Workmen rep. by Gomantak Mazdoor Sangh vs M/s Goa Bagaytdar Sahakari KVS Maryadit

Heard learned Counsel for the parties.

The challenge in this petition is to the Award dated 16.04.2012 disposing of reference No.IT/36/2003 by the Industrial Tribunal and Labour Court, Government of Goa at Panaji. By order dated 02.07.2003, Government of Goa in exercise of powers conferred by Section 10(1)(d) of the Industrial Disputes Act, 1947 (“said Act”) had referred the following disputes for adjudication to the Tribunal:

After the pleadings were filed, the Tribunal cast the following issues:

The Issue Nos. 1 and 2(A) were answered in favour of the Petitioner Union. The Tribunal held that the Union was a registered Trade Union representing the workmen in the present reference, and further, the Petitioner Union had the locus standi to represent the workers and raised hope espouses the dispute on their behalf.

The Issue Nos. 3 to 6 were not pressed by the employer. This means that the employer accepted that it was an industry and the workmen involved in the dispute were workmen as defined under the said Act. This also means that the employer accepted that the dispute referred was an industrial dispute within the meaning of Section 2(a) of the said Act. Consequently, there was no reason to object to the jurisdiction of the Tribunal to entertain and decide the dispute.

However, the Tribunal, by the impugned Award, has answered the second issue, which was the most crucial issue against the Petitioner and consequently the workmen represented by the Petitioner. The Tribunal has held that the Petitioner’s demand for regularization of the services of the workmen and extending them the benefits at par with permanent workmen employed by the employer was not legal and justified. Accordingly, no relief was granted to the Petitioner and the workmen represented by the Petitioner.

The Industrial Tribunal has firstly reasoned that there were no sanctioned posts against which the workmen could be regularised. Secondly, in the absence of any sanctioned posts, there was no element of any unfair labour practices involved in not regularising the workmen or continuing them on casual basis for several years. Thirdly, the Tribunal has referred has referred to Government order dated 18.06.1993 issued in exercise of powers conferred by the Maharashtra Cooperative Societies Act, 1960 (as was then applicable in the State of Goa and made specifically applicable to the employer herein) which inter alia provides that sanction of the Government is necessary for creation of posts. A detailed procedure is provided in the order of 18.06.1993. Relying on this order, the Tribunal has held that employment with the present employer is “on par with Government employment and thus the principle that Court cannot direct creation of posts which is a prerogative of the executive (Registrar in this case) is required to be imported in this case.” The Tribunal proceeded to add “Thus, merely because these casual workmen have continued as such for a long time, the same would not entitle them to create a status of “permanency”.

Apart from other reasons, the Tribunal has relied upon the decision in Shrirampur Municipal Council, Shrirampur v. V.K. Barde, Member, Industrial Tribunal, Ahamadnagar and Ors.^{11.2011 II CLR 336} and State of Karnataka v. Umadevi (3)^{22.(2006) 4 SCC 1}, to hold that merely because the services of a casual or temporary employee are continued for long periods, that would not entitle them to any benefits of permanency. The Tribunal has focused on the Service Rules of the employer and the Government’s order of 18.06.1993 regarding the creation of posts.

For all the above reasons, the Tribunal did not deem it appropriate to grant the Petitioner and the workmen represented by the Petitioner any relief in the dispute which the Appropriate Government referred.

Mr. Gaonkar submitted that the Tribunal has clearly misdirected itself both on facts and law. He submitted that the Fifth Schedule to the said Act inter alia provides that employment of workmen as badlis, casual or temporary and continuing them as such for years, with the object of depriving them of the status and privileges of permanent workmen, amounts to an unfair labour practice. He submitted that this does not depend upon the creation or non-creation of any sanctioned posts, particularly when it comes to private employment. He submitted that there was no evidence of the employer making any efforts to approach the Government/Registrar for the creation of posts in terms of the order of 18.06.1993. In any event, this order is only executive in nature and cannot, in any manner, whittle down the scope of the entries in the Fifth Schedule to the said Act, which were legislative in nature.

Mr. Gaonkar submitted that the decisions in the case of Shrirampur Municipal Council (supra) or Umadevi (supra) concerned “public employment”. The finding that employment with the Respondent Employer was on par with “Government Employment” is perverse. He submitted that merely because some sanction may have been provided for creating posts in certain specified cooperative societies, that does not render the employment on par with Government employment. He submitted that the Tribunal misdirected itself in applying the principles in Umadevi (supra) and Shrirampur Municipal Council (supra) to the facts of this case.

