Mill Manager, Model Mills Nagpur Ltd. vs Dharam Das, Etc. on 25 October, 1957

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 25 October, 1957

Coram: N.H. Bhagwati, P.B. Gajendragadkar, Jafer Imam

In this matter, nine appeals were filed for special leave against the decision of the State Industrial Court at Nagpur. That court had set aside the order of the Assistant Labour Commissioner of Nagpur, which had rejected the respondents’ applications made under Section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947. The respondents had approached the Labour Commissioner invoking Section 16 to have the dismissal order issued by the appellant, the Model Mills Ltd., Nagpur, vacated. The dismissal order had taken effect on 11 January 1956. By exercising the revisional authority granted to it by Section 16(5) of the Act, the State Industrial Court reversed the Assistant Commissioner’s decision and thereby reinstated the dismissal orders.

The mill employed equipment known as “Seven Bowl Calender Machines,” which were commonly referred to as Calender machines. According to the respondents, the established practice for many years required at least three workers to operate each such machine safely. The management of Model Mills Ltd., however, issued an instruction that each machine should now be operated by only two workers. On 16 December 1955, while a machine was being run by two persons, one of the operators sustained a serious injury. The respondents argued that reducing the crew from three to two not only increased the individual’s workload but also made the operation of the machine hazardous, and they claimed that the management’s action was illegal. On 19 December 1955, the respondents again refused to work because, once more, only two persons had been assigned to operate a Calender machine. In response to the refusal, the management conducted an inquiry on 20 December 1955, framed a charge against the respondents, and subsequently dismissed them after the inquiry concluded that they were guilty of misconduct.

It should be noted that out of the nine respondents, only two were actually assigned to work on a Calender machine on 19 December 1955; the remaining seven were posted in other departments. Those seven individuals refused to work not because they were directly affected, but out of sympathy and support for the two colleagues who had been required to operate the machine with only two men. The appellant’s position was that a Calender machine did not ordinarily require more than two workers. The management explained that at times three workers might be assigned if there was an unusually heavy workload, and on other occasions three workers were posted merely to protect the employees from a loss of wages. The appellant asserted that the respondents’ refusal to work amounted to an illegal strike, arguing that such conduct contravened the standing orders of Model Mills Ltd. and was therefore unlawful.

The Court observed that the dismissal of the respondents was made in violation of the Standing Orders of Model Mills Ltd. After a proper enquiry the appellant had found the respondents guilty and had dismissed them in accordance with those Standing Orders.

The Assistant Labour Commissioner, who considered the respondents’ applications to set aside the dismissal orders, expressed the view that the respondents had failed to demonstrate, from the enquiry records, that three persons were necessary to operate a Calender machine. He further held that he lacked jurisdiction to decide that issue, even though evidence had been attempted to be presented concerning the nature of the work and the number of workers required for each Calender machine. The Commissioner also opined that, assuming the appellant had reduced the number of workers required for a Calender machine, the respondents’ decision to strike or refuse work was illegal because they still had legal remedies available to convey their grievances. Consequently, the Commissioner dismissed the respondents’ applications and refused to set aside the appellant’s dismissal orders.

The State Industrial Court, after examining portions of the evidence, concluded that the management’s direction that each Calender machine be operated by only two persons conflicted with a thirty‑year practice of employing three persons and had clearly increased each employee’s workload. The Court was of the opinion that the management had not justified this change, had failed to follow proper procedure, had not given notice, and had not entered into any agreement after negotiations or conciliation. Because the order directing two persons instead of three to work each Calender machine was not a lawful order, the Court held that the respondents could not be punished for refusing to obey it. The Court finally stated:

“Moreover, the refusal to share additional burden of work gave rise to the industrial dispute and the refusal to accept additional work could not be said to be in consequence of an industrial dispute. There is no doubt that the employees refused to bear the additional burden of work but that would not amount to refusal to continue to work in the normal way that is to share the usual or customary burden of work. Here, therefore, there was actually no refusal to continue to work in the usual manner or to accept the usual work and it could not, therefore, amount to a strike as defined in the C. P. and Berar Industrial Disputes Settlement Act.”

