Dhanbad Flour Mills v. Dhanbad Mills Karamchari Sangh And Others

H.L Agrawal, J.:— This is an application under Articles 226 and 227 of the Constitution of India by the petitioner firm carrying on business of manufacturing wheat products.

2. The material facts giving rise to this application are as follows. The petitioner employs more than one hundred workmen in its establishment. On December 11, 1968, it submitted to the Certifying Officer (respondent No. 2) three sets of the requisite number of copies of the draft Standing Orders proposed by it for adoption in its establishment as required under the provisions of the Industrial Employment (Standing Orders) Act, 1946 (Act XX of 1946) hereinafter referred to as ‘the Act’) in order to have the terms and conditions of employment of its workmen defined and settled. According to the scheme of the Act, provision has to be made in the Standing Orders for every matter set out in the Schedule which may be applicable to a particular Industrial Establishment, and where Model Standing Orders have been prescribed, it has, as far as practicable, to be in conformity with such Model and the Certifying Officer or the Appellate Authority is to adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders before certifying the draft Standing Orders and may make any modification therein.

3. On submission of the draft Standing Orders by the petitioner, respondent No. 2, by his order, dated June 7, 1969, after hearing the petitioner and the President of the Union of its workmen certified only one set of the Standing Orders under the Act making various modifications thereto, a copy of the Standing Orders, as certified, is Annexure ‘2’ to the writ application. The petitioner filed an appeal against the order of Respondent No. 2 before the Presiding Officer, Industrial Tribunal, Patna (respondent No. 3), who, by his order, dated January 18, 1971 (Annexure ‘3’), allowed the appeal partly modifying the Standing Orders. The petitioner thereafter has moved this Court as stated above.

4. Mr. Ranen Roy, learned counsel for the petitioner, has challenged the correctness of the order passed by respondent No. 3 with regard to the provisions in the Standing Orders with respect to the following matters only:—

(a) Recruitments;

(b) Age of superannuation/retirement;

(c) Payment of subsistance allowance during the period of suspension pending enquiry;

(d) Holidays:

(i) festival leave;

(ii) Casual leave;

(iii) procedure for extension of the period of leave;

(e) Period of probation;

(f) Act of misconduct;

(g) Classification of workmen; and

(h) Clerical errors.

5. I shall now take up each of the items separately for consideration.

Recruitments:

6. Provision regarding recruitment was not a part of the draft Standing Orders submitted by the petitioner but was included by respondent No. 2 as clause No. 34 in the same which reads as follows:—

“All vacancies will be notified to the local Employment Exchange and then those vacancies should be filled up from amongst the candidates sponsored by the Employment Exchange provided they are found fit and suitable. Other sources of recruitment may be tried when the local Employment Exchange gives a nonavailability certificate. While making recruitments preference shall be given to:—

(i) Ex-employees with good records;

(ii) Near relatives of employees;

(iii) People of the locality; and

(iv) People of the State.

The preference in respect of relation will, however, be limited only to one near relation of an employee and that too in respect of such employee who has been in service in the establishment continuously for a period of 10 years. Similarly, in respect of ex-employees the preference will be restricted to ex-employees with a minimum period of one year's service in the establishment.”

7. Mr. Roy, at the beginning of his submissions, made an argument that the matter regarding recruitment was not a matter set out in the Schedule and, therefore, addition of this provision by the respondents in the draft Standing Orders was ultra vires and outside their authority. He cited several authorities also in support of the provision but it is not necessary to refer to all those cases as, later on, he had to give up this point in view of the amendment in the Schedule by the State Government by a notification, dated August 14, 1964, by which the matter relating to the recruitment was included in the Schedule. By another notification, dated March 18, 1967, the State Government, in exercise of the powers conferred by Section 15(2)(b) of the Act, amended the Bihar Industrial Employment Rules, 1957 by which the matter of recruitment of workmen has been inserted as paragraph 2-A in Appendix ‘A’ in the Model Standing Orders.

