AI Structured Summary
Not yet generated for this judgment
Judgment
This appeal is directed against the order of the learned single Judge,in W.P.No.6303 of 1999 dated 30.07.1999.
The appellant had sought for a writ of declaration declaring that the action of the respondent/management in unilaterally changing the service
condition as illegal and contrary to the Industrial Disputes Act, 1947 (hereinafter called ""the Act"") and consequently, to direct the respondent not to
effect any change in service conditions except by means of a settlement or an award or by giving a notice u/s 9A of the Act. According to the
petitioner/appellant, the petitioner Union was registered under the Trade union Act, 1926 and the respondent was a company registered under the
Companies Act, 1956, involved in the manufacture of Air-conditioners, Water- Coolers, etc. The company has a service station and a godown at
Madras. The company grants 12 days of National and festival holidays apart from one extra day for the year in case of extraordinary situation.
This has been agreed to by the Union and the management as early as 28.12.1984 and from 1984 the management used to send the list of national
and festival holidays during December of every year and ask the Union to select 12 days according to the choice of the workers. On receipt of
information from the Union, the management would exhibit in the Notice Board the list of 12 national and festival holidays for the following year.
Even though this practice was prevalent before 1984 in order to avoid controversy, a Memorandum of Understanding was signed. It was further
contended by the Secretary who had sworn to the affidavit that from the year 1964 when he joined the service, the Union had requested Good
Friday to be declared as a holiday apart from various 11 holidays depending upon the requirements of the workmen. This had been the practice till
1988 and in December, 1998, the Union submitted a list of holidays which included 2nd April, 1999 being Good Friday. The management instead
of intimating the list of holidays for the year 1999, stated affixing in the Notice Board, the list of holidays for the year. The holidays requested by
the Union for the months of January, February, and March, 1999 were accepted and declared, but unfortunately the management refused to
declare Good Friday as a holiday and directed the workers to report for work. But as the workers used to avail Good Friday as a holiday and
directed the workers to report for work. But as the workers used to avail Good Friday as a holiday, they did not report for work and this was
duly intimated to the management. The management put up a notice on 2.4.1999 stating that the workers will not be adjusted in April, 1999.
According to the petitioner, the management, started deviating from the practice of granting holidays as per the list sent by the Union and it was
only with reference to 1999, the management was not acceding to the Union''s request. The workers working in the service station are governed
by the Factories Act and the employees working in godown are governed by the Shops and Establishment Act, 1948. As far as holidays are
concerned the employees working in the aforesaid places are concerned working in the aforesaid places are give 12 days national and festival
holidays apart from one extraordinary situation. The Tamil Nadu Industrial Establishment (National and Festival Holidays) Act is applicable to the
respondent management. As per Section 3 of the said Act the employees shall be allowed in each calendar year 9 holidays. Section 11 of the said
Act protects the festival holidays and also the rights and privileges of any employee should not be curtailed. The employees have been enjoying 12
+ 1 National and festival holidays which are selected by them and the said practice was in vogue for a very long time and this had become a
service condition for the employees. As such, the management cannot withdraw any customary concession or privilege or change in usage except
by issuing a notice u/s 9A of the Act. But unfortunately, the management without following the mandatory provision changed the customary
practice and had deprived a holiday assigned for Good Friday and had also decided to cut wages for the said day. The respondent was a public
limited company and hence the writ petition was maintainable since there was a statutory violation of the provisions of the Act. The management
cannot unilaterally withdraw a holiday and declare it as a working day. The wages was a property under Article 300-A of the Constitution of India.
Hence the writ for declaration.
