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2007 DIGILAW 1437 (BOM)

RASHTRIYA CHEMICALS AND FERTLIZERS LIMITED v. RCF EMPLOYEES UNION

2007-10-04

D.Y.CHANDRACHUD, RANJANA DESAI

body2007
D. Y. CHANDRACHUD, J. ( 1 ) BEFORE the Learned Single Judge an order of the industrial Tribunal holding that it was for the employer to lead evidence first in a reference to adjudication arising out of a notice of change under Section 9-A of the Industrial Disputes Act, 1947 was called into question. The learned Single Judge dismissed the petition filed by the Appellant seeking to question the correctness of the order of the Industrial Tribunal. The order of the Learned single Judge is the subject matter of the Appeal which is being disposed of by this judgment. ( 2 ) THE service conditions of the workmen of the Appellant are regulated by industrial settlements. On 23rd August, 1985, 17th february, 1987 and 11th April, 1987 industrial settlements were entered into between the workmen and the management under which a five day working week comprising 42 hours came to be adopted. On 25th June, 1998 the management issued notices intending to terminate the settlements together with notices under section 9-A of the Industrial Disputes Act, 1947. By the notice of change, the management evinced an intention to introduce to a six day working week in respect of the units at Trombay and Thal. The respondent objected to the notice of change and the dispute was taken into conciliation by the Commissioner of Labour. The Central government by an order dated 31st January, 2000 refused to refer the dispute to adjudication on the ground that the six day week had been restored after due notice under Section 9-A and the settlements have been terminated after due notice upon which "no dispute sustains". The Respondent instituted writ proceedings before this Court under Article 226. By a judgment and order dated 28th June, 2001 a Division Bench of this Court held that it was not open to the Central Government while exercising the power under section 10 (1) to enter upon the merits of the industrial dispute and the Union Government was accordingly directed to make a reference to the Industrial Tribunal thereupon. By a judgment and order dated 28th June, 2001 a Division Bench of this Court held that it was not open to the Central Government while exercising the power under section 10 (1) to enter upon the merits of the industrial dispute and the Union Government was accordingly directed to make a reference to the Industrial Tribunal thereupon. The order of the division Bench led to the Central Government making a reference to adjudication under Section 10 (1) to the Industrial Tribunal in the following terms on 22nd April, 2002 : "whether the action of the management of Rashtriya chemicals and Fertilizers Ltd. and Thal Unit in increasing the five days working week to a six days working week and changing working hours is justified? If not, what reliefs are the workmen entitled to?" ( 3 ) THE Industrial Tribunal by an order dated 11th August, 2003 held that the reference was properly made by the Central government. In a challenge by the management to the Part I award of the Industrial Tribunal, this Court in a judgment dated 18th august, 2006 upheld the contention of the management that the appropriate government in respect of the Appellant was the State government and that consequently the Central Government was not competent to make a reference to adjudication. However, parties agreed to a reference to adjudication by the State government and directions were consequently issued by this court. ( 4 ) AN application was filed by the Appellant before the industrial Tribunal contending that since the reference was made at the instance of the Union the Respondent herein and the Union had filed a statement of claim, it was for the Union to substantiate its contention by leading evidence first in the pending reference. The Industrial Tribunal by its order dated 19th January, 2007 held that the initial burden was cast on the management to justify its action, to introduce a six day working week in terms of the notice of change under Section 9-A. Hence, the Tribunal held that it was for the Appellant to lead evidence initially. The order of the Tribunal was impugned before the Learned Single Judge in writ proceedings which came to be dismissed on 23rd April, 2007. The order of the Tribunal was impugned before the Learned Single Judge in writ proceedings which came to be dismissed on 23rd April, 2007. The learned Single Judge held that the management had issued a notice of change under Section 9-A disclosing its intention to make a change in the working pattern by introducing a six day week in place of the existing five day week. The Learned Single Judge noted that there was a settlement between the parties under which a five day working pattern had been agreed upon. In the circumstances, the burden was cast on the management to establish why the change was required. In the circumstances, the learned Single Judge held that the Tribunal was not in error in directing the management to lead evidence initially upon the reference. ( 5 ) THE order of the Learned Single Judge has been called into question by the Appellant and the submission before the Court is that the burden lies upon a party who complains of an injury caused or which is about to be caused to challenge and prove the illegality. Industrial law, it was submitted, makes no departure from this principle which governs civil cases. In the present case, it was urged that the management had already implemented a change in the working week on 1st August, 2001 (after the High Court had set aside the refusal of the government to make an order of reference to adjudication) and once the change was implemented, the burden lay on the Union to establish how the change was unlawful. ( 6 ) IN assessing the correctness of the submission which has been urged on behalf of the Appellant, it merits emphasis that in the course of industrial settlements dated 23rd August, 1985, 17th february, 1987 and 11th April, 1987, the management and the workmen had agreed to a five day working week with two weekly holidays. The management had by its notice dated 25th June, 1998 terminated the settlements and issued two notices of change in respect of the units at Trombay and Thal. The management had by its notice dated 25th June, 1998 terminated the settlements and issued two notices of change in respect of the units at Trombay and Thal. The industrial dispute which arose between the parties within the meaning of Section 2 (k)was taken into conciliation on 14th July, 1998 and it is abundantly clear from the communication of the Assistant Labour commissioner that the subject matter of the conciliation was the notice of change under Section 9-A of the Industrial Disputes Act, 1947 and the notice of termination of the settlements served by the management upon the Union. The machinery provided by the industrial Disputes Act, 1947 was set in motion by the conciliation proceedings and those proceedings were ex facie initiated with reference to the notice of