Both the aforenoted writ petitions have been heard together and are being decided by a common judgment. WRIT - C No. - 67177 of 2006 is the main leading case.
Petitioner M/s Howkins Cookers Limited is a Public Limited Company registered under the Companies Act, 1956 and is engaged in the manufacturing of the Pressure Cookers. The order dated 6.9.2006 passed by the appellate authority under the Industrial Employment (Standing Orders) Act, 1946-cum-Presiding Officer, Industrial Tribunal (I) U.P. Allahabad (in short as the appellate authority) confirming the order passed by the Certifying Officer under the Industrial Employment (Standing Orders) Act, 1946-cum-Additional Labour Commissioner, U.P. Varanasi Region, Varanasi is subject matter of challenge in this petition.
The main contention raised in this writ petition is that the certifying officer has amended approximately 60 clauses of the Certified Standing Orders, confirmed in the year 1992, without giving any reasons or deciding/adjudicating upon the questions relating to the fairness or reasonableness of the amendments sought for by the Trade Union.
The case set up by the petitioner is that the Draft Model Standing Orders, 1991 were published in December, 1991 and the then Certifying Officer had taken the Draft Model Standing Orders, 1991 into full consideration while certifying the Standing Orders of the petitioner's establishment. The Certified Standing Orders of the petitioner were certified by the Certifying Officer in the year 1992 after coming to the conclusion that they were fair and reasonable and no objections were ever raised regarding any of the clauses of the said Certifying Standing Orders by the workmen of the petitioner's establishment. The name of the petitioner's establishment was changed from M/s PCA Engineering Limited to M/s Hawkins Cookers Limited and same was done after the manufacturer had applied for the change of the name of then establishment. The change was approved by the Certifying Officer vide its order dated 24.6.1994. It is contended by the learned counsel for the petitioner that the petitioner company has had a successful track record of industrial relations and three settlements have been arrived at between the workmen of the Jaunpur Plant of the petitioner in the years 1995, 1998 and 2002. In the recent settlement in the year 2005, 164 out of 233 workmen have entered into an agreement /settlement with the petitioner-company. All the aforementioned settlements have been duly registered under the U.P. Industrial Disputes Act, 1947 . The said settlement covers specific subjects like casual leave, sick leave and National festivals holidays. All these 4 settlements also have concluding clause stating :
"For duration of this settlement the workmen agree not to raise any demand that may impose any additional cost on the Company".
It came to the knowledge of the petitioner that a trade union namely, Howkins Cooker Mazdoor Union, respondent no. 3 had been registered in the year 2004 under the Trade Union Act, 1926 and affiliated with CITU. The petitioner company was not provided with the list of the members constituting the Union so as to find out its representative character in the company. After three months of its registration, the respondent Union submitted an application dated 18.8.2004 under section 10(2) of the Act of 1946 before respondent no. 2, Certifying Officer seeking approximately 60 amendments in the Certified Standing Orders of the petitioner-company.
Another application was filed by the Union for withdrawing its order dated 24.6.1994 by which the name of the petitioner had been changed from Messers PCA Engineering Limited to Messers Hawkins Cookers Limited. The ground for seeking such reference was that the same was against law, illegal, unauthorised and non-maintainable . However, this application was rejected by the Certifying Officer.
Following principal objections were taken by the petitioner in effecting the amendment to certify the Standing Orders :-
(a) Before establishing its representative character, a list of members constituting such Union has not been disclosed to the petitioner.
(b) Respondent-Union had not completed two years since its registration and as such, it was not entitled to represent any party and the Union did not have representative character.
(c) The Certified Standing Orders had been operative in the petitioner's establishment for more than 12 years and an application for amendment/modification in the said Certified Standing Orders could not be entertained unless proper justification, fairness and reasonableness in the said modification was disclosed.
(d) Before permitting any such amendment, it is necessary to examine whether such existing provisions are in any way unreasonable and unfair.
Rejecting the plea of the petitioners, the Certifying Officer has allowed the proposed amendment sought for by respondent no. 3. An appeal was preferred against the said order before the appellate authority who vide its order dated 6.9.2006 effected some amendments but by and large confirmed the order of the Certifying Officer. Under these circumstances, the present writ petition has been filed.
In order to understand the scheme of the said Act, it is necessary to note certain provisions dealing with the issue :-
Section -4 of the Act provides for conditions for certifying of standing orders. The conditions indicated in section-4 are that it must contain provision for every matter set out in the Schedule which is applicable to the industrial establishment, and the standing orders are otherwise in conformity with the provisions of this Act. After satisfying such conditions, the Certifying Officer or appellate authority has to adjudicate upon the fairness or reasonableness of the provisions of any standing orders.
