Karnataka High Court
M/S. Stumpp Schuele & Somappa Pvt Ltd vs Sri.Basavaraja.M on 6 September, 2022
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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WP No. 58467 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
®
WRIT PETITION NO. 58467 OF 2013 (L-RES)
BETWEEN:
M/S STUMPP SCHUELE & SOMAPPA
PVT. LTD., ELECTRONICS DIVISION
POST BOX NO.1905
BULL TEMPLE ROAD
BANGALORE-560019
REPRESENTED BY ITS
GENERAL MANAGER-HR & ADMIN.
SRI.K.NARAYANA
AGED ABOUT 64 YEARS
...PETITIONER
(BY SRI. S.N. MURTHY, SR. COUNSEL FOR
SRI. SOMASHEKAR, ADVOCATE-PH)
AND:
Digitally signed by
POORNIMA SRI. BASAVARAJA.M
SHIVANNA S/O LATE SRI.NARASIMHAIAH
Location: HIGH
COURT OF AGED ABOUT 64 YEARS
KARNATAKA R/AT:NO.207, 2ND CROSS
KEMPEGOWDANAGAR
BANGALORE-560019
... RESPONDENT
(BY SRI. RUDRAPPA.P, ADVOCATE-PH)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT IN
THE NATURE OF CERTIORARI AND OR ANY OTHER WRIT OR ORDER
AND QUASH THE IMPUGNED AWARD DATED 03.07.2013, IN ID
NO.42/2007 AT ANNEXURE-'U' PASSED BY THE INDUSTRIAL
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WP No. 58467 of 2013
TRIBUNAL, BANGALORE AND PASS SUCH OTHER ORDERS AS
DEEMED FIT IN THE FACTS AND CIRCUMSTANCE OF THE CASE.
THIS WRIT PETITION COMING ON FOR FURTHER HEARING
AND HAVING BEEN RESERVED FOR ORDERS ON 28.07.2022, THIS
DAY, THE COURT PRONOUNCED THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
"The petitioner humbly prays, that in the interest of justice, this Hon'ble Court may be pleased to issue a writ in the nature of certiorari and or any other writ or order and quash the impugned award dated 03.07.2013, in ID No.42/07 at Annexure-'U' passed by the Industrial Tribunal, Bangalore and pass such other orders as deemed fit in the facts and circumstance of the case".
2. The petitioner is a Company incorporated under the Companies Act, 1956 having its factory at Hosur Road, having an independent factory licence bearing No.MYB 679, having Certified Standard Orders (CSO).
3. There was one other Company viz., M/s.Nippon Electronics (India) Private Limited (for short, -3- WP No. 58467 of 2013 'Nippon'), which was operating at Bull Temple Road, Bangalore, which also had separate CSO.
4. The respondent had been employed with Nippon.
Nippon was amalgamated with the petitioner- Company by virtue of the order passed by this Court in Co.P No.27/1983 clubbed with C.A.No.165/1983 dated 06.06.1984.
5. It is contended that after amalgamation, the Unit of Nippon was referred to as M/s.Stumpp Schuele and Somappa Private Limited (Electronics Division), Bull Temple Road and the existing unit was referred to as M/s.Stumpp Schuele and Somappa Private Limited (Hosur Road Division). Thus, both the Hosur Road and the Bull Temple Road units existed separately as independent industrial establishments of the petitioner-Company with their respective CSOs.
6. In terms of Clause 19 of the CSO of Nippon, the age of retirement was fixed as 55 years whereas in terms -4- WP No. 58467 of 2013 of the CSO of the Hosur Road Unit, the age of retirement was fixed as 58 years.
7. The respondent having attained superannuation at the age of 55 years as per the birth details furnished by the respondent at the time of his appointment, the petitioner-Company informed the respondent vide letter dated 14.04.2005 that the respondent would be relieved on the close of working hours on 14.05.2005.
