Bombay High Court
Gulf Air, Bombay vs S.M. Vaze, Member, Industrial Court, ... on 19 January, 1994
Equivalent citations: (1995)ILLJ246BOM, 1994(2)MHLJ1060
JUDGMENT
B.P. Saraf. J.
1. As both these writ petitions arise out of the same order of the Industrial Court dated 27 October, 1989 passed on complaint (ULP) No. 1074 of 1988, they are taken up together for hearing and disposal.
2. Writ Petition No. 163 of 1990 has been filed by Gulf Air, an Airline Company owned by the State of Baharain, Qatar, United Arab Emirates, Sultanate of Oman. United Arab Emirates, Sultanate of Oman. It carries on business in India since 1971. The petitioner in writ petition No. 176 of 1990 is Jet Air Private Limited. It is carrying on the business as General Sales Agents of several Airlines since 1974. The Respondents No. 2 in both the writ petitions is the Gulf Air Employees' Association, a registered Trade union representing the employees of Gulf Air.
2-A. The material facts giving rise to the controversy involved in these two writ petitions may briefly be stated as under :
Gulf Air (hereinafter also referred to as "the petitioner"), which has been operating as an Airline in India Since 1971 has its principal place of business for Indian operations in Bombay with two other offices at Madras and New Delhi. At the material time, it employed about 165 persons in Bombay, 63 in the city office and the remaining 102 in the Air Port Office. In the year 1981, it appointed Jet Air Private Limited (petitioner in writ petition No. 176 of 1990 and respondent No. 3 in writ petition No. 163 of 1990) as its General Sales Agents ("GSA") for the whole of India (except Maharashtra and Delhi). The arrangement was based on a General Sales Agency agreement entered into between the parties. The agreement was also approved by the Reserve Bank of India. In Bombay, Gulf Air had 4 ticketing agents right from the inception of its business. However, in the year 1988, it decided to appoint M/s/ Jet Air Pvt. Ltd. ("Jet Air") as its GSA for the purpose of reservation and ticketing for the State of Maharashtra with effect from 20 September 1988. An agreement was entered into between Gulf Air and Jet Air for that purpose. To inform the staff at Bombay about this arrangement, the following circular was issued by Gulf Air on 19 August, 1988 :
"TO ALL GULF AIR STAFF/BOMBAY This is to inform you that Management had decided to expand the operational territory of the GAS M/s. Jet Air Private Limited to include Maharashtra State, and this is being implemented with effect from 20th September, 1988.
The Management while informing you of this decision would like to assure you that this decision will have no implication whatsoever on the existing Gulf Air Staff and their service conditions".
3. The workmen of Gulf Air were however not satisfied by the above arrangement. According to them, it amounted to unfair labour practice within the meaning of Items 1, 5 and 6 of Schedule II and Items 9 and 10 of Schedule IV to the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 ("MRTU and PULP Act"). A compliant was therefore filed by the respondent No. 2 Gulf Air Employees' Association on behalf of the employees of Gulf Air before the Industrial Court under MRTU and PULP Act. The main grievance of the Association was that the appointment of GSA for the State of Maharashtra amounted to a change in the conditions of service applicable to the workmen falling under Item No. 10 of the Fourth Schedule to the Industrial Disputes Act, 1947 which was likely to lead to retrenchment of the workmen. According to the Association, in such a case, before effecting the change it was obligatory on the part of the employer to give a notice to the workmen under Section 9-A of the Industrial Disputes Act and failure to do so amounted to unfair labour practice within the meaning of Item 9 of Schedule IV to the MRTU and PULP Act. The further contention of the Association was that on March 18, 1986 an assurance had been given by the employer to all the air staff at its Bombay Officer and at Bombay Air Port to the effect that it had no plans and nor did it intend to hand over the Bombay Station to GSA. According to the Association, appointment of Jet Air as GSA for Bombay amounted to failure to implement the above agreement which is also an unfair labour practice within the meaning of Item 9 of the Schedule IV to MRTU and PULP Act. The assurance referred to by the workmen is contained in a letter of March 18, 1986 issued by the Assistant Vice-President (Marketing and Sales International) of the petitioner. It reads :
"TO : ALL GULF AIR STAFF AT ITS BOMBAY CITY OFFICE AND AT BOMBAY AIRPORT :
The Management of the Company at the Headquarters had learnt that the Company staff at the Bombay Station were apprehensive that the Bombay Station will be given over to the GSA.
