Full Judgment Text
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PETITIONER:
ROHTAK HISSAR DISTRICT ELECTRICITY SUPPLY CO. LTD.
Vs.
RESPONDENT:
STATE OF UTTAR PRADESH AND OTHERS
DATE OF JUDGMENT:
03/12/1965
BENCH:
GAJENDRAGADKAR, P.B. (CJ)
BENCH:
GAJENDRAGADKAR, P.B. (CJ)
WANCHOO, K.N.
HIDAYATULLAH, M.
RAMASWAMI, V.
SATYANARAYANARAJU, P.
CITATION:
1966 AIR 1471 1966 SCR (2) 863
CITATOR INFO :
APL 1969 SC 513 (16,25,26)
E 1970 SC 237 (13)
RF 1979 SC 65 (5)
R 1984 SC 505 (23)
R 1985 SC 504 (4)
ACT:
Standing Orders-Scope of-Jurisdiction of Certifying
Authorities, character and extent of-Jurisdiction of Court
to examine reasonableness--Industrial Employment (Standing
Orders) Act,. 1946 (20 of 1946), U.P. Industrial Disputes
Act, 1947 (28 of 1948).
HEADNOTE:
In accordance with the provisions of the Industrial
Employment (Standing Orders) Act, 1946, the appellant
prepared draft standing orders in consultation with its
employees and submitted the same to the Certifying Officer
for certification. Since the appellant’s workers had not
formed any union, three. representatives of the workmen were
elected to represent them at the certification proceedings.
These representatives took no objection to the draft
standing orders submitted by the appellant. The Certifying
Officer examined the reasonableness of the provisions
contained in the draft Standing Orders made several changes
in the draft and accordingly certified them. The
appellant’s appeal to the Appellate Authority was dismissed.
In appeal by special leave,
HELD : (i) The contention that the procedure adopted by the
certifying authorities in dealing with the question of the
fairness or reason ableness of the draft Standing Orders is
invalid, must fail.
Though, originally the jurisdiction of the certifying
officer and the Appellate Authority was very limited., s. 4
as amended by Act 56 of 1956 has imposed upon the certifying
officer or the appellate authority the duty to adjudicate
upon the fairness or the reasonableness of the provisions of
any Standing Orders and thus the jurisdiction of these
authorities and the scope of inquiry have become wider. The
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Act contemplates that the Standing Orders must cover matters
initially included in the Schedule as well as matters which
may be added to the Schedule by the appropriate Government
in exercise of the authority conferred on it by s.15. [867
H; 868 F]
It cannot be said that since an elaborate machinery has been
established by the U.P. Industrial Disputes Act, 1948 any
attempt by the certifying authorities to devise detailed
provisions in respect of matters covered by the First and
Second Schedules to the U.P. Act would trespass upon the
provisions of that Act. The scope of the provisions of the
two Acts and the fields covered by them are not the same.
While the Industrial Employment (Standing Orders) Act
purports to secure to industrial employees clear and
unambiguous conditions of their employment, the scheme of
the U.P. Act is to deal with problems posed by Industrial
Disputes which have actually arisen or are apprehended. [869
G-870 C]
(ii)Consent of the employees, though relevant cannot have a
decisive significance in certification proceedings. The
authority has to deal with the matter according to its own
judgment and must decide in appropriate cases, like the
instant case where the employees are not organised or strong
enough, whether or not a particular standing order is fair
or reasonable. [871 A-C]
864
(iii) The draft Standing Orders cannot ’relate to matters
outside the Schedule to the Act. By s. 3 (2) of the Act the
employers have to frame draft Standing Orders and these must
normally cover the items in the schedule to the Act. If,
however, it appears to the appropriate authorities that
having regard to the relevant facts and circumstances it
would be unfair and unreasonable to make provision for a
particular item, it would be competent to the authorities
not to frame draft Standing Orders in that behalf, but the
employer cannot insist upon adding a condition to the
Standing Order which relates to a matter which is not
included in the Schedule. [871 F; 872 E]
(iv) The wording of s. 3 (2) of the Act indicates that the
appropriate authority may permit departure from the Model
Standing Orders if it is satisfied that insistence upon such
conformity may be impracticable. [872 G]
Associated Cement Co. Ltd. v. P. D. Vyas [1960] 2 S.C.R. 974
[1960] 1 L.L.J. 565, referred to.
(v)The object of the Act being to require the employers to
define with sufficient precision the conditions of
employment under them, it is open to the appropriate
Government to add to the Schedule if the item added has
relation to conditions of employment. The enumeration of
particular matters by s. 15(2) will not control or limit the
width of the power conferred on the appropriate Government
by s. 15(1). Whether or not an addition should be made is a
matter for such Government to decide in its discretion and
the reasonableness of such addition cannot be questioned.
