Bombay High Court
Co-Operative Bank Employees Union vs Yeshwant Sahakari Bank Ltd. & Others on 1 October, 1992
Equivalent citations: 1993(1)BOMCR621, (1993)95BOMLR67, (1993)IIILLJ9BOM, 1992(2)MHLJ1696
JUDGMENT Srikrishna, J.
1. This writ petition has been placed before this Bench by the learned Chief Justice, pursuant to a recommendation made by a learned Single Judge of this Court (Kantharia, J.) by his Judgment dated July 1, 1991. The learned Judge (Kantharia, J.) found it difficult to agree with certain views expressed by another learned Single Judge of this Court (S. K. Desai, J.) in his Judgment in Misc. Petition No. 116 of 1974, with regard to the interpretation of Section 42(1) of the Bombay Industrial Relations Act (hereinafter referred to as "the BIR Act"). The matter has, therefore, been referred to this Division Bench by the learned Chief Justice for deciding the interpretation of the said provision of law.
2. The facts, relevant for deciding the writ petition, are very simple, and nothing really turns upon the facts of the case. A statement was made at the Bar by Mr. Kochar, learned advocate for the writ petitioner, that the writ petition is being pursued only for settling the issue of law which is likely to arise frequently, and not for seeking any relief in favour of any employee, as the employee concerned has long since resigned from service.
The first respondent is a co-operative society carrying on banking business, inter alia at its office in Bombay. The first respondent's establishment is covered by the provisions of the BIR Act. The petitioner is a registered and representative union of the employees in the co-operative banking industry in the local area of Bombay. One Dhumal was attending to the work in connection with accounts in the establishment of the first respondent, till he resigned on May 22, 1981. Another employee, Phadtare, was appointed on a post newly created by the first respondent and designated as "Sub-Accountant". This was done without giving any notice of change under Section 42(1) of the BIR Act. The petitioner-union made an application on 27th April, 1982, to the Labour Court under Sections 78 and 79 read with Section 46 of the BIR Act, alleging that the action of the first respondent amounted to an "illegal change" within the meaning of the said Act and sought appropriate reliefs. The application was contested by the first respondent. By an order made by the Labour Court on February 28, 1983, the petitioner's application was allowed and a declaration was made that the act of the first respondent amounted to an "illegal change" and consequential orders were passed. The first respondent being aggrieved by the said order, appealed to the Industrial Court under Section 84 of the BIR Act. By an order made on December 12, 1993 the Industrial Court allowed the appeal and set aside the declaration given and order made by the Labour Court, relying on a judgment of a learned Single Judge of this Court (S. K. Desai. J.) in Bombay Suburban Electric Supply Ltd. v. The Bombay Electric Workers Union and Another (judgment dated September 29, 1977, in Misc. Petition No. 116 of 1974). Though the Industrial Court recorded a clear finding that the 1st respondent's action had resulted in an increase in the number of persons employed in the bank, it was of the view that, as the appointment of Phadtare did not adversely affect any other employee in the establishment of the first respondent, there was neither necessity, nor obligation upon the first respondent, to give a notice of change under Section 42(1) of the BIR Act, and, therefore, its action did not amount to an "illegal change" within the meaning of Section 46 of the Act. Being aggrieved by the decision of the Industrial Court dated December 12, 1983, the petitioner has moved this Court by the present petition. When the petition I came up for hearing before Kantharia, J., the decision rendered in Bombay Suburban Electric Supply's case (supra) was cited before him. The learned Judge did not find it possible to agree with the statement of law made therein with regard to the interpretation of Section 42(1) of the BIR Act, and, therefore, by his Judgment dated July 1, 1991 after expressing his disagreement, recommended to the Hon'ble Chief Justice that the matter be placed before a larger Bench to decide the issue of law.
3. The issue of law, which arises in the present writ petition, succinctly put, is : Where an employer intends to effect any change in respect of the BIR Act, which is not likely to adversely affect any employees in his service, is the employer obliged to give a notice of change contemplated in Section 42(1) of the BIR Act ?
