The Chairman, Bank of Madura Ltd. vs The Presiding Officer

V. Ramaswami, J.—This is a petition for the issue of a writ of certiorari, to quash the award of the Industrial Tribunal, Madras in I.D. No. 1

of 1973. The dispute was between the employers of the Bank of Madura and their workmen and the dispute was referred by the Government of

India in their order No. L.12011/1972 L.R. III dated 20th December, 1972. The petitioner Bank is one of the B-Class banks within the meaning

of the Bank Awards. Some time in the beginning of 1972, the petitioner Bank held an examination for recruitment of about 400 apprentices. After

the written examination, there was an oral examination conducted by three selection committees, each committee consisting of a member of the

Board of Directors and two Officers of the Bank. Out of the 400 people called for interview, 385 candidates were selected, and orders of

appointment were issued to them appointing them as apprentice-clerks in the Bank. Thirty-nine did not report and the rest of them reported for

duty during the period from July, 1972 to December, 1972. Eight resigned some time later and the services of nine others were terminated. Thus,

the total number of people employed as apprentice clerks amounted 329. Of these, some were graduates and the others had only passed the

S.S.L.C. examination. In respect of these graduates-apprentice-clerks, the petitioner paid what is called a stipend of Rs. 150/- per month and for

the non-graduates-clerks a stipend of Rs. 100 was paid. The terms and conditions of appointment in respect of both these categories were the

same except regarding the emoluments. It was stated in the order that the period of apprenticeship would be one year and that at the end of the

apprenticeship period. If they were found suitable, they would be confirmed and absorbed in the Bank''s service, and that the decision of the Bank

in this regard shall be final. It is stated that the suitability for confirmation and ascription would be based on conduct and manners, punctual

attendance, regular attendance, co-operation with the other members of the staff, obedience to the orders or superiors, courteous service to the

customs and the public, inclination, keenness and aptitude for banking service and learn bank work, and general enthusiasm and similar factors.

How their work would be assessed is also mentioned in the order of appointment. The Bank of Madura Employee''s Union, by their letter dated

21st June, 1972, addressed to the Regional Labour Commissioner (Central), Madras, protested against this appointment of apprentice clerks and

contended that the Management was indulging in unfair labour practice by recruiting employees on contract basis on a salary which is almost one-

third of the starting salary payable to an employee of the Bank under the agreement signed by them and the Bank. They also contended that the

action of the Bank was in violation of the Industrial Disputes Act and the various Bank Awards and Settlements in the Bank Industry. They pointed

out that the starting pay of a clerk in a bank was to be Rs. 267 as against a sum of Rs. 100 proposed to be paid by the Management. They

specifically charged that the Management''s action was a naked attempt to exploit the unemployment situation is our country to recruit the un-

employed educated youth on meagre wages and utilise them to defeat the bargaining power of their union. It is not necessary to refer to the other

allegations in this petition as the learned counsel for the respondents did not rely on them. They further stated that since the Management was not

willing for an amicable settlement the General Body of the Union passed a resolution on 4th June 1972 and a copy of this resolution was also

enclosed.

The Assistant Labour Commissioner forwarded this letter and the resolution to the Chairman of the Bank of Madura, proposing to hold a joint

discussion to bring about an amicable settlement of the disputes. In this letter, the Labour Commissioner also requested the Bank to keep the

proposed recruitment in abeyance till the disposal of the dispute. But, as already stated, the Bank issued the orders of appointment and the

apprentices joined their duty from July onwards up till December 1972. The Union filed another petition dated 29th June 1972 before the Labour

Commissioner, in which they stated that in the case of recruitments of apprentices, the Bank was attempting to recruit person to discharge the

regular duties of clerk and officers and to attend to the day-to-day work on nominal wages, in contravention of the subsisting settlements binding

on the bank, in relation to wages, allowances, leave privileges provident fond etc., and that the manner of recruitment and the determination of the

Amount payable to the apprentice lacked bona fides. They also pointed out that the apprentices-clerk now recruited were almost equal to the

existing permanent staff and that in many banks there were no permanent clerks and they were manned only by apprentice clerks.

On the other hand, the petitioner Bank in their latter dated 11th July 1972, denied that the recruitment of apprentice clerks in any way

contravened the settlement entered into between the petitioner and the Union. They also contended that there was no provision against their

recruiting persons at the first instance as apprentices for a stipulated period on a monthly stipend and absorbing them on regular basis thereafter.

