Bombay High Court
Reserve Bank Of India vs All India Reserve Bank Workers ... on 16 September, 1994
JUDGMENT V. P. Tipnis, J.
1. This petition filed by the Reserve Bank of India impugns the legality and correctness of the award passed by the Learned Presiding Officer of the Central Government, Industrial Tribunal No. 1 Bombay, on 28th February, 1991. It appears that in the Reserve Bank of India there are three unions representing Class III employees. The All India Reserve Bank Employees Association (hereinafter referred to as the Association), appears to have maximum membership. The second union is All India Reserve Bank Workers Organisation (hereinafter referred to as the Organisation). The third union appears to be All India Reserve Bank Employees Federation (hereinafter referred to as the Federation). Right from 1935 onwards the Reserve Bank of India has bene negotiating and entering into settlements with the Association. According to the Reserve Bank of India, the Association still continues as the majority union of Class III Employees. The Reserve Bank of India as a matter of policy has been dealing with the association recognising the said Association as representing the largest majority of Class III and Class IV employees.
2. While the Reserve Bank of India was negotiating with the Association on the charter of demands by the said Association regarding revision of pay and various other items in the year 1984, the Organisation and the Federation filed writ petition in the High Court of Judicature at Bombay, Nagpur Bench, as also before the High court at Andhra Pradesh claiming reliefs of Injuncting the Reserve Bank of India from holding any negotiations with the Association. It is an agreed position before me that both the above writ petitions have been dismissed.
3. After dismissal of the above petitioners, the Organisation served strike notice dated 19th December 1988 on the Reserve Bank of India declaring its intention to go on strike on and from 19-1-1989. The Regions Labour Commissioner (Central) Bombay initiated cancellation proceedings on 9-1-1989. However, ultimately he submitted failure report on 6th July, 1989. Upon receipt of the failure report the Government of India referred the matter to the Industrial Tribunal by its order dated 22-1-1990.
4. Following two issues were referred to the Industrial Tribunal for adjudication :
(1) Whether the action of the management of the Reserve Bank of India in not inviting the Reserve Bank Workers Organisation and all India Reserve Bank Employees Federation for discussions over charter of demands regarding wage revision is justified?
(2) Whether the settlement of wage revision arrived at between the management of the Reserve Bank of India and the Reserve Bank Employees Association on 29-8-1989 in respect of Class III employees is binding on all parties to the dispute under Section 18 of the Industrial disputes Act, 1946?
5. Before the Industrial Tribunal several points were raised by the parties concerned. So far as the Reserve Bank of India is concerned, it raised a point that in fact no industrial dispute exists. It further raised a point that there is no constitutional right in any union to be recognised. It specifically raised a point that the Organisation or the Federation have no legal right to be called for discussion. The stand of the Reserve Bank of India was that the Association is having the support of the largest majority of the employees on the basis of check off system. The Bank asserts that the Association has the support of about 83% of the employees belonging to the Class III. As such the bank asserts that dealing, negotiating and entering into settlements with the Association is not only proper but is more conductive to maintain industrial peace. The Federation and Organisation obviously contended that it had to be consulted and negotiations ought to be held with the Federation as well as the organisation.
6. It is to be noticed that the Association was neither party to the dispute referred for adjudication nor was it hear by the Industrial Tribunal before passing the impugned award. The learned Presiding Officer held that the reference is maintainable despite the fact that the Nagpur Bench of the Bombay High Court had decided the writ petition No. 2002 of 1984. The Tribunal specifically held that the Association is not a necessary party to the reference. It further held that the settlement dated 29th August, 1989 on wage revision arrived at between the Bank and the Association is not binding on the Organisation or the Federation. On issue No. 4, which is as under :-
"Whether the action of the Bank in not inviting the Organisation and the Federation for negotiations over the charter of demands justified"?
the finding recorded is not justified. On other issue i.e., whether the action of the Bank in holding meeting on 2nd and 3rd May, 1990 amounts to breach of Section 33 of the Central Act, the Tribunal recorded the finding in the negative. Ultimately the Tribunal observed that the complaint under Section 33A of the Industrial Disputes Act is dismissed as not maintainable. This was with reference to the complaint filed by the Organisation under Section 33A of the Industrial Disputes Act which was also heard alongwith the reference. So far as the reference is concerned, the Tribunal declared that the settlement dated 29th August, 1989 is not binding on the workmen belonging to the Organisation or the Federation. The Tribunal further declared that the action of the management of the Reserve Bank of India in not inviting the Organisation and the Federation for discussions on their charter of demands is not justified, the management are directed to give up this practice and call those unions also for discussion on their demands. Certain ancillary orders regarding payment of costs etc., in favour of the Organisation and the Federation were also passed.
