Bally Jute Company Ltd. vs Regional Provident Fund Commissioner & Ors.

"During investigation it came to know that Bally Jute Company Limited Shramik Sangathan is not at all any affiliated Trade Union/Shramik Sanghatan/Labour Welfare Organization etc, of Bally Jute Company Limited. Examining the authority of Bally Jute Company Limited, it came to know that there is no Trade Union/Shramik Sangathan/Labour Welfare Organization etc. named and style as "Bally Jute Company Limited Shramik Sangathan" in their company. There was one 'majdoor', namely, Sri Birbal Ray who had been terminated in 2011 from the company.

“38.

In the writ petition filed by Respondents 1 and 2 their locus standi to challenge the appointment of the appellant was asserted in the following words:

“The petitioner Association is a trade union registered under the Trade Unions Act, 1926. The petitioner is the only registered trade union existing in the 2nd respondent Board. The Board has held several negotiations with the petitioner Union with regard to the service conditions of the employees of the 2nd respondent Board since its formation in the year 1986. The Board has entered into several settlements with the petitioner Union with regard to their service conditions. The petitioner which is a recognised trade union is entitled to agitate the matter with regard to the appointment of the 3rd respondent to the Board. The petitioner is concerned about the functioning of the 2nd respondent Board, and as such is entitled to question the appointment of the 3rd respondent as Managing Director on contract basis. Hence, the petitioner has locus standi to file this writ petition.”

These averments were established to be false. The registration of the first respondent under the Trade Unions Act had been cancelled as early as on 2-11-1992. It is not a registered and recognised union. In fact, it was pointed out that the one recognised association is the Karnataka Urban Water Supply and Drainage Board Officers' and Employees' Association and the first respondent does not have even a handful of members. The fact of cancellation of registration of the first respondent came to the knowledge of the appellant long after the disposal of the earlier Writ Petition No. 44001 of 1995 wherein the Court had given a finding that the first respondent has locus standi to challenge the appointment of the appellant to the post of Managing Director of the Board solely on the ground that it is a registered trade union. In our opinion, the High Court gravely erred in refusing to examine the question of locus standi on the ground that it is decided in the earlier writ petition which operates as res judicata and that the petitioners even otherwise have locus standi. Chapter III of the Trade Unions Act, 1926 sets out rights and liabilities of the registered trade unions. Under the said enactment, an unregistered trade union or a trade union whose registration has been cancelled has no manner of right whatsoever, even the rights available under the ID Act have been limited only to those trade unions which are registered under the Trade Unions Act, 1926 by insertion of clause 2(qq) in the ID Act w.e.f. 21-8-1984 defining a trade union to mean a trade union registered under the Trade Unions Act, 1926.”

“4.

Mr M.N. Rao, the learned Senior Counsel for the appellant has at the outset very fairly pointed out that as of today and in the light of the fact that the Corporation itself had voluntarily submitted that it was covered by the provisions of the Act the question of a dispute with regard to the liability of the Corporation was now largely academic, but has pleaded that as the employees in question were seasonal employees and the matter pertained to a long-gone period i.e. 1982-1988, the record pertaining to the employees was not available either with the Corporation or with the contractors and that in many a case those who stood to benefit were not even traceable, it would be appropriate that the impugned orders be quashed as they would not serve any useful purpose. It has also been pleaded that although there was no limit prescribed under the Act within which proceedings under Section 7-A could be initiated, but under the broad principle that a reasonable period ought to be read into the statute, the present delay of 16 years from 1982 could not be justified. The learned counsel for the respondents has, however, argued that the Tribunal and the High Court had granted a limited relief to the employees inasmuch that the examination of the claim was to be limited only to those employees who could be identified and that as the authorities below had exercised their authority with respect to a beneficent legislation for the weaker sections, it would be inappropriate to interfere with the impugned orders.

5.

We have heard the learned counsel for the parties and gone through the record. We do appreciate that the inaction on the part of the Commissioner to initiate proceedings within a reasonable time, has to be deplored. However, as the Corporation has itself submitted that it was covered under the Act and in view of the limited relief granted by the authorities below and by the High Court, we are disinclined to interfere with the matter at this stage. We accordingly dismiss the appeals but reiterate the recommendation that the amounts due from the Corporation will be determined only with respect to those employees who are identifiable and whose entitlement can be proved on the evidence and that in the event the record is not available with the Corporation (at this belated stage), it would not be obliged to explain its loss, or that any adverse inference be drawn on this score. With this very small modification, we dismiss the appeals.”

“8.