8. It is in that background that the Electronic Division at Bull Temple Road had raised a dispute claiming that retiring them at the age of 55 years is contrary to law. The Government of Karnataka vide endorsement dated 31.03.2006 had informed the employees that the retirement of the employees at 55 years is in accordance with the CSOs and the Settlement signed with the Union in 1977 and 1986 and as such, there was no violation of the CSO. -5- WP No. 58467 of 2013
9. The respondent, issued a notice dated 03.07.2007 contending that he would retire only at the age of 58 years since the CSOs of the Hosur Road Unit/industrial establishment indicated that the retirement age would be 58 years.
10. The petitioner-Company replied to the same informing the respondent that the respondent being an employed in the Electronic Division at Bull Temple Road, the CSOs for the said Unit/industrial establishment prescribing 55 years as retirement age, it is that age which would be applicable.
11. In the above background, the respondent raised a dispute alleging premature retirement which came to be referred to the Industrial Tribunal by the Government of Karnataka and registered as I.D.No.42/2007. After hearing the parties, the Industrial Tribunal vide its award dated 03.07.2013 held that the petitioner was not justified in retiring the respondent on 14.05.2005 and it is aggrieved by -6- WP No. 58467 of 2013 the said award, the petitioner-Company is before this Court.
12. Sri.S.N.Murthy, learned Senior Counsel appearing for the petitioner would submit that:
12.1. The Electronic Division at Bull Temple Road was always maintained separately. It is never part of the Hosur Road Unit. Infact, the Bull Temple Road Unit was sold with business and machinery to M/s.NEL Private Limited under a Business Transfer Agreement dated 01.04.2011. The purchaser shifted the factory to Kanakapura with all 42 employees and plant and machinery in furtherance of which the petitioner-Company demolished the factory building in Bull Temple Road after which there was no industrial activity being carried on at Bull Temple Road.-7-
WP No. 58467 of 2013 12.2. He submits that both the Units/industrial establishments being separate and distinct, and both the Units/industrial establishments having their own separate CSOs, it is the CSOs of that industrial establishment which would be applicable to that Unit.
12.3. Merely because there is an amalgamation of two industrial establishments, the worker from one industrial establishment cannot avail the higher retirement age available in the CSOs of another industrial establishment. The workers/employees at Bull Temple Road Unit would continue to be governed by the CSOs applicable thereto, both of them being separate industrial establishments.
12.4. That a Company may be having different factories and different activities, each of the factories could have separate CSOs. Merely because the owner of the industrial -8- WP No. 58467 of 2013 establishment is one and the same, the Standing Orders will not become one and the same. The CSOs made applicable to one factory/establishment cannot be made applicable to another factory/establishment. 12.5. In this regard, he relies upon the decision of the Hon'ble Delhi High Court in the case of BHARAT ELECTRONICS LIMITED VS. CHIEF LABOUR COMMISSIONER reported in (1996) 2 LLJ 193 more particularly Paras 4 and 10 thereof, which are reproduced hereunder for easy reference:
4. Before dealing with the above questions, it would be useful to glance at the first instance the facts of this case. The relevant facts are that the petitioner is one of the nine production units of M/s Bharat Electronics Ltd. (hereinafter called the company).
The company is under the Administrative control of the Government of India. Its different units are situated in different parts of the country. The Company is engaged in the manufacturing of sophisticated professional grade electronic equipment and components for the consumption of the armed forces of the Union of India and for Defence and Civil Services, para-military services. Department of Space. All India Radio. Doordarshan, Civil Aviation, Department of Tele-Communications, Oil Industry etc. -9- WP No. 58467 of 2013
10. Question No. 1: What is the effect of Settlement dated 20th July, 1989? Bharat Electronics Ltd., the Company has admittedly nine Units situated in different States and these units have their own standing orders governing the service conditions of its employees. The Kotdwara Unit of the Company arrived at a settlement with its employees before the Conciliation Officer on 20th July, 1989. As per Clause 17.0 of the said settlement the demands raised by the workmen in their Charter of demands stood finally settled. The demands mentioned in their Charter of Demands particularly at S.No. 1 to 10, 14 and 18 were discussed and resolved beside indicating other benefits already enjoyed by the employees. So far as other demands which were not specifically mentioned it was presumed those were given up. In this regard reference can be had to Clause 17.0 of the agreement which is reproduced as under:--
Clause 17.0:
17.0 The settlement is in full and final settlement of all the demands raised by the Unions in their Charter of Demands and none of them shall form a point of industrial dispute during the period of this settlement. No other demand having financial implications will be raised during the period of this settlement.
