1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.3123 OF 2005 Indian Smelting and Refining Co.Ltd. ..PETITIONER VS. Sarva Shramik Sangh ..RESPONDENT Mrs.Meena Doshi with Ms.Naina Dutia i/b Nameet & Co. for petitioner. Ms.Hutoxi Tavadia a/w Mr.H.V.Kode i/b. Mahesh Thorat for respondent. CORAM : A.M.Khanwilkar, J. DATE : OCTOBER 13, 2008. P.C.: 1. This Writ Petition under Article 226 of the Constitution of India takes exception to the Judgment and Order passed by the Industrial Court, Maharashtra, Mumbai dated 23rd September, 2005 in Complaint (ULP) No. 834 of 2000. The subject complaint was filed by Respondent-Union to espouse the cause of 21 employees 2 enlisted in Annexure A to the Complaint, alleging that the Petitioner Company had indulged in unfair labour practice covered by Items 6, 9 and 10 of the Schedule IV of Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971(hereinafter referred to as “the Act”). The substance of the case made out in the complaint filed by the Respondent is as follows. 2. It is stated that the Petitioner Company is a public limited company registered under the provisions of Indian Companies Act, 1956 and is engaged in the business of manufacturing and sale of copper, bronze, nickel, sheets, strips and foils and non ferrous alloys, etc. It is alleged that the Petitioner company has a standing of over 30 years with a reputation and a very good market position. Its financial position is very sound and strong. The Company had employed about 1000 workers including staff, watchman and wards. It is stated that the Respondent union is registered trade union under Trade Unions Act, 1926 and is also recognized union for the undertaking of the Petitioner company under the provisions of the Act of 1971. It is stated that the Union enjoys majority of membership of the workers of the petitioner company. As aforesaid, the complaint in question was filed to espouse the cause of 21 employees enlisted in Annexure A to the complaint. It is stated that the respective employees 3 joined Petitioner company on dates shown against their name in Annexure A to the complaint and thus were deemed permanent employees of the Petitioner company as per law. It is alleged that inspite of the fact that the said employees were working in the Petitioner company for several years, they have been termed as temporary and are denied and deprived of permanency status and its benefits and privileges, which are made applicable to the employees, who are termed as permanent employees. It is alleged that the named employees are denied of grade and variable Dearness Allowance of 140% or fixed DA as per settlement dated 3rd February, 1999 signed between the Management of the Petitioner company and the Respondent union for and on behalf of the workers and which is made applicable to the daily rated permanent workers of the company. It is alleged that the Petitioners have discriminated and discriminating amongst the employees and are denying and depriving the permanency and its benefits and privileges so also the benefits of the settlement dated 3rd February, 1999 to the employees named in Annexure `A' to the Complaint. It is further stated that the employees named in the Annexure `A' to the Complaint have been appointed by the Petitioner company in the category of dependents of the retired/expired workers of the Petitioner company, as per the terms of settlements and Award dated 19th March, 1980. It is then 4 stated that the said employees were entitled to be made permanent after completing 18 months continuous service as per the settlement dated 6th December, 1971. It is further stated that the employees named in Annexure A to the complaint have already completed more than 18 months continuous service and were entitled to permanency and its benefits, which has been wrongfully denied to them by the Petitioner company. It is alleged that the Union had sent communication to the Petitioner company in this regard making this grievance vide letter dated 2nd June, 2000, but no satisfactory reply was received. According to the Respondent union, as the Petitioner company had failed to comply with the settlement dated 6th December, 1971 or the award dated 19th March, 1980 or the settlements dated 21st February, 1996 and dated 3rd February, 1999, the Petitioner continued to knowingly and deliberately breach/violate the said settlements and award thereby denying and depriving the employees named in Annexure `A' to the complaint their status of permanency and its benefits and privileges. It is stated that the Union therefore, sent another letter dated 31st August, 2000 to the Petitioner company which was received by the company on 4th September, 2000. However, no response was received from the Petitioner company. The Union therefore, asserted that the Petitioner company was bound to implement the settlements dated 6th December, 1971 5 and Award dated 19th March, 1980 and to extend the benefits of settlements dated 21st February, 1886 and 3rd February, 1999 to the employees named in Annexure `A' to the complaint. It is alleged that as per settlement dated 6th December, 1971 the company and the management were obliged to hold meeting with the complainant union and the committee members in the month of June every year regularly for the claim of permanency and other benefits of the workers. Having failed to do so, the Union addressed letter dated 2nd June, 2000 to the Petitioner company. Inspite of the said communication, the Petitioner company failed to call any meeting nor made the named employees permanent nor offered them benefits or privileges till the date of filing of the complaint. It is alleged that on the other hand, the Petitioner company is refuting the said claim and has failed and neglected to implement the service conditions as per settlement dated 6th December, 1971, Award dated 19th March, 1980, settlement dated 21st February, 1996 and settlement dated 3rd February, 1999. In that, the named