In this case, the delay of sixteen years would affect the consequential claim for arrears. The High Court was not justified in directing payment of arrears relating to sixteen years, and that too with interest. It ought to have restricted the relief relating to arrears to only three years before the date of writ petition, or from the date of demand to date of writ petition, whichever was lesser. It ought not to have granted interest on arrears in such circumstances.”

“17B. Liability in case of transfer of

establishment.—Where an employer, in relation to an establishment, transfers that establishment in whole or in part, by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally be liable to pay the contribution and other sums due from the employer under any provision of this Act or the Scheme or the Pension. Scheme or the Insurance Scheme, as the case may be, in respect of the period up to the date of such transfer:

Provided that the liability of the transferee shall be limited to the value of the assets obtained by him by such transfer.”

“…………As far as deciding the status of alleged workers as employees under EPF & MP Act, 1952 and determination of contribution due is concerned, I feel that until and unless the dispute regarding learners/apprentice is resolved, we cannot proceed further to determine dues and at this stage present employer who has taken over establishment after period of alleged non-enrollment cannot be held responsible for production of relevant records as the complaint has been made after at least 13 years despite the fact that complainant is a workers union leader and allegedly victim of non-enrollment. Further, the complainant Sri Birbal Rai has failed to submit sufficient material to enable undersigned in dealing with the issue. In fact he has not provided any evidence to support his complaint i.e. (1) he failed to provide details of alleged non-enrolled workers, (2) he failed to provide basis for his claim of contribution due amounting to Rs.7 crore. In fact though Sri Rai has first complained in January, 2009 with claim that he has all the evidence to support his complain, he could produce only a list of employees with ESI No. that too obtained from ESIC Office during proceedings dated 17/10/2011 & 15/11/2011 and copies of some wage slips for the period showing wages of a few hundred rupees per month.

Hence, as far as determination of contribution due in respect of eligible employees is concerned, Sri Birbal Rai is advised to get the dispute of learner/apprentice decided by approaching the competent authority under the Industrial Employment (Standing Order) Act, 1946 as already done by management and if it is decided by the competent authority decides that the said workers were not learners/apprentice then to approach EPF authorities with reasonable supporting documents i.e. proof regarding period of work and wages earned for necessary action at this end.

It is also made clear here that no reference is being made to the competent authority under the Industrial Employment (Standing Order) Act to resolve the dispute regarding status of alleged non-enrolled workers as apprentice/learner as under Section 13A of the said Act only employer or workers/workers representative can make a reference to the Authority………”

“1.

Whether the validity of Certified Standing Orders in respect of Jute Industry is in order or not.

2.

Whether the Jute Industry can engage the learners / Apprentices in terms of the Provisions laid down in the Certified Standing Orders or not.”

“1.

As per Rule 4 of the Bengal Industrial Employment (Standing Orders) Rules, 1946, the Standing Orders were certified by the Certifying Officer, Government of West Bengal, for the Jute Industries. As per rule 4(d), such establishment shall continue to be governed by the Group Standing Orders until such time as it submits separate Draft Standing Orders of its own and has it duly certified;

2.

As per clause 2(g) of the Certified Standing Orders, Jute Industry can engage apprentice.”

“…….. Accordingly, E.P.F Appeal No. 9 of 2012 is allowed. Matter is sent back on remand for causing fresh enquiry and inspection and by following the provision of Section 7A (2) of the Act by recording the evidence of the representative, Union and Management under oath and requiring them to produce the documents for inspection and discovery as provided in Code of Civil Procedure.

The R.P.F.C.II S.R.O. Howrah is directed to complete the enquiry and inspection on complaint within three months from the date hereof and pass necessary orders within two months thereof.”

“………During the course of hearing held on 17/05/2012, both the representatives of establishment and union had stated that have nothing to submit any documents and they have already submitted their submissions, the proceedings concluded and order were reserved for issuance on or before 31/05/2012………”

“……..Sri Birbal Rai has claimed that every worker has earned monthly wages of Rs.6,500/- for the period 1993 to 1996 and if it were to be accepted as true, these workers will automatically become excluded employees as during relevant period wage ceiling was much less than Rs.6,500/- for eligibility to become P.F. member. The wage ceiling was Rs.3,500/- for the period 01/11/1990 to 30/09/1994, Rs.5,000/- for the period 01/10/1994 to 31/05/2001 and is Rs.6,500/- from 01/06/2001 onwards……….

…………From the examination of list of employees with their date of membership of ESIC and PF, it is clear that they have been enrolled as P.F. member much after their membership in ESIC and to that extent, allegation of complainant is correct that the workers were not extended P.F. benefit from their date of joining. However, employer has explained this gap by claiming that these workers were engaged as learners and hence were extended ESIC benefit from their date of joining and P.F. benefit were extended only after their confirmation as employee as per the provision of the EPF & MP Act, 1952.