8. Learned counsel, however, challenged these notifications and addition of the matter of recruitment in the Schedule as ultra vires on the ground that the matter of recruitment was not a condition of service of the workmen and, therefore, it could not be added to the Schedule of the Act on which any provision could have been made in the Standing Orders. In support of the proposition, learned counsel referred us Article 309 of the Constitution which speaks of ‘recruitment’ and ‘conditions of service’ separately. Referring ‘to the definition of ‘workman’ in Section 2(i), according to which a workman means any person employed in any Industrial Establishment to do any skilled or unskilled manual or clerical labour, etc., learned counsel submitted that the intention of the Act was to define the conditions of service of a workman employed by an establishment and the subject of recruitment being not in any way related to the conditions of service of a workman, it could not be a matter for the Standing Orders. It is difficult to accept the contention of learned counsel. There is nothing in the relevant sections of the Act to support the contention that the State Government could not amend the Act by including ‘recruitment’ in the Schedule. The preamble, however, shows that the intention of the Act is to define the ‘conditions of employment’. The expression ‘conditions of employment’ in the preamble to the Act and the expression ‘conditions of service’ in Article 309 of the Constitution need not necessarily be given the same meaning. The expression ‘conditions of employment’ in the preamble to the Act has to be interpreted in the context it is used. As is apparent from the statements of the aims and objects of the Act at the time of its introduction in the legislature, ‘conditions of employment’ included terms of recruitment. In my opinions, therefore, ‘recruitment’ could be added to the Schedule by the State Government for making provisions in the Standing Orders. In the case of R. and H. District Electric Supply Co. v. State of Uttar Pradesh (1), the Supreme Court has held that, when the appropriate Government adds an item to the Schedule, the relevant question to ask would be whether it refers to the conditions of employment or not. If it does, it would be within the competence of the appropriate Government to add such an item. section 15(1) confers wide powers on the appropriate Government to make rules to carry out the purposes of the Act. Whether or not such additions should be made, is a matter for the appropriate Government to decide in its discretion. Reasonableness of such addition cannot be questioned because the power to decide which addition should be made has been left by the legislature to the appropriate Government. In this case, the Government of Uttar Pradesh had included the matters of Provident Fund and age of superannuation or retirement as additional items to the Schedule of the Act which was under challenge and it was held that it could not be said that those matters were not terms and conditions of employment in Industrial Establishment. In view of the above discussions, it has to be held that the contention of the learned counsel for the petitioner has got no substance and the provision with regard to the recruitment of workmen in the Schedule as also in the Rules by virtue of the two notifications issued by the State Government, referred to above, must be held to be valid. Therefore, the provision made in the Standing Orders with respect to the matter of recruitment of the workmen by the petitioner cannot be set aside.

9. Mr. Gur Bachan Singh, learned counsel appearing on behalf of respondent No. 1, however, contended that he was more concerned with the matter of preference in making recruitments to be given to the employees and if the vacancies are to be filled up through local Employment Exchange which may not be aware of the near relatives of the employees/ex-employees the benefit contemplated by this pro vision to the existing workmen might be lost to them. This however cannot be a ground for testing the reasonableness or otherwise of this provision either. According to the provision of Section 10 of the Act, Standing Orders, on agreement between the employer and the work men, can be modified and either of the party may take appropriate steps for suitable modification of this clause of the Standing Orders if so advised.

