Travancore-Cochin Chemicals Co-Operative Society, Ltd. v. Labour Court, Ernakulam

1. Is the dispute between a co-operative society and its secretary an industrial dispute ? Is the secretary a “workman” of the society ? and is it competent for a Labour Court in a reference under S. 12 of the Industrial Disputes Act, to review the evidence and come to a finding different from that arrived at in the domestic enquiry after holding that the enquiry was fairly and properly conducted ? These are the questions which arise for consideration in this original petition.

2. The petitioner is the employer-society consisting of the employees of the Travancore-Cochin Chemicals, Ltd. The second respondent was its secretary. The statutory audit of the accounts of the society for the year 1978–79 seems to have revealed some irregularities. These were revealed by the summary of defects noted by the auditor. The second respondent was on sick leave in 1979. When he rejoined duty, he was required to discharge the duties of a clerk and was not allowed to function as secretary. That provoked a series of correspondence. In a letter, dated 1 August 1981, containing allocation of work with effect from 1 July 1980, the second respondent was given the work of cash credit accounts, personal ledger, schedule, etc. The senior clerk was shown as the acting secretary. The second respondent made an endorsement on the reverse of that letter that he being the secretary of the society at the time when he entered on leave, should be permitted to rejoin duty in that post. He also stated that to his knowledge, there were no disciplinary proceedings initiated against him, and, therefore, requested that he should be permitted to function as the secretary of the society. In reply to the endorsement, the petitioner informed the second respondent that he had been relieved of the duties of the secretary as per Resolution No. 3 of the Board of Directors dated 29 September 1980, and other work was allotted to him. He was also told that there was a criminal case pending against him, and, therefore, he would not be permitted to function as the secretary of the society. He was advised to work in accordance with the allocation order referred to above. A series of correspondence followed. In his letter, dated 14 October 1981, the second respondent informed the president of the society that the criminal case filed against him was referred and there was no case pending against him. He requested for review of the allocation order and his restoration as secretary of the society. In letter, dated 29 October 1981, the president of the petitioner-society informed the second respondent that he would not be paid wages with effect from 30 October 1981, since he was not complying with the directions in the allocation order. The second respondent then filed Arbitration Case No. 584 of 1981. The Registrar passed an interim order, dated 15 March 1982, staying the proceedings instituted by the petitioner against the second respondent. Petitioner filed Original Petition No. 4580 of 1982 challenging that interim order. This Court passed a conditional order of stay on 1 July 1982, in Civil Miscellaneous Petition No. 12997 of 1982. In the meantime, the petitioner-society filed Arbitration Case No. 18 of 1982 against the second respondent under S. 69 of the Act. That case was dismissed by order, dated 10 January 1985, holding that the monetary claim made by the petitioner-society against the second respondent was premature, without sufficient cause, and against the principles of natural justice. In the meantime, by letter, dated 12 December 1981, the petitioner society had required the second respondent to remit an amount of Rs. 894.55 within 15 days of receipt thereof. He was also required to furnish necessary explanation, failing which further steps were threatened against him. The second respondent submitted his explanation on 13 January 1982. In his Resolution No. 173, dated 14 January 1982, the petitioner-society held that the explanations offered by the second respondent were unsatisfactory. In letter, dated 18 January 1982, he was suspended from service, pending enquiry into the allegations levelled against him. He was also informed that the details regarding the enquiry, etc., will be intimated in due course by the enquiry officer. More than six months thereafter, the enquiry officer sent a notice, dated 21 July 1982, proposing conduct of the enquiry on 31 July 1982. It appears that the Board of Directors had, by resolution, dated 4 March 1982, appointed the enquiry officer. But intimation of such appointment was given to the second respondent, as noticed above, only four months thereafter. The enquiry officer framed charges against the second respondent, conducted an enquiry and submitted his report. On a consideration of the same, the petitioner-society issued a show-cause notice proposing to dismiss the second respondent from service. After considering the explanations submitted by the second respondent, the petitioner dismissed him from service by order, dated 1 August 1983. The second respondent disputed the correctness of that order. After unsuccessful attempts at conciliation, the Conciliation Officer referred the matter to the Government, which referred the dispute to the Labour Court in its order, dated 30 July 1984. A copy of the letter of the workman, dated 26 July 1983, which was attached to the order of reference was treated as the statement of claims filed by the second respondent. The petitioner-society filed a written statement. The second respondent had urged that the domestic enquiry was only a make-believe, that the enquiry officer was prejudiced against him and the resultant order of dismissal was vitiated by bias and absence of bona fides. He alleged further that the enquiry proceedings were vitiated by absence of a memorandum of charges with statement of allegations drawn up by the employer prior to the reference to the enquiry officer and that the report of the enquiry officer did not disclose any misconduct which should have resulted in the punishment of dismissal.

