Andhra HC (Pre-Telangana)
Sri Visakha Grameena Bank Employees ... vs Government Of India And Anr. on 24 April, 1989
Equivalent citations: (1992)ILLJ72AP
Author: M. Jagannadha Rao
Bench: M. Jagannadha Rao
ORDER
1. The Petitioner is Sri Visakha Grameena Bank Employees Association. The writ petition is filed for a declaration that the action of the respondents in their letter dated November 25, 1988 and the Circular dated February 21, 1989, purporting to deny the eligibility to the petitioner-association if it continues to maintain "composite membership" of Officers and workers, as arbitrary and for issuing a Writ of Mandamus, directing the respondents to continue to allow the petitioner-Association to represent the Officers.
2. The petitioner-association is registered under the Trade Unions Act, 1926 (Registration No. D-515/80). The said association is a composite association, representing both officers and workers of the second respondent-bank. The bank is established under the provisions of the Regional Rural Banks Act, 1976. The petitioner-association is said to represent more than 90 per cent of the employees of the bank. The total employees are said to be about 820. The Branch Managers, Filed Supervisors, Senior and Junior Clerk-cum-Cashiers, full-time and part-time messengers are all members of the petitioner-association. The petitioner is said to have been recognised by the Bank in the year 1989 and in the year 1983. It is stated that negotiations with regard to the service conditions of officers and other employees are being held only with the petitioner for the last eight years till the impugned orders were passed. There was a settlement in November 1986 entered with the petitioner-association and another settlement in April 1987. There was yet another settlement in December 1987.
3. While matters stood thus, the Government of India (first respondent) has issued the impugned letter dt. November 25, 1988, directing all Regional Rural Banks not to give recognition to associations having "composite membership" of Officers and Workers. The relevant portion of the letter of the Government of India reads as follows :-
"......... the Government is pleased to decide as under :-
(i) Since the Code of Discipline in industry contemplates recognition of Unions in relation only to workers and the RRBs and Unions of their employees are signatories to the above mentioned Code, there can be no recognition of composite Unions of Workers and Officers by Regional Rural Banks. You are accordingly advised not to recognise such Unions.
(ii) In the case of RRBs where the existing composite Unions have completed two years after recognition, the management may seek fresh verification under the Code of Discipline after informing the Composite Union that only such of the Unions whose membership is confined only to workers would be eligible to participate in the verification for the purpose of recognition and those who do not fulfil this condition will be excluded from the purview of verification.
(iii) In so far as the Officers in the Regional Rural Banks are concerned, it is hereby clarified that Govt., will have no-objection to the Management of a RRB permitting them to form service associations.
For purposes of determining as to who is a workman or non-workman, the definition given in the Industrial Disputes Act, 1947 will be strictly adhered to".
4. Based on the abovesaid directive of the in Government of India, the second respondent Bank issued a further circular dt. February 21, 1989, which reads as follows :
"We furnish overleaf the text of the Govt. of India, Ministry of Finance letter No. F9(13)84-RRB, dt November 25, 1988, the contents of which are self-explanatory, for your information. The Board in its meeting held on February 21, 1989, has resolved to implement the instructions contained in the aforesaid communication and to be made applicable to the Employees/Officers Association in our Bank also with immediate effect".
5. The petitioner-association is aggrieved by these circulars as the contents therein, according to it, are unconstitutional.
6. It is pointed out that under the 'Code of Discipline' accepted by the employer and the employee, there is no prohibition for having a 'composite trade union' of officers and workmen. It is stated that the impugned order of the Central Government is beyond the scope of S. 24 of the Regional Rural Banks Act, 1976.
7. The petitioner contends that the Trade Unions Act does not limit the membership of the Trade Union to workers alone and the Act does not require a Trade Union to be restricted to 'workmen' as defined in S. 2(s) of the Industrial Disputes Act. It is further stated that the 2nd respondent-bank, being a party to the dispute cannot decide whether a particular category of employees falls within or outside the scope of S. 2(s) of the Industrial Disputes Act. Such a decision has to be given, it is stated, by a competent Court. It is further stated that Art. 19(1)(c) of the Constitution of India guarantees 'freedom of association' to the citizens and the restriction imposed by the respondents that the petitioner association shall not consist of officers, is an unreasonable restriction. It is the further case of petitioner that the officers and field supervisors employed by the second respondent bank do not have any supervisory or managerial duties and thus, they cannot be excluded from the purview of the definition of 'workmen' under the Industrial Disputes Act. The Central Labour Board, Jaipur, in case No. CLC 15/85 has taken a view that a Branch Manager of Jaipur Nagar Anchalic Grameena Bank is a 'workman' under the Industrial Disputes Act.