7. In this petition I have heard Dr. Chandrachud and Shri K. K. Singhvi, learned counsel appearing for the Reserve Bank of India. I have heard Shri C.J. Sawant learned counsel appearing for the added party - the Association. I have also heard Shri Aney learned counsel appearing for the Organisation. The stand taken by the Organisation and the Federation has been identical all throughout. Therefore, although none appeared for the Federation it does not make substantial difference in as much as all the submissions made on behalf of the Organisation could be considered as the submissions on behalf of the Federation as well.
8. So far as the other issues are concerned, i.e., declaration given by the Presiding Officer that the settlement dated 29th August, 1989 is not binding on the workmen belonging to the Organisation and/or the Federation, the finding was not challenged as it is obviously in consonance with the settled position in law. The findings on issue whether there exists any industrial dispute at all or other directions given by the Tribunal regarding payment to be made and the costs etc., were also not challenged by the petitioners. However, the directions given by the Tribunal to the management and certain findings recorded in the award on that aspect are very seriously challenged on behalf of the petitioner - Reserve Bank of India.
9. On behalf of the petitioner - Reserve Bank of India it was submitted that right from 1935 the Association was the only recognised union and for all these years it is only the Association with which the Reserve Bank of India has entered into settlements. It was submitted that the Association has membership of 80 to 82% of the employees. Relying upon the code of discipline it was pointed out that it was also in consonance with the requirements of the code of discipline that the Reserve Bank of India has been dealing, negotiating and entering into settlements with the Association. On the other hand it was submitted on behalf of the Organisation by its counsel Shri Aney that if a broad view is taken the learned Presiding Officer of the Tribunal was absolutely justified in giving directions to the employer like the Reserve Bank of India to lend its ear also to the demands and the voice raised by the unions like the Organisation or the Federation, not withstanding the fact that they may not represent the majority of the employees. As a matter of fact a specific contention as discernible from the statements and the arguments made before the Tribunal, is to the effect that when the charter of demands of the Association is considered the Organisation and the Federation also must be heard. Shri Aney in this behalf, in support of his submission, relied upon certain decision of this Court. I may have the occasion to make reference to the authorities at the appropriate time.
10. So far as the impugned award is concerned, it requires to be stated that even the learned Presiding Officer of the Industrial Tribunal seems to have understood the grievance of the Organisation is that as the Bank has entered into the settlement with the Association on 29th August, 1989 ignoring the right of the Organisation and the Federation to participate in the negotiations and that the two unions i.e., Organisation and Federation have prayed for a directions to the bank to invite them for discussions over their charter of demands and also declaration that the settlement dated 29th August, 1989 is not binding on their members. Plainly it appears that the demand was that the Reserve Bank of India must entertain or have negotiations with the Federation and Organisation while it was negotiating with the Association for settlement. The apprehension of the Reserve Bank of India is that though the final direction does not mean that the Reserve Bank of India Cannot enter into settlement with the Association without first discussing with the Organisation and Federation, in view of the pleadings and the stand, the award is likely to be misunderstood as meaning that before any settlement could be reached with the Association, it is obligatory on the Reserve Bank of India to discuss the matter with the Organisation and Federation. In fairness to the Organisation, it must be stated that Shri Aney learned counsel appearing on behalf of the Organisation, it must be stated that Shri Aney learned counsel appearing on behalf of the Organisation, specifically submitted that, that is not the stand of the Organisation. The Organisation, Shri Aney submits, is not insisting that while the Reserve Bank of India is negotiating with the Association, they must be involved in the process of those negotiations. However, Shri Aney did submit that after the settlement is reached with the Association, the Reserve Bank of India should take into consideration the view and the representations of the Organisation as well as the Federation in that behalf.