4. In order to appreciate the controversy, it is required to refer to the scheme of the BIR Act, at least insofar as it pertains to "changes". Section 42(1) reads as under :
"42. (1) Any employer intending to effect any change in respect of an industrial matter specified on Schedule II "shall" give notice of such intention in the prescribed form to the representative of employees. He shall send a copy of such notice to the Chief Conciliator, the Conciliator for the industry concerned for the local area, the Registrar, the Labour Officer and such other person as may be prescribed. He shall also affix a copy of such notice at a conspicuous place on the premises where the employees affected by the change are employed for work and at such other place as may be directed by the Chief Conciliator in any particular case".
A notice of change under Section 42(1) has to be given by an employer :
(a) if he intends to effect any change,
(b) the change is in respect of an industrial matter, and
(c) the industrial matter is specified in Schedule II.
The Section requires that such a notice has to be given in the prescribed form to the "representative of employees". The employer is also required to send a copy of such notice to the authorities referred to in sub-Section (1) and, finally, the employer shall also affix a copy of such notice at a conspicuous place on the premises where the employees affected by the change are employed for work and at such other place as may be directed by the Chief Conciliator in any particular case.
5. The expression "change" is defined in Section 3(8) of the BIR Act to mean an alteration in an industrial matter. The expression "industrial matter has been defined in Section 3(18) as under :
3. In this Act unless there is anything repugnant in the subject or context,-
(18) 'industrial matter' means any matter relating to employment, work, wages, hours of work, privileges, rights or duties of employers or employees, or the mode, terms and conditions of employment, and includes -
(a) all matters pertaining to the relationship between employers and employees, or to the dismissal or non-employment of any person;
(b) all matters pertaining to the demarcation of functions of any employee or classes of employees;
(c) all matters pertaining to any right or claim under or in respect of or concerning a registered agreement or a submission, settlement or award made under this Act;
(d) all questions of what is fair and right in relation to any industrial matter having regard to the interest of the person immediately concerned and of the community as a whole.
Schedule II contains a list of 11 industrial matters. Of relevance to us are items 1 and 2 therein, which read as under :
"1. Reduction intended to be of permanent or semi-permanent character in the number of persons employed or to be employed in any occupation or process or department or departments or in a shift not due to force majeure.
2. Permanent or semi-permanent increase in the number of persons employed or to be employed in any occupation or process or department or departments.
6. The scheme of the BIR Act, which deals with 'changes', appears to be that it is obligatory for an employer or an employee, as may be the case, to give a notice of change, if the change is of a particular type, and, if there is no agreement upon the change desired, then, within 7 days from the date of service of the notice under Section 42, the party giving the notice is entitled to move the conciliator for the industry concerned. The conciliator will, thereafter, call the parties and attempt a reconciliation. If the reconciliation succeeds, the parties enter into a settlement in accordance with Section 58. If the conciliation proceedings do not succeed, the conciliator would issue a certificate stating that his attempt at conciliation has failed. The party desiring to initiate the change is entitled, under the provisions of Chapter XI, to refer the consequent dispute for decision of the prescribed forum. After the dispute has been thus referred, the competent Court enters upon the dispute and renders an award, which is binding on the parties under the provisions of the Act.
7. In case an employer makes a unilateral change without issuing a notice of change, which he is required to give under sub-section (1) of Section 42, such a change is styled as an "illegal change", within the meaning of Section 3(15) read with Section 46 of the BIR Act. Under Section 78(1) A(c), the Labour Court is empowered to decide a dispute regarding an illegal change, and, under paragraph C thereof, it is empowered to direct an employer to withdraw any change which is held by it to be illegal and withdraw temporarily any change, the legality of which is a matter of dispute in any proceedings, pending final decision, or to carry out any change, provided such change is a matter in dispute in any proceeding before it under the Act. Section 79, correspondingly, provides the remedial right of moving the Labour Court by way of an application for deciding the legality of a change. Section 106(1) declares that an employer who makes a change, which is held or declared by a Labour Court or Industrial Court to be illegal, shall, on conviction, be punishable with fine which may extend to Rs. 5,000/-. Under Section 82 of the Act, the Labour Court is empowered to take cognizance of a criminal offence punishable under the Act, and it has been conferred with the powers of a Presidency Magistrate under the Criminal Procedure Code as in Chapter XXI of the Code of Criminal Procedure, 1973. With this apercu of the relevant provisions of the BIR Act, we propose to appreciate the rival submissions made at the bar.
