Gujarat High Court
Administrative Officer vs Surendranagar Jilla Mazdoor Sang on 7 July, 2017
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/1996/2008 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 1996 of 2008
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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ADMINISTRATIVE OFFICER, PATDI GRAM PANCHAYAT....Petitioner(s)
Versus
SURENDRANAGAR JILLA MAZDOOR SANG....Respondent(s)
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Appearance:
MR MANAV A MEHTA, ADVOCATE for the Petitioner(s) No. 1
MR P P MAJMUDAR, ADVOCATE for the Respondent(s) No. 1
MR SP MAJMUDAR, ADVOCATE for the Respondent(s) No. 1
MR Y J PATEL, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 07/07/2017
ORAL JUDGMENT
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1. Heard learned advocates for the petitioner and Respondent.
2. In this petition, the Administrative Officer of Shri Patdi Gram Panchayat has challenged award dated 14.2.2007 passed by the learned Labour Court on Surendranagar in (LCD) No. 7 of 1994 whereby the learned Labour Court directed the Petitioner Gram Panchayat to regularise service of claimant Mr. Chaturbhai Jesingbhai with effect from 2000 (i.e. when the claimant completed 10 years of service with the Gram Panchayat) and to regularise service of Mr. Bachubhai Chotabhai with effect from 15.1.2002 (when he completed service of 10 years with the Panchayat) and to pay wages and other consequential benefits from 2000 and 2002 respectively.
2.1 The learned Labour Court also clarified that for the purpose of benefits and payment of salary the period from 2000( in case of Mr. Chaturbhai Jesingbhai) and from January,2002 (in case of Mr. Page 2 of 35 HC-NIC Page 2 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Bachubhai Chotabhai) shall be considered notional.
2.2 Feeling aggrieved by the said award and direction, the Panchayat has taken out present petition.
3. So far as factual backdrop is concerned, it has emerged from the record and rival submissions by learned advocates for contesting parties that three persons who claimed to be employees of the petitioner Panchayat, raised industrial dispute with the demand that their services should be regularised from the date on which they completed services of 240 days with the Panchayat and the Panchayat should be directed to pay all benefits arrears from the date they completed services of 240 days.
3.1 Appropriate government referred the dispute for adjudication to learned Labour Court at Surendranagar. The dispute was registered as Page 3 of 35 HC-NIC Page 3 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Reference (LCD) No. 7 of 1994.
3.2 Before proceedings further it is necessary to mention and clarify that during the proceedings before learned Labour Court only two claimants i.e. Mr.Chaturbhai Jesingbhai and Mr. Bachubhai Chotabhai prosecuted the Reference whereas so far as the third claimant i.e. Mr. Laxmanbhai Kesabhai is concerned, his service came to be terminated by the Panchayat and that, therefore, the Reference seeking regularisation was rendered infructuous. Consequently, the learned Labour Court rejected the Reference so far as the claimant Shri Laxmanbhai Kesabhai is concerned and learned Labour Court adjudicated the Reference only in respect of other two claimants.
3.3 Before the learned Labour Court, the claimants filed statement of claim with the allegation that they were in employment with the opponent Panchayat for more than 10 years and that they had worked for 240 days in each year.
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They also claimed that they worked regularly, continuously and diligently and that though they completed service of more than 10 years they were illegally and arbitrarily continued on daily wage basis and their services were not regularised. They alleged that the opponent Panchayat committed unfair labour practice by continuing them on daily wage basis and by treating them as adhoc and daily wage employees even though they had continuously worked with the Panchayat for more than 10 years. The claimants also contended that Mr. Chaturbhai Jesingbhai worked as wireman/ electrician for 17 years before raising the dispute/ demand and Mr. Bachubhai Chotabhai had completed service of 14 years as wireman/ electrician before he raised dispute/ demand. With such allegations they demanded regularisation in service with consequential benefits.
3.4 The demand was opposed by the Gram Panchayat.
It was claimed that the claimants were engaged on Page 5 of 35 HC-NIC Page 5 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT adhoc and daily wage basis and that therefore the demand by the claimants is not justified and cannot be entertained. It was also claimed that there was no sanctioned setup and there was no vacancies on permanent setup where the services of the claimants can be regularised and that, therefore, the relief prayed for by the claimants may not be granted. It was also claimed that the Panchayat is obliged to fillup the posts by following prescribed procedure and that, therefore, the demand by the claimant is not justified and that the regularisation of their services would amount to backdoor entry. With such allegations and claims, the Panchayat opposed the demand by the claimants.
3.5 After the parties completed their pleadings, learned Labour Court received evidence from both sides and upon conclusion of evidence, the learned Labour Court heard rival submissions by contesting parties. Learned Labour Court thereafter considered the material available on Page 6 of 35 HC-NIC Page 6 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT record and upon consideration of evidence and rival submissions, learned Labour Court reached to the findings of fact that each claimant had completed service of more than 10 years with the Panchayat and that atleast one post of Electrician/ Wireman was sanctioned post on the establishment and that the claimants had continuously and regularly worked with the Panchayat and completed service of 240 days in each year. Learned Labour Court also reached to the conclusion that the opponent Panchayat's action of continuing the claimant as daily wage employees amounted to unfair labour practice.
Having reached to such finding of facts, learned Labour Court passed impugned award with above mentioned direction. Feeling aggrieved by the award, the Panchayat has taken out this petition.
4. Learned advocate for the petitioner contented that the award is misconceived, arbitrary and unjust and therefore, the award may be set aside.