In the counter filed by the management, it was contended that the Company was always strictly adhering to the various statutory provisions
which are applicable to the company and it was one of the few companies in which several welfare measures have been provided for the
employees. The respondent/company was acting in full conformity with the provisions of the Tamil Nadu Industrial Establishment (National and
Festival Holidays) Act, 1958 and declaring the list of holidays every year and appropriately intimating the same to the Inspector of Factories. The
list of holidays for the year 1999 was also duly intimated to the Inspector of Factories and exhibited in the Notice Board of the respondent
company. The respondent had not acted in contravention of the provisions of the Act. It is further stated that the competition in the business
involved by the company has increased manifold in the recent years. The petitioner Union was attempting to distort the contents of the
Memorandum of Understanding regarding holidays. The petitioner Union cannot be permitted to wilfully change the holidays every year in a
manner detrimental to the business and image of the respondent company, especially in today''s severely competitive environment. Even though the
list of holidays had been duly intimated on 3.3.1999, the petitioner Union however, refused to accept the list of holidays for the year 1999. The
Union had categorically mentioned that there was no scope either for studying or proposing another list of holidays than the one given by them. The
stand taken by the Union was not acceptable by the management. The management had also informed the Union in unequivocal terms that inspite
of direction of the management if the Union disobeyed the same, the same would be treated as unauthorised concerted action and appropriate
action will be initiated by the management. The Union by its reply dated 11.3.1999 insisted that the management had no say in the selection of
holidays for the current year for Service Station and Godown. Apart from exhibiting the list of holidays applicable to the Service Station and
Godown for the month of April, 1999, a list of holidays was also displayed in the Notice Board. The management had also issued a letter dated
31.3.1999 making it clear that in case any one of the union members absented himself on 2.4.1999 such absence will be clearly unauthorised. It
was also made clear that any other member absenting himself on the said date will not be entitled to wages. But inspite of such clear
communication and notice, the Union had advised its members to abstain from attending the office. Therefore, the respondent had no other
alternative except to order deduction of one day''s wages for the absence on 2.4.1999.
It was further submitted that the very fact that the management was providing to the Union the list of holidays for every year under Negotiable
Instruments Act for the purpose of the Union indicating 12 holidays was itself indicative that the management had definite say in the matter from the
beginning. Just because the management did not alter the list of holidays proposed by the Union in the past years, it did not mean that the Union
had acquired an unfettered right to decide the holidays of their own choice unilaterally and that the management had permanently abdicated its right
to have a say in the matter for ever. A perusal of the Memorandum of Understanding would show that the same speaks only about the number of
holidays being 12 in a year and nothing else. Therefore, the prerogative of choosing the holidays was with the management. In the past depending
upon the circumstances and the adjustment by switching over to fixing holidays on a festival other than the one for which holidays were declared
earlier the list of holidays was different. In the list of holidays for the year 1999 holidays have been specified for certain festivals for which already a
holiday had been declared in the past years. As such it will be clear that the holidays were not always uniform every year and there have been
changes. Only in line with such a practice, the list of holidays for the current year was prepared. By drawing up the list, the management has taken
care to separate holidays evenly over the entire year and it is only in the said process 2.4.1999 could not be included in the list of holidays for the
year 1999. The allegation that the management did not exhibit the list for the year 1999 was factually incorrect. Although in the past, the
respondent has a gesture of goodwill considered and agreed to the request of the Union in the matter of finalisation of the list of holidays for the
reasons already explained, the respondent was required to be intimated the list of holidays as stated earlier. The allegation that there was change in
the condition of service and that notice was required to be sent u/s 9-A of the Act is without any basis. The question of issuance of such notice did
not at all arise.
The management further contended that the writ petition itself was not maintainable since the respondent was only a public limited company and
not a State under Article 12 of the Constitution of India. It will be clear from the correspondences from the Union, that they have resorted to an
adamant attitude deliberately shutting out the possibility of any discussion on the issue. In spite of repeated communications to the Union for
discussion, they have failed and neglected to utilise the same. Withholding of wages for 2.4.1999 was justified in the circumstances already
explained.
The learned Judge while disposing of the writ petition, held that the Memorandum of Understanding would show that the number of holidays
was 12 in a year and nothing more. The respondent/management had intimated the holidays with respect to the list of holidays for the year 1999.
The learned Judge also held that the total number of holidays had not been changed in the present case and it cannot be stated there was a change
in the service conditions. Therefore, it cannot be assumed that there was an alteration or change in the condition of service for which a notice
would be required u/s 9-A of the Act. The learned Judge also held that the relief sought for under Article 226 of the Constitution of India was not
maintainable, nor the situation was monstrous warranting the exercise of jurisdiction. The petitioner had alternate statutory remedy of raising an
industrial dispute and it was not shown that the management had no jurisdiction or that it had usurped jurisdiction. With the result, the writ petition
was dismissed and hence the present appeal.
