Supreme Court of India
WORKMEN OF WILLIAMSON MAGOR & CO. LTD.versusWILLIAMSON MAGOR & CO. LTD. & ANR.
- Citation
- 1981 INSC 197
- Decided
- 7 December 1981
- Disposal
- Appeal(s) allowed
- Bench
- V D TULZAPURKAR
Holding
Promotions must be governed by objectively framed norms prepared with worker participation, and arbitrary promotions that supersede senior employees constitute victimisation and must be cancelled.
Summary
The workmen of Williamson Magor & Co. alleged that the management arbitrarily promoted junior clerks to the Special Grade, superseding the legitimate claims of senior employees, thereby victimising them. The Industrial Tribunal found the promotions unjustified but declined to grant relief because no promotion norms existed. On appeal, the Supreme Court held that promotions, though a managerial function, must be based on objective criteria and that the absence of norms rendered the promotions arbitrary and constituting unfair labour practice. The Court directed that the promotions be cancelled and that the management, in consultation with workers and under the Labour Commissioner’s supervision, must frame clear promotion norms within two months. No further promotions may be made until such norms are established.
Issues considered
- Whether promotion is a condition of service in a private company.
- Whether the arbitrary promotion of junior employees over senior ones amounts to victimisation and unfair labour practice.
- Whether an industrial tribunal can cancel promotions and direct the framing of promotion norms.
- Whether promotion, as a managerial function, must be based on objective criteria rather than the management’s subjective satisfaction.
- Interpretation of the term 'victimisation' under the Industrial Disputes Act.
Legislation cited
- Industrial Disputes Act, 1947s. 10, s. 15
Subjects
promotionvictimisationunfair labour practiceindustrial tribunalnormssenioritymanagerial functionindustrial disputeprivate sector
Judgment
A 42
WORKMEN OF WILLIAMSON MAGOR
&CO. LTD.
v.
B
WILLIAMSON MAGOR & CO. LTD. & ANR.
December 7, 1981
(V.D. TULZAPURKAR, BAHARUL ISLAM AND
c A. VARADARAJAN, JJ.)
Industrial Disputes Act 1947 Ss JO and 15.
Management granting promotion to junior employees-Rightful claim of senior
employees superseded-Industrial dispute-Whether there is victimization-Jwis·
diction and duty of industrial tribunal to declare promotions illegal and unjusti-
-
D fied-ln consultation with management and union frame norms and rules for
promotion.
Labour Law-Promotion-Whether a managerial function-Whether to be on
subjective satisfaction of management or on some objective criteria.
Words & Pharases-' Victimisation'-Meaning of-Interpretation in favour
E of labour whether to be accepted.
The Workmen (Respondent No. I) alleged that the Management (Appel·
lant) started giving indiscriminate and arbitrary promotions and/or u1>gradations
to some of the employees who were its favourities, disregarding the rightful
-
claims of a number of other employees so much so that even junior members
were given promotions superseding the rightful claims of the senior employees.
F According to the Union, the management arbitrarily promoted/upgraded three
persons and unjustly denied promotion/upgradation to twelve senior employees
and that this was victimisation and unfair labour practice, and that these three
persons after their promotion/upgradation used to do the same work as before
occupying the same chairs and working on the same tables as they had done
before the date of upg,rndation/promotion.
G As a dispute arose between the management and the union, the State
Government referred the issue to the Industrial Tribunal for adjudication.
During the pendency of the reference before the Tribunal the management again
promoted from the General to the Special Grade two clerks supet >eding 56
senior and efficient clerks of the General Grade. This issue was also referred to
the Industrial Tribunal.
H
The Tribunal, on a consideration of the oral and documentary evidence
adduced beforo it, found that the management did not care to establish the
WORKMEN v. WILLIAMSON MAGOR & co. 43
justification of the promotions of the persons named in the two references
A
superseding the claim of the others, but held that it could not give any relief
to the workmen when their positive case was that there was no standard or norms
for giving promotion.
In the appeal to this Court it was contended on behalf of the Manage-
ment that : (I) Promotion is not a condition of service in a private company, 8
and (2) although there were no norms, the promotions of the persons in ques-
tion were not arbitrary and that unless victimisation was proved by the union,
the management's action should not be disturbed.