He submitted that learned Labour Court failed to Page 7 of 35 HC-NIC Page 7 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT appreciate that when there was no vacancy and there was no scope of regularisation of services of the claimant, more particularly in absence of availability of post/ vacancy. He also submitted that the learned Labour Court failed to appreciate that the claimants were not appointed after following prescribed procedure and that, therefore, the claim for regularisation of service of regularly appointed person is not justified and may not be granted. With such contention, the learned advocate for petitioner submitted that the award may be set aside.
5. Learned advocate for respondent opposed the submissions related to unfair labour practice (ScheduleV) of the Act and he submitted that the petitioner Panchayat arbitrarily continued the petitioners on daily wage basis, not regularising their services despite the fact that the claimants worked with the Panchayat as Electrician/ Wireman continuously and regularly for more than 14 years and that, therefore, the Page 8 of 35 HC-NIC Page 8 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT said action of the Panchayat amounts to unfair labour practice. He submitted that finding of learned Labour Court that the Panchayat committed unfair labour practice are based on findings and the said findings are justified and do not warrant any interference. Learned advocate for respondent claimants also submitted that the claim about allegedly irregular appointment is not justified, more particularly after the claimants completed service of more than 14 years with the Panchayat. He submitted that such contention or claim by the Panchayat after having availed service for such long time is unjust. It is also submitted that the fact that the claimants worked for more than 240 days in each year and that they were continuously and regularly in service is not in dispute and that, therefore, there is no justification to interfere with the direction passed by the learned Labour Court, and the award does not suffer from any infirmity of law or jurisdiction. With such submissions by learned advocate for respondent Page 9 of 35 HC-NIC Page 9 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT submitted that the petition may not be entertained.
6. I have considered rival submissions and impugned award as well as other material available on record.
7. At the outset it would be appropriate to take into account observation by Hon'ble Apex Court in Para53 of the decision in case of Secretary, State of Karnataka v. Uma Devi(3) and others [(2006) 4 SCC 1], wherein the Hon'ble Apex Court has observed that:
"53. One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in S.V. Narayanappa (supra), R. N. Nanjundappa (supra), and B. N. Nagrajan (supra), and referred to in paragraph 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of courts or of tribunals. The question of regularization of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases above referred to and in the light of this judgment.
In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularize as a one time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being Page 10 of 35 HC-NIC Page 10 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT now employed. The process must be set in motion within six months from this date. We also clarify that regularization, if any already made, but not sub judice, need not be reopened based on this judgment, but there should be no further bypassing of the constitutional requirement and regularizing or making permanent, those not duly appointed as per the constitutional scheme. "
It would also be appropriate to take into account the decision in case of Umrala Gram Panchayat v. Secretary, Municipal Employees Union (2015) 12 SCC 775, the Hon'ble Apex Court observed, inter alia, that:
"6. It has been further contended by the learned senior counsel that the workmen concerned were engaged in the services, as and when required by the appellant Panchayat and it is not obligatory on the part of the appellant Panchayat to provide work to the workmen on a daytoday basis and the appellant Panchayat has no control over them as there is no employeremployee relationship between them. It has been further contended by him that the appellant Panchayat has no right to make them permanent employees. For making their services permanent in the appellant Panchayat, an application has to be made before the District Panchayat, Bhavnagar and a demand has to be raised before it and the recruitment of the employees of the appellant Panchayat is done by the Gujarat Panchayat Service Selection Board and directions will be issued on its behalf. However, there are no such directions issued in relation to the workmen concerned.
"9. On a perusal of the same, we have come to the conclusion that the High Court has rightly dismissed the case of the appellant as the Labour Court has dealt with the same in detail in its reasoning portion of the award in support of its findings of fact while answering the points of dispute and the same cannot be said to be either erroneous or error in law.
10. In support of the above said conclusions arrived at by us, we record our reasons hereunder: It is an admitted fact that the work which was being done by the concerned workmen was the same as that of the permanent workmen of the appellantPanchayat. They have also been working for similar number of hours, however, the discrepancy in the payment of wages/salary between the permanent and the non Page 11 of 35 HC-NIC Page 11 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT permanent workmen is alarming and the same has to be construed as being an unfair labour practice as defined under Section 2(ra) of the ID Act r/w Entry No.10 of the Fifth Schedule to the ID Act, which is prohibited under Section 25(T) of the ID Act. Further, there is no documentary evidence produced on record before the Labour Court which shows that the present workmen are working less or for lesser number of hours than the permanent employees of the appellantPanchayat. Thus, on the face of it, the work being done by the concerned workmen has been permanent in nature and the Labour Court as well as the High Court have come to the right conclusion on the points of dispute and have rightly rejected the contention of the appellantPanchayat as the same amounts to unfair labour practice by the appellantPanchayat which is prohibited under Section 25(T) of the ID Act and it also amounts to statutory offence on the part of the appellant under Section 25(U) of the ID Act for which it is liable to be prosecuted.
11. Further, the Labour Court has rightly held that there is no restriction for the recruitment of the workmen in the Panchayat's setup as there is evidence to show that by making a proposal, the District Panchayat has increased the work force in the establishment of the appellantPanchayat and therefore, the contention urged by the learned senior counsel appearing for the appellant Panchayat that there are only limited number of permanent vacancies for the workmen in the Panchayat of the appellant is not tenable in law.
12. Further, we have also taken note of the fact that the financial position of the Panchayat is not so unsound as no activity of the Panchayat has been discontinued, as all the other workers of the appellantPanchayat are being paid their wages regularly. Thus, there would be no difficulty for the appellantPanchayat to bear the extra cost for the payment of the wages/salary and other monetary benefits to the concerned workmen if they are made permanent.