11. Coming back to the award passed by the Learned Presiding Officer of the Industrial Tribunal in paragraph 8 of the award, the learned Presiding Officer has observed that the Association has not come before the Tribunal with a request to join them as a party to the reference. He has recorded that the Organisation has no objection even if the Association were impleaded as a party. Thereafter the Tribunal has observed that, however, he does not see any useful purpose in doing so, because the Organisation and/or the Federation do not wish to supplant the Association from the negotiating table. They only press that they may also be associated in the negotiations along with the Association. Therefore the Learned Presiding Officer held that the Association is not necessary party to the reference. Thereafter the learned Presiding Officer in paragraph 10 has referred to the submissions on behalf of the Organisation and the Federation to the effect that it is grossly unfair on the part of the bank to insist on not associating them in the negotiations, particularly when they both and the Bank have accepted the Code of Discipline, while the Association has consciously rejected the same. The learned Presiding officer thereafter has dealt with he principles of one industry and one union and after accepting that the principle is adopted by the Maharashtra Act which gives a recognised union the exclusive right to appoint its nominee to represent the workman on Works Committee and also exclusive bright to represent a employee in any proceedings under the Central Act, the learned Presiding Officer felt that yet under the provisions as at present obtaining even in the Central Act, there is no legal obligation on an employer to call all or any trade unions of workmen for consultations, and viewed from this grossly technical logistic angle, an, employer may adopt an 'I care two hoots' approach and compel the workmen to approach the conciliation machinery and finally got the dispute referred to the adjudication machinery under Section 10 of the Central Act by persuading the Central Government to do so. The learned Presiding Officer further observed that his duty in this reference is not to remit the adjudicatory exercise to strictly legislative technical confines only, but to take a realistic comprehensive vision of all the material circumstances, and after balancing all pros and cons, evolve on a fair and just basis, a course that would be most conducive to the promotion of industrial peace. The learned Presiding Officer thereafter specifically referred to the industrial Relations Bill (Bill No. XXIV/88) as introduced in the Rajya Sabha on 13-5-1988. After referring to various parts and the statements of object and reasons of the Bill the learned Presiding Officer stressed the point that it is too late in the day to claim that the principle of 'One Unit/industry One Union' holds the ground finally today. Thereafter again referring to the provisions of the bill the learned Presiding Officer has concluded that if proper checks and balances provided, a bargaining agency consisting of multiple unions may in actual practice prove more conducive to the promotion of industrial peace than a single union, representing a bare numerical simple majority. However, after all this, the learned Presiding Officer has expressly stated that he leaves this aspect here. Referring to the Code of discipline, though not having the statutory force, the learned Presiding Officer has observed that the criterion 8 for recognition of unions expressly prohibits recognition of a union by the employer, which does not observe the Code. The learned Presiding Officer observed that it is an admitted position that the Bank, the Organisation and the Federation have accepted the Code, the Association has consciously rejected it. The learned presiding Officer has further observed that indeed the bank was not well advised in continuing to recognise the Association inspite of its refusal to observe the Code of Discipline, and the action of the Reserve Bank of Indian in this regard does not appear to be in consonance with the advice given by the Central Government under its letter dated 8-11-1983. These observations of the learned Presiding Officer are difficult to be appreciated. It is difficult to appreciate the reference to several provisions of the Bill which have not become an Act and relying upon the same for the purpose of holding that the principle of 'one industry on union' does not hold the ground finally today.
