Full Judgment Text
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CASE NO.:
Appeal (civil) 5118 of 1992
PETITIONER:
MAHARASHTRA STATE COOPERATIVE COTTON GROWERS’ MARKETING FEDERATION LTD. AND ANR.
RESPONDENT:
MAHARASHTRA STATE COOPERATIVE COTTON GROWERS’ MARKETING FEDERATION EMPLOYEES UNION AND ANR.
DATE OF JUDGMENT: 24/01/1994
BENCH:
P.B. SAWANT & R.M. SAHAI
JUDGMENT:
JUDGMENT
WITH
Civil Appeal No, 5117 of 1992.
1994(1)SCR 289
The Judgment of the Court was delivered by
SAWANT, J. 1. The crucial question that falls for consideration in the
present case is whether the award dated 31.8.1984 of the Industrial
Tribunal (hereinafter referred to as ’Patankar Award’) is applicable to the
seasonal employees involved in the present proceedings. To appreciate the
controversy between the parties, the facts and events which preceded and
succeeded the said award have also to he looked into.
2. The State Government under Section 42 of the Maharashtra Raw Cotton
(Procurement, Processing and Marketing) Act, 1971, appointed the
Maharashtra Cooperative Marketing Federation (hereinafter referred to as
’Marketing Federation’), a cooperative society, as the chief agent to
implement the Cotton Monopoly Procurement Scheme [the ’Cotton Scheme’]. The
Marketing Federation was before that date engaged in the marketing of
several commodities. From that date onwards till 31.8.1984, it continued to
act as the chief agent of the State Government for procurement, processing
and marketing of cotton as well. For this purpose it recruited and
maintained a separate section with a separate staff. The staff consisted of
those who were needed throughout the year and those who were needed only
during the season. The cotton trade (which expression will include
procurement, processing and manufacturing of cotton) in Maharashtra is
mostly in Vidarbha, Marathwada and Khandesh region, and commences roughly
in the first week of November and extends upto April of the next year. In
Western Maharashtra, there is hardly any crop of cotton and the season
there commences in August and ends in November of the same year. The Cotton
Scheme introduced by the Government has three aspects, (i) procurement,
(ii) processing and (iii) marketing. The first two activities extend over
four to six months in a year depending upon the extent of the availability
of the crop. The third stage viz., marketing and also the function of
maintenance of accounts are spread over throughout the year. The seasonal
employees are needed only for the first two stages viz., procurement and
processing which last for a limited period as stated above. The seasonal
employees engaged in the said two activities consist of Weighment Clerks,
Seed Clerks, Heap Clerks, Ginning Supervisors, Press Supervisors etc. who
work at the collection centers and the processing centers. On an average,
the seasonal employees are about twice the number of the perennial
employees.
3. It appears that an industrial dispute having arisen between the
employees and the Marketing Federation, the same was referred by the State
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Government for adjudication to the Industrial Tribunal consisting of Shri
G.K. Patankar by the reference order of 30.5.1973. The terms of reference
show that in all 16 demands of the employees were referred to the said
Tribunal and one of the demands with which we are concerned was demand No.
4 relating to permanency. That demand read as follows:
"Demand No, 4: Permanency:- All the workmen who have put in three months
aggregate service for 78 or more working days in aggregate in spite of any
intervening breaks should be immediately confirmed in writing as permanent
workmen,"
4. None of the demands referred to the Tribunal including the aforesaid
demand No, 4 suggested that they related to the seasonal employees. All the
demands were in relation to the perennial employees. The statement of claim
filed in the Reference by the Union on behalf of the workmen, did not also
refer anywhere to the seasonal employees. On the other hand, in relation to
the aforesaid demand for permanency, it referred to all temporary workmen
and specifically pointed out that at that lime, there were about 400
workmen who had put in more than five years’ service. But still they were
termed as temporary. It also observed that the work of the Marketing
Federation had increased considerably and it required a large number of
permanent staff, and that the services of the temporary workmen could be
terminated at any time which was inequitable. In its written statement, the
Marketing Federation also proceeded on the basis that all the said demands
related only to the perennial employees. While, however, referring to the
aforesaid demand for permanency, the written statement observed as follows:
"9. With regard to demand No, 4" Permanency" the Federation states all
employees who have completed 3 years of continuous service. The period
mentioned in the statement of claim for all employees who have put in 3
months continuous service for making them permanent is too small a period
to judge the capacity and ability of the employee. The Federation,
therefore, agrees in principle that an employee should not remain temporary
for a long time and 3 months period of service for permanency is too short
for judging the capacity and ability of an employee before he is made
permanent in the organisation.
10, With regard to the contents of para 13 of the statement of claim, the
Federation states that for carrying out the activities of the Federation it
has to employ workmen either on temporary basis or on seasonal basis
depending upon the nature of work load of different activities that the
Federation has to discharge at the instance of the State Government. The
Federation, therefore, feels that no period should be laid down in respect
of purely temporary and in seasonal employment. In the submission,
therefore, of the Federation, the rule of permanency should apply only to
employees who are recruited against the permanent post and it should not
apply to the purely temporary or casual employees or seasonal employees who
have to be recruited in times of emergency."
