Gulf Oil Corporation Limited (Lubricant Division), a Company Registered Under the Companies Act, 1956 Vs. Union of India (Uoi) Through Secretary, Ministry of Labour and Employment and ors. - Court Judgment

Swatanter Kumar, C.J.

1. The Government of India, Ministry of Labour and Employment, New Delhi, referred the disputes specified in the Schedule thereto vide order dated 11th July, 2007. The order reads as under.

Government of India/Bharat Sarkar

Ministry of Labour & employment/Shram Aur Rojgar

Mantralaya

New Delhi, dated 11/7/2007

ORDER

No. L30015/9/2007(IR(M): WHEREAS the Central Government is of the opinion that an industrial dispute exists between the employers in relationt o the management of M/s. Gulf Oil Corporation Limited and their workmen in respect of the matters specified in the schedule hereto annexed.

AND WHEREAS the Hon'ble High Court of Judicature at Bombay in WP No. 309/2007 has directed the Central Government to take fresh decision on reference of the dispute for adjudication.

3. NOW THEREFORE, in exercise of the powers conferred by Clause (d) of Sub-section (1) of Section 10 of the Industrial Disputes Act, 1947 (14 of 1947) the Central Government hereby refers the said dispute for adjudication to the CGIT-cum-Labour Court No. 2, Mumbai. The Tribunal shall give its award within a period of three months.

The Schedule

Whether the demand of the union for reinstatement of Shri Sudhakar Parte in services w.e.f. 06.03. 2007 and his absorption/regularisation in service as 'permanent' workman with the management of M/s. Gulf Oil Corporation Ltd. w.e.f. 20.01.1997 is legal, proper and justified? If so, to what relief Shri Sudhakar Parte is entitled to and from which date?

(N.S. BORA)

DESK

OFFICER

2. M/s. Gulf Oil Corporation Limited, a Company registered under the Companies Act, 1956, having its Lubricant Division office at In Centre, 45/50 MIDC, 12th Road, Andheri (East), Mumbai, has challenged the correctness and legality of the said order in the present writ petition on the ground that the demand raised on behalf of the workman cannot constitute industrial dispute as defined under Section 2(k) of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act'). There was no relationship of employer-employee between the workman and the petitioner company. The workman was an employee of respondent No. 5 and respondent No. 6 had no membership in the establishment of the petitioner. Furthermore, the order of reference was bad as it did not refer the question of contract labour despite a specific plea having been raised before it. Respondent No. 3 had clearly contended on record that the employment was by them and, in fact, there was no termination. On this premise, it is argued that the order of reference amounts to referring an erroneous dispute and is arbitrary, contrary to the legal principles and is, therefore, liable to be set aside by this Court.

3. The facts relevant obviously fall within a very narrow compass. The petitioner is a company registered under the Companies Act, having its lubricant division at the address mentioned in the cause title. Respondent Nos. 3,4 and 5 were the contractors, who, according to the petitioner, employed one Sudhakar Parte and in turn had assigned him to work with the petitioner. Respondent No. 6 is the Secretary of the General Employees Association, an alleged trade union which has espoused the cause of the said workman. The petitioner has also raised a plea that the said union has no membership in the establishment of the petitioner and there is no community of interest by other workmen of the company in the demand of the said workman. Respondent No. 3 had assigned the petitioner under a contract for service. The workman filed a complaint of unfair labour practice under Item 1 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, hereinafter referred to as 'the MRTU & PULP Act, alleging therein that the petitioner had conspire to terminate his employment and had lodged the complaint in anticipation before the Labour Court, Mumbai. Parties were directed to maintain status quo. The petitioner appeared, filed a reply denying allegations of the unfair labour practices and even challenged the jurisdiction of the Labour Court. Two basic issues which were raised, inter alia, were that there was no employee-employer relationship and that the appropriate Government was the Central Government. Another complaint was also filed by Sudhakar Parte seeking permanency and absorption in the employment of the petitioner company before the Labour Court. The plea raised by this workman was that the contractor through whom he was appointed as sham and bogus contract and, in fact, he was regular employee of the petitioner. The complaint was disposed of by the Labour Court for want of jurisdiction as the Appropriate Government in respect of notified industries engaged in the manufacture of lubricants was the Central Government. On 25th January, 2007, the petitioner Company received a letter from the said workman claiming permanency and full back wages with effect from January, 1997. This letter of demand was not accepted by the petitioner and, in fact, they pleaded that the same would not constitute a proper demand and, therefore, no conciliation proceedings or other proceedings under the provisions of the said Act would take place. The workman then filed a Civil Writ Petition being Writ Petition No. 309 of 2007, seeking relief that pending the conciliation proceedings, the services of the petitioner be continued with the Company. The said writ petition was disposed of by the Court vide its order dated 28th February, 2007, where the Court, on the basis of the statement made by respondent Nos. 5 and 6, permitted the proceedings to continue.

