Case: Apar Private Limited Vs. S. R. Samant

(1) THE petitioner is a limited company carrying on business of manufacturing conductors, heavy duty underground power and control cables, welding electrodes, etc. The second respondent was working as an employee in the carpentry department of the petitioners factory at Vithalawadi in district Thane. The third respondent is a registered Trade Union representing the employees in the petitioners factory. Industrial Court passed an order holding petitioner guilty of an unfair labour practice under Item No. 9 of Schedule 4 of Maharashtra Recognition of Trade Unions and prevention of Unfair Labour Practices Act, 1971, (in short Maharashtra Act 1, 1972) and directing it to implement a settlement datedwith effect from 15th October, 1975 till the date of closure of the company, which we are informed in the end of October, 1977. By the present petition this order isTHE petitioner is a limited company carrying on business of manufacturing conductors, heavy duty underground power and control cables, welding electrodes, etc. The second respondent was working as an employee in the carpentry department of the petitioners factory at Vithalawadi in district Thane. The third respondent is a registered Trade Union representing the employees in the petitioners factory. Industrial Court passed an order holding petitioner guilty of an unfair labour practice under Item No. 9 of Schedule 4 of Maharashtra Recognition of Trade Unions and prevention of Unfair Labour Practices Act, 1971, (in short Maharashtra Act 1, 1972) and directing it to implement a settlement datedwith effect from 15th October, 1975 till the date of closure of the company, which we are informed in the end of October, 1977. By the present petition this order isBEFORE proceeding with the points raised it would be necessary to set out certain relevant background. The petitioner had approximately 600 workmen on its roll. Beforewages and other emoluments were being paid to the workmen in terms of an agreement dated 23rd January, 1971. Undisputed position is that this agreement also provided for payment of agreed wages which were more than the minimum prescribed under the Minimum Wages Act. By settlement datedthere was increase in the basic wages, dearness allowances, house rent, etc. In addition to that production bonus in terms of the scheme to be formulated had also become payable. The workers agreed to make all their efforts to eliminate the factors of low production and to bring up the same to the productivity level of 1964 and to maintain and improve the same. The workers not only agreed to maintain discipline but further agreed not to raise any demand involving financial burden on the company except the demand for bonus till the settlement was terminated in accordance with law. The settlement was binding on the parties up to the end of April, 1977.(3) IT is common ground that Petitioner Company paid wages and other benefits to the workmen in terms of the settlement up to the end of August, 1975. However, from September, 1975 the company refused to pay the production bonus and with effect from 15th October, 1975 it refused to pay basic wages, dearness allowance, house rent, etc. , as per the settlement. Notice dated 21st august, 1975 was put up for making a mention that because of the attitude of indiscipline on the part of workers and deliberatetactics resulting into low production, the management was relieved of its commitments and obligations imposed upon it by the agreement. A notice in terms of S. 9a of the Industrial Disputes Act, 1947 was issued in Form III under Rule 37 of the industrial Disputes (Bombay) 1957 indicating certain scale of wages to which only, the workers were entitled. The common ground is that these scales conform to the provision of the Minimum wages Act, and were even less than what was agreed in the earlier agreement dated 23rd January, 1971. On 22nd November, 1975 the second respondent filed a complaint before the Industrial Court at Bombay under S. 28 of the Maharashtra Act No. 1 of 1972. The petitioner filed a short written statement on 24th March, 1976 mentioning that the petitioner had nothing to add to what was stated in the two affidavits of Shri R. V. Patil, the factory Manager, dated 25th November, 1975 and 10th February, 1976. The petitioner did not dispute that it had decided not to pay to the workers wages and other emoluments in terms of the settlement dated 3rd August, 1974. However, the petitioner pleaded justification for so doing on the ground that the workers failed to perform their part of the settlement and as a result they were not entitled to the benefits contained in the settlement. According to the petitioner it was not under an obligation to perform its part of the settlement unless and until the other party to the agreement, viz. , workers also performed their part of the settlement, as no agreement can be a one way traffic. It appears that the Industrial Court by its order dated 17th January, 1977 held that the petitioner had engaged in an unfair labour practice as alleged in the complaint. This order was passed even without recording the evidence and it came to be challenged by Special Civil Application No. 452 of 1977. In that petition in addition to the worker second respondent, the union of the workers of the company was also made a party, as the third respondent. By consent of parties the previous order was set aside and the matter was remanded back to the Tribunal for disposal after hearing the parties. This was done on 16th February 1977. On behalf of the petitioner affidavits of various persons were placed on record and the two officers, viz. , Shri R. B. Patil and Shri Madhu holmagi were offered forThe second respondent had also entered into the witness box and was alsoBut it appears that subsequently he was not available for furtheras requested by the petitioner and as a result his evidence was ignored and the matter proceeded on the basis that his evidence should not be considered.(4) THERE is no manner of doubt about the fact that the petitioner has not paid wages and other emoluments in terms of the settlement, from 15th October, 1975. The Tribunal after considering the material on record and so also the certain undisputed positions came to the conclusion that either under any statue or under the settlement, the petitioner had no right to unilaterally reduce the wages and do away with other emoluments on the ground that the workers had indulged into indisciplined behavior and had deliberately resorted totactics. A finding of fact was recorded that the alleged low production could not be attributed to thew tactics and indeed was attributable to other factors, such as retrenchment of more than 100 workers, reduction of quota of basic raw materialaluminum from 7390 metric tones to 2038 metric tones andeven of that quota. On these findings the Tribunal directed the petitioner to implement the settlement as prayed by the second respondent in respect of the workers of the factory till the date of the closure of the factory.