So, having regard to the development of industrial law in
this country it cannot be said that gratuity, provident fund
and the age of superannuation or retirement are not matters
relating to conditions of employment. [873 E-H]
(vi)The provision for pension which the certified Standing
Order No. 54 purports to make must be regarded as invalid
since it was neither extended by the employer nor agreed
upon between the parties as required by item 11-C of the
Schedule to the Act. As such, it will not be fair or
reasonable to retain the other part of Standing Order No. 54
dealing with retirement age without the provision as to
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payment of pension. [874 E-H]
(vii)The two provisos to Standing Order 47 as well as
Standing Orders 48(a)(1) & (2) which make elaborate
provisions for appeals and the finality assigned to the
decision of the Labour Commissioner under Standing Order 49
are outside the purview of the Act and therefore must be
held to be bad in law. Though the scheme of the Act, as
modified in 1956, has widened the scope of the enquiry
before the appropriate authorities, the Act does not
authorise the introduction of Standing Orders which would
result in appeals to outside authorities either by the
workmen or the employer and thereby extend the scope of the
provisions which can legitimately be made by Standing
Orders. The Standing Orders are intended to regulate the
conditions of service of the employees and in that behalf
may legitimately make provisions concerning the rights and
liabilities of the parties and their enforcement by an
internal arrangement between the employer and his employees.
[878 H-879 B]
(viii)In an appeal under Art. 136 of the Constitution this
Court would not be justified in examining the
correctness of the conclusions reached by the appropriate
authorities in dealing with the ’reasonableness or fairness
of the Standing Orders. That is a matter left to the
discretion of the authorities. [879 F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 164 of 1965
and 1105 of 1964.
865
Appeals by special leave from the orders dated the June 29,
1963 and August 31, 1963 of the Industrial Tribunal (II)
Uttar Pradesh and Industrial Tribunal (H), Uttar Pradesh
(Appellate authority) in Appeals Nos. 1 of 1963 and 4 of
1963 respectively.
M. C. Setalvad, B. L. Khanna and K. K. Jain, for the
appellant (in C.A. No. 164/65).
B. L. Khanna and K. K. Jain, for the appellant (in C.A.
No. 1105/65).
C. B. Agarwala and O. P. Rana, for respondents 1 and 2.
The Judgment of the Court was delivered by
Gajendragadkar, C.J. This appeal has been brought to this
Court by special leave and it challenges the validity of
certain orders passed by the Certifying Authorities in
respect of the draft Standing Orders which the appellant,
The Rohtak Hissar District Electric Supply Co. Ltd., had
submitted to them for certification. Five respondents have
been impleaded to this appeal; they are the State of U.P.,
Certifying Officer for Standing Orders and Labour
Commissioner, U.P., Kanpur, and three representatives of the
employees respectively. At the hearing before us, the
employees’ representatives have not appeared and the
appeal has been contested by respondent No. I alone.
The appellant is a Joint Stock Company incorporated under
the Companies Act, and it has its registered office at
Allahabad.The principal object for which this Company has
been incorporated is to carry on the business of generation
and distribution of electricity. In accordance with the
provisions of the Industrial Employment (Standing Orders)
Act, 1946 (No. 20 of 1946) (hereinafter called ’the
Act’), the appellant prepared draft Standing Orders in
consultation with its employees and submitted the same to
the Certifying Officer on the 24th December, 1950, for
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certification. At that time, the workmen employed by the
appellant had not formed any Union, and so, the Labour
Department held proceedings for the election of the three
representatives from the said workmen. Normally, a Union
representing the workmen would have been competent and
qualified to represent the workmen in the certification
proceedings; but since there was no Union in existence, the
Labour Department had to adopt, the expedient of asking the
workmen to elect three representatives. That is how
respondents 3 to 5 came to be elected as the representatives
of workmen. In the certification proceedings, these
representatives took no objection to the draft Standing
Orders submitted by the
866
appellant. In fact, the said draft Standing Orders were
submitted to the Certifying Officer on the basis that they
had been agreed to by the appellant and its workmen.
The Certifying Officer, however, examined the fairness and
reasonableness of the provisions contained in the said draft
Standing Orders and made several changes in them. The draft
Standing Orders with the changes made by the Certifying
Officer were accordingly certified on the 21st November,
1962.
Against the said order passed by the Certifying Officer, the
appellant filed an appeal before the Industrial Tribunal,
U.P., Allahabad, which had been appointed the Appellate
Authority under the Act. It was urged by the appellant
before the Appellate Authority that the Certifying Officer
was in error in making modifications in the draft Standing
Orders submitted to him for his certification, but the
Appellate Authority did not accept the appellant’s
contention and, in substance, confirmed the order passed by
the Certifying Officer. In the result, the appeal preferred
by the appellant was dismissed by the Appellate Authority on
the 29th June, 1963. It is against this appellate order
that the appellant has come to this Court by special leave.
Along with this appeal, Civil Appeal No. 1105 of 1964 has
been placed before us for hearing and final disposal. This
appeal arises between the appellant M/s Amitabh Textile
Mills Ltd., and its workmen and it raises substantially the
same points as arise in ’Civil Appeal No. 164 of 1965. Mr.
