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2016 DIGILAW 1425 (BOM)

Ambadas v. Exide Industries Limited

2016-08-09

RAVINDRA V.GHUGE

body2016
JUDGMENT : 1. Rule. Rule made returnable forthwith and heard finally by the consent of the parties. 2. The Petitioners are aggrieved by the order dated 02.07.2015 passed by the Appellate Authority under the Contract Labour (Regulation and Abolition) Act, 1970 (for short “the CLRA Act, 1970”). 3. The Petitioners submit that Petitioner No.1 was engaged as a contract labourer by Respondent No.1Factory through the contractor. He had worked for about 27 months and thereafter, has been disengaged. He is not in employment for quite sometime. 4. Petitioner No.2 is said to have resigned from the services of Respondent No.1. It is stated that he had subsequently challenged his removal on the ground of illegal termination. The said challenge has been rejected. 5. Petitioner No.3 is the Maharashtra Navnirman Kamgar Sanghatana which claims to have membership amongst the persons engaged by Respondent No.1 Factory. It claims to be representing the workers and hence, has the right to espouse their cause. 6. It is contended that the Petitioner Union had moved an application dated 04.07.2013 to the Honorable Labour Minister, who was the Chairperson of the State Contract Labour Advisory Board at Mumbai, claiming that about 80 workers, who had become the members of the Petitioner Union in 2010, should be reinstated in service. It was also demanded that if 51 workers are made permanent in service, the Petitioner Union would take a positive stand with regard to the proposed abolition of contract labour system in the factory. 7. Pursuant to the above letter, Respondent No.4/ Assistant Commissioner of Labour, Ahmednagar issued the notice to the Respondent No.1 Factory and the President of the Petitioner No.3 Union to participate in the meeting which was to be convened in the office of Shri Hasan Mushrif, Honourable Minister for Labour, so as to discuss the grant of permanency to 51 workers, who were not in employment. It is strenuously submitted by the Petitioners that since the complaints filed by the Petitioner Union were kept pending, a writ petition was filed bearing Writ Petition No.2317/2014 before the learned Division Bench of this Court. By order dated 08.10.2014, the learned Division Bench disposed of the said Writ Petition after recording the statement that the issue as regards abolition of contract labour system is under active consideration of the State Contract Labour Advisory Board. 8. By order dated 08.10.2014, the learned Division Bench disposed of the said Writ Petition after recording the statement that the issue as regards abolition of contract labour system is under active consideration of the State Contract Labour Advisory Board. 8. A letter was issued in the matter on 13.03.2015 whereby the Deputy Commissioner of Labour, Mumbai informed the Deputy Commissioner of Labour, Nashik that the Government had approved the cancellation of 'registration' granted to Respondent No.1 Factory for engaging contract labour system. Consequentially, by order dated 17.03.2015, Respondent No.1 was informed that the registration has been revoked and as such, the Factory would not be able to engage contract labourers. 9. Respondent No.1 Factory preferred Appeal CLA No.1/2015 before the Appellate Authority under Section 15 of the CLRA Act, 1970. By the impugned order dated 02.07.2015, the order under challenge dated 17-03-2015 revoking the registration certificate of the Factory was set aside and Respondent No.1 Factory and the recognized union were directed to participate in discussions for absorption of contract labourers in a phased manner. 10. Shri Gaware, learned Advocate for the Petitioners, has strenuously criticized the impugned order. His basic contention is that the order of revocation dated 17-03-2015 has been passed by the same Authority which has passed the impugned order dated 02-07-2015. As such, the Authority which had passed the first order, sat in appeal over it's own order while holding the charge of the Appellate Authority. 11. It is further submitted that the Petitioners were not heard by the Appellate Authority and therefore, the impugned order is bad in law. Since the Petitioners have brought to light the fact that the contract labourers were engaged on the manufacturing activity, that the State Contract Labour Advisory Board granted its approval for revocation of the registration of the Respondent No.1 Industry. Shri Gaware, therefore, prays that the impugned order be quashed and set aside and the matter be remanded to the Appellate Authority for enabling the Petitioners to participate in the hearing. 12. Shri Changade, learned Advocate for Respondent No.1 Factory, submits that the Petitioners have no locus standi. They have not raised any grievance about either cancellation of recognition of the Respondent No.5 Union under the MRTU & PULP Act, 1971 nor abolition of the contract labour system. 