13. Further, Section 25(T) of the ID Act clearly states that unfair labour practice should not be encouraged and the same should be discontinued. In the present case, the principle "equal work, equal pay" has been violated by the appellantPanchayat as they have been treating the concerned workmen unfairly and therefore, the demand raised by the respondentUnion needs to be accepted. The High Court has thus, rightly not interfered with the Award of the Labour Court as the same is legal and supported with cogent and valid reasons.
14. Therefore, the learned single Judge as well as the Division Bench of the High Court have exercised the power Page 12 of 35 HC-NIC Page 12 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT under Articles 226 and 227 of the Constitution of India and have rightly held that the Labour Court has jurisdiction to decide the industrial dispute that has been referred to it by the Dy. Commissioner of Labour, Ahmedabad. Reliance has been placed upon the decision of this Court in the case of Maharashtra State Road Transport Corporation and Anr. v. Casteribe Rajya P. Karmchari Sanghatana1, wherein it has been held thus: (SCC p.573, Para 32) "32.The power given to the Industrial and Labour Courts under Section 30 is very wide and the affirmative action mentioned therein is inclusive and not exhaustive. Employing badlis, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent employees is an unfair labour practice on the part of the employer under Item 6 of Schedule IV. Once such unfair labour practice on the part of the employer is established in the complaint, the Industrial and Labour Courts are empowered to issue preventive as well as positive direction to an erring employer."
15. Further, reliance has been placed upon the decision of this Court in the case of Durgapur Casual Workers Union v. Food Corporation of India, wherein it has been held thus:(SCC p. 798, para21) "21. Almost similar issue relating to unfair trade practice by employer and the effect of decision of Umadevi (3), in the grant of relief was considered by this Court in Ajaypal Singh v. Haryana Warehousing Corporation decided on 972014. In the said case, this Court observed and held as follows:
(Ajaypal Singh case, SCC p.329, paras 1718)
17. ....The provisions of Industrial Disputes Act and the powers of the Industrial and Labour Courts provided therein were not at all under consideration in Umadevi's case. The issue pertaining to unfair labour practice was neither the subject matter for decision nor was it decided in Umadevi's case.
18..... We have noticed that Industrial Disputes Act is made for settlement of industrial disputes and for certain other purposes as mentioned therein. It prohibits unfair labour practice on the part of the employer in engaging employees as casual or temporary employees for a long period without giving them the status and privileges of permanent employees....""
16. Thus, in the light of the above referred cases of this Court, it is amply clear that the judgments and Page 13 of 35 HC-NIC Page 13 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT orders of the High Court and the Award passed by the Labour Court are reasonable and the same have been arrived at in a just and fair manner.
In the decision in case of Durgapur Workers's Union v. FCI, the Hon'ble Apex Court has observed with regard to unfair labour practice that:
"20.The effect of Constitution Bench decision in Uma Devi (AIR 2006 SC 1806) in case of unfair labour practice was considered by this Court in Maharashtra State Road Transport and another v. Casteribe Rajya Parivahan Karmchari Sanghatana (2009) 8 SCC 556 : (AIR 2009 SC (Supp) 2656). In the said case, this Court held that Umadevi's case has not over ridden powers of Industrial and Labour Courts in passing appropriate order, once unfair labour practice on the part of employer is established. This Court observed and held as follows:
"34. It is true that Dharwad Distt. PWD Literate Daily Wages Employees' Assn.v. State of Karnataka (1990) 2 SCC 396 : (AIR 1990 SC 883) arising out of industrial adjudication has been considered in State of Karnataka v. Umadevi (2006) 4 SCC 1 : (AIR 2006 SC 1806) and that decision has been held to be not laying down the correct law but a careful and complete reading of the decision in Umadevi leaves no manner of doubt that what this Court was concerned in Umadevi was the exercise of power by the High Courts under Article 226 and this Court under Article 32 of the Constitution of India in the matters of public employment where the employees have been engaged as contractual, temporary or casual workers not based on proper selection as recognised by the rules or procedure and yet orders of their regularisation and conferring them status of permanency have been passed.
35. Umadevi is an authoritative pronouncement for the proposition that the Supreme Court (Article 32) and the High Courts (Article 226) should not issue directions of absorption, regularisation or permanent continuance of temporary, contractual, casual, daily wage or ad hoc employees unless the recruitment itself was made regularly in terms of the constitutional scheme.
36. Umadevi does not denude the Industrial and Labour Courts of their statutory power under Section 30 read with Section 32 of the MRTU and PULP Act to Page 14 of 35 HC-NIC Page 14 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT order permanency of the workers who have been victims of unfair labour practice on the part of the employer under Item 6 of Schedule IV where the posts on which they have been working exist. Umadevi cannot be held to have overridden the powers of the Industrial and Labour Courts in passing appropriate order under Section 30 of the MRTU and PULP Act, once unfair labour practice on the part of the employer under Item 6 of Schedule IV is established."
"47. It was strenuously urged by the learned Senior Counsel for the Corporation that the Industrial Court having found that the Corporation indulged in unfair labour practice in employing the complainants as casuals on piecerate basis, the only direction that could have been given to the Corporation was to cease and desist from indulging in such unfair labour practice and no direction of according permanency to these employees could have been given. We are afraid, the argument ignores and overlooks the specific power given to the Industrial/Labour Court under Section 30(1)(b) to take affirmative action against the erring employer which as noticed above is of wide amplitude and comprehends within its fold a direction to the employer to accord permanency to the employees affected by such unfair labour practice."