10. Age of superannuation/retirement—In the draft Standing Orders, the petitioner had proposed 55 years as the age of retirement superannuation but respondent No. 2 raised it to 60 years which was affirmed by respondent No. 3. Respondent No. 3 has referred to two cases of the Supreme Court in his order, namely, (1) Imperial Chemical Industries Ltd. v. Its Workmen (2) and Dunlop Rubber Company v. Its Workmen (3). On this point, the contention of Mr. Roy is that the two authorities should have no bearing on this case in as much as neither the region nor the nature of Industry in those cases were similar to that of the petitioner. Learned counsel for the petitioner submitted that, in those two cases, the region was Maharashtra and the workmen were clerical staff whereas the petitioner were operators and the region was also quite different. Relying upon the case of Guest, Keen, Williams Pr. Ltd. v. P.J Sterling (4), learned counsel submitted that, in fixing the age of superannuation in any industry the Tribunal has to take into account several relevant factors, namely, nature of the work of the employees, the nature of wages structure, retirement benefits, the character of the climate and the age of superannuation fixed in comparable industries in the region and such other relevant facts in every case. There appears substance in the contention of the learned counsel. Elaborate arguments were addressed before us by the learned counsel for both the parties on this question and it was contended that the respondents had not considered any of the factors while raising the age of superannuation from 55 to 60 years. Reliance was also placed upon certain decisions where it was observed that the modern trend in the Country was to raise the age of retirement from 55 years to 60 years. In the case of Hindustan Antibiotics Ltd. v. Workmen (5) in the question of fixation of the age of retirement for the employees, relying upon an earlier decision of the Supreme Court in the case of G.M Talang v. Shaw Wallace and Co. Ltd. (6) and following the trend of the judicial opinions, the age of retirement of the employees of the Company in question was raised to 60 years. It is not necessary to enter upon a detailed consideration of the respective arguments advanced by learned counsel for both the parties, as, in view of the provisions of the ‘Payment of Gratuity Act’ (Act XXXIX of 1972) where ‘superannuation’ in relation to an employee has been defined to mean, inter alia, attainment of the age of 58 years by the employee, in my opinion, the fixation of the age of superannuation or retirement in the case of the petitioner's workmen at the age of 58 years would be quite reasonable and fair and would also meet the grievances of both the sides. It would also be helpful in providing employment opportunities to the younger generation. Respondent No. 2 is accordingly directed to make appropriate modification in the draft Standing Orders in the relevant paragraph of the draft as approved by respondent No. 3 in this regard.

11. Payment of subsistence allowance during the period of suspension pending enquiry:— In the draft Standing Orders, respondent No. 2 provided that, during the period of suspension pending enquiry against a workman by the petitioner, the concerned workmen shall get subsistence allowance at the rate of half the wages and allowances. The contention of the learned counsel for the petitioner is that there should be no such provision as the Model Standing Orders framed by the State Government did not contain such a provision. According to the provisions of Section 3(2) of the Act, Standing Orders have to be made in confirmity with the provisions of the Model Standing Orders as far as practicable. Respondent No. 3, while considering this question, has placed reliance upon the similar provisions in the Standing Orders of the Bihar State Electricity Board where provision for payment of subsistence allowance equivalent to one-half of the average wage is made. He has also relied upon a similar provision in the case of Rohtas Industries Ltd. Mr. Gur Bachan Singh submitted that such provision was also there in case of the Sugar Industries in the State of Bihar. Respondent No. 3 has also referred to the so called recent trend for payment of such an allowance to a suspended workman and has held that such a provision was quite fair.