8. At the stage of admission, I gave notice to the Central Government as also to the Bank, as the matter is likely to be raised by other similar Banks. Sri K. Jagannadha Rao, Standing Counsel for Central Government and Sri K. Srinivasa Murthy, Advocate for Bank, have also been heard. They have argued that the word 'workmen' under the Code of Discipline does not include officers. They argued that the other contentions are not tenable.
9. On the above contentions, the following points arise for consideration :
(1) Whether the petitioner-union is governed by the 'Code of Discipline' in industry, as evolved by the 16th Session of the Indian Labour Conference held in May, 1958, adopted by agreement between the parties ?
(2) Whether the petitioner-union is entitled to any higher rights of recognition than stated in the Code of Discipline ?
(3) Whether the directions issued by the Government of India are within the scope of S. 24 of the Regional Rural Banks Act, 1976 ?
(4) Whether the petitioner's fundamental right under Art. 19(1)(c) of the Constitution of India is affected ?
(5) Whether the petitioner can rely upon any of the provisions of the Trade Unions Act ?
(6) Whether the impugned orders of the Government and of the Bank are invalid ?
This is not a case dealing with violation of Code of Discipline or its enforcement but a case dealing with its interpretation by the Central Government.
Points 1 and 2 :
10 : I shall briefly deal with the history of 'Recognition' of Trade Unions in industry and also with the history of the 'Code of Discipline' in industry.
11. The Supreme Court has recently in B. L. Worker's Union, Bombay v. B. L. & Co. Ltd. (1985-I-LLJ-314), has gone into the historical backward of 'recognition' of trade unions. After mentioning the developments in England and the enactment of the Trade Unions Act, 1913, in that country, and after referring to the Denovan Commission and also to the Report of the Labour Laws Review Committee, Gujarat, the Supreme Court observed that (Para 12 pp. 320-321) :
"A need was felt that where there are multiple unions seeking to represent workmen in an undertaking or in an industry, a concept of recognised union must be developed. Standing Labour Committee of the Union of India at its 29th Session held in July, 1970 addressed itself to the question of recognition of trade union by the employer. In fact even amongst trade union leaders there was near unanimity that the concept of recognised union as the sole bargaining agent must be developed in the larger interest of industrial peace and harmony. The National Commission on Labour chaired by lane Shri P. B. Gajendragadkar, former Chief Justice of India, after unanimously and whole heartedly expressing itself in favour of the concept of recognised union and it being clothed with powers of sole bargaining agent with exclusive right to represent workmen, addressed itself only to the question of the method of ascertaining which amongst various rival unions must be accorded the status of a recognised union. Planting itself firmly in favour of democratic principle, it was agreed that the union which represents the largest number of workmen working in the undertaking must acquire the status as that would be in tune with the concept of industrial democracy. The fissures arose as to the method of finding out the membership".
The Supreme Court, after stating the above facts, observed :-
"The Commission had before it two alternative suggestions for ascertaining the membership (i) verification of membership by registers and (ii) by secret ballot. As there was a sharp cleavage of opinion, the Commission left the question of adopting one or the other method in a given case to the proposed Industrial Relations Commission which was recommended to be set up if the recommendations of the Commission were to be accepted".
12. Their Lordships then pointed out that initially provisions were incorporated in the Bombay industrial Relations Act 1946, for conferring the status of a recognised union with a view to see that a workman who was not a member of such a recognised union did not suffer on account of his cause being not taken by the recognised union. The Legislature has introduced S. 2-A in the Industrial Disputes Act, 1947 which enabled a workman who was dismissed discharged or removed from service or whose services were otherwise terminated, to espouse his own cause without the help of a recognised union. This protection was carried into S. 20(2)(b) of Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The said Act was enacted for the recognition of trade unions for facilitating collective bargaining for certain undertakings, to state their rights and obligations, to confer certain powers on unregistered unions and to provide for declaring certain strikes and lock-outs as illegal, to define and provide for the prevention of certain unfair labour practices; to constitute courts as independent machinery for carrying out the purpose of according recognition to trade unions and for enforcing the provisions relating to the unfair labour practices. The Bombay Industrial Relations Act, 1946 which touched almost all aspects of industrial relations applied to specified industries. Industries other than those covered by that Act was governed by the Industrial Disputes Act, 1947. This later Act was not a comprehensive legislation, inasmuch as there was no provision for recognising the union vis-a-vis the undertaking or the industry. Unions of workmen employed by the undertakings not covered by the Bombay Industrial Regulations Act 1946 had dissatisfaction over its discretionary treatment and the lacunae in the Act of 1947. To bring the provisions of both the Acts on par in certain specific areas, the Maharashtra Legislature enacted the 1971 Act. It now provides for recognition of unions and states that every undertaking wherein 50 or more employees are employed or were employed twelve months prior to a particular date could be governed by the provisions of the Act. That Act provides for an application for recognition and the criteria for eligibility is that the union must have, for a whole of six calendar months before application, a membership of not less than of 30 percent of total number employees. The application has to be made to the Industrial Court set-up under the 1971 Act. The Industrial Court then grants recognition after hearing the affected parties. At no point of time there shall be more than one recognised union. The Act confers powers on the Industrial Court to cancel recognition and also for resolving disputes between a recognised union and another union seeking recognition.
