Bombay High Court
The Premier Automobiles Employees' ... vs The Premier Automobiles Ltd. And Ors. on 5 March, 1987
Equivalent citations: (1995)IIILLJ840BOM
JUDGMENT Bharucha, J.
1. The 1st respondent is a manufacturer of motor cars ana trucks. It has three plants, one at Manpada, one at Wadala and one at Kurla. In December 1977 the workmen at its Manpada plant belonged to the trade union called the Association of Engineering Workers, the workmen at its Wadala plant belonged to the petitioners trade union and the workmen at its Kurla plant belonged to the trade unions of the petitioners and the 2nd respondents.
2. In December 1977 the workmen at the 1st respondent's Manpada plant, were involved in an agitation ana in go-slow tactics. On 2nd January 1978 the 1st respondent gave notice "to all concerned that it is our intention to suspend the work in our Kurla plant, Mechanite Foundry, Wadala and registered office, Bombay, with effect from the 17th day of January 1978, for the reasons explained in the annexure attached hereto."
3. The annexure to the notice stated that the agitation and go-slow tactics at the Manpada plant had dislocated the production at the other plants and the working of the office. This had left no alternative to the 1st respondent but to close down its operations. The workmen at the Manpada plant having refused to restore normalcy in production and having incited the workmen there to resort to acts of indiscipline and sabotage, the suspension of working at the Manpada plant and, consequently, the Kurla ; and Wadala plants and the registered office had become inevitable. In view of these circumstances, which were beyond the control of the Management, the 1st respondent had decided to suspend the working of its plants at Kurla and Wadala, as also its registered office in Bombay, with effect from 17th January 1978 until normalcy was restored.
4. On 11th January 1978 the 1st respondent gave notice of a lock-out at the Manpada plant.
5. The suspension at the Kurla and, Wadala plants continued upto 24th April 1978. During the period of such suspension no wages were paid to the workers therein.
6. Prior to 24th April 1978 the petitioners made a complaint to the Industrial Court that time 1st respondent was guilty of the unfair labour practice mentioned in Item No. 9 of Schedule IV of the M.R.T.U. & P.U.L.P. Act, 1971, namely, of "failure to implement an award, settlement or agreement". At about this time, complaints were also made by the other trade union alleging that the 1st respondent was guilty of the unfair labour practice mentioned in Item 6 of Schedule II of the Act, namely, of "proposing or continuing a lockout deemed to be illegal under this Act."
7. The complaints, three in all, were dismissed by the Industrial Court by its common judgment and order dated 15th April 1980.
8. The Industrial Court found that "once the respondent company was obliged to declare a lock-out at Dombivli (Manpada) plant, they were again left with no alternative but to suspend work at Kurla and Wadala plants as these two plants were getting feeding materials from Dombivli plant. During such abnormal circumstances beyond the control of the respondent company, there cannot be said to have been anything wrong by suspending work at Kurla and Wadala plants. It may be clearly noted here that no mala fides are alleged against the respondent company for such a course of action taken by them. Therefore, it would be difficult for us to come to a conclusion that they had indulged in any unfair labour practice of whatsoever nature."
9. The Industrial Court held "that failure to implement an agreement as envisaged under Item No. 9 of Schedule IV of the Act would be the failure to implement from the very inception of the agreement and not thereafter. If the respondent company could not provide them (the workmen) with work at the later stage of such service agreement, I do not think that it can be said to be non-implementation of service agreement".
10. The Industrial Court noted that the only witness of the 1st respondent before it, namely, one R.S. Pandit, Personnel Manager (Legal), had stated in his evidence that the 1st respondent had a right to suspend work under the Standing Orders and had referred in this behalf to Clause 17 thereof. The Industrial Court said, "For all that we know that the respondent company misinterpreted this provision of the Standing Orders mistakenly in their favour that stoppage of work would mean suspension of work. But even if that is so, their act would not be an unfair labour practice, because they may be wrong in their interpretation but their act cannot be termed as mala fide."
11. The Industrial Court stressed that the advocates for the complainants had not pointed out any specific agreement or agreements allegedly not implemented by the 1st respondent. It noted, however, that they had "vehemently urged that there was always an implied agreement between the respondent company and the workmen employed by them that the respondent company was bound to supply work to their workmen who were always entitled to receive wages for the same and it was that agreement; which the respondent company did not implement by giving notice dated 2nd January 1978 and by suspending work at Kurla and Wadala plants with effect from 17th January 1978". The Industrial Court did not discuss the argument or record its findings thereon.
