Case: Mckenzie &amp; Co. Ltd Vs. Its Workmen And Others

2. The facts leading to the appeal are that on 3rd August 1958, the Government of West Bengal referred under S. 10, Industrial Disputes Act, hereinafter called the Act, to the second Industrial Tribunal, an industrial dispute between the appellant and its workmen. During the pendency of this Reference the workmen acted in a manner subversive of discipline, wilful insubordination and disobedience inasmuch as they surrounded by forming a kind of cordon round E. L. DCruz, acting Works Manager of the Company, illegally confined him in a small place in the factory premises and kept him so confined between the hours of 9-15 a.m. to 2-15 p.m.., till he was rescued by the police. The cause of this action on the part of the workmen is stated to be a dispute as to the payment of Puja bonus for the year 1953. The same day the workmen went on strike at 9.15 a.m. DCruz called upon them to resume work but they refused and the appellant-company issued notices at 9-45 a.m., and 10-45 a .m. asking the workmen to resume work immediately. The workmen took no notice of these notices and the appellant company after the arrival of the police declared a lockout. Some of the workmen were then arrested. The appellant company then served charge sheet on the workmen calling upon them to submit their explanations within 24 hours. The workmen gave no explanation. An enquiry was held and the workmen were found guilty of gross misconduct amounting to major misdemeanour which merited dismissal and the company proposed to dismiss them. For that purpose the appellant company on 31st October 1953, made three applications Cal. Nos. 518, 519 and 557 of 1953 to the Tribunal for permission under S. 33 of the Act to dismiss 170 workmen with effect from 6th OctoberDuring the course of the proceedings the appellant company withdrew its case against a large number of workmen and the proceedings were ultimately continued against 67 workmen. One of these workmen died and two resigned leaving 64 workmen against whom the proceedings were continued.The workmen in their defence denied the commission of any offence and also denied the receipt of charge sheets. They pleaded that there was no enquiry, that the lockout was illegal and that the appellant had acted in contravention of the principles of natural justice. The three applications were heard together and were disposed of by one order. The Tribunal held that a prima facie case had been made out for granting permission for dismissal of workmen directly involved in the incident ; that the appellant company had acted bona fide and that it was not guilty of discrimination, vindictiveness or arbitrary action. Although, it had started cases against 170 workmen it took back a majority of them on their expressing regret. The Tribunal gave permission for the dismissal of only three workmen Subbas Roy, Madhusudhan Rout and Bimal Kumar Ghose and permission with regard to the rest was refused on the ground that there was reasonable doubt as to their identity and complicity in the incident.On 8th January 1954, the workmen made an application under S. 33A of the Act which was allowed on 2nd JulyThree appeals were filed, two by the appellant company against the orders under S. 33 and the other made under S. 33A of the Act. The third appeal was filed by workmen as to the dismissal of three workmen. On 29th March 1955, the appeal of the company with regard to application under S.33 of the Act was dismissed and so was the appeal of the workmen and thus the order as to 3 workmen was upheld. The employers contended that as the strike was illegal, the management had the right to terminate the services of the workmen and the Tribunal was therefore hound to accord sanction to the management but the Labour Appellate Tribunal did not do into this matter as the question had not been raised at any previous stage. On the same day the Labour Appellate Tribunal set aside the order of the Tribunal under S. 33A on the ground that the application under that section was misconceived and the order made by the Tribunal was without jurisdiction.On 20th April 1955, the management of the appellant company took fresh proceedings against the 64 workmen and in order to serve charge sheets on them sent registered notices to their addresses, registered with the appellant company, and also affixed notices on its Notice Boards both inside the premises and outside the gate of the premises which remained affixed there from 20th April 1955, till 9th JuneOut of the registered notices sent notices could not be served on workmen Nos. 2 to 24 and they were returned to the sender with the remark that the addressees had either left or their addresses were unknown. On 28th April 1955, the appellant company wrote a letter to the Labour Commissioner informing him of the offences committed by the workmen and the action that it proposed to take against its workmen. On 20th May 1955, the appellant company wrote to the secretary of the Workers Union asking him for the addresses of the workmen who had not been served but it received no reply from the secretary. The enquiry started by the management of the appellant company terminated on 9th June 1955, and as at that time no proceedings were pending under the Act, the appellant company terminated the services of all the 64 workmen on 22nd June 1955.The termination of the services of those workmen gave rise to an industrial dispute and a reference was made by the West Bengal Government on 8th August 1955 in regard to all the 64 workmen. The points referred for adjudicationWhether the dismissal of the 64 workmen mentioned in the attached list is justified. Whether the Company should not reinstate them. What compensation should they be paid for the action taken against them by the Company?(2) What compensation should be paid to them in respect of the period of enforced idleness from 6-10-53, particularly for the period they were refused permission to rejoin work even after their cases had been disposed of by the Tribunal ?