K A ABRAHAM v. GENERAL MANAGER BHILAI STEEL PLANT HINDUSTAN STEEL PVT LTD
1978-03-10
A.P.SEN, G.P.SINGH
body1978
DigiLaw.ai
JUDGMENT : ( 1. ) THE petitioners were employed as Supervisors (Electrical) in the construction section of the Bhilai Steel Plant when it was a departmental undertaking of the Government of India. Even after taking over of the Plant by the Hindusthan Steel Private Limited, which is a Government Company incorporated under the Companies Act, the petitioners continued in the construction section. In July 1966, both the petitioners were working as Construction Assistants, Grade I, in the pay scale of Rs. 350-575. Both the petitioners were offered employment as Charge men in the grade of Rs. 325-15-475 on the operation side on terms and conditions contained in the managements letter dated 6th July 1966. The petitioners accepted the offer and joined as Charge-men in July 1966. On the date of joining as Charge man, petitioner No. 1 was drawing a basic salary of Rs. 410 per month, while petitioner No. 2 was drawing a basic salary of Rs. 500 per month. During the period of probation as charge men, the petitioners continued to draw the said emoluments but after they completed the period of probation, their basic salary was brought to the minimum of the scale of Rs. 325-15-475. This was done in accordance with the terms and conditions on which the posts of Charge men on the operation side were offered to the petitioners. ( 2. ) THE petitioners first grievance is that the reduction in their basic salary was illegal as it was done without giving any notice of change under section 31 (1) of the Madhya Pradesh Industrial Relations Act, 1960. The other grievance of the petitioners is about the reduction of their leave benefits. The petitioners claim is that as they were originally Government servants, they are entitled to leave benefits under the Fundamental Rules and other rules, and that the Standing Orders framed under the provisions of the Industrial employment (Standing Orders) Act, 1946, in the year 1963, are not applicable to them. ( 3. ) BEFORE proceeding further, it is necessary to refer to certain provisions of the Madhya Pradesh Industrial Relations Act, 1960. The word "employee" as defined in section 2 (13) means any person employed in an industry to do any skilled, unskilled, manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied.
) BEFORE proceeding further, it is necessary to refer to certain provisions of the Madhya Pradesh Industrial Relations Act, 1960. The word "employee" as defined in section 2 (13) means any person employed in an industry to do any skilled, unskilled, manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied. It, however, does not include a person employed in a supervisory or technical capacity drawing wages exceeding Rs 500 per month. The definition of "wages" is contained in section 2 (35) and it is as follows: "2 (35) "wages" means remuneration of all kinds capable of being expressed in terms of money and payable to the employee in respect of his employment of work done in such employment and includes- (i) any bonus, allowance (including dearness allowance), reward or additional remuneration; (ii) the value of any house accommodation, light, water, medical attendance or any other amenity or service; (iii) any wages payable for the period of leave; (iv) any compensation payable for lay-off or retrenchment; (v) any contribution by the employer to any social security scheme, pension or provident fund; (vi) any gratuity payable on discharge; (vii) any travelling allowance or value of any travelling concession; (viii) any sum paid or payable to or on behalf of an employer to defray special expense entailed on him by the nature of his employment; and (ix) any amount payable to an employee under any law for the time being in force for the protection of rights of employees or for regulating their relations with the employers, or under any award, settlement or agreement. " Section 31, which requires a notice of change, is as under : "31. Notice of change.- (1) An employer intending to effect any change in respect of an industrial matter specified in Schedule I shall give notice of such intention in the prescribed form and manner to the representative of employees and to such other persons as may be prescribed. (2) A representative of employees desiring a change in respect of an industrial matter, which is neither covered by Standing Orders nor is specified in Schedule II, shall give notice thereof in the prescribed manner to the employers concerned and to such other persons as may be prescribed.
(2) A representative of employees desiring a change in respect of an industrial matter, which is neither covered by Standing Orders nor is specified in Schedule II, shall give notice thereof in the prescribed manner to the employers concerned and to such other persons as may be prescribed. (3) A representative of employees or an employee desiring a change in respect of an industrial matter specified in Schedule II or any other matter arising out of such chage may make an application to Labour Court in such manner as may be prescribed; provided that no such application shall lie unless the representative of employees or the employee, as the case may be, has in the prescribed manner approached the employer with request for the change and no agreement has been arrived at in respect of the change within the prescribed period. " "wages" is an item of industrial matter specified in Schedule I of the Act. ( 4. ) THE first question that arises for consideration is whether there was really any change in the matter of wages of the petitioners. As earlier stated, the petitioners were originally employed on the construction side The employment on the construction side is of a purely temporary nature. Construction side of Bhilai Steel Plant has been held to be not an industry : (See Ajit Singh v. State Indus. Court, Indure, (1975 M PL J 371, D. B.)] The petitioners first came to be employed in an industry when they were employed as probationer Charge men on the opera lion side. The terms and conditions on which the petitioners were employed are contained in the managements letter dated 6th July 1966, which are as follows: " (i) You will be regarded as if you are a newly appointed person to the cadre of and as such you will be junior to all the persons in that grade on the date of your appointment. Previous service will not count towards seniority. (ii) It will be necessary to refit you for the new responsibility and to give you training for a period of six months. You will accordingly be placed on probation / training for this period and your services may be terminated without giving any notice if your progress over this period is found unsatisfactory.
