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Judgment
N. Paul Vasanthakumar, J.—In this batch, there are two sets of cases. In one set of cases i.e., W.P(MD) Nos. 11197, 11198, 11199,
11200, 11201, 11202, 11203, 11204, 11205, 11206 of 2005 and 296, 297, 298, 299, 300, 301, 302, 303, 304, 305, 306, 307, 308, 309,
310, 311, 312, 327, 328 of 2006, the awards passed by the Labour Court, Tiruchirapalli in I.D. Nos. 135/2000, 122/2000, 106/2000,
136/2000, 119/2000, 3/2001, 121/2000, 134/2000, 11/2001, 120/2000, 38/2000, 62/2000, 39/2000, 40/2000, 41/2000, 56/2000, 65/2000,
59/2000, 92/2000, 61/2000, 63/2000, 91/2000, 64/2000, 57/2000, 58/2000, 60/2000, 93/2000, 140/2000 and 141/2000 are challenged by
the BHEL management insofar as that portion of the award ordering reinstatement of the respective workmen.
In the other set of cases viz., W.P(MD) Nos. 10260, 10261, 10262, 10263, 10264, 10265, 10266, 10267, 10301 of 2005 and 5497, 5796,
5841, 5894, 5895, 5925, 5926, 5927, 5928, 5929, 5930, 5931, 5932, 5933, 5934, 5935 of 2006 are concerned, the concerned workmen have
challenge the respective award insofar as the rejection of backwages and continuity of service, permanent status and other attendant benefits are
concerned.
For easy understanding, in this common order, the parties would be referred to as ''Management'' and ''Workmen''.
The brief facts necessary for disposal of these writ petitions are as follows.
(a) The Management is an Engineering establishment engaged in the manufacture of boilers, boiler components, valves, suit blowers, etc.,
necessary for generation of electricity and also required by other industries including the Defence. Petitioner management is engaged in job work
based on the orders received from the customers as per the specifications and requirements.
(b) The Workmen were engaged temporarily on daily wage basis. They were appointed in such capacity for a specific period without any lien or
right to claim employment. They were not permanent employees and their term of employment comes to an end automatically by efflux of time.
After the period of employment is over, the workmen received their provident fund amount and did not raise any issue or dispute before any
Forum.
(c) In the year 1992, 13 persons who were similarly placed like that of the Workmen herein, filed W.P. No. 4601 of 1992 before the Principal
Bench at Madras for conferring permanent status, which was disposed of on 25.8.1999 with a direction to the Workmen to approach the
authorities under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, within a period of eight
weeks. It was further directed that on such application being made before the concerned authority, the authority was directed to issue notice to the
management and then consider the claim of the parties in accordance with law within a period of six months from the date on which the application
is made.
(d) According to the management, the Workmen did not choose to obey the directions of the High Court and in the year 1999, raised a demand at
the first instance against the management seeking permanent status u/s 2(a) of the Industrial Disputes Act, 1947, which resulted in reference to the
Labour Court, Tiruchirapalli.
(e) Another set of persons, who are also similarly placed, filed applications before the authority under the Tamil Nadu Industrial Establishments
(Conferment of Permanent Status to Workmen) Act, 1981 in the year 1992 and also filed W.P. Nos. 19617 and 19618 of 1992. The Deputy
Chief Inspector of Factories, Trichy, allowed the claim of permanency. Challenging the same the management filed writ petition before the High
Court, Madras, which was remanded by the learned single Judge to the authority to reconsider the same.
(f) The Workmen, who were respondents in the said writ petitions, filed W.A. Nos. 312 and 313 of 1995 and the Division bench of this Court by
order dated 5.11.1997, remanded the matter back to the authority to decide two issues i.e.
(1) Whether the appellants (Workmen) have worked for 480 days in 24 calendar months, and
(2) Whether the interrupted period of service if any or cessation of work, if any, brought about is an unfair labour practice.
The authority found the issues in favour of the workmen and therefore the similarly placed persons like that of the Workmen herein have taken
steps before the competent Forum.
(g) However, the Workmen herein did not choose to file any application before the authority nor did they have chosen to object their appointment
for a specific period at any point of time and therefore they are guilty of delay and laches. The workmen herein have belatedly approached the
authorities after about 7 years and have chosen to raise disputes u/s 2(a) of the Industrial Disputes Act, 1947, which culminated into the Industrial
Disputes in which the Labour Court ordered reinstatement without backwages as well as continuity of service. The said award of the Labour Court
insofar as the order of reinstatement is challenged by the management in these writ petitions and the Workmen have separately challenged the
denial of backwages and continuity of service in the other set of cases.
The Workmen have filed counter affidavits in the writ petitions filed by the management seeking to quash the order of reinstatement wherein it is
contended as follows.
(i) The workmen are ITI trained persons and were initially appointed as apprentices by the management after their names were sponsored through
the Employment Exchange. Those apprentices, on completion of their apprenticeship training were absorbed as skilled workers. This has been the
practice of recruiting the skilled workers by the management. Since the management gave apprenticeship training and spent huge money on the
workmen, who underwent training, the workmen are all entitled to be appointed on permanent basis.
(ii) According to the Workmen, after the completion of apprenticeship training, based on selection only the workmen were appointed, even though
temporarily. The workmen were left with no other option except to accept the temporary nature of appointment. The workmen perform the same
work performed by the permanent workers, during the temporary appointment period and some of the workmen''s performance were also found
excellent and certificate of appreciation were also given for their hard work, sincerity and dedication in work.
(iii) The Workmen further state that the management gives artificial breaks by issuing relieving and posting orders and the workmen even though
were given artificial breaks, actually put in about 336 days of continuous service in 12 calendar months during the year 1989-90 and more than
200 days in an year during their temporary employment. Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status
to Workmen) Act, 1981 states that if an employee is continuously in service for 480 days in 24 calendar months, he should be deemed to be a
confirmed employee. The said Act is applicable to the management and in spite of the same such permanent status was not given to the workmen.