12. Shri Changade, learned Advocate for Respondent No.1 Factory, submits that the Petitioners have no locus standi. They have not raised any grievance about either cancellation of recognition of the Respondent No.5 Union under the MRTU & PULP Act, 1971 nor abolition of the contract labour system. They have actually espoused the cause of those workmen who had resigned from the services of Respondent No.1 in 2004 and were pressurizing the Factory to reinstate all those workmen as permanent employees. They had used the engagement of contract labourers as a tool to exert pressure on Respondent No.1. 13. Shri Upadhye, learned Advocate for the Respondent No.5 recognized Union, submits that the said Union has acquired recognition under the MRTU & PULP Act, 1971. The application for recognition being Application MRTU No.2/2015 filed by Petitioner No.3 Union was withdrawn from the Industrial Court thereby, indicating that Respondent No.5 Union, which acquired recognition on 25.07.2014, is accepted as a recognized Union. He, therefore, prays for the dismissal of this petition with costs. 14. I have considered the submissions of the learned Advocates. 15. There is no dispute that Petitioner No.1 was a contract labourer and he was disengaged after having put in about 27 months as a contract labourer. Petitioner No.2, though denies that he has voluntarily resigned, was an employee and the fact remains that the Employer-Employee relationship between him and the Factory has been severed. He is one of those 80 workers who has joined the Petitioner Union in 2010 and has started exerting pressure on Respondent No.1 Factory, for being reinstated and absorbed as permanent employee, by the agitation commenced in July, 2013. There is also no dispute that Respondent No.5 Union has been recognized on 25.07.2014 and is, therefore, the sole bargaining agent in Respondent No.1 Factory. 16. The learned Division Bench of this Court, in the matter of Maharashtra State Road Transport Corporation, Bombay and others vs. Maharashtra Motor Kamgar Federation, Nagpur and another, 1986 Labour and Industrial Cases 253: 1985 Mh. L.J. 802, has dealt with the menace of mushroom growth of Unions and the long standing need for curbing such growth so as to have industrial peace and harmony in the industrial area. L.J. 802, has dealt with the menace of mushroom growth of Unions and the long standing need for curbing such growth so as to have industrial peace and harmony in the industrial area. In paragraph 22 of it's judgment, this Court has concluded that the recognized union is given the status of a sole bargaining agent for it's employees to the exclusion of all other unrecognized trade unions. The unrecognized union or unions, as like the Petitioner Union in this case, will have no right to discharge any of the obligations or exercise any of the rights flowing under Sections 19 and 20 of the MRTU & PULP Act, 1971, except those conferred upon the registered union under Section 22 of the MRTU & PULP Act, 1971. 17. It would be apposite to reproduce paragraphs 18 to 28 of the MSRTC, Mumbai judgment (supra) as under: 18. In order to appreciate the rival contentions of the parties, a brief review of the basic features and relevant provisions of the Act is necessary to be considered. The Act provides for recognition of trade unions for facilitating collective bargaining for certain undertaking; to state their rights and obligations; to confer certain powers on unrecognized unions and amongst other to provide for prevention of certain unfair labour practices, to constitute courts for carrying out the purposes of according recognition to trade unions and for enforcing provisions relating to unfair practices and other connected purposes. To begin with, the Act applies to the industries to which the Bombay Industrial Relations Act for the time being applies and also to industries as defined in Clause (1) of section 2 of the Industrial Disputes Act and the State Government in relation to any industrial dispute concerning such industry is the appropriate Government. 19. Section 3(17) defines "union" to mean a trade union of employees which is registered under the Trade Unions Act, 1926. Chapter III headed as recognition of unions provided that every undertaking wherein 50 or more employees are employed or were employed on any day of the preceding 12 months will be governed by the provisions therein set out. Section 11 provides for making of an application for recognition of union. Chapter III headed as recognition of unions provided that every undertaking wherein 50 or more employees are employed or were employed on any day of the preceding 12 months will be governed by the provisions therein set out. Section 11 provides for making of an application for recognition of union. The eligibility criterion for obtaining the recognition is that the union applying for the status of a recognized union must have for the whole of the period of six calendar months immediately preceding the calendar month in which it makes the application, a membership of not less than thirty per cent of the total number of employees employed in any undertaking. The application has to be