5. We have quoted the aforesaid two paragraphs from the said written
statement verbatim, for an argument has been advanced by the respondent-
Union of workmen, that notwithstanding the fact that the demands as raised
and the statement of claim filed on behalf of the workmen in the Reference
did nowhere refer to the seasonal employees, the reference by the Marketing
Federation to the workmen employed on seasonal basis in the written
statement as above, shows that the industrial dispute referred to the
tribunal and the Tribunal’s award related to the seasonal employees as
well. We will deal with this argument at its proper place.
6. Shri Patankar while giving his award on 31.8.1984 disposed of the said
demand for permanency in para 19 of the award in the following cryptic
language: -
19, The next demand is in respect of permanency. It is alleged by the Union
that the workers who have put in three months of aggregate service and have
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put in 78 or more days as working days in spite of any breaks in service,
be made permanent. The Federation opposes this demand and contends that it
is willing to confirm all the employees who have put in three years of
continuous service. Considering, therefore, the arguments advanced for both
the sides, it appears that it would be proper to direct that those
employees who have put in 240 days of continuous service be treated as
permanent employees".
7. It will be apparent from the aforesaid portion of the award, which is
the only direction in the award relating to the said demand that the
direction also did not refer to the seasonal employees. There is no dispute
that after this award, the same system of seasonal employees continued till
the present order dated 14.9.1990 of the Industrial Court with which we are
concerned and from which the present proceedings have arisen. There is also
no dispute that as per the Patankar Award, the temporary perennial
employees were made permanent but the seasonal employees on the date of the
award continued as such without demur. On the other hand, subsequently,
there were four settlements entered into between the Marketing Federation
and the Union of seasonal employees. The first settlement is of 12.6.1980
and related to (i) revision of consolidated salary and annual increment in
the consolidated salary of certain categories of the seasonal employees;
(ii) redesignation of some of the categories of the said employees; (iii)
retention allowance to be paid to them; and (iv) absorption of the seasonal
employees in the permanent vacancies in the perennial posts according to
seniority and merit. It may be mentioned here that the settlements on
increments in the consolidated salary specifically stated that those of the
seasonal employees who had to put in more than three seasons of employment
would be entitled to two increments. So also, the settlement on retention
allowance stated that the seasonal employees on consolidated salary shall
be disengaged at the end of the season, and during the period of non-
employment, they would be entitled to 25 per cent of the monthly wages
prevailing in the past cotton season and that it would not exceed half
month’s wages during the year. It, however, mentions that the retention
allowance would be paid to the seasonal employees till they were reemployed
at the commencement of the next cotton season. The next settlement is of
11.12.1981. It spoke of the vacancies of the perennial clerks, stenographer
peons and watchmen at the Head Office and Divisional and Sub-divisional
offices being filled in from the seasonal employees on seniority- cum-merit
basis and the seasonal employees above 58 years of age being not oigible
for such appointments. It also spoke of all vacancies in class HI and IV
cadres of the cotton department of the Marketing Federation being filled in
from among the seasonal employees again on seniority-cum merit basis. It
then spoke of the seasonal employees, excluding watchmen, who had put in
eleven months or more of employment during 1979-80 season including
technical breaks being regularised in the pay-scale of Rs. 130-400/-. That
term of the settlement was clarified by further stating that the said
seasonal employees would be regularised according to Divisional seniority
and on the basis of seniority-cum-merit. The clarification further mentions
that the said appointment would not change the nature of their duties and
they would not be paid retention allowance. The settlement further stated
that excluding the said employees who were regularised, others would be
entitled to the interim hikes of certain amounts in their consolidated
salaries. The settlement also provided that the agricultural graduates from
among the seasonal employees would be suitably trained and appointed as
Graders. This settlement made an important provision for appointment of a
committee to consider the problems of the seasonal employees. The Committee
was to consist of a representative each of the cotton cultivators, the
Marketing Federation, the State Government and the seasonal employees. The
Committee was to submit its recommendation before February, 1982 and the
Stale Government was to take a decision thereon within one month of the
recommendations and implement the acceptable recommendations. The matters
which were to be referred to the Committee were mentioned in the schedule
to the settlement and they were (i) the strength of the seasonal employees
required to be employed in every zone considering the nature of duties,
features of cotton season etc.; (ii) whether the technical breaks were
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necessary in the case of some of the seasonal employees who were then
employed for nine to twelve months; (iii) ways and means to ensure
employment for maximum period for seasonal employees; (iv) the strength of
the permanent, i.e., perennial employees; (v) pay-scales to be granted to
the seasonal employees who were to be regularised and to decide the
modality of annual increment to be granted to them; (vi) the need to change
the then system of paying retention allowance and to suggest change in the
system.