12.6. He relies upon the decision of this Court in the case of BHARAT ELECTRONICS LTD., VS. BEL HEAD OFFICE STAFF ASSOCIATION & ANR., reported in ILR 2000 KAR 1002 more particularly Paras 1 and 25 thereof, which are reproduced hereunder for easy reference:
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1. The petitioner is a company incorporated under the provisions of Companies Act. It is functioning under the control of Ministry of Defence, Government of India. The Company at present has nine production units, besides a number of Regional Offices spread across the country in different States.
Seven of these units have standing Orders certified under the provisions of the Industrial Employment (Standing Orders) Act, 1946. In respect of the other two units, final certification is pending on appeal before the appellate authority. The Company has its Head Office at No. 116/2. Trade Centre, Race Course Road, Bangalore City. The production unit is nearly about 10 kms., away from the Head Office. In the petition, it is stated, that the main function of the Head Office is to lay down broad policies and corporate directions to the various units, which is purely of administrative nature. It is specifically stated that no production activity or manufacturing process as such being carried on at the Head Office. The Head Office is registered under the provisions of Karnataka Shops and Commercial Establishments Act, 1961.
25. In my opinion, the Certifying Officer and Regional Labour Commissioner, before holding that the 'Head Office' of the B.E.L., Bangalore, is covered under the Act, should have applied the tests laid down by the Apex Court in Associated Cement case and other subsequent decisions and without doing so, could not have come to the conclusion that the Head Office of the petitioner-Company is also covered under the Industrial Employment (Standing Orders) Act, by merely relying upon the observations made by this Court in Karnataka Agro Industries Corporation Employees' Association's case, supra, without even finding out whether the factual matrix in the said decision is the same as in the instant case. As observed by the Supreme Court in Associated Cement's case that "it is perhaps impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of those tests is to find out the true relation between the parts, branches, units etc., if in their true
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WP No. 58467 of 2013relation they constitute one integrated whole. We say that the establishment is one, if on the contrary they do not constitute one integrated whole, each unit in them a separate unit. How the relations between the units will be judged must depend on the facts proved..."
12.7. The Industrial Tribunal, therefore, he submits, has erred in holding that the CSOs of Hosur Road unit/industrial establishment would apply to the unit/industrial establishment at Bull Temple Road. The Tribunal ought to have taken into consideration the endorsement issued by Government of Karnataka holding that the employees who had been retired at 55 years were retired in accordance with law. If the same had been taken into consideration, then the Industrial Dispute ought to have been dismissed.
12.8. There was no dispute per se as regards the issuance of an endorsement by the Karnataka Government. Hence, the question of Industrial Tribunal coming to a conclusion that the
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WP No. 58467 of 2013settlement agreement had not been produced to support the endorsement is exfacie bad in law. If at all the Industrial Tribunal could have directed the petitioner to produce any document before it wanted to refer to rely upon.
12.9. He relies upon the decision of this Court reported in the case of RAJU, M.C. vs. EXECUTIVE DIRECTOR, KARNATAKA VIDYUTH KHARKHANE LTD reported in ILR 1983 KAR 189, more particularly Paras 12, 13, 14 and 19 thereof, which are reproduced hereunder for easy reference:
12. The first limb of the contention is that rule 15-A incorporated into the schedule on 11th March 1982 must be regarded as having become part of the certified Standing Orders of KAVIKA as sections 3 and 4 require that draft Standing Orders submitted for certification must confirm to the Schedule and the model rules.