12. This writ petition impugns the judgment and order of the Industrial Court.
13. The Industrial Court found that the 1st respondent was left with no alternative but to suspend work at the Kurla and Wadala plants and that, therefore, it had not been guilty of any unfair labour practice. The complaint before the Industrial Court was by the petitioners, the trade union representing the workmen at these plants. The complaint was made because or the consequence of the suspension of work, namely, the nonpayment of wages. The main question before the Industrial Court was, did the failure to pay wages to the workmen at the Kurla and Wadala plants during the period work therein was suspended amount to the unfair labour practice of failure to implement an agreement.
14. The finding of the Industrial Court that the failure to implement the agreement as envisaged under item 9 of Schedule IV of the Act was only the failure to implement the agreement from its inception and not thereafter is not correct. There is nothing in the phraseology used to so suggest. To so read the item would the to curtail its efficacy by half. The failure to implement an award, settlement or agreement can take place at any time during the currency of the award, settlement or agreement and such failure at any time would constitute the unfair labour practice described by the item. This is also the view taken by a Division Bench of this court in Apar (Pvt) Ltd. v. S.R. Samant and Ors., 1980(2) L.L.J.344.
15. The Industrial Court also based its decision on the complaints upon the observation, "For all that we know that the 1st respondent company misinterpreted Clause 17 of the Standing Orders mistakenly in their favour that stoppage of work would mean suspension of work '. If this was so, the Industrial Court said, the 1st respondent's act would not be mala fide because it may have been wrong in its interpretation. Mens rea or mala fides do not come into the picture. Whether or not the 1st respondent acted with mens rea or mala fide, if it failed to implement an agreement, it was guilty of the unfair labour practice set out in Item No. 9 of Schedule IV of the Act. A Division Bench of this Court sitting at Nagpur has so said in clear terms. This was in the judgment of G.A. Paunikar and H.D.Patel JJ. dated 14th April 1985 in Letters Patent Appeal No. 124 of 1983, Executive Engineer v. P.D. Kalasit. The Division Bench noted that the question which arose in the appeal before them was whether motive or mens rea was an essential ingredient for holding the employer responsible for indulging in or having indulged in unfair labour practices. The Division Bench's answer was in the negative.
16. The Industrial Court failed to note that Clause 17 of the Standing Orders referred to by 1st respondent's witness was contained in the Standing Orders applicable only to the 1st respondent's hourly and daily rated workmen. The complaints related not only to hourly and daily rated workmen but to others also. To those others other Standing Orders applied, and Clause 19A thereof corresponded to the Clause 17 aforementioned. Sub-clause 2 of the said Clause 17 is materially different from Sub-clause 2 of the said Clause 19A. In the latter there is no mention of wages so that it is clear that, even in the event of a suspension contemplated by the said Clause 19A, wages have to be paid to workmen other than hourly or daily rated workmen.
17. All this in regard to the said clauses of the two sets of Standing Orders proceeds upon the assumption that the suspension of work was occasioned by causes of a nature alike to fire, catastrophe, breakdown of machinery, stoppage of power supply, an epidemic and/or civil commotion beyond the control of the establishment. This is what the said clauses provide for. The Industrial Court did not come to a conclusion in this behalf. 'It did not find that it was proved that the suspension was occasioned by a cause of such, like nature or that was beyond the control of the 1st respondent.
18. The Industrial Court recorded the argument on behalf of the advocates for the complainants that there was always an implied agreement between the employer and the employee that the employer was; bound to supply work and the employee was entitled to receive wages. The argument was not considered and there is no finding thereon. I should have thought that it is the most basic, though it may be implicit, term of an agreement between an employer and his employee that the employee shall make himself available to the employer to do his work and that the employer shall pay the employee wages for doing so. Failure . to pay wages, when an employee has made himself available to do the employer's work, is a breach of the agreement between them. That the employer has no work for the employee to do does not cause a suspension of his obligation to pay wages to the employee. When even in such circumstances, the employer does not pay wages to his employee and, particularly, where the failure is regarding his employees en masse - the employer is guilty of the unfair labour practice of not implementing his agreement with the employee.