(ii) It will be necessary to refit you for the new responsibility and to give you training for a period of six months. You will accordingly be placed on probation / training for this period and your services may be terminated without giving any notice if your progress over this period is found unsatisfactory. During the period of probation / training or till such time the concerned incentive unit to which your are appointed is commissioned, whichever is later, your present emoluments will be protected as a special case. The period of probation/training may be extended beyond 6 months, if so decided by the competent authority. (iii) Your appointment will be subject to medical fitness for the trade allotted to you, to be certified by the Industrial Medical Officer. (iv) On completion of six months training/probation, you will be trade tested. The details of trade test will be intimated to you. You will be required to pass the trade test and your probation will be deemed to have been completed satisfactorily only on passing the prescribed trade test. (v) You will be eligible for production incentive, only on commissioning of the unit to which you are posted, or completion of probation/training, whichever is later. (vi) Your pay will be fixed at the minimum of the scale on completion of probation/training or commissioning of the concerned incentive unit to which you are appointed, which is later. (vii) When production incentive becomes payable, the pay of the individual is to be fixed at the minimum of the scale. If the total emoluments (including incentive payment) fall short of last pay drawn before appointment on operation, the difference would be allowed as personal pay, to be absorbed in future increment. For this purpose only first months incentive would be taken into consideration and subsequent variations in monthly production incentive would be ignored. (viii) You will be governed by the Standing Orders, as in force from time to time. You would, however, be allowed to carry forward full E. /leave due to you at your credit and half pay leave not exceeding 60 days. This leave would require to be availed of during the next two calendar year of services, after which no balance of it will be allowed to be carried forward.
You would, however, be allowed to carry forward full E. /leave due to you at your credit and half pay leave not exceeding 60 days. This leave would require to be availed of during the next two calendar year of services, after which no balance of it will be allowed to be carried forward. (ix) Your general behaviour during the period of training/probation will be closely watched and if you are found indulging in acts unbecoming of an employee of b. S. P. , your services may be terminated with immediate effect. (x) You are being selected for expansion units for purposes of training much ahead of the commissioning dates. You would accordingly be treated as junior to this departmental employees promoted to the same post even if they are posted subsequently at the time of actual commissioning of the concerned units. " The effect of conditions nos. (ii), (vi) and (vii) is that the petitioners continue to get the emoluments that they were getting on the conduction side at the time of their absorption on the operation side during the period of probation or till such time the concerned incentive unit to which they are appointed on the operation side is commissioned, whichever is later. They became entitled for production incentive on commissioning of the concerted unit or completion of probation, whichever is later. Although the petitioners pay is fixed at the minimum of the scale on completion of probation or commissioning of the incentive unit, whichever is later, there is no loss of wages and if the total emoluments (including incentive payment) fall short of last pay drawn before appointment on operation side, the difference is allowed as personal pay to be absorbed in future increment. It will thus be seen that the amount of last pay drawn at the time of petitioners absorption on operation side is throughout protected. It is true that the scale of pay of the posts on which the petitioners were working on the construction side is better than the posts on which they have been absorbed on the operation side, but this cannot be taken to be a change in an industrial matter, because while the petitioners were employed on the construction side they were not employed in an industry. The petitioners employment in the industry of Iron and Steel began when they were absorbed on the operation side.
The petitioners employment in the industry of Iron and Steel began when they were absorbed on the operation side. The terms and conditions on which they were so absorbed were expressly accepted by the petitioners These terms and conditions, including those relating to wages, have not been charged by the management. The emoluments which the petitioners received during the period of probation is protected even after their salary is fixed at the minimum of the scale after completion of probation or commissioning of the unit because they are compensated by the incentive payment and the remaining difference, if any, by personal pay. In the circumstance, there is factually no change in wages or pay packet of the petitioners and their grievance in that behalf is entirely misconceived. ( 5. ) THERE is yet another reason why the petitioners argument that there was breach of section 31 (1) has to be rejected. The petitioners admittedly are employed in technical capacity and were at all material times receiving wages in excess of Rs. 500 per month. The petitioners are, therefore, not employees within the meaning of the Act. The definition of "wages", which we have earlier quoted, goes to show that any remuneration to come within the definition of wages must be "payable to the employee". Remunerations paid by the management to non-employees do not come within the category of "wages". The term "wages" as used in Schedule I and in the definition of industrial matter must be understood as defined in section 2 (35 ). Remuneration payable to non-employee, therefore, is not an industrial matter for which a notice of change is required to be given by the employer under section 31 (1 ). Moreover, a reading of section 31 as a whole goes to show that it deals with changes in industrial matters pertaining only to employees. Changes concerning non-employees will not fall within section 31. When the employer intends to effect any change, he is required to give notice to the representative of employees. A representative of employees or employee desiring a change has to give a notice of change or has to make an approach to the employer. The employer is not required to serve any notice of change on the non employees or their representative. That goes to show that a change contemplated by section 31 (1) is a change concerning employees only.
