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Gujarat High Court · body

2016 DIGILAW 1806 (GUJ)

Manager - Alembic Limited v. Kanaiyalal Udalbhai Kahar

2016-08-24

C.L.SONI

body2016
JUDGMENT : C.L. Soni, J. 1. These two petitions are filed by the same petitioner against order dated 25.7.2016 passed by Industrial Tribunal ('the Tribunal') on interim applications Exh. 2 preferred in two complaints pending before the Tribunal under Section 33(A) of the Industrial Disputes Act ('the Act'). 2. The two complaints pending before the Tribunal are in connection with the notice dated 8.7.2016 for deputation of the workmen and the issues raised in the present petitions are identical. Learned advocates appearing for the parties request to hear the arguments for final disposal of the matters. Hence, RULE. Learned advocate Mr. Songara waives service of Rule for respondent Nos. 1 and 2 in the first petition and for respondent No. 1 in the second petition. No Rule is required to be issued to respondent No. 3 in the first petition and respondent No. 2 in the second petition as it is a formal party. The petitions are thus taken up for final disposal. 3. As per the case of the petitioner, M/s. Alembic Ltd. (to be referred as 'the company'), it is engaged in manufacturing of pharmaceutical products but presently finds it difficult to even use installed capacity for manufacturing products. It has been paying idle wages for last few months to about 80 to 100 odd employees. It, therefore, decided to send 54 employees on deputation to ACI Division, Bangalore for a limited period and such decision was made known to said workers by notice dated 8.7.2016. Such decision was taken after a meeting was held with the Union representatives. However, after deputation orders were conveyed to the workmen, they tried to forcibly enter the factory premises amounting to criminal trespass for which complaint was filed before police and 33 workmen were suspended. It was thereafter, complaint before the Tribunal was filed. 4. In Complaint No. 130 of 2016, while challenging the order of deputation referred in the notice dated 8.7.2016, challenge is also made to the order dated 9.7.2016 for holding departmental inquiry and suspending 33 workmen. In Complaint No. 131 of 2016, order of deputation referred in the notice dated 8.7.2016 is challenged for the workers whose authority letter was submitted by the Union in connection with which, second petition is filed. However, both the complaints are for the workmen for whom notice dated 8.7.2016 was placed by the company for their deputation to Bangalore. In Complaint No. 131 of 2016, order of deputation referred in the notice dated 8.7.2016 is challenged for the workers whose authority letter was submitted by the Union in connection with which, second petition is filed. However, both the complaints are for the workmen for whom notice dated 8.7.2016 was placed by the company for their deputation to Bangalore. By the order made below Exh. 2 in Complaint No. 130 of 2016, which is impugned in the first petition, the Tribunal not only stayed the order of deputation but also stayed the order of the company to hold departmental inquiry and suspension of 33 workmen. The order impugned in the second petition below application Exh. 2 in Complaint No. 131 of 2016 is of staying the orders of deputation referred in the notice dated 8.7.2016 and of restraining the company from preventing the workmen from serving in the factory at Vadodara till final disposal of the complaint. 5. Learned senior advocate Mr. Shalin Mehta appearing with learned advocate Mr. Hamesh Naidu for the petitioner in both the petitions submitted that for genuine reason of non availability of work in the factory of the company at Vadodara, the company decided to send the workmen for whom the complaints are filed on deputation to another unit of the company at Bangalore. Mr. Mehta submitted that transfer of such workmen referred as deputation, is for limited period and only to a connected unit of the company at Bangalore and it is not to a new establishment. Mr. Mehta submitted that it is always permissible for a company to send their employees to work at another unit of the company and therefore, sending the workmen to Bangalore could not be said to be in any way change of service conditions of such workmen. Mr. Mehta submitted that if action of the company of sending the workmen to Bangalore does not amount to change of their service conditions, complaint under Section 33(A) of the Act is not maintainable and when complaint is not maintainable, the Tribunal would not have jurisdiction to grant interim relief in such complaint. Mr. Mehta submitted that in any case, the Tribunal has no jurisdiction to stay the order of suspension and holding departmental inquiry as such are independent actions taken by the employer which would not hit by Section 33 of the Act. Mr. Mr. Mehta submitted that in any case, the Tribunal has no jurisdiction to stay the order of suspension and holding departmental inquiry as such are independent actions taken by the employer which would not hit by Section 33 of the Act. Mr. Mehta submitted that suspension of workmen is an interim measure taken pending the departmental inquiry and until the final action for punishment is taken, the complaint under Section 33(A) of the Act is not maintainable. Mr. Mehta submitted that if the workmen cannot make any complaint or grievance in connection with suspension or departmental inquiry, the Tribunal will have no jurisdiction to stay the order of suspension and the departmental inquiry. Mr. Mehta submitted that the impugned order made by the Tribunal below application Exh. 2 in both the complaints is in excess of the jurisdiction vested with the Tribunal and therefore, this Court may interfere with the impugned orders in exercise of the powers under Articles 226and 227 of the Constitution of India. 