Allowing the appeal
HELD : 1. (i) The management, in consultation with the workmen or
their representatives and under the direction, supervision and control of the c
Labour Commissioner shall frame norms/rules fixing quota for the grades and
for promotion/upgradation of its workmen, and the upgradation and/or pro-
motion shall be made by the management in terms of the norms/rules so
framed. [51 D-E]
That meanwhile the promotions/upgradations of the three persons which
is the subject matter of the first reference and the promotions/upgradations of 0
the two persons which is the subject matter of the second reference are can-
celled and these workmen shall be at par with the workmen who were super-
seded till promotions/upgradations are made by the management in terms of
the norms/rules to be prepared. No future promotions/upgradations shall be
made until the norms/rules are framed. [51 F-52 A]
(ii) Industrial Tribunals are inten<jed to adjudicate industrial disputes
between the management and the workmen, settle them and pass effective
awards in such a way that industrial peace between the employers and the
employees may be maintained so that there can be more production to
benefit all concerned. For this purpose the industrial tribunals, should not be
constrained by the formal rules of law and should avoid inability to arrive
- at an effective award to meet justice in a particular dispute. [48 F-G]
In the instant case there was victimisation of the superseded workmen.
The Tribunal should have, therefore declared that the promotions were illegal
F
and unjustified, being the result of arbitrary action of the management which
was nothing but unfair labour practice and the promotions should have been
cancelled. It should also have in consultation with the management and the
union framed norms/rules of promotion and directed the management to give
promotions/upgradations in accordance with those norms and rules. (48 H-49 A] G
2. (i) Although promotion/upgradation is a managerial function it
must not be on the subjective satisfaction of the management but must be on
some objective criteria. [ 49 E]
(ii) The normal meaning of 'Victimisation' is being the victim of unfair H
and arbitrary action. When the word 'victimisation' can be interpreted in two
different ways, the interpretation which is in favour of the labour should be
SUPREME cotJRt REPbktS ii 982] 2 s.c.il
accepted as they are the poorer section of the people as compared to the
A management. [50 G, DJ
Bharat Bank Ltd. v. Employees of Bharat Bank Ltd. [1950] S.C.R. 459:
K.C.P. Employees Association Madras v. Management of K.C.P. Ltd. Madras
& Ors. [1978] 2 SCC 42 referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 351 &
B 352 of 1976
Appeals by special leave from the Award dated the 31st
May, 1975 of the Seventh Industrial Tribunal, West Bengal, Publi-
shed by the Government of West Bengal, Labour DepartJ11ent in
Reference Case No. VIII-39/74, G.0. No. 3278-IR dt. 2.4.1974.
c & VIII-282/74, GO No. 7537-IR dated 10.12.1974.
D. L. Gupta S. K. Nandi and Krishna Prasad for the
Appellant.
G. B. Pai, N. C. Shah, J. R. Das and Parveen Kumar for the
D Respodent.
The Judgment of the Court was delivered by
BAHARUL IsLAM, J. These two connected appeals by special
leave are on behalf of Workmen of M/s Williamson Magor & Co.
E Ltd. (renamed as M/s Macneill & Magor Ltd.) represented by
Willi.amson Magor & Company Employees' Union (hereinafter
called 'the union') and are directed against the award of the 7th
Industrial Tribunal, West Bengal.
F
2. The material facts may be stated thus :
According to the union, all the employees of the aforesaid
company, the respondent before us (who will hereinafter be called
-
'the management') are the members of the union. Disputes had
arisen between the workmen and the management but they ended
in a number of agreements as a result whereof the employees
derived some benefits. Subsequently the management appointed
G
one Mr. P. K. Kaul as a staff officer, who, according to the union,
started to create a cleavage between the workmen, and with that :·
end in view, at his instance, the management started giving indis-
criminate and arbitrary promotions and/or upgradations to some
of the employees who were its favourites, disregarding the right-
H
ful claims of a number of other employees so much so that even
WORkMEN v. WiLLiAMSON MAGOR &. co. (Baharul Islam, J. 4S
junior members were given promotions superseding the rightful
A
claims of the senior employees. The union took up the cause of the
workmen with the management. According to the union, there is
no norm and/or standard guiding promotion and/or upgradatioµ
of the employees. According to the union, the action of the
management is arbitrary, ma/a fide and intended to victimize the
B
employees who are loyal to the union.