The Management would like to remove all doubts and fears from the minds of all staff at Bombay both at the city Office and at the Airport. The Management would like to advise the staff of the Bombay Station that the Company has no plans and does not intend handing over the Bombay Station to the GSA.
The Management at the Headquarters has also taken due note of the matters discussed at the said meetings and wish to assure the staff that these will be adequately looked into at the earliest.
The Management also wishes to state that it is appreciative of the loyal services of all the staff and would like to remove any misunderstanding or misgivings in that behalf".
4. The contention of the employer-Gulf Air, on the other hand, was that no unfair labour practice within the meaning of Item 9 of Schedule IV or any of the Items of any of the schedules to the MRTU and PULP Act had been committed by it. It was contended that there was no likelihood of any retrenchment of workmen as a result of appointment of GSA for Maharashtra and no workman was likely to be affected thereby, and a such, Section 9-A of the Industrial Disputes Act had no application. In regard to the alleged failure to implement the assurance given by it on March 18, 1986 though its Assistant Vice-President, the submission of counsel was two fold. First, that the said letter was neither a settlement nor an assurance, second, that the object of the circular was only to remove the apprehensions in the mind of the staff at Bombay Station that the Bombay Station might be handed over to the GSA; it was in that context that to remove all doubts and fears in their minds, they were advised that it had neither any plans nor did it intend to hand over the Bombay Station to GSA. According to the petitioner, even this clarification or advice which has been termed by the Association as an assurance has also been strictly complied with by it as the agreement in question is neither intended nor purports to hand over the Bombay Station to Jet Air, who has been appointed a GSA for the State of Maharashtra only for the purpose of reservation and ticketing without in any manner affecting the continuity of the service of its existing staff at Bombay or their service conditions including promotions etc. The sole object of appointment of GSA was to achieve better working and to provide better customer service. The Industrial Court, however, did not accept the above contention and held that the appointment of Jet Air as GSA at Bombay for the State of Maharashtra amounted to unfair labour practice under Item 9 of the Schedule IV to the MRTU and PULP Act. According to the Tribunal, the appointment of GAS for Maharashtra had created a situation of likelihood of retrenchment of employees from reservation and ticketing departments and accounts department of the petitioner's office at Bombay and hence before bringing the said change it was incumbent on the petitioner to issue a notice under Section 9-A of the Industrial Disputes Act and wait for 21 days thereafter. Not doing so according to the industrial Court, amounted to unfair labour practice under Item 9 of Schedule IV of the MRTU and PULP Act. The Industrial Court also held that the assurance given by the petitioners to the workmen on March 18, 1986 could be regarded as an agreement with them as it had all the attributes of an agreement. It was further held that the handing over of the ticketing and reservation work to the GSA amounted to breach of the above agreement contained in circular of March 10, 1986. The Industrial court therefore allowed the complaint of the Association and declared that the employer-Gulf Air had committed unfair labour practice under item 9 of Schedule IV to the MRTU and PULP Act and directed it to stop the above unfair labour practice within three months of the order and not to retrench any staff from the Bombay Station only for the reason of surpluses on the ground of GSA. Gulf Air as well as its GSA, Jet Air, have challenged the above order of the Industrial Court by filing these two writ petitions.