8. There is no dispute that pursuant to this settlement, a Committee headed
by one Shri Bhuibhar was appointed. Before the report of the said Committee
was received, there was yet another settlement 22.12.1982 between the Union
of the seasonal employees and the Marketing Federation. One of the terms of
the settlement was that the Bhuibhar Committee should submit its report to
the Government within one month of the dale of that settlement and that the
Government should take decision on the said report at the earliest. There
was also a provision made for interim increase in the monthly consolidated
wages of some of the categories of: the seasonal employees. The said
interim relief was to be adjustable while implementing the recommendations
of the Committee. It is obvious from this settlement that it was
necessitated because of the delay in the submission of the report by the
Committee.
9. The Bhuibhar Committee submitted its report on 1.12.1983. Some of the
recommendations and the Government’s reaction on the same are relevant for
our purpose. They are mentioned below: -
(1) Since, if the demand of the seasonal employees for employment
throughout the year was accepted the financial burden would fall on the
cultivators and would affect the Cotton Monopoly Procurement Scheme, it was
not proper to provide 12 months’ employment to the seasonal employees and
burden the said scheme. The Government accepted this recommendation.
(2) There should be increase in the sanctioned strength of the perennial
employees viz, Clerks, Peons and Watchmen in different zones and at
different Sub-zonal offices. The Government accepted it.
(3) There should be an increase in the sanctioned strength of the seasonal
employees. However, since this aspect required an in depth study, the
matter should be entrusted to a management consultant. The Government
accepted this suggestion.
(4) The seasonal employees should be given pay-scale of Rs.
160-10-210-15-285-EB-20-465. The Government accepted the said pay-scale.
(5) The part-time seasonal employees should be given the pay-scale of Rs.
105-5-.145-10-205-15-210. An annual increment for three years of completed
seasonal employment was also recommended. The Government accepted the
recommendation.
(6) The vacancies in Class III and IV cadres in all offices (including the
cotton and non-cotton department) should be filled in from the seasonal
employees. The Government accepted the recommendation.
(7) In regions other than Western Maharashtra, the seasonal employees
should be given employment for a minimum period of six months, and in
Western Maharashtra, annual plans should be made to make it possible to
furnish employment for a minimum period of six months to them.
10. The Government accepted the recommendation in principle, but also
suggested to the Federation that they make necessary planning for sending
seasonal employees from Western Maharashtra to Vidarbha for a minimum
period of six months.
11. Pursuant to the said report, and the Government’s reactions to it, an
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agreement was entered into between the Marketing Federation and the Union
of the seasonal employees on 18.1.1984, In the preamble, it was stated that
the agreement was entered into pursuant to the recommendations of the
Bhuibhar Committee as accepted by the Government and the agreement was to
be effective from 1.11.1982. The agreement also stated that the Government
had suggested that the agreement should ensure that for the next five
years, Cotton Scheme shall not be burdened and it was pursuant to the
aforesaid directive of the State Government that the Marketing Federation
and the seasonal employees’ Union had agreed to its terms. Incidentally it
may be stated that it is the same Union, which signed the said agreement,
which is the contesting respondent before us. The agreement then
specifically stated that the Marketing Federation had agreed to implement
the decision of the Government in respect of the recommendations of the
Bhuibhar Committee except recommendation No. 33 which had suggested that
the vacancies in class III and IV cadre in all the offices of the
Federation including the cotton and non-cotton departments should be filled
in from the seasonal employees. Instead the agreement provided that it is
only the vacancies in the cotton department, which will be filled in from
among the seasonal employees. The agreement stated that during the period
of five years, the Union shall not raise any demand tending to impose
additional financial burden on the Cotton Scheme.
12. On 31.8.1984, the present appellant No. 1 viz,, the Maharashtra State
Cooperative Cotton Growers’ Marketing Federation Ltd. was constituted for
the first time as a society registered under the Maharashtra Cooperative
Societies Act, 1960 with the express object _f taking over from the
Marketing Federation as the chief agent of the State Government, the Cotton
Monopoly Procurement Scheme. The staff of the Marketing Federation engaged
in the Cotton Scheme was to be taken over by the appellant-Federation.
Accordingly, the entire staff of the Marketing Federation including the
seasonal staff engaged under the Scheme was taken over by the appellant-
Federation on the same terms and conditions. As a result, the appellant-
Federation on the relevant date had perennial staff of about 2200 persons
and seasonal staff of about 4,500 persons.
13. On 27,9.1988, for the first time, certain complaints were filed by the
Union of the seasonal employees, Aurangabad, under the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices Act,
1971 (hereinafter referred to as the ’Act’). In the complaints, it was
stated that since as per the Patankar Award, the seasonal employees who had
put in 240 days of service were not made permanent, the appellant-
Federation had committed an unfair labour practice within the meaning of
the said Act. The Industrial Court dismissed the said complaint holding
that the Patankar Award did not apply to the seasonal employees. On
\00728.9.1989 some seasonal employees from Amravati zone made the very: same
complaint under the Act before the Industrial Court, Nagpur, The same was
also dismissed.