12. So far as the observations regarding recognition accorded to the Association is concerned, same are erroneous and improper on two counts. Firstly the Association was not party to the proceedings. The learned Presiding Officer in fact has held that it is not necessary party to the proceedings. If that be so, it was improper and against the basic principles of natural justice to decide upon the rights of the Association without hearing the Association and without there being any positive material on record in that behalf and in fairness to Shri Aney the learned counsel for the Organisation I must record that he also did not support this finding in view of the fact that the Association was not party to the proceedings. Secondly in this petition I have permitted the Association to be impleaded as party-respondent and on the basis of the affidavit filed, Shri Sawant learned counsel appearing for the Association made it clear that the Association has accepted the Code of Discipline. He has also stated that the Association commands support of the largest majority of the employees. In these circumstances there was no justification in finding fault either with the Association or the Reserve Bank of India for holding negotiations with the Association. All the more so when it is clear from the record that the Reserve Bank of India has been negotiating and entering into settlements with the Association right from 1935 until now. It is also difficult to appreciate the observations of the learned Presiding Officer to the effect that the provisions of the Code points out to one inference i.e., Industrial Relations Management by consensus. In fact in view of several general observations made in the award, the Reserve Bank of India is apprehensive that the final declaration may be mis-interpreted so as to mean that the Reserve Bank of India must hold negotiations with he Organisation and the Federation or with any other unions. In fact even before the learned Presiding Officer a grievance was made on behalf of the Reserve Bank of India that it will be practically impossible to run the administration if they are compelled to consult each and every union. The learned Presiding Officer did not appreciate the submissions, as in his view, the submissions visualise extreme situation which would be pretty rare in actual life. In the opinion of the learned Presiding Officer, in any meaningful human endeavor one has to adjure extreme positions and choose a middle path of sweet resemblances. The learned Presiding Officer has observed that the Bank has accepted the code of discipline, it prescribe procedure for recognition of a union and if the Bank is really serious in advancing the submission that it would be difficult for it to deal with multiple unions, it could go in for the procedure, prescribed by the Code. That would certainly be a more fair, practical and business like approach than continuing to have negotiations with a union which has not even cared to accept the Code. With due difference to the learned Presiding Officer, after having gone through the Code of Discipline I find it difficult to ascertain what procedure was in the contemplation of the learned Presiding Officer. Thereafter the learned presiding Officer has gone into the complaint of the Federation and Organisation regarding the alleged unfair labour practice committed by the Reserve Bank of India of showing favour to the Association. That need not detain me any further in as much as the learned Presiding Officer has specifically negatived the contention - of the Federation and the Organisation and dismissed the complaint. However, the learned Presiding Officer has made observation that the grievance of the Organisation that the Bank has committed unfair labour practice within the contemplation of item 2(b) cannot be dismissed readily as being totally devoid of substance. This is on the basis of the fact that according to the learned Presiding Officer the bank has not placed any material before him to support the plea that the Association commands majority among he Class III employees. The learned Presiding Officer further states that even assuming this to be true, criterion 8 for recognition of unions, as incorporated in the Code, renders the Association ineligible for recognition. As stated earlier no rights of the Association could have been adjudicated upon without hearing the Association and in the absence of the Association. On the basis of the submissions and material on record before me the fact that the Association represents largest majority of the employees belonging to Class III, is almost undisputed. Under these circumstances, nothing which would adversely affect the rights of the Association could have been justified even on merits much less without hearing the Association. I find no hesitation in not approving and setting aside he observations in the award to the effect that the Reserve Bank of India has done anything improper in dealing with the association or entering into settlements with the Association on the alleged assumption that the Association does not command majority among the Class III employees and/or that the Association has not accepted the Code of Discipline.
13. Ultimately the learned Presiding Officer has observed that taking into consideration the totality of the circumstances referred to above, the learned presiding Officer was of the view that the Bank is too legalists to be commended and that its action to exclude the Federation and the Organisation from the negotiating table is detrimental to the promotion of Industrial peace and harmony, and as such it cannot be endorsed as just or fair. The learned presiding Officer observed that a vital State functionary that the Bank is, it should naturally strive to be a model employer by promoting industrial peace by realistic means. The learned presiding Officer thereafter observed that it is obvious that it should invite the Federation and the Organisation also for participation in the negotiations on their charter of demands. It is on these reasonings the learned Presiding Officer has given the final declaration in favour of the Federation and the Organisation.
