Case: Western India Match Company Ltd Vs. Workmen

1. The Western India Match Company Limited, Bareilly (hereinafter called the Company) is governed bythe Industrial Employment (Standing Orders) Act, 1946 (hereinafter called the Act). It appears that it has a separate Standing Order for the Watch and Ward Staff: According to the Standing Order there are five categories of workmen. (1) Permanent, (2) Probationer, (3) Substitute, (4) Temporary, and (5) Apprentice. A permanent workman is one "who has completed a probationary period of two months as such and is employed on a permanent post." A probationer is a workman "who is provisionally employed to fill a permanent vacancy andhas not completed two months Service."(emphasis added )2. The Company appointed one Prem Singh as a watchman on September 1, 1965. The letter of appointment states that he would be "on probation for a period of six months." We shall hereafter refer to this contract of service as a "special agreement." The period of probation expired on March 1, 1966, but he continued to serve on his post. On April 13, 1966 the Company passed an order extending the period of his probation by two months with retrospective effect from March 1, 1966. Nine days later, on April 22, 1966, the Company passed this order: "the above watchman has been discharged with effect from 1-5-1966 for the reasons mentioned below :(1) probation period not approved, services are no longer required by the Company."This order gave rise to an industrial dispute. The dispute was referred for adjudication by the Government of Uttar Pradesh to the Labour Court (II), Lucknow. The referring order was made on April 9, 1968. The question referred to the Labour Court is:"Whether the employers have terminated the services of the workman Shri Prem Singh, son of Shri Bhartu, Watchman T. No. 2-47 with effect from 1-5-1966 legally and/or justifiably? If not, to what relief is the workman concerned entitled."Prem Singh was represented before the Labour Court by the Matches Mazdoor Sangh, Bareilly. The case of the Sangh was that the employment of Prem Singh on probation for six months was in contravention of the Standing Order. It was maintained that on the expiry of two months Prem Singh automatically became a permanent workman. It was also said that during the entire period of his probation Prem Singh was never told by the Company that it was not satisfied with his work According to the Company, the term of six months, probation was valid. It was said that as his work was not found satisfactory, he was discharged3. The Labour Court has found that the discharge was neither male fide nor an act of victimisation for trade union activities. However, the labour Court has set aside the order of discharge and has directed his reinstatement with continuity of service and back wages. This is so because it has taken the view that the term regarding six months, probation was in contravention of the Standing Order and was invalid. It has held that on completing two months probation Prem Singh automatically became a permanent employee.

Court's reasoning:
According to the Standing Order, a workman shall not be kept on probation for more than two months. If he has worked during these two months to the satisfaction of the (company, he becomes permanent. But as a result of special agreement, even though he has worked during these two months to the satisfaction of the Company, he will not be a permanent workman. While the Standing Order says "Confirm him on the expiry of two months, the special agreement says: "No, wait till the expiry of six months." There is thus a conflict between them. They cannot co-exist. So we are of opinion that the special agreement is inconsistent with the Standing Order to the extent of the additional four months probation9. The special agreement, in so fat as it provides for additional four months of probation, is an act in contravention of the Standing Order. We have already held that. It plainly follows From Sections 4, 10 and 13 (2) that the inconsistent part of the special agreement cannot prevail over the Standing Order. As long as the Standing Order is in force, it is binding on the Company as well as the workmen. To uphold, the special agreement would mean giving a go-by to the Acts principle of three-party participation in the settlement of terms of employment. So we are of opinion that the inconsistent part of the special agreement is ineffective and unenforceableWe think that the word may in sub-section (2) should be read as shall in the context of sub-section (3). If social justice is to be ensured and if collusion, fraud or misrepresentation is to be eliminated it is necessary that every privately negotiated settlement should be submitted for registration to the Conciliation Officer. It may be observed that the U. P. Act also insists on the three party participation in the settlement of terms of employment. In the result, the Company cannot enforce the special agreement on the pretext that Prem Singh had voluntarily agreed to it. The conciliation Officer having had no say in the making this agreement, the consent of Prem Singh is meaninglessThis decision does not assist him for in the case before us the Company did not plead in its written statement filed before the Labour Court that the work of Prem Singh was unsatisfactory during the probationary Period, nor did it lead any evidence in proof of his unsatisfactory work.The argument does not appear to have beer raised in the special Leave petition also.Accordingly, it is not possible to permit this argument to be raised nowIt is settled law now that the Labour Court may interfere with the order of discharge where it is satisfied that it was made mala fide or was a measure of victimization or unfair labour practice. It has also been held by this Court that the Labour Court may interfere with the order of discharge if it finds that the order is arbitrary or capricious or so unreasonable as to lead to the inference that it is not made bona fide. As there was no plea and no evidence to show that the work of Prem Singh was unsatisfactory, the conclusion is obvious that the order of discharge is arbitrary. Accordingly, the Labour Court could interfere and make an order of reinstatement.