12. Mr. Ranen Roy, however, contended that, in case the concerned workman was ultimately found guilty of misconduct on the enquiry, the payment of the subsistence allowance made to the workman during that period would be a loss to the Management; but, in case he was ultimately exonerated, the workman would be entitled to get his full wages and allowance and, therefore, the provision for payment of the subsistence allowance would not work equities between the parties. He also put strong reliance upon the case of National Insurance Co. Ltd. v. Their Workmen (7) decided Supreme Court. We, therefore, examined the judgment from the blue print. This was a case of a limited Company and pending an enquiry of misconduct against a workman, the question of payment of subsistence allowance during the period of suspension was raised before the Tribunal and when the matter went to the Supreme Court, Shelat, J., speaking for the Court, held that suspension pending an enquiry was not a suspension of the contract of the employment but was only preventing the employee from discharging his duties during the period and, therefore, the employee would be entitled to his wages unless he is ultimately dismissed which takes place from the date of the suspension order. Subsistence allowance during such period is generally allowed to Government servants under the Rules framed in that regard which have statutory force but no such Rules are ordinarily to be found in industrial establishments and to accede to such a demand would amount to more or less equating industrial employees with civil servants for which there was no justification, and, in that case, the refusal to allow subsistence allowance by the Tribunal was affirmed. Learned counsel for respondent No. 1 referred us to two cases of the Supreme Court namely Hotel Imperial v. Hotel Workers' Union (8) and Balwantrai Ratilal Patel v. State of Maharashtra (9) and also to some cases of other High Courts taking a similar view which have already been referred to in the Patel's case (9). The ratio of these cases is that, if there is no express term relating to the payment during such suspension or if there is no statutory rule relating thereto, the employee is entitled to his full remuneration for the period of his suspension; but, if there is a term in the contract or a statutory rule, payment has to be made in accordance therewith. There cannot be any doubt regarding the correctness of the above proposition but the decisions referred to by the learned counsel for the respondents have got no bearing on the question falling for our consideration as it is not a case where the right to get the subsistence allowance in the absence of any rule or provision is in dispute. But the question is as to the laying down of a provision itself in that regard and in considering this question, relevant consideration of the interests of the Management and the workmen has to be considered. It cannot be denied that, in case the workman is ultimately held to be guilty during the enquiry, the amount of payment by way of subsistence allowance cannot be recovered from him (the concerned workman) and that amount will be altogether lost to the Employer; whereas in the case of exoneration of the workman, he will be entitled to his full wages. There may be, however, hardship to a workman on account of the stoppage of his wages, etc., but the period of such an enquiry is not likely to take a very long time. In case of a civil servant, the enquiry has to be conducted in accordance with the provisions of Article 311 of the Constitution and, in order to follow the said procedure, considerable time usually takes place. Non-payment of any allowance to a civil servant or a Government employee therefore, may cause immense hardship to him, but, in the case of a domestic enquiry held by a private establishment and especially that of the nature of the petitioner, such a delay is not expected to take place. The provision is also likely to have a repurcussion in the attitude of the respective parties also. In a case where there is no such provision, in order to harass a workman, the Management may unnecessarily prolong the enquiry; whereas, if such a provision is there, the delinquent workman guilty of a gross misconduct apprehending the result of the enquiry against him, may likewise be interested in delaying the conclusion of the enquiry as long as possible and securing the benefit of the payment of the subsistence allowance without any work. Mr. Ranen Roy, therefore, submitted that, in order to safeguard the interest of both the parties, some reasonable time may be fixed for the petitioner to complete the enquiry so that any workman may not be harassed or victimised by the petitioner indefinitely by this process as a pretext of the enquiry and, in that event, neither the workman nor the Management will suffer. Keeping in view the observations of the Supreme Court in the case of National Insurance Co. Ltd. (7) and the model Standing Orders in question where there is no such provision as well as of the nature of the establishment of the petitioner, in my opinion a period of a month can be fixed for the petitioner to complete the enquiry during which no such allowance will be payable but in case the enquiry takes a longer period the concerned workman will be paid subsistence allowance at the rate of one-half of the wages and the allowances. Respondent No. 2 will make a suitable alteration in clause 25-A of the Standing Orders.