14. Dr. Chandrachud referred to the decision of the Apex Court reported in 1987 I CLR SC 68 - Reserve Bank of India & Ors. v. C. W. Sahasranabman & Ors. and paragraphs 13 and 14 thereof in particular. this was in support of his case that the bank has been entering into settlements with he Association and in the case before he Apex Court the referendum by secret ballot was ordered and the settlement entered into with the Association received support of the overwhelming majority. In my opinion the said decision is of not great help so far as the issue before me is concerned. Dr. Chandrachud also referred to the decision of the Apex Court - Delhi Police Non-Gazetted Karmachari Sangh & Ors. v. Union of India & Ors. and paragraph 13 thereof in particular. The said decision deals with the aspect of right guaranteed by Article 19(1)(c) of the Constitution of India and states that the right guaranteed under the said article to from associations does not involve a guaranteed right to recognition also. However such a right is not at all claimed before me on behalf of the Organisation or the Federation by Shri Aney. On behalf of the petitioner-bank a reference was made to the decision of the Madras High Court reported in 1984 LIC - Neyveli Lignite Corporation Labour and Staff Union v. Management of Neyveli Lignite Corporation Ltd. The decision lays down that there is no statutory provision dealing with recognition or de recognition of a union of workmen, under the Industrial Disputes Act. It is only the Code of Discipline in an industry that contemplate recognition of a union of workmen by the management and the recognition has to be applied for and got sanctioned by the management. It is only the union recognised under the Code of Discipline that has the status to represent the workmen in matters of negotiation with the management. In the facts and circumstances of the case before the Madras High Court it was observed that merely because the management has indulged in negotiations with an unrecognised union will not give other like unions a status in the eye of law. Refusal by the management to recognise a union does not involve violation of any right not to speak of any fundamental right of the union. It was further observed that excluding a union from the category of unions which could negotiate with the management more so when such a union has not acquired the status of a recognised union under Code of discipline does not amount to a change in the conditions of service of the workmen and therefore does not come within the mischief of the provisions of section 9-A read with Schedule IV. In my opinion this case also is not directly relevant for the decision of the issue involved in this petition.
15. Shri Aney, learned counsel on behalf of the Organisation placed reliance on the judgment of this Court reported in 1985 Mah. Law Journal, 802, Maharashtra State Road Transport Corporation Bombay v. Maharashtra Motor Kamgar Federation & Anr. and Paragraph 24 thereof in particular. In the said paragraph the division bench of this Court dealt with item 2(b) of Schedule II and observed as under :-
"the prohibition to indulge in the aforesaid unfair labour practice is apparent from Section 27 of the Act. Item 2(b) envisages that the employer shall not dominate, interfere with, or contribute, support to any union by show of partiality or favoritism attempting to organise its membership where such a union is not a recognised union. The emphasis is on the words "where such a union is not a recognised union". It clearly suggests that unless the union is recognised under the Act, the employer is strictly prohibited from interfering with or supporting to any of the unions either by show of partiality or favoritism, the whole thing being that the employer should treat all unions equally with the view that the unions in the field can organise themselves, and one who satisfied the conditions for being recognised under the Act could move in that direction. Showing of partiality or favoritism at such a juncture would be disadvantageous to the other unions also functioning in the undertaking or industry. With this end in view provision has been made to avoid un-healthy competition among the unions. When they are still unorganised."
I am afraid the observations must be read in the context of the statutory provisions where there is statutorily recognised union having certain privileges. It cannot be understood as laying down general law that whenever there is no statutorily recognised union, the act of the management in dealing with the union or negotiating with the union having support of majority of employees could be construed as amounting to favouritism or partiality. In the facts of the case before me, admittedly there is no question of any statutorily recognised union. However, I do not find any fault at all if the Reserve Bank of India decides as a matter of policy to deal with, negotiate and enter into settlements with a union, which has the support do overwhelmingly large majority employees belonging to the Class III. As stated earlier the assertion is that the association is enjoying support of almost 80% of the workmen belonging to the Class III employees. Shri Aney also relied upon the judgment of the learned Single Judge of this Court reported in 1989 I CLR 7-3 All India Port and Dock Workers' Federation & Ors. v. Union of India & Ors. Shri Aney especially brought to my notice the observations in paragraphs 8 and 15 to 19 of the said judgment paragraph 8 contains submissions of the learned counsel for the petitioners therein. Paragraphs 15, 16 and 17 contain submissions of the learned counsel for the other side. In paragraph 19 the learned Judge has observed as under.
"Having heard the rival contentions of the contending parties in my view, the first respondent Union of India is not justified in refusing to recognise the first petitioner in the matter of negotiating the terms and conditions of service of the port and dock workers employed in the major ports of India. In my view, the grounds set up by the first respondent that the third to the sixth respondents collectively represent the largest number of workers is nothing but an eye wash. It is conceded on behalf of the first respondent that the first petitioner enjoys the third largest membership from amongst the first petitioner and the third to sixth respondents. It thus commands larger following than the fifth and sixth respondents. Merely because it is a split Federation from the third respondent or merely because it has come into existence at a later stage i.e. in the year 1978 can be no justification to deny the first petitioner a right which on account of large following is due to it. It may be that the right to represent may not be justified as a fundamental right emanating from Article 19(1)(g) of the Constitution. However, the first respondent is expected to act justly and fairly and if it has to deny the first petitioner a right to represent and if it has to discriminate the first petitioner vis-a-vis the third to sixth respondents, there has to be cogent reasons for doing so. That the third to sixth respondents collectively represent the largest number of workers is nothing but an itsi bitsi of the matter............"