Section-5 of the Act provides procedure for certification of standing orders. It contemplates that on receipt of the draft under Section-3, the Certifying Officer shall forward a copy thereof to the trade union, if any, or the workmen, or where there is no such trade union, any of the workmen in such manner as may be prescribed, together with a notice in the prescribed form requiring objections, if any, which the workmen may desire to make to the draft standing orders to be submitted to him within fifteen days from the receipt of the notice.
After hearing the parties, the Certifying Officer shall decide whether or not any modification of or addition to the draft submitted by the employer is necessary to render the draft standing orders certifiable under this Act, shall make an order in writing accordingly. After certifying himself, the Certifying Officer shall thereupon certify the draft standing orders, after making any modifications there, in which, his order under sub-section (2) may require, and shall within seven days thereafter send copies of the certified standing orders authenticated in the prescribed manner and of his order under sub-section (2) to the employer and to the trade union or other prescribed representatives of the workmen.
Section-6 of the Act provides that any employer, workmen, trade union or other prescribed representatives of the workmen aggrieved by the order of the Certifying Officer under sub-section (2) of Section 5 may, within 30 days from the date on which copies are sent under sub-section (3) of that section, appeal to the appellate authority, and the appellate authority, whose decision shall be final, shall by order in writing confirm the standing orders either in the form certified by the Certifying Officer or after amending the said standing orders by making such modifications thereof or additions there to as it thinks necessary to render the standing orders certifiable under this Act. After hearing the parties, the appellate authority shall, within seven days of its order under sub-section (1) send copies thereof to the Certifying Officer, to the employer and to the trade union or other prescribed representatives of the workmen, accompanied, unless it has confirmed without amendment the standing orders as certified by the Certifying Officer, by copies of the standing orders as certified by it and authenticated in the prescribed manner.
Section-10 of the Act provides Standing orders which are finally certified under this Act shall not, except on agreement between the employer and the workmen 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. Sub-section (1) provides an employer or workman or a trade union or other representative body of the workmen may apply to the Certifying Officer to have the standing orders modified. The scheme of the Act clearly provides the manner and mode in which the standing order are required to be certified as also the manner in which the modification in the Standing Order is to be effected. It also provides that no modification would be permissible until expiry of 6 months from the date on which the Standing Orders last modified came into operation. However, there is no bar in effecting any change or modification after the expiry of six months aforementioned. The only question which is required to be determined is as to under what circumstances and in what manner such change or modification are to be allowed.
All these questions will have to be examined in the context of previously modified Standing Orders and proposed amendment or modification, which is sought. While doing so, it is also important to mention that proposed amendment must be fair and reasonable to both the parties. Now I would examine the present case to find out whether such modifications or amendments are fair and reasonable.
The contention of the learned counsel for the petitioner is that the petitioner is aggrieved with the following motifications which are effected in the Standing order modified in the year 1992:-
(i) The number of festival holidays has been raised from 8 to 12 ignoring the fact that only 8 holidays were provided for. Extending number of holidays to 12 will have effect on productivity and advancement of the industry concerned. The Model Standing Order provides for 8 festival holidays. By increasing such holidays will create extra financial burden on the company.
(ii) The Certifying Officer has arbitrarily and illegally deleted Clause 26(1) of the Certified Standing Order which consisted of 44 misconducts framed on the particular working conditions of the petitioner establishment and has in its place, instead amended/inserted Clause 20 of the Model Standing Orders, which has only 24 misconducts of general nature and of which few of them are not even applicable to the petitioner establishment.
(iii) In the Certified Standing Orders under Clause 26(vi) the following misconduct has been defined : 'Threatening, intimidating, abusing or assaulting any superior or co-worker in connection with employer's business.' This has been substituted by Clause 20(i)(k) of the U.P. Model Standing Order which states- "Threatening and intimidating any workman within the premises of industrial establishment".
(iv) Clause no. 26(xxviii) of the Certified Standing Orders states the following misconduct: 'Failure to observe safety instructions, unauthorised removal, interference or damage to machinery, guards, fencing and other safety device installed in the premises of the Industrial establishment'. This has been substituted by Clause 20(2) (b) of the U.P. Model Standing Orders which states that it is a minor misconduct with maximum punishment of a fine, censure or warning. It will be only too evident that a vital matter such as safety and avoidance of industrial accidents has been taken very lightly by the authorities concerned.