made to the Industrial Court set up under the Bombay Industrial Relations Act. On receipt of the application, the Industrial Court has to cause a notice to be displayed on the notice board of the undertaking, declaring its intention to consider the said application on a date to be specified in the notice and calling upon other union or unions, if any, having membership of employees in that undertaking and the employers and the employees affected by the proposal to show cause why the recognition should not be granted. If after considering all the objections that may have been lodged pursuant to the notice given as hereinbefore indicated, the Industrial Court comes to the conclusion that the conditions requisite for registration are satisfied and the union complies with the conditions specified in section 19, the Industrial Court shall grant recognition to the applicant union under the Act and issue a certificate in the prescribed form. At any point of time there shall not be more than one recognized union in respect of the same undertaking. Section 13 confers power on the Industrial Court to cancel the recognition if any of the circumstances therein set out is satisfactorily established. Section 14 provides for resolving the dispute inter se between the recognized union and another union seeking recognition. 20. The obligations and rights of the recognized union are set out in sections 19 and 20 of the Act. Section 14 provides for resolving the dispute inter se between the recognized union and another union seeking recognition. 20. The obligations and rights of the recognized union are set out in sections 19 and 20 of the Act. Amongst other rights conferred on the union recognized under the Act includes the right to collect sums from the members of the union on the premises, to affix notice on the notice board, to hold discussion with the management with regard to any industrial dispute and to appoint nominees or representatives on the works Committee. Section 22 provides for rights of unregistered union which allows their representatives to discuss with the management the grievance of any individual member relating to his discharge, removal, retrenchment, termination of service and suspension etc. and to appear in any domestic inquiry. 21. Section 26 defines "unfair labour practices" to mean any of the practices listed in Schedules II, III and IV. The most vital provision in the Act is contained in section 27 which prohibits the employer, union or employee from engaging in any unfair labour practice. Section 30 provides for powers of the Industrial Court and Labour Court to give declaration and other consequential relief’s including the one relating to cancellation of recognition of a trade union. 22. Long time need was ultimately fulfilled by the enforcement of the Act to permit the workmen to be represented by recognized trade unions in dispute affecting all the employees engaged in an undertaking or industry. Recognized union is given the status of sole bargaining for its employees to the exclusion of all other unrecognized trade unions. The Act further confers rights and obligations on the union recognized under the Act. In these circumstances, the unrecognized union or unions have no right to discharge the obligations or exercise the rights under the Act conferred by sections 19 and 20 of the Act. 23. Undoubtedly the unions operating in the appellant Corporation can mainly be grouped under (1) Maharashtra State Mazdoor Sabha, Bombay, (2) Maharashtra S.T. Workers Federation, Dhulia and the complainant respondent in the two appeals. These federations or unions mainly and substantially represent the workers all over the State. Admittedly none of the federations or unions is recognized so far under subsection (3) of section 12 of the Act. These federations or unions mainly and substantially represent the workers all over the State. Admittedly none of the federations or unions is recognized so far under subsection (3) of section 12 of the Act. It is no doubt true that the Maharashtra State Mazdoor Sabha, Bombay and the Maharashtra S.T. Workers Federation, Dhulia were granted recognition at the State level under "the Code of Discipline" and by reason of such recognition in the past for the purpose of collective bargaining the Corporation used to call and invite the representatives of these two unions. No fault can be attributed to the appellant Corporation for calling such representatives only, but with the enforcement of the Act from 8-9-1975 the position has obviously changed. After coming into force of the Act all the unions/federations have been brought to an equal position and status irrespective of the quantitative strength of membership and enjoyment of equal treatment from the management so long as one of them is not recognized under the Act. Even the intervening unions which enjoyed the preferential treatment in the past are brought on par with all other unions operating in the field since the time the Act has come into force. Their status under the Act is no better than the one of unrecognized union. Impliedly "The Code of Discipline" has lost its value wherever the Act is brought into force. 