SIEMENS LTD. Vs SIEMENS EMPLOYEES UNION
Bench: D.K. JAIN,ASOK KUMAR GANGULY
Case number: C.A. No.-008607-008607 / 2011
Diary number: 17552 / 2010
Advocates: V. N. RAGHUPATHY Vs
K. RAJEEV
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8607 OF 2011 (Arising out of SLP(C) No.17414 of 2010)
Siemens Ltd. & another .....Appellant(s)
- Versus -
Siemens Employees Union & another ....Respondent(s)
J U D G M E N T
GANGULY, J.
1.Leave granted.
2. This appeal has been preferred from the order dated
12th March, 2010 of the Division Bench of the Bombay
High Court in Letters Patent Appeal No. 30/2010.
1
3.The appellant no. 1 is a public limited company
having its registered office at 130, Pandurang
Budhkar Marg, Dr. Annie Besant Road, Worli, Mumbai
and is engaged in the business of manufacturing
switchgears, switchboards, motors, etc., of its many
factories, one is located at Thane-Belapur Road,
Kalwe, Thane, and houses the plant that manufactures
switchboards for the company. The appellant employs
about 2200 employees. The appellant no. 2 is the
Chief Manager (Personnel) of the said Company.
4. Respondent no. 1, the contesting respondent, is a
registered trade union of the workers employed by
the appellant no.1. It is recognized under the
provisions of the Maharashtra Recognition of Trade
Unions and Prevention of Unfair Labour Practices
Act, 1971 (hereinafter, referred to as the
Maharashtra Act). Respondent no. 2, the pro forma
respondent, represents the Switchboard Unit of the
company, and is responsible for the routine
functioning of the plant at Kalwe.
2
5. In 2007 the trade union preferred a complaint under
Section 28 of the Maharashtra Act for unfair labour
practices, jointly and severally against the
company, its Chief Manager for personnel (appellant
no. 2) and its Works Manager (respondent no.2)
before the learned Industrial Court, Thane,
Maharashtra. The trade union impugned a notification
dated 3rd May, 2007 issued by the company for its
workmen employed in its factory located in Kalwe,
whereby applications were invited to appear for a
selection process to undergo a two year long period
as an ‘Officer Trainee’. This training was to be in
the fields of manufacturing, quality inspection and
testing, logistics and technical sales order
execution. The notification stated that after the
successful completion of the said two years, the
trainees were to be designated as ‘Junior Executive
Officers’. The case of the respondent trade union is
that though the designation of ‘Junior Executive
Officer’ was that of an officer belonging to the
management cadre, in fact it was merely a 3
nomenclature, with negligible content of managerial
work. It was urged that the job description of a
Junior Executive Officer was same as that of a
workman, with little additional duties. Resultantly,
the Junior Executive Officers of the factory were
now to do the very same work that had always been
done by the workmen.
6.It was submitted that such a move was, in effect an
alteration in the conditions of service of the
workmen, as some vacancies available for workmen in
the switch board unit were to be reserved for
officers from the management cadre. Resultantly
there would have been a reduction in the job
opportunities for workers. According to the trade
union, any such change could not have been affected
without giving the workmen a prior notice to such
effect in terms of Section 9A of the Industrial
Disputes Act, 1947. In this regard, the trade union
referred to an agreement entered into between itself
and the company in 1982. The said agreement, titled
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‘Rationalization and Transport Settlement’ has
clause (7). The said clause is as follows:-
“7. That employees or officer or staff categories shall not be asked to do normal production work.”
7.The union also referred to clause (12) of the
agreement which is as follows:-
“12. That this settlement shall not be utilized for eliminating the further employment potential or promotional opportunities to the existing workmen.”
8.Clause (16) is set out herein below:
“16. This agreement shall come into force with effect from 01.01.1981 except Clause No.14 which shall have effect from 16.11.1982 only and shall remain in operation until it is changed in accordance with the provisions of law.