19. The Industrial Court observed that the advocates for the complainants had not pointed out any specific agreement or agreements which had been alleged to have been breached by the 1st respondent. The Industrial Court failed to appreciate that the case was not that the 1st respondent had failed to pay the quantum of wages as required by some particular agreement or agreements, but that it was that no wages whatsoever had been paid. Apart from the arguments advanced before it as aforesaid, paragraph 8 of the petitioner's complaint made this case crystal clear. It reads thus:
"It is the complainant's case that the respondents have no right of suspension of work in law, inasmuch as the action of the respondents is neither a lock-out nor a lay-off nor a closure as such, but it is a mere suspension of work which has the effect of tying down the workmen to employment without wages which the complainant submits that the respondents are not entitled in law to do"
20. It is now worth drawing attention to what has been stated by the Supreme Court about suspensions, albeit in the context of the suspension of individual workman, in the case of Hotel Imperial, v. Hotel Workers' Union, 1959(2) L.L.J. 544. The observation reads thus:
"It is now well settled that the power to suspend, in the sense of a .right to forbid a servant to work, is not an implied term in an ordinary contract between master and servant and that such a power can only be the creature either of a statute governing the contract, or of an express term in the contract itself. Ordinarily, therefore, the absence of such power either as an express term in. the contract or in the rules framed under some statute would mean that the master would have no power to suspend a workman and even if he does so in the sense that he forbids the employee to work, he will have to pay wages during the so-called 5 period or suspension. Where, however, there is power to suspend either in contract of employment or in the statute or the rules framed thereunder, the suspension has the effect of temporarily suspending the relation of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay".
21. This observation has been affirmed in subsequent judgments of the Supreme Court. Thus, in V.P. Gindronia v. State of Madhya Pradesh, 1970(2) L.L.J. 143, the Supreme Court observed that three kinds 2 of suspension were known to law. A public servant might be suspended as a mode of punishment or he might be suspended during the pendency of an inquiry against him if the order appointing him or statutory provisions governing his service provided for such suspension. Lastly, he might merely be forbidden from discharging his duties during the pendency of an enquiry against him, which act was also called suspension. The right to suspend as a measure of punishment as well as the right to suspend the contract of service during the pendency of an enquiry were both regulated by the contract of employment or the provisions regulating the conditions of service. But the last category of suspension referred to earlier was thought of the master to forbid his servant from doing the work which he had to do under the terms of the contract of service or the provisions governing his conditions of service, at the same time keeping in force the master's obligations under the contract. In other words, the master might ask his servant to refrain from rendering service but he must fulfil his part of the contract. It was well settled that an order of interim suspension could be passed against an employee while an inquiry was pending into his conduct even though there was no such term in the contract of employment or in the rules, but in such a case the employee would be entitled to his remuneration for the period of suspension if there was no statute or rule under which it could be withheld. The distinction of preventing the employee from performing the duties of his office on the basis that the contract was subsisting was important. The suspension in the latter case was always an implied term in every contract of service. When an employee was suspended in this sense, it meant that the employer merely issued a direction to him that he should not do the service required of him during a particular period. In other words, the employer was regarded as issuing an order to the employee which, because the contract was subsisting, the employee must obey.
22. The notice dated 2nd January 1978 can only be read as an order by the 1st respondent to its employees at the Kurla and Wadala plants not to do the service that was expected of them under their contracts of service for the period of the suspension of work, while the 1st respondent remained obliged to carry out its part of those contracts and pay to these employees their wages during this period. In that the 1st respondent failed to do so it was guilty of the unfair labour practice mentioned in Item 9 of Schedule IV of the Act. That it might have genuinely believed that it was entitled to suspend the work and, consequently, the wages makes no difference to this position.
23. The principal argument of Mr. Khambata, learned counsel for the 1st respondent, was that the notice dated 2nd January 1978 was really a notice of. lock-out. He cited the judgments, in Pruya Laxmi Mills Ltd. v. Mazdoor Mahajan Mandal. Baroda, , S.C. Chemicals & Dyes Trading Employees Union v. S.G. Chemicals Dyes Trading Ltd and Anr., 1986 (1) L.L.J. 490 and Indian Hume Pipe Co, Ltd. v. Industrial Court and Anr. 1984 (1) L.L.J. 46, in support of his submission that the 1st respondent has entitled, in the circumstances, to issue a notice of lock-out.
