Case: National Iron And Steel Co. Ltd. &amp; Ors Vs. The State Of West Bengal &amp; Anr

The appellants are four public limited companies all separately registered under the Indian Companies Act and all carrying on business in the same premises at Belur in the district of Howarh, the respondents being two unions, viz., NISCO Karmachari Sangha, Belur and Howrah and Belur Iron and Steel Workers Union, Howrah. National Iron and Steel Co Ltd., was engaged in the business of steel rolling and steel casting. Britannia Building and Iron Co Ltd. was engaged in steel fabrications work while National Screw and Wire Products was engaged in the manufacture of wires and nails. Tatanagar Foundry Co. Ltd. carried on the business of manufacturing cast-iron sleepers for railways. By an order, dated August 25, 1959, the Government of West Bengal made a reference under S. 10 of the Industrial Disputes Act, 1947 of what was described as an industrial dispute between "Messrs. National Iron and Steel Co. Ltd., and their allied Concerns, viz., Tatanagar Foundry Co. Ltd., Britannia Building and Iron Co. Ltd., and National Screw and Wire Products Ltd., all of P.O. Belur, District Howrah, of the one part and their workmen represented by the two unions on the other- regarding the matters specified in the schedule for adjudication. Nine issues were set forth in the schedule. Issue No. 9 was abandoned at the hearing before the Tribunal and need not be considered at all. The other issues were asGratuity.2. Sickness benefit.3. Leave Rules.4. Abolition of contract labour.5. Whether termination of service of Shri Bhadreswar Ghose is justified ?6. Whether the durwans and other members of the Watch and Ward staff are entitled to weekly rest?7. Whether retirement of Shri Gopal Das and Shri Ramjatin Pandit at the age 55years is justified? To what relief, if any, are they entitled?8. Whether the action of the Company in retrenching the following masons is justified? To what relief, if any, are they entitled? (i) Shri Sushil, (ii) Shri Sarojit, (iii) Shri Sukdeo, (iv) Shri Khalil* * *No. 8 referred to the retrenchment of four workmen. Of the four, the case of the first workmen, viz., Sushil, alone was pressed at the hearing before the Tribunal. There is no dispute that all the four companies were not concerned with all the issues. Messrs National Iron and Steel Co. Ltd., was primarily concerned with almost all of them. Britannia Building and Iron Co. Ltd. was not concerned with issues 7 and 8 while National Screw Wire Products Ltd., was not interested in issues 4, 5, 7 and 8. Tatanagar Foundry Co. Ltd., was not interested in issues 5, 7 and 8. All the companies were interested in the first three issues.2. The award went against the companies and they have come up in appeal.

Reasoning:
6. The contention that all the employers were not interested in all the reliefs claimed is not a matter of any moment in the circumstances of the case. All the four concerns filed written statements which appear to have been drafted by the same draftsman. They were represented by the same set of lawyers. At no point of time was it ever shown to the Tribunal that there was any possibility of conflict of interest between them. It is admitted that some of the issues were common to all the establishments. The fact that some of the establishments were not interested in some of the other issues did not cause any prejudice to anybody. After all, when all the facts were placed before the Tribunal by the same set of lawyers the Tribunal had no difficulty in appreciating the different points of view and granting appropriate reliefs. In our opinion, making separate orders of reference in the cases of the four establishments would only have multiplied costs enormously without any corresponding benefit to anybody. It is also patent from the course of the proceedings that it was only National Iron and Steel Co. Ltd. which played a major part in the adjudication before the Tribunal. The other three concerns were content to abide by what was done by the first named concern.7. In our opinion, there is no substance in the firstare not impressed by this argument. No doubt it was open to the Tribunal to call upon a particular employer to produce any document which was within its possession or power. Balance sheets and profit and loss accounts have to be maintained by all the companies and it goes without saying that the other three concerns could, if they were so minded, have produced these documents before the Tribunal. They could also have prepared statements to show the number of workmen who had retired during several years past and who were due to retire in the years to come. It seems to us that the three concerns were content to make the National Iron and Steel Co Ltd. their mouth-piece in this respect, or they must have felt that the facts and figures, if disclosed, would have been such as would go against them and they deliberately refrained from producing them. On the materials placed before us, we hold that the scheme of gratuity as framed is quite a reasonable one on the facts and figures presented by the National Iron and Steel Co. Ltd. We have no material to hold that the scheme would work hardship on the other