Mr. Gaonkar relied on Jaggo v. Union of India and Ors.^{33.2024 SCC OnLine SC 3826} ,to submit that even the decision in Umadevi (supra) has now been explained as not being some charter to perpetuate exploitation of casual workmen. He submitted that even otherwise, the decision in Umadevi (supra) would not apply to private industrial employment given the special provisions under the I.D. Act and schedules appended to the I.D Act. Mr. Gaonkar submitted that for all the above reasons, the Tribunal’s impugned order warrants interference and must be quashed and set aside. He submitted that the reference should be answered in favour of the Petitioner and the workmen represented by the Petitioner, by granting them benefits of permanency at least from the date the demand was raised on their behalf.

Mr. Gaonkar also relied on and Reliance Energy Ltd. Mumbai v. Yadayya Giri and Ors.^{44.2011 (1) Mh.L.J.998}, to contend that Umadevi principle does not apply for private employment.

Mr. Nigalye, learned Counsel for the Respondent employer, defended the impugned Award based on the reasoning depicted therein. He pointed out that the workers were not working full-time but were offered employment only when there was some work of packing to be done. He submitted that the workmen did not even work for 240 days in a year during the given years. He further submitted that whenever any work was given to the workmen, they were invariably paid the minimum wages. He, therefore, submitted that there was no exploitation or any unfair labour practices.

Mr. Nigalye submitted that in the absence of any sanctioned posts, there could be no unfair labour practices as was held in Shrirampur Municipal Council (supra). He submitted that the Government order of 18.06.1993 introduced a public element, as no posts would be created without the sanction of the Government/Registrar. He submitted that in the absence of any sanctioned posts, no workmen could claim regularization or benefits of permanency.

Mr Nigalye referred to the decision of the Hon’ble Supreme Court in the case of Maharashtra State Road Transport Corporation and Another v. Carteribe Rajya Parivahan Karmchari Sanghatana^{55.(2009) 8 SCC 556}, and Umadevi (supra) to submit that the provisions could neither direct the creation of posts nor grant benefits of permanency in the absence of any sanctioned posts.

Accordingly, he submitted that there was no error in the Tribunal's findings or in its approach in making the impugned Award.

Mr Nigalye submitted that at this point, if any relief is granted to the workmen, the society will collapse under the financial burden that it would have to meet. He submitted and reiterated that there was no question of exploitation involved and work was offered to the workmen when such work was available. He reiterated that minimum wages were paid to the workmen.

For all the above reasons, Mr. Nigalye submitted that this petition may be dismissed.

The rival contentions now fall for determination.

The pleadings in this case allege that the 16 workmen, whose cause the Petitioner Union has espoused, have been working each day with the employer from 8:30 a.m. to 1:00 p.m. and 3:30 p.m. to 7:00 p.m. There are pleadings that the workmen were involved in discharging the following duties:

The Petitioner had already pleaded before the Tribunal that, though the above-referred 16 workmen had been employed for several years, from 1988 to 1999, as casuals, without the benefits granted to other permanently recruited workmen, being extended to them. There are pleadings that they were not being paid minimum wages, bonus, leave, or paid leave, as were granted to the permanent workmen. Even the benefits under the settlements entered into by the employer from time to time with the workmen or their unions, were not made applicable to these 16 workmen.

There are allegations that by requiring the workmen to work on such a casual basis without extending to them the benefits of permanency, they were being treated like “bonded labourers” and, in any event, such actions on the part of the employer constituted unfair labour practices.

Crucially, the Petitioner had pleaded that the posts on which the workmen were working were of a regular and permanent nature. Based on all this, the Petitioner and the workmen they represent applied for the following reliefs from the Tribunal:

The employer raised several preliminary objections in its Written Statement. However, as noted above, most of these preliminary objections were either dropped or decided against the employer. On merits, the employer pointed out that the workmen who were part of the reference were employed purely for casual and piece-rate basis. They were engaged to clear grains, cereals, and other similar materials, weigh them, and pack them in packets of specific weights. They were paid on a piece-rate basis based on their output. They were neither daily-rated, weekly-rated, nor monthly-rated employees. They were offered employment as and when it became available. They had no fixed working hours, and they were free to attend work as per their convenience. They would normally approach work in the morning and be paid at the end of the week.

The employer has pleaded that they were not employed on any sanctioned posts and, therefore, they were not entitled to any other benefits like wage scales, leave, etc. like any other regular employees. Even the service rules of the Society were not applicable to them since they were only piece-rated employees. The eligibility criteria for employment were not made applicable to them. In short, they did not have any lien on service or right for regular employment in the services of the employer.

In response to the Petitioner’s allegations that the workmen were not paid any minimum wages or other benefits, the employer, in para 18 of the Written Statement, simply denied this statement and answered that the workers were employed on piece-rate basis and “paid accordingly”. This paragraph also states that “They have the choice to leave the work during any time of the day as they may deem fit. They are not entitled to any paid leave or other benefits under the settlement or the service rules which are applicable to permanent workmen.”