Regarding those respondents who were not actually assigned to a Calender machine on 19 December 1955, the State Industrial Court expressed the opinion that their refusal to work amounted to a strike but it thought

The Court observed that the dismissal order imposed on each respondent was an excessively severe punishment and that the management’s action was unduly authoritarian. It further held that there were mitigating circumstances which the management had ignored, thereby breaching the mandatory requirement of Standing Order 26(4). Consequently, the State Industrial Court set aside the dismissal orders that had been passed by the appellant in respect of each respondent.

The Court then explained that, under Section 16(5) of the Act, an appeal against an order issued by the Labour Commissioner pursuant to Section 16 is expressly barred. Although the State Industrial Court possesses revisional jurisdiction over any such Labour Commissioner order, that jurisdiction may be exercised only on a question of law. The Court stressed that the State Industrial Court could not entertain a revision merely because it disagreed with the Labour Commissioner on factual findings; otherwise the distinction between a revision and an appeal would disappear, and the State Industrial Court would be hearing the matter as an appeal, which the statute expressly prohibits. Accordingly, the Court noted that it was necessary to examine whether the orders issued by the State Industrial Court in the respondents’ revisional applications were consistent with law, and that this examination required reference to specific provisions of the Act.

The Court quoted the definition of “strike” provided in Section 2(27) of the Act, which describes a strike as a total or partial cessation of work by employees employed in an industrial undertaking, acting in combination, or a concerted refusal, or a refusal under a common understanding, to continue to work or to accept work, where such cessation or refusal is the consequence of an industrial dispute in any industry. The Court further noted that the term “industry” is defined in the Act, and that there is no doubt that Model Mills Ltd., Nagpur falls within that definition. “Industrial dispute” is defined in Section 2(12) as any dispute or difference connected with an industrial matter that arises between employer and employee or between employers and employees. The Act defines “industrial matter” in Section 2(13) as any matter relating to work, pay, wages, reward, hours, privileges, rights or duties of employers or employees, or the mode, terms and conditions of employment or refusal to employ, and it includes questions concerning: (a) the relationship between employer and employee, or the dismissal or non‑employment of any person; (b) the demarcation of function of any employee or class of employees; (c) any right or claim arising under or in respect of an agreement, submission or award made under the Act; and (d) what is fair and right in relation to any industrial matter, having regard to the interests of the person immediately concerned and of society as a whole.

Whole. The term “Change” has been defined in Section 2(6) of the Act to mean a change in any industrial matter. Section 40(1)(c) of the Act provides that a strike or a lock‑out shall be illegal if it is commenced or continued solely because the employer has failed to implement the provisions of any Standing Order or has made an illegal change. The Court observed that it is unnecessary to refer to clauses (a), (b), (d), (e), (f), (g) and (h) of that subsection. It is clear from the material on the record that the respondents, who were employees of Model Mills Ltd., an industrial undertaking, stopped working on 19 December 1955, acted together, and their refusal to work was a concerted action. The principal questions that arise for consideration are first, whether the respondents’ cessation of work or their refusal to work was the result of an industrial dispute, and second, whether there had been a change in any industrial matter at the instance of their employer, Model Mills Ltd. As previously stated, the Assistant Labour Commissioner held that he did not have jurisdiction to adjudicate the issue of whether three persons were required to work a calender machine that had been reduced to two persons, but he firmly expressed the opinion that, even if there had indeed been a reduction in the number of persons required to work the calender machine, the respondents’ action of striking or refusing to work would nevertheless be illegal. The Assistant Labour Commissioner did not refer to the material on the record in order to determine whether an industrial dispute existed that had led to the respondents’ cessation of work. The State Industrial Court, however, found, on the basis of the material before it, that three persons had previously worked a calender machine and that the management’s order reducing that number to two was not a lawful order. The State Industrial Court made no reference to the definition of the word “strike” in the Act, nor did it refer to the record regarding the existence of an industrial dispute prior to the respondents’ refusal to work. Before the orders of dismissal passed by the appellant against the respondents could be set aside by the State Industrial Court, it was essential for the Court to determine whether an industrial dispute existed that had caused the respondents to refuse work. It may be conceded that the plea made by the appellant before the Labour Commissioner is inconsistent with the argument that the strike was illegal; however, in view of the material on the record consisting of the appellant’s conduct immediately after the incident and the admissions made by the workmen, that defect in the pleading cannot be allowed to prejudice or adversely affect the appellant’s case. Having regard to the definition of “industrial dispute” in the Act, there can be no question, on the material on the record, that such a dispute existed.