8. Mr. Kochar, learned advocate appearing for the petitioner, contrasted the difference between the language used in Section 73(1)(c), Section 80-C(2), Section 79(1), Section 86 (B) and Section 116(3) and that used in Section 42(1), and contended that the conspicuous absence of words like 'prejudicially', 'adversely' etc. in Section 42(1) leads to the conclusion that, where the Legislature intended the element of prejudice or adverse effect to be an ingredient of the section, the Legislature has deliberately used appropriate language and that absence of such words in sub-section (1) of Section 42 would lead to the inference that the obligation to give a notice of change would arise, irrespective of whether the change prejudicially affected the employees or not. He relied on a passage at page 33 of Maxwell on Interpretation of Statutes (Twelfth Edition) and portions from G. P. Singh's Interpretation of Statutes (Third Edition) page 48, and contended that, where the language of the statute is clear and unambiguous, it is not permissible to read the statue by adding words, which are not found in the statute. He also relied on a judgment of the Supreme Court in Union of India and Another v. Deoki Nandan Aggarwal 1991 - II - CLR 611, in support of the same proposition.
9. Mr. Sawant, on the other hand, appreciably banked heavily on the judgment of S. D. Desai, J, rendered in Bombay Suburban Electric Supply's case (supra) and the reasoning contained therein. He also relied on another judgment of a learned Single Judge of this Court in Empress Mills Co-op. Society Ltd., Nagpur v. Presiding Officer, Third Labour Court at Nagpur 1988 (57) FLR 144 (Bom). He contends that the observations of the Supreme Court made in judgments while interpreting the provisions of Section 9-A of the Industrial Disputes Act are equally applicable while interpreting Section 42(1) of the BIR Act, since, in his submission, it is a provision parimateria in a cognate statute. To these judgments cited, we shall make detailed reference later.
10. A bare reading of sub-section (1) of Section 42 of the BIR Act shows that employer, intending to effect any change in respect of an industrial matter specified in Schedule II has three obligations. First, he is required to give notice in the prescribed form to the "representative of employees". Second, he is required to send a copy of such notice to the authorities specified therein. Third, he shall also affix a copy of such notice at a conspicuous place on the premises where the employees' 'affected' by the change are employed for work.
11. The contention canvassed on behalf of the first respondent, which appealed to the learned Single Judges deciding the Bombay Suburban Electric Supply's case (supra) and also the Empress Mills' case (supra), is that the word 'affected' used in the last clause of Section 42(1) must lend colour to the interpretation of the entire sub-section. The said judgments have, therefore, taken the view that, unless employees are 'affected' there is no obligation to give a notice of change. The judgments then proceed to construe the meaning of the word 'affected' with reference to the pronouncement made by the Supreme Court in judgments rendered while interpreting Section 9-A of the Industrial Disputes Act, wherein also the word occurs. Taking the view that the word 'affected' used in Section 42(1) of the BIR Act means 'adversely' or 'prejudicially' affected, the judgments hold that no notice of change need be given by an employer, intending to effect a change in respect of any industrial matter enumerated in Schedule II of the BIR Act, unless such intended change is likely to adversely or prejudicially affect the employees.
12. In the first place, it is not possible to accept the view that the word 'affected' must necessarily mean 'prejudicially' or 'adversely' affected. The verb ' to affect' has been defined in Webster's Encyclopedic Unabridged Dictionary of the English Language 1989 Edition as under :
"v.t. 1 to act on; produce an effect or change in : Cold affects the body.2 to impress the mind or move the feelings. The poetry affected him deeply. 3. (of pain, disease, etc.) to attack or lay hold of.
n.4. Psychol. feeling or emotion, disposition or feeling.