9. Clause (7) ensures that the job opportunities for
workers shall not be reduced by the company by
making its managerial staff perform the workmen’s
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job. Clause (16) ensured the perpetuity of this
Settlement until expressly overruled by a subsequent
Settlement. It was submitted by the trade union that
the change sought to be brought about by the company
by its notification dated 3rd May, 2007, was in
violation of clause (7). The trade union thus
complained that the company and its two officers
resorted to unfair labour practices mentioned in
items 9 and 10 of Schedule IV of the Maharashtra
Act, and had thereby violated the mandate of Section
27 of the Maharashtra Act.
10. It was further submitted that even if the said
Settlement was said to be non-binding, the impugned
move was in violation of Section 9A of the
Industrial Disputes Act insofar as the affected
workmen had not been given any notice as
contemplated by clause (a) of Section 9A read with
Entry 11 of the Fourth Schedule of the Industrial
Disputes Act.
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11. The Maharashtra Act was the first enactment of its
kind in the country to have been legislated by a
State for the prevention of unfair labour practices
and consequent victimization. It was a comprehensive
legislative device to weed out unfair labour
practices, not only on the part of the employers,
but also on the part of trade unions and the
workmen. Chapter VI of the Act is titled ‘Unfair
Labour Practices’. Section 26, the first section of
this chapter, defines an unfair labour practice for
the purposes of the Act. It reads as under:
“26. Unfair labour practices: In this Act, unless the context requires otherwise, ‘unfair labour practices’ mean any of the practices listed in Schedules II, III and IV.”
12. Section 27 prohibits ‘unfair trade practices’.
The said Section is as follows:-
“27. Prohibition on engaging in unfair labour practices: No employer or union and no employees shall engage in any unfair labour practice.”
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13. Section 28 deals with the procedure for preferring
a complaint against an unfair labour practice.
Clause (1) of this section reads as follows:
“28. Procedure for dealing with complaints relating to unfair labour practices: (1) Where any person has engaged in or is engaging in any unfair labour practice, then any union or any employee or any employer or any Investigating Officer may, within ninety days of the occurrence of such unfair labour practice, file a complaint before the Court competent to deal with such complaint either under section 5, or as the case may be, under section 7, of this Act:
Provided that, the Court may entertain a complaint after the period of ninety days from the date of the alleged occurrence, if good and sufficient reasons are shown by the complainant for the late filing of the complaint.”
14. In the instant case the complaint has been filed
under Section 28 read with Section 30(2) of the
Maharashtra Act by the respondent-union and in the
instant complaint the respondent-union alleged that
the management is indulging in unfair labour
practices under item Nos.9 and 10 of Schedule IV of
the Maharashtra Act (para 3(a) of the complaint).
Schedule IV of the Maharashtra Act categorizes the
general unfair labour practices on the part of the
8
employers. Under Schedule IV, item Nos.9 and 10, in
respect of which unfair labour practices have been
alleged, provide as follows:
“9. Failure to implement award, settlement or agreement. 10. To indulge in act of force or violence.”
15. In paragraph 3 (b) of the complaint it has been
alleged that the respondent-union is anticipating
that the management is likely to reduce the work of
the workmen category and give it to the newly
recruited officer trainees. It has also been alleged
that by doing so the management is acting in
violation of Section 9(A) of Industrial Disputes
Act, 1947 by bringing about a change in service
condition without giving any notice. In so far as
this allegation in the complaint is concerned, the
order of Industrial Court, Thane, shows that it did
not find that the management was in any way trying
to change the condition of the service or it was
9
acting in violation of the provisions of Section
9(A).
16. The precise findings of the Labour Court, Thane
while dealing with the complaint of the Union about
change of condition of service under Section 9(A) of
the Industrial Disputes Act are as under:
“……Considering the evidence that even earlier also, the company has reduced the strength of the employees in various departments, they were transferred from one section to other section, the promotions are given from the category of workmen to the category of officers and therefore, it cannot be said that there’s any breach under S.9A of the Industrial Dispute Act, 1947.”