Mr.N.G.R. Prasad, learned counsel for the appellant/Union contends that hither to the practice was always that for every succeeding year the
management would forward to the Union a list of holidays and the Union would select 12 holidays out of the list to be declared as holidays and the
management would declare only those holidays chosen by the Union as holidays. The management never altered or amended the list sent by the
Union and the management had never objected to the Union choosing holidays excluding the festival days falling on Saturdays and Sundays and it
was the established practice that the workers were entitled to 12 separate holidays, not including Saturdays and Sundays. He would further submit
that such being the practice in vogue between the parties for several years, the said right had become a customary privilege and if the management
wanted to effect any change it would be detrimental to the interest of the worker. Such a change could be brought about only by issuing a notice
u/s 9-A of the Act, which had not been complied with. He would further submit that the rights of an employee to avail the required minimum
holidays were a very essential feature of the service conditions and referable to Entry 5 of IV Schedule to the Act, which would require prior
notice to be given u/s 9-A of the Act.
Mr.R. Krishnamurthy, learned Senior Counsel appearing for the management would however contend that the management had never
abandoned its rights as final authority to decide about the list of holidays. The settlement or agreement between the employer and the Union did not
require that the choice of holidays by the Union was binding on the employer or that the Union was entitled to choose holidays excluding Saturdays
and Sundays. He would also contend that the management was prepared for discussion with the Union and had intimated its desire to have a
discussion with the Union through several of its communications, but the Union chose to adopt an uncooperative attitude. The agreements between
the parties do not provide for 12 holidays excluding Saturdays and Sundays and therefore, it was the Union which was attempting to deviate from
the established practice and therefore, it was up to the Union to have raised an industrial dispute. Therefore, the action of the Union having sought
for a remedy under Article 226 of the Constitution of India was not sustainable.
A perusal of Tamil Nadu Industrial Establishments (National & Festival Holidays) Act, 1958, hereinafter called the Tamil Nadu Act"", shows that
u/s 3 of the Tamil Nadu Act apart from three National holidays, five other holidays for such festivals as the Inspector may, in consultation with the
employer and the employees, specify in respect of any establishment, the number of holidays. But the number of holidays is made flexible subject
to the rights and privileges to which an employee may become entitled by virtue of any other law, contract, custom, usage, etc., which may be
more favourable to an employee vide Section 11 of the Tamil Nadu Act. Though the Memorandum of Settlement dated 29.4.1983 executed
between the management and the Union does not specifically deal with how the holidays have to be fixed, clause (d) of the Record Note of
understanding reached between the management and the Union on 28.12.1984 states as follows:
The quantum of Holidays applicable to Godown & Service Station will be 12 days a year. In addition, one extra day for the year, if declared
under N.I. for extraordinary situation, will be allowed. Any other holiday, under N.I. if declared and made applicable to Godown and Service
Station will be fully compensated.
No other material is placed before the Court by either side which may be termed as binding terms in the matter of process of fixation of holidays.
There are no specific terms as regards the process by which the holidays are to be fixed and as to whether Saturdays and Sundays could be
excluded while fixing holidays. Therefore, the line of enquiry has to be to find out the actual practice which had been in vogue during the past and
to see whether such practice could assume the character of a condition of service.
