Voltas Limited Vs Voltas Employee''s Union

@JUDGMENTTAG-ORDER

R.J. Kochar, J.@mdashThe Respondent Union expects from the Petitioner Company and demands that the Canteen Costs/prices of the following items should not be Increased from the prevailing rates as stated below :

The price list produced by the Petitioner Company demonstrates that no food item is sold at a price more than Rupee One. The Respondent Union has very strongly opposed the notice of the Petitioner Company to increase the prices of food items sold in the Canteen on the ground that these prices were fixed under the bi-lateral settlement from 1978onwards and that the Petitioner Company cannot increase the price of any eatable item sold in the Canteen without the consent of the Union as provided under the Settlement. It is the case of the Union that the subsidy which the Petitioner Company has been giving in the Canteen must continue as the essential service condition of the workmen. It was very vehemently submitted by Shri Gonsalvis, for the Union that this Court should not merely look at the low prices of the food items but should also consider the other "sacrifice" made by the Union in their other demands. Shri Gonsalvis has admitted that the Consumer Price Index (C.P.I.) and the Dearness Allowance linked with it has Increased from 355 points in the year 1978 to 10501 points in June, 1999 i.e., more than 20 times. Inspite of this admitted steep rise in the figure of the C.P.I, the Union has strongly opposed to any increase in the prices of the food items sold in Canteen though the amount of Dearness Allowance added in the pay packets of the workmen is increased with the C.P.I. It sounds very strange that on one hand the workmen must get higher D.A, on the ground of rise in the C.P.I, and while on the other hand they oppose the increase in the prices of the food items even by a single paisa. The Union has withheld its consent for any such rise in the prices of the food items.

2. The Price Chart produced by the Petitioner Company gives details about the prices of the food Items sold in Mumbai Canteen and Thane Plant Canteen of the Petitioner Company. The Chart also shows that the assessed prices by the Auditor and prices desired to be fixed by the Petitioners in the place of the prevailing prices. By its notice dated 30.4.1999 the Petitioner expressed its demand to increase the food prices in view of the tremendous rise in the prices and also huge losses suffered by the petitioner in the business. After explaining all the factors the Petitioner demanded consent from the Union for increase in the food prices in both the Canteens. It also pointed out that under the Factories Act as well as the Settlement dated 13.8.1957 the Canteen was required to be run on the basis of no profit no loss. The Petitioners took pains to point out to the Union that in view of the current prices in the canteen they are suffering huge losses. By its reply dated 4.5.1999 the Respondent Union refused to give consent to any Increase in the food prices on the ground that the Canteen Subsidise was the part of the service condition of the workmen. In the course of mutual correspondence it appears that the Petitioners tried to participate and convince the Union how on the basis of cost worked out by the Cost Accountant rise in the food prices have become inevitable. It further appears that there was several round of discussion between parties but all in vain. Finally, failure to arrive at an agreement or understanding led the petitioners to effect its notice dated 30.4,1999 w.e.f. 31.5.1999 after expiry of 30 days. The Union promptly objected to such an act and filed a complaint of unfair labour practice on 3.6.1999 u/s 28 read with Item 9 of Schedule IV of the M.R.T.U. & P.U.L.P. Act, 1971. The Union contended that the proposed increase in the food prices in the Canteen was in violation of the mandatory provisions of Section 9A of the Industrial Disputes Act. 1947 as no notice of change was given to the Union and secondly under the various agreements the Canteen Subsidy had become a service condition of the workmen and the prices of the food items in the Canteen should not be increased without the consent of the Union. Both these contentions were termed as unfair labour practice under Item 9 of Schedule IV of the Act. The Petitioner filed their written statement contesting the complaint as misconceived and untenable and prayed for its dismissal. Both the parties adduced their evidence, oral and documentary, before the Industrial Court. By its order dated 20.9.1999 the Industrial Court upheld the contention of the Respondent Union that the proposed increase in the prices of the food items in the Canteen amounted to an unfair labour practice under Item 9 of the M.R.T.U, and P.U.L.P. Act as it was in breach of Section 9A of the I.D. Act and also there was failure to implement the Settlement between the parties as the Union had not given the consent for such Increase in the Canteen rates.

