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PETITIONER: M/S.  NORTH BROOK JUTE CO.  LTD.AND ANOTHER

       Vs.

RESPONDENT: THEIR WORKMEN

DATE OF JUDGMENT: 23/03/1960

BENCH:

ACT: Industrial  Dispute--Rationalisation scheme objected  to  by workmen--Scheme  put  into operation  Pending  reference  to Tribunal--Workmen’s  refusal  to  work--Lock-out--Claim  for wages  for the period of lock-out--Industrial Disputes  Act, 1947 (14 of 1947), ss. 3(2), 9A, 33, 33A.

HEADNOTE: A rationalisation scheme in the mills of the appellant  com- panies  was  agreed to by the Works Committee and  a  notice under S.  9A of the Industrial Disputes Act, 1947, was given to the 365 Union  of their workmen.  The workmen, however, objected  to the introduction of the scheme and the dispute was  referred by the Government to the Tribunal on December 13, 1957.   On December  16,  the  management  of  the  companies  put  the rationalisation  scheme  into  operation  but  the   workmen refused  to  do the additional work placed on  them  by  the scheme.  Later, the same day, the mills declared a lock-out. Work was, however, resumed a few days later as a result of a settlement,  and a dispute arose as to whether  the  workmen were entitled to the payment of wages for the period  during which the mills were closed: Held,  (1) that the workmen’s representatives on  the  Works Committee  represented the workmen only for the  purpose  of the  functions of the Works Committee and that the  approval of the scheme of rationalisation by the Works Committee  was not binding on the workmen or their Union. Kemp and Company Ltd. v. Their Workmen, [1955] 1 L.L.J.  48, approved. (2)  that  the introduction of a rationalisation scheme  was an  alteration of conditions of service to the prejudice  of the  workmen. (3)  that the alteration of conditions of service  was  made not  when notice under s. 9A of the Industrial Disputes  Act was  given  but  on December 16,  when  the  rationalisation scheme was put into operation, and that as it was done  when the  reference  was pending before the Tribunal,  it  was  a contravention of s. 33 of the Act. (4)  that  the closure of the mills in the circumstances  of this  case by the employer amounted to an  illegal  lock-out and  that the workmen unable to work in consequence  of  the lock-out  were entitled to wages for the period  of  absence caused by such lock-out.

JUDGMENT:

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 141 of 1959. Appeal by special leave from the Award dated July 19,  1958, of the Fourth Industrial Tribunal, West Bengal, in Case  No. VIII-240 (166)/57. C.   K.  Daphtary, Solicitor-General of India,  Vidya  Sagar and B. N. Ghosh, for the appellants. P.   K.  Sanyal and P. K. Chakravarty for R. C.  Datta,  for the respondents. 1960.  March 23.  The Judgment of the Court was delivered by DAS  GUPTA, J.-On December 13, 1957, the Government of  West Bengal referred under s. 10 of the Industrial Disputes,  Act the  following  dispute between M/S.  Northbrook  Jute  Co., Ltd., and Dalhousie Jute Mills Who are appellants before  us and their workmen:- 47 366 " Do the proposals of rationalisation in the above two mills involve  any increase in workload ? If so, what  relief  the workmen are entitled to ?" Almost  a  month before this the proposal of  introducing  a rationalisation scheme in time mills of these companies  had been  considered  at an extraordinary meeting of  the  Works Committee  and the Committee had agreed to the proposal.   A notice tinder s. 9A of the Industrial Disputes Act was  then given by the companies to the Unions of their workmen and it was because the workmen objected to the introduction of  the rationalisation scheme that the dispute arose and was refer- red by the Government to the Tribunal.  On December 16  when the  above  reference was pending before  the  Tribunal  the management.  of these mills put the  rationalisation  scheme into operation but the workmen refused to do the  additional work  placed on them by the scheme.  Later the same day  the mills  declared a lock-out.  Work was however resumed  again in  all  departments  excepting the  weaving  and  finishing departments on December 20, and in these two departments  on December 21, as a result of a settlement arrived at  between the  workmen  represented by their Unions and the  Mills  as regards the introduction of the rationalisation scheme.  But a dispute arose as regards the payment  of wages to  workmen for their dues during the period when the mills were closed, viz.,  16th  December to 20th December in  the  weaving  and finishing departments and 16th December to 19th December  in all  other departments.  This dispute was also  referred  to the Tribunal by an order of the Government dated February 1, 1958.    The   earlier  issue  as   regards   the   proposed introduction of the rationalisation scheme was also  amended in view of what had happened in the meantime by substituting therefore  :--"  Have the rationalisation  effected  in  the above  two  mills  since 16th December, 1957,  involved  any increase  in the workload ?  To what relief the workers  are entitled to ?" We are no longer concerned with this issue as the  decision of the Tribunal thereon which is  against  the workmen  is  no longer disputed.  As regards the  other  two disputes the Tribunal has made an award in favour of the 367 workmen  that they are entitled to wages for the  period  of absence above-mentioned. On this question the workmen’s case before the Tribunal  was that  the  reason that workmen could no do any work  on  the days in question was the illegal look-out by the  employers; the  employer’s  case was that the workmen had  struck  work illegally,  and so the closure of the mills on the  16th  of December  after such strike was not illegal or  unjustified. The  Tribunal was of opinion that the eimloyer’s attempt  to put  the  rationalisation  scheme into effect  on  the  16th