At the material time there were two grades of employees
namely; Special Grade, with a higher scale of pay and General
Grade.
c
-
3. This is an admitted position that the management do
not have any norm to determine how many clerks should be in
each of the said grades or in each of the scales of pay; nor is
there any fixed quota in the Special Grade to be filled up by pro-
motion from the General Grade; nor is there any rule determining
the number of vacancies to be filled up by promotion or upgra-
0
dation. According to the union, the normal rule should be
promotion/upgradation by seniority. As this was not done, unrest
cropped up. On the management having upgraded/promoted two
junior clerks, namely; Anil Chandra Ghose and Parameshwar
Banerjee from General Grade to Special Grade on 1.3.1972, super-
seding the claims of senior clerks, without assigning any reason,
E
the union protested. Far from rectifying the unjust action, the
management again promoted/upgraded another person, Shri Saroj
Mukherjee to Special Grade on l.7.1972, superseding the claims
of many others who were senior to him. According to the union,
the management arbitrarily promoted/upgraded the aforesaid three
persons and unjustly denied promotion/upgradation to twelve
F
senior clerks. This was, accordirig to the union, victimization and
unfair labour practice. According to the union, the aforesaid
three favoured clerks and the twelve superseded clerks were doing
exactly similar work. The three promoted/upgraded persons
after their promotion/upgradation used to do the same work as be-
G
fore, occupying the same chairs and working on the same tables
as they had done before the date of upgradation/promotion.
According to the union, there were no jobs related to grades or
scales of pay, and the promotion upgradation has no impact except
mere increase of pay consequent upon the higher scale of pay H
given to each person promoted. As a dispute arose between the
management and the union. the Government of West Bengal referred
46 SUPREME COURT REPORTS [ l 982] 2 s.c.R.
A the following issue to the 7th Industrial Tribunal, West Bengal for
adjudication :
"Whether promotion of Sharbasllree Saroj Kumar
Mukharjee, Anil Chandra Ghose and Parmeshwar Banarjee
from General Grade clerks to Special Grade Clerks in
B preference to the twelve (12) workmen marked in Annexure
"A" attached herewith is justified ? To what relief, if any,
are the workmen marked in Annexure "A" entitled ? The
names of the persons in said Annexure "A" were the
same as mentioned in paragraph 10 above".
c 4. During the pendency of the aforesaid reference before the
Tribunal, the respondent on 23.5.1974 again promoted from the
General to the Special Grade two clerks, namely Sudhir Ranjan
Chakraborty and Jyoti Prasad Paul superseding 56 senior and
efficient clerks of the General Grade inclusive of the twelve senior
grade clerks already superseded in 1972 and concerned in the
D
reference, aforesaid. As a dispute arose, the Government of West
Bengal made a reference to the same Industrial Tribunal for adjudi-
cation of the foll owing issue :
"Whether promotion of the workmen mentioned in
Annexure "A" attached herewith from General Grade to
E Special Grade or Supervisory Grade in preference to the
workmen metioned in Annexure "B" attached herewith is
justified ?
To what relief, if any, are the workmen mentioned in
F Annexure "B'' entitled ?"
5. Before the Tribunal, the parties led evidence and proved
-
Exts. K-1 and K-2, settlements arrived at between the management
of the union earlier. On a consideration of the oral and documen-
tary evidence adduced before it, the tribunal bas arrived at the
G following findings:-
(I) No agreed norm for promotion/upgradation was
formulated.
(2) Both the parties felt that it was desirable that
H
certain norms should be laid do.wn for promoting and/or
upgrading workmen.
WORKMEN v. WILLIAMSON MAGOR & co. (Baharul Islam, J.) 47
(3) That in spite of the fact that no norm had been A
formulated, the management promoted as many as 15
workmen during the pendency of the first reference.
(4) That promotion and/or upgradalion is a mana-
gerial function and that the union can have no say in such
matter. The Tribunal has found "it is now more or Jess
settled that the promotion/upgradation is the administra-
tive function of the management and it can be hardly
disputed before any court of law and/or tribunal unless it
is proved that in effecting such promotion, the management
violated the principles of natural justice and/or existing
rules or norms". The Tribunal also has found, on a consi-
c
deration of the evidence of the management witness,
- Shri P. K. Kaul, that although the witness said that at
the time of giving promotion, recommendations of the
departmental heads and other authorities were taken into
account, his evidence was not supported by any document.
D
The tribunal has also found that although in terms of ear-
lier agreements, it was the duty of the management to
investigate allegations by the union of discriminatory and
unfair promotion and/or upgradation, the management did
not do so. It further found that Ext. B disclosed that on
21.12.1972, the union demanded of the management E
investigation into the matter of the said discriminatory
promotions but "curiously enough, there is nothing before
me to show that the management did, in compliance with
the said agreement, investigate into the matter as agreed
upon."