6. Learned advocate Mr. T.R. Mishra appearing with learned advocate Mr. Prabhakar Upadhyay for respondent Nos. 1 and 2 in the first petition and respondent No. 1 in the second petition representing the workmen submitted that the action of transfer referred as deputation of the workmen is nothing but change of their service conditions and since such action is taken by the company pending the reference before the Tribunal, the workmen are entitled to file complaint under Section 33(A) of the Act. Mr. Mishra submitted that though the company has not placed on record its Standing Order, however the Union with its affidavit has placed copy of such Standing Order, from where, it clearly appears that transfer of workmen is permissible only from one department to another department of the establishment and not permissible outside the establishment. Mr. Mishra submitted that if the company has no power to send the workmen on deputation or on transfer outside the establishment, transferring the workmen in the name of deputation is vindictive action and amounts to unfair labour practice. Mr. Mishra submitted that since the workmen are concerned and connected with the pending reference, the action of transfer is in breach of Section 33 of the Act and therefore, the complaint under Section 33A of the Act is maintainable. Mr. Mr. Mishra submitted that since the workmen are concerned and connected with the pending reference, the action of transfer is in breach of Section 33 of the Act and therefore, the complaint under Section 33A of the Act is maintainable. Mr. Mishra submitted that since alleged incidents for which the order for suspension and departmental inquiry is made are stated to be in connection with and incidental to the order of transfer, complaint against departmental inquiry and suspension is also maintainable and the Tribunal has jurisdiction to pass the impugned orders. 7. Having heard learned advocates for the parties, it appears that there is no dispute that there are two references pending and that the terms of the references encompass the dispute whether the action of the company to get its manufacturing activity done for liquid, tablet, antibiotic divisions from outside Vadodara unit on loan or license by closing such departments in Vadodara unit is illegal and unreasonable and whether 937 workmen involved in the manufacturing activities of the said departments should be given the works in other plants at Vadodara unit of the company considering their position, efficiency and experience, as also whether till such workmen are not absorbed by giving permanent work at Vadodara unit of the company, any person working as casual labour or contract labour in the company or any person who is not directly employed in the company could be given work in the company or not. Pending such references, the company decided to send 54 workmen for temporary deputation which was made known to them by notice dated 8.7.2016. In the notice dated 8.7.2016, copy whereof is placed with the petitions, it is mentioned that to sustain present business and considering the necessity of the work and to sustain business in future, 54 workmen shown in the list attached with the notice are temporarily deputed to API Division of the company at Bangalore from 9.7.2016 to 8.10.2016, and they are asked to report at Bangalore by 13.7.2016. Separate orders of deputation were sent to workmen. It is alleged in the complaints that action in the name of deputation is a vindictive transfer and the workmen were prevented from entering the factory premises of the company on 9.7.2016 and illegal action of suspension and of holding departmental action is taken pending the reference which is in breach of Section 33of the Act. It is alleged in the complaints that action in the name of deputation is a vindictive transfer and the workmen were prevented from entering the factory premises of the company on 9.7.2016 and illegal action of suspension and of holding departmental action is taken pending the reference which is in breach of Section 33of the Act. The prayers made in the complaints are to declare that the action of deputation, as stated in the notice dated 8.7.2016 issued by the company, is in breach of Section 33 of the Act, illegal and of unfair labour practice and also to declare that the order of suspension and of departmental inquiry dated 9.7.2016 is null and void, unauthorized and illegal and to pass order for reinstatement of the workmen on their original posts at Vadodara factory with continuity of service and all incidental benefits. 