(v) Clause no. 26(xxvi) of the Certified Standing Orders states the following misconduct: 'Unauthorised possession of any lethal weapon in the industrial premises.' Such a serious misconduct was totally deleted from the Standing Orders by the Certifying Officer. Though the Appellate Authority has re-inserted the said clause but has listed the same under minor misconduct.
(vi) Petitioner also submitted point wise comments and objections dated 15.3.2005 before the Certifying Officer with regard to the amendments.
What is being stated by the learned counsel for the petitioner is that unilateral modification of the standing orders certifying the standing order has been arbitrary and unfair. While effecting the modification, it has to be done by keeping the interest of both the parties, petitioner as well as workmen in view.
The plea raised by the petitioner is that the workmen have agreed to the certification of the standing order in 1992, which can not be modified more particularly when the effect is to put the petitioner to disadvantage. It is required to show before modification that new circumstances have arisen since the last modification. In the present case, the effect of the modification has resulted in dilution of the certifying standing order of 1992, as the modification so effected has prejudiced the petitioners which is not intended by the scheme of the Act. The reasonableness and fairness of the amendment of standing order was required to be certified.
On the other hand, the stand of the learned counsel for the respondent is that at the time of drafting of the model standing order, it was submitted before certifying the model Standing Order, workmen were not organized under the trade union. The model standing orders were certified in the year 1992. The modification was done without taking into consideration the standing orders in existence in the State of U.P. The fact is that a settlement entered into, as alleged in the petition has no bearing on the standing orders. Admittedly, there was no trade union registered at the time when the standing orders were certified. After the trade union was registered, the standing orders were required to be certified. The standing orders were certified in the year 1992. The amended standing orders make a provision for seeking amendment in the existing standing orders and such amendments, as sought, were reasonable and fair. The changes which have been effected are on account of change in the circumstances that have taken place after 1992. What was relevant in the year 1992 is not relevant today. The amendment, so effected, have no material change in the relationship between the petitioner and the workmen. For example there has been enhancement of the holidays from 9 to 12, which has been in conformity with the model standing orders issued by the State Government. The number of holidays depends up on the social conditions where the factory is situated and there can not be uniform number of holidays in the country. By increasing the number of holidays from 9 to 12 in 365 days, it will not caste financial burden on the petitioners as the petitioner are well within their rights to introduce more than one shift in a day.
In clause-20 of the model standing orders only 24 misconducts have been referred to. The 24 items of misconducts enumerated in the model standing orders cover the whole field of 44 misconducts, enumerated in the standing orders in which amendments had been sought. By allowing the amendments, the acts of misconduct were made more precise and more understandable by the workmen. In respect of promotion, recruitment and transfer of workmen specific conditions have been laid down, which were not in existence prior to that.
I have heard learned counsel for the parties.
The following points arise for determination of the controversy involved in the present case :-
(a) Whether after certification of the standing orders, it is permissible to effect any modification in this behalf ?
(b) Whether modification, so effected, are fair and reasonable ?
The scheme of the Act, already indicated here-in-above, contemplates that all those matters set-out in the schedule applicable to the industrial establishment should be in conformity with the provisions of the Act. It also contemplates that the certifying officer is required to look into the fairness and reasonableness of the provisions of any standing order. While applying the model standing orders, it has to be seen that they are in conformity with the Act of 1946.While complying with these conditions, it has to be seen that the same does not create unfair situation for either of the parties. The pre-requisites for incorporating the standing order is for maintaining the healthy and peaceful atmosphere between the industrial establishment and the workmen. It should not lead to straining of relationship between the parties. After complying with the provisions of law, the draft standing orders are required to be certified and authenticated by the certifying officer. The power to file an appeal is provided under section 6 of the Act.
The standing orders, which are certified under the Act, can not be modified without the consent of the parties until expiry of 6 months from the date of such standing certification of order. Once the standing orders are certified, the same can not be modified within a period of 6 months from the date of its modification. However, an option has been given to the parties to seek modification of the order if some new situation has been brought to the notice of the officer.
Sections 4 to 10 of the Act have not only broaden the acceptance of the Act, it also provides change in the legislative policy of the Act. It provides a right to the workmen to apply for modification despite finality of the standing order under section 6 of the Act. Section-10 of the Act clearly leaves wide scope for the workmen to seek modification of the certifying orders after expiry of a period of 6 months. Even though section-5 fixes a seal of finality on the standing orders already certified, section 10(2) of the Act permits modification on a new set of situation arisen in the meantime.