3. In the written statement, the petitioner contended that what was referred was not an industrial dispute since the second respondent was not a workman as referred to in the Industrial Disputes Act, and that he was entitled to remedies under the Kerala Co-operative Societies Act. It was contended further that the functions of the second respondent were mainly supervisory and that he was drawing a salary of Rs. 500, and, therefore, he could not be treated as a workman under the Industrial Disputes Act. The petitioner also sought to justify the termination of service on merits.

4. The Labour Court framed four issues for consideration, viz.:

(1) Whether the domestic enquiry held is valid and proper ?

(2) Whether the workman is guilty of any misconduct ?

(3) Whether the punishment imposed is not justifiable ?

(4) To what relief, if any, the workman is entitled ?

5. On the first point, the Labour Court held that the domestic enquiry was held validly and properly and could not be set aside for the reasons alleged by the delinquent workman. The Court then examined the charges, allegations, and evidence—both oral and documentary — and came to the conclusion that

“It is impossible to hold the workman guilty of any misconduct and there was really no scope for initiating disciplinary proceedings against him in this manner.”

The Labour Court also found that in the light of his finding that the workman was not guilty of any misconduct which called for disciplinary action, there was no necessity to give the petitioner an opportunity to substantiate the allegations as requested by them in the written statement. In the light of those findings, the Labour Court further held in favour of the second respondent on the third issue. The Labour Court passed an award setting aside the order of dismissal and directed the petitioner to reinstate the second respondent in service with continuity of service and full back-wages and other monetary benefits like bonus, annual increments, etc. Petitioner challenges exhibit P1 award of the Labour Court in these proceedings.

6. Section 2 (k) of the Industrial Disputes Act defines an “industrial dispute” as meaning any dispute or difference between employer and employers or between employers and workmen or between workmen and workmen which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person. The primary question for our consideration here is whether the second respondent was a workman. “Workman” is defined in S. 2(s) of the Industrial Disputes Act as meaning any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purpose of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, or discharge or retrenchment has led to that dispute. Four categories of persons are excluded. The two categories with which alone we are concerned are dealt with in Cls. (iii) and (iv) of S. 2(5). They are:

“(iii) who is employed mainly in a managerial or administrative capacity; or

(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.”

If the second respondent fitted either of the above two exclusions, there would not have been an industrial dispute and the Labour Court would not have had jurisdiction to pass an award.

7. It is true that the second respondent was designated as the secretary of the petitioner-society. Petitioner urges that he was employed in a managerial or administrative capacity and he was exercising, by the nature of the duties attached to his office and by reason of the powers vested in him, functions mainly of a managerial nature. The Labour Court did not enter into a detailed discussion of the question whether second respondent was a workman. But the facts which were dealt with in detain exhibit P1 award are sufficient to justify this assumption in favour of the second respondent. While dealing with the facts, I have noted that the second respondent availed of sick leave while he was functioning as a secretary and on return from such leave, he was required to discharge the duties of a clerk. The petitioner did not allow the second respondent to function as the secretary. The petitioner allotted him the work of cash credit accounts, personal ledger, schedule, etc., which duties are clerical in nature. The senior clerk was designated as acting secretary. The second respuonted remonstrated, asserting that he was the secretary of the society. That he did so was one of the charges levelled against him. On the materials on record, 1 am satisfied that the Labour Court was justified in assuming that the second respondent was not employed mainly in managerial or administrative capacity and that either by the nature of the duties attached to his office or by reason of the powers vested in him, his functions were not mainly of a managerial nature. He was treated as a clerk for all purposes. The duties which he was required to perform was neither managerial nor supervisory nor administrative. One of the specific charges against him and which ended in his dismissal was that he did not comply with the allocation of work which required him to discharge the duties of a clerical nature.