21. Almost similar issue relating to unfair trade practice by employer and the effect of decision of Umadevi in the grant of relief was considered by this Court in Ajaypal Singh v. Haryana Warehousing Corporation in Civil Appeal No.6327 of 2014 decided on 9th July, 2014. In the said case, this Court observed and held as follows:
"20.The provisions of Industrial Disputes Act and the powers of the Industrial and Labour Courts provided therein were not at all under consideration in Umadevi's case. The issue pertaining to unfair labour practice was neither the subject matter for decision nor was it decided in Umadevi's case (AIR 2006 SC 1806).
21. We have noticed that Industrial Disputes Act is made for settlement of industrial disputes and for certain other purposes as mentioned therein. It prohibits unfair labour practice on the part of the employer in engaging employees as casual or temporary employees for a long period without giving them the status and privileges of permanent employees.
22. Section 25F of the Industrial Disputes Act, Page 15 of 35 HC-NIC Page 15 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT 1947 stipulates conditions precedent to retrenchment of workmen. A workman employed in any industry who has been in continuous service for not less than one year under an employer is entitled to benefit under said provision if the employer retrenches workman. Such a workman cannot be retrenched until he/she is given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice apart from compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months. It also mandates the employer to serve a notice in the prescribed manner on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.
If any part of the provisions of Section 25F is violated and the employer thereby, resorts to unfair trade practice with the object to deprive the workman with the privilege as provided under the Act, the employer cannot justify such an action by taking a plea that the initial appointment of the employee was in violation of Articles 14 and 16 of the Constitution of India.
23. Section 25H of the Industrial Disputes Act relates to reemployment of retrenched workmen. Retrenched workmen shall be given preference over other persons if the employee proposes to employ any person.
24. We have held that provisions of Section 25H are in conformity with the Articles 14 and 16 of the Constitution of India, though the aforesaid provisions (Articles 14 and 16) are not attracted in the matter of reemployment of retrenched workmen in a private industrial establishment and undertakings. Without giving any specific reason to that effect at the time of retrenchment, it is not open to the employer of a public industrial establishment and undertaking to take a plea that initial appointment of such workman was made in violation of Articles 14 and 16 of the Constitution of India or the workman was a backdoor appointee.
25. It is always open to the employer to issue an order of "retrenchment" on the ground that the initial appointment of the workman was not in conformity with Articles 14 and 16 of the Page 16 of 35 HC-NIC Page 16 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Constitution of India or in accordance with rules. Even for retrenchment on such ground, unfair labour practice cannot be resorted and thereby workman cannot be retrenched on such ground without notice, pay and other benefits in terms of Section 25F of the Industrial Disputes Act, 1947, if continued for more than 240 days in a calendar year.
26. However, in other cases, when no such plea is taken by the employer in the order of retrenchment that the workman was appointed in violation of Articles 14 and 16 of the Constitution of India or in violation of any statutory rule or his appointment was a backdoor appointment, while granting relief, the employer cannot take a plea that initial appointment was in violation of Articles 14 and 16 of the Constitution of India, in absence of a reference made by the appropriate Government for determination of question whether the initial appointment of the workman was in violation of Articles 14 and 16 of the Constitution of India or statutory rules. Only if such reference is made, a workman is required to lead evidence to prove that he was appointed by following procedure prescribed under the Rules and his initial appointment was legal."
22. In the present case, it is admitted that the workmen had been working as contract labours under the contractor in the rice mill of the Corporation. The contract system was terminated and the rice mill was closed in the year 19901991. The effect was termination of services of the workmen. In that view of the matter, they were entitled for reemployment when the employer proposed to take into his employment any person, in view of Section 25H, which reads as follows:
"25H. Reemployment of retrenched workmen. Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re employment and such retrenched workman who offer themselves for reemployment shall have preference over other persons."
Under Section 25H the retrenched workman who offer themselves for employment shall have preference over other persons. It was for the said reason the workmen were employed by the Corporation in June, 1991.
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23. This Court in Ajaypal Singh held that the provisions of Section 25H are in conformity with Articles 14 and 16 of the Constitution of India, though, the aforesaid provisions (Articles 14 and 16) are not attracted in the matter of reemployment of retrenched workmen in private industrial establishment and undertakings. In that view of the matter it can be safely held that the workmen who were retrenched, were rightly taken in the services of Corporation. Admittedly, no plea was taken by the Corporation either before the State Government or before the Tribunal that the initial appointment of workmen were illegal or they were appointed through back door means.
24. In this background, we are of the view that it was not open to the Division Bench of the High Court, particularly in absence of any such plea taken by the Corporation before the Tribunal to come to a finding of fact that initial appointments of workmen were in violation of Articles 14 and 16 of the Constitution of India, nor it was open to the High Court to deny the benefit to which the workmen were entitled under Item 10 of Part I of the Fifth Schedule of the Act, the Tribunal having given specific finding of unfair trade practice on the part of the Management of the Corporation.
25. Having accepted that there was unfair trade practice, it was not open to the Division Bench of the High Court to interfere with the impugned award."
8. The objection raised by the learned advocate for petitioners in the impugned award are required to be considered in light of the observation by the Hon'ble Apex Court.