K. K. Jain, who appeared for the appellant in this appeal,
has stated before us that the decision in this appeal will
follow our decision in Civil Appeal No. 164 of 1965. That
is why we do not propose to refer to the facts in this
appeal nor deal with it separately.
The first point which Mr. Setalvad has raised before us in
Civil Appeal No. 164 of 1965 is of a general character. He
contends that the Model Standing Orders which have been
followed as a pattern by the certifying authorities in the
present certification proceedings, are themselves invalid in
some material particulars. His argument is that the Model
Standing Orders permissible under the Act should be confined
to matters which do not fall within the purview of the
provisions of the Industrial Disputes Act, 1947 (No. 14 of
1947) (hereinafter called ’the Central Act’) ,or of the U.P.
Industrial Disputes Act, 1947 (No. 28 of 1947) (hereinafter
called ’the U.P. Act’).
Before dealing with this point, it is necessary to indicate
the broad features of the Act. The Act was passed on the
23rd
867
April, 1946, and the Standing Orders framed by the U.P. Gov-
ernment under S. 15 of the Act were published on the 14th
May, 1947. The Central Act came into force on the 1st
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April, 1947, whereas the U.P. Act came into force on the 1st
February, 1948. It will thus be seen that the Act came into
force before either the Central Act or the U.P. Act was
passed. The scheme of the Act originally was 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 the workmen
employed by them. The Legislature thought that in many
industrial establishments, the conditions of employment were
not always uniform, and sometimes, were not even reduced to
writing, and that led to considerable confusion which
ultimately resulted in industrial disputes. That is why the
Legislature passed the Act making it compulsory for the
establishments to which the Act applied to reduce to writing
conditions of employment and get them certified as provided
by the Act. The matters in respect of which conditions of
employment had to be certified were specified in the
Schedule appended to the Act. This Schedule contains 11
matters in respect of which Standing Orders had to be, made.
In fact, the words "Standing Orders" are defined by s. 2(g)
as meaning rules relating to matters set out in the Sche-
dule. The "Certifying Officer" appointed under the Act is
defined by S. 2(c), whereas "Appellate Authority" is defined
by S. 2(a).
Originally, the jurisdiction of the Certifying Officer and
the. Appellate Authority was very limited; they were called
upon to consider whether the Standing Orders submitted for
certification conformed to the Model Standing Orders or not.
Section 3(2) provides that these Standing Orders shall be,
as far as practicable, in conformity with such Model
Standing Orders. Section 15 which deals with the powers of
the appropriate Government to make rules, authorises, by cl.
(2) (b), the appropriate Government to set out Model
Standing Orders for the purposes of this Act. That is how
the original jurisdiction of the certifying authorities was
limited to examine the draft Standing Orders submitted for
certification and compare them with the Model Standing
Orders.
In 1956, however, a radical change was made in the
provisions of the Act. Section 4 as amended by Act 36 of
1956 has imposed upon the Certifying Officer or the
Appellate Authority the duty to adjudicate upon the fairness
or the reasonableness of the provisions of any Standing
Orders. In other words, after the amendment was made in
1956, the jurisdiction of the certifying authorities has
become very much wider and the scope of the
868
enquiry also has become correspondingly wider. When draft
Standing Orders are submitted for certification, the enquiry
now has to be twofold; are the said Standing Orders in
conformity with Model Standing Orders; and are, they
reasonable or fair ? In dealing with this latter question,
the Certifying Officer and the Appellate Authority have been
given powers of a Civil Court by S. 11(1). The decision of
the Certifying Officer is made appealable to the Appellate
Authority under S. 6 at the instance of either party.
Similarly, by an amendment made in 1956 in S. 10(2) both the
employer and the workmen are permitted to apply for the
modification of the said Standing Orders after the
expiration of 6 months from the date of their coming into
operation. It will thus be seen that when certification
proceedings are held before the certifying authorities, the
reasonableness or the fairness of the provisions contained
in the draft Standing Orders falls to be examined. That is
one aspect of the matter which has to be borne in mind in
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dealing with Mr. Setalvad’s contention.
The second aspect of the matter which is relevant on this
point is that the Standing Orders have to cover the matters
specified in the Schedule attached to the Act. Item 1 1 in
the said Schedule refers to any other matter which may be
prescribed. We have already mentioned the fact that s. 15
confers power on the appropriate Government to make rules.
Section 15 (2) (a) provides that the appropriate Government
may, by rules, prescribe additional matters to be included
in the Schedule, and the procedure to be followed in
modifying Standing Orders certified under this Act in
accordance with any such addition. Thus there can be no
doubt that the Act contemplates that the Standing Orders
must cover matters initially included in the Schedule as
well as matters which may be added to the Schedule by the
appropriate Government in exercise of the authority
conferred on it by s. 1 5. In fact, by virtue of this power,
the U.P. Government has added several items to the list
contained in the Schedule; they are 8A-issue of service
certificate; 9A--censure and warning notice; 11 A-issue of
wage slips; II B-introduction of welfare schemes such as
provident fund, gratuity etc.; and 11C--age of
superannuation or retirement, rate of pension or any other
facility which the employers may like to extend, or may be
agreed upon between the parties. We will have occasion to
deal with item 11C later. The position, therefore, is that
in the State of U.P. Standing Orders have to cover the items
originally included in the Schedule as well as the items
which have been subsequently added thereto.