17. Therefore, the complaint of the respondent-union,
which ultimately found favour with Industrial Court
as unfair labour practice, is the attempt made by
the management in not implementing clause 7 of
settlement.
10
18. In this aspect the exact finding of the Labour
Court is as follow:
“……Considering the nature of work to be performed by these Officer’s Trainee, certainly it shows that there’s breach of clause 7 of the Settlement dated 16.11.1982. As such, the Complainant Union has succeeded to prove the unfair labour practice under Item 9 of Schedule IV of the Act.”
19. Before proceeding further in this matter, this
Court proposes to examine the concept of unfair
labour practice and the way it has been dealt with
under the Maharashtra Act and also under the ID Act.
Any unfair labour practice within its very concept
must have some elements of arbitrariness and
unreasonableness and if unfair labour practice is
established the same would bring about a violation
of guarantee under Article 14 of the Constitution.
Therefore, it is axiomatic that anyone who alleges
unfair labour practice must plead it specifically
and such allegations must be established properly
before any forum can pronounce on the same. It is
also to be kept in mind that in the changed economic 11
scenario, the concept of unfair labour practice is
also required to be understood in the changed
context. Today every State, which has to don the
mantle of a welfare state, must keep in mind that
twin objectives of industrial peace and economic
justice and the courts and statutory bodies while
deciding what unfair labour practice is must also be
cognizant of the aforesaid twin objects.
20. Unfair labour practice, for the first time, was
defined and codified in the Maharashtra Act referred
to hereinabove. But in so far as the Industrial
Disputes Act, Central Law, is concerned, unfair
labour practice was codified and brought into force
by the Amending Act, 46 of 1982 with effect from 21st
August 1984.
21. Clause (ra) of Section 2 of Industrial Disputes Act
defines unfair labour practice to mean the practices
specified in the fifth schedule and the fifth
schedule was also inserted by the said Amending Act.
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The fifth schedule has two parts. The first part
refers to unfair labour practices on the part of the
employers and trade union of employers and the
second part refers to unfair labour practices on the
part of the workmen and trade union of workmen.
However, there is some difference between the
provisions relating to unfair labour practices in
the Maharashtra Act and those in Central Act i.e.
Industrial Disputes Act. The Industrial Disputes Act
prohibits an employer or workmen or a trade union
from committing any unfair labour practice while the
Maharashtra Act prohibits an employer or union or an
employee from engaging in any unfair labour
practice. The prohibition under the Industrial
Disputes Act is aimed at preventing the commission
of an unfair labour practice while the Maharashtra
Act mandates that the concerned parties cannot be
engaged in any unfair labour practice. The word
‘engage’ is more comprehensive in nature as compared
to the word ‘commit’ [See Hindustan Lever Ltd. v. Ashok Vishnu Kate & others reported in 1995 (6) SCC 326 at para 37, page 345 of the report].
13
22. In the instant case no allegation of victimization
has been made by the respondent-union in its
complaint. In the absence of any allegation of
victimization it is rather difficult to find out a
case of unfair labour practice against the
management in the context of the allegations in the
complaint. It is nobody’s case that the management
is punishing any workmen in any manner. It may be
also mentioned here that no workmen of the
appellant-company has made any complaint either to
the management or to the union that the management
is indulging in any act of unfair labour practice.
23. Even then the Labour Court, Thane, has come to
certain findings of unfair labour practice against
the management and which have been referred to
above.
24. The appellant-company challenged the finding of the
Labour Court before the High Court by filing a writ 14
petition. The learned Single Judge in his judgment
noted that the main grievance of the respondent-
union was that in the process of reorganizing its
work pattern the management of the appellant-company
was reducing the number of posts of workmen and some
of the work which were done by the workmen are to be
done by the officers and the grievance of the
respondent-union was that this was contrary to
clause 7 of settlement dated 16th November, 1982
(hereinafter ‘the said settlement’). Ultimately,
the learned Single Judge came to a finding that
though the post which is introduced by the
management is named Junior Executive, the said post
was different from the post of Junior Executive
which was in existence and after saying so the
learned Single Judge held, “the Tribunal has rightly
held that this amounted to unfair labour practice
under item 9 of Schedule IV of the said Act” (para
9). The learned Single Judge also noted that even
though promoted as Junior Executive the present
workers will be expected to do a part of the work of
the workman along with some additional work. This,
15
according to the learned Single Judge, was in breach
of clause 7 of the said settlement.
