Full Judgment Text
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CASE NO.:
Appeal (civil) 14572 of 1996
PETITIONER:
Chairman-cum-Managing Director, National Textiles Corporation Ltd. & Ors.
RESPONDENT:
N.T.C. (WBAB & O) Ltd.Employees Union & Ors.
DATE OF JUDGMENT: 14/10/2003
BENCH:
Brijesh Kumar & Arun Kumar.
JUDGMENT:
JUDGMENT
WITH
W.P(C)No.34/1988, W.P.(C) No.1073/1989, W.P.(C) No.1074/1989,
T.P.(C) No.289/1988, W.P.(C) No.152/1988, W.P.(C) No.214/1989,
W.P.(C) No.218/1988, W.P.(C) No.44/1988, W.P.(C) No.134/1988,
W.P.(C) No.211/1988, W.P.(C) No.161/1987, W.P.(C) No.579/1989,
T.P.(C) No.290/1988.
ARUN KUMAR, J.
Various textile mills in the country came to be vested in the
Central Government by virtue of the provisions under Section 3 (1) of
the Sick Textile Undertakings (Nationalization) Act, 1974. The
Central Government transferred all such mills to the National Textile
Corporation Ltd. (hereinafter referred to as ’NTC’) which was brought
into existence for this purpose. Under Section 5 of the said Act the
liability towards wages, salaries and other dues of workers of such
mills after the takeover of management by the Central Government, is
that of the Central Government.
The issue involved in these cases is regarding the claim of the
staff/sub staff engaged by the various textile mills under the NTC for
’equal pay for equal work’. The staff working in the mills is claiming
pay equal to or in parity with the pay scales prevailing for the staff
working in the corporate offices of the mills. It is not in dispute that
the office staff/sub staff is on the Central Dearness Allowance pattern
(for short CDA) while the staff/sub staff working in the mills is on the
variable Industrial Dearness Allowance pattern (for short IDA)
governed by region: cum : Industry awards. It is to be noted that
there has never been any parity in the pay scales between the staff
working in the corporate offices of the NTC and its subsidiaries and
the staff working in the mills. However, over the years the disparity
between the pay scales of the staff working in the corporate offices
and staff working in the mills has become highly disproportionate. It
has been noticed by the Sathyam Committee, to which reference will
be made in detail subsequently, that as against 159% increase in the
emoluments of the staff working in the corporate offices over the staff
working in the mills in the year 1987, the proportion has increased by
the year 2000 to 642%. It is this disproportion between the pay
scales of the staff working in the corporate offices and the staff
working in the mills which has led to tremendous discontent amongst
the staff working in the mills and it is this discontentment which is the
root cause of this entire litigation. The problem is further aggravated
by the fact that the NTC as well as most of its subsidiaries have been
constantly incurring losses and majority of them are sick companies
facing proceeding under the Sick Industrial Companies (Special
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Provision) Act, 1985 (in short ’SICA’).
In support of their plea of "equal pay for equal work" the staff
working in the mills claimed that the nature of work performed by
them is the same as the staff working in the corporate offices. They
have gone to the extent of saying that there is interchangeability
between the staff working at the two places. The subsidiaries of the
NTC are spread over in different parts of the country. The staff
working in some of the subsidiaries through their associations
approached the respective High Courts in the country for relief
regarding revision of pay scales raising the plea of "equal pay for
equal work". Ultimately these cases stood transferred to this Court
and were bunched together. The matter has been pending in this
Court for quite some time. The effort of the Court has been to find an
amicable settlement of the problem. In fact, by an order dated 29th
September, 1989, by consent of all the counsel appearing for the
parties, reference was made to the National Industrial Tribunal in a
bid to resolve the controversy. The Tribunal deliberated on the
issues involved over a long period of time. It ultimately submitted its
report on 17th July, 1996. This report did not succeed in resolving the
issues. The report found that the "workmen in the mills are getting
lesser emoluments than those comparable categories of employees
serving in the corporate offices. The workmen have succeeded in
showing that there are some similarities in the work done by two sets
of employees but they have failed to show satisfactorily that
employees working in the mills discharge similar functions when
judged on the yardstick of reliability, quality, responsibility,
confidentiality etc." The finding of the Tribunal regarding absence of
equality or parity on working between the staff working in the
corporate offices and the other working in the mills has an important
bearing on the claim of the staff working in the mills. The long time
that elapsed during the pendency of the matter in this Court and
before the National Industrial Tribunal resulted in further prejudice to
the claim of the staff in the mills because the management refused to
entertain any request for pay revision during this period on the plea of
matter being subjudice. While the claim for revision of the pay scale
for the staff working in the mills remained pending, the pay scales of
the staff working in the corporate offices continued to be revised from
time to time which resulted in the situation as noticed earlier that is,
from a disparity in pay scales of the two categories being 159% in the
year 1987, it became 642% in the year 2000.