Mr. Setalvad’s argument is that in determining the scope of
the Standing Orders and the character and extent of the
jurisdic-
869
tion conferred on the certifying authorities under the Act,
we should not overlook the fact that when the Act was
passed, the Central Act and the U.P. Act had not come into
operation; and as it was originally passed, the Act required
certification of Standing Orders which were in conformity
with the Model Standing Orders without examining their
reasonableness or fairness. The position under the original
Act, according to Mr. Setalvad, therefore was that the
conditions of employment which had to be included in the
Standing Orders were no better than, or different from,
similar conditions which would otherwise have been included
in contracts of service between the employers and their
employees. After the Central Act and the U.P. Act were
passed, a different situation has arisen. The U.P. Act,
following the pattern of the Central Act, has provided for
the settlement of industrial disputes and other incidental
matters in accordance with its own scheme. Sections 4(A)
and 4(B) of the U.P. Act deal with the establishment of
Labour Courts and Industrial Tribunals, and S. 4K gives
power to the State Government to refer disputes for
adjudication to Labour Courts or Industrial Tribunals. The
First Schedule to the U.P. Act sets out 6 items of
industrial disputes which can be referred to the Labour
Courts, whereas the Second Schedule refers to 11 items of
industrial disputes which can be referred for adjudication
to the Industrial Tribunals. Thus, an elaborate machinery
has now been established by the U.P. Act for the purpose of
dealing with industrial disputes concerning the matters
specified in the First and the Second Schedules to the U.P.
Act. That is why any attempt which the certifying
authorities may purport to make in devising elaborate
provisions in respect of matters covered by the First or the
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Second Schedule of the U.P. Act, would trespass upon the
provisions of the said Act, and in that sense, would be
invalid. Let the operation of the Act be confined to its
original form and no further; that, in substance, is the
general point raised by Mr. Setalvad before us.
We are not inclined to accept this contention. In
substance, the argument proceeds on the assumption that
there is a conflict between the Act and the U.P. Act. Since
we are not satisfied that there is any such conflict, it is
not necessary for us to consider what would have been the
result if we had taken the view that there was any such
conflict between the said two Acts. The schemes of the two
Acts are in essence different in character. The Act
purports to secure to industrial employees clear and unambi-
guous conditions of their employment. The obvious object of
the Act is to avoid any confusion in the minds of the
employers or the employees in respect of their rights and
obligations concerning the
870
terms and conditions of employment and thereby avoid
unnecessary industrial disputes. The result of the Standing
Orders which are certified under the Act is to make it clear
to both the parties on what terms and conditions the workmen
are offering to work and the employer is offering to engage
them. The scheme of the U.P. Act, on the other hand, is to
deal with the problem posed by industrial disputes which
have actually arisen or are apprehended, and naturally the
nature of the industrial disputes which may arise or which
may be apprehended, relates to items larger in number than
the items covered by the Act. It is true that some of the
items are common to both the Acts, but as we have just indi-
cated, the scopes of the provisions of the two respective
Acts and the fields covered by them from that point of view
are not the same.
After the Act was amended in 1956, the Legislature has pro-
vided a speedy and cheap remedy available to individual
employees to have their conditions of employment determined
in the manner prescribed by the Act. If employees or
employers desire any modification in the said Standing
Orders, that remedy is also provided. The decision of the
Certifying Officer is made subject to an appeal, and so,
after its amendment in 1956, the Act provides for a self-
contained Code for the fixation of conditions of employment
in establishments to which the Act applies. It is true that
the original scope of the Act was rather narrow and limited;
but even after the scope of the Act has been made wider, we
cannot see how it can be said to conflict with the
provisions of the U.P. Act or the Central Act. Therefore,
we are not impressed by the argument that the procedure
adopted by the certifying authorities in the present case in
dealing with the question of the fairness or reasonableness
of the draft Standing Orders submitted for certification is
invalid, and for that reason alone, some of the draft
Standing Orders certified by them should be set aside.