24. The Act has specified various types of unfair labour practices, which could be indulged in by an employer, either in Schedule II or in Schedule IV of the Act. Item 2(b) of Schedule II reads as under: "2. To dominate, interfere with, or contribute, support financial or otherwise to any union, that is to say (a) ..................... (b) an employer showing partiality or granting favour to one of several unions attempting to organize his employees or to its members, where such a union is not a recognized union." (Underlining is ours). The prohibition to indulge in the aforesaid unfair labour practice is apparent from section 27 of the Act. Item 2(b) envisages that the employer shall not dominate, interfere with or contribute, support to any union by show of partiality or favoritism attempting to organize its membership where such a union is not a recognized union. The emphasis is on the words "where such a union is not a recognized union". Item 2(b) envisages that the employer shall not dominate, interfere with or contribute, support to any union by show of partiality or favoritism attempting to organize its membership where such a union is not a recognized union. The emphasis is on the words "where such a union is not a recognized union". It clearly suggests that unless the union is recognized under the Act, the employer is strictly prohibited from interfering with or supporting to any of the unions either by show of partiality or favouritism, the whole idea being that the employer should treat all unions equally with the view that the unions in the field can organize themselves, and one who satisfied the conditions for being recognized under the Act could move in that direction. Showing of partiality or favouritism at such a juncture would be disadvantageous to other unions also functioning in the undertaking or industry. With this end in view provision has been made to avoid unhealthy competition among the unions, when they are still at organizational stage. 25. Section 20 confers rights on the union which is recognized under the Act. Since none of the unions involved in the proceedings is recognized as such, the rights conferred by that section cannot be enjoyed by any of the unions. The status enjoyed by the intervening unions prior to coming into force of the Act comes to an end. The continuance of enjoyment by the intervening unions of the obligations and rights specified for the recognized union after coming into force of the Act is nothing short of interference or support given by the employer Corporation and smacks of partiality and favouritism to those unions in comparison to other unions in the field. The denial of such right to other unions has adverse effect on their credibility, prestige and reputation. The morale of the members also stand adversely affected. The grievance made out by the complainant unions has considerable force and must be accepted. In our opinion, the activities of the Corporation clearly fall within the mischief of Item 2(b) of Schedule II of the Act. 26. It is not necessary for us to deal with Item 5 of Schedule IV in view of our above finding that the activity of the employer is an unfair labour practice under Item 2(b) of Schedule II of the Act. 26. It is not necessary for us to deal with Item 5 of Schedule IV in view of our above finding that the activity of the employer is an unfair labour practice under Item 2(b) of Schedule II of the Act. However, since the parties have addressed us on the point, we have no hesitation to deal with this aspect of the case as well. Item 5 of Schedule IV of the Act reads as under: "5. To show favouritism or partiality to one set of workers, regardless of merits". Though the words are similar as contained in Item 2(b) of Schedule II, the difference lies in the show of partiality or favouritism to a particular set or group of workers and not the unions. This is again qualified by the words "regardless of merits". In our opinion this item is not at all attracted. 27. An anxiety was shown on behalf of the employer as also the intervening unions that there will be mashroom growth of unions and if representation is required to be given to all of them on the negotiating table it would frustrate the very purpose of collective bargaining resulting in chaos in the undertaking or industry. No doubt the fears expressed are genuine, but the solution lies in getting the union with largest membership recognized under the Act. Sufficient time has elapsed after the Act has come into force, and if steps are not taken in that direction, the inevitable result is bound to follow. We are informed that the proceedings for recognition are already initiated in Bombay and are pending investigation. The parties must accelerate the process so as to avoid future inconvenience that may eventually arise. The Supreme Court has accepted the principle of sole bargaining agent, namely, the recognized union in the case of Balmer Lawrie Workers Union and another v. Balmer Lawrie & Company Ltd. and others, 1985 Labour and Industrial Cases 242. 