8. In Complaint No. 130 of 2016, the Tribunal allowed the application Exh. 2 and stayed the order of deputation as per the notice dated 8.7.2016 of the company and also stayed the order of holding departmental inquiry and of suspension of workmen pending inquiry and ordered the company not to prevent the workmen from working at Vadodara factory till the complaint is decided. In Complaint No. 131 of 2016, the Tribunal granted restraint order against the company not to prevent the workmen from working at Vadodara factory and also stayed the order of deputation mentioned in the notice dated 8.7.2016. 9. As provided in Section 33 of the Act, during the pendency of any proceeding before any authority in respect of an industrial dispute, no employer shall in regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; save with the express permission in writing of the authority before which the proceeding is pending. It is further provided that during pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with standing orders applicable to a workman concerned in such dispute, or where there are no such standing orders, in accordance with the terms of the contract, whether express or implied between him and the workman, alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding. Therefore, if dispute is pending before any authority under the Act, wherein workmen are concerned, the conditions of service applicable to them immediately before commencement of the proceeding, are not to be altered to their prejudice in regard to any matter connected with the dispute without express permission of the authority before which the dispute is pending. However, pending such proceedings in respect of the industrial dispute, the employer may alter the conditions of service applicable to workman concerned in such dispute immediately before commencement of the proceeding in regard to any matter not connected with the dispute but in accordance with the standing orders applicable to that workmen or in accordance with the terms of contract whether express or implied between him and the workman. Whether the transfer of workmen outside establishment would amount to alteration of service conditions in regard to any matter connected with the dispute for which the reference is pending will be considered by the Tribunal when the complaints are decided. However, when the alteration of conditions of service is permitted in regard to any matter not connected with the dispute, only in accordance with the standing order, the Tribunal if prima facie finds on consideration of standing order that transfer appears to be in breach of Standing order, it can exercise its discretion to grant protection pending the complaint. Learned advocate Mr. Mishra drew the attention of the Court to the copy of the standing order placed with the affidavit-in-reply to point out that transfer only from one department to another department of the same establishment is permissible. Whereas, learned senior advocate Mr. Mehta submitted that the company has its another unit at Bangalore and transfer or deputation of the workmen at Bangalore could not be said to be outside the establishment. 10. Whereas, learned senior advocate Mr. Mehta submitted that the company has its another unit at Bangalore and transfer or deputation of the workmen at Bangalore could not be said to be outside the establishment. 10. Clause 2(b) of the standing order provides that "Company" or "Establishment" or "works" means the Alembic Chemical Works Company Limited, Baroda-3. Clause 8(5) provides that workmen are liable to be transferred from one department of the establishment to another to meet the exigencies of the work provided that the terms and conditions of service and the seniority of the workmen concerned are not adversely affected. 11. Considering the matter in the context of above provisions made in standing order, when the Tribunal has prima facie found that the action of transfer in the name of deputation does not appear to be in consonance with the standing order or appointment order and has exercised its discretion to prevent irreparable loss being caused to the workmen on finding balance of convenience in their favour for grant of interim stay against the order of deputation/transfer, the Tribunal could not be said to have acted in excess of its jurisdiction. 12. Mr. Mehta however submitted that no complaint could be lodged under Section 33(A) of the Act if there is no contravention of Section 33 of the Act. For such purpose, he relied on the judgment of this Court in the case of Nadiad Municipality v. Ghanshyam Barot and others reported in, 1998 (2) GLH 728 . He also submitted that transfer of an employee does not amount to change in service conditions. He relied on the decision of Hon'ble Supreme Court in the case of Cipla Limited v. Jayakumar R. reported in (1999) 1 SCC 300 . The Court having gone through the said judgments finds that in the facts of the case and at interim stage, they could not be relied. 