(iv) It is further stated that in the said circumstances, the similarly placed workmen, viz., Mamundiraj and 18 others approached the authority under
the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, namely the Deputy Chief Inspector of
Factories, Trichy, and sought for permanent status. The authority granted permanency to Mamundiraj and Ors....
(v) The management took the matter to this Honourable Court and ultimately the First Bench of this Court gave a decision in favour of the
workmen and the same is reported in 1999 FJR 275 (M. Mamundiraj and Ors. v. The Management of Bharat Heavy Electricals Limited, Trichy
and Anr.) In the said judgment the Division Bench of this Court held that the petitioner management resorted to unfair labour practices of giving
repeated relieving and posting orders with artificial breaks and acted with mala fide. The Honourable Division Bench ultimately remanded the
matter to decide the two issues stated supra. The authority decided the two issues in favour of the workmen by order dated 5.7.1999 and ordered
that the management shall confer permanent status benefits thereof on the workmen.
(vi) The management complied with the said order of the authority and consequently the said Mamundiraj and 18 others were made as permanent
workmen. The Workmen herein, though worked for more than six years continuously with artificial breaks, were not given employment after
31.3.1993. Consequently, some of the workmen filed W.P. No. 4601 of 1992 and this Court directed them to approach the appropriate
authority. Therefore the workmen approached the conciliation machinery under the Industrial Disputes Act and filed claim statements seeking all
consequential benefits. Since the conciliatory efforts were failed, industrial disputes were raised, in which the Labour Court ordered reinstatement
without backwages and continuity of service.
(vii) The Labour Court considered the order passed in favour of Mamundiraj and others, who are the co-workers of the workmen herein and held
that the management contravened Sections 25F, 25H, 25G and 25N of the Industrial Disputes Act, 1947 in terminating the services of the
workmen. It is also stated that the said finding given by the Labour Court is based on materials and is a finding of facts based on evidence and the
said finding of facts cannot be interfered with as the same are not perverse finding.
(viii) As against the denial of backwages and continuity of service, the workmen have filed separate writ petitions and contended that they are also
similarly placed like Mamundiraj and others and their delay in approaching the Labour Court was only due to the pendency of writ petitions before
this Court and even assuming that there is any delay in approaching the Labour Court, backwages alone can be denied and continuity of service
ought to have been ordered.
Mr.K.Jayaraman, learned Counsel appearing for the Management of BHEL submitted that in view of the Constitution Bench Judgment,
Secretary, State of Karnataka and Others Vs. Umadevi and Others, the workmen have no right to claim employment and conferment of
permanency on the ground that they were employed without reference to employment exchange sponsorship or by appropriate advertisement
inviting applications and therefore their initial temporary appointment itself is illegal. The learned Counsel further submitted that in view of the
illegality in the initial appointment, the workmen have no right to claim employment on the basis of the prior engagement/appointment. Further, the
workmen were not terminated and they were only disengaged and therefore compliance of Section 25F of the Industrial Disputes Act, 1947 does
not arise. The learned Counsel also submits that since the Management is a Public Sector Undertaking it is coming under Article 12 of the
Constitution of India and therefore the said judgment of the Supreme Court will apply with full force. The learned Counsel also submitted that the
Constitution Bench Judgment was subsequently followed by the Supreme Court in the decision reported in Union Public Service Commission Vs.
Girish Jayanti Lal Vaghela and Others, and argued that the appointment made without reference to sponsorship through employment exchange or
inviting applications through advertisements is in violation of Article 14 and 16 of the Constitution of India and therefore such appointees will not
get any right to claim either permanency or reinstatement if they were already disengaged. The learned Counsel also submits that the claim of the
Workmen that they have worked for more than 240 days in 12 calendar months were disputed by the Management by stating in the counter
affidavit that the Workmen are to strictly prove the period of their engagement, made in the claim statement. The learned Counsel also denied the
contention raised by the Workmen that there is malice and discrimination and there was no vacancy till the year 2005 and therefore the Labour
court award is unable to be implemented. It is further argued that the workmen have kept quiet for 6 to 7 years and they are guilty of laches and
there is a distinction between the case of Manundiraj and Ors. and the Workmen herein and hence the workmen cannot seek the relief as ordered
in that case.
Mr.S.Vaidyanathan and Mr.D.Hariparanthaman, learned Counsels appearing for the respective Workmen submitted that the awards of the
Labour Court are based on the factual findings and relief was granted taking note of the relief granted to Mamundiraj and other workmen, which
was accepted by the Management. The said factual findings not being perverse, the same cannot be assailed. The learned Counsels further
submitted that the cessation of work is amounting to termination and retrenchment u/s 2(oo) of the Industrial Disputes Act, 1947, and the
mandatory conditions contained in Section 25N read with 25F having not been followed, the termination/disengagement is void and illegal. The
learned Counsels also argued that the Juniors appointed after the appointment of the workmen herein in similar fashion were retained and new
workmen were recruited and the said action is in violation of Section 25G and 25H of the Industrial Disputes Act, 1947. The action of the
management is discriminatory as the benefit extended to Mamundiraj and others are denied to the workmen herein, apart from engaging them as
temporary workmen, which is an unfair labour practice. It is also argued that the action of the management is in violation of Section 3 of the Tamil
Nadu Industrial Establishments (Conferment of Permanent Status to the Workmen) Act, 1981 and the retrenchment/disengagement of the
Workmen are with mala fide intention as the works were given to the contract workmen initially and thereafter on the job trainees. The action of
the management is contrary to the assurance given before this Court in paragraph 9 of the counter affidavit filed in WPMP No. 8720 of 1993 in
WP. No. 19617 of 1992. The learned Counsel also argued that the Constitution Bench Judgment relied upon by the management is not applicable
to the facts of these cases since that case arose under the Service law and not under the Industrial Disputes Act. It is further argued that the
respondents were selected for apprenticeship training after their names were sponsored through employment exchange and once they were
selected as apprentices through due process, again their names need not be sponsored through employment exchange for their appointment as the
apprentices are entitled to get preference for getting employment in the same establishment and the same was the practice followed by the
management all these years. Ultimately, the learned Counsel argued that Clause 4.4 and 6.1 of the recruitment rules of the BHEL management are
followed while appointing/engaging the respondents workmen by the petitioner management and therefore the management is not justified in now
contending that the workmen herein are back door entrants and were selected in violation of the recruitment rules. The learned Counsels also cited
various decisions to support their contentions.