13. I find no merit in the contention. Admittedly draft standing orders prepared by KAVIKA in conformity with the provisions of the Act, have been certified and they are in force and that there is no provision in it relating to the age of retirement.
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WP No. 58467 of 2013There is nothing in the provision of Sections 3 and 4 to indicate that if any new item of condition of service is added to the schedule to the Act and a model rule on that item is incorporated in the model Standing Orders by any amendment made to the schedule to the Act and the model standing orders, respectively, the certified standing orders of an establishment automatically stand modified or amended so as to bring it in conformity with such modification or amendment. All that can be said is that on such amendment by the force of Sections 3 and 4, it becomes obligatory for the employer, to include a provision, on such new item of conditions of services, in the certified standing orders. Further the provision so included must be, so far as is practicable in conformity with such new rule added to the model standing orders.
14. The Second limb of the contention urged by the learned Counsel was based on section 12-A of the Act. Learned Counsel strenuously contended that the effect of section 12-A was that the Rule 15-A incorporated into the model Standing Orders on 11th March 1982 must be deemed to have become part of the certified standing orders.
19. (1) Therefore, immediately after Rule 15-A was added to the model Standing Orders on 11th March 1982, while undoubtedly the employers governed by it, came under an obligation to get their certified standing orders amended so as to confirm to Sections 3 and 4 of the Act, by making an appropriate application under Section 10(2) of the Act, the workmen could also make an application before the certifying officer, under that provision seeking an amendment of the certified standing orders on those lines, who is under a duty to pass an order on that application in accordance with law. (2) Thus, it may be seen that the Act itself provides a procedure for bringing into effect, any amendment made to the schedule to the Act or the model standing orders and it is the workmen who have failed to utilise the said provision immediately
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WP No. 58467 of 2013thereafter. However, Annexure-E produced along with the petition discloses that the workmen have made an application under Section 10(2) for that purpose only on 16th June 1982 and admittedly it has not yet been allowed.
(3) Section 7 prescribes the date from which the certified standing orders come into operation. It reads--
"7. Standing Orders shall, unless an appeal is preferred under Section 6, come into operation on the expiry of thirty days from the date on which authenticated copies thereof are sent under sub- section (3) of Section 5, or where an appeal as aforesaid is preferred, on the expiry of seven days from the date on which copies of the order of the appellate authority are sent under sub-section (2) of Section 6."
By virtue of Section 10(3), the above provision applies to an amendment of Standing Orders pursuant to an order made under Section 10(2) also. The combined effect of Sections 7 and 10(3) therefore, is, that the amendment would come into force only after the application filed by the workmen is allowed by the Certifying Officer and, if any, appeal is presented by the employer against that order, it would come into force if and when it is confirmed by an appellate order made and communicated and after the expiry of the period, thereafter as specified in Section 7. (4) The resultant position is that a rule similar to rule 15-A has not yet become the part of the Standing Orders of the KAVIKA and, therefore, the petitioner has not acquired any legal right to continue in service till 58 years.
13. Sri.P.Rudrappa, learned counsel for the respondent would submit that:
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13.1. Simply because Nippon Electronics Limited is referred to as an Electronics Division of the petitioner Company, it cannot be said that it was separate establishment of the petitioner company governed by different Standing Orders other than the one of the petitioner. The very purpose and object of the Industrial Employment (Standing Orders) Act, 1946 ('IESO Act' for short) is to ensure uniform service conditions to all the employees working in different divisions of the same employer. 13.2. Section 3(2) of the IESO Act stipulates that the Standing Orders shall contain provisions for every matter set out in the Schedule to the Act and to be in conformity with the Model Standing Orders contained in the Act. Therefore, different ages of retirement cannot be prescribed for two different units.
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WP No. 58467 of 201313.3. That in the absence of a separate agreement being entered into between the employees and the employer, common age of retirement would be applicable to both the Units/industrial establishments and as such, he submits that the order passed by the Tribunal holding that the age of retirement applicable to respondent is 58 years is proper and correct and does not require any interference.
