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Workmen Of Lakheri Cement Works Ltd. v. The Associated Cement Companies Ltd.
Factual and Procedural Background
The appeal arose from an order of the Labour Court, Rajasthan, Jaipur, which had affirmed the Certifying Officer’s decision dated 18 April 1966 under the Industrial Employment (Standing Orders) Act, 1946. The employer sought certification of two additional standing orders—Clause 22 (“Right of transfer”) and Clause 23 (“Quarters”)—for its industrial establishment. These clauses dealt respectively with the unilateral power of management to transfer workmen within the establishment and with conditions governing occupation of company housing. The Labour Court upheld their certification; consequently, the aggrieved party filed the present appeal before the Supreme Court of India.
Legal Issues Presented
- Whether the Certifying Officer and the Labour Court had jurisdiction under the Industrial Employment (Standing Orders) Act, 1946, read with the Rajasthan Industrial Employment (Standing Orders) Rules, 1963, to certify standing orders on subjects not enumerated in the Schedule to the Act or in the additional matters prescribed by the State Rules.
- Whether Clauses 22 and 23, concerning managerial power of transfer and occupation of company quarters, could validly form part of certified standing orders.
Arguments of the Parties
Respondent's Arguments
- The Act prescribes only the minimum set of matters that must be covered, but does not expressly prohibit employers from including additional subjects in their standing orders.
- On that basis, Clauses 22 and 23 should be permitted even though they are not expressly listed in the Schedule or in the State-added matters.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rohtak & Hissar District Electricity Supply Co. Ltd. v. State of Uttar Pradesh and Others, 1966 (2) SCR 863 at 871 | Standing orders cannot deal with matters outside the Schedule to the Industrial Employment (Standing Orders) Act unless expressly authorised. | The Court relied on this decision to hold that Clauses 22 and 23, not being covered by the Schedule or State-added matters, were beyond the Certifying Officer’s jurisdiction. |
Court's Reasoning and Analysis
The Court examined the statutory scheme:
- Section 3(2) of the Act mandates that draft standing orders must cover every matter in the Schedule applicable to the establishment and, where model standing orders exist, conform to them.
- Section 4 permits certification only if the standing orders meet those statutory requirements.
- The Schedule does not mention either transfer of workmen or conditions of occupation of company quarters. Although Item 11 of the Schedule allows “any other matter which may be prescribed,” the Rajasthan Industrial Employment (Standing Orders) Rules, 1963, prescribe only three additional matters (recruitment of badlis, abolition of posts, and promotion) and none covers the disputed clauses.
Applying the precedent in Rohtak & Hissar District Electricity Supply Co., the Court concluded that certification authorities lack jurisdiction to approve standing orders on subjects outside the Schedule or the State-prescribed additions. Hence, Clauses 22 and 23 were ultra vires. The Court further noted that even though the jurisdictional objection had not been raised before the lower forums, an order passed without jurisdiction is a nullity and can be set aside at any stage.
Holding and Implications
Appeal Allowed — Clauses 22 and 23 are ordered to be expunged from the certified standing orders.
Direct Effect: The employer’s standing orders will operate without the impugned provisions relating to transfer and occupation of company quarters. Broader Implication: The decision reaffirms that certifying authorities under the Industrial Employment (Standing Orders) Act, 1946, cannot validate standing orders on topics not enumerated in the Act’s Schedule or in rules validly made thereunder, and underscores that jurisdictional defects render such orders void ab initio. No costs were awarded.
M. Hidayatullah, C.J.
1. This is an Appeal from the judgment and order of the Labour Court Rajasthan, Jaipur in an appeal from the order of the Certifying Officer dated April 18, 1966 under the Industrial Employment (Standing Orders) Act, 1946. The matter concerns the inclusion of two standing orders which, it is said, cannot be so included; because there is no authority to frame the standing orders on those topics either under the Act or the rules made thereunder. Those standing orders are:
22. Right of transfer: The manager shall have the right to transfer any workman from one department or section to another provided that such transfer does not cause any prejudice to his wages and other conditions of service and provided that reasonable notice is given of such transfer.