As regards to the writ petitions filed by the Workmen, the respective counsels for the Workmen submitted that they were under the impression
that the management will follow the order passed in the case of Mamundiraj and others and absorb the workmen as per their turn, which the
management followed earlier. Further the petitioners have filed W.P. No. 4601 of 1992 and prayed for direction to the BHEL Management to
regularise the services of the petitioners therein from the date of their inception, which was disposed of on 25.8.1999 and thereafter the workmen
have approached the authorities under the Industrial Disputes Act and therefore there is no delay or laches on the part of the workmen. The
learned Counsels further submit that in any event the denial of backwages from 1999 and denial of continuity of service on the ground of delay is
unsustainable and the Workmen will be satisfied if they are given continuity of service for the purpose of fixation of pay and for terminal benefits
without affecting the seniority of others.
From the above pleadings and contentions, it has to be ascertained as to whether the Labour court is justified in ordering reinstatement of the
workmen and denying backwages and continuity of service to the workmen on the ground of delay in approaching the Labour Court.
Before considering the validity of the awards passed by the Labour Court, Tiruchirapalli, it is necessary to go into the background of the case
for proper appreciation of the matter in issue.
The fact that the management has selected apprentices after their names were sponsored through Employment Exchange and appointed them
subsequently after due selection on their completion of training in batches is not in dispute.
Some of the workers in the present writ petitions have filed writ petition before this Court in W.P. No. 4601 of 1992 seeking regularisation of
their services from the date of their appointment and a learned single judge dismissed the said writ petition on the ground that the petitioners have
not exhausted the alternate remedy of preferring a claim petition before the authority prescribed under the Tamil Nadu Industrial Establishments
(Conferment of Permanent Status to Workmen) Act, 1981, namely, the Deputy Chief Inspector of Factories, Trichy, within a period of eight
weeks and the said authority was directed to pass orders after hearing all the parties concerned within six months, by order dated 25.8.1999.
From the rival submissions made by the learned Counsel appearing for the Management as well as learned Counsel appearing for the
respective Workmen, the questions to be decided are as follows,
(1) Whether the appointment of the Workmen are proper or whether there is any substance in the contention that they were not selected as per the
recruitment rules ?
(2) Whether the claim of the workmen are similar to the claim made by Mamundiraj and 18 others, whose services were made permanent pursuant
to the order of the Deputy Chief Inspector of Factories, Trichy, and implemented by the Management ?
(3) Whether the findings of the Labour Court are proper and sustainable?
Question No. 1: Whether the Workmen were appointed by following the Recruitment Rules of the Management ?
As the learned Counsel for the management contended that the issue with regard to the selection and appointment of the workmen are contrary
to the recruitment rules, I directed the learned Counsel for the management to produce the Recruitment Policy of BHEL and the same was
produced before the Court. The Sources of recruitment as stated in the Recruitment Policy of BHEL are as follows,
Recruitment Plans - Induction Levels
4.4. Induction levels for Non-Executive categories in ''A'' group salary grades (Technical) are as under:
Unskilled group : A-I
Skilled group : A-III
Supervisory/
Technical Group : SA I/AVII
Induction in A-III and SA-I is normally by absorption of Artisan Trainees and Supervisory Trainees on satisfactory completion of their
apprenticeship/training under the Apprentices Act, 1961.
Source of Recruitment
Recruitment to induction and other levels, where approved by the competent authority, is normally made from the sources mentioned below:
(a) From Employment Exchanges as per the provisions of the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959.
(b) From open market through advertisement in the Press.
(c) By considering departmental candidates possessing the specified requirements.
(d) From reputed Engineering/Management Institutes through campus interviews.
(e) By absorption of deputationists from the Central/State Governments and other Public Sector Undertakings.
Note:
The question whether employees who join the Company from Government Departments on deputation can be permitted to opt for absorption in
the service of the Company from a retrospective date has been examined. It has been decided that option for retrospective absorption will not
normally be accepted by the Company. Where, for special reasons, it is considered necessary to accept the resignation/option for absorption from
a retrospective date, the matter should be referred to Corporate Personnel Department for a decision.
(f) From the Pool of Technical/Professional Personnel maintained by the N.C.S.T. and other Governmental agencies.
(g) By making reference to recognised associations and agencies who maintain rosters of suitable persons in different skills and specialisations for
promotion of the interests and welfare of Scheduled Castes/Scheduled Tribes, Ex-Servicemen and other similar special categories.
(h) Recruitment of specialists to stop brain drain or to repatriate them from foreign countries.
(i) Any other source as approved by the competent authority in exceptional circumstances.
It is not in dispute that the names of the Workmen were sponsored through Employment Exchange at the time when they were selected as
apprentices, i.e., at induction level and after completion of apprenticeship training, the Management was absorbing the Apprentices in batch by
batch after issuing interview call letters and by due selection in the post of Artisan Grade-IV. Sample of interview call letters issued by the
Management was filed before the Labour Court, which was marked as Ex.W-4 in I.D. No. 38 to 41 of 2000. The workmen were duly inducted
as Apprentices and thereafter absorbed as Artisan as per the above rule, viz., Rule 4.4. It is not stated in the rules that after completion of the
Apprenticeship training, their name should be once again sponsored through the Employment Exchange for absorption. When such is the factual
position, it is not open to the Management to contend now that the names of the Workmen were not sponsored through Employment Exchange at
the time of their absorption/appointment and therefore they should be treated as back door entrants. All ITI holders are given opportunity for
selection to the apprenticeship training through the employment sponsorship.
