U.P. State Sugar & Cane Dev. Corpn. Ltd vs Chini Mill Mazdoor Sangh & Ors

of the respondent No.1 Union, and had

admittedly been employed under the

appellant as "seasonal workmen" as defined

in the Standing Orders governing the

conditions of employment of workmen in 2

vacuum pan sugar factories of the State,

raised a claim that although they had been

categorized as "seasonal workmen" they

had been employed by the appellant not

only during the crushing season but

throughout the year. It is their

grievance that although their services

were utilized as permanent workmen they

were paid the salary given to seasonal

workmen. They, therefore, made a

representation to the Conciliation Officer

which ultimately resulted in a Reference

made by the State of Uttar Pradesh to the

Labour Court on 3.11.1989. The terms of

Reference are as follows:

i) Whether 39 employees mentioned in the Schedule `Ka' can be declared permanent by their employer. If yes, from which date and with other details ?;

ii) Whether the 28 workmen mentioned in the Schedule `Kha' are to be given salary/pay scales on the 3

posts mentioned against their names by their employer. If yes, from which date and with other details ?"

3. At the very outset it may be recorded that

out of 39 employees, referred to in the

terms of reference, 8 have died or have

retired from service; 13 have been made

permanent; 4 workmen have not pressed

their claim before the Labour Court and

only 14 workmen, mentioned in Schedule

`Ka', had continued with their claim

before the Labour Court.

4. It may also be noted that the second term

of reference was not ultimately pressed

before the Labour Court, which was,

therefore, required to adjudicate only on

the claim of the 14 workmen, who remained

out of the 39 workmen, that they were

entitled to be declared permanent by the

appellant herein.

4

5. In order to appreciate the claim of the

said 14 workmen it is necessary to look

into the circumstances and the system of

employment which prevail in the sugar

industry in Uttar Pradesh on account of

the fact that sugarcane is a seasonal crop

and large numbers of workers are required

by the sugar mills during the crushing

season which is between the month of

October in a given year to the month of

April of the following year, i.e. roughly

for a period of 7 months in a year. During

the remaining part of the year only such

employees as are required for maintenance

of the mill are employed as permanent

workmen as defined in the above-mentioned

Standing Orders, but there is no bar to

the sugar mills employing even seasonal

workmen during the off-season in the mill.

6. The other practice which is followed is

that workmen from different categories, as 5

defined in the Standing Orders, are

promoted to the next higher category as

and when vacancies occur and that merely

because the workmen may be required to

perform other functions during the off-

season, a claim could not be raised that

such workmen would be entitled to be

categorised in the said higher post in the

hierarchy. In order to appreciate the

matter with greater clarity the Standing

Orders dated 3.12.1958, as revised and

published on 27.9.1988, are reproduced

hereinbelow:

"Relevant extracts of Standing Orders

Uttar Pradesh Extraordinary Gazette,

27th September, 1988

In pursuance of the provision of clause (3) of Article 348 of the Constitution the Governor is pleased to order the publication of the following English translation of notification No.5692 (HI)/XXXVI-2-110 (HI)-77, dated September 27, 1988: 6

No.5692(HI) XXXVI-2-110(HI) - 77, Dated September 27, 1988

Whereas, the Standing Orders governing the conditions of the employment of workmen in vacuum pan sugar factories of the State were enforced under Government notification No.5436- ST/XXXVI-A/208-ST-58, dated October 3, 1958;

And whereas, there was persistent demand for revision of the aforesaid Standing Orders which had become necessary in view of passage of time;

Xxxx xxxx xxxx xxxx

B. Classification of workmen

1. Workmen shall be classified as

(i) Permanent,

(ii) Seasonal,

(iii) Temporary,

(iv) Probationers,

(v) Apprentices, and

(vi) Substitutes.

(i) A "Permanent Workman" is one who is engaged on the work of a permanent nature or permanent requirement lasting throughout the year and has 7

completed his probationary period, if any,

(ii) A "Seasonal workmen" is one who is engaged only for the crushing season and has completed his probationary period, if any,

(iii) A "Temporary Workman" is one who is engaged for meeting a temporary or casual requirement.

xxxx xxxx xxxx K. Special Conditions Governing

Employment of Seasonal Workmen

1. A seasonal workman who has worked or, but for illness or any other unavoidable cause, would have worked under a factory during the whole of the second half of the last preceding season shall be employed by the factory in the current season and shall be entitled to get retaining allowance provided he joins the current season and works for at least one month. The payment of retaining allowance shall be made within two months of the date of the commencement of the season.

Explanation - Unauthorised absence during the second of the last preceding season of a workman who has not been validly dismissed under these Standing Orders and of a workman who has been re-employed by the Management in the current season, shall be deemed to have been condoned by the Management.

2. Every seasonal workmen who worked during the last season shall be put up on his old job whether he was in 8

the `R' shift or in any of the usual shifts.

However, if the exigencies of works so require the management may transfer a workman from one job to another job or from one shift to another including the `R' shift, so however, that the number of workman so transferred does not exceed five per cent of total number of the employees of the factory and that the wages and status of such workman is not affected in any way.