- (5) Ultimately the Tribunal held that the promotions
of the three persons mentioned in the first reference "can
not be justified because when it was agreed upon that
F
the management would investigate in case any comp-
laint is made. but even in spite of the complaint
lodged by the union, the management did not investi- G
gate." The Tribunal has even found that the manage-
ment did not care to establish the justification of the
promotions of the aforesaid three persons superseding
the claims of others.
H
(6) The Tribunal has also found, "it is not their
(management's) case before me that, in fact, the manage-
48 SUPREME COURT REPORTS [ ! 982] 2 S.C.R.
A ment found those three persons suitable to the rest of the
workmen.
(7) Similarly, with regard to the second reference,
the Tribunal came to the finding that "junior persoris
B were given promotions superseding the claims of a
number of senior workmen, but there is nothing before
me from where I can say that the management was justi-
fied in giving promotion to them."
c 6. The above enumeration of the findings of the Tribunal
clearly shows that the action of the management in promoting junior
clerks of the General Grade superseding the claims of the senior
clerks of the same Grade was arbitrary and unjustified. The Tribu-
nal has categoricalfy found, "I am constrained to observe that no
material has been placed before me nor it has been claimed im evi-
-
D dence that the management found that these people were more
efficient and competent than the rest of the workmen.
In the premises, I am bound to hold that I cannot justify the
promotion of the said persons named in the two references and dispose
of the first issue accondingly" (emphasis added). But to our amaze-
E
ment, it failed to pass any consequential order, and instead held,
"I cannot give any relief to these workmen when their positive case
is that there is no standard or norms for giving promotion." In
other words, although the Tribunal categorically held that the
actions of the management were unjustified, it expressed, its inabi-
lity to give any relief to the workmen in the case. We do
F
not think that the Tribunal should be so powerless. The industrial
tribunals are intended to adjudicate industrial disputes between the
management and the workmen, settle them, and pass effective awards
-
in such a way that industrial peace between the employers and the
employees may be maintained so that there can be more production
to benefit all concerned. For the above purpose, the industrial
G tribunals, as far as practicable, should not be constrained by the
formal rules of law and should avoid inability to arrive at an effec-
tive award to meet justice in a particular dispute. The Tribunal in
the instant case, in view of its findings, first of all should have
declared that the promotions of the aforesaid fifteen persons were
H illegal and unjustified, their promotions being the result of arbitrary
action of the management which was nothing but unfair labour
practice, and the promotions in question ~hoql<;! have been cancelled,
WORKMEN v. wh:.LiAMSON MAGOR & co. (Baharui is/am, J.) 49
The Tribunal also, in our opinion, in consultation with the mana- A
gement and the union, should have framed norms/rules of promo-
tions and directed the management to give promotions/upgradations
in accordance with those norms/rules.
7. We do not agree with the claim of the union tl~at promo-
tions or upgradations should be on the basi,s of Seniority. al9ne.
The National Industrial Tribunal in its award gave the following
wholesome directions:-
"I give the ge.neral formula wliich has been accepted
by many concerns, namely, all things being equal, seniority
shall coi.mt for promotion. If the senior person has beeri
c
overlooked in the question of promoti.ori, he ls at liberty
to ask the concern for reason why he has been overlooked,
in which case the concern shall give him the reasons provi-
ded that it does not expose the concerti or the officer glving
any reasons to any civil or criminal proceedings". D
The management has failed to follow this direction in the case
in hand.
Although we agree that promotion/upgradation is a manage-
rial function, it must not be on the subjective satisfaction of the
E
management but must be on some objective criteria,
8. Mr. ·Pai, 'learned counsel appearing for the management,
made two submissfons before us. Firstly, he submitted that unlike
--- in public sector iindettakings, promotion is not a condition of
service in a private company. W'e are unable to accept the submis-
sion of Mr. Pai in toto. If there is no scope .of any promotion or up-
gradation or increase in salary in a private undertaking, the submi-
ssion of the learned counsel may be justified but if there are grades
and scopes of upgradation/promotion and there are different scales
of pay for different grades in a private undertaking, and, infact,
promotion is given or upgradation is made, there should be no arbi- G
trary or unjust and unreasonable upgradation or promotion of
persons superseding ·the claims of persons who may be equally or
even more, suitable. The second submission of Mr. Pai is that. al-
though there were no norms, the promotions of the persons in
question were not arbitrary and that the linings of the Tribunal in
H
this regard were incorrect. He I ed us through the material evidence
so SUPREME couRt R.ili>oR.ts [198i] i $.C.R.