The decision cited by the learned Counsel for the Management, reported in Secretary, State of Karnataka and Others Vs. Umadevi and
Others, deals with the appointment of Daily wagers/Temporary employees contrary to the recruitment rules, where the claim of the employees
were to prevent the Government by making regular recruitment on the ground that they are entitled to get absorption and regularisation. Since the
appointment of the temporary employees in that case was found contrary to the recruitment rules, in para 41 of the Judgment the Honourable
Supreme Court held as follows,
It is argued that in a country like India, where there is so much poverty and unemployment and there is no equality of bargaining power, the
action of the State in not making the employees permanent, would be violative of Article 21 of the Constitution. But the very argument indicates
that there are so many waiting for employment and an equal opportunity for competing for employment and it is in that context that the Constitution
as one of its basic features, has included Articles 14, 16 and 309 so as to ensure that public employment is given only in a fair and equitable
manner by giving all those who are qualified, an opportunity to seek employment. In the guise of upholding rights under Article 21 of the
Constitution of India, a set of persons cannot be preferred over a vast majority of people waiting for an opportunity to compete for State
employment. The acceptance of the argument on behalf of the respondents would really negate the rights of the others conferred by Article 21 of
the Constitution, assuming that we are in a position to hold that the right to employment is also a right coming within the purview of Article 21 of the
Constitution. The argument that Article 23 of the Constitution is breached because the employment on daily wages amounts to forced labour,
cannot be accepted. After all, the employees accepted the employment at their own volition and with eyes open as to the nature of their
employment. The Governments also revised the minimum wages payable from time to time in the light of all relevant circumstances. It also appears
to us that importing of these theories to defeat the basic requirement of public employment would defeat the constitutional scheme and the
constitutional goal of equality.
Here in this case, the Workmen were appointed as per the recruitment policy and rules followed by the Management all these years and the
Workmen were originally selected for apprenticeship training after their names were sponsored by the Employment Exchange and then they were
selected by a Selection Committee after interview and thereafter absorbed. Hence the entry of the workmen in the service of the management as
Apprentices and their subsequent appointment cannot be treated as back door entry in the light of the recruitment policy and rules of the
Management.
The Workmen concerned are ITI holders. As stated above, they were sponsored through the Employment Exchange and selected for
apprenticeship training and after the training, the Apprentice Trainees were absorbed batchwise after selection upto the 29th batch in Fitter trade
as admitted by MW-1 before the Labour Court. The said practice, namely, absorption of the Apprentice Trainees is also approved by the
Honourable Supreme Court in the decision reported in Kripa Shankar Chatterji Vs. Gurudas Chatterjee and others, In the said judgment in para
12 it is held as follows,
In the background of what has been noted above, we state that the following would be kept in mind while dealing with the claim of trainees to
get employment after successful completion of their training:
(1) Other things being equal, a trained apprentice should be given preference over direct recruits.
(2) For this, a trainee would not be required to get his name sponsored by any employment exchange. The decision of this Court in Union of India
(UOI) and Others Vs. N. Hargopal and Others, , would permit this.
(3) If age bar would come in the way of the trainee, the same would be relaxed in accordance with what is stated in this regard, if any in the
concerned service rule. If the service rule be silent on this aspect, relaxation to the extent of the period for which the apprentice had undergone
training would be given.
(4) The concerned training institute would maintain a list of the persons trained year wise. The persons trained earlier would be treated as senior to
the persons trained later. In between the trained apprentices, preference shall be given to those who are senior.
The above said decision is followed in the subsequent decision reported in (2000) 5 SCC 438 : 2000 (3) LLN 20 (U.P. Rajya Vidyut Parishad
Apprentice Welfare Association and Anr. v. State of U.P. And Ors.)
It is the case of the workmen that after 1993, the Workmen were deliberately not given permanent posting as given to the previous batch-
mates and they were given appointment only as temporary workmen for 2 to 6 years with artificial breaks even though they were also selected and
appointed as per the recruitment Rule 4.4, at the induction level of non executive categories in ''A'' group salary grades (Technical) appointments.
The Workmen, who are parties in these writ petitions are all selected as per Rule 4.4 and they have satisfactorily completed their
Apprenticeship Training under the Apprentices Act, 1961. Hence I am of the view that selection of the workmen as Apprentices and also their
subsequent appointments are as per the recruitment policy of the management, particularly as per the Rules 4.4 and 5(i). The contention that at the
time of appointment, their names were not sponsored through the employment exchange is unsustainable in view of the Recruitment Policy Rule
4.4, extracted above.
Question No. 2: Whether the right of the Workmen, who are all parties in these writ petitions are similar to that of Mamundiraj and 18 others?
The similarity of the selection to Apprenticeship Training and subsequent selection and appointment given to Mamundiraj and 18 others as well
as to the workmen herein are admitted by the management. A Division Bench of this Court in W.A. No. 312 and 313 of 1995 considered the case
of the said Mamundiraj and 18 others and passed orders on 5.11.1997. The said decision is reported in 1999 FJR 215. The Division Bench
deprecated the practice adopted by the Management and directed the concerned authority under the Tamil Nadu Industrial Establishments
(Conferment of Permanent Status to Workmen) Act, 1981 to find out as to (1) Whether the Workmen worked for 280 days in 24 calendar
months, (2) Whether the interrupted period of service if any or cessation of work if any, brought about is an unfair labour practice, keeping in view
the observations made in the earlier part of the judgment and held that if the answer is in the affirmative, the workers would be entitled to
conferment of permanent status with effect from the date of termination from service with all other consequential reliefs. The authority under the Act
was directed to determine the above referred questions within three months after affording opportunity of hearing to both parties. The Division
Bench in the said judgment extracted the settled principles emerged from the decided cases relied on by the learned Counsel for the appellants,
which are extracted below,
The settled principles emerged from the preponderance of the decided case relied on by learned Counsel for the appellants are:
(1) The perception of continuous service by the deeming definitions of Section 25B of the Industrial Disputes Act, Section 2(c) of the Payment of
Gratuity Act and Section 49 of the Factories Act are in pari materia with the provisions of Section 3 of the 1981 Act.