4. Thereafter, petitioner company received a letter dated 1st March, 2007, from the workman stating therein that he may not be terminated without due process of law. The said notice was also sent to the Regional Labour Commissioner, Mumbai, who has issued a notice to the petitioner. The petitioner stated before the said authority that they had not terminated the services of the petitioner, who, in fact, was a contract employee of respondent No. 3. It is the averment of the petitioner in the writ petition that the Regional Labour Commissioner had close the said file. On 18th April, 2007,a letter was received by the petitioner from Respondent No. 6 that the workman had joined their union and they were entitled to represent his cause and raised a demand for reinstatement, continuity of service and permanency in the petitioner company. The demand letter was served upon the petitioner company. In furtherance to this letter, Conciliation Officer held the conciliation proceedings and on 15th June, 2007, he submitted his failure report. The Appropriate Government considered the report of the Conciliation Officer and vide order dated 11th July, 2007 made a reference of the dispute.

5. It is denied by the workman that he was the employee of respondent No. 3 and in any case the said contract was sham as he was a direct employee of the petitioner company and was entitled to permanency, reinstatement and back wages from the petitioner. The main argument on behalf of the petitioner before us is that the dispute stated in the schedule to the order dated 11th July, 2007 is incomplete, besides being arbitrary, does not refer the question of the contract between the petitioner and respondent No. 3. Finding of any relationship between the petitioner and workman cannot be recorded in the absence of such a specific reference and as such the order of reference is vitiated by law.

6. At the very outset we may notice that various questions of fact in relation to employer-employee relationship, dispute being covered under the provisions of the Act as well as other details can be raised safely by the petitioner before the Industrial Tribunal and shall be decided by the Tribunal in accordance with law. The limited question that we are presently concerned in the facts of this case is whether the dispute is comprehensive enough to take into its ambit the contract being sham or the Appropriate Government should be directed to consider reframing of the scheduled dispute or refer a specific question. The Courts while entertaining the petition under Article 226 of the Constitution do not sit over the order of reference as if it was an appellate tribunal. Certain amount of discretion is vested and the opinion contemplated under the industrial law has to be examined with objectivity and it is not necessary to give it a restricted meaning or go into the questions of hyper technicalities.

7. The Supreme Court in the case of S.K. Verma v. Mahesh Chandra and Anr. : (1983)IILLJ429SC , while dealing with the question as to whether an industrial disputes exists or not, held as under:

There appears to be three preliminary objections which have become quite the fashion to be raised by all employers, particularly public sector corporations, whenever an industrial dispute is referred to a tribunal for adjudication. One objection is that there is no industry, a second that there is no industrial dispute and the third that the workman is no workman. It is a pity that when the Central Government, in all solemnity, refers an industrial dispute for adjudication, a public sector corporation which is an instrumentality of the State instead of welcoming a decision by the Tribunal on merits so as to absolve itself of any charge of being a bad employer or of victimisation etc. should attempt to evade decision on merits by raising such objections and never thereby satisfied, carry the matter often times to the High Court and to the Supreme Court, wasting public time and money. We expect public sector corporations to be model employers and model litigants. We do not expect them to attempt to avoid adjudication or to indulge in luxurious litigation and drag workmen from court to court merely to vindicate, not justice, but some rigid technical stand taken up by them. We hope that public sector corporations will henceforth refrain from raising needless objections, fighting needless litigations and adopting needless postures.