14. Thereafter on 20.4.1990, the respondent-Union filed the present
complaint under the Act before the Industrial Court, Nagpur which has given
rise to the present proceedings. This complaint was heard by another member
constituting the Industrial Court. The grievance made in the complaint was
that those seasonal employees who had worked for 24(1 clays in 1982-83 and
1983-84 were not made permanent and inasmuch as the Patankar Award had
directed the Marketing Federation to make permanent seasonal employees who
had completed 240 days of service, there was an unfair labour practice
under Items 5, 6 and 9 of Schedule IV to the Act. The relief claimed was to
quash the termination of the services of the said employees at the end of
the season and to make the employees permanent from the date they completed
240 days of continuous service in 1983-84 Cotton Season. The further relief
claimed was that the practice of continuing the employees under reference
as seasonal or casual be declared as unfair labour practice and the
direction be issued to the appellants to cease to indulge in it. The
incidental relief claimed was that the appellants should be directed to pay
the arrears of wages and all service benefits to the concerned employees
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treating them as permanent from 1983-84 Cotton Season. The Industrial Court
by its impugned order of 14.9,1990 (i) allowed the said complaint, (ii)
declared that the appellants had engaged in and were engaging in unfair
labour practices as contemplated by Items 5, 6 and 9 of Schedule IV to the
Act, (iii) directed the appellants to cease and desist from indulging in
the said unfair labour practices and (iv) directed them not to terminate
the services of the concerned employees w.e.f. 30.4.1990, (v) directed the
appellants to absorb and make permanent the said employees in compliance
with the provisions of the Patankar Award and the agreement dated 18.1.1984
and also by giving the benefit of the Government letter dated 18.1.1985 and
to grant arrears of wages by processing their cases in the light of the
directions given in the said letter which was referred to by the High Court
in its decision in Shripati Pandurang Khade & Ors. v. Zonal Manager, M.S.
Co-op. Marketing Federation Ltd. Ors., (1987) Mh. LJ 694.
15. The appellants challenged the said order by a writ petition in the High
Court. The learned Single Judge dismissed the petition holding that the
Patankar Award had become final and since it had given the direction to
make permanent even the seasonal employees who had put in the more than 240
days of service, the writ petition had no merit. The Letters Patent Appeal
filed before the Division Bench of the High Court was also dismissed on the
same ground by the impugned decision dated 27.3,1992. It is against the
said decision that the present appeals have come before us.
16. Before we advert to the respective contentions of the parties, it
would be advantageous to clear some conceptions regarding the nature of the
operations involved in the Cotton Scheme, the category of the staff
employed and the character of the seasonal employment under it. Although
some attempt was made before as on behalf of the respondent-Union to show
that the operation of procuring and processing of cotton is carried on
throughout the year, there is nothing on record to support the said
contention. On the other hand, the record shows that out of the three
operations under the Scheme, the procurement and processing of cotton lasts
on an average only for six months from November to April in the principal
cotton regions, viz., Vidharbha, Marathwada and West Khandesh and rarely
extends beyond that period depending upon the cotton crop, In fact, if the
crop is less, the said period even ends earlier. In Western Maharashtra,
where there is scant crop of cotton, the procurement and processing season
lasts only for about four months from August to November. Hence the staff
needed for procurement and processing is only for about six months on an
average but never beyond 7 to 8 months in any year. It is only the
operation of marketing, which goes on throughout the year and for the
marketing as well as for the maintenance of accounts the staff is needed
throughout the year. The seasonal staff is further classified into
permanent, temporary, casual and part-time. The permanent seasonal
employees have scales of wages different from those of the perennial staff.
So also the part-time employees have scales of pay different from those of
the full-time seasonal employees. The permanent seasonal employees are paid
their full wages during the season, i.e., when they are in employment,
according to the scale of pay. They are also paid their annual increments
in that scale. During the off-season, they are paid monthly retention
allowance equivalent to 25 per cent of their monthly salary. In respect of
the said employees, further a seniority list is maintained and this
seniority list is scrupulously adhered 1o while employing them. If there is
any vacancy in the perennial posts, the recruitment is first made from the
seasonal employees according to the said seniority fist. Fn addition, the
following facilities are given to them:
Specified grades and annual increments in the said grades: (ii) Bonus in
accordance with the provisions of the Payment of Bonus Act at the same rate
at which it is paid to the perennial employees; (iii) Leave with wages;
(iv) Casual leave at the rate of one day’s casual leave for every month;
(v) Paid holidays or salary in lieu of holidays; (vi) Gratuity in
accordance with the provisions of the Payment of Gratuity Act; (vii)
Benefit of Provident Fund Scheme and Family Pension Scheme; (viii) Festival
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advance for Diwali. Ganapati festivals etc.; (ix) Travelling Allowance and
Daily Allowances as are paid to perennial employees; (x) Dearness
Allowance; (xi) Benefit of Group Accident Insurance Scheme; (xii) Model
standing orders are made applicable mutatis mutandis to give security of
employment; and (xiii) Family Planning incentives; (xiv) Fifteen days’
salary at the end of every season towards overtime work.