8. The question whether the designation of a person as secretary of a co-operative society would disentitle him to claim to be a workman under S. 2(s) of the Industrial Disputes Act was considered by this court in Tirurangadi Service Co-operative Bank, Ltd. v. District Labour, Officer, Malappuram [1982-I L.L.N 159|. Referring to the decisions of the Supreme Court in Reserve Bank Employees' Association v. Reserve Bank [A.I.R 1966 S.C 305] and Burmah Shell Company v. Burmah Shell Management Staff Association [1970-11 L.L.J 590], this Court held that the duties assigned to the secretary of the co-operative society were mostly clerical and to some extent supervisory. It was, therefore, held that he was a workman coming within the definition contained in S. 2(s) of the Industrial Disputes Act. The same view was expressed by my learned brother Khalid, J., in the decision in Perungottukurissi Service Co-operative Bank, Ltd. v. K. Balakrishnan [1982 I L.L.N 167], in respect of an employee of a co-operative society who was designated as manager.

9. Once it is held that the second respondent was workman as defined in S. 2(s) of the Industrial Disputes Act, the dispute between him and the society relating to his dismissal will be an industrial dispute. The question which the Labour Court was to decide in the reference was the validity of the dismissal of the second respondent from the service of the petitioner-society. Petitioner urges that having found that the second respondent was dismissed after duly conducted domestic enquiry, it was not open for the Labour Court to consider the propriety of the order of dismissal. It is further submitted that in any case, the petitioner having sought for an opportunity to justify the order of dismissal, it ought to have given an opportunity to lead evidence in support of the dismissal before the Labour Court passed exhibit P1 award. The second respondent submits that it was perfectly competent for the Labour Court in exercise of the powers under S. 11-A of the Industrial Disputes Act to find that the order of dismissal was not justified and to set aside the order, directing reinstatement of the workman.

10. It is true that the Labour Court found that the enquiry was properly conducted, that the enquiry officer was not biased against the second respondent, that the enquiry officer had given reasons for the findings entered by him and they were supported by documents produced by the management at the enquiry. The Labour Court also found that there was no impropriety in the conduct of the enquiry. It was thereafter that the Labour Court reviewed the evidence, both oral and documentary, which the enquiry officer had before him to see whether the order of dismissal was justified. It was a part of the duty of the Labour Court to consider the propriety of the dismissal of the second respondent since the dispute which was referred for adjudication was, “dismissal of Sri K.V Sreenivasan from the service of T.C.C Co-operative Society, Ltd. No. R-23.” I am not impressed by the submission that it was not within the competence of the Labour Court to consider whether the dismissal of the workman was justified or not.

11. It is true that the Labour Court had a duty to take a decision on the question of the validity of the domestic enquiry as a preliminary issue. It decided that in favour of the petitioner. I am not persuaded to accept the submission that once the Labour Court found in favour of the employer on this preliminary issue, the Labour Court did not have the jurisdiction to consider the question whether there was legally acceptable evidence before the enquiry officer to sustain the conclusion which he reached. As a matter of fact, it was the obligation of the Labour Court to satisfy itself whether the dismissal was justified or not. The Supreme Court in the decision in Firestone Tyre and Rubber Company (Private), Ltd. v. Workmen [A.I.R 1968 S.C 236], had held that the Labour Court was obliged to consider the propriety and justifiability of the penalty of discharge or dismissal imposed by the employer on the concerned employee. Referring to the scope of S. 11-A of the Industrial Disputes Act the Supreme Court held in Workmen of Firestone Tyre and Rubber Company of India (Private), Ltd. v. Firestone Tyre and Rubber Company of India (Private), Ltd. [1973-I L.L.N 278], that the Tribunal or Labour Court was clothed with the power to reappraise the evidence and satisfy itself whether the evidence established a misconduct. The question whether the Labour Court or an Industrial Tribunal can go into the question of the propriety of the punishment was considered in the decision in Ved Prakash Gupta v. Delton Cable India (P) Ltd.), Ltd., Faridabad [1984-II L.L.N 27]. In Rama Kant Misra v. State of Uttar Pradesh [1983-I???.L.N 1], it was held that the Labour Court had jurisdiction and power to substitute its measure of punishment in the place of that awarded by the employer. Even in a case where the Tribunal or Labour Court found that the alleged misconduct was proved, the Tribunal was still within his jurisdiction in holding that the punishment was not justified. It can set aside the order of dismissal, award a lesser punishment, or even direct reinstatement subject to conditions which may be imposed. The proposition that the Labour Court has jurisdiction to consider the propriety and justifiability of findings entered against the workman as also the punishment are fully supported by the decisions in Arya Vaidya Pharmacy (Coimbatore), Ltd. v. Secretary, Arya Vaidya Pharmacy Employees' Union [1982-I L.L.J 364], General Secretary, Kerala Times Non-Journalists Staff Union v. Labour Court, Ernakulam [I.L.R 1984 (2) Ker. 306] and Joseph v. Labour Court [1987 (1) K.L.T 24].