Reasoning: (5) BEFORE proceeding with the points raised, we would like to mention that as far as the term regarding payment of production bonus is concerned the scheme envisaged under the agreement was not formulated. The production bonus was, therefore, being paid on the basis of the earliersee no substance whatsoever in the submission and no justification for putting such a narrow construction on the words of the relevant item. Failure to implement the settlement would include failure to implement not only at the initial stage but at any point of time till the settlement was in force and had binding effect on the party. In view of the admitted position that it was to remain in force upto the end of April, 1977 it seems clear to us that the action of the management cannot fall out of the item by virtue of the only fact that there has beene see considerable force in this point raised by Shri Shetye. Independent of the question, as to whether the workmen did indulge into acts of indiscipline and deliberatetactics, the basic question is whether even in such case there was any right in the employer to deduct the wagesNOW it cannot be disputed that the wages can be deducted either in terms of settlement or in terms of the statutory provisions. Turning to the question of statutory provision permitting deduction, we may notice certain provision of the Payment of Wages Act, Sections 7 and 9 of the said Act permits certain deductions from wages on certain grounds. While S. 7 deals with contingencies other than the absence from duty, S. 9 refers to the same. The Legislature in its wisdom has chosen not to permit the employer, deduction from wages on the grounds and contingencies with which we are presently dealing with, as will be clear from these provisions. Even if the claim for wages made in terms of Payment of Wages Act it would not be possible for the petitioner to withhold the payments under the settlement on the grounds on which it unilaterally reduced the wages and any otherdo not think that the argument is sound. Undisputed position is that all these workers including the second respondent were on the permanent roll of the petitioner and were being paid on monthly basis. They had fixed duty hours and had attended the duty within that period and indeed did work. The moment this is established it is clear that they became entitled to "wages" as defined under the Payment of Wages Act. Wages include not only actual wages but also potential one. The employees do not earn wages, hour to hour or minute to minute. The contract of employment admittedly was subsisting in spite of the so calledwork. It is pertinent to note that no norms have been fixed either workman wise or department wise, to spell out the individual liability or responsibility to do particular quantity of work. In these state of affairs it seems to us that reduction of wages or of the emoluments on the allegation that the workers in general had resorted tois wholly impermissible in law, specially when they were notemployees. There can arise a case of settlement under which such deduction is specifically provided for. Different consideration may arise in such a case. Settlement in question contains no provision authorising the petitioner to deduct any part of the salary either on pro rata basis or to the bare statutory minimum for failure or refusal on the part of the employees to carry on their work in such manner as would bring particular production level. This is not to suggest that the individual worker or the workers in general can commit misconduct and still can goThe standing orders as well as the terms of the settlement provide for remedy relating to such misconduct on the part of the employees. Remedies include, having disciplinary action, claim for damages on partial failure of consideration and complaining of unfair labour practice on the part of the employees to the appropriate Tribunal in terms of maharashtra Act No. 1 ofthese circumstances and taking into consideration the whole scheme and object of the Act, it seems clear to us that Schedule III refers to the unfair labour practice not only on the part of the trade unions but also employees though the said word is absent from the caption. We agree with Shri Shetye that the Act in terms provide for taking action against individual employee or employees in general on the ground of unfair labourIN the present matter, we are informed by the parties that the petitioner in fact had filed a complaint bearing ULP No. 351 of 1976 against the employees on the allegation that they had resorted toThis complaint came to be dismissed in default of the petitioner on 31st January, 1977. In the next year another complaint on the same ground was filed against the union which was registered as ULP No. 8 of 1977 which came to be dismissed onthe ground that it was defective and was not legally maintainable. At this very stage we may also notice one fact and it is to the effect that nearly a month after impugned notice datedthe petitioner gave a notice of change in terms of S. 9a of the Industrial Disputes Act seeking to terminate the settlement. In view of this legal as well as factual position the grievance of the petitioner that it had no alternative than to resort to unilateral reduction seems to beIN our judgment, therefore, in the absence of a specific term in settlement or statutory provision an employer has no right to reduce the wages or the emoluments on the allegation that the workers