M/S. North Brook Jute Co. Ltd. and Another v. Their Workmen

Nor th Brook f utd Co. Ltd. v. Their Workmen \ DAS GUPTA, J.-On December 13, 1957, the Govern- Das Gupta J. ment of West Bengal referred under s. 10 of the Industrial Disputes' Act the following dispute between M/s. Northbrook Jute Co., Ltd., and Dalhousie Jute Mills who are appellants before us and,their workmen:-. North Brook jute Co. Ltd. v. Their Workmen Das Gt~pta J. "Do the proposals of rationalisation in the above two mills involve any increase in workload ? If so, what relief the workmen are entitled to?" Almost a month before this the proposal of introduc­ ing a rationalisation scheme in the mills of these companies had been considered at an extraordinary meeting of the Works Committee and the Committee had agreed to the proposal. A notice under s. 9A of the Industrial Disputes Act was then given by the com­ panies to the Unions of their workmen and it was because the workmen objected to the introduction of the rationalisation scheme that the dispute arose and was referred by the Government to the Tribunal. On December 16 when the above reference was pending before the Tribunal the management of these mills put the rationalisation scheme into operation but the workmen refused to do the additional work placed on them by the scheme. Later the same day the mills declared a lock-out. Work was however resumed again in all departments excepting the weaving and finishing departments on December 20, and in these two departments on December 21, as a result of a settlement arrived at between the workmen represent­ ed by their Unions and rthe Mills as regards the introduction of the rationalisation scheme. But a dispute arose as regards the payment of wages to workmen for their dues during the period when the mills were closed, viz., 16th December to 20th Decem­ ber in the weaving and finishing departments and 16th December to 19th December in all other departments. This dispute was also referred to the Tribunal by an order of the Government dated February 1, 1958. The earlier issue as regards the proposed introduction of the rationalisation scheme was also amended in view of what had happened in the meantime by substi­ tuting therefor :-"Have the rationalisation effected, in the above two mills since 16th December, 1957, involved any increase in the workload? To what relief the workers are entitled to?" We are no longer concerned with this issue as the decision of the Tri­ bunal thereon which is against the workmen is no longer disputed. As regards the other two disputes the Tribunal has made an award in favour of the • • ... ,, - 3 S.C.R. SUPREME COURT REPORTS 367 workmen that they are entitled to wages for the period of absence above-mentioned. On this question the workmen's case before the Tribunal was that the reason that workmen could not do any work on the days in question was the illegal lock-out by the employers; the employer's case was that the workmen had struck work illegally, and so, the closure of the mills on the 16th of December after such strike was not illegal or unjustified. The Tribunal was of opinion that the employer's attempt to put the rationalisation scheme into effect on the 16th Decem­ ber was a contravention of s. 33 of the Industrial Disputes Act, and so, the workmen's refusal to work in accordance with that scheme was not an illegal strike and the employer's closure of the mills was illegal. Learned counsel for the employer-mills has tried to convince tis that they had acted in accordance with law, in introducing the rationalisation scheme on the 16th December. He pointed out that the Works Committee duly constituted under the Act had con­ sidered the scheme and approved of it, and argued that as the workmen's representatives on the Works Committee had agreed to the scheme, the workmen themselves should be taken to have agreed to it. That the workmen's representatives on the Works Com­ mittee agreed to the introduction of the scheme by the companies" whenever they desired" is established by a copy of the resolution of the Works Committee. It has to be noticed however that the workmen's re­ presentatives on the Works Committee do not represent the workmen for all purposes, but .only -for the purpose of the functions of the Works Committee. Section 3(2) of the Act sets out the functions of the Works Committee in these words : " It shall be the duty of the Works Committee to promote measures for securing and preserving amity and good relations between the employer and workmen' and, to that end to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters." North Brook Jute Co. Ltd. v. Their Workmen Das Gupta j. North Brook ] ute Co. Ltd. v. Theif' Workmen Das Gupta]. The language used by the Legislature makes it clear that the Works Committee was not intended to supplant or supersede the Unions for the purpose of collective bargaining; they are not authorised to consider real or substantial changes in the conditions of service; their task is only to smooth away frictions that might arise between the workmen and the management in day-to-day work. By no stretch of imagination can it be said that the duties and functions of the Works Committee included the decision on such an important matter as the alteration in the conditions of service by rationalisation. "To promote measures for secur­ ing and preserving amity and good relations between the employer and workmen " is their real function and to that end they are authorised to " comment upon matters of their common concern or interest and endeavour to compose any material difference of opinion in respect of such matters." The question of introduction of rationalisation scheme may be said to be a matter of common interest between the emp­ loyers and workmen; but the duty and authority of the Works Committee could not extend to anything more than making comments thereupon and to endea­ vour to compose any ma.terial difference of opinion in respect of such matters. Neither " comments" nor the "endeavour" could be held to extend to decide the question on which differences have arisen or are likely one way or the other. It was rightly pointed out by the Labour Appellate Tribunal in Kemp and Company Ltd. v. Their Workmen(') that: "the Works Committees are normally concerned with problems arising in the day to day working of the concern and the functions of the Works Commit­ tee are to ascertain the grievances of the employees and when occasion arises to arrive at some agreement also. But the function and the responsibility of the works committee as their very nomenclature indi­ cates cannot go beyond recommendation and as such they are more or less bodies who in the first instance endeavour to compose the differences and the final decision rests with the union as a whole." The fact tlrnt the workmen's representatives on the Works Committee agreed to the introduction of the (I) (1955] I L,L.J. 48, ..... - .. ... .. 