Case: KANDLA PORT WORKERS UNION Vs. FCI

2. An agreement was entered into between the Government of India and the Trustees of the Port of Kandla (KPT) on 08.04.1965 by which the KPT accepted to act as an agent of the Government for the purpose of assembly, operation and maintenance of wheat discharging machines on behalf of the Government of India in connection with discharge of food grains from tankers/ vessels arriving at Kandla as and when required by the Government of India. According to the Agreement, the KPT was responsible for the operation and maintenance of the machines with a view to obtain the best possible performance therefrom and for the said purpose, KPT shall ensure adequate staff at various stages of operation and maintenance. It was further agreed that the Government shall, on conclusion of the Agreement, take over the staff engaged by the KPT3. An order was passed by the FCI on 18.09.1973 taking over the staff of the Vacuvator Division of the KPT w.e.f. 01.01.1973. By the said order, the regular employees of KPT were taken over as confirmed in the appropriate posts and they would be governed by the service conditions prescribed in the FCI (Staff) Regulations, 1971 ( the Regulations for short). The work charge employees were taken over as regular employees w.e.f. 01.01.1973 and they would be governed by the service conditions in respect of leave, probation, disciplinary action, etc., according to the Regulations. The employees were made eligible to the pay as fixed and indicated in the Annexure to the said order w.e.f. 01.01.1973 in the FCIs scale of pay. The employees who were taken over would be governed by the Food Corporation of India CPF Regulations. All the employees who worked in the Vacuvator Division of KPT joined and continued to work in the FCI4. In the meanwhile, an industrial dispute was raised which was referred to the Industrial Tribunal. The terms of reference are as follows:1. Whether the action of the management of FCT, Adipur in not extending the Option to elect revised pay scales to 15 workmen of Vacuvator Division Switched over from Kandla port Trust to FCT, Adipur with effect from 1.1.1973 or from the subsequent date after drawing increments etc., is justified? If not, to what relief these workmen are entitled to and from what date?2. Whether the action of the management of Food Corporation of India Adipur in not regularizing the CPF/ GRP subscription and contribution from 1965 to March, 1973 in respect of the workmen switched over from Kandla Port Trust to Food Corporation of India, Adipur from CPF to CPP scheme is justified if not, to what relief the concerned workmen are entitled and from which date?5. The reference was allowed and Respondent No.1 was directed to give an option to the 15 persons whose names were mentioned in the award as per Para 3 of the Circular dated 01.05.1976 and fix their pay and increments accordingly. The said workmen were held to be entitled to exercise option under Section 12A (4) of the FCI Act, 1964 on their transfer to the FCI w.e.f. 01.01.1973. Respondent No.1 was unsuccessful in the challenge made to the award before the learned Single Judge of the High Court. In a reference made by the Government of India under Section 10(2) of the Industrial Disputes Act, 1947, the Central Government Industrial Tribunal directed seniority to the employees of the FCI in the Vacuvator Division from the dates of their initial appointment in KPT6. In exercise of the powers conferred by Section 12A of the FCI Act, 1964, the Central Government transferred 15 employees to the FCI w.e.f. 01.01.1973 by an order dated 09.05.1996. The Appellant-Union filed Special Civil Application No.6891 of 1996 questioning the grant of transfer to the FCI w.e.f. 01.01.1973 only to 15 employees and not the remaining 306 employees. It was contended by the Appellant- Union in the said application that there were two terms of reference which were answered in favour of the employees. Though the operative portion was confined to 15 employees, the Industrial Tribunal directed that all the employees who worked in the Vacuvator Division shall be entitled to exercise optionunder Section 12A (4) of the FCI Act. The Appellant- Union averred in the Special Civil Application that all the employees were similarly situated and the restriction of the benefit of transfer w.e.f. 01.01.1973 only to 15 employees resulted in hostile discrimination. The application was allowed by a learned Single Judge, in which it was held that the benefit granted to the 15 employees should be extended to all the other employees who were taken over by the FCI on 01.01.1973. The award of the Industrial Tribunal dated 18.05.1987 was interpreted by the learned Single Judge as covering all the 321 employees. On such basis, the learned Single Judge directed Respondent No.1 to issue an appropriate order clarifying that all the 321 employees shall be deemed to have been transferred to the FCI under