employees have been continued by the Petitioner company as temporaries, violating settlement and have denied and deprived the said employees the status, privileges and benefits of permanency resulting in unfair labour practice under Item 6, 9 and 10 of Schedule IV of the Act. It is further stated in the complaint that the provisions of Industrial Employment(Standing Orders) 6 Act, 1946 is applicable to the establishment. The complaint then gives details of the furnaces operated by the Petitioner company and the number of permanent employees working during the three shifts and the minimum number of permanent employees required in a day to maintain the normal level of establishment. Similar details are furnished in respect of several mills in the establishment and it is asserted that the named employees were working in the same place where the employees were given the benefits of permanency while working. Assertion in the complaint is to the effect that the work undertaken by the named employees is perennial in nature and they were performing the same job as their counter-parts, who were called as permanent by the employer and were given higher DA and other benefits. Similar details are provided in respect of four Yadar machines and four Pickling machines. It is also asserted that employee at Sr.No.14 in Annexure A to the complaint is a Crane Driver, whose work is permanent and of perennial nature. Details about other named employees are also spelt out in the complaint. It is then stated that the Petitioner company had employed about 1150-1200 permanent employees in the establishment. However, gradually the strength of permanent employees was reduced due to various reasons such as retirement, death, resignation etc. over the period of years. The Petitioners however, did not fill up the permanent vacancies 7 and managed the work by engaging employees as casuals, temporaries or contract employees. It is stated that besides the named 21 employees in Annexure `A' to the complaint, there are other set of about 170 employees, who are junior to these employees and another about 200 employees who are still called as contract employees in the establishment. It is then asserted that the Petitioner company was extending the facilities of casual leave, sick leave, privilege leave etc. to the employees who are junior to the employees named in Annexure `A' to the complaint. At the same time, the Petitioner was not extending even the minimum facility of casual leave and sick leave to these employees named in Annexure `A' to the complaint. It is stated that the employees called as permanent by the Petitioner were being paid DA at the rate of 140%, whereas the employees named in Annexure `A' were paid only 100% thereby denying them the substantial amount of wages every month. It is also asserted by the Respondent union that the monthly production in the years before 1984, was around 250 to 300 tonnes with the strength of 750 employees. After 1985, during the period from 1988 to 1991, the production is increased to 500 tonnes and thereafter during the period 1994-95, it was 625 tonnes and then in the year 1999, it was about 700 tonnes and from around year 2000 onwards, it is around 800 tonnes. However, the strength of permanent employees of the 8 Company has reduced drastically and going down every year by year; because the Petitioners are not showing employees doing the extra work as permanent with a view to deprive them the status and benefits of permanent employees. It is further asserted that under the provisions of Standing Orders all the employees listed in Annexure A are entitled to be made permanent on completion of 240 days of service in the establishment. On the basis of the above assertions, the Respondent Union prayed that it be declared that the Petitioner has engaged in unfair labour practice under Items 6,9 and 10 of the Schedule IV of the Act, 1971, and to direct the Petitioner to cease and desist from engaging in unfair labour practice complained of. Further relief was claimed by the Respondent to declare that the employees named in the Annexure `A' to the complaint are permanent employees on completion of continuous service of 18 months as per settlement dated 6th December, 1971. It was further prayed that direction be issued to the Petitioner to extend benefits under settlements dated 21st February, 1996 and 3rd February, 1996 and 3rd February, 1999 respectively to the employees named in the Annexure `A' to the complaint and to direct the Petitioner to pay the difference of the benefits of the settlements dated 21st February, 1996 and 3rd February, 1999 to the employees named in the Annexure `A' to the complaint with retrospective effect. Lastly, it was 9 prayed that direction be issued to the Petitioner to issue letters of permanency to the employees named in Annexure `A' to the complaint with retrospective effect from the date they have completed 18 months continuous service. 3. The Petitioner-company contested the complaint. In the first place, the Petitioner filed affidavit in reply to the interim relief application. That reply was treated as Written Statement of the Petitioner. In addition, the Petitioner filed additional Written Statement. Significantly, the Petitioner has conceded that the workmen named in Annexure `A' to the complaint, were neither badli nor casuals nor temporary but were deemed to be permanent by virtue of provisions of Industrial Employment (Standing Orders) Act, 1946. It is the case of the Petitioner that the said workmen were getting consolidated wages, mostly minimum wages, as prescribed by Government of Maharashtra for engineering workers. However, as and when they became entitled to the benefits under Industrial Employees (Standing Orders) Act, 1946 they were fitted in basic wage and granted 100% revised textile DA and other terms and conditions were fixed. This was done with the knowledge of the complainant union as well as workers when the settlement