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Judgment
Honourable Mr. Justice K. Chandru
The petitioner in this writ petition seeks for a declaration declaring that the decision of the third respondent Assistant Provident Fund
Commissioner, Sub Regional Office, Trichy, dated 17.10.2012 directing the first respondent Neyveli Lignite Corporation (for short NLC) to hold
an election consisting of the members of the two recognized unions for electing representatives of employees to the NLC P.F. Board of Trust as
illegal, null and void and contrary to Regulation 79-C(3) of the Employees Provident Fund Scheme, 1952. Since the matter involves interpretation
of Regulation 79C(3), it is necessary to extract the entire regulation 79C, which reads as follows :
79C. Composition of the Board of Trustees of the exempted establishments and the terms and conditions of service of the trustees.-
(1) The Board of Trustees of the establishment granted exemption under clause (a) of sub-section (2) of section 17 of the Act shall consist of not
less than two and not more than six representatives each of the employers and employees. The number of trustees shall be so fixed, as to afford, as
far as possible, representation to employees of each branch or department of the establishment. In the case of common provident fund for a group
of two or more establishments, there will be at least one representative each from the participating establishments:
(2) The employer shall nominate his representatives on the Board of Trustees from amongst the officers employed in managerial or administrative
capacity in the establishment.
(3) The representatives of the employees, on the Board of Trustees shall be nominated or elected in the following manner, namely:
(a) wherever there is a union recognised by the employer under the Code of Discipline in industry or under any Act, such union shall nominate the
representatives of the employees;
(b) where there are more than one trade union recognised by the employer, the representatives of employees shall be elected by the members of
the union in an election to be held for the purpose of any working day;
(c) where there is no union recognised by the employer under the Code of Discipline in industry or under any Act but there are more than one
registered union, functioning in the establishment, the union having the largest number of members, subject to a minimum of 15 per cent
membership, shall have the right to nominate employees representatives; and in case there is only one registered union, it shall have the right to
nominate the employees representative, provided it has a minimum of 15 per cent membership.
(4) The employer shall nominate one of his representatives on the board to be the Chairman thereof. In the events of equality of votes, the
Chairman may exercise a casting vote.
(5) The terms of office of the Trustee shall be five years from the date of election or nomination. An outgoing Trustee shall be eligible for re-
election or re-nomination. A Trustee elected or nominated to fill the casual vacancy shall hold office for the remaining period of the term of the
trustee in whose place he is elected or nominated.
(6) A person shall be disqualified from being a trustee if he,
(a) is declared to be of unsound mind by a competent court; or
(b) has been convicted of an offence involving moral turpitude; or
(c) is an undischarged insolvent; or
(d) is an employer of an exempted or un-exempted establishment which has defaulted in payment of any dues under the Act.
(7) A person shall cease to be a Trustee of the Board if,
(a) he ceases to be an employee of the establishment; or
(b) he ceases to be a member of the provident fund of the establishment; or
(c) the union on whose behalf he was elected or nominated, ceases to be recognised by the employer; or
(d) he fails to attend three consecutive meetings of the Board without obtaining leave of absence from the Chairman of the Board of Trustees. The
Chairman may, however, condone the absence of a trustee if he is satisfied that there were reasonable grounds for such absence.
(8) The procedure for election or nomination of trustees, the quorum at the meeting of the Board, records to be kept of the transaction of business
and all other matters not specifically provided for in the Scheme shall be regulated as per the provisions of the approved provident fund rules of the
establishment and the guidelines for the functioning of the Board of Trustees of the exempted establishments which the Commissioner may specify
from time to time.
(9) In case of any dispute or doubt, the matter shall be referred to the Regional Provident Fund Commissioner in whose jurisdiction the head office
of the establishment is located. The decision of the Commissioner in the matter shall be final and binding.
(Emphasis added)
It was stated by the petitioner that he is the member of the NLC Progressive Workers Union. Until the year 2001, his union was the only
recognized union. On 15.10.2002, his union had nominated 6 of its members as the representatives to sit in the Board of Trustees of the PF Trust.
