Employer And Workman Cannot Override The Statutory Contract Embodied In Certified Standing Order: Sc In Bharatiya Kamgar Karamchari Mahasangh V. M/s. Jet Airways Ltd.

CASE TITLE:  

Bharatiya Kamgar Karamchari Mahasangh v. M/s. Jet Airways Ltd. 

DATE OF ORDER:

25th July, 2023

BENCH:

Justice Sanjay Karol and Justice Abhay S. Oka

PARTIES:

Petitioner (s)- Bharatiya Kamgar Karamchari Mahasangh

Respondent (s)- M/s. Jet Airways Ltd

SUBJECT:

This case involves employment Contracts: Interpretation and Preeminence of Certified Standing Orders.

IMPORTANT PROVISIONS:

• Industrial Employment ( Standing Orders) Act, 1946
• Section 2 (b) Industrial Employment ( Standing Orders) Act, 1946
• Section 15 Industrial Employment ( Standing Orders) Act, 1946

BRIEF FACTS: 

• The respondent runs a commercial airline company that transports cargo and passengers. The appellant is representing 169 workmen who were temporarily assigned on a fixed term contract by the respondent company in various works like cleaners, drivers and operator.
• It is contended by the appellant that despite the permanent nature of work and completing 240 days service with respect to Model Standing Order mentioned in Bombay Industrial Employment ( Standing Order) Rules, 1959 the employees were treated as temporary workers. 
• Later the Trade Union raised a Charter of demands which resulted in a settlement dating 2nd May 2002.  In the charter, the Bharatiya Kamgar Sena gave up their demand of permanency and the settlement deed signed guaranteed many benefits to the employees.
• The respondent later claimed that the employees are not entitled to permanency as per the settlement agreement between the trade union and the company. The Central Government Industrial Tribunal ( CGIT) however, posed the question of whether the Union's claim for the re-employment/reinstatement of these 169 craftsmen with full back wages in its award from March 30, 2017, in response to a referral. The first party's service was fair and appropriate, and it was addressed in the negative. 
• Based on Section 25-H of the Industrial Disputes Act, 1947, it was determined that no retrenchment had occurred because the termination of a fixed-term contract did not constitute a termination as defined in Section 2(oo)(bb) of the same Act. Therefore, the notion of hiring the concerned workers again was out of the question.

ISSUES:

• Which appropriate authority is authorised by the Industrial Employment (Standing Orders) Act of 1946 (hereafter referred to as "The Act") to issue the standing order(s)? 
• To what extent might a private agreement or settlement between the parties supersede the Standing Order?

JUDGEMENT ANALYSIS: 

• With respect to Issue 1, the Court stated that Every industrial firm that employs or has employed 100 or more workers on any given day within the previous year is subject to the Act. According to Section 2(b) of the Act, "appropriate government" is defined as the Central Government in the case of industrial establishments under their control, the State Government in the case of major ports, mines, or oilfields, or the Railway Administration. 
• The competent Government is authorised to enact rules for implementing the Act's purposes under Section 15 of the Act. The Bombay Industrial Employment (Standing Orders) Rules, 1959 were created by the then-State of Bombay in the exercise of the authority granted by Section 15. The Industrial Employment (Standing Orders) Central Rules of 1946 apply to establishments for which the Central Government is the relevant government.
• Since the Respondent Company is not, as defined by Section 2(b), under the jurisdiction of the Central Government, the State Government is plainly the proper government in relation to the Respondent Company. The State Government is the appropriate Government because the current situation fits under the section's latter part. For the parties, the Bombay Model Standing Order would apply.
• While answering Issue 2, the court cited relevant judgements pertaining to the subject matter of the case. It emphasized that certified standing orders contain statutory force and thus implies a contract between the employer and employee. Thus, employer and workman cannot enter in a contract that would override the statutory contract embodied by the Standing Order.
• The court cited the case of U.P SEB v. Hari Shankar Jain (1978) 4 SCC 16 to explain the scope of the Act. The Act in question was exclusively designed to define terms of employment of workers in industries, it empowers the workers to determine the terms of employment along with scrutiny of quasi-judicial authorities that ensure fairness. The Court acknowledged that it is a unique Act that specifically and only addresses the workmen's schedule-enumerated conditions of employment in industrial facilities.
• In discussion of the spirit of the act, the court cited the case of Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. (1984) 3 SCC 369 where it was held that There can be no doubt that the Standing Orders certified under the 1946 Act become a part of the statutory terms and conditions of service between the employer and his employee and they govern the relationship between the parties, given the intention behind the Act and the provisions of the Act enacted to give effect to the intendment and the scheme of the Act.
• In Western India Match Co. v. Workmen (1974) 3 SCC 330 ( or WIMCO) it was held further that In the event that the Standing Order is put into effect, the employment conditions outlined in it shall take precedence over any comparable provisions in any existing contract of service. The Standing Order is enforceable for as long as it is in effect, and it applies to both the Company and the employees. 
• In Rasiklal Vaghajibhai Patel v. Ahmedabad Municipal Corpn. (1985) 2 SCC 35 this court relied on WIMCO (above) and concluded that any condition of service that conflicts with certified standing orders would not apply since the certified standing orders would take precedence over any similar agreements. The Model Standing Order would not be superseded by any agreement the Employee Union and Employer reach unless it is in the employees' best interests.

CONCLUSION:

• The Court observed that the airlines provided the workers with letters of fixed-term appointment that made it apparent that their job would stop after the stipulated term expired. Despite this, the workers assert that their work beyond the stipulated term and totalled more than 240 days, demonstrating that their employment was regular and permanent.
• During the hearing, the Tribunal took into account the airline's inability to extend the fixed-term contracts because of a change in government policy, which emerged as a key issue in the case. The airlines contended that they were forced to let the workers go at the end of the predetermined period and had no other choice.
• The High Court upheld the Tribunal's ruling and argued that just finishing 240 days of labour does not automatically qualify the workmen for permanence under the Model Standing Order. The Model Standing Order is not a statutory instrument, but rather a condition of service that may be modified through settlements or awards, according to the High Court, which emphasised the importance of the settlement and its Clause 18.
• The Supreme Court, however, had a different opinion. It was decided that no contract or settlement could restrict the right of a workman who has completed 240 days of continuous service, which is expressly stated in the Bombay Model Standing Order. The Act protects employees' rights, and the Court emphasised that any agreement or contract purporting to surrender their rights would not supersede the Standing Orders.
• The Supreme Court made it clear that the insolvency proceedings brought under the Insolvency and Bankruptcy Code against the Respondent Company were irrelevant to the current dispute and had no bearing on the rights of the employees.
• As a result, the Bombay Model Standing Order benefits were granted to the workers after the Supreme Court accepted the Appellant-Union's appeal. In doing so, the Court nullified both the High Court's ruling and the award made by the CGIT.
• The Court's ruling establishes a significant precedent and emphasises the importance of the Bombay Model Standing Order as a safeguard for workmen's rights. It supports the idea that, regardless of any contractual or settlement stipulations, labourers should be entitled to permanency after completing a period of 240 days of employment.
• This ruling highlights the crucial function of labour laws in defending the rights of workers even in trying situations like shifts in governmental priorities or business financial struggles.The Court assures fair treatment of workers and emphasises that labour laws should be respected to protect the welfare of the working class by disallowing any concession of rights under the Model Standing Order.