BHARATIYA KAMGAR KARMACHARI MAHASANGH versus M/S. JET AIRWAYS LTD on 25 July 2023

1. The present appeal arises out of the judgment of the High Courtof Bombay in Writ Petition No. 2657 of 2017, wherein it confirmed theaward dated 30.03.2017 passed by the Central Government IndustrialGTribunal (hereinafter referred to as ‘CGIT’) rejecting the demand of theAppellant-Union for reinstatement with full back wages.

2. The brief facts involved in the case are as follows: Therespondent company operates a commercial airline, flying aircraft fortransporting passengers and cargo. The Appellant represents around H

169 workmen temporarily engaged on a fixed-term contract by theRespondent in various cadres like loader-cum-cleaners, drivers andoperators. The Appellant contends that the workmen were treated astemporary despite completing 240 days in service in terms of the ModelStanding Order provided under the Bombay Industrial Employment(Standing Orders) Rules, 1959 (hereinafter referred to as “BombayModel Standing Order”) and despite the nature of the work beingpermanent and regular. The Trade Union had raised a charter of demandswhich, after negotiations, resulted in a settlement dated 02.05.2002. Inthe said charter of demands, Bhartiya Kamgar Sena gave up the demandfor the grant of permanency and a comprehensive settlement dated02.05.2002 was signed as a package deal that conferred many benefitson the workmen who gave up the said demand. The Respondent Companyclaims that the workers are not entitled to permanency as per thesettlement dated 02.05.2002 entered between the Union and Company.The workmen raised disputes and the matter landed up for adjudication.However, the CGIT, in its award dated 30.03.2017, while answering areference framed the issue, whether the Union’s demand for re-employment /reinstatement with full back wages of these 169 workmenin service of that first party is just and proper and answered it in thenegative. Relying upon Section 25-H of the Industrial Disputes Act, 1947it was held that there is no retrenchment since the non-renewal of fixedterm contract did not amount it to be so as provided under Section2(oo)(bb) of the said Act. Thus, there was no question of re-employmentof the concerned workmen.

OPINION OF THIS COURT

3. After hearing learned counsel of the parties at great length, thefollowing issues arise for our consideration:

-Which is the Appropriate Authority empowered to issue theStanding Order(s) under the Industrial Employment (StandingOrders) Act, 1946 (hereinafter referred to as ‘The Act’)?

-Whether private agreement/settlement between the partieswould override the Standing Order?

ISSUE I

4. The Act applies to every industrial establishment wherein onehundred or more workmen are employed or were employed on any day A

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Aof the preceding twelve months. The expression ‘appropriate government’is defined by Section 2(b) of the Act to mean in respect of industrialestablishments under the control of the Central Government or RailwayAdministration, or a major port, mine or oilfield, the Central Government,and in all other cases, the State Government. Section 2(e) defines theexpression ‘industrial establishment’. Under Section 15 of the Act, theBappropriate Government is empowered to make rules for carrying outthe purposes of the Act. In exercise of the powers conferred by Section15, the then State of Bombay had issued the Bombay IndustrialEmployment (Standing Orders) Rules, 1959. Insofar as thoseestablishments in respect of which the appropriate Government is theCCentral Government, the Industrial Employment (Standing Orders)Central Rules, 1946, stand framed.

5. Insofar as the Respondent Company is concerned, theappropriate Government is clearly not the Central, but the StateGovernment since the Respondent is not, within the meaning of SectionD2(b), under the control of the Central Government. The present casefalls under the latter part of the section; thus, the appropriate Governmentmeans the State Government. The Bombay Model Standing Order wouldbe applicable to the parties.

ISSUE II

E6. For the adjudication of this issue, it is pertinent to take note ofvarious judicial pronouncements.

7. On various occasions, this Court has observed that the certifiedstanding orders have a statutory force. The Standing Order implies acontract between the employer and the workman. Therefore, theFemployer and workman cannot enter into a contract overriding thestatutory contract embodied in the certified Standing Orders.

8. This Court has succinctly laid down the scope of The Act inU.P. SEB v. Hari Shankar Jain,[1] (3-Judge Bench) that it was speciallydesigned to define the terms of employment of workmen in industrialGestablishments, to give the workmen a collective voice in determiningthe terms of employment and to subject the terms of employment to thescrutiny of quasi-judicial authorities by the application of the test offairness and reasonableness. It is an Act giving recognition and form toworkmen’s hard-won and precious rights. We have no hesitation in saying H1 (1978) 4 SCC 16

BHARATIYA KAMGAR KARMACHARI MAHASANGH v. M/s.JET AIRWAYS LTD. [SANJAY KAROL, J.]

that it is a special Act expressly and exclusively dealing with the schedule-enumerated conditions of service of workmen in industrial establishments.

9. While discussing the letter and spirit of The Act, this Court inSudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd.[2] (3-JudgeBench) held that:

“11. …it was an act to require employers in industrialestablishments to formally define conditions of employment underthem. The preamble of the Act provides that it is expedient torequire employers in industrial establishments to determine withsufficient precision the conditions of employment under them andto make the said conditions known to workmen employed bythem…… The Act was a legislative response to the laissez-fairerule of hire and fire at sweet will. It was an attempt at imposing astatutory contract of service between two parties unequal tonegotiate on the footing of equality.