The fond hope of this Court that the matter will be settled
equitably before the National Industrial Tribunal did not fructify. This
Court continued its effort to see that some amicable settlement to the
issue is found. The Central Government was persuaded to make
positive efforts in this direction. As a result by a notification dated
27th October, 1999 the Government of India appointed a one man
Committee of Shri S.R. Sathyam, a retired IAS officer and a former
Secretary in the Ministry of Textile to look into the grievances of the
staff and sub staff of the NTC mills regarding their pay structure. As
per the notification the findings of the Committee were to be of a
recommendatory nature. The Committee was expected to keep in
view:
I. The capacity of NTC to pay wages and salaries;
II. The pay structure of other employees in the mills;
III. The pay structure of NTC Headquarters;
IV. The pay structure of similarly placed private mills;
V. The observations of the National Industrial Tribunal and of
this Court.
The Sathyam Committee gave its report on 31st October, 2000.
The Committee found that the different identity of workers working in
the corporate offices and workers working in the mills has always
been maintained. The pay structures in the two cadres had been
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different. The pay scales for the staff in the corporate offices were
substantially better as compared to the pay scales of the staff working
in the mills. Most importantly the Sathyam Committee endorsed the
finding of the National Industrial Tribunal that the two categories of
employees were not performing equal work. When there was no
equal work, there was no question of equal pay. However, the
Committee found that the staff working in the mills cannot be
legitimately denied some relief on account of delay in settlement of
the dispute. Some of the recommendations of the Committee are as
under:
"23.10 The relief to be provided can be called ’special relief’. It
must count for all pay-related benefits although it can
formally be merged with pay only at the time of the next
pay revision [Paragraph 15.4]
23.11 The ’special relief’ must also count for VRS. The
Guidelines issued by the DPE for implementation of the
VRS may be amended to accommodate this provision
[Paragraph 16.1]
23.12 The VRS itself will have to be implemented in a time-
bound manner. Otherwise, the purpose of counting the
’special relief’ for VRS so as to make it more attractive
may not be (fully) realized.[Paragraph 16.2.1]
23.13 For purposes of computation of VRS benefits, the
Gujarat model may be adopted. [Paragraph 16.2.2.]
23.14 In the context of voluntary retirements, it will be a
thoughtful gesture to allow some flelxibility regarding
transfer of Staff/sub-Staff between ’closure’ and ’revival’
mills. [Paragraph 16.2.3.]
23.15 For the purpose of providing ’special relief’, the mills of
the NTC may be divided into two categories:
(i) ’Revival Mills’ i.e., sick mills identified by the BIFR to be
revivable.
(ii) ’Closure Mills’ i.e., sick mills ordered by the BIFR to be
closed. [Paragraph 17.1]
23.16 The approach towards providing ’special relief’ in respect
of these three categories can be as follows:
(i) For ’Good Mill’, payment shall made with immediate
effect with reference to a ’cut-off date’
(ii) (a). For ’Revival Mills’, the benefit of the ’special relief’
shall be available immediately for purposes of VRS.
(b) If the Staff/sub-Staff chooses to stay with the Mill,
then, the ’special relief’ will be available with effect
from the ’cut-off date’, but only after the Mill is
revived.
(c) In case, the rehabilitation plan fails and the Mill
cannot be revived, the staff/sub-staff can, at that
stage, opt for VRS and claim the benefit of the
special relief. Only, there can not be any claim for
arrears.