The next contention which Mr. Setalvad has raised is that
the appropriate authorities under the Act were in error in
insisting upon conformity with the Model Standing Orders
under S. 3(4). His argument is that in certifying the
Standing Orders the appropriate authorities may, no doubt,
compare them with the Model Standing Orders, but they need
not insist upon strict compliance with them. He also
suggested that it would be open to the employers to include
matters in the Standing Orders which may not strictly be
included in the Schedule. In this connection, he relied on
the fact that the draft Standing Orders which the appellant
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had submitted for certification, had been assented to by the
871
employees. In our opinion, this contention is misconceived
and, must be rejected. The consent of the employees is, no
doubt, a relevant factor which the certifying authorities
may bear in mind in dealing with the question as to the
fairness or reasonableness of the said Orders. If both the
parties agree that certain Standing Orders submitted for
certification are fair and reasonable, that, no doubt, is a
consideration which the appropriate authority must take into
account; but clearly, the appropriate authority cannot be
denied the jurisdiction to deal with the matter according to
its own judgment. It is for the appropriate authority to
decide whether a particular Standing Order is fair or
reasonable, or not. Sometimes, the employees may not be
organised enough to resist the pressure of the employer or
may not be articulate; and where the employees are not
organised or strong enough to put forward their point of
view vigorously, the fact that the employer has persuaded
his employees to agree to the draft Standing Orders, will
not preclude the appropriate authority from discharging its
obligation by considering the fairness or reasonableness of
the draft. The present case itself is an illustration in
point. When the Standing Orders were drafted by the
appellant and submitted for certification, it was found that
the employees of the appellant had no Union of their own;
and so, three representatives were elected by the employees
at the instance of the Labour Department. The fact that the
employees’ representatives have not appeared before this
Court also shows that they are either not organised enough,
or have not the financial capacity to take steps to engage
lawyers to appear before this Court. Therefore, we do not
think that the consent of the employees can have a decisive
significance in certification proceedings.
Then in regard to the matters which may be covered by the
Standing Orders, it is not possible to accept the argument
that the draft Standing Orders can relate to matters outside
the Schedule. Take, for instance, the case of some of the
draft Standing Orders which the appellant wanted to
introduce; these had reference to the liability of the
employees for transfer from one branch to another and from
one job to another at the discretion of the management.
These two Standing Orders were included in the draft of the
appellant as Nos. IO and II. These two provisions do not
appear to fall under any of the items in the Schedule; and
so, the certifying authorities were quite justified in not
including them in the certified Standing Orders.
In this connection, we may incidentally add that if the
appropriate Government adds to the list of items in the
Schedule, it may,
3Sup.CI/66-9
872
in some cases, be permissible to the certifying authorities
to say that having regard to the relevant factors, no
provision need be made for some of the items thus added.
The U.P. Government has, by adding clause II B to the
Schedule, referred to items of welfare schemes such as
provident fund, gratuities, etc. It would, we think, be
unreasonable to hold that the Standing Order must
necessarily refer both to provident fund and gratuities, and
other welfare schemes. It is well known that the
introduction of these amenities in industrial establishments
involves financial liabilities for the employers, and the
decision as to whether these amenities should be introduced
or not, depends upon a consideration of several relevant
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factors; and so, if the additional items are included in the
Schedule, and they appear to overlap or cover the same or
similar ground, the appropriate authorities may, for good
reasons, take the view that the provision need not be made
for each one of those items. This position has not been
seriously disputed before us by Mr. Agarwal for respondent
No. 1. He has fairly conceded that it is not obligatory on
the employer to have a scheme ,for provident fund as well as
gratuity in every case. Thus, the true position appears to
be that under s. 3 (2) of the Act the employers have to
frame draft Standing Orders and they must normally cover the
items in the Schedule to the Act. If, however, it appears
to the appropriate authorities that having regard to ’the
relevant facts and circumstances, it would be unfair and
unreasonable to make a provision for a particular item, it
would be competent for them to do so; but the employer
cannot insist upon adding a condition to the Standing Order
which relates to a matter which is not included in the
Schedule.
Then in regard to the conformity with the Model Standing
Orders, the position is clear. Section 3 (2) of the Act
specifically requires that the Standing Orders shall be, as
far as practicable, in conformity with the model. These
words indicate that the appropriate authority may permit
departure from the Model Standing Orders if it is satisfied
that insistence upon such conformity may be impracticable.
This fact also shows that in a given case, the appropriate
authority may permit departure from the Model Standing
Orders and may come to the conclusion that one or the other
of the conditions included in the Model Standing Orders may
not, for the time being, be included in the Standing Orders
of any particular establishment vide Associated Cement
Company Ltd.v. P. D. Vyas, and Others(1).
(1) [1960] 2 S.C.R. 974. [1960) 1 L.L.J. 563.
873
The next point raised by Mr. Setalvad is in relation to the
addition of two items to the Schedule by respondent No. 1.