25. The appellant-company also challenged the said
order of the learned Single Judge before the
Division Bench. The Division Bench came to a
finding that whatever work is given to the
officers/trainees in addition to the present work
was the work of a workman. So even if the workmen
are promoted they will be doing the job of a workman
with some additional work and the Division Bench
also came to the same finding that this will be in
violation of clause 7 of the agreement and thus
considered it unfair labour practice. With these
findings, the Division Bench affirmed the finding of
the learned Single Judge.
26. Mr. K.K. Venugopal, learned Senior Counsel
appearing on behalf of the respondent-union urged
that in exercise of its powers under Article 136
this Court normally does not interfere with 16
concurrent finding and, therefore, should not
interfere with the concurrent finding in the instant
case.
27. It is true that this Court normally does not upset
a concurrent finding but there is no such inflexible
rule. The jurisdiction of this Court under Article
136 is a special jurisdiction. This is clear from
the text of the Article itself which starts with a
non-obstante clause. This is a jurisdiction
conferring residual power on this Court to do
justice and is to be exercised solely on discretion
to be used by this Court to advance the cause of
justice. This Article does not confer any right of
appeal on any litigant. But it simply clothes this
Court with discretion which is to be exercised in an
appropriate case for ends of justice. Therefore,
there can be no hard and fast rule in the exercise
of this jurisdiction. Just because the findings
which are assailed in a special leave petition are
concurrent cannot debar this Court from exercising
17
its jurisdiction if the demands of justice require
its interference. In a case where the Court finds
that the concurrent finding is based on patently
erroneous appreciation of basic issues involved in
an adjudication, the Court may interfere. In the
instant case the Court proposes to interfere with
the concurrent finding for the reasons discussed
hereinbelow.
28. Admittedly, the finding of unfair labour practice
against the appellant-company by the High Court and
the Labour Court is based on the premise that the
appellant-company acted in breach of clause 7 of the
agreement. It is well known that an industrial
settlement is entered into between the management
and labour for maintaining industrial peace and
harmony. Therefore, any attempt by either the
management or the workmen to violate such a
settlement may lead to industrial unrest and amounts
to an unfair labour practice. Here the charge of
unfair labour practice against the appellant-company
18
is that it has violated item 9 of Schedule IV of the
Maharashtra Act. Item 9 has been set out
hereinabove and the purport of item 9 is that any
failure to implement an award or settlement or
agreement would be an unfair labour practice. In
the instant case while considering clause 7 of the
said settlement the Courts have not taken into
consideration clause 12. Both clauses 7 and 12 have
been set out hereinabove. If a harmonious reading
is made of clauses 7 and 12 it will be clear that
clause 7 cannot be given an interpretation which
makes clause 12 totally redundant. Clause 7
contains a prohibition against the employees or
officers or members of the staff of the appellant-
company from doing normal production work. But that
cannot be read in such a manner as to nullify the
purport of clause 12 which reserves the promotional
employment potential of existing workmen. So in the
instant case if by way of rearrangement of work, the
management of the appellant-company gives
promotional opportunity to the existing worker that
does not bring about any violation of clause 7 of
19
the said settlement rather such a rearrangement of
work will be in terms of clause 12. At the same
time if some of job of executive officers are the
same as is done by the existing worker that does not
bring about such a violation of clause 7 as to
constitute unfair labour practice.
29. What is restricted under clause 7 is asking the
officers to do the normal production work. There is
no blanket ban in asking the officers from doing any
production work. Therefore, both clause 7 and
clause 12 of the said settlement must be reasonably
and harmoniously construed to make it workable with
the evolving work culture of the appellant-company
in facing the new challenge in the emerging economic
order which has changed considerably from 1982.