23. Quarters: (i) If a workman is authorised or allowed to occupy a quarter belonging to the company he will do so as a Licensee and not as a tenant of the company. The occupation will be further subject to the conditions stipulated by the company.
(ii) When a workman who is in occupation of the company's quarter, is found to have misbehaved with other residents of the Colony by being drunk, or otherwise behaved indecently or disorderly, causing nuisance in or disturbing the peace of the colony, the manager, at his sole discretion, may order offending workman to vacate the quarter and the workman should vacate the quarter within the time specified in the order.
These Standing Orders were framed under the Industrial Employment (Standing Orders) Act, 1946. The scheme of the Act is that the "standing orders" means rules relating to matters set out in the Schedule. Under Section 3 of the Act it is provided that within six months from the date on which the Act becomes applicable to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment. Sub-section (2) of Section 3 provides that provision shall be made in such draft for every matter set out in the schedule which may be applicable to the industrial establishment, and where model standing orders have been prescribed, shall be, so far as is practicable, in conformity with such model, Section 4 says that standing orders shall be certifiable under the Act if provision is made therein for every matter set out in the Schedule which is applicable to the industrial establishment and the standing orders are otherwise in conformity with the provisions of the Act. The other provisions of Sections 3 and 4 do not concern us and need not be mentioned. The Act bears a schedule which sets out the matters to be provided in standing orders under the Act. It is not necessary to analyse the first ten items which speak of specific matters, because none of them apply to the two standing orders which we have quoted above. There is, however, item II which we speak of "any other matter which may be prescribed". In furtherance of this power the Rajasthan Government has framed the Rajasthan Industrial Employment (Standing Orders) Rules, 1963. These rules were applicable to the present matter, because the standing orders were certified in 1965. In paras 3 and 4 there is provision bearing upon the subject-matters of standing orders. Para. 3 speaks of the model standing orders and says that they will be those set out in Schedule 1 appended to the rules. We have looked into the model standing orders and none of them bears upon the two topics which were the subject-matter of the standing orders in the present case. Para. 4 of the rules then adds certain matters to the schedule of the Act. There are three such matters and they are, (1) procedure for recruitment of badlies, (2) conditions for abolition of posts, and (3) conditions for promotion of workmen whether on temporary or permanent, basis. It is manifest that this enlargement to the schedule does not take in the two topics on which paras 22 and 23 of the standing orders were framed. It follows therefore that there is no authority to extend the standing orders to topics not mentioned in the first schedule to the Act as amplified by the rules to which we have referred.
2. Mr. I.M. Nanavati appearing for the Respondent contends that the scheme of the Act is to show the minimum which has to be prescribed in an industrial establishment, but it does not exclude the extension otherwise. This argument cannot be accepted, because in a decision of this Court in Rohtak Hissar District Electricity Supply Co. Ltd. v. State of Uttar Pradesh and Ors. 1966 (2) SCR 863 at 871, it was observed as follows:
Then in regard to the matters which may be covered by the Standing Orders, it is not possible to accept the argument that the draft Standing Orders can relate to matters outside the Schedule. Take, for instance, the case of some of the draft Standing Orders which the Appellant wanted to introduce. These had reference to the liability of the employees for transfer from one branch to another and from one job to another at the discretion of the management. These two Standing Orders were included in the draft of the Appellant as Nos. 10 and 11. These two provisions do not appear to fall under any of the items in the Schedule; and so, the Certifying authorities were quite justified in not including them in the certified Standing Orders.
In view of the pronouncement this Court, it is quite clear that the extension of the standing orders to the two topics was entirely without jurisdiction and the standing orders could not therefore be framed. It may however be mentioned that this point does not seem to have been taken either before the Certifying Officer or before the Appellant Authority. But even so, any action without jurisdiction would be a complete nullity as this Court has already stated in the passage quoted above. In the result, the appeal must be allowed. Those two standing orders must be expunged and we order accordingly. In the circumstances of the case, there shall be no order as to costs.
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