13. Holidays: In this item, one dispute is regarding the extension of the number of festival leave from 13 to 16 days in a year and providing 7 days casual leave with pay. The petitioner, in the draft Standing Orders, had suggested 13 days holidays only, including the Republic Day, Independence day and Gandhi Jayanti day, i.e, 10 days for festival holidays and 3 days for National Holidays. Respondent No. 2 provided for 16 days which has been affirmed by respondent No. 3 on appeal. It was contended on behalf of the petitioner that the respondents while deciding this question did not consider the nature of the industry of the petitioner and its region as well as the financial burden involved in the same. It was argued that, in another comparable concerns, namely, Shri Bihariji Mills Ltd. of Patna City, which was an industry of the similar nature, only 13 festival holidays were provided by authorities. Reference was also made to the Standing Orders of some Dal and Oil Mills of Bihar where still a fewer holidays were provided for. Reliance was also placed on the case of Alembic Chemical Works Co. Ltd. v. Workmen (10) where it was observed by the Supreme Court that, while seeking industrial adjudication to do social justice, the national economy cannot be ignored, as unduly generous or liberal leave provisions would affect production and, obviously production of essential commodities which was in the interest of not only the employers and the employees but also of the general community. The Supreme Court has considered the question of leave in the case of Indian Oxygen Ltd. v. Its Workmen (11). This case arose from an award of the Industrial Tribunal, Bihar, and one of the questions was what should be the annual leave for the staff. The Tribunal had directed that a workman should get 15 days leave on full pay or 30 days on half pay as medical leave during the year. It was observed in that case that there was no reason for granting the increased pay and allowance which was clearly and distinctly above the pattern in the comparable concerns in the same area (Jamshedpur City). Learned Judges also stressed that it was hardly necessary to say that especially at the present time emphasis in the country should be more on increased production and absence from work should not be unduly encouraged. A similar feeling was expressed again by the Supreme Court in the case of Pfizer India Ltd., Bombay v. Workmen (12). This case was decided at the wake of the Chinese invasion on India and it was observed that the capital, labour and industrial adjudication alike must be sensitive and responsive to the paramount requirement of the community and all legitimate efforts should be made on all reasonable terms by the employees to prdouce more and more of the goods required for the community and the employer must receive the co-operation of the employees. Gajendra Gadakar, J., (as he then was) observed that it was generally accepted that there were too many public holidays in our country. Considering, therefore, the case of the petitioner from all its aspects, namely, the number of holidays granted by a comparable concern in the region as also the critical food problem facing the country in general and the State in particular, in my opinion, respondents were not justified in increasing the number of festival holidays from 13 to 16. I would, accordingly, direct them to reduce the same to 13 days holidays only which is quite reasonable.

14. The next question under this item is the matter of casual leave. Respondent No. 2 has provided that all employees shall be entitled to casual leave with wages for 7 days during a calendar year in clause 10-A of the Standing Orders. It was argued on behalf of the petitioner that, in the Factories Act, there is no provision for any casual leave with wages. Respondent No. 2 has not given any reason for providing this leave in the Standing Orders but respondent No. 3 has discussed this question in some detail. In the model Standing Orders, a workman may be granted casual leave of absence with or without pay not exceeding 10 days. He has also referred to the provisions of casual leave in some of the comparable concerns. In my opinion, the reasons given in the Appellate Order are well founded and do not call for any interference particularly when there has been a curtailment of three days' in the festival holidays.

15. Now there remains a small matter in this item of holidays, namely, the procedure for extension of the period of leave by a work man. The petitioner in the draft Standing Orders had suggested that, in the event of a workman desiring for extension of the period of leave, he should make an application in writing to the petitioner before the period of expiry of the original sanctioned leave by a registered post. The only modification made by the respondents is that, instead of making the application by workmen by a registered post, they have permitted the application being forwarded under certificate of posting. Although, in the order of respondent No. 3, the reason for this alteration that there may be no post office near at hand in the village of the workman which does not appear to be intelligible as the procedure for sending the application by certificate of posting, would also require a workman to go to the post office where he could equally send the application by a registered post. This change is quite justified and proper.