5. Learned counsel for Gulf Air submitted that the Industrial Court went wrong in interpreting Item 10 of the Fourth Schedule to the Industrial Disputes Act and Section 9-A thereof as also Item 9 of Schedule IV to MRTU and PULP Act. It was contended that the Industrial Court also misconstrued and misinterpreted the circulars of March 18, 1986 and September 19, 1988. So far as the allegation of the unfair labour practice based on violation of Section 9-A of the Industrial Disputes Act is concerned, according to the learned counsel, it has no application to the facts of the present case. This section comes into operation only if any rationalisation undertaken by the employer is likely to lead to retrenchment of workmen. Only in such a case it will amount to change in the service conditions within the meaning of item 10 of the Fourth Schedule to the Industrial Disputes act. What is relevant, according to the counsel, is not rationalisation but "its likely effect and consequences". Only those cases of rationalisation fall under Item 10 of the Fourth Schedule which are likely to lead to retrenchment of workmen. Rationalisation per se, without such a consequence, does not fall under Item 10 and no notice in such cases is required to be issued to the workmen under Section 9-A. Reference was also made to clauses (a) of Section 9-A of the Industrial Disputes Act which requires the notice to be given "to the workmen likely to be affected by such change". The contention, in other words, was that if there is no likelihood of retrenchment, the question of any workmen being agreement, the question any workmen being aggrieved canto arise and so also the question no notice. So far as the contention regarding violation of the circular issued by the Assistant Vice-President of the Petitioner to the workmen on March 18, 1986 is concerned, it is submitted that even if that circular is taken to be an assurance, there is no failure to implement the same in as much as in truth and substance the Bombay Station has not been handed over to the GSA as indicted in the said circular but only the ticketing and reservation work has been entrusted to it. In support of his contention, reliance was placed on the statement of the Secretary of the Association made in his cross-examination which I shall refer a little later.
6. Learned counsel for the Association Mr. Deshmukh, on the other hand, supports the order of the Industrial court and submits that appointment of GSA for Bombay was likely lead to retrenchment of workmen and, as such, notice under Section 9-A was mandatory and failure to do so amounted to unfair labour practice under Item 9 of Schedule IV to the MRTU and PULP Act. He also submits that there was a clear violation of the assurance of the undertaking given by the petitioner on March 18, 1986 by appointment of Jet Air as its GSA for Bombay. According to the counsel for the Association, the appointment of GSA for Bombay clearly amounts to violation of the said assurance and the Industrial Court was justified in arriving at a finding of commission of unfair labour practice under Item 9 of the Schedule IV to the MRTU and PULP Act.
7. The learned counsel for the petitioner employer, in reply, submitted that even if in a given case, a particular rationalisation measure is likely to lead to retrenchment of workmen and it has been undertaken without complying with the requirements of Section 9-A of the Industrial Disputes Act, the rationalisation itself cannot be undone. The appropriate relief in such cases where the Rationalisation measure results in retrenchment would be to protect the workmen from retrenchment by restraining the employer from retrenching them. However according to the learned counsel for the association, any change, in service condition falling with Item 10 of the Fourth Schedule to the Industrial Disputes Act effected without complying with the requirements of Section 9-A would be void ab initio and the Courts have to declare so.
8. I have carefully considered the rival submissions. I have also heard the learned counsel for the GSA-M/s. Jet Air Mr. Vahanvati. I have perused Item 10 of the Fourth Schedule and Section 9-A of the Industrial Disputes Act, and Item 9 of Schedule IV to the MRTU and PULP Act. I have also carefully gone through the circular of September 19, 1988 intimating the workmen of appointment of GSA and circular of March 18, 1986 which has been held to be an assurance that the petitioner failed to implement.
9. I will first deal with the contention based on the alleged violation of Section 9-A of the Industrial Disputes Act. This section prohibits an employer from effecting any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule without giving to the workmen likely to be affected by such change, a notice thereof. Section 9-A, as it stood at the material time, is in the following terms :
9-A. Notice of change :- No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule shall effect such change -
(a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or
(b) within twenty-one days of giving such notice :
Provided that no notice shall be required for effecting any such change.
(a) where the change is effected in pursuance of any settlement, award or decision of the Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950); or
(b) where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services (Classification, Control and Appeal) rules, or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette only.
The Fourth Schedule deals with the conditions of service for the change of which notice has to be given. Item 10 thereof reads :
"10. Rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment of workmen."