Even if we assume that 1982 agreement still subsists
even then when a challenge is made of unfair labour
practice on the basis of violation of a clause of
1982 agreement on the basis of a complaint filed in
2007, the Labour Court and the High Court must
20
consider the said agreement reasonably and
harmoniously keeping in mind the vast changes in
economic and industrial scenario and the new
challenges which the appellant-company has to face
in the matter of reorganizing work in order to keep
pace with the changed work culture in the context of
scientific and technological development. This
Court also finds that while adjudicating on the
complaint of the union both the Labour Court and the
High Court should have taken into consideration all
subsequent settlements between the management of the
said company and the union in 1985, 1988, 1992, 1997
and 2004. Both the Labour Court and the High Court
failed to notice that in its complaint the union has
accepted that they are not objecting to the
promotion being granted to the workers. However,
the said stand of the workers union is not
consistent with the nature of the complaint filed
before the Labour Court.
21
30. The admitted facts are, there are 89 vacancies in
the category of officers and 154 workers have
applied. Therefore, everybody who has applied cannot
be promoted, only a certain percentage of the
workers applying can be promoted. Both the Labour
Court and the High court failed to take into
consideration that the workers voluntarily applied
for the promotion scheme pursuant to its
introduction. Nowhere has it been alleged by the
workers that any force or pressure was brought upon
them to apply. In the background of these facts the
question is when the workers applied on their own to
a scheme of promotion introduced by the management
and they do not make any complaint either to the
union or to the management in respect of the
introduction of the scheme, can it be said that by
introducing a promotional scheme the management is
indulging in unfair labour practice? The union is
supposed to represent the interests of the workers.
When the workers themselves do not consider the
scheme as unfair to them, can the union take upon
them the burden of saying that the scheme is unfair?
22
In the instant case the respondent-union is
unfortunately seeking to do that. Both the Labour
Court and the High Court have failed to appreciate
this basic fundamental issue in their adjudication
and have, therefore, come to an obviously erroneous
finding. Apart from the aforesaid clear factual
position legally also the management of the company
is not prevented from rearranging its business in
the manner it considers it best, if in the process
it does not indulge in victimisation.
31. Reference in this connection may be made to a
decision of this Court in Parry & Co. Ltd. v. P.C. Pal & ors., reported in AIR 1970 SC 1334, a three-Judge Bench of this Court held as follows:-
“It is well established that it is within the managerial discretion of an employer to organize and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent of a tribunal to question its propriety. If a scheme for such reorganization results in surplusage of employees no employer is expected to carry the burden of such economic dead weight and retrenchment has to be accepted as inevitable, however unfortunate it is…”
23
(para 14, page 1341 of the report)
32. In the instant case no malafide has been alleged
against the appellant-company. Nor it is anybody’s
case that as a result of reorganization of its
working pattern by introducing the scheme of
promotion any person is either retrenched or is
rendered surplus.
33. In the given situation, this Court cannot
appreciate how by introducing the scheme of
promotion to which the workers overwhelmingly
responded on their own can it be said that the
management has indulged in unfair labour practice.
34. Similarly, in the case of Hindustan Lever Ltd. v. Ram Mohan Ray and others reported in 1973 (4) SCC 141, another three-Judge Bench of this Court held
that nationalization and standardization of work by
24
the management by itself would not fall under item
10 of Schedule IV of Industrial Disputes Act unless
it is likely to lead to retrenchment of workers.
Relying on the decision in Parry (supra) this Court held in Hindustan Liver (supra) that since the reorganization has not brought about any change
adversely affecting the workers and there has been
no retrenchment, similar principles are applicable
here.
