Union of India vs C.P.W.D. Mazdoor Union and Others

S.B. Wad, J.

(1) This writ petition is filed by the Union of India against the Award of the Umpire Shri M.G. Wanare, Deputy Chief Labour Commissioner (Central), New Delhi, u/s 10-A of the Industrial Disputes Act,1947, published in the gazette u/s 17 of the Industrial Disputes Act on 15.2.1988.

(2) The dispute relates to re-categorisation/re-classification of work- charge staff and regular classified categories of Cpwd on the analogy of classification of scheduled employment as per the schedule under the Minimum Wages Act,1947. There is a long-standing demand of the Cpwd worker

(3) The two arbitrators disagreed on most of the demands of the workmen through their awards. Therefore, the Umpire rendered his Award. The parties to the Agreement had agreed. "The majority decision of the arbitrators shall be binding on us and in case the arbitrators are equally divided in their opinion ,the Award of the Umpire shall be binding on us."

(4) Broadly speaking, the Umpire has rectagoriesed some unskilled workmen into skilled workmen and some skilled workmen into highly skilled workmen .The Umpire has followed the principle of a certain length of service for the purposes of getting into higher category, such as some skilled and highly skilled .In some cases the trade test for the purposes of promotion has been abolished .In certain categories of workmen method of promotion and the ratio for the promotees and direct recruits has been prescribed. The Umpire has directed that the re-categorinsation should be notionally fixed from 1.1.1973and the arrears should be paid to the workmen from 1.4.1981. Shri G.K.Khamani, Arbitrator, had recommended that the Award should be given effect to from 1.1.1986, the date from the which the IVth Pay Commission recommendations were made applicable to the Central Government employees. On the other hand Shri Vats, Arbitrator, had recommended that the effect to the Award for the purposes of arrears also should be from 1.1.73. The not effect of the Award of the Umpire is that the Central Government will have to pay about Rs. 250 crores by way of arrears. The Umpire has recommended that 50per cent of the arrears of wages should be deposited in the respective Provident Fund accounts/National Saving Certificates ; and 5 per cent of the amount of arrears should be deposited in the Prime Minister''s Relief Fund for the purposes of using it for drought relief. The respondent Union had accepted this recommendation. The Umpire has further directed that 5 per cent of the arrears should be made over to the respondent Union as Union Fund. The Umpire has rejected the Union''s demand of 15 per cent of the arrears as Union Fund.

(5) The Award of the Umpire is challenged by the Union of India on several grounds. The first submission on behalf of the Union of India is that the payment of arrears from 1.4.1981, as directed by the Umpire, would involve huge financial payment of over Rs. 250 crores, which is an unbearable burden on the Central Government, particularly in the light of the precarious financial/economic resources of the Central Government. It is also submitted that the Award will have wide repercussions on other workers in the other Central Government departments as they will also claim the same wages are paid to the workers of CPWD. It is submitted that the Award should be given effect to from 1.1.1986, the date from which the IVth Pay Commission recommendations have been made applicable to the Central Government employees. The Counsel for the respondent Union, however, strongly objects. He submits that as a matter of fact the ''dispute is pending since 1973 and, Therefore, the arrears should have been paid from 1.1.73. The Counsel further submits that in any case this Court should not interfere with the Award of the Umpire, which is now gazetted by the Government of India u/s 17 of the Industrial Disputes Act .The Counsel further submits that Section 17A of the Act, which relates to the commencement of the Award, empowers the Central Government to declare that the Award shall not be enforceable if it is expedient on public grounds of national economy to do so. The Legislature, it is submitted, has expressly given the said power to the appropriate government, but if the government does not avail of the said power u/s 17A and merely publishes the Award u/s 17 of the Act, the Court should be slow to interfer with the Award, particularly, in the extraordinary jurisdiction of the writ petition. The Counsel has referred to certain decisions of the Supreme Court, laying down that the Government should act as a model employer in a welfare state, acting under the constitutional mandate of socialism. On the other hand Counsel for the petitioners has relied upon the decision of the Supreme Court in The Dharwad Distt. P.W.D. Literate Daily Wages Employees Association and others, etc. Vs. State of Karnataka and others etc., . In that case the Supreme Court had directed the regularisation of the daily rated employees appointed on or before 1984 to be regularised from 1.1.1990.