10. A conjoint reading of Section 9-A and Item 10 of the Fourth Schedule makes it clear that Section 9-A is applicable only in cases of proposed change in the conditions of service in respect of any matter specified in the said schedule. Item 10 of the Fourth Schedule, with which we are concerned in this case, deals which we are concerned in this case, deals with rationalisation, standardisation or improvement of plant "which is likely to lead to retrenchment of workmen". Evidently, the emphasis is not on rationalisation but on its likely effect on employment. This interpretation also gets support from Section 9-A of the Act which requires a notice to be given to "the workmen likely to be affected by such change". If there is no likelihood of retrenchment, there will be no workmen who is likely to be affected by such change and no question of serving any notice under Section 9-A would arise. The question that falls for determination is how to decide whether a particular measure of rationalisation is likely to lead to retrenchment or not. The whole object of Section 9-A is to protect the workmen from likely retrenchment. It is the employer who is required to issue a notice under Section 9-A of the Act in case of change in any condition of service specified in the Fourth Schedule. It is, therefore, for the employer at the first instance to assess the situation and arrive at a decision to form his opinion whether the rationalisation proposed to be introduced by him is likely to lead to retrenchment of the workmen or not. If on such a consideration, he is of the opinion that it is likely to lead to retrenchment, notice under Section 9-A will have to be given before effecting the change otherwise not. In a given case, the employer may form a bona fide opinion that there is no likelihood of retrenchment as a result of rationalisation etc. sought to be introduced by him, but the workmen may not be satisfied with such opinion of the introduced by him, but the workmen may not be satisfied with such opinion of the employer. They might be apprehensive of retrenchment. In such a situation, they have been given a right to challenge the decision of the employer before the Industrial Court under MRTU and PULP Act, as has been done in this case by the Association of the workmen. On such a complaint being filed, it is for the Industrial Court to consider the totality of the facts and circumstances of the case to ascertain whether the opinion of the employer in regard to the likelihood retrenchment of the workmen is reasonable and bona fide. The sole object of all this exercise is to see that in garb of rationalisation, workmen are not thrown out of the employment. If, in a given case, the employer on proper appreciation of the situation, not only forms an opinion that there is no likelihood of the proposed rationalisation leading to retrenchment of the workmen but also assures the workmen categorically that no retrenchment in any event shall be effected, it would be difficult to hold that "it is likely to lead to retrenchment" with the meaning of item 10 of the Fourth Schedule. "Likely" is a word of general usage and common understanding, broadly defined as of such nature or so circumstantial as to make something probable and having better chance of existing or occurring than not (Black's Law Dictionary, Sixty Edition). According to Random House dictionary of English Language, it means "probably or apparently destined; seeming like truth, fact or certainly; reasonably to be believed or expected..............". The answer to the question whether the proposed rationalisation is likely to lead to retrenchment therefore would depend upon the facts and circumstances of each case. If the facts and circumstances are such to lead a reasonable person to believe that there is probability of retrenchment, the cases will of all under Item 10 of the Fourth Schedule otherwise not. But the inference must be of a reasonable persons based upon reasonable grounds. It must have nexus with the circumstances of the case. Mere suspicion of the workmen based on gossip or rumour cannot justify an inference of "likelihood". In my opinion in such a case, even it there is any apprehension of likelihood of retrenchment in the minds of the workmen, the same should be cleared with the undertaking or assurance of the employer because in the event of any retrenchment because in the event of any retrenchment taking place despite such an assurance, remedy is available to the workmen under MRTU and PULP Act - it might approach the Industrial court for appropriate relief.
11. In the instant case, the specific averment of the employer before the Industrial Court was that by the appointment of GSA for Maharashtra there was no likelihood of retrenchment of any workman at all. According to it, as a result of this arrangement, at the most there might be reduction of work to the extent of 5% in the particular section which would not lead to any retrenchment because it would be possible to absorb such workmen in various other departments. Moreover, a categorical undertaking was also given to the workmen by the petitioner that appointment of GSA would not affect the existing staff and their service conditions. In such a case, it is difficult to hold that there is likelihood of retrenchment within the meaning of Item 10 of the Fourth Schedule to the Industrial Disputes Act.
12. The above conclusion gets full support from the decision of the Supreme Court in The Workmen v. Hindustan Lever Ltd. (1971) I LLJ 427. In the case, it was categorically held by the Supreme Court that rationalisation or standardisation by itself would not fall under Item 10 unless it is likely to lead to retrenchment of workmen. In that case it was found that the re-organisation had not resulted in any retrenchment. Moreover, during the course of prolonged negotiation between the parties, the employer had also made it abundantly clear again and again that nobody would be retrench. It was clearly made part and parcel of scheme of re-organisation. It was observed (at 431) :
"It must be remembered that the Fourth Schedule relates to conditions of service for change of which the notice is to be given and Section 9-A requires the employer to give a notice under that section to the workmen likely to be affected by such change. The word "affected" in the circumstances could only refer to the workers being adversely affected and unless it could be shown that the abolition of one department has adversely affected the workers it cannot be bought under Item 11."