3. A seasonal workman, who is a retainer shall be liable to be called on duty at any time in the off season and if he does not report for duty within 10 days he shall lose his retaining allowance for the period for which he was called for duty.

4. Where owing to trade reasons or other reasons necessary for a bona fide Law Off, as given in Standing Order, `J', it becomes necessary for a factory so to do, it may discharge the seasonal workman before the close of the season with the previous permission of the State Labour Commissioner if he so directs Additional Labour Commission or Regional Additional/ Deputy Labour Commissioner of the area after paying such compensation to the discharged workman, as may be determined by the authority granting the permission.

True Copy"

7. Accepting the case made out by the 14

employees, the Labour Court came to the 9

conclusion that the said workmen had been

engaged during the off season neither for

additional work nor for temporary work,

but for the work for which they had been

employed during the crushing season and

that the nature of their work was,

therefore, continuous despite the fact

that there have been a few breaks in their

work during the off season. The Labour

Court came to the conclusion that the 14

workmen had really been engaged for the

major part of the year and that the breaks

in service were resorted to only to

prevent them from getting the benefits

enjoyed by a permanent workman. The Labour

Court held that the said workmen came

within the definition of permanent

workmen, and were, therefore, entitled to

be declared as permanent. The concerned

14 workmen were, therefore, declared to be

permanent from the date of the Award and

the appellant was directed to give them 10

all the benefits that a permanent workman

was entitled to from the same date. The

Award of the Labour Court was challenged

by the appellant before the High Court in

Writ Petition CMWP No.1263 of 2004.

Accepting the findings of the Labour Court

that the 14 workmen had really been

performing their duties on a permanent

basis, the High Court chose not to

interfere with the Award of the Labour

Court and dismissed the writ petition.

8. The U.P. State Sugarcane Development

Corporation Limited is now in appeal

before us questioning both the Award of

the Labour Court as also the decision of

the High Court in respect thereof.

9. Mr.Upadhyay, learned Advocate who appeared

for the appellant -Corporation, reiterated

the stand taken by the appellant before

the Labour Court and the High Court that

the work performed by the respondent 11

Nos.2-15 had been wrongly determined to be

of a permanent nature. It was submitted

that the said workmen had been engaged

only for the crushing season, but since

they were not workmen who were involved in

handling of the sugarcane during the

crushing season but were technical hands,

they were also provided with work in the

mill during the off season, not as a

matter of right but to provide them with a

livelihood during the off season. It was

urged that both the Labour Court, as well

as the High Court, misconstrued the

intention of the appellant in coming to a

finding that 14 workmen were, in fact,

performing the work of a permanent nature

which entitled them to the status of

permanent worker.

10. Mr. Upadhyay also submitted that since the

policy with regard to promotion of workmen

from one category to a higher category 12

depended on the vacancies available in the

next higher category, it was a managerial

function, which could not be usurped by

the Labour Court and, in any event, the

concept of redetermining the status of the

workmen, on account of the duties

performed by them, did not arise in the

present case.

11. In support of his submission Mr. Upadhyay

firstly referred to a Constitution Bench

decision of this Court in Management of

Brooke Bond India (P) Limited v Workmen

[(1966) 2 SCR 465], wherein while

considering the power of the Labour

Tribunals and the management to grant

promotions, it was observed:

"Generally speaking, promotion is a management function; but it may be recognized that there may be occasions when a tribunal may have to interfere with promotions made by the management where it is felt that persons superseded have been so superseded on account of mala fides or victimization. Even so after a 13

finding of mala fides or victimization, it is not the function of a tribunal to consider the merits of various employees itself and then decide whom to promote or whom not to promote. If any industrial tribunal finds that promotions have been made which are unjustified on the ground of mala fides or of victimization, the proper course for it to take is to set aside the promotions and ask the management to consider the cases of superseded employees and decide for itself whom to promote, except of course the person whose promotion has been set aside by the tribunal."

12. The other decision relied upon by Mr.

Upadhyay is that of this Court in the case

of The Hindustan Lever Limited v The

Workmen [(1974) 3 SCC 510], wherein while

considering the question of an employer's

right to transfer a workman in the absence

of victimization, unfair labour practice

or violation of any condition of service,

this Court reiterated its earlier views

and held promotion to be a management

function and the Labour Court could not

arrogate to itself such management funtion 14

in the absence of findings of mala fides

or victimization or any unfair labour

practice.

13. Mr. Upadhyay submitted that in declaring

the concerned workman to be permanent from

the date of the Award the Labour Court had

arrogated to itself the functions of the

management which had been held to be

beyond the powers of the Labour Court and

the Award was, therefore, liable to be set

aside along with the judgment of the High

Court.

14. Mr. P.K. De, learned Advocate who appeared

for the respondents, supported the

findings and observations of the Labour

Court and the High Court and urged that it

had been correctly found that the

respondent Nos.2-15 had been performing

work of a permanent nature which is

required to be performed throughout the 15

year and not only during the crushing

season.

