Case: Bhavnagar Municipality Vs. Alibhai Karimbhai & Others

Goswami, J.1. This appeal by special leave at the instance of the Bhavnagar Municipality is directed against the order of the Gujarat High Court dismissing in limine its writ application challenging the award of the Industrial Tribunal, Gujarat, made under S.33A of the Industrial Disputes Act (briefly the Act).2. There was an industrial dispute pending between the Bhavnagar Municipality (briefly the appellant) and its workmen before the Industrial Tribunal in Reference No. 37 of 1974 referred to it under S. 10(1)(d) of the Act on March 5, 1974. The said industrial dispute related to several demands including the demand for permanent status of the daily rated workers of the Water Works Section of the Municipality who had completed 90 days service. While the aforesaid industrial dispute was pending before the Tribunal, the appellant, on September 30, 1974 passed orders retrenching 23 daily rated workmen (briefly the respondents) attached to the Water Works Section of the Municipality. It is not disputed that the appellant had complied with S.25F of the Act and due retrenchment compensation had been paid to those workers. On June 20, 1975, the respondents filed a complaint to the Tribunal under S.33A of the Act for contravention of S.33 of the Act by the appellant.3. Neither party adduced any oral evidence before the Tribunal but relied only upon document produced before it. On October 30, 1975, the Tribunal made its award holding that the appellant contravened S. 33(1)(a) of the Act and, therefore, directed reinstatement of the respondents. The appellant preferred writ application before the High Court which was dismissed in limine, as stated above. Hence this appeal by special leave.4. Two questions arise for decision in this appeal. First, whether the appellant contravened S. 33(1)(a) of the Act by ordering retrenchment of the respondents who, along with other workers, were directly involved in the industrial dispute pending before the Tribunal. Second, whether contravention of S. 33 will automatically lead to an order of reinstatement of the respondent, as has been held by the Tribunal.5. It is common ground that the appellant did not obtain prior permission of the Tribunal before retrenching the respondents.6. It is well-settled that a complaint under S. 33A is maintainable only if the employer contravenes S.33 of the Act. It is submitted by Mr. Agarwal, on behalf of the respondents, that the object of S. 33 should be borne in mind in considering the question about alteration of conditions of service under S. 33(1)(a) of the Act. He submits that since the respondents were directly involved in the dispute and the question of their permanent status from a casual or temporary status formed the subject-matter of the dispute, the reference has been made nugatory by the action of the appellant in retrenching them, Mr. Parekh, on the other hand, submits that retrenchment of the respondents does not involve alteration of conditions of service and hence there is no contravention of S.33 of the Act.7. There is no complaint by Mr. Agarwal that there is any non-compliance by the appellant with S.25F of the Act. Mr. Agarwal further rightly concedes that he cannot bring his case under S. 33(1)(b) or under S. 33(2)(b) since it is not a case of discharge or dismissal for misconduct. His entire submission is based on S. 33(1)(a) of the Act.8. Section33 of the Act so far as material for us may be set out :"33(1) During the pendency of any ....... proceeding before a ..... Tribunal ....... in respect of an industrial dispute, no employer shall -(a) in regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding :x x x x xSave with the express permission in writing of the authority before which the proceeding is pending."9. There is a clear prohibition in S. 33(1)(a) against altering conditions of service by the employer under the circumstances specified except with the written permission of Tribunal or other authority therein described.10. In order to attract S. 33(1)(a), the following features must be present :"(1) There is a proceeding in respect of an industrial dispute pending before the Tribunal.(2) Conditions of service of the workmen applicable immediately before the commencement of the Tribunal proceeding are altered.(3) The alteration of the conditions of service is in regard to a matter connected with the pending industrial dispute.(4) The workmen whose conditions of service are altered are concerned in the pending industrial dispute.