BHARATIYA KAMGAR KARMACHARI MAHASANGHversusM/S. JET AIRWAYS LTD

             [2023] 10 S.C.R. 859 : 2023 INSC 646                      859


    BHARATIYA KAMGAR KARMACHARI MAHASANGH                              A
                                 v.
                    M/s. JET AIRWAYS LTD.
                  (Civil Appeal No. 4404 of 2023)
                          JULY 25, 2023                                B
         [ABHAY S. OKA AND SANJAY KAROL, JJ.]
       Bombay Industrial Employment (Standing Orders) Rules, 1959
– Industrial Employment (Standing Orders) Act, 1946 – Appellant-
Union represents workmen temporarily engaged on a fixed-term
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contract by the respondent-company – Appellant contended that
the workmen were treated as temporary despite completing 240 days
in service in terms of the Model Standing Order provided under the
Rules of 1959 and despite the nature of the work being permanent
and regular – Respondent claimed that the workers are not entitled
to permanency as per the settlement dated 02.05.2002 – Central         D
Government Industrial Tribunal (CGIT) rejected the demand of the
appellant for reinstatement with full back wages – High Court
confirmed the award of CGIT – Issues before the Supreme Court:
Which is the Appropriate Authority empowered to issue the Standing
Order(s) under the Industrial Employment (Standing Orders) Act,
                                                                       E
1946 – Whether private agreement/settlement between the parties
would override the Standing Order – Held: Respondent is not, within
the meaning of s.2(b), under the control of the Central Government
– It is under the control of the State Government – Thus, Bombay
Model Standing Order would be applicable to the parties – As far
as second question is concerned, as per Bombay Model Standing          F
Order clauses, a workman who has worked for 240 days in an
establishment would be entitled to be made permanent, and no
settlement which abridges such a right can be agreed upon, let alone
be binding – Any agreement/contract/settlement wherein the rights
of the employees are waived off would not override the Standing
                                                                       G
Orders – Appellant-Union entitled to all the benefits per the Bombay
Model Standing Order – Award passed by CGIT and Judgment of
High Court set aside – Appeal allowed.


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                                859
860            SUPREME COURT REPORTS                        [2023] 10 S.C.R.


A           Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd.
            (1984) 3 SCC 369 : [1984] 3 SCR 325; Western India
            Match Co. v. Workmen (1974) 3 SCC 330 : [1974] 1
            SCR 434; Rasiklal Vaghajibhai Patel v. Ahmedabad
            Municipal Corpn. (1985) 2 SCC 35 : [1985] 2 SCR
            556 – relied on.
B
            U.P. SEB v. Hari Shankar Jain (1978) 4 SCC 16 : [1979]
            1 SCR 355 – referred to.
                              Case Law Reference

C     [1979] 1 SCR 355                referred to             Para 8
      [1984] 3 SCR 325                relied on               Para 9
      [1974] 1 SCR 434                relied on               Para 10
      [1985] 2 SCR 556                relied on               Para 11
D           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4404
      of 2023.
            From the Judgment and Order dated 10.01.2018 of the High Court
      of Judicature at Bombay in WP No. 2657 of 2017.
E          Sanjay Singhvi, Sr. Adv., Nitin S. Tambwekar, Seshatalpa Sai
      Bandaru, Advs. for the Appellant.
             Ujjwal A. Rana, Himanshu Mehta, M/s. Gagrat and Co., Advs.
      for the Respondent.

F           The Judgment of the Court was delivered by
            SANJAY KAROL, J.
            1. The present appeal arises out of the judgment of the High Court
      of Bombay in Writ Petition No. 2657 of 2017, wherein it confirmed the
      award dated 30.03.2017 passed by the Central Government Industrial
G     Tribunal (hereinafter referred to as ‘CGIT’) rejecting the demand of the
      Appellant-Union for reinstatement with full back wages.
            2. The brief facts involved in the case are as follows: The
      respondent company operates a commercial airline, flying aircraft for
      transporting passengers and cargo. The Appellant represents around
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BHARATIYA KAMGAR KARMACHARI MAHASANGH v. M/s.                                861
       JET AIRWAYS LTD. [SANJAY KAROL, J.]