-syn, 1. influence, sway; modify, alter. AFFECT. EFFECT agree in the idea of exerting influence. TO AFFECT is to concern, be of interest or importance to; to produce an effect in or upon something; to affect one's conduct or health. TO EFFECT is to accomplish or bring about something; to effect a reconciliation .2. touch, stir."
It would, thus, be seen that the word 'affect' has two distinct connotations-one general and the other special. Generally, it means to act upon or to produce a change in; specially, it means to produce a prejudicial change in.
In Stroud's Judicial Dictionary (Fifth Edition), a number of illustrations have been given as to how the word "affected" has been judicially interpreted. These also support the view that the word 'affected' can have the two connotations referred to hereinabove. Bouvier's Law Dictionary (Unabridged) (Third Revision), Volume 1, defines the verb 'affect' as to lay hold of, to act upon, impress or influence. It is often used in the sence of acting injuriously upon persons and things. Ryan v. Carter, 93 U.S. 84, 23 L.Ed. 807 Baird v. Hospital Ass'n... 116, 419, 22S. W. 726.
In Re Bluston (deceased) Bluston v. Davis and another, 1966 (3) All E.R. 220, the Appeal Court in England had to judicially construe the word 'affecting' with reference to circumstances affecting the administration or distribution of business. The observations made by the three Law Lords therein support the view that there are two connotations of the word "affected"-one general and the other special. We might particularly refer to the observations of Winn, L.J. (at page 225) :
As I understand the word "affected", it means "influenced", "altered", "shaped".
Thus, the survey of lexical and judicial literature leads to the conclusion that both meanings are legitimately attributable to the word 'affected'.
13. At this stage, we might usefully refer to the observations in judgments of the Supreme Court made while construing the provision of Section 9-A of the Industrial Disputes Act.
14. In Hindustan Lever Ltd. v. Ram Mohan Ray and others 1973 - I - LLJ - 427 the Supreme Court was concerned with the interpretation to be given to the word 'affected' as used in Section 9-A of the Industrial Disputes Act. This section provides that no employer, who proposes to effect a change in the conditions of service of a workman with respect to any matter specified in the Fourth Schedule of that Act, shall do so, unless he has given a notice of such change in the prescribed manner to the affected workmen and twenty one days have expired from the date of such a notice. While construing Section 9-A, particularly with reference to item 11 of the Forth Schedule, the Supreme Court observed :
"The word 'affected' in the circumstances could only refer to the workers being adversely affected and, unless it could be shown that the abolition of one department has adversely affected the workers, it cannot be brought under item 11. The same consideration applies to the question of change in usage under item 8.
15. In The Management of Indian Oil Corporation Ltd. v. Its Workmen, 1975 - II - LLJ - 319 once again, construing the provision of Section 9-A of the Industrial Disputes Act, the Supreme Court, after referring to its own observations in Hindustan Lever's case (supra), observed (p.324) :
"..... It is true that this Court held on the facts of that case that the Company had abolished one department, but as the work-load was not increased the workers were not adversely affected and the abolition of one department could not be brought under item 11. The contingency contemplated in the aforesaid case, however, cannot be equated with the present case by virtue of the unilateral deprivation of the compensatory allowance which was received by the employees by the withdrawal of which they were undoubtedly prejudiced. It cannot be contended that the sudden withdrawal of a substantial concession in the conditions of service would not materially or adversely affect the workmen.
These observations of the Supreme Court were emphasized by learned counsel for the first respondent, who also pointed out that these observations were heavily relied upon by S. K. Desai, J., in his judgment in Bombay Suburban Electric Supply's case (supra).
16. In Bombay Suburban Electric Supply's case (supra) after referring to the scheme of Section 9-A of the Industrial Disputes Act, 1947, and item 1 of the Fourth Schedule of the Industrial Disputes Act, the learned Judge came to the conclusion that the provisions of the said item were substantially not different in phraseology from items 1 and 2 of the Schedule II of the BIR Act; while the phraseology in the Industrial Disputes Act was terse, that in the case of the BIR Act was elaborate. The learned Judge then went on to interpret the provision requiring a notice of change under Section 42(1) of the BIR Act, with the aid of the observations made in the two judgments of the Supreme Court referred to earlier. As the Supreme Court had, while construing Section 9-A of the Industrial Disputes Act, categorically held that a notice of change could be necessary only if the change was likely to prejudicially affect the workmen, the learned Judge was inclined to think that the same would be the situation under Section 42(1) of the BIR Act. We are, with respect, unable to subscribe to this line of thinking for several reasons.