14. Heard Sri.S.N.Murthy, learned Senior Counsel for the petitioner and Sri.Rudrappa P., learned counsel for the respondent and perused papers.
15. The points that would arise for consideration by this Court are:
1. Whether the Certified Standing Orders are applicable to all the Units/industrial establishments of a Company or are they specific to a particular industrial establishment. As a corollary, could each industrial establishment of a Company have different Certified Standing Orders?
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WP No. 58467 of 2013
2. Could a Company have different ages of retirement for its different industrial establishments?
3. On an amalgamation of two Companies and the industrial Establishments owned by the said Companies, which Standing Orders would apply to the employees?
4. Could it be contended that the Standing Orders most beneficial to the employee would apply to the employee?
5. In the present case, does the order of the Industrial Tribunal require to be interfered with by this Court?
6. What order?
16. I answer the above points as under:-
17. Answer to Point No.1:Whether the Certified Standing Orders are applicable to all the Units/industrial establishments of a Company or are they specific to a particular industrial establishment. As a corollary, could each industrial establishment of a Company have different Certified Standing Orders? 17.1. The object of Industrial Employment (Standing Orders) Act, 1946 reads as under: -
"An Act to require employers in industrial establishments formally to define conditions of employment under them.
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WHEREAS it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them";
17.2. The stress is on the industrial establishment and not the employer or the nature of employer, be it company, partnership or proprietary concern. What is required to be accomplished is that the conditions of employment in an Industrial Establishment is defined with sufficient precision. 17.3. "Employer" is defined under Section 2(d) of Industrial Employment (Standing Orders) Act, 1946, which reads as under: -
(d) "employer" means the owner of an industrial establishment to which this Act for the time being applies, and includes --
(i) in a factory, any person named under 5 [clause (f) of sub-section (1) of section 7, of the Factories Act, 1948 (63 of 1948)], as manager of the factory;
(ii) in any industrial establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf, or where no authority is so appointed, the head of the department;
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(iii) in any other industrial establishment, any person responsible to the owner for the supervision and control of the industrial establishment; 17.4. The employer is defined only for the purposes of the Industrial Establishment and not for the organization. Thus once again it is the Industrial establishment which is laid stress upon.
17.5. "Industrial Establishment" is defined under Section 2(e) of Industrial Employment (Standing Orders) Act, 1946 as under:-
2(e) "industrial establishment" means--
(i) an industrial establishment as defined in clause (ii) of section 2 of the Payment of Wages Act, 1936 (4 of 1936), or 1 [(ii) a factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948), or]
(iii) a railway as defined in clause (4) of section 2 of the Indian Railways Act; 1890 (9 of1890), or
(iv) the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen;
17.6. The definition of an "Industrial Establishment"
is again restricted to an establishment under
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the payment of wages act, factory under the Factories Act, railway under the Railways Act etc., which again does not have any relation to the nature of employer.
17.7. Section 3 of the Industrial Employment (Standing Orders) Act, 1946 reads as under:-
3. Submission of draft standing orders.--
(1) Within six months from the date on which this Act becomes applicable to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment.
(2) Provision shall be made in such draft for every matter set out in the Schedule which may be applicable to the industrial establishment, and where model standing orders have been prescribed, shall be, so far as is practicable, in conformity with such model.
(3) The draft standing orders submitted under this section shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment including the name of the trade union, if any, to which they belong. (4) Subject to such conditions as may be prescribed, a group of employers in similar industrial establishments may submit a joint draft of standing orders under this section. 17.8. In terms of Section 3 of Industrial Employment (Standing Orders) Act, 1946, within six months
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WP No. 58467 of 2013from the date of the Act becoming applicable to an industrial establishment, an employer is required to submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in his industrial establishment. In furtherance thereof, the certification process is required to be resorted to.
17.9. In the present matter, the contention of the respondent is that there cannot be two different CSOs as regards two different industrial establishments functioning in the City of Bangalore. On an amalgamation of an unit/industrial establishment into the Company, the Standing Orders most beneficial to the employees would be applicable to all the employees.