What is important in permitting such a modification is that it should be reasonable and fair. Such modification effected can not be treated as review of the order passed by the said authority earlier. The contention raised by the learned counsel for the petitioner is that modification once certified can not be changed is not correct. My view is fortified by the judgement of Supreme Court in Management Shahdara (Delhi) Saharanpur Light Railway Co. Ltd. Versus S.S. Railway Workers Union AIR 1969 SC 513. The Apex Court has observed as under :
"When an application under s. 10(2) of the Act is made, the Certifying Officer can modify Standing Orders already certified, only if the request is not made on the basis of the same material which existed at the earlier stage when the Standing Orders were certified. I am unable to accept an interpretation which will completely do away with the finality of orders made under s. 6 of the Act by an Appellate Authority. This interpretation, of course, does not affect the right of the workmen to seek an amendment of the Standing Orders, even if certified as reasonable and fair by the Appellate Authority under s. 6 by appropriate proceedings under the Industrial Disputes Act. In fact, it appears to me that the power of a Tribunal dealing with an industrial dispute under that Act relating to a Standing Order will, of course, be wide enough to permit the Tribunal to direct alteration of a Standing Order held to be reasonable and fair by the Appellate Authority under s. 6 of the Act, in case a dispute about it is referred to the Tribunal; and that is the only remedy available if either the workman or the employer desires to have modification without any fresh grounds, material or circumstances."
Second question which is required to be considered is that the modification should be reasonable and fair. Four modifications on which objections have been raised by the petitioner are said to be unfair and unreasonable. The first modification is regarding number of festival holidays which have been enhanced to 12 ignoring the fact that in the model standing order only 8 festival holidays are provided for. It is stated that corresponding number of holidays 12 will have effect the productivity of the factory. It is stated by learned counsel for the respondent that in the model conduct, as applicable in the State, there are 12 festival holidays and extending this benefit to the respondents would not in any way be said to be unreasonable or unfair. Even though curtailment of 4 working days will have effect on the productivity but the petitioner can always be compensated by increasing the number of shifts in the said industry. This modification can not be rejected merely on the ground that it will have effect on productivity. The festival holidays are part of cultural heritage which can not be denied. As a matter of fact through out the State of U.P., as indicated by the respondent, there are 12 holidays. I do not agree with this contention of the learned counsel for the petitioner. However, modification nos. 2, 3, 4 and 5, as stated here-in-supra, requires some consideration.
The modification, as stated here-in-above, clauses (ii) and (iv) have been replaced by alternative definition of misconduct which prejudiced the cause in this case and following modification have been effected :-
The earlier definition of misconduct was defined under clause 26(vi) as that 'Threatening, intimidating, abusing or assaulting any superior or co-worker in connection with employer's business.' This has been substituted by Clause 20(i)(k) of the U.P. Model Standing Order which states- "Threatening and intimidating any workman within the premises of industrial establishment".
The necessary modifications have been issued while dealing with the issue of misconduct. Before adverting to the issue whether the modifications are reasonable and fair, it is necessary to understand the meaning of the 'misconduct'.
The Apex Court in the case of Noratanmal Chouraria versus M.R. Murli and Another reported (2004) 5 SCC 689, the misconduct has been defined as :
"Any unlawful behaviour by a public officer in relation to the duties of his office is, wilful in character. Term embraces acts which the office holder had no right to perform, acts performed improperly and failure to act in the face of an affirmative duty to act".
Learned Counsel for the petitioner has also placed reliance on a decision of this Court, Ram Sharan Lal Son Of Sri Prahlad versus State Of U.P. Reported in 2008 (1) ADJ 453, in which it is held that :
"Code of conduct as set out in the Conduct Rules clearly indicates the conduct expected of a member of the service. It would follow that that conduct which is blameworthy for the Government servant in the context of Conduct Rules would be misconduct. If a servant conducts himself in a way inconsistent with due and faithful discharge of his duty in service, it is misconduct (see Pearce v. Foster) (1988) 17 QBD 536 (at p. 542). A disregard of an essential condition of the contract of service may constitute misconduct [see Laws v. London Chronicle (Indicator Newspaper)]. (1959) 1 WLR 698. This view was adopted in Shardaprasad Onkarprasad Tiwari v. Divisional Supdt., Central Railway, Nagpur Divn., Nagpur, and Satubha K. Vaghela v. Moosa RazaF (1969) 10Guj LR 23. The High Court has noted the definition of misconduct in Stroud's Judicial. Dictionary which runs as under:
Misconduct means, misconduct arising from ill motive; act of negligence, errors of judgment, or innocent mistake, do not constitute such misconduct."