The contention of employer that complain is false appears to be convincing in absence of any complaints from any quarter including the complainant Sri Birbal Rai who himself joined as learners during the relevant period for 16 years and no observation from inspecting authorities of EPFO despite regular inspections and verification of records and as to why Sri Birbal Rai himself failed to complain when he joined the establishment in 12/1993 as per ESIC records but extended P.F. membership only in 04/1996.

On the other hand, at least 3 operating union representatives of the establishment have submitted letters stating that complain is false and that workers were engaged as learners during the period and hence no complain.

Hence, in the light of above, it is appear to be highly unlikely that at a stretch 800 workers were not extended P.F. benefit and nobody raised a finger despite presence of so many unions with national affiliation.

Further, there was and is a valid standing order for the establishment and the said standing order provides for engagement of workers as learners is an established fact and also accepted by the complainant vide his letter dated 15/12/2011…………..”

“………..The only contradiction is that the complainant submit that learners can only be freshers from I.T.I.s and can be paid stipends but not wages, however, the standing order does not elaborate on the nature of learners of his service conditions or period of learnership and at Para 2(g) simply states that "An apprentice is a learner who is paid an allowance during the period of training". Thus the issue of learner can be subject to different interpretations and hence is disputed.

However, as pointed by employer, the competent authority to decide the question as to application or interpretation of a standing order certified under the Industrial Employment (Standing Order) Act, 1946. (Labour Court constituted under the Industrial Dispute Act and the question may be referred to such Court by any employer or workmen or a trade union or other representative body of workmen).

Hence, the question regarding status of workers as learners or otherwise engaged by the establishment for the period 1993 to 1996 has already been referred to the competent authority by the establishment, the complainant may also raise the issue before the competent authority to decide the issue of status of alleged workers as learners or not.

Further, every employees of a covered establishment is eligible to become member of P.F. except those who are excluded on account of monthly wages above wage ceiling, but apprentices under the Apprentice Act and under standing order of an establishment are not employees.

(Section 2(f)ii of the EPF & MP Act, 1952 states employee means "engaged as an apprentice, not being an apprentice engaged under the Apprentice Act, 1961 (52 of 1961) or under the standing orders of the establishment").

Hence, until and unless these alleged workers are declared not to be learners under the standing order of the establishment, they will not come under category of employee and hence will not be eligible to be member of P.F.

From the above discussion following emerges:-

a)

The alleged worker's status as employee is under dispute i.e. if they are learner then they cannot be employee under EPF & MP Act and thus will not be eligible for any benefit under the Act. This dispute regarding status as learners/apprentice or otherwise can be resolved only by competent authority under Section 13A of Industrial Employment (Standing Order) Act, 1946 i.e. designated labour court but not be any authority under EPF & MP Act.

b)

If it is decided that they are not learners/apprentice and thus if come under definition of employee under EPF & MP Act may still be treated as excluded employees on account of drawing monthly wages of Rs.6,500/- per month against the wage ceiling of Rs.3,500/- upto September, 1994 and Rs.5,000/-from October, 1994 to May, 2011, if contention/claim of complainant Sri Birbal Rai is accepted.

c)

It is evident from the wage slips submitted by Sri Rai the actual wages drawn by the workers in the range of Rs.150/- to Rs.650/- and hence the claim of Sri Rai that each employee earned a wage of Rs.6,500/- is without truth and hence his claim of contribution due of Rs.7 Crore cannot be true and at most it will be a fraction of the alleged amount, still contribution due in respect of each worker can not be calculated in absence of details of their period of work and wages earned.

Now, in the light of above, 1 declare the complain of Sri Birbal Rai made first vide his letter dated 12/01/2009 to the effect that (a) employee share of P.F.

Contribution was deducted but not deposited; (b) that all alleged workers worked for equal period i.e. 1993 to 1996 and earned wages of Rs.6,500/- per month and; (c) that contribution is about Rs.7 crore to be false and baseless……..”

“Hence, as far as determination of contribution due in respect of eligible employees is concerned, Sri Birbal Rai is advised to get the dispute of learner/apprentice decided by approaching the competent authority under the Industrial Employment (Standing Order) Act, 1946 as already done by management and if it is decided by the competent authority decides that the said workers were not learners/apprentice then to approach EPF authorities with reasonable supporting documents i.e. proof regarding period of work and wages earned for necessary action at this end.

It is also made clear here that no reference is being made to the competent authority under the Industrial Employment (Standing Order) Act to resolve the dispute regarding status of alleged non-enrolled workers as apprentice/learner as under Section 13A of the said Act only employer or workers/workers representative can make a reference to the Authority.”