169 workmen temporarily engaged on a fixed-term contract by the              A
Respondent in various cadres like loader-cum-cleaners, drivers and
operators. The Appellant contends that the workmen were treated as
temporary despite completing 240 days in service in terms of the Model
Standing Order provided under the Bombay Industrial Employment
(Standing Orders) Rules, 1959 (hereinafter referred to as “Bombay
                                                                             B
Model Standing Order”) and despite the nature of the work being
permanent and regular. The Trade Union had raised a charter of demands
which, after negotiations, resulted in a settlement dated 02.05.2002. In
the said charter of demands, Bhartiya Kamgar Sena gave up the demand
for the grant of permanency and a comprehensive settlement dated
02.05.2002 was signed as a package deal that conferred many benefits         C
on the workmen who gave up the said demand. The Respondent Company
claims that the workers are not entitled to permanency as per the
settlement dated 02.05.2002 entered between the Union and Company.
The workmen raised disputes and the matter landed up for adjudication.
However, the CGIT, in its award dated 30.03.2017, while answering a
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reference framed the issue, whether the Union’s demand for re-
employment /reinstatement with full back wages of these 169 workmen
in service of that first party is just and proper and answered it in the
negative. Relying upon Section 25-H of the Industrial Disputes Act, 1947
it was held that there is no retrenchment since the non-renewal of fixed
term contract did not amount it to be so as provided under Section           E
2(oo)(bb) of the said Act. Thus, there was no question of re-employment
of the concerned workmen.
      OPINION OF THIS COURT
      3. After hearing learned counsel of the parties at great length, the
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following issues arise for our consideration:
      - Which is the Appropriate Authority empowered to issue the
        Standing Order(s) under the Industrial Employment (Standing
        Orders) Act, 1946 (hereinafter referred to as ‘The Act’)?
      - Whether private agreement/settlement between the parties             G
        would override the Standing Order?
      ISSUE I
     4. The Act applies to every industrial establishment wherein one
hundred or more workmen are employed or were employed on any day
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862                SUPREME COURT REPORTS                       [2023] 10 S.C.R.


A     of the preceding twelve months. The expression ‘appropriate government’
      is defined by Section 2(b) of the Act to mean in respect of industrial
      establishments under the control of the Central Government or Railway
      Administration, or a major port, mine or oilfield, the Central Government,
      and in all other cases, the State Government. Section 2(e) defines the
      expression ‘industrial establishment’. Under Section 15 of the Act, the
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      appropriate Government is empowered to make rules for carrying out
      the purposes of the Act. In exercise of the powers conferred by Section
      15, the then State of Bombay had issued the Bombay Industrial
      Employment (Standing Orders) Rules, 1959. Insofar as those
      establishments in respect of which the appropriate Government is the
C     Central Government, the Industrial Employment (Standing Orders)
      Central Rules, 1946, stand framed.
             5. Insofar as the Respondent Company is concerned, the
      appropriate Government is clearly not the Central, but the State
      Government since the Respondent is not, within the meaning of Section
D     2(b), under the control of the Central Government. The present case
      falls under the latter part of the section; thus, the appropriate Government
      means the State Government. The Bombay Model Standing Order would
      be applicable to the parties.
               ISSUE II
E           6. For the adjudication of this issue, it is pertinent to take note of
      various judicial pronouncements.
             7. On various occasions, this Court has observed that the certified
      standing orders have a statutory force. The Standing Order implies a
      contract between the employer and the workman. Therefore, the
F     employer and workman cannot enter into a contract overriding the
      statutory contract embodied in the certified Standing Orders.
             8. This Court has succinctly laid down the scope of The Act in
      U.P. SEB v. Hari Shankar Jain,1 (3-Judge Bench) that it was specially
      designed to define the terms of employment of workmen in industrial
G     establishments, to give the workmen a collective voice in determining
      the terms of employment and to subject the terms of employment to the
      scrutiny of quasi-judicial authorities by the application of the test of
      fairness and reasonableness. It is an Act giving recognition and form to
      workmen’s hard-won and precious rights. We have no hesitation in saying
H     1
          (1978) 4 SCC 16
BHARATIYA KAMGAR KARMACHARI MAHASANGH v. M/s.                                   863
       JET AIRWAYS LTD. [SANJAY KAROL, J.]

that it is a special Act expressly and exclusively dealing with the schedule-   A
enumerated conditions of service of workmen in industrial establishments.
     9. While discussing the letter and spirit of The Act, this Court in
Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. 2 (3-Judge
Bench) held that:
          “11. …it was an act to require employers in industrial B
          establishments to formally define conditions of employment under
          them. The preamble of the Act provides that it is expedient to
          require employers in industrial establishments to determine with
          sufficient precision the conditions of employment under them and
          to make the said conditions known to workmen employed by C
          them…… The Act was a legislative response to the laissez-faire
          rule of hire and fire at sweet will. It was an attempt at imposing a
          statutory contract of service between two parties unequal to
          negotiate on the footing of equality.
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          ….
          The intendment underlying the Act and the provisions of the Act
          enacted to give effect to the intendment and the scheme of the
          Act leave no room for doubt that the Standing Orders certified
          under the 1946 Act become part of the statutory terms and             E
          conditions of service between the employer and his employee
          and they govern the relationship between the parties.”
      10. In Western India Match Co. v. Workmen3 (2-Judge Bench),
the Court further held that:
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          “7. The terms of employment specified in the Standing Order
          would prevail over the corresponding terms in the contract of
          service in existence on the enforcement of the Standing Order…..
          8. If a prior agreement inconsistent with the Standing Orders will
          not survive, an agreement posterior to and inconsistent with the G
          Standing Order should also not prevail…..
          ...

