Case: M/S. Tata Iron &amp; Steel Co. Ltd Vs. State Of Jharkhand

The appellant before us is M/s. Tata Iron & Steel Company Limited (rechristened as Tata Steel Ltd.). Apart from manufacturing steel, its core business, the appellant company was having cement division as well. In the era of globalization, liberalization and also because of economic compulsions, the appellant decided to follow the policy of disinvestment. Persuaded by these considerations it sold its cement division to Lafarge India Pvt. Ltd (hereinafter to be referred as ‘M/s.vide Business Transfer Agreement (BTA) dated 9.3.1999 which was to be effected from 1.11.1999. This agreement, inter alia provided that M/s. Lafarge would take over the company personnel, including, in terms of Section 25 FF of the Industrial Disputes Act, 1947. It was on the conditionThe services of the company personnel shall not be or deemed to be interrupted by such transfer.(b) The terms and conditions of service applicable to the company personnel after such transfer are not in any way less favourable to the company personnel than those applicable to them immediately before the transfer.(c) The purchaser is, under the terms of transfer herein, legally liable to pay to the company personnel in the event of their retrenchment, compensation on the basis that services have been continued and have not been interrupted by the transfer of business.This decision to hive off and transfer the cement division by the appellant to M/s Lafarge was communicated to the employees of the cement division as well. According to the appellant, consequent upon this agreement, with the transfer of business, the employees working in the cement division were also taken over by M/s Lafarge & M/s Lafarge issued them fresh letters of appointments. These included Respondent Nos. 8-82 herein who started working with M/s Lafarge.5. It appears that these workers were not satisfied with the working conditions in M/s. Lafarge. They submitted a statement of demand to the appellant on 15.9.2003, stating inter alia that they were directed to work with M/s. Lafarge without taking their consent. As per these respondents/ employees, impression given to them was that they would work in different departments in M/s. Lafarge for some days for smooth functioning of that establishment, which was a part of the appellant organization and thereafter they would be posted back to the parent department. They had obeyed these orders faithfully believing in the said representation. However, the concerned employees were not given all the benefits by M/s Lafarge which they were enjoying in their parent department. Thus, the demand was made to take them back with the appellant company. The company did not pay any heed to this demand. These employees approached the Deputy Labour Commissioner, Jamshedpur, raising their grievances and requesting to resolve the dispute.6. Notices were issued to the appellant to participate in the Conciliation Proceedings. The appellant appeared and took the plea that on and from 1.11.1999, the cement division was sold to M/s. Lafarge and these workmen had become the employees of M/s. Lafarge. It was also stated that fresh appointment letters issued by M/s. Lafarge and they ceased to be the employees of the appellant. Since no amicable settlement could take place and conciliation proceedings resulted in failure. The failure report was sent by the Labour Department to the Government of Jharkhand which resulted in two reference orders, thereby referring the disputes between the parties to the Labour Court, Jamshedpur, for adjudication. The dispute was referred under Section 10(1) of the Industrial Dispute Act, 1947 with following terms andnot to take back Shri K. Chandrashekhar Rao and 73 other workmen (list enclosed) of M/s TISCO Limited, Jamshedpur in service by their own TISCO Management after their transfer to M/s. Lafarge India Limited, is justified? If not what relief they are entitledreference was also worded identically.7. According to the appellant, the manner in which the references are worded, do not depict the true nature of the dispute between the parties. It was their submission that the concerned workmen were no longer in their employment and, therefore, could not have raised the grievance or any dispute against the appellant company and thus, no industrial dispute at all existed between the appellant and the respondent workmen. They took a specific plea that if M/s. Lafarge did not provide assured service terms, these respondents could raise the dispute only against M/s. Lafarge which was their real employer and M/s. Lafarge was not even made partial in the present proceedings. As per the appellant, the Conciliation Officer had not considered material on record and without applying its mind submitted the failure report leading to the reference in question. On that basis, Writ Petitions were filed by the appellant before the High Court of Jharkhand at Ranchi seeking quashing of the said reference.8. These Writ Petitions came up before the learned Single Judge who dismissed these Writ Petitions with the observation that the Labour Court, which was already in seisin of the matter, can very well adjudicate and answer the reference after considering all the points raised by the parties and on the basis of evidence led by the parties in the reference proceeding before the Labour Court. Intra Court Appeals preferred by the appellant have been dismissed by the Division Bench of the said Court observing that as there is a dispute between parties and, therefore, the learned Single Judge rightly dismissed the Writ Petitions.9. It is how the parties are before us in the present proceedings.

Reasoning:
It follows from the above that the reference in the present form is clearly defective as it does not take care of the correct and precise nature of the dispute between the parties. On the contrary, the manner in which the reference is worded shows that it has already been decided that the respondent workmen continue to be the employees of the appellant and further that their services were simply transferred to M/s. Lafarge. This shall preclude the appellant to put forth and prove its case as it would deter the labour court to go into those issues. It also implies that by presuming so, the appropriate Government has itself decided those contentious issues and assumed the role of an adjudicator which is, otherwise, reserved for the Labour Court/ Industrial Tribunal.21. As a consequence, this appeal is allowed and the impugned judgment of the High Court is set aside. Sequitur to that would be to quash the references made in the present form. However, at the same time, direction is given to the appropriate Government to make fresh reference, incorporating real essence of the dispute as discussed in this judgment, within a period of two months from the date of receipt of the copy of this judgment.