3 S.C.R. SUPREME COURT REPORTS 369 rationalisation scheme is therefore in no. way binding on the workmen or their Union. The next argument was that whatever alteration was effected in the conditions of service, was made, on the date when notice under s. 9A was given and that being before the 13th December there was no con­ travention of s. 33. .There is in our opinion no sub­ stance in this contention, Section 9A in accordance with which the notice was given provides that "No employer who proposes to effect any change in the conditions of service applicable to any workmen in respect of any matter specified in the Fourth Schedule, shall effect such change- _ (a) without giving to the workmen likely to be affected by such a notice in the prescribed manner of the nature of the change proppsed to be effected; or (b) within twenty-one days of giving such notice;". With the proviso to the section we are not concerned. What is important to notice is that in making this provision for notice the Legislature was clearly con­ templating three stages. The first stage is the proposal by the employer to effect a change; the next stage is when he gives a notice and the last stage is when he effects the change in the conditions of service on the expiry of 21 days from the date of the notice. The conditions of service do not stand changed, either when the proposal is made or the notice is given but only when the change is actually effected. That actual change takes place when the new conditions of service are actually introduced. It necessarily follows that in deciding for the purpose of s. 33 of the Act, at what point of time the employer "alters" any conditions of service, we have to ascer­ tain the time when the change of which notice under s. 9A is given is actually effected. If at the time the change is effected, a proceeding is pending before a Tribunal, s. 33 is attracted and not otherwise. The point of time when the employer proposes to change the conditions of service and the point of time when the notic~ is given are equally irrelevant. It was further contended that in any case, the altera­ tion was not to the prejudice of the workmen. How such a contention can be seriously made is difficult to North Brook jute Co. Ltd. v. Their Workmen Das Gupta ] . r960 understand. The whole basis of the scheme was so to N -- allocate the machines to workmen, as to enable fewer orth Brook jute k k th h' h h b co. Ltd wor men to wor e mac mes t an t e num er pre- v. · viously required so that surplus workmen could be Their Workmen discharged. The object was to decrease the cost of production. The method adopted for attaining the Das Gupta J · object was to obtain more work from the workmen for approximately. the same wages. However laudable the object be, it cannot be doubted for a moment that the scheme prejudiced the workmen seriously. Mr. Fraser, the company's witness, stated in his evidence that while previously for every machine in the batching department, there were two hands, now there are two hands for two machines. In giving the reasons for the introduction of the scheme, he said "we had surplus labour in both the mills. The company was losing heavily. Till then we depended on natural wastage and did not think of rationalisation; in November last year, the decision was taken to take action on rationalisation. " Rationalisation which was introduced had therefore two effects-first that some workers would become surplus and would face discharge ; and secondly, the other workmen would have to carry more workload. The introduction of the rationalisation scheme was therefore clearly an alteration of conditions of service to the prejudice of the workmen. The alteration was made on the 16th December, when reference as regards the scheme had already been made and was pending before the Industrial Tribunal. The Tribunal has therefore rightly held that this intro­ duction was a contravention of s. 33. Lastly it was contended that even if the introduc­ tion of the rationalisation scheme was a contravention of s. 33 the workmen's remedy lay in applying under s. 33A, and that they were not entitled to strike work. Section 33A no doubt gives the workmen aggrieved by the contravention by the employer of s. 33 to apply to the Tribunal for relief; but the existence of this remedy does not mean that the workmen were bound to work under t'3.e altered conditions of service, even though these were in clear contravention of law. When they refused to do the additional work which the ·- 3 S.C.R. SUPREME COURT REPORTS 371 rationalisation scheme required them to do, they refus­ ed to do work, which the employer had no right in law to ask them to do. It is difficult to say that ·this amounted to a "strike" by the workmen ; but even if it could be said to be a " strike " such strike was certainly not illegal or unjustified. Our conclusion therefore is that the Tribunal was right in its opinion that the closure of the mills by the employer amounted to an illegal lock-out, and the workmen, unable to work 'in consequence of the lock­ out, are entitled to wages for the period of absence, caused. by such lock-out. The appeal is therefore dismissed with costs. Appeal dismissed. MANAGEMENT OF KAIRBETTA ESTATE, KOTAGIRI v. RAJ AMANICKAM AND OTHERS. (P. B. GAJENDRAGADKAR and K. 0. DAS GUPTA, JJ.) I ndu.strial Dispute- Lay-off compensation-Closure of division due to disturbances by workers-Lock-out-Subsequent reopening of division-Claim for lay-off compensation-Lock-out and lay-off, Distinction-Industrial Disputes Act, z947-(I4 of z947), ss. 2(l), 2 (kkk), 25C, 25E(iii), 33C. The appellant's manager was violently attacked by its workmen as a result of which he sustained serious injuries. The workers in the lower division also threatened the appellant's staff working in that division that they would murder them if they worked there. The appellant was therefore compelled to notify that the division would be closed until further notice. Subsequently as a result of conciliation before the labour officer, the division was opened again. The workers made a claim for lay-off compensation under s. 25C of the Industrial Disputes Act, r947, for the period during which the lower division was closed on the footing that :the management for their own reasons did not choose to run the division during that period. The appellant's answer was, inter alia, that the closure of the division amounted to a lock-out which under the circumstances was perfectly justified and as such the workers were not entitled to claim any lay-off compensation : Held; (r) that the concept of a lock-out is essentially different from that of a lay-off and where the closure of business amounts to a lock-out under s. 2(1) of the Industrial Disputes Act, Nor th Brook ] ute Co. Ltd. v. Their Workmen Das G"pta ]. March z4.