28. The intervening unions have come forward with a plea that they have been recognized as bargaining agents under an understanding, which could be construed as an agreement, between the parties and breach of which is enforceable under Item 9 of Schedule IV of the Act. 28. The intervening unions have come forward with a plea that they have been recognized as bargaining agents under an understanding, which could be construed as an agreement, between the parties and breach of which is enforceable under Item 9 of Schedule IV of the Act. According to them, all the unions agreed for a scrutiny of relative strength of members through the Government agency on the understanding that the union with majority strength would alone represent the workers in the negotiation. As stated above, we have already observed that "the Code of Discipline" has lost its value or gone into oblivion after coming into force of the Act. Hence even assuming that there exists an agreement the same cannot be enforced after the Act has come into force. In any eventuality what the complainant unions demand is the equal rights, facilities and privileges as enjoyed by the intervening unions. Calling the complainant unions also on the negotiating table cannot affect the so called agreement and there is no reason to infer that the rights of the intervening unions are in any way prejudiced. ” 18. To a pertinent query put to Shri Gaware as to whether, 2/3rd of the elected office bearers of Petitioner No.3 Union are actual workers working in the industrial unit of Respondent No.1, he was unable to offer any explanation on this count since he has no instructions. This issue assumes significance in the light of Section 22 of the Trade Unions Act, 1926 which mandates that 2/3rd of the elected office bearers of any trade union ought to be workers working in a particular industry if that union is to establish any legal connection with such factory falling under such an industry. The meaning of the term “industry” in this backdrop is with regard to the nature of the activity as like Respondent No.1 which falls under the engineering industry. 19. Section 22 of the Trade Unions Act, 1926 reads as under: “22. The meaning of the term “industry” in this backdrop is with regard to the nature of the activity as like Respondent No.1 which falls under the engineering industry. 19. Section 22 of the Trade Unions Act, 1926 reads as under: “22. Proportion of office bearers to be connected with the industry: (1) Not less than one half of the total number of the office bearers of every registered Trade Union in an unrecognized sector shall be persons actually engaged or employed in an industry with which the Trade Union is connected: Provided that the appropriate Government may, by special or general order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in the order. Explanation : For the purposes of this section “unorganized sector” means any sector which the appropriate Government may, by notification in the Official Gazette, specify. (2) Save as otherwise provided in subsection (1), all office bearers of a registered Trade Union, except not more than one third of the total number of the office bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the Trade Union is connected. Explanation: For the purposes of this subsection, an employee who has retired or has been retrenched shall not be construed as outsider for the purpose of holding an office in a Trade Union. (3) No member of the Council of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the Trade Union is connected), in the Union or a State, shall be a member of the executive or other office bearer of a registered Trade Union.” 20. Respondent No.5 Union was granted recognition by the Industrial Court, Ahmednagar on 25.07.2014. As such, all other unions claiming existence in the Respondent No.1 Factory would lose their authority in view of paragraph 22 of the MSRTC Bombay judgment (supra). 21. The notice dated 22.08.2013 indicates that the thrust of the Petitioner Union, prima facie, appears to pressurize Respondent No.1 Factory for absorbing 51 workers, who are amongst those 80 workers who had resigned from the services of Respondent No.1 in 2004 and had joined the Petitioner Union in 2010. 21. The notice dated 22.08.2013 indicates that the thrust of the Petitioner Union, prima facie, appears to pressurize Respondent No.1 Factory for absorbing 51 workers, who are amongst those 80 workers who had resigned from the services of Respondent No.1 in 2004 and had joined the Petitioner Union in 2010. The demand set out in the letter of the Petitioner Union dated 04.07.2013 in fact indicates a threat to Respondent No.1 that if 51 workers are absorbed, they would adopt a soft stand on abolition of contract labour system. It is, therefore, apparent that the Petitioner Union, on the one hand, projected that it was espousing the cause of contract labourers and on the other hand, had put forth the demand of absorption of it's members who had resigned in 2004. 