He was also one of the nominated trustees. The period of the office is for 5 years. Again during 2007, his union had nominated 6 members to the
Board. He was again nominated to the Board. Thus, he had functioned as the member of the trust from 2002-2012 for a period of 10 years. It
was stated by the petitioner that under Regulation 79C(3), if no union is recognised by the employer under the Code of Discipline in industry or
under any Act, but there are more than one registered union, functioning in the establishment, the union having the largest number of members,
subject to a minimum of 15% membership, shall have the right to nominate employees'' representatives. In case if there is only one registered union,
it shall have the right to nominate the employees'' representative provided it has membership of 15% in the establishment.
It was stated by the petitioner that a secret ballot was conducted in the NLC corporation on 28.02.2012 for the purpose of selection of union to
accord recognition. In that election, his union as well as the 4th respondent union, being the largest polled unions, were given recognition by the
NLC. After the tenure of the existing trustees, the third respondent wrote a letter dated 17.10.2012 to the General Manager/HR of the NLC
stating that the terms of the existing trustees expired on 14.10.2012 and a fresh set of trustees are to be elected or nominated and it should be
elected by the embers of the two recognized unions in accordance with paragraph 79C(3)(b). But the contention of the petitioner was that though
the 4th respondent union was given recognition being the second largest union in the elections held on 28.2.2012, it membership was less than
15%. The 4th respondent union''s membership was 2434, whereas the total membership of provident fund in the NLC was 17800. Thus, they are
having only 13.6%, which is less than 15%. Even if they nominate any one, they cannot claim to have truly represent workers as they are having
less than 15% of membership. Even if it is a recognised union, since it is not having membership of 15%, no right will accrue to the union. The third
respondent cannot direct the NLC to hold elections between the two recognized unions alone without ascertaining whether they have membership
of 15%. Therefore, allowing the 4th respondent to participate in the election to nominate its members was not valid.
This court is not inclined to accept the same as it would be a strange interpretation to the regulation in question. As seen from the above, there
are only 3 situations contemplated, i.e., the existence of single union recognized either under the Code of Discipline or under any other Act and that
union alone shall nominate the representatives of employees. While the Code of Discipline is a non statutory arrangement evolved in the tripartite
labour conference of the 15th Labour Conference. In the State of Tamil Nadu, there is no law for grant of recognition to unions. Therefore, if
under the Code of Discipline, a union is given recognition, then certainly that union whether it has got 15% or lesser percentage of membership, can
have the right to nominate its members to the trust. It is only when there are more than one recognized union by the employer, then the
representatives of the employees will be elected from among the members of such unions in an election held for that purpose. In this case,
admittedly, an election was conducted on 28.02.2012 for the grant of recognition. Only two unions secured largest number of votes. Thus the
petitioner trade union as well as the 4th respondent union came to be recognised as the trade unions in the NLC. Therefore, in the present case, as
rightly directed by the third respondent, Regulation 79C(3)(b) alone will apply and not 79C(3)(c).
The petitioners pressing into service of paragraph 79C(3) is misconceived, because it is not a case where no union is recognized by the NLC.
Only in such a case where no union is recognised, then the union (registered trade union) having membership of 15% will have authority to
nominate trustees. It was also stated that under paragraph 79C(9), in case of any dispute, the matter will have to be taken before the Regional
Provident Fund Commissioner and that the decision of the Commissioner shall be binding. The petitioner has not chosen to go before the
Commissioner. But on the other hand, he directly came before this court. The reliance placed on paragraph 79C(3)(c) is uncalled for in view of the
fact that there are two recognised unions. The method by which recognition was granted to those unions is not under challenge. Certainly, though it
is not obligatory, the NLC had conducted a secrete ballot, by which the 4th respondent union was recognised. Therefore it cannot be said that it is
not a recognised union. For the grant of recognition by secret ballot, the question of 15% membership is not necessary. As noted already, the
Code of Discipline for the grant of recognition is a non statutory Code. Though it was stated that 15% of the workers in the establishment
concerned should be the members, but in the present case, deviating from the Code of Discipline, the workers insisted upon secret ballot.
Thereafter after conducting the secret ballot, the first two unions were recognised.
In the light of the above, this court do not find any case is made out for entertaining the writ petition as the direction issued by the third
respondent is well within the four corners of the law. Hence the writ petition will stand dismissed. No costs. Consequently connected miscellaneous
petition stands closed.