This position was reiterated in L. Robert D'Souza v. Exe. Engr., Rly., 1982 I LLJ 330. In this case also, it was clearly held that if the change proposed does not cover any matter in Fourth Schedule, Section 9-A is not attracted and no notice is necessary.
13. Applying the ratio of the above decisions of the Supreme Court to the facts and circumstances of the present case, I am of the clear opinion that the appointment of the GSA in the instant case did not fall under Item 10 of the Fourth Schedule to the Industrial Disputes Act as there was no likelihood of its leading to retrenchment of any workman. The petitioners have also filed an affidavit before this Court that till today not to speak of retrenchment or reduction of work force, the total requirement of workmen has gone up and a number of fresh appointments have been made. In view of what has been stated above. I do not find it necessary to go into this aspect of the matter. It would have been relevant if the workmen would have alleged that after the appointment of the GSA, in fact, retrenchment has taken place. There is no such allegation. On the other hand, as earlier indicated, the categorical affidavit on behalf of the partition is that no workman has been retrenched. The work load has not gone down; it has rather gone up and the total number of persons employed has increased.
14. So far as the allegation of unfair labour practice based on non-implementation of the circular of March 18, 1986 is concerned, it appears that even if such circular is taken to be an assurance, there is no violation of any assurance contained therein. For a reading of the above circular which has already been set out earlier, it is clear that it was issued to remove all doubts and fears from the minds to the staff who are employed at Bombay Station that Bombay Station was being given to the GSA by telling them that there was no such plan and the petitioner did not intend to hand over the Bombay Station to the GSA.
15. The learned counsel for the petitioners submitted before me that they have in no way violated the assurance given to the workmen because the Bombay Station as such has not been handed over to the GSA. The GSA has been appointed only for ticketing work and direct sale of tickets is still retained by the petitioner.
16. My attention was drawn to the following statement of Mrs. Daulat Darayes Damania, who is General Secretary of the Union of the Workmen made in cross-examination :
"It is true that the statement made by me earlier in my evidence to the effect that no part of any work at the Bombay station would be handed over to GSA is not reflected in the letter of the Assistant Vice-President, dated 18-3-1986 and which is at Ex. `C'. It is not true that in the meeting dated 19-3-1986 the Vice-President and the Assistant Vice-President and the Assistant Vice-President had merely assured that the Bombay Station in toto would not be closed down and handed over to the GSA and in the meeting what had been assured was that not only ticketing but no other work of the Bombay Station would be handed over to the GSA. All these details are not given in the complaint though I had told about it to the Advocate and I cannot give the reason why this was not mentioned. I had signed the Complaint after reading it. It is true that reservation work is still going on at our town office......."
My attention was also drawn to the following statement :
"Our only anxiety all along is about loss of our job by retrenchment if G. S. A is appointed. Our fears are mainly upon what management had written to the Labour Commissioner in relation to the Delhi Office".
17. The learned counsel for the petitioner submits that it is clear from the above statement that it was mere apprehension without any basis which should have been dispelled by the categorical statement of the employer which was a part of the scheme of the rationalisation. That being so, it is clear that there was no handing over of the Bombay Station to the GSA and, as such, even if the circular of March 18, 1986 is taken to be any assurance, there was no violation of any statement or assurance contained therein which would amount to an unfair labour practice under Item 9 of the Schedule IV to the MRTU and PULP Act.
18. In view of the foregoing discussion, I am of the opinion that in the instant case no unfair labour practice under Item 9 of Schedule IV to the MRTU and PULP Act was committed by gulf Air by appointing Jet Air as its GSA for the State of Maharashtra. The impugned order of the Industrial Court dated October 27, 1989 is, therefore, set aside and quashed. The rule is made absolute.
19. Under the facts and circumstances of the case, there shall be no order as to costs.
20. Rule made absolute.