dated 3rd February, 1999 was signed. It is the case of 10 the Petitioner that the named workmen were not getting benefits which regular permanent workers were getting due to settlement dated 3rd February, 1999 and no fault can be found with the Petitioner company in that behalf. In support of its contention that the named workmen were not entitled for benefits under the settlement dated 3rd February, 1999, reliance was placed on Clauses 26 and 27 of the said settlement, which according to the Petitioner, preserved the right of the Petitioner company to fix separate service condition for temporary, casual, badli or other types of workmen. It is the case of the Petitioner that by filing present complaint, the Union is attempting to resile from the settlement which is only for the benefit of permanent workmen who were on the rolls of the company on the day of signing of the settlement and who signed it. According to the Petitioner, named workmen were not temporaries or were getting service condition of temporary workmen but were getting basic plus 100% revised textile DA, as determined by the Petitioner company with mutual consent of the workmen concerned. According to the Petitioner, while fixing service conditions of the named workmen, the Petitioner has mostly followed the provisions of clause 4 of the settlement dated 6th December, 1971 signed with the respondent union. In substance, the stand of the Petitioner is that the Petitioner was entitled to provide separate service conditions in respect of 11 workmen named in Annexure A to the complaint as they were not covered by the settlement dated 3rd February, 1999. 4. The Industrial Court, on analyzing the rival stand and considering the evidence on record, proceeded to hold that the real controversy centers around the applicability of agreement qua the workmen named in Annexure A to the complaint. At the outset, the lower Court opined that there was neither any pleading nor any evidence with regard to the violation of Item 10 of Schedule IV. The lower Court accordingly, confined the enquiry only regarding violation or breach of Item Nos. 6 and 9 of Schedule IV. It found as of fact that the benefits under the settlement were not offered or extended to the workmen named in Annexure “A” to the complaint. It then considered as to whether the justification offered by the Petitioner company can be countenanced. It went on to observe that as per the agreement or settlement, the benefits of the settlement will have to be extended to daily rated permanent workmen. It went on to observe that even if the settlement deems to exclude the workmen named in Annexure A to the complaint, the same cannot bind them as they were not signatories to the said agreement. In as much as the settlement was against their interest and detrimental to them. It further found that if the office bearers of the 12 Trade Union have agreed to do certain act ignoring interest of one set of employees who were going to be affected by the arrangement, such agreement would not disentitle the concerned workmen from claiming their legitimate rights and ventilating their grievance. It then proceeded to hold that admittedly the workmen named in Annexure A were continuously working with the Petitioner company for number of years and their services were uninterrupted, which was sufficient to confer permanency on them as well as to extend benefits as given to the permanent employees; failure to do so results in unfair labour practice within the meaning of Item 6 and 9 of Schedule IV of the Act. The lower Court has found that in fact the Petitioner has conceded that the workmen named in Annexure A to the complaint were deemed permanent employees and that the said employees had put in more than 240 days of continuous service and were entitled to seek protection of provisions of law including section 25 (F) of the Industrial Disputes Act. It has then found that since the Petitioner admits that the concerned employees were deemed permanent, the Petitioner was under obligation to confer all the benefits extended to permanent employees even to the complainant-employees. The lower Court has then adverted to rule 4(B) of the Industrial Employment(Standing Orders) Rules, 1959 which stipulates that the temporary workman, who has put in 190 13 days' uninterrupted service in aggregate in any establishment of a seasonal nature or 240 days uninterrupted service in the aggregate in any establishment during the period of preceding 12 calendar months, shall be made permanent in that establishment by an order in writing signed by the Manager or any person authorized in that behalf by the Manager, irrespective of whether or not his name is on the muster roll of the establishment during the said 12 calendar months. The lower Court then adverted to the communication sent by the Respondent Union to the Petitioner on 2nd June, 2000 calling upon the Petitioner to confer permanency to the employees concerned. Notwithstanding the Company asserted that the concerned employees were not temporary employees, relying on the reported decision, the lower Court then went on to observe that even if the concerned employees were daily rated employees, denial to confer permanency and permanency benefits despite clear vacancy, was admittedly unfair labour practice. The lower Court has found as of fact that even though the concerned employees were appointed on compassionate ground, however, they were appointed on clear vacant post and those persons after their appointment were continued for number of years as temporary. The lower Court has thus found that ipso facto and ipso jure, the Petitioner employer has indulged in unfair labour practice within the 14 mischief of Item 6 and Item 9 of the Schedule IV of the Act. It is on the basis of these findings the Court below proceeded to pass following order: “Complaint is allowed. It is hereby declared that the respondents have engaged in an unfair labour practices under items 