(2) For counting the continuous service, the period of interruption has to be counted as provided by the deeming provisions of the respective Act
for conferring the benefits provided by the respective Act.
(3) The non-employment or break in service while in employment must be considered as some act on the part of the employee which has the effect
of terminating the contract of employment, i.e., if there arises a non-employment for the justifiable termination could be treated as break in service.
(4) Conferment of permanent status on an employee or a workman is intended to bring about an improvement in the conditions of the
labourer/workman thus fulfilling the constitutional mandate of providing justice to poor oppressed class of the society apart from meeting the
requirements of the interest of the general public to maintain tranquility and peace in the industrial world, besides the development of the industry.
(5) The legislation, while conferring the permanent status on a workman, has taken note of all the malpractices prevalent in the industrial
establishments to the effect that the workmen, though in employment for long period of time, are deprived of the benefits which a permanent
workman gets, as they are treated not permanent or are treated as temporary labourers by using the terminology of temporary or casual labourers,
depriving the workmen of the monetary benefits which are incidental to the status of a permanent workman. The legislation had attempted to fulfil
the mandate of Article 46 of the Constitution of India and taken a step forward that the same is not frustrated.
(6) It was observed that though the workmen used to be in the service of the employer for a specific period provided by the statute, yet the
employer, with an ulterior motive, or with malice and with an intention to deprive the workmen of their monetary benefits, practices or uses a
particular terminology in employment for escaping from the statutory duty cast on them.
(7) Rendering of continuous service, the relationship of master and servant the contract of employment are not synonymous. They are different
concepts. It is the nature of employment which is relevant consideration for conferment of permanent status on an employee. Specific reference
was made to (1985) II LLJ 252.
(8) The statute has provided statutory period of the deemed period of employment for conferment of the status of permanent employee with an
object and intention to cover the malpractices referred to above or where the employer deliberately discharges the workman in order to effect a
break in service, and again re-employ him as a fresh workman, without continuity of service. The conferment of permanent status by operation of
law is to undo the malpractices prevalent in the industrial field.
(9) The period of non-employment or the period of discharge cannot be counted for the purpose of giving the benefit of continuity of service,
unless the workman is reinstated by a process known to law by which the workman automatically gets the continuity of service.
(10) It is only the period provided by the Legislature by enacting the deeming provision for counting the days towards the continuous service for
which the workman has not actually worked, could be counted, for the purpose of continuous service.
(11) It was specifically observed in State Bank of India, Madras Vs. Central Government Industrial Tribunal, Madras and others, , while giving the
meaning to the expression ''continuous service'' (page 160):
The argument of Sri Narayanaswami that there should have been a subsisting contract of employment during the entire period of 12 months for
calculating 240 working days may have reference to Section 25B(1), but is not supported by the plain phraseology of Section 25B(2)(a)(ii) of the
Act (supra). It appears to us that the thrust of the above provisions is the existence of the relationship of master and servant for the period during
which a workman has actually worked during the preceding 12 months from the relevant date, and not the existence of a contract of employment
during the entire period of 12 months. To hold otherwise would amount to making Section 25B(2)(a)(i) and 25B(2)(a)(ii) of the Act redundant and
defeating the intention of the Legislature. The deeming provision in Section 25B(2) of the Act by fictionally treating interrupted service, under
certain conditions also as continuous service, was introduced by the Legislature apparently to mitigate the hardships of a workman who is made to
actually serve under an employer, intermittently, but actually work for him for a period of not less than 240 days in the preceding 12 months from
the date his services are terminated.
In regard to cessation of work, the Division Bench observed as follows,
Cessation of work, as envisaged by the Act, does have a different colour and is different from the discharge of employment or ceasing the
relationship of employer and employee or subsistence of relationship of master and servant. For conferment of permanent status, the continuity of
relationship of employer and employee or relationship of master and servant cannot be termed to be of paramount consideration especially when
an end to the said relationship has been brought about by the employer for no fault of the workman if we may hasten to add, especially in violation
of the public policy provided by the 1981 Act.
As observed in the earlier part of our judgment that the breaks in service, if any brought out in the chart of the days the appellants have worked it
can be reasonably inferred that the respondent has restored to unfair labour practice and the discharge of the appellants for cease of relationship of
master and servant even if assume to be quint-essential suffers form the vice of malice apart from being in violation of the States policy. If I may say
so, it would be a void order. The workmen would be deemed to be in service when the cessation of work has been brought about by the
employer for extraneous consideration, as in the case in hand.
As directed by the Division Bench in the above referred judgment, the authority concerned, namely the Deputy Chief Inspector of Factories,
Trichy, gave a factual finding that the said Mamundiraj and 18 others have satisfied the conditions for conferment of permanent status under the
Act and they were ordered to be conferred permanent status by the Management. The relevant portion of the order of the authority dated
5.7.1999 reads as follows,
As per the direction of the High Court of Madras, two things have to be examined and decided. The first one is whether the appellants have
worked for 480 days in preceding 24 calendar months. The appellants have produced the documents to the effect that they have worked for more
than 480 days in preceding 24 calendar months. The respondent have also admitted the above facts. As such the answer for the first question is
affirmative.