13. However, as regards the decision of the company to hold departmental inquiry and of suspension of workmen pending the inquiry, the Court finds that there is no prohibition in law preventing the employer from holding departmental inquiry against the workman and to suspend the workman pending the inquiry. The standing order provides for conduct of the workman and for holding inquiry into alleged acts amounting to misconduct and also for suspending the workman pending inquiry. The standing order provides for conduct of the workman and for holding inquiry into alleged acts amounting to misconduct and also for suspending the workman pending inquiry. What is provided under Section 33 is not to discharge or punish the workman for any misconduct connected with the dispute without permission of the authority or may discharge or punish the workman in accordance with the standing order and in terms of the contract between the workman and the company for any misconduct not connected with the dispute, as per the procedure provided therein. Learned advocate Mr. Mishra however submitted that the action of departmental inquiry and of suspension taken by the company is vindictive and such action since is direct fall out of and connected to the transfer of workmen, the Tribunal is justified in staying the order to hold departmental inquiry and of suspension of workmen while staying the order of transfer/deputation of the workmen by the impugned orders. He also submitted that since the impugned orders are interlocutory orders pending the complaint and do not decide the rights of the parties finally, this Court may not interfere with the impugned orders in exercise of the powers under Article 226 of the Constitution of India. 14. In the case of Management of Ranipur Colliery under M/s. Equitable Co. Ltd. v. Bhuban Singh and others, reported in AIR 1959 SC 833 , Hon'ble Supreme Court has held and observed in para 7 and 8 as under:- "7. The scheme and object of S. 33 also show that this conclusion is reasonable. Section 33 of the Act, as already stated, imposes a ban on the employer, thus preventing him from dismissing an employee till the permission of the tribunal is obtained. But for this ban the employer would have been entitled to dismiss the employee immediately after the completion of his enquiry on coming to the conclusion that the employee was guilty of misconduct., Thus if S. 33had not been there, the contract of service with the employee would have come to an end by the dismissal immediately after the conclusion of the enquiry and the employee would not have been entitled to any further wages. But S. 33 steps in and stops the employer from dismissing the employee immediately on the conclusion of his enquiry and compels him to seek permission of the Tribunal, in case some industrial dispute is pending between the employer and is employees. It stands to reason therefore that so far as the employer is concerned he has done all that he could do in order to bring the contract of service to an end. To expect him to continue paying the employee after he had come to the conclusion that the employee was guilty of misconduct and should be dismissed, is, in our opinion, unfair, simply because of the accidental circumstance that an industrial dispute being pending he has to apply to the tribunal for permission. It seems to us therefore that in such a case the employer would be justified in suspending the employee without pay after he has made up his mind on a proper enquiry to dismiss him and to apply to the tribunal for that purpose. If this were not so, he would have to go on paying the employee for not doing any work and the period for which this will go on will depend upon an accidental circumstance viz., how long the tribunal takes in concluding the proceedings under S. 33. In the present case the application for permission was made on 29-4-1955 and the Tribunal's award was given on 10-3-1956, more than ten months later. So if the view taken by the Appellate Tribunal is correct, the employer has to pay the employee for this period of more than ten months, even though the employer had completed his enquiry and made up his mind to dismiss the employee long before and would have done so but for the ban imposed by S. 33. The purpose of providing ten days as the maximum period of suspension without pay pending enquiry in Cl. 27 obviously is that the employer should not abuse the provision of suspension pending enquiry and delay the enquiry inordinately, thus keeping the employee hanging about without pay for a long period. The object further seems to be to see that the employer finishes his enquiry. promptly within ten days if the suspension of the employee is without pay. 27 obviously is that the employer should not abuse the provision of suspension pending enquiry and delay the enquiry inordinately, thus keeping the employee hanging about without pay for a long period. The object further seems to be to see that the employer finishes his enquiry. promptly within ten days if the suspension of the employee is without pay. But it could not have been intended that the Industrial Tribunal should also conclude the proceedings under S. 33 within ten days, an if that was not done there would be a breach of Cl. 27. In any case the time taken by the proceedings before the tribunal under S. 33 is beyond the control of the employer and as the provisions of Cl. 27 would be inappropriate and inapplicable to the said proceedings. We are therefore of opinion that the words "pending enquiry" in C. 27 both in the context and in justice and reason refer only to the enquiry by the employer and not to the proceedings before the tribunal under S. 33. 