The temporary and casual seasonal employees are engaged as and when needed
on account of occasional increase in work and they are paid consolidated
salary.
17. What is further necessary to note is that there is a difference
between seasonal employment and seasonal employees. The employments which
are only seasonal may require only seasonal employees and there are no
perennial employees on their staff. On the other hand, an employment may
have both perennial and seasonal work as in the present case, and hence
require both kinds of workmen. Further, seasonal employees may be permanent
or temporary. The permanent employees are employed from season to season
successively and are entitled on that account for retention allowance and
all other benefits referred to above during the off-season because of their
permanency as seasonal employees which is different from permanency as
perennial employees. The temporary seasonal employees are not obviously
entitled to the said benefits as the permanent seasonal employees since the
temporary employees are not engaged from season to season but only when
there is an increase in work. So is the case with the casual employees.
There arc also part-time seasonal employees and they carry different scales
of wages by the very nature of their employment as pointed out above. The
seasonal employees like the perennial employees also belong to different
categories and grades. As stated above, at the relevant time the perennial
employees of all categories were 2200 whereas the seasonal employees were
4500, We have to stress this aspect because we find that there is a good
deal of confusion by the Tribunal and the Courts below on these aspects of
the matter which has contributed to their erroneous conclusions.
18. Coming now to the contentions of the parties, the appellants urged
before us that the present order of the industrial Court as well as the
decisions of the learned Single Judge and the Division Bench of the High
Court have granted relief to the seasonal employees on the basis that the
Patankar Award had directed the then Marketing Federation to give
permanency also to the seasonal employees who had put in 240 days’ work in
a year. This assumption is itself erroneous since the terms of reference,
the statement of claim of the workmen, the written statement filed by the
Marketing Federation and the award would themselves show that the said
Dispute related to, and, therefore, the relief was given in respect of only
the perennial employees. While not disputing the fact that there was no
Specific reference to the seasonal employees in either the terms of refer-
ence or the statement of claim of the workmen or in the award, the
respondent-Union relied upon paragraph 10 in the written statement filed by
the Marketing Federation in the said reference, to urge that since the
Marketing Federation had itself referred to the seasonal employees in the
said paragraph, it had understood the demand for permanency as being
related to the seasonal employees as well. We have quoted earlier the said
paragraph in the written statement of the Federation. That paragraph has to
be read in the context of not only the preceding paragraph (which is also
quoted above) but also in the context of the statement of claim and the
demand made. The relevant demand No. 4 for permanency has also been quoted
by us above. Without mentioning whether it was in respect of perennial or
seasonal employees, it proceeded to state that all the workmen who have put
in three months’ aggregate service for 78 or more working days in
aggregate, in spite of any intervening breaks, should be immediately
confirmed in writing as permanent workmen. Since it is not and cannot be
disputed that there is seasonal work under the Cotton Scheme and some
workmen have necessarily to be employed for such work, it is difficult to
hold that the Union had made the said demand also in respect of the
seasonal employees. There is further nothing in the statement of claim
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filed on behalf of the Union in support of the said demand to suggest that
the Union had in contemplation the case of any seasonal employees. On the
other hand, in paragraphs 12 and 13 of the statement of claim, which
related to the said demand, the Union had stated as follows:
"12. It would be rather surprising for any authority to note that such a
gigantic organisation like Federation (employing about 3000 number of
workmen) throughout the State of Maharashtra is having majority of the
workmen as temporary workmen. The Union further points out that there are
about 400 workmen who have put in more than 5 years service but still they
have been termed as "temporary" workmen by the Federation. The Union
further points out that the business of the Federation is stable and has
been continued progressively and, therefore, it is desirable that such of
the workmen who have put in three months aggregate or who have put in 78
days minimum service in aggregate in spite of any should be confirmed as
permanent workmen.