The second question to be decided is whether the interrupted period of service, if any or cessation of work if any, brought about is an unfair labour
practice. The respondent have stated that the cessation of work was not due to the fault of the respondent and in any event the petitioners had not
approached the respondent for work during the period of disengagement. They further stated that during the period of disengagement no substitute
have been engaged by the respondent. But the plea of the Management is not reasonable since it is not possible for the employees to approach the
respondent during the period of disengagement. The Management/Respondent have not produced any documents relating to the non-employment
in this regard. They further stated that as per the Factories Act, the attendance register has to be kept for the period of three years and as a
documents sought for production are for more than 3 years and as they are not available no adverse inference could be drawn. The respondent are
well aware that the appellants are proceeding in the appropriate forums for redress even before their termination from the respondent
establishments. As such they have to keep all the records pertaining to this case for production before the legal forum. But they have failed to do
so. In the absence of the documents, the statement of the respondent could not be considered and taken into account. Unless or otherwise
specifically proved by the respondent the break in service cannot be considered due to the fault of the appellants. The burden of proof that the
breaks/cessation of work is not due to the fault of the employee but due to the fault of management does not lies upon the petitioner, because it is
not possible for the employees to prove so. So the burden of proof lies with the management/respondent. Mere production of Register of
Workmen maintained under Rule 6(1) of the said Act alone is not sufficient to establish the view of the respondent.
At the beginning of enquiry, the respondent have assured that they will provide employment for the above stated workmen shortly. Even though so
many month have passed, the respondents failed to fulfill the assurance.
The Rule 6(4) of the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Rules, 1981, envisages that the
Inspector after examining the representation of after making enquiries may issue suitable direction to the employer for the rectification of the register
in Form I or for the issue of orders conferring permanent status to the workman concerned.
In the light of the foregoing the plea of the applicants are genuine and appropriate within the scope of law and as such they are entitled for the
statutory benefits incorporated in the said Act. The answers for the two questions put forth by the High Court of Madras are affirmative and hence
all the applicants are entitled to the conferment of permanent status with effect from the date of termination of service with all other consequential
relief. Accordingly it is hereby directed the respondent to issue orders for conferring permanent status to all the applicants/petitioners with effect
from the date of termination of service with all other consequential relief.
The Management also accepted the said finding and made the said Mamundiraj and others as permanent workmen and they are still continuing in
the services of the Management. The only objection raised by the learned Counsel for the Management is that the workmen herein were silent and
they have not approached the authority or the Labour court instantaneously and therefore they are guilty of laches and no relief could have been
granted by the Labour court for reinstatement.
To counter this argument, the learned Counsels for the Workmen submitted that some of the workmen filed W.P. No. 4601 of 1992 before
this Court and the writ petition was disposed of and orders were passed only in the year 1999 and thereafter they approached the Labour Officer
and raised the respective Industrial Disputes. Insofar as the persons who are not parties before the High Court in W.P. No. 4601 of 1992 it is
stated that they enquired about their disengagement and the Management orally stated that they can wait till the matter in issue in Mamundiraj and
others are decided by the authorities concerned. The learned Counsels for the Workmen therefore submitted that there are no laches on the part of
the workmen and they were bona fidely prosecuting their claim before this Court and subsequently through the Labour court. In the above writ
petition, i.e., W.P. No. 4601 of 1992, the stand taken by the management was that the workmen have not exhausted the alternate remedy by way
of raising Industrial Dispute under the Industrial Disputes Act, 1947. The said writ petition was disposed of by order dated 25.8.1999 by giving
direction to the workmen to approach the authority constituted under the Act and the authority was directed to pass orders within a period of six
months from the date on which the application is made. The learned Counsel also submitted that since the services of the workmen were
disengaged by the Management due to which they are not in employment, they could not seek the status of permanency before the authority,
constituted under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and they have rightly
chosen to raise Industrial Disputes before the Labour Court.
It is also argued by the learned Counsels for the workmen that in paragraph 9 of the counter affidavit filed in W.P.M.P. No. 8720 of 1993 in
W.P. No. 19617 of 1992, it was stated by the Management that there is no vacancy available and therefore the Workmen cannot be engaged
further. It is also stated that the Management regularised the services of the Apprentices belonging to 29th batch in Fitter trade, 26th batch in Sheet
metal and 36th SC batch in Fitter trade and subject to the vacancies persons like the workmen will be offered employment on the basis of their
seniority. The reason for non-employing the workmen, who are parties in these writ petitions, is that the Company has no sanction for the post for
absorbing these casual employees and further there is a ban by the Government of India on recruitment and hence the Management is not in a
position to offer employment to the Workmen. It is also stated that all the Workmen were considered according to their seniority for permanent
absorption. The said counter affidavit filed in the above miscellaneous petition finds a place in the typed set of papers filed by the Workmen in
W.P. Nos. 5497 and 5796 of 2006 at page Nos. 89 to 91. No other plea as raised now was raised by the Management and therefore the learned
Counsel for the workmen submitted that the Management is estopped from contending all these issues at this stage when admittedly vacancies are
available and recruitment process is now going on. The learned Counsel for the Workmen further contended that in any event Section 25H of the
Industrial Disputes Act, 1947, gives preference to the workmen who are already employed and subsequently retrenched for future vacancies. On
the strength of the said order passed by the authority under the Act giving permanent status to the said Mamundiraj and 18 othes, the learned
Counsel for the workmen submitted that the workmen herein are also similarly placed and the action of the Management is discriminatory and
violative of Article 14 of the Constitution of India.
Since there is similarity between Mamundiraj and others and the workmen concerned herein, except they belong to different batches as
admitted by the Management, I am of the view that the petitioners herein are also entitled to get equal treatment like that of Mamundiraj and
others, even tough they have not approached the appropriate forum immediately. The employment notices issued by the Management clearly states
that there were 90 vacancies in the post of Artisan-IV and 250 vacancies in various posts in the year 2005. Therefore the contention that the
workmen could not be permanently absorbed due to want of vacancy is not sustainable any more.
Question No. 3: In the light of the said conclusion it has to be ascertained as to whether the findings of the Labour court is proper and sustainable.