15. Mr.De submitted that all the said workmen

were technical hands and not labour

engaged to perform manual work during the

crushing season. Even during the crushing

season the said workmen were engaged in

maintenance of the machinery in the mill,

which was not a seasonal work, but

entailed maintenance of the mill machinery

throughout the year. Although, it had been

urged on behalf of the appellant that they

were seasonal workmen who had been

provided work during the off season, their

work was of a continuous nature which

required the appellant to engage them not

only during the crushing season but also

during the whole year.

16. According to Mr. De, the definition of the

expression "permanent" as used in the

Standing Orders referred not to the 16

employee but to the nature of work being

performed. Since in the instant case the

work performed was of a permanent nature,

which required the services of the

respondent Nos. 2-15 throughout the year,

they had been rightly declared by the

Labour Court as permanent workmen on

account of the nature of work performed by

them throughout the year.

17. Reliance was placed on the decision of

this Court in Jardine Henderson Ltd. v

Their Employees [AIR 1967 SC 515) which

was a case involving the payment of

gratuity and provident fund by way of

retiring benefits and is of little

relevance to the facts of this case. He

also relied on the decision in the Brooke

Bond Limited case (supra) where in the

opening paragraphs of the judgment the

Tribunal had expressed the view that

although promotion was a management 17

function and had to be left mainly to the

discretion of management, in an

appropriate case the workman had a right

to demand relief when the just claim of

the senior employees were overlooked.

18. Reference was lastly made to the decision

of this Court in Workmen employed by

Hindustan Lever Limited v. Hindustan Lever

Limited, [(1984) 4 SCC 392], where

reference had been made to the earlier

decisions in the Brooke Bond case (supra)

and the Hindustan Lever Limited case

(supra) and an observation had been made

that the view taken in the said cases that

promotion is a managerial function may

have to be re-examined in an appropriate

case.

19. Mr. De contended that the Award of the

Labour Court was fully justified in the

facts and circumstances of the case and 18

the High Court had rightly upheld the

same.

20. From the facts as set out hereinabove and

the submissions made by the respective

parties, we are left to decide the

question as to whether even in the light

of the Tribunal's finding that the work

performed by the respondent Nos. 2-15 was

of a permanent nature on account whereof

their services were required throughout

the year, it could have declared the said

workmen to be permanent or whether such

declaration amounted to usurpation of the

management's functions which were beyond

its powers.

21. That there are different categories of

workers employed in the sugar industries,

and, in particular, during the crushing

season, is not disputed by any of the

parties. It is not denied that apart from

the permanent workmen, the other 19

categories of workmen are employed during

the crushing season which begins in the

month of October in a given year and

continues till the month of April of the

following year. It is the period during

which the sugarcane crop is harvested,

and, thereafter, transported to different

mills where they are crushed for

production of sugar. Admittedly, as will

appear from Standing Order No.2, a muster-

roll of all employees, who are not

permanent, is maintained by the different

sugar mills and at the beginning of the

crushing season the seasonal labour who

had worked during the previous crushing

season are asked to join their duties for

the crushing season in their old jobs. It

is also not denied that the pay scales of

the different categories of workmen are

different.

20

22. It has been submitted on behalf of the

appellant that even when the seasonal

workmen are employed during the off season

they are paid the same wages as are paid

to them during the crushing season, which

is one of the basic distinctions between

them and permanent workmen who are on the

rolls of the sugar mills. It is also an

admitted position that, in terms of the

policy followed by the sugar mills,

promotions are given from one category to

the next higher category depending on the

number of vacancies as are available at a

given point of time. Even in the instant

case, of the 39 workmen referred to in the

terms of reference, 13 had been made

permanent by the appellant which supports

the case of the appellant that promotion

is given from one category to the higher

categories as and when vacancies are

available and that such function was

clearly a managerial function which could 21

not have been discharged by the Labour

Court.

23. We are in agreement with the views

expressed by the Constitution Bench of

this Court in the Brooke Bond case (supra)

as also those of the three-Judge Bench in

the Hindustan Lever case (supra). In our

view, this is not a case of fitment

depending on the nature of the work

performed, but a case of promotion as and

when vacancies are available. Both the

Labour Court as well as the High Court do

not appear to have considered this aspect

of the matter with the attention it

deserved and proceeded on the basis that

this was a case where the respondent Nos.

2-15 had been denied their right to be

categorised as permanent workmen on

account of the nature of the work

performed by them throughout the year. The

High Court has, in fact, merely relied on 22

the findings of the Labour Court without

independently applying its mind to the

said aspect of the matter.

24. We, therefore, accept the submissions

advanced by Mr. Upadhyay and allow the

appeal. The Award of the Labour Court and

the Judgment of the High Court impugned in

this appeal, are set aside.

25. There will be no order as to costs.

_________________J.

(ALTAMAS KABIR)

_________________J.

(MARKANDEY KATJU) New Delhi Dated : 26.9.2008