8. In the case of Shambu Nath Goyal v. Bank of Baroda : (1978)ILLJ484SC , the Supreme Court has clearly stated that question whether an industrial dispute exists at the date of reference is a question of fact to be determined on material placed before the Tribunal with cautions enunciated in C.P. Sarthy's case (infra) and party concerned can impugn the reference before the Court including that there was no material before the Government to make reference and the Tribunal could examine such a question. Still the Tribunal would not sit in appeal over the decision of the Government.

9. In the light of the above two decisions, we have to examine the scope of the reference. The reference made by the Appropriate Government vide its order dated 11th July, 2007, is wide enough to cover all ancillary questions or such questions of material facts, determination of which would be essential prior to answering the specifically formulated question in the schedule to the order. In somewhat similar circumstances, a Division Bench of this Court in the case of National Organic Chemical Industries Limited v. State of Maharashtra and Ors. Writ Petition No. 451 of 2007 decided on 19th April, 2007, while dealing with somewhat contentions of the authority exceeding its jurisdiction, making reference of a dispute which was not contemplated under Section 2(k) and there being no material to establish privity of contract between the employer and the employee, the Court after a detailed discussion recorded the following principles:

Reference to the decision of the Constitutional Bench of the Supreme Court in the case of State of Madras v. C.P. Sarathy : (1953)ILLJ174SC can be usefully made at the very outset. It was observed:

But, it must be remembered that in makaing a reference under Section 10(1), the Government is doing an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it anytheless administrative in character. The Court cannot, therefore, canvass the order of reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi-judicial determination.Explaining the ratio of the decision in Sarathy's case (supra), in Western India Match Co. Ltd. v. Western India Match Co. Workers Union : (1970)IILLJ256SC , it was observed as under:

In the State of Madras v. C.P. Sarathy, this Court held on construction of Section 10(1) of the Central Act that the function of the appropriate Government thereunder is an administrative functions. It was so held presumably because the Government cannot go into the merits of the dispute its function being only to refer such a dispute for adjudication sot hat the industrial relations between the employer and his employees may not continue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible.35. In the case of National Engineering Industries Ltd. v. State of Rajasthan and Ors. 2000 (1) SC 371, the Supreme Court emphasised the scope of the powers and jurisdiction of the Industrial Tribunal vis-a-vis the power of the Government to make a reference. The Court held as under:

The Industrial Tribunal is the creation of a statute and it gets jurisdiction on the basis of reference. It cannot go into the question on validity of the reference. The question before the High Court was one of jurisdiction which it failed to consider. A tripartite settlement has been arrived at among the Manatement, the Labour Union and the Staff Union. When such a settlement is arrived at it is a package deal. In such a deal some demands may be left out. It is not that demands, which are left out, should be specifically mentioned in the settlement. It is not the contention of the Workers' Union that the tripartite settlement is in any way mala fide. It has been contended by the Workers' Union that the settlement was not arived at during the conciliation proceedings under Section 12 of the act and as such was not binding on the members of the Workers Union. This contention is without any basis as the recitals to the tripartite settlement clearly show that the settlement was arrived at during the conciliation proceedings.46. The learned Counsel appearing for the petitioner heavily relied upon the judgment of the Supreme Court in the case of National Engineering Industries Limited v. State of Rajasthan and Ors. : (2000)ILLJ247SC to contend that the High Court has jurisdiction to entertain the writ petition when there is allegation that there is no industrial dispute and none apprehended which could be subject matter of reference for adjudication under Section 10 of the Act. An industrial dispute has to be in existence at the time of making a reference.