change issued by the management. ( 7 ) THERE is merit in the submission that is urged on behalf of the Union that parties were governed by the industrial settlements of 1985 and 1987. It is a settled principle of law, following the judgment of the Supreme Court in The Life Insurance corporation of India v. D. J. Bahadur1 that upon a notice of the termination of an industrial settlement the existing settlement would continue to govern the relationship between the parties until a new contract supersedes the existing relationship either by negotiations or by adjudication : "once the earlier contract is extinguished and fresh conditions of service are created by the award or the settlement, the inevitable consequence is that even though the period of operation and the span of binding force expire, on the notice to terminate the contract being given, the said contract continues to govern the relations between the parties until a new agreement by way of settlement or statutory contract by the force of an award takes its place. If notice had not been given, the door for raising an industrial dispute and fresh conditions of service would not have been legally open. . . . . . . If notice had not been given, the door for raising an industrial dispute and fresh conditions of service would not have been legally open. . . . . . . the sound rules of statutory construction converge to the same point that when a notice intimating termination of an award or settlement is issued the legal import is merely that the stage is set for fresh negotiations or industrial adjudication and until either effort ripens into a fresh set of conditions of service the previous award or settlement does regulate the relations between the employer and the employees. " ( 8 ) WE therefore cannot countenance the submission urged before us by the management that insofar as the employer was concerned, the change was duly implemented on 1st August, 2001 upon which no dispute would survive insofar as the employer was concerned. We have dealt with this aspect of the matter, conscious as we are of the pendency of the proceedings before the industrial Tribunal, since it was the express submission of counsel appearing for the Appellant that the Appellant having implemented the notice of change with effect from 1st August, 2001, it was for the union to establish the illegality of the change and therefore, the burden lay on the Union to establish its case in the adjudication under Section 10 (1 ). The submission is clearly fallacious because it overlooks the admitted position that it was the employer in the present case who had sought to alter the prevailing conditions of service which were the subject matter of industrial settlements. That was the import of the notice of change under Section 9-A and it is therefore, for the employer to establish the legitimacy of the grounds underlying the notice of change. The Industrial Tribunal was, therefore, not in error in rejecting the application filed by the employer that the Union be directed to lead evidence first. ( 9 ) THE issue which arises before the Court is not res integra. A Bench of three Learned Judges of the Supreme Court inter alia dealt with a situation where a notice of change was issued by the management for doing away with the slab system of dearness Allowance in respect of the head office and the monthly rated factory staff, in a dispute between The monthly rated workmen of Indian Hume Pipe Company Limited and Indian hume Pipe Company Limited2. A dispute arose when the management served a notice under Section 9-A of the Industrial disputes Act, 1947. The Supreme Court noted that Dearness allowance was being paid to the workmen on the slab system without any objection by the management until the notice of change was sent. The Supreme Court observed that it was to be borne in mind that the reference was occasioned because of the notice of change given by the company. The Court held thus : "it was therefore necessary for the Company to make available before the Tribunal all evidence necessary to justify its stand for a change from the existing system. " the Supreme Court held that the Tribunal was in fact in error in 2 1986 I LLJ 520 ). casting the burden upon the workmen to establish that a change was not necessary : "the Tribunal committed an error by overlooking the circumstances under which reference was made and casting the burden wrongly on the workmen to prove that a change in the system was not necessary. " ( 10 ) THE judgment of the Supreme Court ofcourse dealt with a final award of the Industrial Tribunal and we would wish to clarify that our observations in the present judgment are confined only to considering the legality of the order passed by the Industrial tribunal holding that it was for the employer to discharge the burden by leading evidence first. We are not called upon to deal at the present stage with whether the employer has made out a case in terms of the notice of change under Section 9-A; for this is a matter which would have to be adjudicated upon by the Tribunal. We have adverted to the judgment of the Supreme Court because it is abundantly clear that where the employer seeks to alter an existing pattern pertaining to the conditions of service by issuing a notice of change under Section 9-A, the burden lies on the employer to establish the basis for effecting the change that is proposed. The Tribunal in the present case was, therefore, not in error. ( 11 ) ON behalf of the Appellant reliance has been placed on the judgment of a Division Bench of this Court in Narang Latex and Dispersions Pvt. Ltd. v. S. V. Suvarna3. The Tribunal in the present case was, therefore, not in error. ( 11 ) ON behalf of the Appellant reliance has been placed on the judgment of a Division Bench of this Court in Narang Latex and Dispersions Pvt. Ltd. v. S. V. Suvarna3. That was a case where the Labour Court held that the burden lay on the management to establish the fairness of a disciplinary enquiry. The Division Bench accepted the contention of the management that the burden of establishing that the termination of the services of the employee was not legal and justified, was on the workman at whose behest the reference to adjudication was made. The judgment in Narang Latex is distinguishable since that related to a situation where it was a workman who had challenged an order of punishment imposed in the course of a disciplinary proceeding. Where the workman challenges the fairness of a domestic enquiry, it is for the workman to establish his case. That does not apply to a situation such as the present where it is the employer who seeks by a notice of change under Section 9-A to alter the existing conditions of service. As we have already noted earlier, this is coupled with the circumstance that it was the employer who had terminated the existing settlements that had held the field for over a decade. The burden therefore was correctly cast on the Appellant. We, therefore, do not find any infirmity in the order of the Learned single Judge which confirmed the order of the Tribunal. The appeal shall accordingly stand dismissed.