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2003 DIGILAW 385 (ORI)

Management of Orissa Mining Corporation Ltd. v. Its Workmen, represented through the General Secretary, Orissa Mining Workers

2003-06-18

M.PAPANNA, R.K.PATRA

body2003
JUDGMENT R. K. PATRA, J. — The Management in this writ petition seeks to assail the validity of the award dated 29th July, 2002 of the Central Government Industrial Tribunal, Bhubaneswar in Industrial Dispute Case No. 421 of 2001 by which it has held that reduction of house rent with effect from 1st April, 1998 to the workmen without complying the provision of Section 9-A of the Industrial Disputes Act, 1947 is no justified. 2. The case of the petitioner is that it is a wholly owned Government of Orissa Undertaking whose administrative department is Steel and Mines. It carries on mining and other allied opera¬tions. By office order dated 4th March, 1982 (Annexure-1) house rent allowance was revised with effect from 1st January, 1982 @ 25% of the basic pay for those head office employees at Bhubanes¬war residing in the rented house and 20% of the basic pay for those remaining in their own houses. By subsequent order dated 6th May, 1985 (Annexure-2), the rate of house rent allowance for employees at the head office was revised and raised to 30% of basic pay with effect from 1st April, 1985 while retaining the rate of house rent allowance same as before for those who are remaining in their own houses within Bhubaneswar N.A.C. area. By office order dated 12th December, 1986 (Annexure-3) the pay scales, allowances and other service conditions of all employees of the petitioner working within the State and beyond wore re¬vised with effect from 1st January, 1985 in a package. So far as house rent is concerned, the said order provided that employees at the head office, Delhi, Calcutta and Bangalore would get it at the rate of 30%, those working in regional office at the rate of 25% and those working in the Mines at the rate of 20% of their basic pay. The next revision of pay scales and other allowances was made by office order dated 24th August, 1991(Annexure-4).But so far as house rent allowance was concerned, it was indicated that the existing rates would continue. The next revision of pay scales, allowances and other service benefits was made by office order dated 3rd February, 1999 (Annexure-5) with effect from 1st January, 1996. The revision of house rent allowance was, however, given effect from 1st June, 1998. The next revision of pay scales, allowances and other service benefits was made by office order dated 3rd February, 1999 (Annexure-5) with effect from 1st January, 1996. The revision of house rent allowance was, however, given effect from 1st June, 1998. By the said revision, the concerned employees were given option as to whether they would accept the revised pay scales with all other conditions or would continue in the old pre-revised scales of pay. It was mentioned therein that if options were not offered within the time stipu¬lated therein, it would be presumed that the said employees have elected to be governed by the revised scales of pay. It was also mentioned therein that the amount of house rent allowance shall not be less than the amount received by the employees in their old scales of pay, but the employees shall get the house rent allowance at the old rates in the pre-revised scales of pay from 1st January, 1996 to 31st May, 1998. After receiving the benefi¬cial emoluments available under Annexure-5, the employees raised dispute which came to be referred to the Industrial Tribunal for adjudication. By the impugned award, the Tribunal has accepted the plea of the workmen holding that the reduction of house rent without complying Section 9-A of the Industrial Disputes Act, 1947 is no justified and the concerned workmen are entitled to get house rent as per the office orders dated 4th March, 1982 and 6th May, 1985. 3. Shri Nanda, learned counsel for the petitioner submit¬ted that by office order dated 3rd February, 1999 (Annexure-5) the employees were offered the revision of scales of pay and other allowances as a package and they were given option either to accept the benefits available thereunder or to continue with their existing pay scales and allowances and after exercising option, they cannot go back from the choice and challenge the same on the ground of absence of notice under Section 9-A of the Industrial Disputes Act. In support of this, he placed reliance on a judgment of the Madras High Court in Tamilnadu Electricity Workers Federation v. Madras State Electricity Board, AIR 1965 Madras 111. 4. In support of this, he placed reliance on a judgment of the Madras High Court in Tamilnadu Electricity Workers Federation v. Madras State Electricity Board, AIR 1965 Madras 111. 