In the above context, not only the documents filed as typedset disclose that the choice was left with the Union and the Union always chose the
holidays excluding Saturdays and Sundays, but also admitted to be so by the management in its counter, subject of course, to the stand of the
management that the management always had a final say in the matter and that it did not abandon its right. Copies of the correspondence between
the management and the Union had been filed from the year 1994 to show that the management sends the list of all holidays declared under
Negotiable Instruments Act for necessary action by the Union and the Union sends a list of 12 + 1 holidays to the management, which are
subsequently accepted by the management and a copy of the same being sent to the Inspector and put up on the Notice Board. A further fact
which is also evident is that the Union had always chosen the holidays excluding Saturdays and Sundays without any objection or dissent from the
management. This has been going on till the end of 1998 after which the impugned dispute arose while fixing holidays for the year 1999. Though
such correspondence has been filed only from the year 1994, in the affidavit of the Union, it is positively asserted that the same practice was
prevalent even prior to 1984, and in order to avoid controversy. the Memorandum of Understanding was signed in 1984 and since then the
management used to send the list to the Union and the Union would select 12 holidays according to the choice of the workers. In the counter by
the management, this assertion is not positively or seriously denied or disputed; but as stated earlier while extracting the stand taken in the counter
affidavit, the management has merely stated (Paragraph No. 11 of the counter affidavit) that just because the management did not alter the list of
holidays proposed by the Union, it did not mean that the Union had acquired unfettered right to decide the holiday or that the management had
permanently abdicated its right. Therefore, there is no other alternative except to come to the conclusion that as a matter of long practice the choice
of holidays was left to the Union including the exclusion of Saturdays and Sundays. At this juncture, it would be relevant to recall that u/s 11 of the
T.N. Act the rights and privileges acquired by the employees as a result of any other law, contract, custom, or usage, which are mote favourable to
the employee are protected. Apart from the said specific statutory entitlement, reference may also be made to the observation of the Supreme
Court in Sudhir Chandra Sarkar Vs. Tata Iron and Steel Co. Ltd. and Others, , that a facet of collective bargaining is that any settlement arrived at
between the parties would be treated as incorporated in the contract of service and a presumption of systematic translation of the results of
collective bargaining into individual contracts was created. It is true that Judgment, the Supreme Court was dealing with certified Standing Orders.
In the present case, the circumstances relating to the execution of Memorandum of Understanding dated 28.12.1984 and the admitted position of
the process of declaration of the holidays prevalent for considerable length of past period and considered in the light of the protective clause u/s 11
of the Tamil Nadu Act, are sufficient to hold that the said long practice had assumed the character of a regular condition of service.
In this contest, we would however, make it clear that the assertion by both the parties that they are the ultimate authority to decide about the
holidays cannot be sustained. Neither the Union nor the management can claim that their decision should be final and binding. A perusal of Section
3 of the Tamil Nadu Act shows that it is the Inspector appointed under the Act who has to specify the holidays in consultation with the employer
and employee. The Section contemplates mutual agreement which would be final and binding. Neither the employee nor the employer can claim to
have the last word.
The next question which arises for consideration is whether the stand taken by the management for the year 1999 can be termed as a variation
of conditions of service so as to invoke the requirement of notice u/s 9-A of the Act. As we have already found that the long practice had become
ripened into a condition of service, any attempt to alter or deviate the said practice has to be examined in the context of Section 9-A of the Act.
There is no dispute over the fact that the action of the management had resulted in the inclusion of Saturdays and Sundays totalling up to five days.
That the management wanted to depart from the existing practice is not only implied from its stand in paragraph 11 of its counter as stated earlier,
but also in paragraph No. 14, there is a tacit admission that the management wanted to deviate. In paragraph No. 14, it is stated as follows:
As regards the averments contained in para 5, it is submitted that, although in the past, the Respondent had, as a gesture of goodwill, considered
and agreed to the request of the union in the matter of finalisation of the list of holidays, presently, for the current year, for the reasons explained in
detail herein above, the Respondent is required to intimate the list of holidays as stated earlier.
Whether the reason behind the action of the management would warrant or justify a deviation is a matter for the union and the management to
negotiate and to arrive at a settlement. But the intention to deviate is explicit and clear.
In this background, whether a notice u/s 9-A of the Act would be necessary has to be considered. Entry 5 of the IV Schedule to the Industrial
Disputes Act, stipulates ""Leave with wages and holidays"" as a condition of service covered u/s 9-A of the Act. Therefore, there is no reason to
ignore the specific mention of holidays.
In Tata Iron and Steel Co. Ltd. Vs. The Workmen and Others, , the Supreme Court held that the attempt to change Sunday as a holiday
would be within the contemplation of Section 9-A of the Act. It was further held that a process of consultation was necessary for the employer to
reflect his sympathetic cooperation in improving the status and dignity of the employee consistent with the egalitarian and progressive trend.