(iii) For ’Closure Mills’, the benefit of the ’special relief’ shall
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be available immediately to staff/sub-staff opting for
VRS. The benefit shall not be available to staff not
proceeding on VRS. [Paragraph 17.2]
23.17 It will be necessary to define the ’cut-off date’ without
any ambiguity. It will be reasonable to identify the date
of the meeting in the Ministry of Textiles in which an
ad hoc relief was proposed as the ’cut-off date’.
[Paragraph 18.1. and 18.2]
23.18 It will be more convenient to exclude the retired
employees from the scope of the benefit
proposed.[Paragraph 19.1]
23.19 The ’benefit order’ must incorporate revised work norms.
[Paragraph 19.2]
23.20 The ’special relief’ to be given can only partially
neutralize the gap in emoluments.[Paragraph 20.1]
23.21 The prescription of partial neutralization need not
necessarily apply equally at all levels. It will be more
equitable to apply the ’special relief’ in a graded manner.
Towards this end, the staff/sub-staff in Mills can be
divided into four categories. [Paragraphs 20.2.1., 20.2.2,
and 20.2.3.]
23.22 The graded relief to be provided can be as follows:
(i) Rs.1,500/- per month for category (i);
(ii) Rs.1,250/- per month for category (ii);
(iii) Rs.1,000/- per month for category (iii); and
(iv) Rs.750/- per month for category (v).
[Paragraph 20.2.4.]"
The learned counsel for the Union of India submitted that the
recommendations of the Sathyam Committee have been
implemented and nothing further survives. The learned counsel
appearing for the Union of India further pointed out that various sick
mills were declared as sick under the SICA and proceedings before
the Board of Industrial and Financial Reconstruction (hereinafter
referred to as ’BIFR’) for rehabilitation of the concerned mills are
pending. In fact, it appears that the BIFR has already formulated and
sanctioned schemes in relation to some of the sick mills and the
sanctioned schemes are being implemented. In view of this, the
submission is that any financial burden placed on the management
by virtue of any financial relief granted to the workers at this stage
would upset the rehabilitation scheme. Further financial burden
which is not under consideration of the rehabilitation package cannot
be foisted on the mills. Such a burden would result in, the entire
scheme falling through. For this reason it is contended that this Court
should not grant any relief to the workers.
The plea of discrimination in the matter of revision of pay scales
between staff working in the corporate offices/headquarters and the
staff working in the Mills is sought to be met by contending that office
staff is governed by the CDA pattern while Mills staff is governed by
the IDA pattern.
On the other hand, the argument on behalf of the staff/sub staff
of the Mills is that great injustice has been done to the workers
working in the Mills. While their counterparts working in the corporate
offices have been getting pay revisions in normal course as and when
it is allowed to other Government servants, the staff working in the
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mills has been deprived of the said benefit. As a result of this, it is
submitted that during the last two decades while the cost of living has
gone up several times the salary and allowances of the workers
working in the Mills have remained constant. The emphasis on
behalf of the workers has been that there is equality and parity in the
work and working conditions of the workers of the corporate offices
and the workers working in the Mills. Therefore, it is a case for equal
pay. On this aspect however, as noticed earlier, the National
Industrial Tribunal found against staff of the Mills. The finding of the
Tribunal was endorsed by the Sathyam Committee. In the face of the
findings of the two fact finding bodies we find ourselves unable to
take a different view on this issue. Neither necessary facts have
been placed before us nor we would like to go into such a question of
fact. We have no reason to differ with the finding of fact on this issue
arrived at by the two independent bodies. So far as the claim of the
staff based on the principle of equal pay for equal work is concerned,
it is therefore, not tenable. When the work is not equal, the question
of equal pay does not arise. But we cannot ignore the fact that the
staff/sub staff working in the Mills has unfortunately received a step
motherly treatment. They have not had a pay revision for years. The
litigation has been pending for more than a decade. They have been
told that the matter is subjudice. The Sathyam Committee noticed
this sorry plight of the workers. The Committee gave some ad hoc
relief to the workers. But that is not enough. The Sathyam
Committee noticed disparity in the pay scales of the two categories of
workers which was 159% in 1987 and had risen to 642% in the year
2000. This is highly unjust and unfair. So far as the staff working in
the mills is concerned we are told that all the mills are incurring
losses and that does not justify any increase in the pay package of
the workers. But the staff working in the corporate offices of the Mills
is also staff of the parent body. If the mill is incurring losses the
impact has to be on everyone connected with the mill, in whatever
capacity. You cannot have double standards. When you give
revised pay scales to office staff is there no financial burden?