We have already mentioned these items. Mr. Setalvad objects
to the addition of item II B which has reference to welfare
schemes, such as provident fund, gratuities, etc., as well
as item 11C which has reference to the age of superannuation
or retirement, rate of pension or any other facility which
the employers may like to extend or may be agreed upon
between the parties. We do not think that this argument is
well-founded. We have already emphasised the fact that the
Act, even in its original form, was intended to require the
employers to define with sufficient precision the conditions
of employment under them. In pursuance of the said object,
the Schedule enumerated 10 items in respect of which
Standing Orders had to be drafted by the employers and
submitted for certification. Item 1 1 in the Schedule
refers to any other matter which may be prescribed. When
the appropriate Government adds any item to the Schedule,
the relevant question to ask would be whether it refers to
the conditions of employment or not. If it does, it would
be within the competence of the appropriate Government to
add such an item. Section 15(1) confers wide powers on the
appropriate Government to make rules to carry out the
purposes of the Act; and s. 15(2) specifies some of the
matters enumerated by clauses (a) to (e), in respect of
which rules may be framed. It is well-settled that the
enumeration of the particular matters by sub-s. (2) will not
control or limit the width of the power conferred on the
appropriate Government by sub-s. (1) of s. 15; and so, if it
appears that the item added by the appropriate Government
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has relation to conditions of employment, its addition
cannot be challenged as being invalid in law. Whether or
not such addition should be made, is, a matter for the
appropriate Government to, decide in its discretion. The
reasonableness of such addition cannot be questioned,
because the power to decide which additions should be made
has been left by the Legislature to the appropriate
Government. Having regard to the development of industrial
law in this country during recent years, it cannot be said
that gratuity or provident fund is not a term of conditions
of employment in industrial establishments. Similarly, it
would be difficult to sustain the argument that the age of
superannuation or retirement is not a matter relating to the
conditions of employment. Therefore, we are satisfied that
the contention raised by Mr. Setalvad that the addition of
items 11B and 11C to the Schedule is invalid, must fail.
That takes us to the points raised by Mr. Setalvad on the
merits of the Standing Orders. Lot us begin with the
Standing
874
Order in relation to the age of superannuation. The
appellant had made a provision about the age of
superannuation in its draft Standing Orders and it was
numbered as 59. The Certifying Officer had dropped this
draft Standing Order, because the appellant did not agree to
provide for any retirement benefits. On appeal, however,
the appellate authority has made substantial alterations in
the said draft provisions and has numbered it as Standing
Order 54. Under Standing Order NO. 54 as certified, it is
provided that " a workman shall retire from service after
attaining the age of 55 years, or after putting in 30 years
service whichever is earlier. If he has put in more than
seven years’ service, he shall get a pension at the rate
specified by the said Standing Order." Mr. Setalvad contends
that even if the addition of item 11C is valid, the relevant
certified Standing Order is not justified by item 11C. In
our opinion, this argument is sound and must be upheld. We
have already noticed that item 11C provides for the fixation
of the age of superannuation or retirement, and in that
connection, it incidentally refers to the rate of pension or
any other facility which the employer may like to extend or
may be agreed upon between the parties. This item consists
of two parts; the first relates to the age of superannuation
or retirement; and the second refers to the rate of pension
or any other facility. In regard to this latter part of
item 11C, the important provision is that this rate of
pension or any other facility should be such as the employer
may like to extend, or as may be agreed upon between the
parties. It is plain that the provision for pension which
the certified Standing Order 54 purports to make was neither
extended by the employer, nor agreed upon between the
parties. On this narrow ground alone, the said provision.
in certifying S.O. No. 54 must be regarded as invalid.
That raises the question as to whether it would be fair or
reasonable to retain the other part of certified S.O. 54
without the provision as to payment of pension. It appears
to us that it would not be fair or reasonable to introduce a
term of retirement in the conditions of service without
making any provision for a suitable retiral benefit; but
such a provision cannot be made suo Moto by the appropriate
authority under item 11C; it has to be made either at the
initiative of the employer, or by consent of parties. Mr.
Setalvad did not dispute the position that it would be
equitable to make some suitable provision for retiral
benefit to the employees, particularly the existing
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employees, if an age of superannuation or retirement is
going to be fixed for the first time in this establishment.
He was, therefore, prepared that the whole of certified S.O.
No. 54 should be deleted and the matter of retire-
875
ment of the employees should be left to be determined under
the existing practice. It is common ground that under the
existing practice, there is no age of superannuation or
retirement.
The next certified Standing Orders which are challenged by
Mr. Setalvad are in regard to the payment of compensation
for "lay-off"; they are Nos. 29 and 30. Clause (a) of the
certified S.O. 29 reads thus:-
"The employer may at any time or times, in the
event of a fire, catastrophe, break-down of
machinery or stoppage of power supply,
epidemic, civil commotion or other causes,
whether of a like nature or not, beyond the
control of the employer, stop any machine or
machines or department or departments, wholly
or partly for any period or periods, by giving
two days’ notice, if possible. If two days’
notice of closure has not been given, the
employer shall pay wages in lieu of such
notice, i.e., two days’ wages.
Provided that no compensation in lieu of
notice in excess of wages for the actual
period of closure shall be payable when the
period of closure is less than two days".
Mr. Setalvad argues that it is wholly unreasonable to expect
that where work is stopped for any of the reasons mentioned
in this clause, it would be possible for the employer to
give two days’ notice before such stoppage of work. All the
causes mentioned in this clause are causes over which the
employer has no control and which would overtake the
establishment suddenly and unexpectedly. We have no
difficulty in accepting this argument. We would, therefore,
modify the last sentence in the first paragraph of certified
S.O. No. 29(a) by providing that if in cases where it would
have been possible to give two days’ notice of closure, but
the employer has not given such a notice. he shall pay wages
in lieu of such notice, i.e., two days’ wages. Plainly
stated,. having regard to the nature of the causes mentioned
in this clause, such a case can rarely arise.