\00713. It is a matter of regret that there are many workmen who have put in
long number of years of service are being continued as temporary workmen,
and, therefore, in the interest of justice, equity and fair play the demand
may be given due consideration by the authorities concerned and more so by
the Federation itself. It is respectfully submitted that the work of the
Federation has increased considerably during last seven years and the new
projects have been coming up every now and then which require a large
number of permanent staff and therefore, it is necessary to make the
workmen permanent as demanded by the Union, The Union further points out
that services of temporary workmen on the ground of being a temporary can
be terminated at any lime in spite of the fact that such workmen has put in
a number of years of service, which is inequitable, unjust and improper and
that under the circumstances, the demand of the Union is just and proper,"
19. This would show that the Union was concerned with the temporary
perennial workmen and not with seasonal workmen. The Union knew that even
among the perennial workmen there were some permanent and others temporary
and they were espousing the cause of the said temporary workmen. That is
also clear from the fact that the demand is raised in the context of the
alleged requirement of the large number of permanent staff. The Union was
particular in pointing out that the temporary workmen could be terminated
at any time. As regards the seasonal employees, their services are
terminated every year, after every season and they are re-engaged according
to the seniority list for the successive seasons. Therefore, the statement
made in the statement of claim could not even remotely be connected with
the seasonal employees. If at all the meaning of the said two paragraphs is
stretched, it can at best be construed to refer to the temporary seasonal
employees and not to the permanent seasonal employees. In that case, it
would only mean that the Union wanted the temporary seasonal employees to
be made permanent seasonal employees. But that is not how either the demand
or the statement of claim can be read, and we do not read them so. Now
coming to paragraph 10 in the written statement of the Marketing
Federation, in paragraph 9, it showed its willingness to make permanent
those employees who had completed three years of continuous service. This
showed that even the Federation had understood the demand as relating only
to the perennial employees and nut to seasonal employees. In that paragraph
the Federation also pointed out that the Union’s demand for making
permanent the employees who had put in three months’ continuous service was
not justified since the said period was too short to judge the capacity and
ability of the employee. These statements in paragraph 9 make it clear that
knowing fully well that it had also seasonal employees who had to be
continued from season to season for seasonal work, the Federation could not
have made the statement in connection with the permanent seasonal
employees. Paragraph 10 of the written statement has, therefore, to be read
in that context. In further support of its opposition to the Union’s
demand, the Federation went on to point out that it required for carrying
out its activities workmen both on temporary basis and on seasonal basis
depending upon the nature of the workload. It then went on to point out
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that no period should be laid down in respect of such purely temporary and
seasonal employees and the rule of permanency should apply only to
employees who are recruited against the permanent posts and that it should
not apply to purely temporary or casual employees or seasonal employees.
Read as a whole, these statements made in paragraph 10 will also show that
if at all the seasonal employees were in the contemplation of the Marketing
federation, they were the temporary seasonal employees and not the
permanent seasonal employees. By the very nature of their employment, the
temporary seasonal employees can be made permanent only as permanent
seasonal employees and not as permanent perennial employees. In any case,
it is difficult to sustain the argument that the Federation was there
referring to the permanency of the permanent seasonal employees. What is
further, the Patankar Award does not even refer to the seasonal employees.
It also does not make any distinction between the two and give reasons
either to accept or reject the contentions of the parties. It merely
summarises the arguments of the parties and gives a direction, which is
quoted above. The operative portion reads "considering, therefore, the
arguments advanced on both sides, it appears that it would be proper to
direct that those employees who have put in 240 days of continuous service
be treated as permanent employees." The direction can be read either as a
direction to make the temporary perennial employees and temporary seasonal
employees as permanent perennial employees and permanent seasonal employees
respectively or as a direction relating only to the temporary perennial
employees. But in no case, it can be read as a direction to make seasonal
employees as permanent employees as in the nature of things such a
direction could not have been given. There are other reasons why the
Tribunal could not have given such a direction and if such a direction was
given, it would have been highly iniquitous and discriminatory to the
perennial employees - whether temporary or permanent, On the undisputed
fact, that the procurement and processing operations under the Cotton
Scheme do not last for more than 4 to 6 months and in any case not more
than 8 months, to make the seasonal employees permanent and give them all
the benefits of the perennial employees would mean that they would get the
salary and all other benefits throughout the year as the perennial
employees do, without putting in work throughout the year as the latter
have to do. On the admitted fact that there is a need of seasonal employees
and there is no work available to be given to them for a part of the year,
the Cotton Scheme has always to maintain a distinction between the
perennial employees and seasonal employees and has to provide them with
different service conditions though some of the service conditions may be
common. It is the failure to understand the nature of the operations and
the nature of the employment required under the Cotton Scheme, which is
responsible for the impugned decisions of the Industrial Court and the High
Court.
20. Further, the fact that even the seasonal workmen and their Union did
not understand either the said demand adjudicated by Shri Patankar on the
award given by him as referring to the seasonal employees is clear from the
subsequent events to which we have already made a reference. We have
pointed out that after the Patankar Award which was given on 31.8.1984, all
the then seasonal employees continued as seasonal employees throughout, and
the Marketing Federation made only the temporary perennial employees
permanent perennial employees as per the direction of the said Award. None
of the seasonal employees was made permanent except when he was recruited
in the vacancies occuring in the post of permanent perennial employees. But
that was not because of the Patankar Award, It was as per the understanding
between the parties. The Union never raised any objection to the same. In
fact, as pointed out earlier, there were three settlements between the
parties on 12.6.1980, 11.12.1981 and 22.12.1982 which not only did not
speak a word about making any seasonal employee who had put in 240 days of
work, permanent but spoke about all other matters relating to them. The
settlement of 11,12.1981 in fact spoke about the setting up of the
Committee for examining problems of the seasonal employees. The problems
referred to there would show that not only was the system of seasonal
employees to continue but the strength of such seasonal employees was to be
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assessed zonewise. They were to be ensured maximum period of employment
during the season. In fact, oae of the problems which was to be
investigated was whether the technical breaks which were given to employees
who were employed for 9 to 12 months were necessary. This meant that the
Patankar Award had no bearing on the seasonal employees. In fact, the
recommendations made by the Bhuibhar Committee as accepted by the State
Government, showed that the seasonal employees were not on the agenda of
the industrial dispute adjudicated by Shri Patankar.
