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.  

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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.

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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  

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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  

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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.

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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].  

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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,  

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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  

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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  

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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  

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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  

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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.  

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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?  

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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…”

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(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  

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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  

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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.  

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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)

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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.   

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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.   

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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

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