9. The finding of facts recorded by the learned Labour Court are not in dispute. It is not in disputed that the claimant Mr. Chaturbhai Jesingbhai completed service of 17 years at the time when the learned Labour Court rejected the Page 18 of 35 HC-NIC Page 18 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Reference and the claimant Mr. Bachubhai Chotabhai had, by then, completed service of 18 years. It is also not in dispute that the claimants were in continuous and regular in their service and worked for more than 240 days each year during said period. Thus, the fact that by the time the dispute was raised and reference was adjudicated by the learned Labour Court, the claimant had worked for more than 240 days and continuously for more than 10 years.
10. At this stage, it would also be appropriate to take into account Item No. 10 of ScheduleV under the Act, which reads thus:
"10. To employ workmen as "badlis", casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen."
11. Having regard to the fact that the claimants worked for more than 240 days in each year for more than 14 years and despite such fact petitioner Panchayat continued the petitioners on daily wage basis and did not regularise their Page 19 of 35 HC-NIC Page 19 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT service, the learned Labour Court reached to the finding of fact that such action on the Panchayat amounts to unfair labour practice.
12. There is no justification to interfere with the said finding of fact and the same cannot be faulted in light of the discussion in the award more particularly in view of the fact that during hearing of the petition, learned advocate for the petitioners could not point out any material from record which would conclusive assail the finding of fact recorded by the learned Labour Court i.e. the conclusion that claimant had worked for 240 days and they had completed service of more than 14 years and therefore, the said observation and conclusion by learned Labour Court cannot be faulted.
13. When the learned Labour Court has passed the impugned award and direction on the premise that the employer committed unfair labour practice, the direction to regularise service of the Page 20 of 35 HC-NIC Page 20 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT claimants cannot be faulted and cannot be interfered with, however, there is no rider in this context.
14. The direction to put an end to unfair labour practice and to regularise the service of the claimants could not have been passed without having regard to the qualification of the claimants. If any person who does not possess prescribed qualification and consequently he is not eligible for regular appointment is continued in service then he would not be entitled to raise plea of unfair labour practice.
15. Learned Labour Court ought to have addressed the issue as to whether the claimants possessed requisite qualification for holding the post in respect of which they claimed regularisation.
16. There is no material on record of the petition and there is no discussion in the award which would establish that the claimants Page 21 of 35 HC-NIC Page 21 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT possessed prescribed qualification for the post in respect of which regularisation is claimed for i.e. Electrician/ Wireman.
17. Unfortunately, without having regard to the said vital aspect, learned Labour Court passed impugned award.
18. The learned Labour Court also lost sight of another vital aspect i.e. learned Labour Court failed to examine whether there was sanctioned post and any vacancy on the establishment or not.
In absence of availability of post and vacancy, direction to regularise the service of the claimants could not have been passed.
19. On this count, it is appropriate to turn to observation of full bench Court in Amreli Municipality V. Gujarat Pradesh Municipal [2004 (3) GLR 1841] wherein the full bench has observed in Para12 of the judgment that :
"12.1 After considering the decisions cited before Page 22 of 35 HC-NIC Page 22 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT us, the following principles emerge:
(A) No regularisation or permanency can be effected de hors the statutory provisions or the guidelines.
(B) Long service put in by the workmen itself may not be a ground to regularise services of ad hoc/temporary workmen against the sanctioned set up without following statutory procedure of recruitment. At the most, Labour Court/ Industrial Tribunal can issue direction for consideration of absorption subject to availability of posts on the establishment.
(C) To avoid nepotism and corruption, no backdoor entry in service;
(D) Financial capacity of the local body to have additional burden is a relevant consideration to be kept in mind while ordering regularisation or absorption.
12.1.2 The Apex Court, in no uncertain terms, ruled that the Labour Court/ Industrial Tribunal can neither regularise services of a workman nor grant permanency when his initial appointment itself is de hors the rules or not on the sanctioned post and has depricated orders of the High Court/ Labour Courts/Tribunals directing to regularise services of illegally recruited persons and has given guidelines. We are not impressed by the submission advanced on behalf of the workmen that the orders were passed in petitions under Article 226 of the Constitution of India and, therefore, such orders are not applicable in the present case in deciding the controversy. The Labour Courts/ Industrial Tribunals are required to pass orders consistent with the law laid down by the higher Courts. Needless to say that the exercise of wide powers by Labour Court/ Tribunal is always subject to or governed by the law laid down by the higher Courts.
12.1.3 As far as the cases on hand are concerned, wherein local authorities are involved, so far as the Municipality is concerned, it is bound by the statutory provisions, more particularly sections 47, 50, 260 and 271 of the Gujarat Municipalities Act. As provided under subsection (2) of section 47, the Municipality, with the previous sanction of the Director and if so required by the State Government, create all or any of the posts stated therein and shall have power to make appointment to the post as provided under subsection (3) of section 47. Likewise, under section 50 of the Act, it is obligatory on the part of the Municipality to obtain previous sanction of the Director to create such posts of officers and servants as specified under Page 23 of 35 HC-NIC Page 23 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT subsection (1) and (2) of section 47 as it shall deem necessary for the purpose of carrying out duties under the Act. Any recruitment in that behalf shall be determined in accordance with the rules made under section 271 of the Gujarat Municipalities Act and the power to make appointment in any post referred to in subsection (1) shall vest in the Municipality or in the authority empowered by the Municipality by rules made in this behalf under section 271. Thus, the local authority is the appointing authority and in service jurisprudence, the appointing authority has the key role to play in the matter of appointment. Before creating a post of Officer or a servant of the Municipality, previous sanction of Director of Municipalities is a mandatory condition which is known as "sanctioned set up" of the Municipality.