12. Petitioner submitted that it has pleaded in its written statement before the Labour Court that if the Labour Court was not satisfied that a proper enquiry was conducted, it may be given an opportunity to substantiate the punishment by adducing evidence before the Labour Court itself. Counsel submits that denial of such opportunity amounted to a manifest error vitiating the proceedings, and refusal to exercise the jurisdiction which the Labour Court had.

13. In the decision in Arya Vaidya Pharmacy case [1982-I L.L.J 364] (vide supra), an almost identical situation arose for consideration. The argument on behalf of the employer was that when the Labour Court found that termination of service could not be sustained on the basis of domestic enquiry, it was not open for the management, as a matter of right, to insist that the Labour Court should not proceed further without affording it a iresh opportunity of adducing evidence. In General Secretary, Kerala Times Non-Journalists Staff Union v. Labour Court, Ernakulam [I.L.R 1984 (2) Ker. 306] (vide supra), my learned brother Kochu Thommen, J., dealing with the same question held:

“…After coming to a finding that the domestic enquiry was proper, the Court must necessarily confine itself to the evidence already recorded at the domestic enquiry. It is open to the Court by virtue of its power under S. 11-A of the Industrial Disputes Act, 1947, to reappreciate the evidence and come to a finding on the charges independently. But a finding on the charges on the basis of the evidence recorded by the enquiry officer can be come to only after holding that the domestic enquiry was proper.

Reliance was placed on the decisions in Meenglas Tea Estate v. Workmen [1963-II L.L.J 392???] and Associated Cement Companies v. Their workmen [1963-II L.L.J 396]. In Writ Appeal No. 835 of 1986 (Joseph v. Labour Court [1987(1) K.L.T 24] (vide supra), a Division Bench of this Court with reference to S. 11-A of the Industrial Disputes Act, held as follows:

“The jurisdiction exercised by it is not really an appellate power. It is really a rehearing of the case by an independent body constituted by the statute. It has a wide or comprehensive power to hear the matter afresh even without reference to the original decision. The power to hear or appraise the matter afresh under the de novo proceeding, by the first respondent is not trammelled by anything said or done by the employer as an original authority. In such cases, even assuming that the employer— original authority—passed the order of dismissal, as to whether it is vitiated by bias, can be independently gone into by the first respondent.”

I do not understand the decisions referred to by counsel for the petitioner to cast an obligation on the Labour Court to give a fresh opportunity to the management to lead evidence before he can exercise his power under S. 11-A of the Industrial Disputes Act. What the Industrial Tribunal or Labour Court is ordinarily expected to do in exercise of the powers under S. 11-A is to satisfy itself as to whether the order of discharge or dismissal was not justified and if its finding be in the negative, to set aside the order of dismissal and direct reinstatement of the workman. It is true that in cases whether the Labour Court found that the enquiry was not properly conducted, or that no enquiry at all was conducted preceding the order of dismissal, the employer may have a right to adduce fresh evidence if he had sought such Opportunity at the earliest possible moment. That position is clear from the decision of the Supreme Court in Shambu Nath Goyal v. Bank of Baroda [1984-1 L.L.N 8]. That decision does not, however, entitle the employer to insist that even in a case where the Labour Court found that the enquiry was properly conducted, the Tribunal or Labour Court shall call upon the management to adduce fresh evidence before it proceeded to reappreciate the evidence available, before the enquiry officer, to consider whether the order of dismissal or discharge was justified or not.

14. In this view, I am not inclined to agree with the submission urged on behalf of the petitioner that it was not open for the Labour Court to review the evidence which the enquiry officer had before him to come to a different finding.

15. In the result, I hold that on the facts and circumstances of this case, the second respondent, though designated as a secretary of the petitioner-co-operative society, was a workman as defined in S. 2(s) of the Industrial Disputes Act. Consequently, the dispute relating to the dismissal of the second respondent from service was an industrial dispute as defined in S. 2(k) of that Act. The Labour Court, therefore, did have jurisdiction to decide the dispute. I also hold that it was competent for the Labour Court under the Industrial Disputes Act to review the evidence to satisfy itself as to whether the dismissal of the second respondent was not justified. I hold further that the Labour Court was right in directing reinstatement of the second respondent with continuity of service, full back-wages, and other service benefits.

16. The original petition, therefore, fails and is hereby dismissed, with costs.