(3) Whether the Tribunal Awards concerning the 64 workmen have been properly implemented. What compensation should be paid to them by the company for not having properly implemented the AwardSixteen workmen resigned and one of them Haroo Haldar pleaded guilty and therefore, proceedings were continued against only 47 workmen. The Tribunal (6th Industrial Tribunal, West Bengal) made its award on 7th JuneIt held that the workmen Nos. 2 to 24 had not been properly served and ordered their reinstatement as from 1st April 1955 with back wages, dearness allowance etc. from 1st April 1955, but upheld the dismissal of workmen Nos. 25 to 48, it held that there was evidence to establish the identity of persons who had taken part in the strike and had wrongfully confined DCruz and that no bias or ill will could be attributed to the management nor was it inspired by any vindictive motives. It saidthere was evidence and it was a possible view the Tribunal must accept the finding and hold that the dismissal of those workers was justified".In regard to wages the Tribunal held that the strike of 6th October 1953 was illegal as at that time the reference was pending before the Industrial Tribunal; that the lockout was fully justified as the strikers had taken a belligerent attitude and had actually kept the acting Works Manager illegally confined till he was rescued by the police; that no compensation could, therefore, be claimed for the period from 6th October 1953 up to the time that the Labour Appellate Tribunal on 29th March 1955 disposed of the proceedings under S. 33; but the workmen Nos. 2 to 24 who were held to be wrongfully dismissed and had been ordered to be reinstated but had not been allowed to return to work were entitled to wages but only from 1st April 1955 up to the date of reinstatement. On the third issue i.e, the matter of Subbas Roy, Madhusudan Rout and Bimal Kumar Ghosh permission for dismissal granted by the State Tribunal was confirmed on appeal. No question of compensation could arise in their case.9. Against this order of the 6th Industrial Tribunal two appeals were taken to the Labour Appellate Tribunal one by the Union and the other by the appellant company. On 11th September 1956 the Labour Appellate Tribunal dismissed the appeal of the appellant company and allowed that of the Union. It held that the evidence of E. L. DCruz given in the managerial enquiry in May 1955 could not be accepted. In its order the Appellate Tribunal saidJune 1954 Mr. E.L.DCruz was unable to give evidence against the appellants in Appeal No. Cal. 223 of 1956.In May 1955 he gave evidence connecting the appellants with the misconduct that was committed on 6th OctoberNo other evidence is to be found on the record to show that the workmen who are concerned in these proceedings committed misconduct on 6th October 1954.In these circumstances, it is difficult to act on the evidence given by Mr. E. L. DCruz in the managerial enquiry In Mayreferring to the principles laid down in the case of Buckingham and Carnatic Co. Ltd. v. Its Workmen, 1952 Lab. A. C. 490 the Labour Appellate Tribunal ruled out the evidence of DCruz and as there was no other evidence to prove misconduct against the workmen, it came to the conclusion that the decision of the management was perverse. It heldthese circumstances, we set aside the order of the Industrial Tribunal giving permission to the management to discharge the appellants fromconsequently the order of the Industrial Tribunal giving permission to discharge workmen Nos. 25 to 48 was set aside. The Appellate Tribunal suo motu amended this order on 28th September 1956 and the following order was substituted in place of the operative portion of the order of 11th September 1956those circumstances we set aside the order of the Industrial Tribunal upholding the action of the Management in discharging the appellants from service . . . In the result the Award under appeal confirming the action of the Management in discharging twenty four workmen from service is set aside. In other respects that Award is confirmed. In other words we order the reinstatement of the twenty four workmen discharged by the Management with back wages for the period between 1st April 1955 to the date ofthis order the appellant company has come up in appeal by special leave

Court's reasoning:
It is not necessary to go into the first question because, in our opinion, the second question raised is well founded. The principles which govern the power of an Industrial Tribunal to interfere with the decision of the employer following an enquiry made by him were laid down by this Court in Indian iron and Steel Co. Ltd. v. Their Workmen, A. I. R. 1958 S. C. 130 where S. K. Das J., said at page 138the management of a concern has power to direct its own internal administration and discipline; but the power is not unlimited and when a dispute arises, Industrial Tribunals have been given the power to see whether the termination of service of a workman is justified and to give appropriate relief. In cases of dismissal on misconduct, the Tribunal does not, however, act as a Court of appeal and substitute its own judgment for that of the management. It will interfere (1) when there is want of good faith (ii) when there is victimisation or unfair labour practice (ii)when the management has been guilty of a basis error or violation of a principle of natural justice, and (iv) when on the materials, the finding is completely baseless or perverse.In our opinion, the Industrial Tribunal proceeded on correct principles as to its power in regard to an enquiry held by the management and the Labour Appellate Tribunal seems to have approached the question as if it was sitting in appeal against the decision taken by the management in regard to the termination of service of their workmen.In the instant case none of the principles, which have been laid down by Labour Courts as well as by this Court in regard to enquiry by the management into the misconduct of their workmen, have been violated and the Labour Appellate Tribunal was in error in setting aside the order of the Industrial Tribunal on the ground that it was unable to accept the testimony of DCruz as to the identity of persons who had taken part in wrongfully confining him on the day of the illegal strike. It appears to have proceeded as if it was sitting in appeal against the decision of the managerial enquiry and further it was under a misapprehension as to the nature of the proceedings before the Industrial Tribunal and before itself, inasmuch as it seems to have been under the wrong impression that the appeal before it arose out of an