4. In order to appreciate the contention of both parties it is relevant to know about the benefits flowing from the office order dated 3rd February, 1999 (Annexure-5) wherein it was de¬clared that the scales of pay of employees of the Orissa Mining Corporation Limited are revised with effect from 1st of January, 1996. Paragraph-4of the said office order reads as follows : “4. Fixation of pay in the Revised Scales of Pay : Unless directed otherwise, the pay of the employees shall be fixed in the manner laid down in the format as at Annexure-10. Provided that an employee may elect to continue to draw pay in the existing pre-revised scale until the date on which he earns his next or subsequent increment in the existing scale or until he vacates his post or ceases to draw pay in that scale. Provided further that an employee who, prior to the com¬mencement of these rules, had elected to come over to the revised scale from a date after the First day of January, 1996 shall, unless he exercises fresh option to come over to the revised scales from any subsequent date, be deemed to have elected to be governed by the revised scale applicable to his/her post with effect from the First day of 1996 and in either case the pay of the employee shall notionally be computed in the existing scale in accordance with the appropriate rules on the First day of 1996 or any subsequent day as may be elected by him/her within the stipulated period and on the basis of the pay so computed the pay in the revised scale shall be fixed in accordance with the rules...” In paragraph-16 of the said office order, mention has been made with regard to house rent allowance, which is quoted hereun¬der : “16. House Rent Allowance : Employees not provided with houses by the Corporation shall be entitled to house rent allowance as under with effect from 1.6.1998 : (a) Employees stationed at Head Office and Delhi shall be paid house rent allowance @ 10% per month on the revised basic pay. House Rent Allowance : Employees not provided with houses by the Corporation shall be entitled to house rent allowance as under with effect from 1.6.1998 : (a) Employees stationed at Head Office and Delhi shall be paid house rent allowance @ 10% per month on the revised basic pay. (b) Employees stationed at Regional Offices shall be paid house rent allowance @ 7 1/2% on the revised basic pay. (c) Employees stationed at the Mines/Camps shall be paid house rent allowance @ 5% per month on the revised basic pay. The amount of house rent allowance shall not be less than the amount received by the employees in their old scale of pay, but the employees shall get the house rent allowance at the old rates in the pre-revised scales of pay from 1.1.1996 to 31.5.1998.” 5. The limited question that arises for consideration is whether the employees having exercised their option required under the office order dated 3rd February, 1999 and enjoyed the benefits flowing from it, can make volta face to contend non-compliance of Section 9-A. Section 9-A requires an employer who proposes to make any change in the conditions of service applica¬ble to any workman in respect of any matter specified in the Fourth Schedule to give a notice in the prescribed manner of the nature of the change proposed to be effected to the workmen likely to be effected by such change. The object behind this requirement is to prevent a unilateral action on the part of the employer changing the conditions of service to the prejudice of the workmen. In other words, in a case where a change in the conditions of service which is no likely to be effected prejudi¬cial to the workmen, no notice is necessary to be given. The petitioner has enclosed a salary statement of five of the workmen by way of sample who had exercised option to come over to the revised scales of pay as Annexure-7. From it, it would appear that by the office order dated 3rd February, 1999 none of them was prejudicially affected. The gross emoluments of one J.K. Das in January, 1995 was Rs. 4818/- including H.R.A. Rs. 555/-, whereas in June, 1998 his gross emolument was Rs. 7434/-(inclu¬sive of house rent allowance of Rs. 590/-.) Similarly, in case of one Kapilendra Nayak in January, 1995 his gross emoluments was Rs. The gross emoluments of one J.K. Das in January, 1995 was Rs. 4818/- including H.R.A. Rs. 555/-, whereas in June, 1998 his gross emolument was Rs. 7434/-(inclu¬sive of house rent allowance of Rs. 590/-.) Similarly, in case of one Kapilendra Nayak in January, 1995 his gross emoluments was Rs. 3619/- (inclusive of house rent allowance of Rs. 414/-), whereas in June, 1998 his gross emolument was Rs. 5853/-(inclu¬sive of house rent of Rs. 465/-). It has been held by the Divi¬sion Bench of the Madras High Court in Tamilnadu Electricity Workers Federation (supra) as follows : “ It appears to us to be very clear that S.9-A was never designed to prevent the implementation of any change, which is not change imposed by the employer on the workmen, but which is based upon the consent of the workmen to the offer by the employ¬er, upon the exercise of their judgment that the change was beneficial...” We are in respectful agreement with the above proposition. The office order dated 3rd February, 1999 (Annexure-5) revising scales of pay and other allowances was by way of a “package deal” requiring the concerned employees to exercise their option. The employees have exercised their option to come over to the revised scales of pay which is beneficial to them as evident from the salary chart at Annexure-7 to the writ petition (extract of which has been mentioned above). As the employees are not prejudicially affected by the aforesaid office order dated 3rd February, 1999, the Tribunal clearly fell into error in declaring it as unjusti¬fied. For the reasons mentioned above, the award of the Industrial Tribunal at Annexure-10 cannot be sustained in law and is hereby quashed. The writ petition is allowed. No costs. M. PAPANNA, J. I agree. Petition allowed.