(5) The alteration of the conditions of service is to the prejudice of the workmen."11. The first feature is admittedly present in this case since action has been taken by the appellant in retrenching the respondents during the pendency of the proceeding before the Tribunal. The point that requires consideration is whether the other features are also present in the instant case.12. Before we proceed further we should direct our attention to the subject-matter of the industrial dispute pending before the Tribunal. It is sufficient to take note of the principal item of the dispute, namely, the demand of the respondents for conversion of the temporary status of their employment into permanent. To recapitulate briefly the appellant employed daily-rated workers to do the work of boring and hand pumps in its Water Works Section. These workers have been in employment for over a year. They claimed permanency in their employment on their putting in more than 90 days service. They also demanded two pairs of uniform every year, cycle allowance at the rate of Rs. 10 per month, provident fund benefit and national holidays and other holidays allowed to the other works. While this particular was pending before the Tribunal, the appellant decided to entrust the work, which had till then been performed by these workers in the water works section, to a contractor. On the employment of the contractor by the Municipality for the self same work, the services of the respondents became unnecessary and the appellant passed the orders of retrenchment. It is, therefore, clear that by retrenchment of the respondents even the temporary employment of the workers ceased while their dispute before the Tribunal was pending in order to improve that temporary and insecure status.13. Retrenchment may not, ordinarily, under all circumstances, amount to alteration of the conditions of service. For instance, when a wage dispute is pending before a Tribunal and on account of the abolition of a particular department the workers therein have to be retrenched by the employer, such a retrenchment cannot amount to alteration of the conditions of service. In this particular case, however, the subject-matter being directly connected with the conversion of the temporary employment into permanent, tampering with the status quo ante of these workers is a clear alteration of the conditions of their service. They were entitled during the pendency of the proceeding before the Tribunal to continue as temporary employees hoping for a better dispensation in the pending adjudication. And if the appellant wanted to effect a change of their system in getting the work done through a contractor instead of by these temporary workers, it was incumbent upon the appellant to obtain prior permission of the Tribunal to change the conditions of their employment leading to retrenchment of their services. The alteration of the method of work culminating in termination of the services by way of retrenchment in this case has a direct impact on the adjudication proceeding. The alteration effected in the temporary employment of the respondent which was their condition of service immediately before the commencement of the proceeding before the Tribunal, is in regard to a matter connected with the pending industrial dispute.14. The character of the temporary employment of the respondents being a direct issue before the Tribunal, that condition of employment, however insecure, must subsist during the pendency of the dispute before the Tribunal and cannot be altered to their prejudice by putting an end to that temporary condition. This could have been done only with the express permission of the Tribunal. It goes without saying that the respondents were directly concerned in the pending industrial dispute. No one can also deny that snapping of the temporary employment of the respondents is not to their prejudice. All the five features adverted to above are present in the instant case. To permit rupture in employment, in this case, without the prior sanction of the Tribunal will be set at naught the avowed object of S. 33 which is principally directed to preserve the status quo under specified circumstances in the interest of industrial peace during the adjudication. We are, therefore, clearly of opinion that the appellant has contravened the provisions of S. 33(1)(a) of the Act and the complaint under S. 33A, at the instance of the respondents, is maintainable. The submission of Mr. Parekh to the contrary cannot be accepted.15. That, however, does not conclude the matter. The Tribunal was clearly in error in not adjudicating the complaint on the merits. It is well-settled that in a complaint under S. 33A, even if the employer is found to have contravened the provisions of S. 33, the Tribunal has to pronounce upon the merits of the dispute between the parties. The order passed in an application under S. 33A is an award similar to one passed in a reference under S.10 of the Act. The award passed has to be submitted to the Government and the same has to be published under S.17 of the Act. For the purposes of the Act the complaint under S. 33A takes, as it were, the form of a reference of an industrial dispute by the appropriate authority and the same has to be disposed of in a like manner. The Tribunal has committed an error of jurisdiction in declining to adjudicate the matter and to make its award on the merits as required under the law. The High Court, was, therefore, not right in dismissing the writ application of the appellant in limine. We should also observe that, in the absence of adjudication on the merits by the Tribunal, the High Court was not right in holding that the retrenchment by the appellant was "a gross act of victimisation".