application under S. 33 of the Act and that the Industrial Tribunal had given permission to the appellant company to discharge its workmen. Its amended order shows that it thought, and again wrongly, that really the proceedings were under S. 33A of the Act and it was that mistaken view of the nature of the proceedings which led to its order for reinstatement of the workmen with back wages from 1st April 1955 to the date of reinstatement. The Labour Appellate Tribunal seems to have overlooked the fact that the appeal before it arose out of a Reference made by the West Bengal Government under S. 10 of the Act. This misconception as to the nature of the proceedings vitiated its order as the Appellate Tribunal misdirected itself as to the scope of the powers to be exercised by it and consequently it led to the making of an erroneous order.The Industrial Tribunal held that there was no proper notice to workmen Nos. 2 to 24 and the mere affixing of the notices on the notice Board of the company was not sufficient as the workmen could not enter the appellant companys premises due to the lock out. It overlooked the evidence as to the notice being affixed on the appellant companys board outside its date from where the workmen were not excluded as a result of the lock out and it was open to them if they so desired to go and look up, the notices there. Further the Tribunal was of the opinion that the appellant company might have sent the notices to the secretary of the Union "for circulation to the absentees". In the first place this is not one of the recognised modes of effecting service and in this case the company would have been justified in not taking this action after the way that, gentleman had neglected even to reply to the appellant companys letter asking him to supply the addresses of the workmen. Apart from complying with its standing orders the appellant company made every effort under the circumstances to serve notices on its workmen. No principle of natural justice has, in our opinion, been infringed and the finding as to the workmen having no notice of the charges against them and consequently not having a proper opportunity to meet the case against them cannot be sustained. It cannot be said that the workmen did not have a proper opportunity to answer the case against them. If the rule were as the order o the Industrial Tribunal holds it to be then by their action of not giving proper addresses to the employer or abstaining from looking up the Notice Boards where under the standing orders notices were required to be affixed the workmen might make it impossible for an employer to take disciplinary action assuming that such action is necessary or justified. The Labour Appellate Tribunal did not consider or apply its mind to this aspect of the case, it being under a misapprehension as to correct nature of theis no force in this contention, which seems to be based on a misapprehension as to the nature and scope of proceedings under S. 33.That section does not confer any jurisdiction on a Tribunal to adjudicate on a dispute but it merely empowers the Tribunal to give or without permission to the employer during the pendency of an industrial dispute to discharge or punish a workman concerned in the industrial dispute. And in deciding whether permission should or should not be given, the Industrial Tribunal is not to act as a reviewing tribunal against the decision of the management but to see that before it lifts the ban against the discharge or punishment of the workmen the employer makes out a prima facie case. The object of the section is to protect the workmen in pending industrial disputes against intimidation or victimisation. As said above principles governing the giving of permission in such cases are that the employer is not acting mala fide, is not resorting to any unfair labour practice, intimidation or victimisation and there is no basic error or contravention of the principles of natural justice. Therefore when the Tribunal gives or refuses permission it is not adjudicating an industrial dispute, its function is to prevent victimisation of a workman for having raised an industrial dispute. The nature and scope of proceedings under S. 33 shows that removing or refusing to remove the ban on punishment or dismissal of workmen does not bar the raising of an industrial dispute when as a result of the permission of the Industrial Tribunal the employer dismisses or punishes the workmen.Atherton West and Co: Ltd. Kanpur, U. P. v. Suti Mill Mazdoor Union, 1953 S C R 780 at p. 788 : (A I R 1953 S C 241 at p. 244); (S) A I R 1957 S Cis significant that this basic error does not seem to have been argued either before the Industrial Tribunal or the Labour Appellate Tribunal, on the other hand, the parties seem to have proceeded on the basis that the number of workmen proceeded against by the appellant company was 67 out of whom 64 were left after three were allowed to be dismissed. Out of the rest 16 had resigned and there were only 48 persons whose cases remained for adjudication by the Industrial Tribunal. No basic error is therefore made out.20. The question of compensation to the workmen from the date when they were ordered to be reinstated i. e. from 1st April 1955 to 6th June 1955 when their services were terminated is equally unsustainable. The Industrial Tribunal in its order of 26th June 1954 and the Labour Appellate Tribunal in its order dated 29th March 1955 held the strike to be illegal. Mr. S. C. Sen Gupta Judge of the 6th Industrial Tribunal who gave the award dated 7th June 1956 refused to give any compensation to workmen Nos. 25 to 48 whose dismissal he upheld on the ground that the strike was illegal, the strikers had taken up a belligerent attitude and the lock out was fully justified. The Labour Appellate Tribunal awarded to the 24 workmen reinstated by its amended order dated 28th September 1956 back wages from 1st April 1956 to the date of reinstatement as was done by the Industrial Tribunal in the case of workmen Nos. 2 to 24, whom the Tribunal had ordered to be reinstated. As we have come to the conclusion that the order of reinstatement by the Industrial Tribunal of workmen Nos. 2 to 24 and by the Appellate Tribunal of workmen Nos. 25 to 48 was erroneous, neither of the two sets of workmen is entitled to back wages by way of compensation.