They specifically denied that there was any substance in the criticism that in the guise of approving apprentices, the Bank was extracting regular

work from them. On the conciliation failure report submitted by the Labour Commissioner and at the request of the Union the Government of

India, in their reference aforementioned, referred the following question for adjudication:

whether the management of the Bank of the Madura was justified in appointing about 400 apprentice clerks during the year 1972 on a scale other

than the awarded scale of pay and whether such apprentice clerks were engaged for doing the normal electrical duties in the Bank ? If they were

engaged for the said duties, to what relief, if any, are the said workmen entitled.

Before the Tribunal, the Union filed a claim statement, in which they contended that the deposits of the Bank rose from Rs. 9.73 crores to Rs.

20 73 crores during the period from August 1971 to December 1972 indicating a growth of 113 per cent and that in view of the increase in the

volume of business, the Bank required the services of clerks on a permanent basis. But, with a view to avoid the obligation imposed and the

monetary commitments under the bipartite settlement, the petitioner herein resorted to the device of recruitting apprentice clerks on nominal meagre

pay. Even though the nomenclature assigned to the newly recruited staff was apprentice clerks, in effect they have been called upon to shoulder

and discharge the routine normal duties and responsibilities of permanent clerks. Thus, in the guise of recruitting apprentices, the Management of

the Bank was recruitting persons to discharge the day-to-day functions and duties of clerks on nominal pay in contravention of the Awards and

Agreements. In another part of the statement, it was claimed that the increase in the volume of business necessitated the recruitment of clerks on

permanent basis, but the management resorted to unfair labour practice by employing persons as apprentices on nominal meagre pay. Another

allegation. In this petition was that 75 persons who were employed is the subordinate services, would have been entitled to be promoted as clerks

but for the appointment of these apprentice clerks, thereby denying them the right for promotion by the device adopted by the management of

recruiting apprentices. This was also characterised as an unfair labour practice adopted by the Bank to flout the obligations under the settlement in

regard to the terms.

The Bank of Madura Staff Union, which is another union also filed a claim statement, in which they contended that the period of twelve months

provided in the orders was too long a period, considering the actual clerical work to be learnt by them.

The petitioner bank filed a counter statement denying the allegation of unfair labour practice and contending that their action in appointing

apprentice clerks did not in any way violate any of the agreements or awards.

On behalf of the Union, there witnesses were examined, who spoke to the fact that these persons recruited as apprentice-clerks were

performing exactly the same duties as any other permanent clerk and that only in order to deprive the employees of the dearness allowance, house

rent allowance, city compensatory allowance and other allowances payable to them under the Bank Award and another agreements, the petitioner

had adopted this method of recruiting apprentice-clerks. They also further stated that the training period was too long and that it was enough if

training was given for 21 days. One witness, of course, said that a period of one month would be enough and the third witness said, fifteen days.

The Union also filed a number of documents which are marked as Exs. W.1 to W.31. On behalf of the Management, the Agent of the Bank of

Madura at the Royapettah Branch was examined and he spoke to the factum of holding written and oral examinations for selection of apprentice-

clerks and their payment as per their orders of appointment. The Management also filed certain documents. On a consideration of the oral and

documentary evidence, the Industrial Tribunal, in its award dated 26th April, 1974, held that the Bank recruited these apprentices Clerks with a

view to get cheap labour, amounting to unfair labour practice, that the apprentice-clerks were doing normal clerical duties that a period of 21 days

would be enough for training and that these apprentice clerks, to the pay of permanent clerks for the period beyond 21 working days from

commencement of their service in the Bank. It is to quash this award, the present writ petition has been filed by the Management.

It was contended by the learned counsel for the petitioner that both the Sastry''s Award and the Dasai''s Award contemplated and considered it

as legal to appoint apprentice-clerks on such terms and conditions as the Bank may choose and that the petitioner in no way bad contravened any

of the terms of the bi-partite settlement or the Bank Awards. According to the learned counsel, the petitioner had an extensive expansion

programme of opening numerous branches and extending its activities and in order to meet the future demands, they selected candidates with a

view to train them and in such circumstances it could not be characterised as any unfair labour practice. He also charged that the dispute referred

to the Tribunal was vague and did not call for a finding on the question as to whether there was any unfair labour practice in this case.