22. With regard to abolition of contract labour system, Section 10 of the CLRA Act, 1970 reads as under: “10. Prohibition of employment of contract labour. (1) Not with standing anything contained in this Act, but subject to the provisions of clause (c) of subsection (5) of Section 1, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment. (2) Before issuing any notification under subsection (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as – (a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment; (b) whether it is of perennial nature, that is to say, it is of sufficient duration, having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment; (c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto; (d) whether it is sufficient to employ considerable number of whole time workmen. Explanation: If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final.” 23. Explanation: If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final.” 23. It is, therefore, clear that if any of the four contingencies under Section 10(2) of the CLRA Act, 1970 are noticed, the appropriate Government can proceed to initiate steps for abolition of contract labour system. It requires no debate that abolition of contract labour system would not lead to an automatic absorption of contract labourers by the Principal Employer. 24. The Honorable Supreme Court (a five Judges Bench), in the matter of Steel Authority of India vs. National Union Water Front Workers and others etc. etc. decided on 30.08.2001, 2001 (III) CLR 349, has concluded that after the contract labour system is abolished, the contract labourers will have to follow the labour contractors and leave the Principal Employer's premises. They would have to seek employment with the Contractor and in the event, the Contractor has no work to offer, the Contractor can dispense with their services by following the law of retrenchment under the Industrial Disputes Act, 1947. However, it cannot be ignored that the Honorable Apex Court has observed that it would be appreciable if the Principal Employer decides to absorb the contract labourers. 25. Considering the impugned order that has been passed, the argument of the Petitioners that the Authority which passed the first order dated 17.03.2015, which was subject matter of the Appeal, was the same Authority that passed the impugned order, is fallacious. The order dated 17.03.2015 was passed by Shri B.V.Wagh, who was the Registering Authority under the CLRA Act, 1970. The impugned order dated 02.07.2015 has been passed by Shri R.S.Jadhav, who is the Appellate Authority under the CLRA Act, 1970. 26. Considering the statement made by Respondent No.1 Factory before the Appellate Authority, which has been recorded in the impugned order, I have every reason to disbelieve the bona fides of the Petitioner Union so vehemently tried to be canvassed by Shri Gaware. The Petitioner Union claims to be a crusader for abolishing the contract labour system in the Respondent No.1 Factory. It's major demand, however, is that it's members, who are out of employment from 2004, should be first absorbed as permanent employees. This indicates that the Petitioner Union has no interest in espousing the cause of contract labourers. The Petitioner Union claims to be a crusader for abolishing the contract labour system in the Respondent No.1 Factory. It's major demand, however, is that it's members, who are out of employment from 2004, should be first absorbed as permanent employees. This indicates that the Petitioner Union has no interest in espousing the cause of contract labourers. The Appellate Authority has recorded the statement of Respondent No.1 Factory that they would embark upon the policy to absorb the contract labourers, who are presently deployed in the factory as it's permanent employees. 27. Shri Changade has made a categoric statement that in between 2011 and 2016, Respondent No.1 had been negotiating with Respondent No.5 Union and during this period of five years, about 300 contract labourers have been absorbed on the rolls of Respondent No.1. It is further stated that after the passing of the impugned order, about 100 contract labourers have been absorbed with the intervention of Respondent No.5 recognized Union. Shri Upadhye does not dispute this statement. 28. In the light of the above, it is apparent that the Petitioners have no locus standi to raise any issue of abolition of contract labour system. They do represent any contract labourer. Similarly, they have no locus standi to challenge the impugned order since the notice of hearing was issued by Shri B.V.Wagh, Registering Officer under the CLRA Act, 1970 cum Assistant Labour Commissioner dated 12.11.2013 which indicates that the process was set in motion for cancellation of the registration certificate issued under Section 8 to Respondent No.1 Factory. There is no involvement of the Petitioners as is appearing from the record except that it demanded absorption of 51 workers in return of their taking a soft stand on the contract labour system. 29. In the result, this Writ Petition is dismissed. Rule is discharged. No order as to costs.