Pune District Central Co-operative Bank Ltd. Vs. Bank Karmachari Sangha and Another - Court Judgment

Excerpt:
labour and industrial - mandatory requirement - sections 42 and 46 of bombay industrial relations act, 1946, item 9 of schedule 4 of maharashtra recognition of trade unions and prevention of unfair labour practice act, 1971 and articles 226 and 227 of constitution of india - whether by framing separate and independent service rules de hors certified standing orders or in addition to certified standing orders without following mandatory provisions under section 42 (1) amounts to unfair labour practice as contemplated under item 9 - if petitioner bank desired to introduce new rules or alteration of existing rules in addition to existing standing orders then it is mandatory for petitioner bank to serve statutory notice of change under section 42 (1) - change introduced by petitioner bank in.....orderr.j. kochar, j.1. the petitioner bank has filed the present petition under articles 226 and 227 of the constitution of india, to challenge the judgment and order dated 1-3-1994 passed by the member, industrial court, maharashtra at pune in a complaint ulp no. 378 of 1988 filed by the respondent no. 1 in the petition under section 28 of the m.r.t.u. & p.u.l.p. act, 1971 read with item 9 of schedule iv of the same. the petitioner bank is aggrieved by the aforesaid impugned order granting a declaration to the respondent union that the petitioner had engaged in an act of unfair labour practice under item 9 of schedule iv of the act by framing the impugned service rules. the petitioner was also aggrieved by the second consequential part of the order directing the petitioner bank to cease.....

Judgment:
ORDER

R.J. Kochar, J.

1. The petitioner bank has filed the present petition under Articles 226 and 227 of the Constitution of India, to challenge the judgment and order dated 1-3-1994 passed by the Member, Industrial Court, Maharashtra at Pune in a Complaint ULP No. 378 of 1988 filed by the respondent No. 1 in the petition under section 28 of the M.R.T.U. & P.U.L.P. Act, 1971 read with Item 9 of Schedule IV of the same. The petitioner bank is aggrieved by the aforesaid impugned order granting a declaration to the respondent union that the petitioner had engaged in an act of unfair labour practice under Item 9 of Schedule IV of the Act by framing the impugned service rules. The petitioner was also aggrieved by the second consequential part of the order directing the petitioner bank to cease and desist from indulging in the said act of unfair labour practice by not giving effect to the said service rules under Circular No. 3500 dated 12-4-1988. Both the parties herein would be referred to as the petitioner bank and the respondent union. The crucial and interesting issue to be decided by me is whether by framing separate and independent Service Rules de hors the certified standing orders or in addition to the certified standing orders without following the mandatory provisions under section 42(1) of the Bombay Industrial Relations Act, 1946 amounts to unfair labour practice as contemplated under item 9 of the Act.

2. To appreciate the above issue, the following admitted factual matrix of the matter would be necessary and also sufficient. The petitioner is a District Central Co-operative Bank for Pune district registered under the Maharashtra Co-operative Societies Act, 1960. The respondent union is a representative and approved union for the banking industry in the local areas of Pune cantonment and various talukas of Pune district under the BIR Act, 1946. It appears that the respondent No. 2 i.e. the Deputy Registrar of Co-operatives Societies under the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as DDR) appears to have issued directions to the petitioner bank to frame service regulations for the bank employees in exercise of his powers vested in him under Rule 8(a) of the Maharashtra Co-operative Societies Rules, 1961. Pursuant to the said directions, the petitioner bank framed such service regulations which subsequently came to be approved by its circular No. 3500 as the new service regulations which were enforced from 15-4-1988. The respondent union was aggrieved by the said new service regulations and challenged the same by filing a complaint of unfair labour practice being violative of the mandatory provisions of the B.I.R. Act. Both the parties filed their pleadings and relevant documents before the Industrial Court, Pune. The Industrial Court, Pune by its impugned order partly allowed the complaint and granted the reliefs as stated hereinabove to the respondent union.