Before I go into the question of unfair labour practice, it is necessary to understand what exactly was the question that was referred to the

Tribunal. The question that was referred has already been set out in the earlier part of this order and it is not necessary to repeat the same here.

There can be no doubt that the question as framed is a little ambiguous, and calls for a probing into the actual dispute in order to find out what

exactly was referred to the Tribunal. It is well-settled that when a dispute arises as to the exact scope of the question referred, it is open to the

Tribunal as also this Court to look into the claim petitions and the statements filed before the Tribunal in order to understand what was the exact

dispute that was sought to be referred. I am in entire agreement with the counsel for the respondents that the dispute between the parties was as to

whether the method adopted by the Bank was an unfair labour practice in that when an increase in the volume of work demanded recruitment of

persons on permanent basis, they resorted to engaging apprentices on meagre salary. Learned counsel for the respondents further submitted that

there was a question of subordinate officer (sic) their chance of promotion. That was also raised by the Union in their claim statements. But, I am

unable to agree that this later dispute could have formed the reference to the Tribunal as there was no evidence or claim by these 75 persons, who

are supposed to have lost their chances of promotion, agitating their right either by themselves or through their onion. That was never in the field of

disputes, so as to warrant any reference to the Tribunal. Therefore, the only dispute that could have been referred was as to whether there was any

unfair labour practice in the matter of appointment of these apprentices, on the facts and circumstances of this case, on wages other than those

fixed or awarded under the various Bank Awards. The Tribunal understood the reference only as meaning: ""Whether it amounted to unfair labour

practice in employing apprentice-clerks on a scale other than those awarded under the various Bank Awards"". In my opinion, the Tribunal was

right in its view on the scope of the reference.

In the first Bank Award given by Sri S. Panchapagesa Sastry, in dealing with the demands of workmen that apprentices should be paid at a

rate not lower than the ordinary clerk, the right of the management in regard to the appointment of apprentices was dealt with in paragraph 497,

which reads as follows:

The workman in their written statements want the Tribunal to direct that the apprentices should be paid at the rate not lower than the ordinary

clerk. However, our attention has been drawn to the fact that same of these apprentices work in banks so as to quality themselves to appear for

the examinations of the Institute of Bankers. On behalf of the banks it was urged that the banks should be allowed free scope to engage

apprentices as part-time or full time, and to pay them either nothing or less than whet an ordinary clerk should get, and that the apprenticeship

period may to up to two years. According to them the apprentices come to learn and not to do work in the full sense, and unlike the firms of

accountants, banks do not charge any premium for training them. We do not feel Justified in compelling the banks to pay emoluments to such

apprentices. The matter most be left to their discretion. Only there should be no discrimination. But we direct that the period of apprenticeship

except in the case of those who work in banks so as to qualify themselves for the examination of the Institutes of Bankers should not exceed

twelve months.

Before the second Tribunal of Sri Justice Kantilal T. Desai also, it was contended on behalf of the workmen that the discretion left to the Bank

under paragraph 497 of the Sastry. Award was grossly abused by the bank, that the banks appoint unpaid apprentices against permanent

vacancies and further that from paid apprentices bank take normal work and utilise their services Indefinitely against permanent vacancies, without

paying the wages of full-fledged clerks and that too for an indefinite period and therefore the banking industry should not be allowed to appoint

apprentices and that the employees with similar qualifications without any previous experience or training are to be taken directly as probationers.

This claim was dealt with in the Award in Chap. XXIII, paragraphs 22 and 23, which reads as follows : Paras. 22 and 23:

Serious allegations have been made against banks in connection with the engagement of apprentices which have bees denied. There is not much

evidences support of these allegations. The Sastry Tribunal in paragraph 497 of its award has directed that the period of apprenticeship, except in

the case of those who work in banks so as to qualify themselves for the examination of the Institute of Bankers should not (sic) twelve months"".

This direction is a salutary one. I give a direction similar to the one given by the Sastry Tribunal.

Paras. 22-23 :

The demand that an apprentice who has already been in the service of a bank for a total period of six months should be deemed to be a permanent

employee of the bank appears to me to be unreasonable, so also the demand that apprentices who hove already been in the service of a bank for a

total period of two months should be deemed as probationers and confirmed accordingly. I have carefully considered all the demands made in

connection with apprentices. Save as otherwise expressly provided in this award, I do not give any further or other directions in connect ion with

apprentices.