21. On the other hand, recommendation 11 made in the said report
categorically stated that the demand made by the seasonal employees
subsequent to the said Award (pursuant to which the committee itself was
appointed) for employment throughout 12 months could not be accepted since
the financial burden would fall on the cultivators and consequently would
affect the Cotton Scheme itself. That recommendation was accepted by the
Government, So also the recommendation 24 stated that the increase in the
sanctioned strength of the seasonal employees at Zonal and Sub-zonal
offices which was suggested to the Committee required indepth study of the
matter. That recommendation was also accepted by the Government.
Recommendations 25 and 27 suggested new pay scales for the full-time and
part-time seasonal employees respectively. The report also suggested the
recruitment of seasonal employees in the vacancies of the perennial
employees. The agreement of 18.1.1984 between the Marketing Federation and
the respondent-Union, which followed the said report, records the relevant
facts. Thus, apart from the agreement of 12.6.1980, agreement dated
11,12.1981 under which the Committee was appointed and the agreement of
.18.1.1984 by which the recommendations of the Committee were accepted,
show that the problems of the seasonal employees were all along kept
separate and were dealt with separately from the problems of the perennial
employees. Had the dispute with regard to the permanency of the seasonal
employees been referred for adjudication to the Industrial Tribunal of Shri
Patankar and had the said Award related to the seasonal employees, there
would have been no need to enter into the agreements of 12.6.1980, 11.12.81
and 22,12.82. There would also have been no need to appoint the special
Committee to study the problems of the seasonal employees including the
problem of their permanency, and there would have been no need for the
agreement of 18.1.1984, which followed the recommendations of the
Committee. We are, therefore, more than satisfied that there is no
substance in the contention of the respondent-Union that either the
Industrial Tribunal of Shri Patankar was called upon to adjudicate the
dispute with regard to the permanency of the seasonal employees or that the
award made by the said Tribunal had directed the seasonal employees who had
put in 240 days of work to be made permanent.
22. As has been pointed out above in fact no such direction could have
been given by the said Tribunal, in the circumstances of the case. The
question whether there was a need of the seasonal employees, and for what
period was essentially a matter of indepth investigation. To answer the
said question, it was necessary to collect facts from each of the Cotton
Zones since the seasons varied from zone to zone, and to assess the need
for each category of workmen for each of the zones and for each of the
processes of procuring and processing of cotton. It was also necessary to
assess the required strength of each of the categories of the seasonal
workmen by taking into consideration the compliment of the perennial
workmen. For this purpose, it is necessary to raise a specific demand for
abolition of the category of the seasonal employees. If such a demand is
referred for adjudication, the adjudicator would have to formulate specific
questions, give opportunity to the parties to lead evidence on each of the
questions and to give his specific findings on them. There cannot be a
common demand for permanency of perennial and seasonal employees, the
nature of their employment being different. As pointed out above, if the
demand is for making temporary seasonal employees permanent seasonal
employees, it would have to be stated so clearly and the finding thereon
has to be in specific terms, On the other hand, if the seasonal employees
have to be made permanent meaning perennial, in the sense that they have to
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be given work for all the 12 months, they would still be temporary
perennial employees, and not necessarily permanent perennial employees.
That is why the demand of the seasonal employees, even before the Bhuibhar
Committee was to give employment to them for 12 months. The demand was not
for making them perennial employees. A demand merely for permanency in
their case in effect involves two demands, viz., (i) to abolish the
seasonal employment and to make it perennial and (ii) after making it
perennial, to make the erstwhile seasonal employees permanent. These are
two different things and it is the omission to understand the significance
of the said difference, which has led to the present confusion.
23. Being faced with this problem, it was urged on behalf of the
respondent-Union that firstly the Marketing Federation as per the decision
of this Court in Maharashtra Slate Cooperative Cotton Growers’ Marketing
Federation Ltd. v. Shripati Pandurang Khade and Ors., [1989J Supp. 1 S.C.C.
226, had implemented the decision of the Patankar Award. Secondly, it was
urged that since the appointment letter given to the seasonal employees
shows that the Model Standing Orders framed under the Industrial Employment
(Standing Orders) Act, 1946 were applicable to them and since one of the
Model Standing Orders, viz,, Order No. 4-B reads as under.
"A temporary workman, who has put in 190 days uninterrupted service in the
aggregate in any establishment of a seasonal nature or 240 days
uninterrupted service in the aggregate in any other establishment during a
period of preceding twelve calendar months, shall be made permanent in that
establishment by an order in writing signed by the Manager or any other
person authorised in that behalf by the Manager, irrespective of whether or
not his name is on the muster roll of the establishment throughout the
period of the said twelve months."