3. The Petitioners are aggrieved by the said Judgment and Order of the Industrial Court and have questioned its legality and validity under Article 226 of the Constitution of India in this Petition. Both the learned counsel have taken me through the entire proceedings and the law. At the outset Shri Singh, the learned Counsel for the Petitioner submitted that in response towards demand No. 13 titled "Subsidized Food" both the parties had finally agreed that the Canteen must be run on "no profit no loss" basis under the Settlement dated 13.8.1957. He further pointed out that the principle of "no profit no loss rates" was continued as the basis of the determination of the food prices in the Canteen but It only remained on paper and no price Increase was effected in any subsequent settlement. In the Settlement dated 8.12.1987 the Union agreed to assist the Company in running the canteen economically. This assurance was given by the Union in ail the subsequent settlements and I need not deal with the relevant clause appearing in such settlements. It is the grievance of Shri Singh that the said assurance of the Union remained only on paper causing Petitioner Company tremendous losses in the matter of the Canteen. Shri Singh has made a very serious grievance against the Union that it had neither co-operated to run the Canteen efficiently and economically as agreed in various settlements while necessitating to maintain subsidy level of the year 1976-77 nor had It given consent to increase the food prices in the canteen. Shri Singh has further attacked the conduct of the Union that in every settlement they got fabulous increase in the total pay packets of all the workmen and they got higher and higher D.A. which was linked with the C.P.I. Shri Singh pointed out that the Union had Insisted to get higher D.A. on the ground of rising prices of their own food items in their own kitchen while they totally adopted a negative and obstinate stand as far as rising cost of food items sold in the Canteens. This was totally double standard practice adopted by the Union. Shri Singh has pointed out that there was no unfair labour practice engaged by the Petitioner as the food Items in the Canteen were to be sold strictly on the basis of no profit no loss and it was not disputed by the Union that the Canteen was suffering huge losses. He also submitted that even under the Factories Act and Rules the principle of no profit no loss to run the factory Canteen is well established. Secondly Shri Singh has argued that the notice dated 30.4.1999 was a notice akin to a notice of change u/s 9A of the Industrial Act was required. The learned counsel submitted that the Petitioners have waited for a period of 30 days though u/s 9A the period was 21days during which the desired change should not be effected. The Petitioners have tried to effect the desired change with effect from 31.5.1999 and therefore, there is more than substantial compliance of Section 9A of the Act. According to the learned Counsel the principle of no profit no loss was agreed under the settlement and on the basis of the said principle the Petitioners proposed as the last resort and to Increase the prices of the food items in the canteen to meet the recurring losses in the Canteen, According to him, the complaint was totally misconceived and ought to have dismissed by the Industrial Court.

4. Shri Singh has also submitted that it was for the Union to have approached the Conciliation Officer u/s 33 of the Industrial Disputes Act to oppose the proposed price rise in the Canteen. It was for the Union to have raised an Industrial Dispute against the decision of the Company to alter or modify the service conditions agreed in the settlements. The Union having not resorted to the legal provisions cannot be allowed to oppose the change in the canteen prices. Shri Singh has pointed out that u/s 9A of the I.D. Act. the bar on the employer before effecting any desired change is a prior notice of 21 days to be given to the workmen/union and the proposed change should not be effected within the said notice period of 21 days. The learned Counsel pointed out that these are the only two conditions required to be observed by the employer and there is absolutely no prohibition to effect any change after the expiry of 21 days notice period unless the adjudicating machinery if resorted to by the Union injects or prohibits the employer to effect the change.

5. Shri Singh has relied upon the following Judgments :-

1. Blue Star Employee''s Union v. Blue Star Ltd.

2. Voltas Switchgear Plant Employee''s Union v. Voltas Switchgear Limited, Thane.

3. G. Appaswami Chettiar and Anr. v. R. Sarangapani Chettiar & Ors.

4. Permanent Magnets Ltd. v. Vasant Ganu Patekar & Anr.

6. On the other hand Shri Gonsalvis supported the Judgment of the Industrial Court on the ground that under the relevant clause of the subsisting settlements the Petitioners were bound to sell the food items in the Canteen at the subsidised prices and no increase in the prices would be effected without the consent of the Union. Shri Gonsalvis, therefore, submitted that the proposed rise in the food items in the Canteen without the consent of the Union amounted to an unfair labour practice under Item 9 of Schedule IV of the Act. In contravention of the subsisting binding settlement between the parties. He also submitted that the proposed change was in contravention of Section 9A of the Act as no notice of the change under the said Section was given by the Petitioner Company. This omission to observe the mandatory provision of Section 9A of the Act also attracted Item 9 of Schedule IV of the M.R.T.U. & P.U.L.P. Act that is being breach of statutory provisions amounting to an unfair labour practice. In the submission of Shri Gonsalvis the following points have merged :

(1) Though the Factory Act and Rules do specify that the food in the Canteen shall be sold at no profit no loss basis, nothing prevents parties to enter into settlements giving more favorable benefits to the workmen and if such settlements are entered into they shall be binding.