17. The objects of the two statutes under consideration, viz., the BIR Act and the Industrial Disputes Act, are dissimilar; the former is preventive, the latter curative. As indicated in the preamble of the BIR Act, the Act is intended "to regulate the relations of employers and employees, to make provision for settlement of industrial disputes and to provide for certain other purposes." The Industrial Disputes Act, 1947 is intended "to make provision for the investigation and settlement of industrial disputes, and for certain other purposes". While the BIR Act makes elaborate provisions for regulating Industrial Relations, greater emphasis is laid on dispute resolution under the scheme of the Industrial Disputes Act. Though there are also provisions with regard to dispute resolution in the BIR Act, the emphasis is not on them. The BIR Act being concerned with the larger issue of industrial relations, there is the concept of a "representative of employees" under this Act and a special status has been given to the representative of employees. This paramount status even includes the right to act to the exclusion of or against the wishes of an individual, affected employee in the larger interests of the employees in the industry (see, in this connection the decision of the Supreme Court in Girja Shankar Kashi Ram v. The Gujarat Spinning and Wvg. Co. Ltd. 1962 - I - LLJ - 369 followed by Santuram Khudai v. Kimatrai Printers and Processors Pvt. Ltd. and others 1978 - I - LLJ - 174) Concepts of industry-wise representation and "representative of employees" are conspicuously absent in the scheme of the Industrial Disputes Act. It is for this reason that Section 9-A of the Industrial Disputes Act requires a notice of change to be given, in advance, to the workmen, who are "likely to be affected" by a change in the conditions of service applicable to them in respect of any matter specified in the Fourth Schedule, before such change can be brought about.
18. When one turns to Section 42(1) of the BIR Act. one discerns a triple obligation on the employer who intends to effect a change with regard to any industrial matter enumerated in Schedule II. The first and primary obligation is to give a notice of the intended change to the "representative of employees". The second obligation is that a copy of such notice be sent to the statutory authorities, and, the third, that a copy of such notice is to be displayed at a conspicuous place where "the employees affected" by the change are required to work. The thrust in sub-Section (1) of Section 42 is on the "representative of employees" and not on the employees themselves. This is designedly so as to be inconsonance with the general scheme and legislative policy of the Act. The expression "representative of employees" has been defined in Section 3(32) to mean a representative of employees entitled to appear or act as such under Section 30. Section 30 of the BIR Act gives the hierarchy of such representatives of employees, the Representative Union for industry being given the primary and paramount status. A conspectus of the provisions of the BIR Act would, therefore, fortify the conclusion that the notice of change required to be given under sub-Section (1) of Section 42 is primarily intended for consideration of the representative of employees. We, are therefore, unable to accept the line of thinking reflected in Bombay Suburban Electric Supply's case (supra) that the construction of sub-Section (1) of Section 42 must run parallel to or draw inspiration from the construction of Section 9-A of the Industrial Disputes Act.
19. Though it may not be possible to construe the provisions of Section 42(1) by wholesale adoption of observations made by the Supreme Court, while construing Section 9-A of the Industrial Disputes Act, those observations do have a material bearing in construing the third obligation of the employer under Section 42(1) of the BIR Act. Perhaps, where employees are not likely to be 'affected', the third obligation may not arise, consistently with the interpretation put by the Supreme Court, in the judgments in Hindustan Lever's case (supra), upon the word 'affected'.
