the Act provides for contractual employment through Clause (bb) introduced to Section 2(oo), inserted by Act 49 of 1984 and was brought into force w.e.f. 18.08.1984 so that it shall always be permissible for the management to make appropriate classification of workmen, who could be engaged permanently in respect of areas where the activity is regular and permanent and another category for specific periods depending on the temporary character of such activities. 9. The issue in this case is whether for an organization which is a creature of statute and whose permanence is thereby guaranteed and which engages in activities that are meant to serve public interest as well as fostering the welfare of Ex-Servicemen, could employ their workmen merely for a brief period and extend the service periodically. Defence of our country and national security being sovereign functions, it is a matter of regional pride that Punjab stands foremost in offering its men of valour for the security of the nation working in Armed Forces. A perennial flow of Ex-Servicemen would require to be absorbed into civil society and their contribution to productivity is the immediate result in an organization created by a statute to foster their welfare. As already observed, the PESCO has been posting C.W.P. No.5624 of 2000 -11- profits continuously and except for one or two units which are reported to have stopped, all other units and services which are extended through PESCO are fairly regular. The Industrial Tribunal examined the whole scheme of activities of the PESCO in the context of how the management was treating their workmen by employing them on contracts for various spells and periodically extending their contracts. In such a context, the Industrial Tribunal was perfectly justified in making reference to decisions in Dilip Hanuman Trao Shrika and others Vs. Zila Parishad and others 1990 LIC 100 that sub clause (bb) of Section 2(oo) being in the nature of exception has to be construed strictly in favour of the workmen and the provision itself has to be construed in the light of what the Act defines as unfair labour practice that includes deliberate engagement of persons as temporary workers on contracts. The Industrial Tribunal also referred to a decision of this Hon'ble Court in Balbir Singh Vs. Kurukshetra Bank Ltd. 1990 I LLJ (P&H), 1990-II-LLN 576 (P&H) when it pointed out that sub clause (bb) of Section 2(oo) has to be interpreted to limit it to a case where work itself had been accomplished and the agreement for hiring for a specific period shall be shown as genuine. The provision is not intended to be a handy tool to unscrupulous employers to shunt out the workmen in the garb of non-renewal of the contract even if the work subsists, as if they were flotsam and jetsam that could be jettisoned fathoms deep. If contractual employment is resorted to as a mechanism to frustrate the claims of employees to become regular or permanent against jobs which continue or the nature of duties is such that the colour of contractual agreement is C.W.P. No.5624 of 2000 -12- given to take it out from Section 2(oo) of the Industrial Disputes Act, it was held by the Allahabad High Court in Shailendera Nath Shukla Vs. Vice Chancellor, Allahabad University 1987 LIC 107, then such agreement cannot be regarded as fair and bona fide. 10. After examination of all the relevant details and the case law on the subject, the Industrial Tribunal had held in favour of the workmen pointing out to the nature of contractual engagements and the unfair labour practice in which the management was indulging in. It also held that the objection of the management that the reference was not maintainable was clearly untenable. In my view, the approach of the Industrial Tribunal is perfectly justified. All these years, since the time when the Tribunal has delivered its verdict, the PESCO has only dragged its feet through its mindless litigation and attempted to scuttle a justifiable legal process that was set in motion by the workmen through their union. In the meanwhile, it has also indulged in several precipitative acts which hightened the industrial tensions between the management and the workmen. It is in this context that the other demands or complaints of the workmen that they were all being victimized should be considered VI. Instances of victimisation/ harrassment 11. Demand No.10 was in omnibus fashion that the management should stop harassment of employees in the branches as well as in the head office of PESCO. Evidence were sought to be let in to explain the nature of harassment felt by the workmen that whoever had joined or actively participated in labour union activities, they were systematically weeded out of the organisation. They C.W.P. No.5624 of 2000 -13- pointed out to a case Sh. K. Sada Sivam, President of the Union, who was terminated because of his having been instrumental in forming the union of the workmen. Another person, Sh. P.S. Sohal, General Secretary of the Union gave details of the fact that the Union had been registered w.e.f. 04.10.1995 and the management had scaled up their ways of victimization only from the date when the union had been registered. Yet another person Iqbal, Helper had joined the service on 24.06.1992 for 89 days and as soon as he joined the Union, his services were terminated on 26.01.1996. It is entirely a different matter that the said worker had been subsequently reinstated. The attitude of Capt. Lachhman Dass who was the Managing Director as regards formation of unions was reminiscent of his long association in the army where it would have been unacceptable for men in uniform to form unions but Ex-Servicemen engaged in commercial activity for profit were not in the same league. They would be perfectly justified in promoting their activities and expressing their grievances through labour unions. The demand complaining of victimization was examined by the Industrial Tribunal only in the context of how the workmen had faced several difficulties and how the management which was manned by retired army officers did not get adjusted to a new paradigm, clouded as they were, in their predilections of intolerance to any labour union activities. VII. Award fully justified – Challenge in writ petition vexatious 12. The award of the Industrial Tribunal must have been really an eye-opener for the management to correct their own ways and better their industrial relations. They have allowed instead the C.W.P. No.5624 of 2000 -14- bickerings to grow and the heart burns to escalate for the workmen by engaging them in a long drawn litigations. All that the Industrial Tribunal had done was to direct that the workmen participating in unions shall not be victimized. It could hardly be in doubt that it could not be a contentious issue but should have been pursued as an ideal industrial policy. The other demand that the workmen who had been employed for short spells on contract but had actually been continued for long number of years by periodical extensions was just as well reasonable that the workmen deserved consideration for security of tenure by evolving a policy of regularization. The direction from the Industrial Tribunal must have been taken up as wake-up call to spruce up their own ways and secure to the workmen what were due to them. Instead, the management is before this Court pleading that persons who had completed 240 days were not entitled to regularization. It was just not the plea of the workmen at all. A Corporation that owes its origin to a statute and which carries on production activities and reaping profits through the working of their staff ought to treat them with respect and esteem that they deserve. The Ex-Servicemen that have been associated with the Corporation are not men of straw; not picked up from dirt; and if they wallowed in dirt, it was dust smeared with mother earth of men and women, who had made substantial sacrifices in their lives for the sake of the country. 13. The writ petition is wholly vexatious. The objections taken as regards maintainability of reference which had been substantially answered by the Industrial Tribunal had not been urged before me. C.W.P. No.5624 of 2000 -15- The learned counsel merely confined himself to the issue that the regularization could not be a matter of course any longer in view of the disposition