3. At the outset I must mention that the present State Legislation the B.I.R. Act, 1946, with which we are dealing is indeed a beautiful peace of legislation, very well drafted and the same is as comprehensive and forward looking as it could be. This Act provides for almost every contingency to be dealt with and every problem and its remedial steps and well defined remedial judicial forums. It is the first peace of legislation enacted in the year 1946 which takes in its contemplation almost all the creases to be ironed out first jointly and mutually by the employers and the employees represented by the representative of 'employees' a Trade Union statutorily recognised for the first time to act as a representative union for the notified industries in a defined local area; in case of their failure to arrive at a bilateral agreement the parties can approach the State Machinery provided under the Act, such a conciliation proceedings and thereafter the arbitration or judicial forums. It is for the first time this Act has compelled the employers to deal with the statutorily recognised trade union representing the employees in the industry. The basic philosophy of the Act is 'industrial relations' between the employers and the employees. Again it is for the first time the participation of labour in the management of an industry is contemplated and provided for. Another very crucial aspect under this Act is that the employees and the employers first advised and compelled to come on a negotiating table and resolve the disputes, differences or conflict between them and not to resort to any extreme step of a strike or a lockout or a closure. Whatever changes either party wants to introduce in the industry/factory/mill or the work place they have to mutually approach each other to thrash out the problem and to bring about a desired change by entering into a legal, valid and registered agreement which would be binding on all the employers as well as the employees. No unilateral action on part of either is allowed within the four corners of the law. There are very neatly designed schedule appended to the Act enumerating all such relevant and necessary industrial matters which can become the subject matters of any desired change by the employees, employers, the representative union and even an individual employee. Whatever actions or steps or changes become necessary in accordance with the need of the changing times both have to jointly devise their mutual acceptable solutions. Every change which is unilateral and which is not bilaterally agreed or mutual in respect of the items prescribed in the schedules would be termed by the law as an illegal change attracting the legal proceedings and the resultant sequences and also be penal if the parties are adamant and recalcitrant.

4. It is surprising how in the present case the petitioners have totally ignored the beneficial and all pervasive and all inclusive provisions of the Act. The nub of the complaint of the representative union, the 1st respondent, was that the petitioner Bank unilaterally introduced its own Service Rules/Regulations in contravention of the law i.e. without following the mandatory section 42(1) of the Act read with Chapter VII and the relevant schedule. According to the 1st respondent Union, the petitioner Bank ought to have given a notice of change in respect of the industrial matters relating to the service conditions of the employees and the Bank could not have unilaterally framed its own service regulations in violation or in breach of the mandatory provisions of the Act. According to the Union the very fact that no such notice of change was given, admittedly so, by the Bank in respect of the introduction of new/additional service regulations governing the employees of the Bank it amounted to an unfair labour practice within the meaning of the other State Legislation viz. 'Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1971 (M.R.T.U. & P.U.L.P. Act)', under Item 9 of Schedule IV of the Act read with section 28 of the Act. The said Item 9 has been judicially interpreted in a number of decisions of this High Court and also of the Supreme Court of India. In its celebrated judgment relating to the interpretation of this very Item the Supreme Court has in the case of S. G. Chemicals & Dyes Trading Employees Union v. S. G. Chemicals & Dyes Trading Ltd. & another, reported in 1986(1) C.L.R. 360 has observed the essence of the said item as under :

'It is an implied condition of every agreement including a settlement that the parties thereto will act in conformity with the law. Such a provision is not to be expressly states in any contract.'

Applying the said ratio of the judgment the learned Judge of our High Court (B.N. Srikrishna, J.) in the case of Dalanvalan Imarat Bandhkam and Patbandhare Kamgar Union v. State of Maharashtra and others, reported in 1991(4) Bom.C.R. 111 : 1991(11) C.L.R 726 wherein Item 9 was invoked against the State department for having not applied with the provisions of section 33(1)(a) of the Industrial Disputes Act, 1947. The nature of the complaint was the same as is in our case, that is, the violation of provisions of statute. In our case it is B.I.R. Act while in that case it was the Industrial Disputes Act, 1947. The learned Judge has observed as under :

'Once a conclusion is reached that there was breach of section 33(1)(a), it is only a short hope therefrom to the conclusion that there is an unfair labour practice within the meaning of Item 9 of Schedule IV of the Act, in view of the judgment of the Supreme Court in S.G. Chemical's case 1986 C.L.R 360.'

The case of the petitioner-bank before the Industrial Court was that the respondent No. 2 had issued the directions to the Bank with regard to framing of service regulations and hence the service regulations were framed by the bank which were approved by the said authority, under its powers under the provisions of Maharashtra Co-operative Societies Act, 1960. It was therefore, submitted on behalf of the petitioner before the Industrial Court as also before me that the bank had acted under the directions of the authority under the Maharashtra Co-operative Societies Act, 1960 and had framed new service regulations under the directions issued by the authority and therefore the bank had committed neither an illegal change nor an unfair labour practice under either the B.I.R. Act or under the M.R.T.U. & P.U.L.P. Act. The learned member of the Industrial Court by his order dated 8-3-1994 held and declared that the petitioners have committed an act of unfair labour practice under Item 9 of Schedule IV of the M.R.T.U. & P.U.L.P. Act by framing the impugned new service regulations (Rules) and consequently restrained the bank from giving effect to the said service rules under Circular No. 3500 dated 12-4-1998. He has recorded cogent and valid reasons for allowing the complaint of the respondent union. He has discussed the submissions advanced on behalf of both the parties. According to me, the impugned judgment has dealt with exhaustively with the points raised by both the parties.