(6) Section 17A of the Industrial Disputes Act, gives wide powers to the appropriate government to declare that the Award shall not become enforceable on the expiry of the period of 30 days from its publication if it is expedient on public grounds affecting national economy to do so. It is true that the Central Government has not availed of this power and had merely published the Award as it is u/s 17 of the Act. The Award was published in 1988. It can be taken judicial notice of that the national economy has received a serious setback in the last three years, so much so, that it was on the brink of collapse but for .the assistance received from the Imf and the World Bank .It is not easy for any government not to give effect to an Award on the ground of very precarious national economy, particularly where a large number of employees (27,000 in this case) repeatedly resort to strikes and other intimidating tactics. It is true that in the Dharwad case the Supreme Court had directed that the regularisation should be effected from 1.1.1990 although the demand was pending for over a decade. In that case the Supreme Court had directed regularisation of about 50,000 daily rated employees. The consideration that weighed with the Supreme Court was very heavy financial burden of payment of arrears if the regularisation was to be directed from the date of the initial demand. But that direction was given by the Supreme Court in a petition under Article 32 of the Constitution.

(7) Where the award is u/s 10-A of the Industrial Disputes Act and where the appropriate government has not exercised the power u/s 17A, the Court should be slow to make major changes in the Award. On examination of all aspects of the matter, we have come to the conclusion that the umpire has balanced the two extreme positions, one regarding payment of arrears for 15 years and the other not to pay arrears at all. The date fixed by the Umpire for payment of arrears, i.e. 1.4.1981, is not arbitrary and is based on the sound perception of the realities by the Umpire. The submissions of the petitioner and the respondent union in this regard are rejected. The next submission on behalf of Union of India is that the Umpire has pronounced the award on the matters not referred to in the arbitration agreement .The first serious objection is that the matter in regard to Muster Roll employees, which are about 10,000 in number, was not referred to the arbitrators .The only two categories in regard to whom the reference was made were" Work charged and Regular Classified Establishments". There is good deal of merit in this submission. The arbitrators were not in a position of the Fourth Pay Commission to consider generally the conditions of service of all classes of employees ,but their power was circumscribed by the exact terms of the agree-ment which formed the basis of the reference. The award, in so far as it coversMuster Roll employees, is null and void.

(8) Similar is the submission of the petitioners in regard to the criterionfor promotional posts laid down by the Umpire. The Umpire has recommendedthat in regard to Mason, Carpenter, Plumber, Lift Operator, Firemen Driver.Motor Lorry and Road Roller, Sr. Mechanic Ac & R and Sr. Operator, thereshould not be more than 25% of the direct recruitment. The Umpire has alsorecommended that there should be 50% direct recruitment for cable jointer andboilerman. From the award, we do not find any convincing reason as to whythe direct recruitment should be limited to the percentage given by the Umpire,There are various considerations which go into the decision as to what should be the appropriate percentage of direct recruitment incorporating fresh blood in the service. All the workmen are Government servants working the C.P.W.Dand are governed by statutory Rules 1n regard to seniority, promotion, etc.Since there was no specific reference in regard to the quota of direct recruits and the promotees for the purposes of all the promotions, the finding of the Umpire is beyond the scope of reference and is, Therefore, void and a nullity.

(9) The petitioners have attacked another general recommendation made by the Umpire, namely, that all workmen classified unskilled should be placed under semi-skilled category when the workman completes 5 years regular continuous service. The category of unskilled, semi-skilled or highly skilled has more relevance to the type of job or the work that is handled. Therefore, mere work for five years in a particular category does not automatically qualify a person to go to the higher ladder. If the job or the work remains the same, the principle of equal pay for equal work would certainly be affected. We agree with the submission of the petitioner that the recommendation of the Umpire is unreasonable and likely to create legal difficulties in matters of equal pay for equal work.

(10) Another submission of the petitioner is that it was not a term of reference to the arbitrator as to whether trade test in certain categories should be abolished and the workmen should go into the next categories after completion of service of a certain number of years, say three or five. The submission of the Union of India, namely that the Umpire has overstepped the terms of reference in recommending abolition of trade test is correct. The general submission on behalf of Union of India namely that if trade test is abolished and if a workman is permitted to automatically go to the higher category, all incentive for efficiency and excellence will go from the service has a great merit. The Umpire has over-looked this vital aspect generally affecting the service underC.P.W D. The Umpire''s recommendations in this regard cannot be accepted.

