Case: Process Technicians and Analysts' Union Vs. Union of India

Bharat Petroleum Corporation Ltd., the second respondent in this appeal has about 12,000 employees. Out of these about 1850 employees are working in the refinery division of the second respondent. Process Technicians and Analysts Union which is thePrior to 1976 there were two companies; one was Burmah Shell Refineries Ltd. which was an Indian company and the other was Burmah Shell Oil Storage and Distributing Company which was a foreign company registered in the United Kingdom and was a marketing company. On or about 24th of January, 1976, the entire share capital of Burmah Shell Refineries Ltd. was purchased by the Government of India and Burmah Shell Refineries Ltd. became a Government Company, and later a Public Sector Undertaking. The Burmah Shell Oil Storage and Distributing Company which was a foreign company was acquired by the Central Government by enacting the Burmah Shell (Acquisition of Undertakings in India) Act, 1976. After the acquisition of the Burmah Shell Oil Storage and Distributing Company, both these companies were merged and a notification was issued under Section 7 of the said Act vesting the undertakings of the Burmah Shell Oil Storage and Distributing Company in Burmah Shell Refineries Ltd. The name of the said company was changed on or about 1st of August, 1977, to Bharat Petroleum Corporation Ltd. Upto 24th of January, 1976, there were approximately 220 Burmah Shell workmen who were working in the Refinery Company. After 24th of January, 1976, some of these employees continued with the Government Company. Fresh workmen were employed thereafter by the Government/Public Sector Company on a temporary basis on consolidated salaries.In February, 1978 Petroleum Employees Union filed U.L.P 38/1978 under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, claiming on behalf ofworkmen in the refinery of Bharat Petroleum Corporation Ltd. benefits ofWage Settlements signed by the then unions with Burmah Shell Refineries Ltd. Those settlements were dated 21.2.1973, 31.10.1973 and 16.8.1974.By a letter dated 27th of February, 1981 addressed by the Government of India to the secondthe attention of the second respondent was invited to existing directions to the effect that the Wage Scales/Service Conditions which were prevalent before theof the company cannot be granted to the employees recruited subsequently and that the secondshould recruit all new entrants afterof the company on consolidated wages. It was in compliance with this directive that the secondhad engaged employees after nationalisation on a temporary basis and on consolidated salaries.During the pendency of U.L.P. 38/1978, there were other litigations between the employees and/or unions of these employees and the secondpertaining to service conditions of the employees. These are, however, not relevant for the present purposes. On 29th of April, 1987, U.L.P. 38/1978 was allowed in favour of the employees. The Industrial Court held that the secondest of Burmah Shell Refineries Ltd. and that the settlement of 16th of August, 1974 continued to apply to employees recruited after nationalisation (hereinafter referred to asemployees). It was also held that the letter from the Government of India to the second respondentcorporation dated 27.2.1981 was of no legal effect and legislation was required if it was intended that the same service conditions would not apply toemployees. This decision was challenged by the second respondent by filing a writ petition being Writ Petition No. 1835 of 1987 in the Bombay High Court on or about 1st of July, 1987. The writ petition prayed for a writ of certiorari to quash the judgment dated 29th of April, 1987 in U.L.P. 38 of 1978. By an interim order of the same date the application of the settlement of 16th of August, 1974 was stayed for the past period but for prospective period from 1.7.1987 the said settlement of 1974 was made applicable to all workmen of the refinery who were complainants in U.L.P. 38 of 1978.On 2nd of July, 1988, Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service of Employees) Ordinance, 1988, was promulgated . Under Section 3 of the Ordinance power was vested in the Ministry of Petroleum, Government of India to determine service conditions under a scheme comparable with the employees of other public sector companies. The Ordinance was replaced by the Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service of Employees) Act, 1988, being Act 44 of 1988 (hereinafter referred to as `the Act of 1988). The relevant provisions of Section 3 of the said Act are as follows: Where the Central Government is satisfied that for the purpose of making the conditions of service of the officers and employees of the Corporation comparable with the conditions of service of the officers and employees of other public sector companies, it is necessary so to do, it may, notwithstanding anything contained in the Industrial Disputes Act, 1947 or any other law or any agreement, settlement, award or other instrument for the time being in force, and notwithstanding any judgment, decree or order of any Court, tribunal or other authority, frame one or more schemes for the purpose of determination of the conditions of service of the officers and employees of thex x x x xThe Central Government may make a scheme to amend or vary any schemes made under) The power to make any scheme under(1) or subsection (3) shallthe power to give retrospective effect to any such scheme or any provision thereof;the power to amend, by way of addition, variation or repeal, any existing provisions determining the conditions of service of the officers and employees of the Corporation in force immediately before the commencement of thisEvery scheme made underon (3) shallbe laid, as soon as may be after it is made, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the scheme, or both Houses agree that the scheme should not be made, the scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that scheme.Pursuant to the power given under Section 3, the Central Government, or about 29th of April , 1989, framed a scheme by a notification of that date, being the Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service ofRefinery Employees) Scheme, 1989 (hereinafter referred