2
    (1984) 3 SCC 369
3
    (1974) 3 SCC 330 (hereinafter referred to as ‘WIMCO’)                       H
864                SUPREME COURT REPORTS                      [2023] 10 S.C.R.


A              10. In the sunny days of the market economy theory, people
               sincerely believed that the economic law of demand and supply
               in the labour market would settle a mutually beneficial bargain
               between the employer and the workmen. Such a bargain, they
               took it for granted, would secure fair terms and conditions of
B              employment to the workman. This law they venerated as natural
               law. They had an abiding faith in the verity of this law. But the
               experience of the working of this law over a long period has
               belied their faith.
               11. …It plainly follows from Sections 4, 10 and 13(2) that the
C              inconsistent part of the special agreement cannot prevail over the
               Standing Order. As long as the Standing Order is in force, it is
               binding on the Company as well as the workmen. To uphold the
               special agreement would mean giving a go-by to the Act’s principle
               of three-party participation in the settlement of terms of
D              employment. So we are of the opinion that the inconsistent part of
               the special agreement is ineffective and unenforceable.”
            11. Placing reliance on WIMCO (supra), this court in Rasiklal
      Vaghajibhai Patel v. Ahmedabad Municipal Corpn.4 (2-Judge
      Bench) held that any condition of service, if inconsistent with certified
E     standing orders, would not prevail, as the certified standing orders would
      have precedence over all such agreements. Any settlement, the employee
      Union enters into with the Employer would not override the Model
      Standing Order, unless it is more beneficial to the employees.
              12. Coming to the facts of the case, the CGIT noted that the
      letters issued by the airlines (Respondent herein) to the workmen aimed
F
      to appoint them for a fixed term. Even though their appointment orders,
      issued from time to time, extended their appointment period, however,
      on expiry of such period, their employment was supposed to end. It is
      argued that they carried out work for more than 240 days, which was of
      a regular and permanent nature, but since the appointment was for a
G     fixed-term contract, it would be of no consequence even though they did
      work for 240 days or more. The Tribunal observed that the airlines had
      no option but to not renew the fixed-term contracts of the workmen due
      to a change in Government policy.

      4
H         (1985) 2 SCC 35
BHARATIYA KAMGAR KARMACHARI MAHASANGH v. M/s.                                   865
       JET AIRWAYS LTD. [SANJAY KAROL, J.]

       13. The High Court, while upholding the order of the CGIT, held          A
that the mere completion of 240 days would not entitle the members to
claim permanency under the Model Standing Order given the settlement
and, more specifically, Clause 18 thereof. It further observed that the
Model Standing Order is not a statutory provision but, at best, a statutorily
imposed condition of service that a settlement or award can alter.
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       14. On all counts, we respectfully disagree with the findings of
the Tribunal and the High Court.
      15. Thus, it becomes pertinent to reproduce and analyse relevant
Clauses of the Bombay Model Standing Order, which reads as follows:
      “Clause 4C- A badly or temporary workman who has put in 190               C
      days’ uninterrupted service in the aggregate in any establishment
      of 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 order in writing signed by the Manager, or any           D
      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.”
      “Clause 32: Nothing contained in these Standing orders shall
      operate in derogation of any law for the time in force or to the          E
      prejudice of any right under the contract of service, custom or
      usage or an agreement settlement or award applicable to the
      establishment.”
       16. A cumulative reading of aforesaid clauses reveals that a
workman who has worked for 240 days in an establishment would be                F
entitled to be made permanent, and no contract/settlement which abridges
such a right can be agreed upon, let alone be binding. The Act being the
beneficial legislation provides that any agreement/contract/settlement
wherein the rights of the employees are waived off would not override
the Standing Orders.
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        17. Learned counsel for the Respondent has appraised this Court
of the insolvency proceedings initiated against the Respondent Company
under the Insolvency and Bankruptcy Code, 2016. However, we refrain
from commenting thereupon, for it does not bear any consequence to
the present lis and neither was it a subject matter of adjudication before
the courts/authorities below.                                                   H
866              SUPREME COURT REPORTS                    [2023] 10 S.C.R.


A           18. Given the above discussions, we allow the appeal holding the
      Appellant-Union entitled to all benefits per the Bombay Model Standing
      Order. The award dated 30.03.2017 passed by CGIT in Reference No.
      CGIT-2/56 of 2013 and the judgment dated 10.01.2018 passed by the
      High Court of Judicature at Bombay in Writ Petition No. 2657 of 2017
      affirming the same are quashed and set aside.
B
             19. No costs.

      Ankit Gyan                                               Appeal allowed.
      (Assisted by : Aarsh Choudhary, LCRA)

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