13. Without such a statute governing the mode of recognition, it is clear that the employee and the employer would be governed by the 'Code of Discipline. The said Code of Discipline permits the recognition of a union and also provides for method of ascertaining the membership. I shall now refer to the concept of 'Code of Discipline'.
14. In the report submitted in 1969 by the National Commission on Labour headed by Sri P. B. Gajendragadkar, former Chief Justice of India, it is stated (Chapter 24 at p. 345, para 24., 17 etc.) that the Government of India shifted the emphasis in 1957 from legislation to 'voluntary arrangements' so far as labour laws, and rights and duties of labour, are concerned. In that context, the question of 'discipline' in industry was discussed in the Indian Labour Conference.
15. The Code enjoins on parties to refrain from taking unilateral action in connection with any industrial matter, to utilise machinery for settlement and to abjure strikes and lockouts without exploring all avenues of settlement. The employees are required to recognise the majority union in an establishment or industry. The working of the Code was discussed in every tripartite forum as also in the Annual Report of the Ministry of Labour and Employment. According to the Commission the Code had a limited area of success as also limited use. According to the Commission, among other methods, the matter of 'Recognition of a Union' as a bargaining agent required to be formalised.
16. The Report also deals with Trade Union legislation (p. 294, Chapter 20). After referring to the Trade Unions Act, 1926, the Report says that suggestions were made in some quarters to amend the Trade Unions Act to provide for compulsory recognition on the lines of the Bombay Industrial Relations Act, 1946. Chapter 23 of the Report (p. 329, para 23.47) deals with recognition of unions. Recognition is governed by (a) laws in Bombay, Madhya Pradesh and Rajasthan, (b) the amendment incorporated (but not enforced) in the Trade Unions Act, and (c) the Code of Discipline. The Report says (para 23.49, at p. 329) :
"The need for a provision for recognition of unions was stressed in the second plan. Because of the desire to go slow on legislation, recognition was provided for on a voluntary basis in the Code of Discipline. According to the criteria in the Code, a union claiming recognition should have been functioning atleast for a period of one year as a registered union and should have the specified membership."
If there is more than one union, in an establishment, the concerned Labour Commissioners have to inquire, in accordance with the procedure laid down by the tripartite Standing Labour Committee. A trade union seeking recognition as a bargaining agent should have at least 30% membership of "workers" or 25% in an industry in a local area. Where more unions than one contend for recognition, the union having larger following should be recognised. Suggestions were made regarding procedure for verification of membership and for election. They suggested the establishment of an Industrial Relations Commission. The rights of recognised and other unions are then discussed (para 23.57).
17. I shall now refer to the various communications issued by the Government of India regarding the 'Code of Discipline' in industry to the Rural Banks. They initially issued proceedings dt. December 27, 1980 to the Chairmen of the Regional Rural Banks with regard to recognition of employee unions. After consulting the Reserve Bank of India, the Central Government felt that recognition of employees unions was purely a managerial function and that there was no need for the Government to accord recognition to any union at the All India Level or at other levels. The Regional Rural Banks are, therefore, directed to take suitable action for according the recognition to a representative union or association of the Regional Rural Banks employees registered under the Trade Unions Act, 1946. It was stated further as follows :
"This may be done in accordance with the guidelines contained in the 'Criteria for Recognition of Unions' and 'Code of Discipline in industry' as laid down by Ministry of Labour in the Government of India. A copy of the said criteria and Code of Discipline is sent herewith for guidance."