The Labour court in para 30 of its award gave a finding that the Workmen were given Apprenticeship training after being sponsored by the
Employment Exchange and after completion of the training, they were given appointment and the Management maintained a list of apprentices in
batches and were appointing them according to their seniority and selection by the Committee. Taking note of the said factual aspect the Labour
Court found that the Claim of the Workmen cannot be rejected on the ground that the employer is not under obligation to offer employment. The
disengagement of the workmen without giving any notice or without giving any compensation is also admitted by MW-1 during the course of his
evidence and it is also admitted by MW-1 that there is no difference between Mamundiraj and 18 others and other group of workers and the
Workmen who are parties in these writ petitions, except that they belong to different batches. Hence the Labour Court followed the Division
Bench decision of this Court in Mamundiraj case reported in 1999 FJR 215, cited supra.
It is also held by the Labour Court that the cessation of work of the workmen is not due to the act of the workmen or it can be termed due to
any fault on the part of the workmen even though they had put in continuous service of more than 240 days in 24 months and therefore that is in
violation of Section 25F of the ID Act. The Labour Court also gave a finding that Section 25G and 25H of the ID Act are violated by the
Management since some of the juniors to the petitioners before the Labour Court were given re-employment and subsequently some fitters had
been given appointment which was justified on the ground that some of them have obtained gold medals. The factum of appointment of juniors
having been proved, the Labour Court found that Section 25G and 25H of the ID Act are violated. Since the workmen were not given any notice
prior to the retrenchment, there is violation of Section 25N of the ID Act. The Labour Court heavily relied upon the decision made by the Deputy
Chief Inspector of Factories, Trichy in the case of Mamundiraj and 18 others who were given the status of permanency as per the judgment made
by the Division Bench reported in 1999 FJR 215.
In regard to the delay and laches raised by the management, the Labour Court found that the litigation between the Management and
Mamundiraj and others were pending till 1999 and the writ petition was filed by some of the Workmen herein in the year 1992 were also pending
till 1999 before this Court and after the disposal of the same, the workmen were under the impression that they will be given similar treatment by
the management and the same having been denied they were compelled to move the Labour Officer and therefore the delay is properly explained
and hence the delay and laches alleged by the Management is not proved.
The Workmen are right in approaching the Labour Court as they could not go before the Deputy Chief Inspector of Factories for permanency.
The Honourable Supreme Court in the decision reported in 2001 (3) LLN 86 (Tamil Nadu Civil Supplies Corporation Workers Union v. Tamil
Nadu Civil Supplies Corporation Ltd.) in paragraphs 5 and 6 held as follows,
In the meantime the first respondent terminated the services of a number of workmen. The Union therefore, filed a writ petition claiming a
blanket injunction that the workers should not be relieved from their work. The writ petition, filed by the Union was dismissed by a Single Judge on
10 April, 1997 by holding that the union was not entitled to have a blanket injunction of the nature sought. It was held that the employees whose
services were terminated would take such action as is available to them in accordance with law. Against the dismissal of the writ petition the
petitioners filed an appeal. In the meantime a number of workmen had filed writ petitions claiming permanency. By the impugned judgment, dated
14 October, 1997 the appeal of the union came to be disposed of along with the numerous writ petitions filed by workmen.
The Division Bench held that the questions raised, by the appellants herein in that appeals were the same which were pending in the writ petition
filed by the 1st respondent against the orders made by the Inspector of Labour. The Division Bench held that the union had to wait the final
outcome of those writ petitions. The Division Bench also agreed with the conclusion of the Single Judge that since the services of the employees
had been terminated, it was for the employees to seek their remedies in a manner known to law. We find no infirmity with the reasoning of the
Division Bench and see no reason to interfere.
The workmen having been not in employment on the date when the claim petition was filed and they having been disengaged by the
Management, the Workmen are not entitled to seek permanency and the issue involved before the Labour Court was whether the disengagement
of the Workmen are fair and proper and what relief could be given to the workmen who are disengaged by the management. The Labour Court
ultimately moulded the relief and ordered reinstatement without backwages and continuity of service. Insofar as the regularisation claim of the
workmen, the Labour Court directed the workmen to approach the concerned authority viz., the Deputy Chief Inspector of Factories, Trichy, for
appropriate relief. Hence I hold that there is no perversity in the factual findings of the Labour Court.
As already discussed by me in the earlier paragraphs, the workmen, whose rights are involved in these cases are all selected as Apprentices
after their names were sponsored through Employment Exchange and all of them have obtained apprenticeship certificates. The management
invited the workmen for interview on the basis that they have completed the Apprenticeship training and after due selection only the workmen were
appointed by the management. The recruitment Rule 4.4 clearly contemplates appointment of Apprentices on their completion of training. The
sources of recruitment as contained in Rule 6.6 also empowers the Management to make appointment from any other source as approved by the
competent authority in exceptional circumstances. Hence it is clear that the appointment of the petitioners on their completion of apprenticeship
training is permissible under the recruitment rules and it is also a source of appointment as approved by the competent authority followed by the
management till 2004. Hence the selection and appointment of the workmen by the management cannot at all be treated as contrary to the
recruitment rules and once the workmen are selected as per the recruitment rules, their entry shall not be termed as back door entry.
Yet another factor which is in favour of the workmen concerned in these writ petitions are that it is an admitted case that all the Apprentices
who completed their training batchwise were given appointment as could be seen from the deposition given by MW-1 before the Labour Court.
Even before this Court the Management was unable to distinguish as to how the claim of Mamundiraj and 18 others are different from that of the
workmen involved in these writ petitions. In the absence of any differential claim than the one which was pointed out by the learned Counsel for the
management that they were in the earlier batch of apprentices, in all other respects, the selection method followed for apprenticeship training,
selection and for appointment are one and the same. Management having accepted to implement the order of the Deputy Chief Inspector of
Factories, Trichy, granting permanent status to the said Mamundiraj and others, is bound to apply the same yardstick to the workmen who are
parties in these writ petitions and treating the workmen differently is definitely in violation of Article 14 of the Constitution of India. It is well settled
in law that even in discretionary matters Article 14 should be followed otherwise, it will be discriminatory and violative of the provisions of the
Constitution of India.