A ofthe witness examined. We are unable to agree with learned
counsel and do not find any reason to differ from the findings of the
learned Tribunal that the promotions of the fifteen persons were
arbitrary and unjustified. Mr. Pai also submitted that unless victimi-
zation was proved by the union, the management's action should
not be disturbed. The word 'victimization' has not been defineJ in
8 the statue. The tetm was considered by this Court in the case
of Bharat Bank Limited v. Employees of Bharat Bank Ltd.(1) This
Court observed, "It (victimization) is an ordinary English word
which means that a certain person has become a victim, in other
words, that be has been unjustly dealt with". A submission was
made on behalf of the management in that case that 'victimization'
had acquired a special meaning in industrial disputes a:nd com10ted
a person who became the victim of the employer's wrath by r<:ason
of his trade union activities and that the word could not relate to a
person who was merely unjustly dismissed". This submission, how-
ever, was not considered by the Court. When, however, the word
--
'victimization' can be interpreted in two different ways, the inter-
D pretation which is in favour of the labour should be accepted as they
are the poorer section of the people compared to the management.
This Court in the case of K. C. P. Employees' Association,
Madras v. Management of K. C. P. Ltd. Madras & Ors.(2)
observed
"In. Industrial Law, interpreted and applied in the per-
spective of Part IV of the Constitution, the benefit of
reasonable doubt on law and facts, if there be such doubt,
F
must go to the weaker section, labour. The Tribunal wll!
dispose of the case making this compassionate approach but
without over-stepping the proved facts".
-
We would therefore accept the interpretation of the word
'victimization' in·the normal meaning of being the victim of unfair
and arbitrary action, and hold that there was victimization of the
G superseded workmen.
9. Even if promotion may not be a condition of service in a
private company and promotion may be the function of the manage-
H
. (I) [1950] SCR 459.
(2) [19781 2 sec 42.
WORKMEN v. WILLIAMSON MAGOR & co. (Ba!wrul Islam, J.) 51
ment, it may be recognised that there may be occasions where the A
Tribunal may have to cancel the promotions made by the manage-
ment where it is felt that persons superseded have been so superseded
on account of legal malafide or victimization (See 1966 (2) SCR
465). Although in spite of the allegations of rnala fide, the union
has not been able to prove factual ma/a fide, in this case malice in
law and effectual victimization are obvious due to the fact that un- B
justified promotions of some junior persons were made superseding,
without any reason or necessity, the cases of a large number of
senior persons.
10. As a result of the foregoing considerations, we allow C
the appeals and, accepting the finding of the Tribunal, give the
- following directions :
(I) The management, in consultation with the workmen or
their tepresentatives and under the direction, supervision and control D
of the Labour Commissioner of the region, shall frame norms/rules
fixing quota for the grades and for promotion/upgradation of its
workmen, in the light of the observations made above, within two
months from the date of the receipt of a copy of this judgment by
the Labour Commissioner.
E
(2) The upgradation and/or promotion shall be made by the
management in terms of the norms/rules so framed.
(3) That meanwhile the promotions/upgradations 0f Sharba-
- shree Saroj Kumar Mukherjee, Anil Chandra Gl10se and
Parameshwar Banerjee from General Grade to Special Grade clerks
in preference to the twelve workmen mentioned in Annexure 'A',
F
which is the subject matter of the first reference, namely,
No. 3278-IR/IR/l lL-13271 dated April 2, 1974, and the promo-
tions/upgradations of the persons mentioned in Annexure 'A' from
the General Grade to Special Grade or Supervisor Grade in prefe·
G
rence to the workmen mentioned in Annexure 'B', which is the
subject niatter of the second reference, namely, Reference No. 7537-
IR/IR/1 lL-132/71 dated December 10, 1974, are cancelled; and the
workmen whose promotions are cancelled and the workmen who
were superseded shall be at par wilh effect from the date of this
H
judgment till promotions/upgradations are made by the management
in terms of the norms/rules to be prepared; and no future promo-
52 SUPREME COURT REPORT~ [1982} 2 s.c.R.
A tions/upgradations shall be made until the norms/rules are
framed. ·
'.
11. T~e appeals are allmved with costs.
B 12. Send a copy of this judgment to the Labour Commis-
sioner forthwith.
N. V. K. Appeals allowed.
--
-
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