24. Let us see whether this argument is permissible, to the 1st respondent.
25. In regard to the Wadala and Kurta plants, the 1st respondent issued the notice " of suspension dated 2nd January 1978. Almost simultaneously, the 1st respondent issued the notice of lock-out at the Manpada plant. The distinction between the two was, plainly, known to the 1st respondent. The 1st respondent, plainly, intended to make the distinction. If at all there could be any doubt, it is cleared by reading the statement in cross-examination of the 1st respondent's only witness before the Industrial Court. He agreed "that there was no lock-out at Kurla and Wadala plants, it was our intention to suspend the work at Kurla and Wadala plants........". "The suspension and the lock-out were two different actions by us."
26. At an earlier time the 1st respondent had suspended work at one of its plants. The trade union of its employees had then made an application to the Labour Court under Section 25(2) of the Act praying for a declaration that in the guise of such suspension the 1st respondent had resorted to a lock-out and that the lock-out was illegal. This court had then held the lock-out to be illegal but, in the course of doing so, had observed that a notice of lock-out did not have to be in the prescribed form. Despite this knowledge, the 1st respondent's answer to the petitioner's complaint before the Industrial Court was not, principally or in the alternative, that the notice dated 2nd January 1978 was really a notice of lock-out, that the lock-out was not illegal and that, therefore, it had committed no breach of any agreement and was not guilty of the unfair labour practice alleged against it. The answer to the complaint, in fact, was that the notice was only of suspension and that such suspension was legal. Not even in the evidence, as has been indicated, was this position deviated from.
27. In the circumstances, I decline to permit the 1st respondent to canvass before this court the argument that the notice dated 2nd January 1978 was a notice of lock-out.
28. Apart from what is set out above, since the contention of the 1st respondent before the Industrial Court was as set out above, no opportunity was given to the Industrial Court to decide whether there was a lock-out and whether it was legal. It is not for this court to go into those questions. Nor is it equitable, having regard to the 1st respondent's conduct as aforesaid, that the matter should be remanded to the Industrial Court for that purpose.
29. Having regard to the case with which the 1st respondent went before the Industrial Court, the 1st respondent must be held guilty of failure to implement the agreements between itself and its employees at the Kurla and Wadala. plants and, therefore, guilty of the unfair labour practice mentioned in Item No. 9 of Schedule IV of the Act.
30. Mr. Khambata pointed out that the complaint of the other trade union was that the 1st respondent had been guilty of an unfair labour practice under Item No. 6 of Schedule II of the Act, namely, of proposing or continuing a lock-out deemed to be illegal under this Act. Even in response to this complaint, I have ascertained, the 1st respondent's case was that it had not imposed a lock-out. It was only in the alternative that it was submitted that, if it was held to be a lock-out it was a legal lock-out. This alternative contention was, however, not pursued, judging from the judgment of the Industriaf Court.
31. It was submitted by Mr. Khambata that if this court took the view that an unfair labour practice had been committed, it still could not declare that the 1st respondent was bound to pay wages to the employees concerned. In his submission, this was peculiarly within the competence of the Industrial Court. I cannot accept this submission. If in the exercise of powers under Article 226 this court finds the Industrial Court to have been in error, as it does, it may exercise all the power that is vested in the Industrial Court.
32. It may thus declare that the 1st respondent was bound to pay wages as prayed in the complaint. Having regard to the conduct of the 1st respondent, there is no case for diminishing in any way the quantum of the wages so declared, there is, accordingly no other reason to remand the matter to the Industrial Court.
33. The prayer of the petitioners before the Industrial Court was for declarations that the notice dated 2nd January 1978 is unlawful and bad in law; that the 1st respondent is bound to pay wages; and thus the 1st respondent's action constitutes an unfair labour practice as set out in Item No. 9 of Schedule IV of the Act.
34. In the premises, the impugned judgment and order of the Industrial Court dated 15th April 1980 is quashed and set aside. It is declared that the 1st respondent's notice dated 2nd January 1978 is unlawful and bad in law; that the 1st respondent is bound to pay to its workmen at the Kurla and Wadala plants all wages and emoluments for the period 17th January 1978 to 24th April 1978; and that in not having done so, the 1st respondent is guilty of the unfair labour practice set out in Item 9 of Schedule IV of the Act.
35. The 1st respondent shall pay to the petitioners the costs of the petition.
Rule accordingly.