The employer is not required to serve any notice of change on the non employees or their representative. That goes to show that a change contemplated by section 31 (1) is a change concerning employees only. Non-employees or their representative do not come in at all under the scheme of section 31. In our opinion, therefore, even if there was any change in respect of emoluments of the petitioners, the management was not required to give notice under section 31 (1) and there is no violation of that provision. ( 6. ) LEARNED counsel for the petitioners has submitted before us that an industrial dispute may be raised also in respect of the terms and conditions of persons who do not fall within the definition of workman under the Central industrial Disputes Act. It has been held by the Supreme Court that an industrial dispute may be raised in respect of even a non-workman provided he is a person in whose employment or non employment or terms of employment or conditions of labour the workmen as a class have direct and substantial interest: See Workmen v. Greaves Cotton and Co. Ltd. , ( (1971) 2 L L J 479.) and other cases referred to therein. These cases, in our opinion, are not relevant for the present controversy. These cases arise under section 2 (k), which defines industrial dispute under the Central Act. It may be, although we do not decide it that even under the Madhya Pradesh Industrial Relations Act a dispute in respect of the terms and conditions of employment of a non-employee may also amount to industrial dispute provided the employees as a class have a direct and substantial interest in that dispute. The question, however, before us is whether the statutory restriction of making a change in respect of an industrial matter as provided by section 31 (1) is also in respect of non-employees. The corresponding section in the Central Act is section 9a which is clearly limited to changes in conditions of service applicable to any workman. It has no application to a non-workman. Although the language of section 31 (1) is not identical, yet for the reasons already indicated, in our opinion, the scheme is the same and changes in respect of non employees do not fall within it. ( 7.
It has no application to a non-workman. Although the language of section 31 (1) is not identical, yet for the reasons already indicated, in our opinion, the scheme is the same and changes in respect of non employees do not fall within it. ( 7. ) AS regards the question whether the petitioners are entitled to leave benefits to which they were entitled under the Fundamental Rules and other rules applicable to them when the Plant was run by the Government of India, the petitioners rely upon a saving clause in the Standing Orders certified under the Industrial Employment (Standing Orders) Act, 1946. The saving clause is as follows: "nothing contained in these Standing Orders shall operate in derogation of any law or to the prejudice of any right under a written contract of service, settlements or awards for the time being in force, nor shall any agreement between the employer and the workman prejudicially affect the rights of the workmen under these Standing orders. " In our opinion, such a saving clause is invalid and cannot be given effect to. It is well settled that it is not permissible for an industrial establishment to have two sets of Standing Orders to govern the terms and conditions of its employees. Uniformity in application is an essential attribute of Standing orders, and no provision can be introduced in them which is destructive of uniformity. A saving clause which preserves to the previous employees longer leave benefits to which they were entitled under their service conditions before the introduction of the Standing Orders militates against the principle of uniformity and cannot be said to be in conformity with the Act. When the standing Orders are first made they begin to apply to all workmen, existing and future. Provision cannot be inserted in them to preserve special benefits to existing employees : See Steel W. Union, Bhilai v. Chief Lab. Commr. 3. The petitioners expressly accepted, when offered employment on the operation side, to be governed by the Standing Orders. They cannot now claim to be governed by the Fundamental Rules and other rules which were applicable when the steel Plant was run depart mentally by the Government. ( 8.
Commr. 3. The petitioners expressly accepted, when offered employment on the operation side, to be governed by the Standing Orders. They cannot now claim to be governed by the Fundamental Rules and other rules which were applicable when the steel Plant was run depart mentally by the Government. ( 8. ) IT was contended by the learned counsel for the respondent that the petitioners have no remedy under Article 226 of the Constitution and, if at all, they should have resorted to the remedies provided under the Madhya Pradesh industrial Relations Act, by getting an industrial dispute referred for arbitration In view of the fact that in our opinion on merits the petitioners are not entitled to any relief, we do not think it necessary to go into this question. ( 9. ) THE petition fails and is dismissed with costs. Counsels fee Rs. 100, if certified. The outstanding amount of the security deposit, if any, shall be refunded to the petitioners. Petition dismissed.