It is also stated in the said communication dt. December 27, 1980, that the activities carried on by the Regional Rural Banks is treated as an industry for purposes of Industrial Disputes Act. A Regional Rural Bank will come in the Central sphere as the same is established under S. 3 of the Regional Rural Banks Act as mentioned specifically in S. 2(a)(i) of the Industrial Disputes Act. Consequently, as long as industrial disputes are raised by workmen as defined in the Industrial Disputes Act on matters which are industrial disputes as defined in that Act, the recourse to various adjudications mentioned in that Act shall be available. It is further stated that the definition of 'workmen' excludes certain other staff particularly those employed in a managerial/administrative/supervisory capacity. It is stated that the above legal provisions have to be taken note of at the time of entering into discussions or negotiations with any representative union. Annexure-I to the said letter of the Central Government dt. December 27, 1980 contains the 'Code of Discipline' in an industry. Sub-paragraph (vii) of para 2 states that "the management agreed to recognise the union in accordance with the criteria (Annexure) evolved at the 16th Sessions of the Indian Labour Conference held in May 1958."
18. Thereafter, there is a further Annexure-II to the said letter of the Government of India which sets out the "Criteria for Recognition of Unions" as agreed in the Indian Labour Conference held in May, 1958.
19. The 'Criteria' in so far as they are relevant, read as under :
"2. The membership of the Union should cover at least 15% of the 'workers' in the establishment concerned. Membership would be counted ...........
3. A union may claim to be recognised as a representative union for an industry in a local area if at least 25% of the workers of that industry in that area ..........
............
8. Only unions which observed the Code of Discipline would be entitled to recognition."
20. A question arose as to who were governed by the 'Code of Discipline'. The Government of India gave a clarification on August 1, 1981 that after referring the matter to the Ministry has clarified for the guidance of the Regional Rural Banks as follows :-
"(i) The Code of Discipline circulated with our letter No. F. 13-2/80 RRB dt. December 27, 1980 contemplates recognition of unions in relation to 'workers' only.
(ii) The recognised Union/Association is entitled to rights agreed to at the 20th Session of Indian Labour Conference listed in Annexure to this letter."
It is further stated that for an union to be recognised under the Code of Discipline, it is necessary that it should be registered under the Trade Unions Act, 1926 and have completed a period of one year after registration. The union should also agree to abide by the Code of Discipline and should not have committed any breach of the Code of Discipline within a period of one year before claiming recognition. To the said letter dated August 1, 1981 of the Government of India, is attached another Annexure containing the "Rights of unions recognised under the Code of Discipline" as agreed to at the 20th Session of the Indian Labour Conference held in August, 1962.
21. By a further letter dt. June 28, 1983, the Government of India informed the Chairmen of all Regional Rural Banks in respect of three matters. Firstly, they stated that in relation to Himachal Gramin Bank, the particular union was recognised subject to the following clarifications, viz., that the Code of Discipline circulated with the letter of the Government of India dt. December 27, 1980 contemplating recognition of union in relation to 'workers' only. The said clarification was issued by the Government of India. In the letter of the Ministry of Labour & Rehabilitation, Department of Labour O.M. No. L-52025/119/81-I & E (E) dated nil, addressed to the Ministry of Finance (Banking Division) it is stated as follows :-
"The undersigned is directed to refer to the O.M. No. F. 9(10)/82-RRB dt April 11, 1983 of the Ministry of Finance on the above subject. It is suggested that the management may be advised to issue a clarificatory amendment to their recognition letter to Himachal Gramin Bank Karmachari Sangh informing that it can represent the interests of 'workers' only."
It appears that it was in the abovesaid context that the impugned order dt. November 25, 1988 and the order dt. February 21, 1989 had been issued by the Government of India and the second respondent-bank, stating that unless the union consisted only of 'workers' it is not entitled to recognition so long as the officers also are included as members of the union.