These are the legally accepted definition of misconduct. It is in the light of these definitions of misconduct the Court has been called up to address the issue raised by the petitioner that the modifications are not only unfair but are not in consonance with the definition of misconduct. Any definition of misconduct must necessarily cover all those cases where act of an employee arises out of ill motive. The modification effected in the Certified Standing Orders shall have to include all those acts of the employees which are born of ill motive. No dilution in this behalf can be permitted. The case of the petitioner is that the definition of modification has been diluted which has prejudiced the case of the petitioner.
The modifications, as stated hereinabove, have been replaced by determining the definition of misconduct, which according to the petitioner has prejudiced his case. These modifications are required to be corrected. While examining the modifications, following things have emerged:
It is contended that the word misconduct is confined to the case of threatening and intimidating any workman excludes assault on any superior or co-worker in connection with the employer's business. The result of such modification would be that a worker can not be found guilty of misconduct in case threatening, intimidating, abusing or assaulting is extended to any superior. As a result of the modification a workmen can not be found guilty of misconduct in case of threatening any superior. This, in my opinion, is unfair and needs to be modified accordingly by including threatening, intimidating, abusing or assaulting any superior or co-worker in connection with employer's business.
Similarly the word misconduct has been defined under clause 26(xxviii) of the certified standing orders which states that 'Failure to observe safety instructions, unauthorised removal, interference or damage to machinery, guards, fencing and other safety device installed in the premises of the Industrial establishment'. This has been substituted by Clause 20(2) (b) of the U.P. Model Standing Orders which makes a minor misconduct with maximum punishment of a fine, censure or warning. In my opinion, the modification is unfair. Causing any damage to machinery, guards, fencing etc. is serious misconduct and can not be said to be minor misconduct with maximum punishment of a fine, censure or warning also needs to be modified and earlier definition of misconduct in this respect requires to be retained.
Earlier Clause no. 26(xxvi) of the Certified Standing Orders states the following misconduct: 'Unauthorised possession of any lethal weapon in the industrial premises.' Such a serious misconduct was completely deleted from the Standing Orders by the Certifying Officer. Though the Appellate Authority has re-inserted the said clause but has listed the same under minor misconduct. In my opinion, it can not be said to be a case of minor misconduct and earlier definition of the misconduct is required to be re-inserted in the Certified Standing Order.
In view of the aforesaid, the order of the court below requires to be set aside by retaining the earlier definition of the misconduct as stated above of clauses 26(vi), 26 (xxviii) and 26(ii as inserted in the Certified Standing Order.
With these modifications, the WRIT - C No. - 67177 of 2006 is partly allowed to the aforesaid extent.
In respect of the reliefs claimed by the petitioner in WRIT - C No. - 2409 of 2007 the petitioners have questioned that the amendment in Clause 23 (4) of the Standing Order, as amended by the appellate authority, restraining the area of workman in the Industrial establishment. The contention of the learned counsel for the petitioner is that modification as effected on 4.5.2006 be modified in the manner that the workmen have a say in the matter of fixation of norms for daily output and liberty to engage representatives of their choice to represent them before the management irrespective of fact whether they belong to same establishment or not. In my view that can not be accepted. While dealing with the issue the appellate court has relied upon a decision of the Apex Court in the case of Bharat Petroleum Corporation Ltd. In which the following observations have been made by the Apex Court :-
"The only embargo is that the representative should be an employee of the parent establishment. The choice of the delinquent in selecting his representative has to be a co-employee of the same establishment in which the delinquent is employed. There appears to be some logic behind this as a co-employee would be fully aware of the conditions prevailing in the parent establishment, it service Rules, including the standing orders, and to assist the delinquent in the domestic proceedings for a fair and early disposal. The basic features of the Model Standing Orders are thus retained and the right of representation in the disciplinary proceeding through another employee is not altered, affected or taken away."
I do not find any reason to interfere with the findings of the appellate authority. Regarding the other contention that the workmen have a say in the matter of fixation of norms for daily output. Daily output of different category of the workmen is fixed in the form of norms of specific jobs/operations. Comparisons are also done with the norms of similar jobs/operation already released/declared. It is only after such a procedure that the norms are finalised and displayed on the notice board for the information of the workmen. Based on these very norms, production incentive is paid to the workmen as agreed through settlements signed with workmen.
This stand has been taken by the respondents in their counter affidavit. I do not find any reason to disagree with what has been stated by the respondent-company in this behalf. The contention is misplaced.
In the result, the WRIT - C No. - 67177 of 2006 is partly allowed and WRIT - C No. - 2409 of 2007 is dismissed.
Dated: 2nd March,2012.
SU.