8. This interpretation would not cause any serious hardship to the employee, for if the tribunal grants permission to the employer to dismiss the employee he will not get anything from the date of his suspension without pay; on the other hand if the tribunal refuses to grant the permission sought for, he would be entitled to his back wages from the date of his suspension, without pay. We may in this connection refer to the case of Lakshmi Devi Sugar Mills Ltd. (supra), where a similar point arose for decision. In that case the Standing orders provided suspension without pay only for four days. It was there held that suspension without pay pending enquiry as also pending permission of the tribunal could not be considered a punishment, as such suspension without pay would only be an interim measure and would last only till the application for permission to punish the workman was, made and the tribunal had passed orders thereon. It was also held that if the permission was accorded the workman would not be entitled to payment during the period of suspension but if the permission was refused he would have to be paid for the whole period of suspension. The principle laid down in that case applies to this case also. It was also held that if the permission was accorded the workman would not be entitled to payment during the period of suspension but if the permission was refused he would have to be paid for the whole period of suspension. The principle laid down in that case applies to this case also. We would only like to add that that principle will apply only to those cases where there is a ban under S. 33 and the employer has to apply under that section for lifting the ban after completing the enquiry. The matter will be different if there is no question of applying under S. 33 and under the relevant Standing Orders the employer is competent to dismiss the employee immediately after his enquiry is complete. In such a case if the Standing Orders provide that suspension without pay will not be for more than a certain number of days, the enquiry must either be completed within that period or if it goes beyond that period and suspension for any reason is considered necessary, pay cannot be withheld for more than the period prescribed under the Standing Orders. In the present case, the suspension without pay took place even after the application under S. 33 had been made and was pending permission under that section. As the Industrial Tribunal has accorded permission to dismiss the employees in this case and as that part of the award has been upheld by the Appellate Tribunal, there is no question of the employees being paid during the period of suspension without pay. We, therefore, allow the appeal, set aside the order of the Labour Appellate Tribunal and restore the order of the Industrial Tribunal dismissing the two applications under S. 33-A. In the circumstances, we pass no order as to costs." 15. When it is within the domain of the employer to hold inquiry and suspend the workman by way of interim measure and when such action is not prohibited expressly by any provisions of law, granting of interim order in the complaint to prevent the employer to hold departmental inquiry against the workman and to suspend him could be said to be in excess of the jurisdiction vested with the Tribunal. Therefore, impugned interim order of the Tribunal insofar as staying the departmental inquiry and the order of suspension of workmen and restraining the company from preventing the workmen from working at Vadodara factory needs to be interfered with in exercise of the powers under Articles 226 and 227 of the Constitution of India. 16. For the reasons stated above, the petitions are partly allowed. The impugned order dated 25.7.2016 passed below application Exh. 2 in Complaint No. 130 of 2016 by the Tribunal insofar as the Tribunal has stayed the order of suspension of 33 workmen and of holding departmental inquiry and has further restrained the company from preventing the workmen from working in Vadodara factory is quashed and set aside. The impugned order staying the transfer, referred as deputation of the workmen as per the notice dated 8.7.2016, is not disturbed. Similarly, the impugned order dated 25.7.2016 passed below application Exh. 2 in Complaint No. 131 of 2016 by the Tribunal insofar as the company is restrained from preventing the workmen from working in Vadodara factory is quashed and set aside. However, the impugned order staying transfer, stated to be deputation of the workmen, as per notice dated 8.7.2016, is not disturbed. Rule is made absolute accordingly in both the petitions.