Decision reasoning: 1[ds]7. There is no complaint by Mr. Agarwal that there is any non-compliance by the appellant with S.25F of the Act. Mr. Agarwal further rightly concedes that he cannot bring his case under S. 33(1)(b) or under S. 33(2)(b) since it is not a case of discharge or dismissal for misconduct. His entire submission is based on S. 33(1)(a) of the Act.There is a clear prohibition in S. 33(1)(a) against altering conditions of service by the employer under the circumstances specified except with the written permission of Tribunal or other authority thereinis sufficient to take note of the principal item of the dispute, namely, the demand of the respondents for conversion of the temporary status of their employment into permanent. To recapitulate briefly the appellant employed daily-rated workers to do the work of boring and hand pumps in its Water Works Section. These workers have been in employment for over a year. They claimed permanency in their employment on their putting in more than 90 days service. They also demanded two pairs of uniform every year, cycle allowance at the rate of Rs. 10 per month, provident fund benefit and national holidays and other holidays allowed to the other works. While this particular was pending before the Tribunal, the appellant decided to entrust the work, which had till then been performed by these workers in the water works section, to a contractor. On the employment of the contractor by the Municipality for the self same work, the services of the respondents became unnecessary and the appellant passed the orders of retrenchment. It is, therefore, clear that by retrenchment of the respondents even the temporary employment of the workers ceased while their dispute before the Tribunal was pending in order to improve that temporary and insecure status.13. Retrenchment may not, ordinarily, under all circumstances, amount to alteration of the conditions of service. For instance, when a wage dispute is pending before a Tribunal and on account of the abolition of a particular department the workers therein have to be retrenched by the employer, such a retrenchment cannot amount to alteration of the conditions of service. In this particular case, however, the subject-matter being directly connected with the conversion of the temporary employment into permanent, tampering with the status quo ante of these workers is a clear alteration of the conditions of their service. They were entitled during the pendency of the proceeding before the Tribunal to continue as temporary employees hoping for a better dispensation in the pending adjudication. And if the appellant wanted to effect a change of their system in getting the work done through a contractor instead of by these temporary workers, it was incumbent upon the appellant to obtain prior permission of the Tribunal to change the conditions of their employment leading to retrenchment of their services. The alteration of the method of work culminating in termination of the services by way of retrenchment in this case has a direct impact on the adjudication proceeding. The alteration effected in the temporary employment of the respondent which was their condition of service immediately before the commencement of the proceeding before the Tribunal, is in regard to a matter connected with the pending industrial dispute.14. The character of the temporary employment of the respondents being a direct issue before the Tribunal, that condition of employment, however insecure, must subsist during the pendency of the dispute before the Tribunal and cannot be altered to their prejudice by putting an end to that temporary condition. This could have been done only with the express permission of the Tribunal. It goes without saying that the respondents were directly concerned in the pending industrial dispute. No one can also deny that snapping of the temporary employment of the respondents is not to their prejudice. All the five features adverted to above are present in the instant case. To permit rupture in employment, in this case, without the prior sanction of the Tribunal will be set at naught the avowed object of S. 33 which is principally directed to preserve the status quo under specified circumstances in the interest of industrial peace during the adjudication. We are, therefore, clearly of opinion that the appellant has contravened the provisions of S. 33(1)(a) of the Act and the complaint under S. 33A, at the instance of the respondents, is maintainable.That, however, does not conclude the matter. The Tribunal was clearly in error in not adjudicating the complaint on the merits. It is well-settled that in a complaint under S. 33A, even if the employer is found to have contravened the provisions of S. 33, the Tribunal has to pronounce upon the merits of the dispute between the parties. The order passed in an application under S. 33A is an award similar to one passed in a reference under S.10 of the Act. The award passed has to be submitted to the Government and the same has to be published under S.17 of the Act. For the purposes of the Act the complaint under S. 33A takes, as it were, the form of a reference of an industrial dispute by the appropriate authority and the same has to be disposed of in a like manner. The Tribunal has committed an error of jurisdiction in declining to adjudicate the matter and to make its award on the merits as required under the law. The High Court, was, therefore, not right in dismissing the writ application of the appellant in limine. We should also observe that, in the absence of adjudication on the merits by the Tribunal, the High Court was not right in holding that the retrenchment by the appellant was "a gross act of victimisation".