47. This judgment of the Supreme Court would hardly place the case of the petitioner on any better footing. There can be no dispute to the principle of law enunciated in the judgment that settlement has to be preferred over adjudication and that a writ could lie wherever no industrial dispute was in existence at the time of making the reference. The facts of the present case clearly reflect that there was not only mere apprehended dispute but there existed an actual dispute which has been the bone of contention between the parties in different proceedings and over a prolonged period of time the workmen had been asserting their right of absorption as well as wrongful termination and that there was sham and camouflage transaction between the company and the contractor being intended to frustrate their claim. This of course was denied by the petitioner company. According to them the company had closed its unit with leave and paid retrenchment compensation to the workmen and as such no dispute existed. This was the controversial bone of the contention between the parties and in view of the fact that failure report was submitted by the Conciliation Officer on 14th December 2005, adjudication by the proper forum was inevitable. The learned Counsel for the petitioner also placed reliance upon another judgment of the Supreme court in the case of The Secretary, Indian Tea Association v. Ajit Kumar Barat and Ors. : (2000)ILLJ809SC in support of his argument that the Government has to form an opinion whether an employees are workmen and thereafter has to consider whether an industrial dispute exist or is apprehended. We have already discussed the law in this regard at great length. At the cost of repetition we may notice that these are unquestionable propositions of law. It is only their application to the facts of a given case that would resolve the controversy. The Government has formed an opinion and has made a reference satisfying itself that there is an industrial dispute in existence between the parties. Of course formation of such an opinion can be examined by the court under Article 226 of the Constitution but it certainly falls within the very limited ambit. The court cannot sit as a court of appeal or appellate authority to examine excess of jurisdiction of the appropriate Government. Unless and until the opinion is apparently without jurisdiction, in excess of jurisdiction or is based on no material as also inter alia do not satisfy the ingredients of Section 10 of the Act, the court would be very reluctant to interfere in such a reference. The Legislature in its wisdom has provided special forum for settlement of an industrial dispute which is expected to be expedient and any attempt to throttle such a proceedings at the threshold has to be examined with great caution. On the one hand the petitioner company itself questioned the legality of the orders passed by the appropriate authority/forums on the complaints of the workmen in writ petitions and certain observations have come in those orders/judgments that the respondent workmen were part and parcel of the frame work of the workmen of the petitioner company. Even if they were employed by the contractor as alleged by the company, still the labour court would have to examine the contentions of the workmen that the contract is sham and a camouflage to frustrate the legitimate claim of the workmen. The Government was obviously not competent to go into these niceties of law and evidence and then write a judgment. Such an approach would be an apparent contradiction to the concept of formation of an opinion, which is to be based on prima facie material. From the history of this case, right from the talks from the year 2002, when the company took a decision to declare closure under Section 25(O) of the Act and thereafter the parties have been in continuous litigation before one authority or the other forum or court, we are really unable to appreciate the contention of the petitioner that there exists no prima facie case for reference to the industrial court. The parties are neither strangers to each other nor there is any conclusive findings recorded which has attained finality between the parties, answering the query whether there exists or not, relationship of employer employee between the parties. This question itself has to be adjudicated upon though there is more than prima facie material before the appropriate Government to form an opinion for making a reference within the provisions of Section 10 of the Act.

The concluding paragraphs of the above judgment clearly show that the reference made by the Appropriate Government to the Industrial Court should be understood in its proper perspective and must necessarily be left to the discretion of the Industrial Court to adjudicate comprehensively the relevant factors essentially for determining the specific question formulated and referred to the said Tribunal. Certainly, the Industrial Tribunal should not be unduly influenced by academic questions of law and they should make an attempt to deal with the merits of each case according to its facts and circumstances. The duties of the Industrial Tribunal are different from determination of commercial disputes. It still remains the obligation of the Industrial Court to consider all relevant facts de hors abstract legal grounds and answer the refeferred questions. The questions which are ancillary or would necessarily arise for proper and complete adjudication of the referred question would have to be necessarily dealt with by the Tribunal. In the present case, the reference has been formulated by the Appropriate Government in somewhat wider expression. The Petitioner's management would have to discharge its onus while the workman would have to discharge the onus placed upon him to show that he was the workman of the petitioner company. For this purpose, he may also be able to show that the alleged contract between respondent No. 3 and petitioner company was sham and was intended to over reach the law i.e. prohibition of contract labour. For this, it is not necessary for this Court to either set aside the order dated 11th July, 2007 or to hold that the question of reference should be reframed by the Appropriate Government. This Court has hardly any jurisdiction to reframe the question but certainly Court can clarify that within the ambit and scope of the referred dispute, the Labour Court would have to decide ancillay but essential questions of fact and law.

10. For the reasons aforerecorded, we find no merit in the challenge to the impugned ordere and the writ petition is disposed of with the above clarification. No order as to costs.