Case title:
Bharatiya Kamgar Karmachari Mahasangh vs. M/s. Jet Airways Ltd.
Date of Order:
July 25, 2023
Bench:
Parties:
Appellant(s)-
Bharatiya Kamgar Karmachari Mahasangh
Respondent(s)- M/s. Jet Airways Ltd.
SUBJECT
- The current case originates from the ruling of the Bombay High Court in Writ Petition No. 2657 of 2017. In this ruling, the High Court upheld the decision of the Central Government Industrial Tribunal (referred to as 'CGIT'), dated 30.03.2017, which denied the request of the Appellant-Union for reinstatement along with complete retroactive wages.
- In alignment with the CGIT's decision, the High Court upheld its ruling by asserting that the completion of 240 days of work alone would not grant the workers entitlement to permanent status according to the Model Standing Order, especially considering the settlement and, more importantly, Clause 18 of that agreement.
- The High Court further remarked that the Model Standing Order isn't a legally binding provision, but rather a condition of service imposed by statute, which could be altered by a settlement or award.
- On all fronts, the Supreme Court respectfully disagrees with the conclusions drawn by both the Tribunal and the High Court.
IMPORTANT PROVISIONS
- Section 25-H of the Industrial Disputes Act, 1947: This section relates to the non-renewal of fixed-term contracts and retrenchment.
- Provisions of the Bombay Industrial Employment (Standing Orders) Rules, 1959: These rules govern the standing orders for industrial establishments in the Bombay region.
OVERVIEW
- The respondent company operates a commercial airline, utilizing aircraft to transport passengers and goods. The Appellant represents approximately 169 workers who were hired on temporary fixed-term contracts by the respondent.
- These workers hold various positions, such as loader-cum-cleaners, drivers, and operators. The Appellant argues that despite completing 240 days of service, as stipulated in the Model Standing Order outlined in the Bombay Industrial Employment (Standing Orders) Rules of 1959 (referred to as the "Bombay Model Standing Order"), the workers were classified as temporary. This classification persists despite the work being consistent and permanent in nature.
- The Trade Union initially presented a list of demands, which were later settled through negotiations resulting in a comprehensive agreement dated 02.05.2002. The Bhartiya Kamgar Sena, in this list of demands, abandoned the request for permanency. Instead, a comprehensive settlement was reached on 02.05.2002, offering various benefits to the workers who withdrew their demand for permanency.
- The respondent company maintains that the workers are not entitled to permanent employment according to the settlement reached between the Union and the Company on 02.05.2002.
- Subsequently, disputes arose among the workers, and the matter was taken up for adjudication. However, the Central Government Industrial Tribunal (CGIT), in its decision dated 30.03.2017, addressed a reference that questioned whether the Union's request for the re-employment and reinstatement of these 169 workers, along with full back wages, was justified and appropriate. The CGIT answered this query in the negative.
- This decision relied on Section 25-H of the Industrial Disputes Act of 1947, stating that the non-renewal of fixed-term contracts did not qualify as retrenchment, as defined by Section 2(oo)(bb) of the Act. Consequently, the issue of re-employment for the concerned workers did not arise.
ISSUES RAISED
Which is the Appropriate Authority empowered to issue the Standing Order(s) under the Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as ‘The Act’)?
Whether private agreement/settlement between the parties would override the Standing Order?
ARGUMENTS ADVANCED BY THE RESPONDENT
The legal representative for the Respondent has informed this Court about the commencement of insolvency proceedings against the Respondent Company as per the provisions of the Insolvency and Bankruptcy Code, 2016. Nevertheless, we choose not to make any remarks about this matter, as it holds no relevance to the current legal dispute, and furthermore, it was not a topic that underwent examination in the lower courts or authorities.
JUDGEMENT ANALYSIS
- The legislation is relevant to any industrial establishment where one hundred or more workers are employed or have been employed within the past twelve months. The term 'appropriate government' is specified in Section 2(b) of the Act, referring to the Central Government for industrial establishments controlled by it, such as Railway Administration, major ports, mines, or oilfields.
- In all other cases, the State Government is considered the 'appropriate government'. The definition of 'industrial establishment' is provided in Section 2(e) of the Act.
- Section 15 of the Act empowers the appropriate Government to establish regulations for the effective implementation of the Act. Acting on this authority, the State of Bombay, at that time, issued the Bombay Industrial Employment (Standing Orders) Rules, 1959. For establishments falling under the jurisdiction of the Central Government, the Industrial Employment (Standing Orders) Central Rules, 1946, were established.
- In relation to the Respondent Company, it is evident that the State Government, rather than the Central Government, serves as the appropriate authority, as the Respondent does not fall under the control of the Central Government as defined in Section 2(b).
- This case pertains to the latter aspect of the section, meaning that the State Government is the relevant authority. As a result, the Bombay Model Standing Order is applicable to the parties involved.
- Drawing inspiration from the WIMCO case, this court, in the case of Rasiklal Vaghajibhai Patel v. Ahmedabad Municipal Corporation (decided by a two-judge bench), established that any term of employment, if in conflict with officially approved standing orders, would not take precedence, as the certified standing orders would hold greater authority over any such agreements.
- Any agreement reached between the employee Union and the Employer would not supersede the Model Standing Order, except in cases where it provides greater benefits to the employees.
- Turning to the case's details, the CGIT observed that the airline company (the Respondent in this case) issued letters to the workers, appointing them for specific fixed terms. Although their appointment letters extended their tenure each time, their employment was intended to conclude upon the expiration of these fixed periods.
- Despite the fact that they performed tasks of a consistent and enduring nature for over 240 days, their status as being on a fixed-term contract was deemed significant, thereby undermining the significance of their 240 days of work. The Tribunal noted that the airline had no alternative but to not renew the fixed-term contracts due to a shift in Government policy.
- In alignment with the CGIT's decision, the High Court upheld its ruling by asserting that the completion of 240 days of work alone would not grant the workers entitlement to permanent status according to the Model Standing Order, especially considering the settlement and, more importantly, Clause 18 of that agreement.
- The High Court further remarked that the Model Standing Order isn't a legally binding provision, but rather a condition of service imposed by statute, which could be altered by a settlement or award.
- On all fronts, the Supreme Court respectfully disagrees with the conclusions drawn by both the Tribunal and the High Court.
CONCLUSION
- As a result, the Supreme Court grants approval to the appeal, affirming the entitlement of the Appellant-Union to receive all the advantages outlined in accordance with the Bombay Model Standing Order.
- The award issued on 30.03.2017 by the CGIT in Reference No. CGIT-2/56 of 2013 and the verdict dated 10.01.2018 from the High Court of Judicature in Bombay, which upheld the aforementioned award in Writ Petition No. 2657 of 2017, are nullified and invalidated.