5. Shri C.J. Sawant, the learned Senior Counsel for the petitioner bank has assailed the impugned judgment on the very same grounds which were urged before the Industrial Court. According to him, when the bank has acted under the directions of a statutory authority it cannot be said that the action of the bank amounted to an unfair labour practice. He also submitted that the bank was legally bound to obey the directions issued by the authority under the Maharashtra Co-operative Societies Act. He further submitted that the respondent Union represented only the unionised employees and not the remaining staff in the employment of the Bank. The service regulations framed by the bank under the directions of the District Dy. Registrar covered not only unionised employees but also the non unionised staff of the bank. Shri Sawant made a grievance that the bank was entitled to frame service regulations in respect of such other staff in its employment which does not fall within the definition of an employee given in section 3(13) of the B.I.R. Act, 1946.

6. On the other hand Ms. Naina Buch, the learned advocate for the respondent Union supported the judgment of the Industrial Court and submitted that the bank had clearly engaged in an unfair labour practice within the meaning of Item 9 of Schedule IV of the M.R.T.U. & P.U.L.P. Act as the bank has framed new service regulations without giving a notice of change as required under section 42(1) of the Act. In support of her case she cited the judgment of the Supreme Court in S.G. Chemicals (supra) and also a judgment of Division Bench of this High Court in the case of Co-operative Bank Employees Union v. Yeshwant Sahakari Bank Ltd. & others, reported in 1992(2) C.L.R. 840 Bom. She also sought support from a third judgment rendered by a learned Single Judge of this Court reported in 1991 (2) C.L.R 726 (supra). Her argument in nutshell was that for any change of whatsoever nature, adverse or beneficial to the employees, a notice of change must be given to them under section 42 of the Act by any party intending to effect any change in respect of an industrial matter and the procedure prescribed under Chapter VIII must be followed.

7. It is needless to mention that the petitioner bank is governed by the provisions of the Bombay Industrial Relations Act, 1946 and is also governed by the provisions of the Maharashtra Co-operative Societies Act, 1960.1 need not dwell on the point that both the statutes operate in separate fields and both have different object to be achieved. Former obviously operates in the field of employer-employee relations while the later operates in the field of cooperative societies and their internal management and all the questions relating to the stage of admission and registration of a co-operative society, membership, capital, elections and many other items. According to me, there is no clash or conflict between the provisions of both these Acts, Shri Sawant has also very fairly conceded that the B.I.R. Act being a special legislation in the field of employer-employee relations, it will prevail over the provisions of the Maharashtra Co-operative Societies Act, which is in the filed of co-operation and it will prevail over any other law in respect of the said matters which are covered by this legislation. Both have their own individual superiority in their own fields. To be precise any provision regarding the employer-employee relationship covered by the B.I.R. Act will prevail over any rule, regulation or provision made under the Maharashtra Co-operative Societies Act, in respect of the employer-employee relationship. Shri Sawant has fairly accepted this position with a caveat that the service regulations framed under the Maharashtra Co-operative Societies Act, in respect of non employees or non unionised employees would not be hit by the provisions of the B.I.R. Act, 1946. I must also mention that this clear legal position has not been questioned even by Ms. Buch for the respondent Union.

8. The object of the B.I.R. Act is obviously to regulate relations of employers and employees and to make provision for settlement of industrial disputes and to provide for certain other purposes. It has defined exhaustively 39 industrial matters including the employer, employee, change, industrial dispute and industrial matter, The industrial matters have been divided in three Schedules appended to the Act. Chapter VII deals with the provisions in respect of standing orders to be framed by the employer in the prescribed manner in respect of the industrial matters mentioned in Schedule I. A detailed procedure which is mandatory for framing of the standing orders is given in the Chapter VII of the Act and section 40 finally lays down that the standing orders framed under this Chapter under section 35 in respect of the employees shall be determinative of the relations between the employer and the employees in regard to all the industrial matters specified in Schedule I. It would be convenient and useful to reproduce the aforesaid section 40 along with section 42 as follows :

40. (1) Standing orders in respect of an employer and his employees settled under this Chapter and in operation, or where there are no such standing orders, model standing orders, if any, applicable under the provisions of sub-section (5) of section 35 shall be determinative of the relations between the employer and his employees in regard to all industrial matters specified in Schedule I.

(2) Notwithstanding anything contained in sub-section (1) the State Government may refer, or an employee or a representative union may apply in respect of any dispute of the nature referred to in Clause (a) of paragraph A of section 78, to a Labour Court.