In view of the fact that the nature of duties of the staff in the two
categories has been found to be not at par, parity in pay scales may
not be possible. Yet there can be no case for total denial of revision
of pay to the staff/sub staff working in the mills.
Discrimination between the two categories of staff cannot be
justified on the basis of applicability of the CDA pattern and the IDA
pattern to the respective categories of staff. The IDA pattern cannot
be taken to debar any revision of pay scales. The Central
Government has to act as a model employer and such specious
pleas on its part are highly improper and unjustified.
In our view, a case for relief to the staff/sub staff working in the
Mills is definitely made out. The workers deserve some relief though
not parity of pay scales with staff/sub-staff working in corporate
offices, but certainly on account of revision of pay scales/increase of
D.A. or emoluments from time to time as and when fell due during
period of nearly three decades since when, no revision of their pay
scale has been made.
Relief to what extent is the next question? Nothing has been
placed before us nor has been brought to our notice which may
enable us to spell out the extent of relief. Even on behalf of the
workers the emphasis has been on the fact that they are entitled to
revision of pay scales as in the case of staff in the headquarters or
corporate offices. Nothing more has been urged. Even otherwise we
feel we are ill-equipped to work out the extent of relief which can be
granted to the workers in the mills. Therefore, we direct the Central
Government to take appropriate steps which if so required may
include appointment of an expert to work out the extent of relief which
ought to be granted to the workers in the mills. Some consideration
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may be had about the financial constraints, if any, but it cannot be to
the extent of virtual denial of any benefit. Before taking a final
decision in the matter, an opportunity of hearing be allowed to the
management as well as to the workers to enable them to place their
respective stands before the decision making authority. The decision
should be taken within four months from the date of this judgment
and the same should be implemented within two months thereafter.
The learned counsel for the Union of India relied on a recent
judgment of this Court in A.K. Bindal and another vs. Union of
India [(2003) 5 SCC 163] in support of his contention that pay
revision should not be allowed. This was a case of public sector
company employees seeking revision of their pay scales. It was held
that employees could not claim such a right and such additional
financial burden could not be placed on the Government in the
absence of material placed before Court justifying the same. This
case pertains to public sector undertaking namely Fertilizer
Corporation of India. This case is not attracted in the facts of the
present case. First, here the Government has a statutory liability for
the wages, salaries and dues of the workers. Second, pay revision
was being allowed in case of one category of workers within the
same organisation, while it was being denied to another category of
workers, giving rise to discrimination. Therefore, Bindal’s case has
no relevance so far as the present case is concerned.
So far as the argument regarding no relief being admissible to
the workers in the Mills in view of rehabilitation schemes being
worked out before the BIFR, we have to note that the proceedings
have been pending since 1993, i.e. for more than ten years. The
management was all along fully aware of the demand of the workers
of the Mills in this behalf. Their cases have been pending in courts
since much before the rehabilitation schemes were conceived of.
How long shall the concerned workers be continued to be denied
their legitimate claims? In the various deliberations with the workers
it has been noted that rehabilitation schemes are independent of any
orders that may be passed by this Court. Therefore, pendency of the
rehabilitation schemes before the BIFR is not a sufficient ground for
us to deny relief to the staff/sub staff working in the Mills. As per the
provisions of Section 5 (2) (c) of the Sick Textile Undertakings
(Nationalisaion) Act, 1974, the wages, salaries and other dues of the
employees of the sick textile undertakings after the takeover of their
managements by the Central Government are the responsibility of
the Central Government. The Central Government has failed to
discharge its responsibility for all these years by raising such
specious pleas. The Central Government has to discharge its
responsibility de hors the BIFR schemes. The argument therefore, is
rejected.
The appeal as well as the various writ petitions and transfer
petitions are disposed of in above terms.