In L.I.C. v. D.J. Bahadur, 1981 (1) L.L.J. 1 the Supreme Court examined the applicability of Section 9-A of the Act in detail and after
examining the earlier rulings, the Supreme Court held that the unilateral variation of the conditions of service by the management so exercised was
in futility and before a contract was sought to be varied, there should be an award or settlement.
Even in a case where the management had invoked Section 9-A of the Act, the Supreme Court held that a benefit prevailing for a long time
and thus becoming a condition of service, should not be interfered with lightly to the prejudice of the workmen, in the absence of compelling
material vide judgment of the Supreme Court in Monthly Rated Workmen v. Indian Hume Pipe Co. 1986 (Suppl.) S.C.C. 79.
18.In M.R.F. Ltd. Vs. Inspector Kerala Govt. and Others, , the Supreme Court considered the validity of Kerala Industrial Establishments
(National and Festival Holidays) Amendment Act 24 of 1990. Section 3 was amended increasing the number of National holidays from 3 to 4 and
the festival holidays from 4 to 9. While upholding the judgment of the Kerala High Court sustaining the validity of the Amendment Act, the
Supreme Court observed that Article 43 of the Constitution of India ensures proper conditions of work for the employees for decent standard of
life and full enjoyment of leisure and social and cultural opportunities. The above quoted judgments not only emphasise the importance of the rights
of the workers to be assured of proper and sufficient holidays as an inherent condition of service, but also hold that any alteration of the prevalent
mode of holidays, would require invocation of Section 9-A of the Act.
We are therefore, unable to accept the stand of the management that Section 9-A of the Act is not attracted. We are also not persuaded to
accept the defence of the management that in spite of their repeated offer to the Union to discuss the issue, the Union was not cooperative. If the
requirement u/s 9-A of the Act is found to be imperative then the provision has to be fully and properly complied with and the process cannot be
substituted by a mere invitation for talks.
20.In M/s. Lokmat Newspapers Pvt. Ltd. Vs. Shankarprasad, , the Supreme Court held that notice for any change as contemplated u/s 9-A of
the Act should be issued before the introduction of a new scheme and that the notice issued after the installation of the new scheme would be still
born and incompetent and would be violative of the provisions of Section 9-A of the Act.
The last issue which remains to be considered is the question of maintainability of the writ petition. As a result of the finding that there is non-
compliance of Section 9-A of the Act, it follows that there is gross infringement of a statutory provision and also the consequential violation of
principles of natural justice which should be sufficient to eliminate the objections on the ground of alternative remedy, vide the judgment of the
Supreme Court in Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and Others, . To the same effect is the judgment of K.
Govindarajan, J., rendered in South Arcot District Central Co-Operative Bank Ltd. Empolyees Association Vs. The Deputy Commissioner of
Labour D.M.S. Compound, Teynampet, Madras-6, and another, . The submission that if the Union was aggrieved, an industrial dispute could be
raised by the Union, cannot also be countenanced. The situation has been brought about by the unilateral action of the management and ignoring its
statutory obligation u/s 9-A of the Act. The need to remedy the situation is emergent and grave enough from the point of view of the Union who
have not only been deprived of the accustomed holiday for Good Friday, but also are deprived of wages for that day. As a result of the
managements unilateral action of including Saturdays and Sundays, the employees have lost five holidays. It would not be reasonable to expect that
the Union should raise a dispute and await indefinitely for the ultimate conclusion of the proceedings. Therefore, we are unable to sustain the
objection based on alternate remedy.
In the result, the writ appeal is allowed. If the management chooses to vary the existing practice in vogue namely, of excluding Saturdays and
Sundays from the list of holidays, the management is at liberty to comply with the requirement u/s 9-A of the Act In the event of such compliance
culminating in any dispute or proceeding before the appropriate authorities under the Industrial Disputes Act, such authorities shall deal with the
issue independently without being influenced by any of the observations contained in this judgment. It is also made clear that our rinding that the
practice adopted till now had become a condition of service will be restricted only to the extent that the union was allowed to opt for holidays
excluding Saturdays and Sundays and not as regards the claim of the Union that their choice of holidays was binding on the management. No
costs. Consequently, connected C.M.Ps. are closed.