Then as regards Standing Order No. 30, Mr. Setalvad’s con-
tention is that this Standing Order conflicts with s. 6K of
the U.P. Act. This section deals with the right of workmen
laid-off for compensation. It is not necessary to refer in
detail to the provisions of this section for the purpose of
dealing with Mr. Setalvad’s argument. It would be enough to
state that this section refers to cases in which workmen
laid off are entitled to compen-
876
sation, and it provides for the scales at which ’such
compensation should be computed. Mr. Setalvad suggests that
the matter of payment of compensation for Jay-off having
thus been covered by s. 6K, it would not be legitimate for
the Standing Orders to make a separate provision in that
behalf. The field in question is covered by a specific
provision of the U.P. Act and matters relating to that field
must be dealt with by s. 6K and no other provision.
in this connection, Mr. Setalvad referred us to s. 6K of the
U.P. Act. Section 6-R(1) provides that the provisions from
section 6-J to 6-Q shall have effect notwithstanding
anything inconsistent therewith contained in any other law
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(including Standing Orders) made under the Industrial
Employment (Standing Orders) Act, 1946. There is a proviso
to this sub-section which is also relevant. It says that
nothing contained in this Act shall have effect to derogate
from any right which a workmen has under the Minimum Wages
Act, 1948, or any notification or order issued thereunder or
any award for the time being in operation or any contract
with the employer. It is clear that the proviso cannot
cover the cases of Standing Orders which are expressly
included in s. 6-R(1). It is true that the Standing Orders,
when certified, in substance embody statutory conditions of
employment, but they cannot be treated as a contract within
the meaning of the proviso. The context obviously negatives
such a construction; and so, if the point raised by Mr.
Setalvad had to be decided solely by reference to the
provisions of s. 6-K and 6-R, there would have been
considerable force in his argument. But the difficulty in
accepting Mr. Setalvad’s argument is created by the
provisions of s. 25-J of the Central Act. Section 25-J
corresponds to s. 6-R of the U.P. Act, except this that the
proviso to s. 25-J(1) and sub-s. (2) of s. 25-J which have
been recently added by Act 36 of 1964, make a substantial
departure from the pre-existing position of the law even
under the Central Act. Section 25-J(2) is more important
for our purpose. It reads thus :-
"For the removal of doubts, it is hereby
declared that nothing contained in this
Chapter shall be deemed to affect the
provisions of any other law for the time being
in force in any State in so far as that law
provides for the settlement of industrial
disputes, but the rights and liabilities of
employers and workmen in so far as they relate
to Jay-off and retrenchment shall be
determined in accordance with the provisions
of this Chapter".
877
It is thus clear that the last part of S. 25-J(2)
categorically provides that the rights and liabilities of
the employers and workmen in relation to lay-off shall be
determined in accordance with the provisions of Chapter V-A
of the Central Act. This clearly means that in regard to
the question about the payment of compensation for lay-off
and retrenchment, the relevant provisions of the Central Act
will apply and not those of the U.P. Act. This position
cannot be, and is not, disputed by Mr. Setalvad.
Once we reach this stage, we have to go to the proviso to S.
25.J(1), because it is one of the provisions contained in
Chapter V-A which is made applicable by s. 25-J (2); and
this proviso clearly and unambiguously lays down, inter
alia, that where under any Standing Orders, a workman is
entitled to benefits in respect of any matter covered by
Chapter V-A which are more favourable to him than those to
which he would be entitled under this Act, he shall continue
to be entitled to the more favourable benefits in respect of
that matter, notwithstanding that he receives benefits in
respect of other matters under this Act. The position,
therefore, is that s. 25-J(2) makes Chapter V-A of the
Central Act applicable to disputes in relation to
compensation for lay-off, notwithstanding S. 6-K and 6-R of
the U.P. Act; and amongst the provisions thus made
applicable by S. 25-J(2) is the proviso to s. 25-J(1) under
which the Standing Orders which give more favourable
benefits to the employees in respect of compensation for
lay-off, will prevail over the provisions of the Central
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Act. We ought to add in fairness that as soon as this
aspect of the matter was brought out in the course of
arguments, Mr. Setalvad conceded that his contention against
the validity of certified Standing Order 30(a) could not be
pressed. A somewhat similar question was raised before this
Court and has been considered in Workers of Dewan Tea Estate
and Others v. Their Management(1).
There is one more point which still remains to be
considered. In this connection, the controversy centres
round certified Standing Orders 47, 48 and 49. These
Standing Orders purport to have been made under item 10 of
the Schedule to the Act. Item 10 refers to the means of
redress for workmen against unfair treatment or wrongful
exactions by the employer or his agents or servants.