(2) Though it may be true that Canteen prices are normally not a condition of service, once this becomes part of the settlement between parties, then it becomes a condition of service. Both the Voltas Switchgear case cited (W.P. 479/2000) and the Blue Star case (W.P. 1959/1999) are differentiate in - as much as there existed no settlement in those cases.

(3) The settlement of 1978 requires "Consent of the Union" in cases of price Increases. This Consent was not granted. The proposed changes are therefore in breach of the 1978 settlement.

(4) The reasonableness of the unions action in withholding consent cannot be seen by looking at apart of the settlement alone, the settlement as a whole has to be seen. The settlements in word show that small wage increases took place through various settlements and a ceiling of D.A. imposed. Thus though the Union benefited by favorable terms in case of canteen it lost in other respects.

(5) The settlement of 1978 being binding and valid the only way for the Company to change the terms of a settlement is by raising a dispute and having the dispute adjudicated. Only the adjudicating body under the I.D. Act can decide whether the clause should be modified and It is not open for the Court under the M.R.T.U. & P.U.L.P. Act to look into the justification for an alteration in the condition of services.

Shri Gonsalvis has relied on the following Judgments :

1. The Life Insurance Corporation of India v. Bahadur & Ors.,

2. Herbertsons Ltd. v. The Workmen of Herbertsons Ltd. & Ors..

3. Kamani Tubes Ltd. v. Kamani Employee''s Union & Anr.,

Shri Gonsalvis has lamented that the workmen and the Union have always sacrificed in certain other demands and have accepted the settlement at lower level in lieu of subsidized canteen prices. Baring this submission no concrete Illustration was given to point out what sacrifices were made by the Union to enable to claim the subsidized level of the canteen prices at such a low level. Shri Gonsalvis has rightly and fairly not disputed the rise in the prices of food items in the market and also not disputed the fact that the C.P.I, has galloped 20 times as already observed. He has also not disputed that on account of rise in the C.P.I, and the cost of living the workmen have received 20 times more D.A.. There is no dispute that in every settlements the service conditions were improved and the workmen got higher and more benefits. There is no dispute that on an average each workman employed in the Petitioner Company receives a salary of Rs.14.000/- p.m..

7. In my opinion the attitude adopted and stand taken by the Union is absolutely unreasonable, adamant and" obstinate. It is totally unfair on the part of the workmen and the Union to expect prices of all food items in the Canteen veg or non-veg not to exceed 0.75ps. There is no dispute that these prices were ranging from 0.06 ps. to 0.75 ps. and were fixed decades ago. There is also no dispute that the workmen have received 20 times rise on account of D.A. There is also no dispute that the settlement provided for Canteen facility on the principle of "no profit no loss". It is an unfair attitude on the part of the Union and the workmen not to Implement the principle of "no profit no loss" while fixing the food prices in the canteen. I am constrained to observe that the Union is following a double standard and duel policy while dealing with the management of the Petitioner Company. It is expected that a matured Trade Union like the Respondent would always take reasonable attitude which in this case is totally absent on the part of the present office-bearer of the Union. In the current rates for which the food items are sold, the meaning of subsidy has totally lost. To subsidies there is some limit and it does not mean that an item should be sold at 0.06 ps. though the making cost of the said item is Rs.5/-. This does not amount to subsidy but it amounts to snatching free. The meaning and the content of subsidy has completely lost and therefore, in my opinion the Union cannot put its finger on the word subsidy in the settlement of 1978. According to me, the Petitioner Company is fully justified in finally putting Its foot down in necessitating to run the canteen on no profit no loss basis as provided not only in the settlement but also in the rules framed under the Factories Act. 1950. Both under the settlements and the Factory Rules pragmatism and common sense are Inherent. The welfare of the workmen is to have a facility of the canteen in the factory premises. It does not extend to having the prices or rates of food items in accordance their whim and arbitrary attitude regardless of the cost of the preparation of such food Items.