The contention raised by the Management before this Court earlier when some of the workmen prayed for absorption was, there was no
vacancy and an assurance was given in the counter affidavit filed in WPMP. No. 8720 of 1993 in WP No. 19617 of 1992 that as and when
vacancy arises the claims of the petitioners in that writ petition will be considered. Another reason stated was that there was a ban order issued by
the Central Government in filling up the post. Now there is no ban order in force and as stated supra, the Management invited applications to fill up
90 vacancies in Artisan-IV post and 250 vacancies in various posts in the year 2005, by issuing subsequent notification published in the
Employment News, 24-30, June, 2006. Hence the said ground is also not available to the Management from the year 2005.
It is contended by the learned Counsel for the Management that the Workmen have closed their PF accounts and received the same without
any demur and therefore it is not open to them to claim reinstatement and other reliefs before the Labour Court. The learned Counsel for the
Workmen contended that mere acceptance of the P.F. amount will not disentitle the workmen to maintain the claim petition before the Labour
Court as there is no estoppel or waiver of fundamental right. In the decision reported in Nar Singh Pal Vs. Union of India and Others, similar issue
arose as to whether acceptance of retrenchment compensation will be a bar to challenge the termination order. In para 13 of the Judgment, the
Honourable Supreme Court held as follows,
The Tribunal as also the High Court, both appear to have been moved by the fact that the appellant had encashed the cheque through which
retrenchment compensation was paid to him. They intended to say that once retrenchment compensation was accepted by the appellant, the
chapter stands closed and it is no longer open to the appellant to challenge his retrenchment. This, we are constrained to observe, was wholly
erroneous and was not the correct approach. The appellant was a casual labour who had attained the ""temporary"" status after having put in ten
years of service. Like any other employee, he had to sustain himself, or, maybe, his family members on the wages he got. On the termination of his
services, there was no hope left for payment of salary in future. The retrenchment compensation paid to him, which was only a meagre amount of
Rs. 6350, was utilised by him to sustain himself. This does not mean that he had surrendered all his constitutional rights in favour of the
respondents. Fundamental Rights under the Constitution cannot be bartered away. They cannot be compromised nor can there be any estoppel
against the exercise of Fundamental rights available under the Constitution....
In view of the said decision, the contention of the management is bound to be rejected and the argument advanced by the learned Counsels
appearing for the workmen is accepted.
I am also in entire agreement with the award of the Labour Court that the Workmen who are parties in these writ petitions are not entitled to
get backwages and continuity of service. It is the specific case of the workmen that they were engaged from 1988 to 1993 and thereafter they
were disengaged and there is cessation of work. Till 2000 the workmen have not approached the Labour Court for one reason or the other and if
continuity of service is ordered to the workmen, it will definitely affect the seniority of the persons who are in service. The workmen having not
worked in all these years they are also not entitled to get backwages on the principle of ''No Work, No Pay''.
(a) The power of the High Court under Article 226 of Constitution of India, to interfere with the findings of the Labour Court is considered by
the Honourable Supreme Court in the decision reported in Indian Overseas Bank Vs. I.O.B. Staff Canteen Workers'' Union and Another, and in
para 21 it is held thus,
21... If on the facts proved, the findings recorded by the Tribunal are justified and could not be considered to be based upon ""no evidence"", there
is no justification for the High Court in exercising writ jurisdiction to interfere with the same....
(b) In the recent decision reported in Amrit Vanaspati Co. Ltd. Vs. Khem Chand and Another, the Honourable Supreme Court in para 9 (SCC
p.332) held thus,
We have also perused the award dated 7.12.1989 passed by the Labour Court. The Labour Court in the concluding part of its award has held
that the charges framed against the workman are charges of misconduct of serious nature and, therefore, it agreed with the argument of the
management that it was not in the interest of the management and industrial peace to retain such a person in service who was guilty of creating
indiscipline in the factory which affects the production of the factory adversely. On the basis of the aforesaid discussion, the Labour Court came to
the conclusion that the management had succeeded in proving the charges against the workman before the Court. Hence, the Labour Court held
the dismissal of the workman from service from 8.3.1976 by the management as justified, proper and lawful and the workman concerned was held
to be not entitled to receive any benefit or relief. However, the High Court, as stated earlier, interfered with the factual and categorical findings of
the Labour Court and ordered reinstatement with back wages and other benefits. In our opinion, the High Court while exercising powers under
writ jurisdiction cannot deal with aspects like whether the quantum of punishment meted out by the management to a workman for a particular
misconduct is sufficient or not. This apart, the High Court while exercising powers under the writ jurisdiction cannot interfere with the factual
findings of the Labour Court which are based on appreciation of facts adduced before it by leading evidence. In our opinion, the High Court has
gravely erred in holding that the evidence of Respondent 1 was not considered by the Labour Court and had returned the finding that the evidence
of Respondent 1 did not inspire any confidence. We are of the opinion that the High Court is not right in interfering with the well-considered order
passed by the Labour Court confirming the order of dismissal.
(c) This Court in the decision reported in Anna Transport Corporation Ltd. Vs. Presiding Officer, Labour Court and Another, in para 11 held thus,
As a general rule, the High Court would not interfere unless the order of the Labour Court is perverse or not based on any evidence or grossly
illegal or based on a complete misconception of law or that no reasonable man would come to the conclusion to which the Labour Court has
arrived at.
I have followed the said decision in the decision reported in P. Venkatesan Vs. The Management of Pattukottai Azhagiri Transport Corporation
Ltd., (now renamed as Tamilnadu State Transport Corporation) and The Presiding Officer, Labour Court,
Since I find there is no perversity in the finding of the Labour Court, I confirm the awards of the Labour Court and dismiss all the writ petitions,
without costs. As I am confirming the awards of the Labour Court, ordering reinstatement, the management is directed to reinstate the workmen in
their respective posts within one month from today. The workmen are entitled to get continuity of service from the date of the award, but without
backwages. Connected miscellaneous petitions are also dismissed.