It is not in dispute that as per the settlement arrived at between the petitioner Bank and its employees, except in regard to matters that are

specifically dealt with therein, the other terms and conditions of the Award were binding on the parties. Learned Counsel for the petitioner,

therefore, contended, relying on the paragraphs in the two bank awards extracted above, that the management was entitled to appoint apprentices

on such terms as they choose provided the period of apprenticeship does not exceed twelve months. On the other hand, learned counsel for the

respondents contended that though the management has a right to appoint apprentices in a given case, in the instant case the recruitment was

necessitated by the increase in the volume of work of the petitioner bark and that the appointments were made only with reference to permanent

vacancies and there can be no appointment of persons as apprentices. He also contended that the necessary and reasonable inference from the

fact that a large number of person were appointed as apprentices almost equalling to the number of permanent staff in the employ and also the fact

that the period of training required for clerks should be as long as one year, is only that in the case of appointing apprentices they were fitting the

services of permanent clerks on payment of meagre wages, amounting to unfair labour practice. It is seen from the records, Exs. W-9 and W-10,

that the bank deposit which was about a little over Rs. 9.8 crores, increased to a little over Rs. 13.75 crores at the end of the year 1971 and to

Rs. 20.78 crores and above by the end of the year 1972. Similarly advances also increased from Rs. 6.86 crores to Rs. 8.97 crores in 1971 and

Rs. 12.15 crores in 1972. The increase in number of branches was 28 in the year 1971 and II in the year 1972. In Ex. W-10, which is a press

advertisement given by the petitioner bank, it is clearly stated that in order to meet the increased volume of work, the bank recruited as a

temporary measure about 225 persons as casual employees from time to time. This situation was felt unhappy and in order to rationalise the system

of recruitment resulting in better conditions of service, the bank recruited about 575 persons after conducting written tests and interviews. These

facts clearly show that far from being a recruitment to meet a feature expansion programme, it was with the object of meeting the present increased

volume of work that these apprentices were recruited. The question then arises as to whether in such circumstances the petitioner is entitled to

appoint apprentices. I am of the view that when a need arises for appointment of more number of staff in order to meet the increased volume of

work, that could be only treated as permanent vacancies. It is true that the increase in the volume of work should not be temporary, and if in such

cases of temporary situations, additional staff are employed, they may be treated as temporary staff. But, if the increase of work in fairly

permanent, in that it is expected to continue for quite a long time, the need for appointment could be considered only on a permanent basis and no

apprentices could be appointed for such, vacancies. In fact in the Sastry''s Award, a probationer was defined as an employee who is provisionally

employed to fill a permanent vacancy of post and has not been made permanent or confirmed in service. Thus, if a person is appointed

provisionally to fill a permanent vacancy, he could be only termed as a probationer and not as an apprentice. If he is to be termed as a probationer

under the various Awards which are binding on the parties, he would be entitled to be paid equally as a permanent clerk and not anything less.

Thus, in this case though the situations warranted the appointment of permanent clerks, the management chose to appoint them as apprentices. This

was characterised by the Union as with a view to avoid payment of wages as required by the wage awards. It may be seen from the evidence as

also the findings, which could not be disputed in this writ petition, that these apprentices were performing the duties of regular clerks and their

duties were in no way different from the permanent staff. The irresistible conclusion therefore, is that the bank resorted to this method of appointing

apprentices with a view to get cheap labour, amounting to unfair labour practice. These can be no doubt that if an employer, with the object of

depriving an employee of his legitimate dues, appoints a person in a permanent post as an apprentice and pays him less, it would amount to unfair

labour practice. A similar view was expressed by the Allahabad High Court in Eveready Flash Company v. Labour Court Bariely, and others

1961-2 L.L.J. 294, which I respectfully agree.

As already stated, the reference did not include the question as to whether the promotion prospects of the subordinate category were affected

by the appointment of these apprentice clerks. The finding on this question is, therefore to be set aside. Equally, the finding of the Tribunal that the

recruitment itself was not fair and was made at the sweet will and pleasure of management cannot be accepted. These two findings do not arise

from the reference and therefore have to be and are set aside.

For the foregoing reason, I agree with the Tribunal that the recruitment of the apprentice-clerks was with a view to got cheap labour amounting

to unfair labour practice and that these apprentice clerks were doing the normal work of clerks, thereby entitling them to be paid as per the various

Bank Awards. The petition accordingly fails and is dismissed. The rule nisi is discharged. There will be no order as to costs.