16. Period of probation: While defining the classification of workmen the petitioner had, in the draft Standing Orders, defined a probationer as a workman who provisionally worked in a permanent vacancy in a post and had not completed six months service therein or any other extended period which might have been allowed to him. Respondent No. 3 has fixed the probationary period by a fixed term of ‘six months’ only. Mr. Ranen Roy submitted that the petitioner should be given an opportunity to extend this period of probation in appropriate cases as a probationer may not pick up the work during the period of six months. However, considering the nature of the employment in the establishment of the petitioner, probationary period of six months is quite sufficient and, therefore, there is no substance in this grievance of the petitioner on this score.

17. Act of misconduct: The petitioner had suggested wilfully mixing of any sub-standard material or foreign material in the products of the petitioner by a workman as an act of misconduct on the part of the workman. Respondent No. 2 did not consider this question at all in his order; whereas, on appeal, respondent No. 3 has rejected this clause on the ground that the same was vague and ambiguous. In this Court, Mr. Roy submitted that the terms ‘foreign matters’ or ‘sub-standard matters’ were not at all vague and ambiguous; but, if they were found to be so, the appellate authority should have made it more specific and distinctive instead of rejecting it altogether. Mr. Gur Bachan Singh, appearing on behalf of respondent No. 1, however, submitted that making a provision of this nature in the Standing Orders would expose the workmen to a great risk and would rather amount to giving a protection to the petitioner who might take shelter for its sub-standard or adulterated products in the name of its workman. This argument does not carry any conviction. If there is a specific provision in the Standing Orders that mixing of any sub-standard material or foreign material in the products would amount to misconduct by a workman, the workman can resist and refuse the direction of the petitioner to do the said wrongful act instead of obliging it. Inclusion of such a provision, therefore, is not likely to give any protection or advantage to the employer at all and the apprehension indicated is a misconceived one. Such a provision in the Standing Orders would rather provide a check for the rampant adulteration in the essential commodities produced for human consumption. I would, accordingly, direct the respondent No. 2 to include a suitable clause in this regard in the Standing Orders. The expression ‘foreign matters’ and ‘sub-standard matters’ should be defined to make it more specific.

18. Classification of workmen:— The grievance of the petitioner under this heading is that it was employing three kinds of workmen, namely, operators, clerical staff and watch and ward personnel, and had submitted three sets of Standing Orders. Respondent No. 2 sanctioned only one set of the Standing Orders relating to the operators which covered the maximum number of employees in the establishment of the petitioner but has not said anything regarding the other sets of Standing Orders. In the case of Salem-Erode Electricity Distribution Co. (P) Ltd. v. Employees' Union' Union (13), it was observed by the Supreme Court that, for the same establishment, only one set of Standing Orders should be certified. The petitioner, therefore, is not entitled to have different sets of Standing Orders. But the grievance of Mr. Roy seems to be reasonable to the extent that the respondents should have considered the case of other categories of the employees and made appropriate modifications in the respective provisions in the Standing Orders to which the other two categories of the employees might be deemed to be entitled. He, for an example, suggested that the watch and ward personnel were not entitled to the same number of holidays as that of the operators. As this as pect has not been considered by respondent No. 2, I would direct respondent No. 2 to consider this aspect of the petitioner's grievance and, if necessary make suitable amendment in the Standing Orders in this regard.

19. Clerical errors:— Some clerical errors in the draft Standing Orders, which are of the nature of typing mistake, have accrued. The petitioner is a partnership firm. But, in sub-clauses (a) and (b) of clause 17, it has been described by the expression, ‘company’. The mistake is obvious and there is no objection on behalf of respondent either for this formal and clerical mistake in the said clauses to be accordingly corrected. The respondents will, therefore, describe the petitioner as ‘Mill’ instead of ‘company’.

20. No, other question now remains for consideration. In the result, the application succeeds in part and the respondents are directed to make necessary modifications in the Standing Orders as indicated and directed in this judgment.

21. In the circumstances parties will bear their own costs.

Shambhu Prasad Singh, J.:— I agree.

22. Application partly allowed.