Significantly, in the claim statement, there was not even any whisper about the Government order of 18.06.1993 or that this order was one of the main reasons why the services of the workmen could not be regularised. There is also no evidence that the employer, at any stage, applied to the Government/Registrar for sanction of posts or followed the procedure for creation of posts as provided under the order dated 18.06.1993.

The employer has not even denied that the workmen had been working for several years. The fact that the workmen were not being paid the benefits or offered the service conditions that were applicable to permanent or regular employees is not even denied. In fact, it is positively accepted. However, the Tribunal has completely overlooked these aspects which emanate from the pleadings and the evidence on record.

The Tribunal has also not adequately considered the provisions of 8(3)(10) of the Fifth Schedule to the said Act. This schedule is in pursuance of Section 2(ra), which defines “unfair labour practices” to mean any of the practices specified in the Fifth Schedule.

8(3)(10) reads as follows:

At least, prima facie, a case of unfair labour practice could be said to have been made out. However, at this stage, only a prima facie opinion is being expressed because for reasons discussed hereafter, I am satisfied that the interest of justice would be met if the impugned Award is set aside and the matter is remanded to the Tribunal for reconsideration of the evidence on record and if, a case is made out, for granting the parties leave to lead additional evidence.

However, the reasoning that because no posts were sanctioned, a case of unfair labour practice was not made out cannot, again, prima facie, be accepted. The observations to this effect in Shrirampur Municipal Council (supra), cannot be read out of context. That was a case dealing with public employment. It is prima facie that such an observation would not apply purely for private employment.

Similarly, merely because the Government order of 18.06.1993 requires the approval or sanction of the Government/Registrar before the Cooperative Society creates any posts, does not mean that the employment with the Respondent employer Society can be placed on par with Government employment or public employment. As it is, there is no evidence that the employer attempted to create posts by seeking the Government/Registrar's sanction. Therefore, on the one hand, no sanction was sought or obtained. On the other hand, the employer, prima facie, continued to employ the workmen on a casual basis for several years, thereby depriving them of the status and privileges of permanent workmen. The defence, which the Tribunal accepted, was prima facie unacceptable.

The Tribunal, in furtherance of its findings that the employment with the Respondent employer was on par with Government employment, has proceeded to apply the principles of Umadevi (supra) to a private employment. The grounds on which the decision in Reliance Energy Ltd. (supra) was distinguished also do not appear to be prima facie proper. In any event, even Umadevi (supra) has been explained, if not watered down in Jaggo v. Union of India (supra). The decision inter alia holds that the observations in Umadevi (supra) are not to be construed as a charter to perpetuate the exploitation of casual labour. The Tribunal, of course, did not have the benefit of this decision when it made the impugned Award.

At the same time, Mr Nigalye’s contentions on behalf of the employer may also warrant consideration. Several aspects are required to be considered before relief of regularisation or permanency is granted, consequent upon the finding of unfair labour practice. Even where the Tribunal finds that there has been unfair labour practice, the grant of regularisation or permanency cannot be automatic or sequitur. Several relevant considerations have to inform the decision-making, and this will also include an opportunity for the employer to place on record its financial position, or the need for employment, etc. The Tribunal, if it ultimately concludes that there was unfair labour practice, can also mould the relief and consider awarding compensation. As it is, the workmen involved in the reference must have attained the age of superannuation or may be close to the age of superannuation by this time. The Tribunal can best consider all these facts & factors and, therefore, the necessity of remand.

For all the above reasons, the impugned Award is quashed and set aside and the reference No.IT/36/2003 is restored to the Industrial Tribunal’s file for reconsideration. If the parties wish to lead further evidence, they may be granted one opportunity to do so, provided that it does not unnecessarily delay the matter. The Tribunal, based upon the existing evidence and/or the additional evidence that the parties may choose to lead, should decide the reference afresh.

The observations made in this order are only prima facie and are primarily intended to justify the remand. This Court is aware that, in industrial adjudication, it is usually loath to order remands. However, considering the peculiar circumstances discussed above, this Court had no option but to reverse the Tribunal’s order and then remand the matter for fresh consideration. This was a case where the Tribunal had misdirected itself in facts and law. Still, an independent adjudication by this Court, based on the material available, was not possible. Therefore, the Tribunal need not be influenced by the prima facie findings, but at the same time, the Tribunal must consider the legal position emanating from the decision of the Hon’ble Supreme Court in the case of Jaggo v. Union of India (supra) and also have regard to the other decisions referred to, or that may be relied upon by the parties.

The rule is made absolute in the above terms without any order for costs.

The parties are now to appear before the Tribunal on 15.01.2026 at 10:30 a.m. and file an authenticated copy of this order.

The Tribunal is directed to dispose of the reference afresh as expeditiously as possible and in any event, within a year from the parties filing an authenticated copy of this order.

Both parties must cooperate with the Tribunal and not delay the proceedings before it. All concerned are to act on an authenticated copy of this order.