On the above premises the learned Judge took a view that the action of the first respondent in ignoring the first petitioner and refusing to permit it on the negotiating table is against law and justice and the same cannot be sustained. In my opinion the observations are clearly on the basis that the learned Judge found that the claim of majority support put up by respondent Nos. 3 to 6 unions therein, was not accepted by the learned Judge and as a matter of fact the learned Judge felt that the 1st petitioner before him had the support of substantial members of the employees. By no stretch of imagination this case could be said to have laid down the principle that the management is obliged to negotiate with each and every union irrespective of the support it commands. In any case on the basis of the facts and circumstances of the case before me, without any allegations of mala fides or any other unfair labour practice against the Reserve Bank of India, I do not see any impropriety or unfairness if the Reserve Bank of India deals with, negotiates and enters into settlements with the Association, which is a recognised union as per the Code of Discipline by the Reserve Bank of India, which is having he support of overwhelmingly large majority of the employees and with whom the bank has been entering into settlements for over a long period from 1935 i.e., from inception till this date. It is always open to the other unions to register support of the majority of the employees and seek recognition. In fact the learned presiding Officer of the Tribunal has also observed accordingly.
16. Under the circumstances, if the claim of the Organisation or the Federation is to the effect that that they should be called for negotiations simultaneously while the Reserve Bank of India is negotiating or entering into settlements with the Association, the said claim cannot be accepted. If the claim of the Federation or organisation is to the effect that before implementing the settlements or concluding settlements with the Association, though not simultaneously, but separately, they must be consulted or called for negotiations on that issue, even the said claim cannot be accepted. It must be stated that it is also in the interest of industrial peace that the management is negotiating and setting issues with one union, of course, having majority support. Therefore even to that extent the claim of the Federation and Organisation cannot be upheld.
17. However, Shri Aney learned counsel for the Organisation made a serious complaint that though they may not be called on the same negotiating table or although they may not be called upon to make their submissions on the charter of demands submitted by the Association, whenever these two unions i.e., Organisation and Federation submit any charter of demands that cannot be totally ignored by the Reserve Bank of India. Shri Aney seriously complaints that this is precisely what has been happening. He in fact complained that the Reserve Bank of India do not show any Courtesy of acknowledging their communications. As far as this aspect of the matter is concerned it cannot be forgotten that the Federation and the Organisation may not have majority or even may have a very small support from the employees, but the settlement which the Reserve Bank of India finalises with the Association is not binding on the other employees who are not member of the Association. Under such circumstances of the organisation and the Federation representing other employees, meaning thereby who are not members of the Association, make Association, make any representation or place any charter of demands, it cannot be said that the Reserve Bank of India will be justified to completely ignore the same and will not even apply its mind to the same. In that behalf the approach of the Industrial Tribunal to the effect that the employer like the Reserve Bank of India will have to lend its ear to the demands or grievances of other employees or unions though they may not be having the support of majority is, just and proper.
18. In the result the final order or declaration in the award to the effect that "It is further declared that the action of the Management of the Reserve Bank of India in not inviting the Organisation and the Federation for discussions of their charter of demands is not justified. The Management are directed to give up this practice and call those unions also for discussion of their demands" is quashed and substituted by the following :
"It is further declared that the action of the management of the Reserve Bank of India in not taking into consideration the charter of demands by the Organisation and the Federation is not justified and the Reserve Bank of India is directed to take into consideration the charter of demands by the Organisation and the Federation as well".
In what manner the said demands or charters may be considered and whether the management will invite the Organisation and Federation for actual personal discussion will depend upon the nature of the demands and other relevant circumstances, which will have to be left to the discretion of the Reserve Bank of India. The Award accordingly will stand modified.
19. Rule made absolute partly in the aforesaid terms. In the circumstances of the case there shall be no order as to costs. Certified copy expedited.