Standing Order 47 deals with the procedure for enquiring
into complaints. The substantive part of this Standing
Order is not in dispute; what is challenged is the validity
of the two provisos to the said Standing Order, and the
whole of Standing Orders 48
(1) [1964] 1 L.L.J. 358.
878
and 49. The first proviso to S.O. 47 gives a right to the
complainant workman to appeal to the Labour Commissioner or
to a Conciliation Officer of the U.P. Government, or to the
machinery provided by collective agreements, if any, against
the decision of the investigating officer or the employer,
without prejudice to any right of the workmen aggrieved by
the decision of the investigating officer or the employer to
resort to proceedings in a court of law. The second proviso
authorises a workman or a registered Union of which he is a
member to submit a complaint of dismissal for the decision
to the Labour Commissioner or to a State Conciliation
Officer direct without first referring it to the Labour
Officer of the industrial establishment or if there is none,
any other officer appointed by the employer in this behalf
or the employer. Standing Order 48(a) purports to provide
that the decision of the employer upon any question arising
out of, in connection with, or incidental to, these orders
shall be final, subject to the appeals indicated by clauses
(1) and (2) thereto. Standing Order 48 (b) seems to lay
down that as soon as a workman or an employer sends a notice
through a legal practitioner or resorts to any legal process
whatsoever, or indicates in any other manner his intention
of having recourse to legal process, no appeal shall be
heard by the Labour Commissioner. Standing Order 49
empowers the employer at its discretion to refer any matter
for decision to the Labour Commissioner, without giving any
prior decision of his own; and it prescribes that the
decision of the Labour Commissioner in such matters shall be
final and binding on the workmen and the employer, subject
to the provisions of the Act or the Rules.
Mr. Setalvad argues that this elaborate provision for
appeals contemplated by certified Standing Order 48 (a) ( 1
) & (2) as well as the finality assigned to the decision of
the Labour Commissioner under S.O. 49, are entirely outside
the purview of the Act, and as such invalid. Similarly, he
argues that the two provisos to S.O. 47 are invalid, because
appeals of the kind contemplated by the said provisos do not
fall within the scope of the Act.
We are inclined to uphold this contention. Though the
scheme of the Act, as modified in 1956, has widened the
scope of the enquiry before the appropriate authorities, we
do not think that the Act authorises the introduction of
Standing Orders which would result in appeals to outside
authorities either by the workmen or the employer. The
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Standing Orders which fall within the contemplation of the
Act, are intended to regulate the conditions
879
of service of the employees, and in that behalf they may
legitimately make provisions concerning the rights and
liabilities of the parties and their enforcement by an
internal arrangement which can be regarded as a domestic
arrangement between the employer and his employees. It is
not permissible under the Act to introduce appeals to
outside authorities, and thereby extend the scope of the
provisions which can legitimately be made by the Standing
Orders.
Besides, on the merits, Standing Order 48(a) (2) seems to be
unfair inasmuch as it does not give a right of appeal to the
employer in regard to decisions reached by the Joint
Disciplinary Committee under S.O. 48 (a) ( 1 ) even though
the employer may feel aggrieved by them. Likewise, the
finality assigned to the decision of the Labour Commissioner
by S.O. 49 would plainly be inconsistent with the provisions
of the U.P. Act inasmuch as disputes arising from matters
covered by the decision of the Labour Commissioner are
completely taken out of the purview of s. 4-K of the said
Act; and prima facie, that does not seem to be permissible
under the impugned provision of finality. But quite apart
from these considerations, we have no hesitation in holding
that the eleborate provisions made by the two provisos to
S.O. 47, as well as Standing Orders 48 and 49 are outside
the purview of the Act, and therefore, must be held to be
bad in law.
Mr. Setalvad attempted to argue that some other Standing
Orders certified by the appropriate authorities should not
have been so certified; but we have not allowed him to
proceed with this part of his case, because we do not think
that in an appeal brought to this Court under Art. 136 of
the Constitution, we would be justified in examining the
correctness of the conclusion reached by the appropriate
authorities in dealing with the reasonableness or fairness
of the Standing Orders in question. That is a matter which
is left to the discretion of the Certifying Officer in the
first instance, and the Appellate Authority when the matter
goes in appeal before it. These are not matters which can
be legitimately raised before this Court under Art. 136.
The result is, certified Standing Order 29(a) is modified as
indicated in this judgment; Standing Order 54 which deals
with the age of superannuation or retirement and provides
for consequential payment of pension, as well as the two
provisos to Standing Order 47, and Standing Orders 48 and 49
are struck down and deleted from the list of certified
Standing Orders. The rest of the
880
order passed by the Appellants Authority is confirmed. The
certified Standing Orders will now have to be renumbered.
As we have already indicated, this order will govern also
Civil Appeal No. 1105 of 1964, with the result that the
Standing ,Orders in this appeal which correspond to the
Standing Orders in C.A. No. 164 of 1965, will be modified or
struck down in accordance with this judgment. There would
be no order as to costs in both the appeals.
Appeal allowed in part.
881