to as `the Scheme of 1989). The Scheme was made retrospective and Clause 1(2) of the Scheme provided that the Scheme shall be deemed to have come into force on and from the 24th day of January, 1976. The Scheme laid down conditions of service for the employees covered by the Scheme for five different periods : (1) the period from 24th of January, 1976 to 31st December, 1979; (2) 1st of January, 1980 to 31st December, 1983; (3) Ist January, 1984 to 31st December, 1987; (4) 1st January, 1988 to 31st December, 1991; and (5) after 31, of December, 1991, unless the conditions are altered, varied or repealed by any other scheme.Two unions of the employees of the secondnamely, the appellant union and Petroleum Workmens Union filed Writ Petition No. 3549 of 1988 in the Bombay High Court challenging the constitutional validity of the Bharat Petroleum Corporation (Determination of Conditions of Service of Employees) Act, 1988. Another writ petition being Writ Petition No. 3619 of 1988 was filed by another union, namely, Bharat Petroleum Corporation (Refinery) Employees Union challenging the constitutional validity of the said Act of 1988. After the coming into force of the said Scheme of 1989, these writ petitions were amended to challenge the validity of the said Scheme which was framed on 29th of April, 1989. These writ petitions were heard together. By a common judgment and order, a Division Bench of the Bombay High Court has dismissed these writ petitions and has upheld the constitutional validity of the said Act of 1988 and the Scheme of 1989.The present appeal is filed by thefrom the judgment and order of the Division Bench of the Bombay High Court in Writ Petition No. 3549 of 1988. Similarly, an appeal was also filed from the said judgment and order by the Petroleum Workmens Union who was a joint petitioner in the said Writ Petition No. 3549 of 1988. An Appeal was also filed by the Bharat Petroleum Corporation (Refineries) Employeess Union before this Court from the said judgment and order in Writ Petition No. 3619 of 1988. The other two appeals, however, have been disposed of before us by earlier orders in view of the settlements arrived at by the said two unions with the second respondentcorporation on or about 17th May, 1996. Thehowever, has not reached a settlement with the corporation.

Court's reasoning:
17. The considerations which have impelled the provisions of Section 3(1) and 3(2) in the 1988 Act are very similar to those cited in B.S. Yadavs case (supra). In the case of Imperial Bank of India Pensioners Association and others v. State Bank of India and others, JT 1989(1) SC 383 : 1989 Supp. (1) SCC 236, this Court upheld a distinction made between theed pensioners of Imperial Bank of India which was later taken over by the State Bank of India. The Court said that such a distinction did not violate Articles 14 and 16 of the Constitution. It said thatemployees constitute a class by themselves and there was no discrimination within the same class. The contention of the appellant, therefore, in this regard, cannot be sustained.We fail to see how these decisions help the appellant in the present case. The decision in A.V. Nachanes case (supra) on which strong reliance is placed by Mr. Phadnis, learned senior counsel for the appellant, has turned upon an existing writ of mandamus which was issued by the Calcutta High Court and which the Court said would have to be obeyed. This was the reason why only prospective operation was given to the rules of 1981 in A.V. Nachanes case (supra). In the present case, there is no writ of mandamus or any other writ issued by any High Court in favour of the appellant directing the second respondent to apply thesettlements of 1974 to the postnationalisation employees. Even the judgment and order of the Industrial Court has been set aside by the High Court in Writ Petition No. 1835 ofis in these circumstances that there is difference between the wages received by the employees of the two different departments of the second respondent. Each of these employees constitutes a distinct class which is receiving different pay packets because of different circumstances which have affected the wage structure of each class. This cannot be considered as discrimination under Articlefail to see how the distinction made between those employees who have entered into a settlement and those employees who have not entered into a settlement can be considered as discriminatory. The second respondents have even now stated before us that they are willing to sign a similar settlement with the appellant union. The appellant union, however, has declined to do so. Having declined to do so the appellant cannot complain of discrimination. The amended Scheme of 1996 grants further benefits to the employees of the appellant union who are the only group of employees in the refinery not covered by the settlements, by giving them further increases in the manner set out in the amended scheme. The appellant cannot compare the benefits which they get under the amended scheme with the benefits which other employees have got under settlements signed with the employer. Better terms under the settlement may be the result of negotiations between the employer and the employees. There are various considerations which go into finalising such settlements on the part of the employer. These include (1) industrial peace so that the workers can concentrate on their work without agitations, (2) putting an end to expensive litigation between the employer and the employees and establishment of goodwill and harmony between the employer and the employees leading to better functioning of the establishment. These considerations are very different from considerations which govern the framing of a statutory scheme by the Central Government. Such a scheme must necessarily bear in mind the wage pattern in other public sector undertakings and provide for revision of wages based on certain accepted principles for all public sector undertakings. The considerations for framing the amended scheme are different. Those who are governed by a statutory scheme cannot compare themselves with employees who have entered into a negotiated settlement with their employer. The charge of discrimination under Article 14, therefore, cannot be sustained in this regard.