22. It will also be noted that in the absence of any statute like the Maharashtra Act (1 of 1971), the parties are only governed by the 'Code of Discipline'. This is clear from the observations of the Rajasthan High Court in a recent judgment in Hindustan Copper Mazdoor Sangh v. Chief Labour Commr, 1986 Lab IC 1845. Sharma, J. brought in this matter in the following words (at pp. 1848-1849) :-
"Unless a statute confers an exclusive right on the union of workmen to enter into negotiations with the management, even a minority union of workmen, if there are more than one union in the industry or establishment, can raise demand and conciliation proceedings can be initiated and settlement can be arrived at. If the consultation proceedings fail, any industrial dispute raised even by an union which does not represent the majority of the workmen, may be referred for adjudication by the Government to Labour Court or Industrial Tribunal. No doubt, it is within the competence of the legislature to confer an exclusive right on a recognised union, to enter into negotiations with the employer on behalf of the workmen whether or not such workmen are members of that Union. But, as already stated, in the absence of any such law, the recognised union cannot claim an exclusive right for negotiation as a sole authorised bargaining agent for collective bargaining on behalf of the workmen of the industry or establishment. There can be no dispute that such a law conferring an exclusive right on the recognised union to enter into negotiations will be in the interest of the employer and workmen as a charter of demands shall then be made only by such union and not by other unions having only minority of the workmen. But, it is for the legislature to intervene as has been done in Maharashtra. In Maharashtra, Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act (No. 1 of 1971) (for short, the Act of 1971) was made."
The learned Judge then referred to the decision of the Supreme Court in B. L. Workers' Union, Bombay v. B. L. & Co. Ltd. above referred to. The Bombay High Court in M. S. R. T. Corporation v. M. M. Kamgar Federation, Nagpur 1986 Lab IC 253 has also stated :
"Impliedly the 'Code of Discipline' will lose its value wherever the Act is brought into force."
23. From the aforesaid rulings and Reports, the following position can be stated. The Trade Unions Act, 1926 as in force today does not deal with recognition as such. Though Parliament has passed the Trade Union (Amendment Act) 1947 for amending the 1926 Act, dealing with recognition of trade unions, the said Act has not been brought into force. The question of recognition is governed by the guidelines in the 'Code of Discipline' voluntarily accepted by the employer and employees and will hold good unless replaced by any statute like the Bombay Industrial Relations Act, 1946 or the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 or similar provisions in force in Madhya Pradesh, Rajasthan etc. The Code of Discipline agreed to in the present case is applicable only to 'workers' simpliciter and not to those in managerial/supervisory capacities. In that view of the matter, it must be held on points 1 and 2 that the petitioner union is governed by the 'Code of Discipline' in the industry and the petitioner is not entitled to any higher rights of recognition than stated in the Code of Discipline. Inasmuch as the said Code applies only to "workers", no recognition can be granted for composite unions.
Point 3.
24. Coming to the third point, it is necessary to refer to Section 24 of the Regional Rural Banks Act, 1976, which reads as follows :-
"Power of Central Government to give directions :-
(1) A Regional Rural Banks shall, in the discharge of its functions, be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Reserve Bank, give.
(2) If any question arises as to whether any such direction related to a matter of policy involving public interest, the decision of the Central Government thereon shall be final".
The question relating to the recognition of union of employees as per the 'Code of Discipline' applicable to the parties is not a matter of policy involving public interest which required the Central Government to make any consultation with the Reserve Bank. These directions relate merely to the enforcement of the procedure relating to the recognition of employees' union as per the agreement and has nothing to do with any policy decision concerning the development of rural economy or credit or of agriculture, trade, commerce and industry or other productive activities to the rural areas, credit and other facilities to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs which are the main objectives of the Regional Rural Banks Act, 1976 as set out in the preamble to the Act. Therefore, the question of the directives being invalidated on account of non-consultation with the Reserve Bank of India does not arise. The directives are merely in the form of clarification as to the procedure to be adopted by the Bank in recognising any union as part of bank's managerial function and it is merely a guideline, interpreting the provisions of the 'Code of Discipline'. Therefore, it is not necessary for the Government of India to have consulted the Reserve Bank before issuing these orders.
Point 4.
25. So far as the fourth point is concerned, it has been held in M. A. David v. State Bank of Kerala, (1972-I-LLJ-44) that denial of recognition does not constitute a violation of any of the fundamental rights under Art. 19(1)(c) of the Constitution of India. Relevant case law in that behalf was referred to by Balakrishna Eradi, J. (as he then was). Therefore, this point has to be held against the petitioner.
Point 5.
26. Coming to the fifth point, it may be noted that the Trade Unions Act deals merely with the registration of trade unions and the conditions for registration and it has nothing to do with recognition of Trade Unions. The matter of recognition is governed by the 'Code of Discipline' referred to above. The petitioner-Union, therefore, cannot rely upon the provisions of the Trade Unions Act.
27. It must, therefore, be held on point No. 6 that the impugned orders of the Government of India dt. November 25, 1988 and the consequential circular issued by the second respondent bank on January 21, 1989 are valid.
28. For the aforesaid reasons the Writ Petition fails, and it is accordingly dismissed. No costs.