Section 12A of the FCI Act w.e.f. 01.01.19737. The Division Bench allowed the Appeal filed by Respondent No.1 by holding that the transfer of employees who worked in the Vacuvator Division of the KPT should be done by the Central Government. Only permanent employees of the KPT were granted benefit of transfer w.e.f. 01.01.1973. However, the work charge employees were taken over as regular employees w.e.f. 01.01.1973 and were also given the benefits of leave, probation, disciplinary action, etc. in accordance with the provisions of the FCI Regulations. As per the Agreement dated 08.04.1965, the work charge employees of the KPT have been taken over by Respondent No.1- FCI. The Division Bench of the High Court held that in case the work charge employees did not take up their option of takeover by the FCI, they would have faced retrenchment from the service of the KPT. The submission of the Appellant-Union that Section 12A of the FCI Act is applicable to the members of the Appellant-Union was rejected by the Division Bench of the High Court and it was held that the provision is applicable to the Central Government employees only. Moreover, the work charge employees signed General Conditions of Employment with their erstwhile employer i.e. KPT that they would not claim pension or gratuity which are extended to the Central Government employees. The Office Order dated 18.09.1973, which was issued pursuant to an agreement, provided that the employees taken over by Respondent No.1 shall be governed by the FCI CPF Regulations. The conclusion reached by the learned Single Judge that the benefit conferred on the 15 regular employees of the KPT should have been given to the others was not approved by the Division Bench and it observed that the operative portion of the award conferred benefit only to 15 regular employees of the KPT and not to the other work charge employees. The Division Bench of the High Court highlighted the latches on the part of the Appellant- Union in filing the Special Civil Application in the year 1996 for a relief that they were claiming from 1973. However, the Division Bench directed Respondent No.1 to make payment of gratuity for the service rendered by the work charge employees prior to 1973, while they were employed with the KPT.

Court's reasoning:
10. The nub of the dispute revolves around the entitlement of the work charge employees to the relief that was granted to the 15 regular employees. The Office Order of the FCI dated 18.09.1973 was issued under Clause XIX of the Agreement dated 08.04.1965 entered into between the President of India and the Trustees of the Port of Kandla. A clear distinction was made in the Office Order between regular employees and work charge employees. The regular employees were taken over as confirmed in their appropriate posts and they would be subject to the FCI (Staff) Regulations, 1971 regarding service conditions. According to the said agreement, the work charge employees were also taken over as regular employees from 01.01.1973 and would be bound by the FCI (Staff) Regulations, 1971. The award dated 05.08.1991 of the Industrial Tribunal requires to be considered in a detailed manner. The reference pertains to the demand regarding the extension of option to select revised pay scales to the 15 workmen of the Vacuvator Division of KPT who were taken over by the FCI13. The distinction between a regular employee and a work charge employee cannot be ignored. The questions raised in the reference before the Industrial Tribunal also deals with the regular employees and work charge employees separately. The ultimate relief that was granted by the Tribunal is also restricted to the 15 workmen who were regular employees. There is no doubt that the findings recorded by the Industrial Tribunal pertaining to the arbitrary or unilateral change of Respondent No.1 from GPF to CPF are qua the work charge employees14. The Office Order dated 18.09.1973 by which all the employees who were working in the Vacuvator Division of the KPT were employed in the FCI also shows that regular employees and work charge employees were treated differently. Even assuming that the work charge employees also had a right to be appointed in the FCI, they cannot claim parity with the regular employees, that too in 1996. After having accepted the appointment in FCI as per the Office Order dated 18.09.1973, it is not open to the Appellant-Union to take up the cause of the work charge employees and claim on their behalf benefits similar to those granted to the regular employees15. The Division Bench of the High Court directed that Respondent No.1-FCI shall make payment of gratuity to those employees who shall give details, such as the dates of their joining in the KPT, by treating them as employees of the FCI16. Though, we are not in agreement with the judgment of the Division Bench that the award of the Industrial Tribunal did not deal with question No.2 in the reference made to it