42. (1) Any employer intending to effect any change in respect of an industrial matter specified in Schedule II shall give notice of such intention in the prescribed form, to the representative of employees. He shall send a copy of such notice to the Chief Conciliator, the Conciliator for the industry concerned for the local area, the registrar, the Labour Officer and such other person as may be prescribed. He shall also affix a copy of such notice at a conspicuous place on the premises where the employees affected by the change are employed for work and at such other place as may be directed by the Chief Conciliator in any particular case.

(2) Any employee desiring a change in respect of an industrial matter not specified in Schedule I or III give a notice in the prescribed form to the employer through the representative of employees, who shall, forward a copy of the notice to the Chief Conciliator, the Conciliator for the industry concerned for the local area, the Registrar, the Labour Officer and such other person as may be prescribed.

(3) When no settlement is arrived at in any conciliator proceeding in regard to any industrial dispute which has arisen in consequence of a notice relating to any change given under sub-section (1) or sub-section (2), no fresh notice with regard to the same change or a change similar in all material particulars shall be given before the expiry of two months from the date of the completion of the proceeding within the meaning of section 63. If at any time after the expiry of the said period of two months, any employer or employee again desires the same change or a change similar in all material particulars, he shall give fresh notice in the manner provided in sub-section (1) or (2), as the case may be.

(4) Any employee (or a representative union) desiring a change in respect of (i) any order passed by the employer under standing orders, or (ii) any industrial matter arising out of the application or interpretation of standing orders, or (iii) an industrial matter specified in Schedule III (except item (5) thereof) shall make an application to the Labour Court (and as respect change desired in any industrial matter specified in Item (5) of Schedule III, to the industrial Court) :

Provided that no such application shall lie unless the employee (or a representative union) has in the prescribed manner approached (the) employer with a request for the change and no agreement has been arrived at in respect of the change within the prescribed period.

As far as Schedule I is concerned it enumerates 14 industrial matters from classification of employees to termination and also re-employment of the employees, including the mode of punishment etc. Schedule II enumerates 11 classes of industrial matters and for any change to be effected by the employer in such matters, a notice of change under section 42(1) is mandatory. Schedule III enlists 7 industrial matters and if any employee or representative union desires a change in respect of such matters a notice of change under section 42(4) is mandatory. For our purpose Item 8 of Schedule II is relevant.

Item: 8 Introduction of new Rules of discipline or alternation of existing Rules and their interpretation, except in so far as they are provided for in the standing orders applicable under this Act.

It is, therefore, crystal clear that if the petitioner bank desired to introduce new Rules of discipline or alternation of existing Rules in addition to the existing standing orders applicable under this Act it was mandatory for the bank to have served a statutory notice of change under section 42(1) of the Act. Before framing any such Service Rules or Regulations for the matters which are already covered under the standing orders purportedly under the directions from the D.D.R. it was obligatory for the petitioner bank to have resorted to section read with Item 8 of Schedule II of the Act. Even for following directions from the authority under the Maharashtra Co-operative Societies Act the only channel is B.I.R. Act and there is no by pass or any diversion to the highway under the B.I.R. Act. It was mandatory for the bank to have passed through the channel provided under the B.I.R. Act only even when the authority under the Maharashtra Co-operative Societies Act had directed the petitioner bank to frame service Rules it had explicitly directed the petitioner bank to frame the service regulations in the manner prescribed under the law and it could not have directed the bank to frame such service Rules in breach of or in violation of the B.I.R. Act or any other law for that matter. It was simple for the petitioner bank to have given a notice of change under section 42(1) as soon as it had received the directions from the authority under the Maharashtra Co-operative Societies Act and should have entered in to an agreement with the representative Union i.e. first respondent. In no case the representative Union can ever be by passed by any employer governed by this Act. Not only Item 8 of Schedule II but the employer bank could not have made any service regulations under the guise of following the mandate of Chapter VIII 'Changes' of the B.I.R. Act. In the impugned Service Rules there are number of such provisions which covered and which definitely touched the items enumerated in Schedule II of the Act. The petitioner bank could not have altered or modified or effected any change even beneficial to the employees without giving a notice of change under section 42(1) of the Act. The change introduced by the petitioner bank in the guise of the service Rules in contravention of section 42(1) of the Act does amount to an illegal change under section 46 read with section 42(1) of the Act and consequently it also amounts to an unfair labour practice under Item 9 of Schedule IV of the M.R.T.U. & P.U.L.P. Act.

9. I therefore find no substance in the writ petition, as there is absolutely no illegality or infirmity in the impugned judgment and order of the Industrial Court, and therefore, it does not warrant any interference by this Court under Articles 226 and 227 of the Constitution of India. It is, however, clarified once again that the petitioner bank would be at liberty to enforce the impugned service regulations qua its employees who do not fall within the definition of the employee given under section 3(13) of the B.I.R. Act. The Rule is therefore discharged with no order as to costs.

10. Certified copy of this order is expedited.

11. Petition dismissed.