6 and 9 of Schedule-IV of the MRTU & PULP Act, 1971 and respondents are directed to cease and desist from engaging in such practices. It is hereby declared that the employees concerned are entitled for status of permanency as well as the permanency benefits in pursuance of the agreements that were timely entered into by the respondent employer, with effect from the date of completion of 19 months continuous service by the concerned each employee. No order as to the cost.” 5. After having considered the pleadings and documents on record, to my mind the real controversy is whether the workmen who are deemed permanent would be entitled to the benefits under the settlement dated 3rd February, 1999. For, it is common ground that the workmen named in the Annexure `A' to the complaint were appointed between 1996 to 1998 on different dates. Their date of appointment is not in dispute. It is also not in dispute that the said workmen were continuously employed by the Petitioner. It is also evident from the record that the service of those workmen was engaged in relation to work which was permanent and 15 perennial in nature. It is conceded by the Petitioner that the workmen named in Annexure A acquired the status of deemed permanent on completion of 240 days by virtue of provisions of Industrial Employment (Standing Orders) Act, 1946. It is a different matter that in response to the representation sent by the Respondent union, the Petitioner termed the concerned workmen as temporary. The question is whether the Petitioner has committed breach of such nature that it results in unfair labour practice within in the meaning of Item 6 of Schedule IV of the Act. Item 6 read thus: “To employ employees 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 employees.” 6. It is not in dispute that on completion of 240 days of continuous service of the concerned workman, no letter has been issued by the manager of the Petitioner company informing in writing that they have been made permanent in the establishment, as required by rule 4B of the Industrial Employment (Standing Orders) Rules 1959. Indeed, till recently even when the Respondent made representation to treat the workmen permanent or deemed permanent employees, the Petitioner company 16 asserted that the said workmen were temporary. The fact remains that before the Court, the Petitioner has conceded that the concerned workmen were deemed permanent by virtue of provisions of Industrial Employment(Standing Order) 1946. Even so the Petitioner cannot be absolved of the unfair labour practice within the meaning of Item 6. It would have been a different matter if the manager of the Petitioner company in compliance of the mandate of the rule 4 B of the Industrial Employment(Standing Orders) Rules had issued order in writing treating the concerned workmen as permanent soon after completion of the continuous service of 240 days in aggregate during a period of preceding 12 calendar months. Having failed to do so, rigours of item 6 were clearly attracted. The fact that the concerned workmen were paid on the basis of basic plus 100% revised textile D.A. and other allowances, by itself does not result in treating the workmen as permanent or deemed permanent. If the said workmen were to be treated as permanent by the Petitioner company, the Petitioner Company would be obliged to provide all the privileges and status as given to its permanent employees. It necessarily follows that the object of not issuing order in writing as required on account of Rule 4B of the Industrial Employment (Standing Orders) Rules, was to deprive the workmen named in the Annexure `A’ of the status and privileges of the 17 permanent employees. This is the gravamen of the grievance made in the complaint as filed. 7. To get over this position, Counsel for the Petitioner would contend that even if the complaint is read as a whole, there is no pleading that the object of not treating the named workmen as permanent was to deprive them of the status of permanent employees. Counsel for the Petitioner would rely on the decision of the Apex Court in the case of Regional Manager, SBI V/s. Rakesh Kumar Tewari, reported in (2006) 1 SCC 530, in particular, paragraph-14 thereof, where the Apex Court has expounded that unless foundation has been laid in the pleadings, no amount of evidence can be looked into. Reliance is also placed on the decision reported in 1994 (I) CLR page 913 in the case of Punjabrao Krishi Vidyapeeth, Akola Vs. General Secretary, Krishi Vidyapeeth Kamgar Union & Ors.. Obviously, this submission is advanced on misreading of the pleadings in the complaint. In my opinion, on a fair reading of the complaint as a whole, it is seen that at more than one place it is asserted that the object of not recognising the named workmen was to deprive them of the status and privilege of permanent employees. That can be culled out from paragraph-3(c), where it is asserted that the Petitioner had 18 discriminated and discriminating amongst employees and are denying and depriving the permanency and benefits and privileges thereof so also the benefits of the settlement dated 3rd February, 1999 to the employees named in Annexure A to the complaint. In last sub-paragraph of paragraph 3, it is once again stated as follows: “..Whereas the strength of permanent employees of the Company has reduced drastically and going down year by year because the Respondents are not showing employees doing permanent job as permanent with a view of deprive them the status and benefit of permanent employees.” In my opinion, there is sufficient pleading so as to attract the provisions of Item 6 of Schedule IV. It is well established position that the strict rules of pleadings as required by the civil code do not apply in relation to the disputes before the Labour and Industrial Court. If any authority is required in support of this proposition, reliance can be usefully made to the observation in paragraph-4 in the