In this case the Court observed that there was a clear industrial dispute that arose before the respondents stopped working. The evidence presented by both the respondents and the appellant was substantially consistent. For example, Gulabchand Nanhelal, who worked as a Calenderman, testified that before 19 December 1955 three men were normally assigned to operate a Calender machine, but on that particular day only two men were allotted to the machine. He further stated that the appellant was asked to provide three men; when the appellant refused, work on the machine was halted. Similarly, the Superintendent of Dye and Bleach at Model Mills Ltd., Mr Sukhadwala, affirmed that the workers had repeatedly requested that three men be placed on the machine, yet management continued to keep only two men. On 19 December 1955 Mr Sukhadwala recounted that a worker named Sharma informed him that the employees were demanding three men for each Calender machine. When Mr Sukhadwala advised the workers not to stop work, they replied that they would not resume work unless three men were assigned to each machine. The Court considered further evidence unnecessary, concluding that the testimony already mentioned was sufficient to demonstrate that on 19 December 1955 a dispute or difference concerning an industrial matter existed between the employer and the employees. The specific contention over whether two or three persons should operate a Calender machine was indisputably a matter relating to work and therefore fell within the definition of an industrial dispute under the Act. Consequently, there could be no doubt that the respondents ceased work as a result of that industrial dispute.

The Court also noted that the record showed the stoppage of work was the product of a coordinated and collective refusal. Even those respondents who were not assigned to operate a Calender machine on 19 December 1955 stopped working in order to express sympathy and lend support to the colleagues who were assigned to the machine on that day. The State Industrial Court had expressly found that the actions of workers who were not allotted to a Calender machine on 13 December 1955 amounted to a strike. The Court held that the State Industrial Court erred in law by failing to reference the relevant provisions of the Act and by concluding that the cessation of work by the workers assigned to a Calender machine did not constitute a strike as defined by the statute. Accordingly, the Court determined that both the workers who were actually operating the Calender machine and those who were not operating it had gone on strike within the meaning of the word “strike” as defined in the Act.

The remaining issue for consideration, the Court said, was whether the strike committed by these workers was an illegal strike. Regarding the respondents who were not operating a Calender machine, their strike was undoubtedly an illegal strike.

In this case the Court held that the strike carried out by the respondents who had been assigned to work a Calender machine was also an illegal strike. The Court based this finding on the wording of Section 40(1)(c) of the Act, which classifies such a strike as unlawful even if it were assumed that the employer had failed to comply with any Standing Order or had effected an illegal alteration to the terms of employment. The Court noted, however, that the record did not show that the order issued by the management was in violation of any Standing Order. Consequently, the Court regarded it as unnecessary to resolve the question of whether the employer had actually made any change in an industrial matter. Even if such a change had occurred, and even if that change had been illegal, the Court explained that the strike would remain illegal simply because it was commenced or continued in response to the employer’s illegal change, a result that Section 40(1)(c) of the Act makes unmistakably clear. The Court then expressed its view that the State Industrial Court had adopted an entirely incorrect approach to the principal issues presented in the case and that its conclusions were contrary to the provisions of the Act.

The Court observed that the State Industrial Court erred in law when it set aside the dismissal orders issued by the appellant against the respondents who were not employed on the Calender machine, as those respondents had, according to the State Industrial Court’s own findings, gone on strike. The Court also found that the State Industrial Court was wrong in overturning the dismissals of the respondents who had been deputed to work the Calender machine, because their conduct likewise amounted to an illegal strike. Under the Standing Orders applicable to Model Mills Ltd., the Court determined that all of the respondents had committed misconduct, and that the appellant had acted within his authority under those Standing Orders when he dismissed them. The Court concluded that there was no justification for any of the respondents to have engaged in an illegal strike. As a result, the Court held that all nine respondents, having participated in an illegal strike, were correctly dismissed by the appellant. Accordingly, the appeals were allowed, the orders of the State Industrial Court were set aside, and the orders of the Assistant Labour Commissioner were reinstated, with no order for costs being made.