companies and the findings of the Tribunal cannot therefore bethere was no compliance with S. 25F, we need not consider the other points raised by the learned counsel. This conclusion receives support from the observations of this Court in Bombay Union of Journalists v. State of Bombay, (1964) 6 SCR 22     at pp. 31-32: (AIR l964 SC 1617 at p. 1623). Incidentally it may also be pointed out that the retrenchment of Sushil does not seem to be otherwise justified in that following the principle of last come first to go, Sushil could not be called upon to leave the companys service. Another employee by name Joy Kishen, junior to Sushil, was retained in service. No doubt, the Labour Officer, Jha, tried to make out a case in his oral evidence that Joy Kishen was retained in service because he was doing a special job at the time while Sushil was not. The Tribunal rejected this contention on the ground that this plea had not been put forward in the written statements of the company and we do not see any reason why we should take a differentwe have not the material before us to come to such a conclusion, we do not feel competent to express any opinion on this point and can only add that abolition of contract system of labour can be ordered by an Industrial Tribunal if the facts justify it. Industrial adjudication should not encourage the employment of contract labour is a principle which was laid down by this Court as far back as 1960 in Standard Vacuum Refining Co. of India Ltd. v. Its Workmen (1960) 3 SCR 466     at p. 473: (AIR 1960 SC 948   at p.this case, we find that all the four establishments were engineering concerns producing iron and steel goods though of different types. They had a common General Manager who later on became their Works Manager, they had a common time office, a common canteen and a common Labour Officer. That their Standing Orders were the same may be due to the fact that they were all members of the Engineering Association. But the things they had in common are sufficient to show a commonalty of interests so far as industrial disputes are concerned. If the wages, the dearness allowance or benefit of gratuity or leave rules were altered in one without affecting the others, the industrial peace and harmony in the other establishments were bound to be disturbed. The workmen, of all the four concerns were so closely associated that it would be asking for trouble if the conditions of employment in one concern were varied to the benefit of the workmen of that particular establishment, leaving the conditions of service in the other three concerns undisturbed. In our opinion the observations of this Court in Wenger and Co. v. Their Workmen,Lab LJ 403 at p. 408 : (AIR 1964 SC 864   at p. 869) apply with equal force to the facts of the case before us. In that case, there were two orders of reference of industrial dispute in regard to service conditions of the employees in a number of hotels and restaurants in the city of New Delhi. The Tribunal heard both the references together and did not make any classification between restaurants and hotels for the purpose of fixing the service conditions. Negativing the contention of the employers, it was observed by this Courtthe situation of the restaurants and the hotels which have been included in the present reference shows that they are carrying on the same business in about the same locality and it is desirable that the terms and conditions of service of the employees working in them should, as far as possible, be uniform. Such uniformity is not only conducive to peace and harmony amongst the employees and their employers, but would be helpful to the managements themselves because it would tend to avoid migration of labour from one establishment tothat case, some of the hotels and restaurants were situated in Connaught Place while one restaurant was situated in Karolbagh and another hotel was situated in Aurangzeb Road at some distance from Connaught Place. In the case before us, all the concerns are housed in the same premises and the workmen of the different establishments have ample opportunity of getting together during the day and discussing things which are to their commonthe light of the above observations and on the materials placed before the Tribunal it is not possible to hold that a wrong, conclusion had been arrived at. The Tribunal scrutinised the balance sheets of the National Iron and Steel Co. Ltd., for the years 1953 to 1960 and found that excepting in the solitary case of the year 1960, the company had been making substantial amounts of profit every year. The companys balance sheets further show that it had substantial reserves. The Tribunal found that the number of workmen who retired during the 11 years under consideration was only 77, that is to say, 7 workmen per year. According to the scheme framed, the companys liability would be only Rs. 7,500 per year and this amount could easily be provided out of the funds of the company. The learned Additional Solicitor General referred to a statement of the number of workmen who would be due to retire during, the years to come and according to this statement, the financial burden would be much heavier than that found by the