had resorted to go slow tactics or had not performed their part of the obligation in a settlement. Applying this test to the present case we see absolutely no justification on the part of the management to issue the disputed notice dated 21st August, 1975 reducing the wages to the bare minimum fixed under the Minimum Wages Act and in going behind even the earlier agreement dated the 23rd January, 1971. It is clear that the management has proceeded on the assumption that the workers have indulged into serious types of misconduct. Reduction of wages under the circumstances is clearly a punishment. Such penal action is not permissible without holding necessary enquiry as it is violative of principles of natural justice. There is absolutely no justification for such action, specially when it has been taken unilaterally. After all pay packet is the property of the workman and there can be no deprivation of it except in due process of law.To our mind, the answer is in thethe circumstances it does not appear that the principle "no work; no wages" can have any application to the facts of the presentdo not think that existence of financial difficulty or lowering of production level could be a good ground affording justification for failure to implement the settlement under the circumstances. The facts that the petitioner reduced the wages to less than even 1971 agreement and did neither prosecute the complaint against the employees nor took disciplinary action are pointers towards want of good faith in the present case. We may at this stage merely take note of the findings recorded by the Tribunal that low production was due to retrenchment of employees and reduction of quota of basic raw material. we will indicate our reasons for not disturbing them littledo not think such a course under the circumstances would have been either legal or proper. The Tribunal has taken care to order implementation of the settlement only till the date of the closure of the company and no reason whatsoever exists for granting less than what wasthe first place it does not appear that the parties treated the present matter as a individual dispute only. Even before the recording of the evidence commenced the union was added as a party in the writ petition. The relief claimed in the complaint was the general relief for all. From the affidavits filed on record by the petitioner also it is clear that the management has given evidence with relation to all the workers and the general conditions regarding indiscipline, loss of production, etc. Moreover, such a point was neither raised before the Tribunal nor has been raised in the writ petition. Under the circumstances we do not think it would be proper to permit the writ petitioner to raise this point for the first time before us during the course of hearing, specially when even from paragraph 23 of the petition it is apparent that interim payment as ordered was made by the petitioner to all the workmen during the pendency of the complaint and the various figures supplied for that purpose also related to all the workers in general. Moreover, under the scheme of the Act it seems to us that not only in individual worker but an investigating officer can also file a complaint making a grievance generally about all workers.(17) THIS takes us to the next point regarding low production due toVoluminous evidence has been placed before the Tribunal in the form of oral as well as documentary evidence from which it does appear that the workers did indulge in acts of indiscipline, disorderly behaviour and even rowdisum. It also appears that they raised certain demands contrary to the settlement. It is possible that all these has contributed to the inefficiency and low production. While by no stretch of imagination what workers did in the factory can be justified, the basic question is whether the production had gone down only because of the attitude of the workers. The extent of that contribution cannot also be spelt out on the basis of material on record. The Industrial Tribunal has arrived at a finding of fact that the figures of production produced before related only to few departments and out of total 700 employees 116 were retrenched. The companys allotment of basic raw productaluminum was reduced from 7390 metric tones to 2038 and there had beenof even that allotted quantity. The Tribunal has also referred to certain inconsistent statements made by Shri Patil, the factory manager and under all these circumstances arrived at the finding of fact that burden of proof of justification for such drastic reduction of the wages and other emoluments. We do not think that we can call this appreciation of evidence perverse so as to attract interference under Art. 226 of the constitution, mainly because no oral evidence as such is adduced by theTribunal has given its decision in January, 1980 and affidavit of Shri madhu Holmagi the officer of the petitioner was filed in the Tribunal onthat is approximately after 7 months after the so called settlement. The settlement was admittedly not brought on record before the Tribunal nor any reference was made to it during the course of the hearing before the Tribunal. There is no reference to the settlement even in the present petition and under these circumstances it will be improper and unjust to take note of this so called settlement to which reference was made at the fag end of argument. Hence, it will not be proper to base our judgment on that aspect.