12.1.4 True, as far as the petitioner Amreli Municipality is concerned, there are no rules under Section 271 of the Act. However, for filling up the vacancies, previous sanction by the Director of Municipalities is a statutory requirement. The Municipality is bound by the directions issued by the State Government from time to time. Likewise, under section 260 of the Act, the Director of Municipalities is empowered to prevent extravagance in the employment. The Director can issue such directions without hearing the local authority or the employees in view of the fact that such directions are not affecting any individual employment.
12.1.5 As far as Municipal Corporations are concerned, Chapter IV provides for Municipal Officers and servants, their appointments and conditions of service. Chapter III of the Schedule provides for method of appointment of certain Municipal Officers and servants and their duties and powers. As far as Panchayats are concerned, the employees are governed by provisions of section 227 of the Gujarat Panchayats Act which reads as under:
"227.PANCHAYAT SERVICE TO BE REGULATED BY RULES.
(1) For the purpose of bringing about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of Panchayats, there shall be constituted a panchayat service in connection with the affairs of Panchayats. Such service shall be distinct from the State service.
(2) The panchayat service shall consist of such classes, cadres and posts and the initial strength of officers and servants in each such class and Page 24 of 35 HC-NIC Page 24 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT cadre shall be such as the State Government may by order from time to time determine. Provided that nothing in this subsection shall prevent a district panchayat from altering with the previous approval of the State Government any class, cadre or number of posts so determined by the State Government. "
12.1.6 So far as the Panchayats in the State of Gujarat are concerned, the Legislature has constituted Gujarat Panchayats Service Selection Board under section 235 of the said act having duty to select candidates for recruitment to such posts in the Panchayat service and to advice the panchayat in such matters as may be prescribed by rules. Under the Gujarat Panchayats Act, the State Government has framed several rules providing for recruitment of various employees under the Panchayat infrastructure. Such rules are statutory in nature. Some of such rules are mentioned hereunder to show that the recruitment procedure with respect to large number of posts under various Panchayats in the State are regulated by the rules statutorily framed in exercise of statutory powers of the State Government. To illustrate the following rules can be pointed out:
1. Accountant (Class III) (Panchayat Service) Recruitment Rules, 1999.
2. Additional Assistant Engineer (CivilClass III) (Panchayat Service) Recruitment Rules, 2002.
3. Agriculture Officer, Grade I (Class III) (Panchayat Service) Recruitment Rules, 1998.
4. Agriculture Supervisor (Class III) (Panchayat Service) Recruitment Rules, 1998.
5. ArtistcumPhotographer (Class III) (Panchayat Service) recruitment Rules, 1998.
6. Assistant Administrative Officers (Class III) (Panchayat Service) recruitment Rules, 1998.
7. Assistant District Malaria Officer (Class III) (Panchayat Service) Recruitment Rules, 1998.
8. Assistant Draftsman (Class I) (Panchayat Service) Recruitment Rules, 1998.
9. Assistant Instructor (Class III) (Panchayat Service) Recruitment Rules, 1998.
10. Auto Electrician (Class III) (Panchayat Service) Recruitment Rules, 1998.
11. Auxilliary Nurse Midwife (Class III) (Panchayat Service) Recruitment Rules, 1999.
12. Avas. Dais (Class IV) (Panchayat Service) Recruitment Rules, 2002.
13. Cinema Operators (Class III) (Panchayat Service) Recruitment Rules, 1998.
14. Circle Inspector (Class III) (Panchayat Service) Recruitment Rules, 1998.
15. Compounder (Ayurved) (Class III) (Panchayat Page 25 of 35 HC-NIC Page 25 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Service) Recruitment Rules, 2002.
16. Compounder (Class III) (Panchayat Service) Recruitment Rules, 1998.
17. Computer (Class III) (Panchayat Service)Recruitment Rules, 1998.
18. Deputy Accountant (Class III) (Panchayat Service) Recruitment Rules, 1999.
19. Deputy Chitnis (Class III) (Panchayat Service) Recruitment Rules, 1998."
It is, thus, clear that recruitment in local bodies is being governed by recruitment rules and established procedure and any appointment de hors these norms is per se illegal. Therefore, it would amount to regularisation of backdoor entries which had vitiated from the very inception. As held by the Apex Court in Ashwinikumar's case (supra), services of employees who have continued for long time can be regularised provided the initial entry must be made against available vacancies by following rules and regulations governing such industry. We, therefore, see merit in the submission advanced on behalf of the petitioners local bodies.
12.1.7 The judgment of this Court reported in 1993(2) GLR 997 (Kalol Municipality and ors. Vs. Shantaben Kalidas and anr.) has taken a view that even in case of employment in a Municipality governed by the provisions of Gujarat Municipalities Act and the rules framed thereunder, the Labour Court/ Industrial Tribunal is not bound by the statutory rules framed under the Gujarat Municipalities Act. On going through the said decision, it appears that the Division Bench was not concerned with the question as to whether regularisation of workmen in that case was with respect to the workmen who were regularly appointed or were appointed de hors the statutory rules or any known method of recruitment. It further appears that the Division Bench had emphasized on the fact that the rules framed under section 271 of the Gujarat Municipalities Act are unilateral rules and while framing rules for the purpose of deciding the strength of the workmen or their recruitment procedure, the workmen were not consulted or that the workmen were not involved in the rule making process.