35. Mr. K.K. Venugopal, learned Senior Counsel appearing
for the union in support of his submission relied on
a decision of this Court in the case of Arkal Govind Raj Rao v. Ciba Geigy of India Ltd., Bombay reported in 1985 (3) SCC 371. In that case the question
which was considered by this Court was where an
employee was performing multifarious duties and the
issue is whether he is a workman or not the test to
be applied is what was the primary, basic or
dominant nature of the duties for which the workman
was employed. This Court came to the conclusion
25
that when the primary and basic duties of an
employee are clerical but certain stray assignments
are given to him to create confusion, the Court may
remove the gloss to find out the reality.
36. In Arkal Govind Raj (supra) the aforesaid question arose out of the termination of service of the
appellant Govind Raj as his termination led to an
industrial dispute. In that dispute numerous
primary objections were raised by Ciba Geigy and one
of them was that Govind Raj was not a workman within
the meaning of Section 2(s) of the Industrial
Disputes Act. In that context, this Court, after
analyzing the evidence, came to a finding that
Govind Raj was a workman within the meaning of the
Act and held that neither the Labour Court nor the
High Court came to a correct finding. With that
finding this Court remanded the matter to the Labour
Court for deciding the dispute in accordance with
its judgment. The said decision has no bearing on
the issues with which we are concerned in this case.
26
It is well known that the ratio of a decision has to
be appreciated in its context. Going by that
principle, we do not find that the decision in Arkal Govind Raj (supra) is of any assistance to the respondents.
37. Mr. Venugopal also relied on the commentary of K.D.
Srivastava on Law Relating to Trade Unions and
Unfair Labour Practices in India (Fourth Edition).
The learned counsel relied on a decision of the
Allahabad High Court in the case of L.H. Sugar Factories and Oil Mills (P) Ltd., v. State of U.P., (1961) 1 LLJ 686 (HC All). Some of the observations
made in the said judgment which have been quoted in
the commentary of K.D. Srivastava are as follows:-
“…If an employer deliberately uses his power of promoting employees in a manner calculated to sow discord among his workmen, or to undermine the strength of their union, he is guilty of unfair labour practice.”
(page 402)
27
38. In the instant case no malafide has been alleged by
the union against the appellant-company in the
matter of reorganization of its work. It is also
nobody’s case that as a result of the reorganization
of the work any attempt is made by the appellant-
company to create discord amongst the workmen so as
to undermine the strength of the union. Apart from
that the facts in the case of L.H. Sugar Factories (supra) are totally different. In L.H. Sugar Factories (supra) the company wrongfully deprived ten workers of their promotion to the post of
driver-cum-assistant fitter while preferring eleven
other workmen over them. This led to an industrial
dispute. Therefore, those observations of Allahabad
High Court in a totally different fact situation are
not attracted in the present case to make out a case
of unfair labour practice. We fail to appreciate
the relevance of the aforesaid decision to the facts
of the present case.
28
39. At the same time it is not the case of the
respondent-union that its recognition is in any way
being withdrawn or tinkered with. Nor is it the
case of the respondent-union that it is losing its
power of collective bargaining. It may be that the
number of workmen is reduced to some extent pursuant
to a promotional scheme to which the workmen readily
responded. But no union can insist that all the
workmen must remain workmen perpetually otherwise it
would be an unfair labour practice. Workmen have a
right to get promotion and improve their lot if the
management offers them with a bona fide chance to do
so. In fact if the order of the High Court is
upheld, the same will go against the interest of
erstwhile workmen of the appellant-company who have
responded to the scheme of promotion.
40. For the reasons aforesaid, we are of the view that
the High court failed to have a correct perspective
of the questions involved in this case and obviously
came to an erroneous finding.
29
41. We allow the appeal and set aside the order of the
High Court in which has merged the order of the
Labour Court. However, we make it clear that in
implementing the scheme the management of the
appellant-company must not bring about any
retrenchment of the workmen nor should the workmen
be rendered surplus in any way.
42. The appeal is, thus, allowed. There will be no
order as to cost.
.......................J. (D.K. JAIN)
.......................J. New Delhi (ASOK KUMAR GANGULY) October 12, 2011
30