(11) There are some other submissions made by the Union of India before the arbitrators/Umpire. It is submitted that the two CategorisationCommittees appointed by the Government in 1960 and 1973 had reviewed the categories of workmen as mentioned in C.P.W.D. Manual Volume Viii and therefore the demand of the workmen was unreasonable. C.P.W.D. MazdoorUnion, respondent No. 1, was not consulted by the Categorisation Committee during 1973 because that was not the recognised Union at that time. It was then submitted that when the reference was in relation to the recategorisation and re-calssification on the basis of the Minimum Wages Act, the arbitrators could not have looked to similar categories in municipal organisations or public sector undertakings. Another objection on behalf of Union of Indiais that minimum wages fixed under the Minimum Wages Act are fixed for the daily wages and they do not hold good for Work charged /Regular Classified Estt. for whom regular pay scales and service conditions are fixed under the statutory rules. The Umpire has not accepted any of these submissions. When the Union of India, through C.P.W.D. Management, agreed for the arbitration u/s 10A and agreed to the terms of reference, it cannot now be said that the categorisation was already done by the CategorisationCommittee in 1973 and that the question cannot be re-opened after ten years. Once a reference is made to the arbitrator, they are free to consider the minimum wages in different establishments including municipal organisations and public sector undertakings. .Such references are only for finding out the reasonable basis for fixing the wages and the categories of employment. So also ,the rate fixed for the daily wagers under the Minimum Wages Act is a good starting point even for fixing wages for Workcharged/Regular Classifieds .Estt. because in no case their wages can be below that of the daily wagers. None of these submissions on behalf of the Union of India have any merit and they are, Therefore, rejected.

(12) As regards the apportionment of arrears, as directed by the Umpire ,we are of the opinion that it requires some reconsideration.

(13) Since the worker''s Union, respondent No. 1, has agreed that 5%of the arrears be deposited in the Prime Minister''s Relief Fund for draughtre if we do not think that we should vary this recommendation. We do not agree with the Umpire that 5% of the amount of arrears should be made over to the C.P.W.D. Union, respondent No. 1, unconditionally. The Umpire was quite right in rejecting the demand of the Union for payment of 15% of the total arrears to the Union Fund. During the course of hearing, we had found that handing over about 12 crores of rupees to the respondent union is fought with great danger. Such large amount cannot be at the disposal merely of the union leaders. We had, Therefore, suggested to the parties thata trust be created treating the said amount of about 12 crores of rupees as a corpus .This corpus would fetch at least Rs. 1,20,00,000.00 (Rupees One crore and twenty lacs only) as annual interest. The said amount of interest should be utilised for the welfare activities for the workmen. The fund should be a welfare fund for the benefit of all the workmen and should not be limited only to the workmen who are the members of the respondent No. 1 union. During the course of arguments, the case was adjourned from time to time in order to examine various draft schemes. It was understood that all the workmen unions would have one representative and there would be equal number of representatives of the Union of India, for e.g. if there are three representatives of the workmen union, there would be three members on behalf of Union of India managing the trust. It was also examined as to whether such arrangement can be made through a society registered under Societies RagistrationAct. However, the arrangement could not be given a final shape because of the sudden somersault by the respondent union in insisting that the fund should be made available to their union alone and it can be utilised for opposing victimisation and litigation by the workmen.

(14) Having considered the matter in great detail, we are of the opinion that both the conditions imposed by the respondent unon are unreasonable and contrary to the general interest of the workmen. We direct the concerned parties to work out a scheme as indicated by us above for the proper utilisation of 5% of the arrears which come to about 12 crores of rupees .In case there is no agreement between the parties within a reasonable period, the recommendation of giving 5% of arrears to the Union Fund shall stand deleted from the award. Out of the balance of the amount towards areas ,the workmen who are retiring within one year from today, should be paid their entire amount in cash. Similarly, the workmen who have retired between 1-4-1981 and the date of this judgment should also be paid the arrears due according to law. The balance amount, after such payment. should be deposited in the Gpf Account of the workmen, to be governed bythe Gpf Rules.

(15) For the reasons stated above, the writ petition is partially allowed .There shall be no order as to costs.