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The intendment underlying the Act and the provisions of the Actenacted to give effect to the intendment and the scheme of theAct leave no room for doubt that the Standing Orders certifiedunder the 1946 Act become part of the statutory terms andconditions of service between the employer and his employeeand they govern the relationship between the parties.”

10. In Western India Match Co. v. Workmen[3](2-Judge Bench),the Court further held that:

“7. The terms of employment specified in the Standing Orderwould prevail over the corresponding terms in the contract ofservice in existence on the enforcement of the Standing Order…..

8. If a prior agreement inconsistent with the Standing Orders willnot survive, an agreement posterior to and inconsistent with theStanding Order should also not prevail…..

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2 (1984) 3 SCC 369

3 (1974) 3 SCC 330 (hereinafter referred to as ‘WIMCO’)

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A10. In the sunny days of the market economy theory, peoplesincerely believed that the economic law of demand and supplyin the labour market would settle a mutually beneficial bargainbetween the employer and the workmen. Such a bargain, theytook it for granted, would secure fair terms and conditions ofBemployment to the workman. This law they venerated as naturallaw. They had an abiding faith in the verity of this law. But theexperience of the working of this law over a long period hasbelied their faith.

11. …It plainly follows from Sections 4, 10 and 13(2) that theCinconsistent part of the special agreement cannot prevail over theStanding Order. As long as the Standing Order is in force, it isbinding on the Company as well as the workmen. To uphold thespecial agreement would mean giving a go-by to the Act’s principleof three-party participation in the settlement of terms ofDemployment. So we are of the opinion that the inconsistent part ofthe special agreement is ineffective and unenforceable.”

11. Placing reliance on WIMCO (supra), this court in RasiklalVaghajibhai Patel v. Ahmedabad Municipal Corpn.[4] (2-JudgeBench) held that any condition of service, if inconsistent with certifiedEstanding orders, would not prevail, as the certified standing orders wouldhave precedence over all such agreements. Any settlement, the employeeUnion enters into with the Employer would not override the ModelStanding Order, unless it is more beneficial to the employees.

12. Coming to the facts of the case, the CGIT noted that theletters issued by the airlines (Respondent herein) to the workmen aimedFto appoint them for a fixed term. Even though their appointment orders,issued from time to time, extended their appointment period, however,on expiry of such period, their employment was supposed to end. It isargued that they carried out work for more than 240 days, which was ofa regular and permanent nature, but since the appointment was for aGfixed-term contract, it would be of no consequence even though they didwork for 240 days or more. The Tribunal observed that the airlines hadno option but to not renew the fixed-term contracts of the workmen dueto a change in Government policy.

BHARATIYA KAMGAR KARMACHARI MAHASANGH v. M/s.JET AIRWAYS LTD. [SANJAY KAROL, J.]

13. The High Court, while upholding the order of the CGIT, heldthat the mere completion of 240 days would not entitle the members toclaim permanency under the Model Standing Order given the settlementand, more specifically, Clause 18 thereof. It further observed that theModel Standing Order is not a statutory provision but, at best, a statutorilyimposed condition of service that a settlement or award can alter.

14. On all counts, we respectfully disagree with the findings ofthe Tribunal and the High Court.

15. Thus, it becomes pertinent to reproduce and analyse relevantClauses of the Bombay Model Standing Order, which reads as follows:

“Clause 4C- A badly or temporary workman who has put in 190days’ uninterrupted service in the aggregate in any establishmentof seasonal nature or 240 days ‘uninterrupted service’ in theaggregate in any other establishment during a period of precedingtwelve calendar months, shall be made permanent in thatestablishment by order in writing signed by the Manager, or anyperson authorised in that behalf by the Manager, irrespective ofwhether or not his name is on the muster roll of the establishmentthroughout the period of the said twelve months.”

“Clause 32: Nothing contained in these Standing orders shalloperate in derogation of any law for the time in force or to theprejudice of any right under the contract of service, custom orusage or an agreement settlement or award applicable to theestablishment.”

16. A cumulative reading of aforesaid clauses reveals that aworkman who has worked for 240 days in an establishment would beentitled to be made permanent, and no contract/settlement which abridgessuch a right can be agreed upon, let alone be binding. The Act being thebeneficial legislation provides that any agreement/contract/settlementwherein the rights of the employees are waived off would not overridethe Standing Orders.

17. Learned counsel for the Respondent has appraised this Courtof the insolvency proceedings initiated against the Respondent Companyunder the Insolvency and Bankruptcy Code, 2016. However, we refrainfrom commenting thereupon, for it does not bear any consequence tothe present lis and neither was it a subject matter of adjudication beforethe courts/authorities below.

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[2023] 10 S.C.R.

A18. Given the above discussions, we allow the appeal holding theAppellant-Union entitled to all benefits per the Bombay Model StandingOrder. The award dated 30.03.2017 passed by CGIT in Reference No.CGIT-2/56 of 2013 and the judgment dated 10.01.2018 passed by theHigh Court of Judicature at Bombay in Writ Petition No. 2657 of 2017affirming the same are quashed and set aside.

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19. No costs.

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Ankit Gyan(Assisted by : Aarsh Choudhary, LCRA)

Appeal allowed.

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