17.10. A perusal of the above extracted provisions would indicate that the Standing Orders are made in respect of an industrial establishment.
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WP No. 58467 of 2013An industrial establishment is defined under Section 2 of the Payment of Wages Act, 1936. 17.11. The said Section 2 of Payment of Wages Act, 1936, defines 'industrial establishment' which is reproduced hereunder for easy reference:
2.xxxxx 7 [(ii) industrial or other establishment means any-
8
(a) tramway service, or motor transport service engaged in carrying passengers or goods or both by road for hire or reward;
(aa) air transport service other than such service belonging to or exclusively employed in the military, naval or air forces of the Union or the Civil Aviation Department of the Government of India;]
(b) dock, wharf or jetty;] 1 [(c) inland vessel, mechanically propelled;]
(d) mine, quarry or oil-field;
(e) plantation;
(f) workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use, transport or sale;2
[(g) establishment, in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations
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WP No. 58467 of 2013connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on;] 3 [(h) any other establishment or class of establishments which the Central Government or a State Government may, having regard to the nature thereof, the need for protection of persons employed therein and other relevant circumstances, specify, by notification in the Official Gazette;] 17.12. Section 2(m) of the Factories Act, 1948 has defined 'factory', which is reproduced hereunder for easy reference:
2. (m) "factory" means any premises including the precincts thereof--
(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, but does not include a mine subject to the operation of 6[the Mines Act, 1952 (35 of 1952)], or 7[a mobile unit belonging to the armed forces of the Union, railway running shed or a hotel, restaurant or eating place].
17.13. 'Railway' is defined under Sub-Section 4 of Section 2 of the Indian Railways Act, 1890,
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WP No. 58467 of 2013which is reproduced hereunder for easy reference:
4. "railway" means a railway, or any portion of a railway, for the public carriage of passengers, animals or goods, and includes--
(a) all land within the fences or other boundary-
marks indicating the limits of the land appurtenant to a railway;
(b) all lines of rails, sidings or branches worked over for the purposes of, or in connection with, a railway;
(c) all stations, offices, warehouses, wharves, workshops, manufactories, fixed plant and machinery and other works constructed for the purposes of, or in connection with, a railway; and
(d) all ferries, ships, boats and rafts which are used on inland waters for the purposes of the traffic of a railway and belong to or are hired or worked by the authority administering the railway;"
17.14. The employer is stated to be the owner of an industrial establishment to which the Act applies and would include in any factory, any person named in clause (f) of Sub-section (1) of Section (7) of Factories Act, 1948.
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17.15. An 'employer' is defined under Sub-section (d) of Section 2 of IESO Act, which has been reproduced hereinabove.
17.16. The definition of an employer as can be seen is with reference to an 'industrial establishment and not with regard to a Company or a partnership or the like. Thus, the Act lays emphasis on the industrial establishments and not the employer per se. This is reinforced by Section 13-B of IESO Act, which is reproduced hereunder for easy reference:
13B. Act not to apply to certain industrial establishments.--Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed therein are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Services) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Service (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply.] 17.17. In terms of Section 13-B of IESO Act, it is made clear that the Act shall not apply to certain
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industrial establishment. Thus, the applicability or non-applicability of the Act is premised on an industrial establishment and not the employer per se.
17.18. Each Industrial establishment therefore needs to have a CSO, depending on the agreement between the employer and workmen, different Industrial Establishments can have the same CSO or each Industrial Establishment can have a separate CSO.
17.19. In view of the above, I answer Point No.1 by holding that the Certified Standing Orders would be applicable to a particular industrial establishment of a Company and would not be applicable to all the industrial establishments owned and operated by the Company unless specifically made applicable thereto and as a corollary, each industrial establishment of a
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WP No. 58467 of 2013Company can have different Certified Standing Orders.