The seasonal employees were entitled to be made permanent after they had
put in 240 days’ uninterrupted service. None of these arguments had any
merit. In Pandurang khade’s case the employees involved belonged to Phaltan
Zone in the Western Maharashtra where as stated earlier, the cotton season
does not last for more than 4 months. They had made a complaint before the
Industrial Court on the ground of unfair labour practice by the Marketing
Federation referred to in items 5, 6 and 9 of Schedule IV to the Act. The
Industrial Court had dismissed the said complaint holding that the
grievance made was not covered by the said items but it came under Item 1
of the Schedule and there was no complaint under the said item. The
Industrial Court had also dismissed the complaint as being barred by
limitation. The High Court allowed the writ petition of the respondent-
Union against the said decision and that is how the matter had reached this
Court. It is evident from paragraphs 8, 11 and 12 of the judgment of this
Court that firstly the Court had proceeded on the footing (hat the
expressions ’temporary employees’ and ’seasonal employees’ were.
synonymous. Secondly, the Court had assumed that before the Industrial
Tribunal of Patankar, there was a demand for the permanency of seasonal
employees and that the Patankar Award had granted permanency to the
seasonal employees. The Court had also proceeded on the footing that since
the letter of the Government dated 9.11.1984 had directed the appellant to
finally absorb all staff employed with the Marketing Federation as on
1.1.1985, the appellant was under an obligation to absorb the six seasonal
workmen concerned therein who had according to the Court, become permanent
pursuant to the Patankar Award. The Court for that purpose also relied upon
the letter dated 18.11985 to which a reference was made by the High Court
in its judgment under appeal in that case to hold that those who had put in
240 days of service were-to be given all the benefits mentioned in the said
letter, whether the employees were perennially or seasonally employed.
24. As has been pointed oat earlier, this Court in Pandurang Khade’s case
had proceeded on the footing that the Patankar Award had directed even the
seasonal employees to be made permanent which presumption was not borne out
by the facts. As far as the letter of 9.11.1984 is concerned, it only
speaks of the employees who were with the Marketing Federation to be
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absorbed on the "as is" basis by the appellant-Federation which means that
the perennial and seasonal employees were to be taken over as such
employees only. The letter did not mean that those who were seasonal
employees should be taken over as perennial employees. As far as letter of
18.1.1985 is concerned, it is addressed to one of the employees concerned
in the Pandurang Khade’s case. That letter was relied upon both by the High
Court as well as this Court in that case to hold that Patankar Award
applied to the seasonal employees. We have pointed out that the presumption
was contrary to facts and, therefore, the decision was per incuriam. That
letter does not improve the matter. Hence, the reliance placed on the two
letters for contending that the seasonal employees who had put in 240 days
of service were to be made permanent or that the appellant-Federation
had accepted them as perennial permanent employees, is not well merited.
25, The reliance placed by the respondent-Union, therefore, on the fact
that the seasonal employees belonging to the Phaltan Zone were made
permanent although they were jun; to the other seasonal employees to
contend that all the seasonal employees who had put in 240 days of service
should be made permanent is misconceived. The cases of the said employees
having been decided on incorrect facts will have, therefore, to be treated
as isolated instances and cannot be made the basis of the contention that
the seasonal employees who have put in 240 days’ work should be made
permanent perennial employees.
26. Coming now to the next contention, viz., that in the appointment letter
of the seasonal employees it has been specifically mentioned that their
conditions will be governed by the Model Standing Orders and Model Standing
Order No. 4-B which is quoted above, requires that the employees who have
put in 240 or more days of service should be made permanent, we are of the
view that the contention has no substance. It must in the first instance be
remembered that the Model Standing Orders do not apply to seasonal
employees. Secondly, the seasonal employees in the present case are
governed by their own service conditions, which as pointed out above, have
in material respects no relation to the service conditions of the perennial
employees who are governed by the said Model Standing Orders. It is,
therefore, incorrect to say that all the Model Standing Orders are
applicable to the seasonal employees. By the appointment letters, the Model
Standing Orders have only been incorporated in the other service conditions
of the seasonal employees only to the extent that the specific service
conditions of the seasonal employees are silent on the aspects covered by
the Model Standing Orders and which orders would necessarily apply to the
seasonal employees. The Model Standing Orders, therefore, are applicable to
the seasonal employees mutatis mutandis. The Model Standing Order No. 4-B
in particular will be inapplicable to the seasonal employees because of the
very nature of their employment and hence it cannot be read into the
service conditions of the seasonal employees. Lastly, a reading of the said
Model Standing Order No. 4-B would itself make it clear that it is
applicable to the perennial employees only. It speaks of temporary workmen
in any establishment of a seasonal nature or in other establishment during
a period of preceding twelve months. Admittedly, the appellant-Federation’s
establishment is not of a seasonal nature. It is only some employees
employed therein who are seasonal. Secondly, as far as the employees in the
other establishments spoken of there, are concerned, they can only be such
employees who are employed for perennial work but for some reason or the
other, arc not allowed to complete 240 days in such perennial work. It is,
therefore, clear that the said Model Standing Order does not apply to
seasonal employees. Hence this contention has also to be rejected.
27, In the result, as allow the appeals and set aside the decisions of the
Industrial Court and of the High Court. In the facts and circumstances of
the case, there will be no order as to costs.