12.1.8 We are afraid, we are not in a position to subscribe to the views expressed in Kalol Municipality's case (surpa). Deciding the strength and mode of recruitment of workmen is an exclusive domain of an employer. As observed in para 21 of Piara Singh's case (supra): abolition of a post is Page 26 of 35 HC-NIC Page 26 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT the prerogative of the Executive. It is the Executive again that lays down the conditions of service subject, of course, to a law made by the appropriate legislature. This power to prescribe he conditions of service can be exercised either by making rules under the proviso to Article 309 of the Constitution or (in the absence of such rules) by issuing rules/instructions in exercise of its executive power. The court comes into the picture only to ensure observance of fundamental rights, statutory provisions, rules and other instructions, if any, governing the conditions of service. The main concern of the court in such matters is to ensure the rule of law and to see that the Executive acts fairly and gives a fair deal to its employees consistent with the requirements of Articles 14 and
16."
In view of the fact that in the present case, the employer is a statutory body, a Municipality and the rules framed by it are required to be approved by the State Government, noninclusion of workmen in the process of framing of rules is no ground for ignoring the rules which are statutory in nature.
12.1.7 Besides, it appears to us that the judgment in the case of Kalol Municipality (supra) is per incuriam inasmuch as it does not take into consideration the provisions of sections 47 and 50 of the Gujarat Municipalities Act. In our opinion, irrespective of any rules framed under section 271 of the Gujarat Municipalities Act, section 50 independently requires prior approval and sanction of the Director of Municipalities. In absence of any such sanction being granted, no Municipality can create a post for being filled up either by regular selection process or by appointing temporary/adhoc employees. We feel that the Division Bench in Kalol Municipality's case, completely ignored the 'sanctioning set up' before making permanent the temporary or adhoc appointment.
12.1.8 We are also of the view that the Division Bench overlooked the fact that when the local self Government created under the statute by statutory provisions, makes appointment contrary to the statute, the Labour Court/ Industrial Tribunal cannot order regularisation, is not answered in Kalol Municipality's case in the perspective of provisions of Gujarat Municipalities Act.
12.1.9 Apart from that, the view taken by the Division Bench in Kalol Municipality's case (supra) is impliedly overruled by the subsequent judgment of the Supreme Court. The Constitutional Bench of the Page 27 of 35 HC-NIC Page 27 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Supreme Court, in the case of The New Manekchowk Spinning and Weaving Mills Ltd. Vs. The Textile Labour Association, Ahmedabad, reported in AIR 1961 SC 867 and in the case of Hindustan Times Ltd. Vs.Their Workmen, reported in AIR 1963 SC 1332, (a Four Judges Bench) has held that the Industrial Tribunal is bound to consider and follow the statutory provisions of other enactments also while exercising powers under the Industrial Disputes Act.
12.1.10 In N.S.Giri Vs. Corporation of State of Mangalore, AIR 1999 SC 1958, in para 5 of the said judgment, the Supreme Court was posed with a question "Whether an award made under section 10(A) of the Industrial Disputes Act, 1947 can be given effect to if it be inconsistent with the statutory provisions governing the service conditions of the employees?". After following the earlier decision in the case of The New Manekchowk Mills Ltd.(supra) and Hindustan Times Ltd. ( supra), the Apex Court held that an award under the Industrial Disputes Act cannot be inconsistent with the law laid down by the Legislature or by the Supreme Court and if it does so, it is illegal and cannot be enforced.
12.1.11 Thus, in our opinion, the decision rendered by the Division Bench in Kalol Municipality (supra) is impliedly overruled by the judgment of the Supreme Court in the case of N.S.Giri (supra) as well as by the subsequent decisions.
12.1.12 While deciding Kalol Municipality's case(supra), the Division Bench relied upon an unreported decision in Special Civil Application No. 351 of 1976 decided on 26.4.1976 as well as decision reported in 1965 (6)GLR 189. In our opinion, both the said judgements are impliedly overruled by the Supreme Court judgment with respect to right of regularisation of employees appointed against the sanctioned set up and de hors the statutory rules provided for recruitment and more particularly the judgment of the Supreme Court in N.S.Giri's case (supra).
12.1.13 Even if it is held that the Labour Court/Industrial Tribunal has wide jurisdiction to alter service conditions, it can exercise such powers subject to the recruitment rules, availability of sanctioned posts and subject to the grant and limits of budgetary provisions. When there is no permanent post, no direction can be given to the authorities to absorb daily wage employees by creating new posts. It is the common phenomenon in the case of Nagarpalikas/ Municipalities/ Government Page 28 of 35 HC-NIC Page 28 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT Corporations where such appointments are made on political considerations. The parties in power may recruit their own persons as daily rated employees and thereafter by seeking orders from the Court, they want to absorb such employees on permanent establishment. Time and again, such practice is depricated in so many words in the judgments referred by us. The Panchayats, Municipalities, Municipal Corporations or Government Corporations as well as Government establishments are facing severe financial crisis only because of such staff which may be required for the time being, but to make them permanent would definitely adversely affect the financial substratum of respective organisations and the the Courts should not be party to such illegal and irregular appointments by allowing them to be continued at the cost of public exchequer. We are conscious of the fact that by not approving the appointments of such daily wagers, it will be very difficult for them to survive and the question of their livelihood would arise. Keeping this aspect in mind, we do feel that in appropriate cases, their interests are required to be protected. We accordingly give following guidelines. (1) If casual workers or daily rated workers are not required by the Local bodies and whose services are likely to be terminated, they should be relieved on the principle of "last come, first go". In the event of filling up the posts in future, those who are eligible and qualified from and amongst the relieved workmen shall be preferred by waiving the age limit. (2) If the workmen who have continued for years as temporary employees, in the event of their termination, the authorities will see that no unqualified person is appointed in their place. (3) The question of regularisation can also be considered by the authorities before terminating services provided the workers are eligible on the sanctioned posts.