18. Answer to Point No.2: Could a Company have different ages of retirement for its different industrial establishments?
18.1. In terms of Model Standing Order 3 of Schedule 1B of the Industrial Employment (Standing Orders) Central Rules, 1946, the age of retirement has been provided, which reads as under:-
3. Age of retirement:
The age of retirement or superannuation of a workman shall be as may be agreed upon between the employer and the workman under an agreement or specified in a settlement or award which is binding on both the workman and the employer. Where there is no such agreed age, retirement or superannuation shall be on completion of 58 years of age by the workman.
18.2. Thus, the Model Standing Order provides for the age of retirement to be provided and/or agreed upon between the employer and the workman under the agreement and/or as specified in the settlement or award and if there is no such agreed age of retirement or
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superannuation shall be on completion of 58 years of age of the workman.
18.3. The fact that the Model Standing Orders provides for an agreement between the employer and the employee would indicate that it is on the basis of the agreement and/or settlement entered into between the employer and the employee, that the age of superannuation/retirement could be fixed. 18.4. Thus, there being a possibility of having different Standing Orders for different industrial establishments, the contents of the Standing Orders in respect of each of the different industrial establishments could also be different, which would therefore imply that the Company could have a different age of retirement for its different industrial establishments.
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19. Answer to Point No.3: Would on an amalgamation of two Companies and the industrial Establishments owned by the said Companies, which Standing Orders would apply to the employees?
AND Answer to Point No.4: Could it be contended that the Standing Orders most beneficial to the employee would apply to the employee? 19.1. Both the above points being connected to each other are taken up for consideration together. 19.2. An amalgamation of two companies would bring together the business of two companies as also the industrial establishments under the said two companies.
19.3. As answered to Point No.1 above, a Company could have different Standing Orders for each industrial establishment. If that be so, if company 'A' were to be amalgamated with company 'B' and company 'A' has five units/industrial establishments and company 'B' has three units/industrial establishments, there
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WP No. 58467 of 2013could be as many as eight CSO's applicable to the different units/industrial establishments of the same company. On amalgamation, the CSOs in respect of three units/industrial establishments of company 'B' cannot be negated and/or superseded by the CSOs applicable to other units/industrial establishments of the said Company. 19.4. Whether amalgamated or not, the industrial units would have their own independent existence and the Industrial Standing Orders applicable to each of the industrial establishments would continue to apply to such industrial establishment.
19.5. Since the very basis of the applicability of the Industrial Employment (Standing Orders) Act and Rules is on an industrial establishment and not the employer.
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WP No. 58467 of 201319.6. Thus, I answer Points No.3 and 4 by holding that on an amalgamation of two companies/employers, the Industrial Standing Orders applicable to each of the units/industrial establishments as it exists prior to amalgamation would continue to exist and apply to each of the industrial establishment and there would be no change or supersession or negation of the Standing Orders merely because there is an amalgamation. 19.7. The CSO as negotiated between the employer and employee and/or adjudicated by the Certifying Officer would have a precedence over any amalgamation. Merely because the CSO of another industrial establishment of the same employer is more beneficial to the employee, the employees of another establishment cannot contend that the same would also apply to them. As a corollary even on amalgamation
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WP No. 58467 of 2013merely because the CSO of the Company to which the industrial establishment is amalgamated has more beneficial provision of the CSO, the same would not enure to the benefit of industrial establishment amalgamated with that employer.
20. Answer to Point No.5: In the present case, does the order of the Industrial Tribunal require to be interfered with by this Court?
20.1. The Industrial Tribunal, in the present case, has vide its award dated 03.07.2013, come to a conclusion that the M/s.Stumpp Schuele and Somappa Private Limited, Electronic Division was not justified in relieving the respondent No.2 from services on 14.05.2005 on attaining the age of superannuation viz., 55 years. 20.2. The CSO applicable to Nippon Electronics India Private Limited, Bull Temple Road was certified on 29.06.1970 relating to age of retirement is
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WP No. 58467 of 2013Rule 19, which is reproduced hereunder for easy reference:-
All petitions must be made within three days of the occasion leading to the petition.