20. There is another aspect of the matter, which appears to us to be clinching. Having cast the obligation upon the employer under sub-Section (1) of Section 42 to give a notice of change, the Act also provides remedies in case of failure. Under Section 79(1), not only is an employee 'directly affected' entitled to move an application before the Labour Court for seeking the relief of declaration of an illegal change, but the right of moving such an application has been specifically conferred upon the Labour Officer and the representative union, Apart from and irrespective of the right conferred upon the employee 'directly affected', which we may take to mean prejudicially affected, the Labour Officer and the representative union-neither of whom, obviously, could ever be prejudicially or adversely affected by any illegal change made by the employer have been independently conferred with the right of moving the statutory forum for appropriate relief. In respect of the offence under Section 106 (1), the Labour Court is entitled to take cognizance of any offence, upon a complaint of facts constituting such offence made by the person affected thereby, or a representative union or on a report in writing by the Labor Officer. Here again, we find that, apart from the person 'affected' by the illegal change, the representative union and the Labour Officer, neither of whom, obviously, can be directly affected by the illegal change, have been specifically conferred with the power of launching the prosecution into motion. These remedial provisions under Sections 79 and 82 also lead us to the conclusion that the right granted to the representative employee is independent of the right granted to the employees prejudicially or adversely affected thereby. Correspondingly, therefore, the right of the representative of employees to receive a notice of change under sub-section (1) of Section 42 and the obligation of employer to give such a notice of change is spelt out, independent of any adverse effect upon employees by the intended change, as long as it is a change with regard to an industrial matter specified in Schedule II of the BIR Act.
21. Although Mr. Sawant, learned counsel appearing for respondent No. 1, referred to the judgment of the Supreme Court in Amrit Banaspati Co. Ltd. v. S. Taki Bilgrami and others 1971 - II - LLJ - 317 which was a judgment construing the provision of item 1 of Schedule II of the Bombay Industrial Relations Act, we find therein nothing which would help us in deciding the present case. The said decision turned on the construction to be put on the expression 'reduction' and 'employed' in item 1 of Schedule II of the BIR Act, and the contentions advanced before us did not appear to have been either canvassed before or considered by, the Supreme Court.
22. Mr. Sawant referred to the judgment of the Supreme Court in Kehar Singh and others v. The State (Delhi Admn.), to emphasize the 'golden rule' of construction of statutes. The principle is well known and often repeated, and we have applied the 'golden rule' while construing the provisions of the statute under consideration.
23. Mr. Sawant drew out attention to another judgment of a learned Single Judge of this Court (Quazi J.) in Empress Mills Co-op. Society Ltd., Nagpur v. Presiding Officer, Third Labour Court at Nagpur, (supra). He particularly emphasized the observations in paragraph 5 and 6 as clearly supporting the proposition canvassed by him. The authority, doubtless, supports him. We are, however, unable to agree that it is the correct view to take of the provisions of Section 42(1) of the BIR Act.
24. To sum up, we are of the view that sub-section (1) of Section 42 of the BIR Act casts three obligations upon the employer, if he intends to effect any change in any industrial matter enumerated in Schedule II. The first, to issue a notice of change in the prescribed form on the representative of employees. The second, to forward a copy of such notice of change to the statutory authorities specified therein. The third, to affix a copy of such notice at a conspicuous place, where the employees, affected by the intended change, are at work. Perhaps, the employer may be relieved of the last obligation, in case the employees are not prejudicially or adversely affected by the proposed change. We, are, however, unable to accept the view that the employer can be relieved of the other two obligations also if no employee is likely to be prejudicially or adversely affected.
25. In the premises, we are of the view that the judgments in Bombay Suburban Electric Supply Ltd. v. The Bombay Electric Workers union and another (supra) (unreported) and Empress Mills Cooperative Society Ltd., Nagpur v. Presiding Officer, Third Labour Court, at Nagpur, (supra) do not lay down the law correctly, and, to that extent, we over-rule the said judgments.
26. There are no other reliefs which need to be granted in the petition, since the employee concerned, we are told, has already resigned his job in December, 1983, and the petitioner claims no other reliefs. This writ petition having been pursued only for the purpose of settling the law, the Rule is made partly absolute to the extent of setting aside the impugned order of the third respondent without any consequential reliefs. No order as to costs.