(4) If the posts are not sanctioned, the authorities may take such steps which are necessary in accordance with the provisions of law/ rules/ circulars within the budgetary provisions.
12.1.14 Thus, in view of the above, even if it is held that keeping daily rated/casual employees for a long duration amounts to unfair labour practice, that fact by itself, will not make them permanent and/ or regularise service. While deciding such preferences for regularisation or permanency, the Labour Court/ Industrial Tribunal, at the most, can pass order directing the authorities to consider their claim in the light of factors/ observations stated above instead of straight away passing the Page 29 of 35 HC-NIC Page 29 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT orders of regularisation or granting permanency.
12.1.15 In view of the above discussion, we answer the question referred to us as under:
(i) The Labour Court/Industrial Tribunal has no jurisdiction to issue direction or pass an award regularising services of employees of a Municipality or local authority without there being any 'sanctioned set up' and no person can be regularised if such a person had entered service without following selection process under the title of daily rated employee.
(ii) In view of our answer to the above question, the judgment rendered by Division Bench in the case of Kalol Municipality Vs. Shantaben, reported in 1993(2) GLR 997 is now no longer a good law in view of subsequent decisions rendered by the Apex Court and more particularly the decision in the case of N.S.Giri Vs. Corporation of State of Mangalore, AIR 1999 SC 1958.The subsequent decision rendered by the Division Bench of this Court in the case of Halvad Nagarpalika and ors. Vs. Jani Dipakbhai Chandravadanbhai and ors., reported in (2003) 2 GHCJ 397 is held to be a good law.
All the matters shall be placed before the concerned Courts taking up such matters for passing appropriate orders.
12.1.16 Before parting, we may like to observe that the unfortunate workmen who have continued for years as temporary employees and have succeeded before the Labour Court/ Industrial Tribunal, in view of our decision, in the event of their termination, the authorities may see to it that no unqualified person is appointed in their place and their claim for regularisation be considered provided they are eligible on the sanctioned posts. If the posts are not sanctioned, the authorities may take such steps which are necessary in accordance with the provisions of law/rules/ circulars within the budgetary provisions. So as to see that no irregularities are committed in the matter of appointment by Panchayats, Municipalities and Corporations, in our opinion, it would be advisable if the State Government issues an appropriate circular giving details with regard to the aforestated guidelines to all the local authorities.
Order accordingly."
20. In view of the said observation by the Court, Page 30 of 35 HC-NIC Page 30 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT direction which is passed without considering the availability of vacancy, deserve to be modified.
21. Since the impugned award suffers from above two defects, ordinarily this Court would be obliged to remand the proceedings before learned Labour Court for fresh consideration.
22. However, having regard the fact that dispute was raised way back in 1994 and by that time the claimants had already completed services of more than 10 years and since the date when the dispute came to be raised almost 25 years have rolled by and also having regard to the fact that even present petition, after admission has been pending for almost 10 years, the said course of action would not be justified and, therefore, this Court is not inclined to remand the proceedings to learned Labour Court. Instead it would be just and appropriate to modify the award. Therefore, while rejecting the contention by learned advocate for petitioner Panchayat Page 31 of 35 HC-NIC Page 31 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT against the direction to regularise the service of the claimants, the said impugned direction and award are partly set aside and modified by following direction.
23. The Panchayat will take up the case of the claimants for examination as to whether the claimants possess requisite qualification or not.
It is clarified that the direction to regularise the service of the claimant would continue and shall be complied provided it is established that the claimants possessed prescribed qualification in respect of the post for which regularisation is prayed for and directed by learned Labour Court.
24. If the details with regard to qualification of the petitioners is not available on record of the panchayat it would be open to call for the relevant documents from the claimants.
25. The claimants will be obliged to supply Page 32 of 35 HC-NIC Page 32 of 35 Created On Sun Jul 23 18:50:50 IST 2017 C/SCA/1996/2008 JUDGMENT relevant document/ certificate to establish that they possess prescribed qualification of the post for which regularisation is prayed for.
26. If it is established that each claimant possess requisite and prescribed minimum qualification for the post, then only the direction to regularise service of the claimant will operate.
27. However, if it is found that both the claimants or any one of them does not possess requisite qualification then he will not be entitled for benefits of direction to regularise their services. In that event the consequences as provided by larger bench in case of Amreli Nagarpalika would followapply.
28. It is clarified that for the purpose of giving effect to the direction of regularisation, it will be open to the Panchayat to also take into account the age of the claimants.
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29. However, for the said purpose, Panchayat will take into account the age of the claimant on date of the entry in the service and not as on the date of the award or on the date of the decision to be taken by the Panchayat. If the claimants were of employable age i.e. within the maximum age limit prescribed under the Rule (as on the date of entry in service with the Panchayat) then they would be considered eligible for regularisation subject to their fulfilling requirement of educational qualification.
30. If the claimants fulfill the above conditions then the direction by learned Labour Court to regularise the services of the claimants will be available to the claimants, however, so far as the direction to pay salary and other benefits is concerned, it is clarified that the petitioners will be entitled for salary and said benefits/ arrears from 15.2.2007 and period prior to the date of the award shall be considered notional.
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31. With the aforesaid clarification, the petition is partly allowed. Rule is made absolute to the aforesaid extent.
(K.M.THAKER, J.) saj Page 35 of 35 HC-NIC Page 35 of 35 Created On Sun Jul 23 18:50:50 IST 2017