Tribunal. Unfortunately, we cannot take this statement into account which was not before the Tribunal. Again, we are not impressed by the argument of the learned counsel that if a scheme for gratuity could, on the materials before the Tribunal, be introduced in National Iron and Steel Co. Ltd., the Tribunal had no material whereby it could introduce the same scheme with regard to the other three companies. It was further argued that the Tribunal should have compelled the other three companies to produce the relevant documents in this connection. Weare not impressed by this argument. No doubt it was open to the Tribunal to call upon a particular employer to produce any document which was within its possession or power. Balance sheets and profit and loss accounts have to be maintained by all the companies and it goes without saying that the other three concerns could, if they were so minded, have produced these documents before the Tribunal. They could also have prepared statements to show the number of workmen who had retired during several years past and who were due to retire in the years to come. It seems to us that the three concerns were content to make the National Iron and Steel Co Ltd. theirin this respect, or they must have felt that the facts and figures, if disclosed, would have been such as would go against them and they deliberately refrained from producing them. On the materials placed before us, we hold that the scheme of gratuity as framed is quite a reasonable one on the facts and figures presented by the National Iron and Steel Co. Ltd. We have no material to hold that the scheme would work hardship on the other companies and the findings of the Tribunal cannot therefore bethat section, a workman employed in any industry should not be retrenched until he had been given one months notice in writing indicating the reasons for retrenchment and the period of notice had expired, or the workman had been paid in lien of such notice, wages for the period of the notice. The notice in this case bears the date November 15, l958. It is to the effect that the addressees services were terminated with effect from the 17th November and that he would get one months wages in lieu of notice of termination of his service. The workman was further asked to collect his dues from the cash office on. November 20, 1908 or thereafter during the working hours. Manifestly, S. 25 F, had not been complied with under which it was incumbent on the employer to pay the workman, the wages for the period of the notice in lien of the notice. That is to say, if he was asked to go forthwith he had to be paid at the time when he was asked to go and could not be asked to collect his dues afterwards. Asthere was no compliance with S. 25F, we need not consider the other points raised by the learned counsel. This conclusion receives support from the observations of this Court in Bombay Union of Journalists v. State of Bombay, (1964) 6 SCR 22     at pp.(AIR l964 SC 1617 at p. 1623). Incidentally it may also be pointed out that the retrenchment of Sushil does not seem to be otherwise justified in that following the principle of last come first to go, Sushil could not be called upon to leave the companys service. Another employee by name Joy Kishen, junior to Sushil, was retained in service. No doubt, the Labour Officer, Jha, tried to make out a case in his oral evidence that Joy Kishen was retained in service because he was doing a special job at the time while Sushil was not. The Tribunal rejected this contention on the ground that this plea had not been put forward in the written statements of the company and we do not see any reason why we should take a differentwas on this ground that Tatanagar Foundry Co. Ltd. had made an application at the early stages of the enquiry and pressed for a number of engineering concerns to be made parties to the dispute but the Tribunal had not acceded to this prayer. After dealing with the point in some detail, the Tribunal directed Tatanagar Foundry Co. Ltd. to abolish the system of contract labour excepting for the purpose of loading, unloading and for removing slags, ashes, burnt sand etc. and waste products. It was not argued before us that the Tribunals appraisal of the evidence and the direction to abolish contract labour were fundamentally wrong. What was urged before us was that such a direction would be discriminatory as between concerns engaged in the manufacture of railway sleepers and the abolition of contract labour in Tatanagar Foundry Co. Ltd. would mean an increase in its working expenses while the other concerns similarly engaged would be free to employ contract labour and thus oust Tatanagar Foundry Co. Ltd. from competition. Aswe have not the material before us to come to such a conclusion, we do not feel competent to express any opinion on this point and can only add that abolition of contract system of labour can be ordered by an Industrial Tribunal if the facts justify it. Industrial adjudication should not encourage the employment of contract labour is a principle which was laid down by this Court as far back as 1960 in Standard Vacuum Refining Co. of India Ltd. v. Its Workmen (1960) 3 SCR 466     at p. 473: (AIR 1960 SC 948   at p.