1) Every employee who is physically unfit or has attained the age of 55 shall retire provided that the company may re-employ the super-annuated workman for sufficient reasons.
2) If no correct date of birth is available, the decision of the Manager in consultation with the Company's medical officer or any other Medical officer nominated by the Company for the purpose, regarding the age of any workman is binding and final.
3) The Company may require that any workman should be examined by a Medical Practitioner specified by the Company. If any such examination shows that the workman is suffering from any disease or complaint that is infectious or liable to interfere with the workman's duties or with the health of other workman, the company may terminate the employment of the workman.
4) i) No workman while in service of the company is allowed to accept other employment or undertake any work or service either direct or indirect, honorary or otherwise without previous written permission from the Manager or any other officers authorised on this behalf by the Management.
ii) Each departmental Head will be held personally responsible for the proper and faithful observance of the Standing Orders.
5) All workmen will submit satisfactory evidence of their date of birth or age within a period of three months from the date they are asked by the management.
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WP No. 58467 of 201320.3. Admittedly the said Standing Orders has not been amended or sought to be amended by either the employer or trade union or workman by following workman the procedure prescribed under Section 10 of the IESO Act, 1946. 20.4. Section 10 of IESO Act is reproduced hereunder for easy reference:-
10. Duration and modification of standing orders.--(1) Standing orders finally certified under this Act shall not, except on agreement between the employer and the workmen 1[or a trade union or other representative body of the workmen], be liable to modification until the expiry of six months from the date on which the standing orders or the last modifications thereof came into operation. 2
[(2) Subject to the provisions of sub-section (1), an employer or workman 1[or a trade union or other representative body of the workmen may apply to the Certifying Officer to have the standing orders modified, and such application shall be accompanied by five copies of 3[***] the modifications proposed tobe made, and where such modifications are proposed to be made by agreement between the employer and the workmen or a trade union or other representative body of the workmen, a certified copy of that agreement shall be filed along with the application.] (3) The foregoing provisions of this Act shall apply in respect of an application under sub-section (2)as they apply to the certification of the first standing orders.
4 [(4) Nothing contained in sub-section (2) shall apply to an industrial establishment in respect of
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WP No. 58467 of 2013which the appropriate Government is the Government of the State of Gujarat or the Government of the State of Maharashtra.] 20.5. Whenever any Standing Orders are certified, it would be in force for a period of six months and thereafter, the employer or the workman or a trade union or a representative body of the workman can apply to the Certifying Officer for modification of the Standing Orders. Until and unless the same is done, the CSOs would continue to be in operation.
20.6. In the present case, the only contention of respondent No.2 which has been accepted by the Industrial Tribunal is that on account of Nippon Electronics India Private Limited being amalgamated with M/s.Stumpp Schuele and Somappa Private Limited, the Standing Orders of M/s.Stumpp Schuele and Somappa Private Limited which provided for retirement age of 58 years would apply to the employees of Nippon Electronics India Private Limited.
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WP No. 58467 of 201320.7. For the reasons aforementioned and the points above answered, the said finding of the Industrial Tribunal is improper inasmuch as amalgamation or otherwise would not by itself have an effect of modifying the CSOs. For the purpose of such modification, the procedure prescribed under Section 10 of the IESO Act is required to be followed.
20.8. As held above, the Standing Orders being applicable to a particular industrial establishment, mere amalgamation would not have any effect of supersession or modification of the CSOs. In view thereof, I am of the considered opinion that the reasoning of the Industrial Tribunal not being proper and not being in accordance with law, the order passed by the Industrial Tribunal suffers from legal infirmity and as such, it is required to be set aside.
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WP No. 58467 of 2013
21. Answer to Point No.5: What order?
21.1. In view of the above, I pass the following:
ORDER i. The Writ Petition is allowed.
ii. The award dated 03.07.2013 in I.D.No.42/2007 passed by Industrial Tribunal, Bangalore at Annexure-U is hereby quashed.
Sd/-
JUDGE Prs* List No.: 1 Sl No.: 49