Case: Salem Erode Electricity Distribution Company Ltd Vs. Salem Erode Electricity Distribution Co. Ltd. Employe

1. The appellant, Salem Erode Electricity Distribution Co. Ltd., is a licencee under the Indian Electricity Act, 1910, and its business consists in buying electrical energy in bulk from the State Electricity Board of Madras and selling it to consumers in Salem and Erode and certain rural districts in the State of Madras. For the purpose of carrying on this business, the appellant has an industrial establishment at Salem.2. In or about 1940, when the number of the appellants consumers was about 3,000, and that of its workmen about 45, the appellant framed certain terms and conditions of its workmens employment. Amongst these were included terms about leave and holidays. Later, when the Industrial Employment (Standing Orders) Act, 1946 (No. 20 of 1946) (hereinafter called the Act) came into fore, the provisions as to leave and holidays which had been introduced by the appellant in the terms and conditions of the employment of its workmen, were embodied in the appellants Standing Orders which were certified under the relevant provisions of the Act in or about 1947. The said terms readOrder 5 (b) - The number of holidays to be granted to the workmen and the days which shall be observed as holidays by the Establishment shall be regulated in accordance with the Factories Act, 1948 or other relevant law for time being in force and the custom or usage of the Establishment, viz., holidays under the Negotiable Instruments Act. 1881 and festival holidays peculiar to this locality which are being given.Standing Order 10 (a) - Leave will be given in accordance with the law and existing practice provided the leave facilities now available to the worker are not curtailed in any manner.The proceedings which have give rise to the present appeal by special leave between the appellant and the respondents, its employees, began with the application made by the appellant on the 6th October, 1960, before the Certifying Officer, Madras, for the amendment of the certified Standing Orders to which we have just referred. By its application, the management of the appellant wanted the said Orders to readOrder 5 (b) - For all workmen who have joined service prior to ........ holidays under the Negotiable Instruments Act, 1881, and festival holiday of one day per year which day may be chosen by the workmen shall be given. For all workmen who have joined on and after ....... holidays under the Madras Industrial Establishments (National and Festival holidays) Act, 1958, shall beOrder 10 (a) - Leave will be given to all employees who are appointed on and after ...... in accordance with the provisions of the Madras Shops and Establishments Act, 1947 or any statutory modification thereof (irrespective of whether this Act applies or not to any category of employees or employees). Provided, however, that for all employees who have been confirmed prior to the above said date, viz ....... The leave facilities now available are not curtailed in any manner.It is relevant to mention the background of the present application. The appellant believed that the urgent need for increased production and for increased supply of electrical energy could be met if the existing rules embodied in Standing Orders 5 (b) and 10 (a) were suitably modified; and so, the appellant wanted to make the change in the said two Standing Orders on the lines indicated by it in its application to the Certifying Officer. It appears that these Rules were introduced by the appellant on the 1st October, 1960, and were embodied in the contracts of services of new entrants who joined the appellants employment as from that date. In fact, they were agreed to by such new entrants. In order to regularise the steps taken by the appellant by revising the relevant Rules in respect of the new entrants to its employment, the appellant made the present application.5. The change proposed to be made by the appellant in the two Standing Orders in question was resisted by the respondents Union. It was urged by the respondents that the proposed change was unfair and unreasonable, and it was also argued that it would introduce discrimination between one set of employees and another working under the same employer, and that would naturally cause industrial unrest and disharmony. The Certifying Officer upheld the pleas raised by the respondents and he accordingly directed that the proposed amendments should be negatived.6. The appellant then preferred an appeal against the said order before the appellant authority. Both the parties urged similar contention before the appellate authority and the said authority agreed with the view taken by the Certifying Officer and dismissed the appeal preferred by the appellant. It is against this order that the appellant has come to this Court by special leave.

Court's reasoning:
25. The last case to which reference must be made is Guest, Keen, Williams Private Ltd. v. P. J. Sterling, 1960-1 SCR 348  : (AIR 1959 SC 1279  ). In that case, the Standing Order had been certified under the Act prior to its amendment. The relevant Standing Order had relation to the age of retirement of the employees under the establishment in question. When the Standing Order was certified, its fairness and reasonableness could not have been examined by the Certifying Authority. After it was certified, the employer sought to give effect to the age of retirement in regard to employees who were already in its employment; and that gave rise to an industrial dispute. The employees who were already in the employment of the employer, contended that prior to the certification of the Standing Order, there was no age of retirement in the concern and they urged that the certified Standing Order could not affect their right to continue in the employment so long as they were fit to discharge their duties. It was in the context of this dispute that the question arose as to whether the certified Standing Order applied to the previously existing employees. The Labour Appellate Tribunal against whose decision the appeal was brought to this Court by the appellant Guest, Keen Williams Private Ltd. had held that the certified Standing Order could not apply to the employees who were already in the employment of the appellant. This Court affirmed the view expressed by the Labour Appellate Tribunal that the certified Standing Order could not affect the rights of the previous employees; nevertheless, it was held that the question of prescribing an age of retirement for them could be considered in the proceedings before the Court and under the special circumstances to which reference has been made in the judgment, it was thought that the age of superannuation for prior employees could be reasonably and fairly fixed at 60 years. This decision again is not of any assistance, because the matter came to this Court from an industrial dispute which was the subject-matter of industrial adjudication before the Industrial Tribunal and the Labour Appellate Tribunal and all that this Court did was to fix an age of superannuation for workmen who had been employed prior to the date of the certification of the relevant Standing Order, at 60, and that course was adopted under the special and unusual circumstances expressly stated in the course of the judgment. As we have already pointed out, the question as to whether two sets of Standing Orders can be certified under the provisions of the Act, did not fall to be considered in that case. Therefore, we are satisfied that the Certifying Officer as well as the appellate authority committed no error of law in refusing to certify the modified Standing Orders submitted by the appellant in the present proceedings.Prior to the enactment of the Act, industrial establishment used to employ workmen on different terms and conditions of service and they used to enter into separate agreements with employees on an ad hoc basis. It was precisely with the object of avoiding this anomalous position that the Act has been passed and an obligation has been imposed upon the industrial establishments to have their Standing Orders certified by the appropriate authorities. Therefore, we do not think Mr. Setalvad is right in contending that it is open to an industrial establishment to have two sets of Standing Orders certified in relation to leave and holidays provided that the modified Standing Orders apply to future entrants and the existing Standing Orders apply to entrants who are already in the employment of the establishment.The result, therefore, appears to be that in regard to the certification of the Standing Order, the Act provides for aCode. The Certifying Officer is given the power to consider questions of fairness and reasonableness as well as the other question indicated by S. 4 (a) and (b). An appeal is provided against the decision of the Certifying Officer and in case a dispute arises as to the interpretation or the application of the Standing Order, a remedy is provided by S. 13A. Besides, as we have already pointed out, a right is given both to the employer and the workmen to move the appropriate authorities for modification of the existing Standing Orders. That is why we do not think that Mr. Setalvad is right in contending that the Certifying Officer as well as the appellate authority erred in law in refusing to certify the modified Standing Orders submitted by the appellant for certification.