8. I am in respectful agreement with the learned Single Judge [Hon''ble M.L.Pendse, J., as he then was] that the workmen do not have vested right in the fixing of rates. In the case before the learned Judge the facts were similar and he refused to Interfere with the Judgment of the Industrial Court, accepting the increase in the food items sold in the canteen of the said Company. In that case the grievance of the Company was that though the basis of the running of the Canteen was no profit no loss since six years the prices were not allowed to be increased by the Union. In our case there are more than two decades that the Canteen prices have remained unaltered. The learned Judge approved the Judgment of the Industrial Court permitting the rise in the prices of the food items sold in the Canteen. The principle followed by the learned Judge was that the workmen have vested right to have a canteen under. Section 46 of the Factories Act but they did not have vested right in the rates of the food items sold in the canteen. The learned Judge further observed that the food Items sold in the canteen must be on the basis of no profit no loss. This judgment was followed by my learned brother Vijay Daga. J. In the case of Voltas Switchgear Plant Employee''s Union. The learned Judge has observed that the canteen facilities and rates to be charged for the food items is not a condition of service . He also refused to interfere with the order passed by the Trial Court in that case.

9. In the case of Permanent Magnets Ltd. v. Vasant Ganu Patekar & Ors. while dealing with the case of voluntary retirement scheme I have taken a view that a notice for voluntary retirement scheme Itself can be treated as a notice u/s 9A of the Industrial Disputes Act, 1947. In the present case the Respondent Union has withheld its consent unreasonably and for no Justifiable reasons. When a consent of the other side is required such party cannot withhold its consent improperly with oblique motive or maliciously to harass the other party which requires such consent. The law demands and expects every party to be Just, fair and reasonable. This is the ratio laid down by the Supreme Court in the case of G. Appaswami Chettiar (supra).

10. In my opinion the Petitioners have made out a very strong case to quash and set aside impugned judgment of the Industrial Court. There is no unfair labour practice engaged in by the Petitioner Company as contemplated by Item 9 of Schedule IV of the M.R.T.U. and P.U.L.P. Act. 1971. The Petitioners have given a notice of proposed change in the food prices on 30.4.1999 and have given effect to such proposed changes only after the expiry of 30 days, though Section 9A of the I.D. Act prescribes a period of notice as 21 days. There is no other bar u/s 9A to give effect and it was for the Respondent Union to have raised an industrial dispute to challenge the proposed change. It cannot be argued that the employer who passes an order of dismissal himself has to approach the adjudicating machinery for declaration that his action is legal and proper. In the similar circumstances it cannot be argued that the Petitioner Union having proposed a change has to approach the Conciliation Officer to seek a permission to effect change. There is no such provision which is pointed out to me. The Petitioner Company has displayed the notice intending to change in the food prices sold in the canteen and it was for the Respondent Union, on getting aggrieved to have approached the adjudicating machinery. In my opinion after expiry of 21 days it was open to the Petitioner Company to have given effect to the intended or proposed change. In my opinion there was no Illegality in the decision and action of the Company to effect the change proposed in its notice dated 30.4.1999. Further I am also of the opinion that the agreed principle throughout all the settlements is "no profit no loss" in the conduct of the factory canteen. The Respondent Union having not challenged the costing of the food items, the Petitioner Company was fully justified in proposing the change in the food Items as reflected in the chart handed over by the Petitioner Company and which is reproduced below :

It is common knowledge that these rates are still much lower than in the market. Not only in the settlement but also in the rules under the Factories Act the mandate of the Legislature is to follow the principle of: no profit no loss in the conduct of the canteen. I, therefore, hold that there is no violation or breach of the settlements and also the rules framed under the Factories Act, 1940. The impugned Judgment of the Industrial Court, therefore, cannot be sustained as the same is Illegal and improper, which deserves to be quashed and set aside. The impugned Judgment is therefore quashed and set aside. Rule is made absolute in terms of prayer clause (a) with no order as to costs. The Petitioners are hereby directed to give effect to the notice dated 30.4.1999 with effect from 1st May. 2001.

11. Certified copy is expedited. Parties to act on an ordinary copy of this order duly authenticated by the Associate of this Court.

12. The learned Advocate for the Respondent Union prays for Stay of the order. Stay is refused.