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December  was  a contravention of s. 33  of  the  Industrial Disputes  Act,  and so, the workmen’s refusal  to  works  in accordance  with that scheme was not an illegal  strike  and the employer’s closure of the mills was illegal. Learned counsel for the employer-mills has tried to convince us   that  they  had  acted  in  accordance  with  law,   in introducing the rationalisation scheme on the 16th December. He  pointed  out that the Works Committee  duly  constituted under the Act had considered the scheme and approved of  it, and  argued  that as the workmen’s  representatives  on  the Works  Committee  bad  agreed to  the  scheme,  the  workmen themselves  should be taken to have agreed to it.  That  the workmen’s  representatives on the Works Committee agreed  to the  introduction of the scheme by the companies "  whenever they desired " is established by a copy of the resolution of the Works Committee.  It has to be noticed however that  the workmen’s  representatives  on the Works  Committee  do  not represent  the  workmen for all purposes, but only  for  the purpose  of the functions of the Works  Committee.   Section 3(2)  of  the  Act  sets out  the  functions  of  the  Works Committee in these words: "  It  shall be the duty of the Works Committee  to  promote measures   for  securing  and  preserving  amity  and   good relations between the employer and workmen and, to that  end to comment upon matters of their common interest or  concern and  endeavor to compose any material difference of  opinion in respect of such matters." 368 The language used by the Legislature makes it clear that the Works  Committee was not intended to supplant  or  supersede the  Unions for the purpose of collective bargaining ;  they are  not authorised to consider real or substantial  changes in  the conditions of service; heir task is only  to  smooth away  frictions that might rise between the workmen and  the management in day-to-day work.  By no stretch of imagination can  it be said that the duties and functions of  the  Works Committee included the decision on such an important  matter as   the  alteration  in  the  conditions  of   service   by rationalisation.   "  To promote measures for  securing  and preserving amity and good relations between the employer and workmen  " is their real function and to that end  they  are authorised to " comment upon matters of their common concern or interest and endeavour to compose any material difference of  opinion  in respect of such matters,"  The  question  of introduction  of rationalisation scheme may be said to be  a matter of common interest between the employers and workmen; but the duty and authority of the Works Committee could  not extend  to anything more than making comments thereupon  and to  endeavour to compose any material difference of  opinion in  respect of such matters.  Neither " comments" nor the  " endeavour  " could be held to extend to decide the  question on  which differences have arisen or are likely one  way  or the  other.   It  was  rightly pointed  out  by  the  Labour Appellate  Tribunal  in  Kemp  and  Company  Ltd.  v.  Their Workmen(’) that: " the Works Committees are normally concerned with  problems arising  in  the day to day working of the concern  and  the functions  of  the  Works Committee  are  to  ascertain  the grievances  of  the employees and when  occasion  arises  to arrive  at  some agreement also.  But the function  and  the responsibility   of  the  works  committee  as  their   very nomenclature  indicates cannot go beyond recommendation  and as  such  they  are more or less bodies  who  in  the  first instance endeavour to compose the differences and the  final decision rests with the union as a whole.  "

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The  fact that the ’workmen’s representatives on  the  Works Committee agreed to the introduction of the (1)  [1955] 1 L.L.J. 48. 369 rationalisation scheme is therefore in no way binding on the workmen or their Union. The next argument was that whatever alteration was  effected in  the  conditions of service, was made, on the  date  when notice under s. 9A was given and that being before the  13th December  there was no contravention of s. 33.  There is  in our  opinion no substance in this contention, Section 9A  in accordance  with which the notice was given provides that  " No  employer  who  proposes  to effect  any  change  in  the conditions  of service applicable to any workmen in  respect of any matter specified in the Fourth Schedule, shall effect such change- (a)  without giving to the workmen likely to be affected  by such a notice in the prescribed manner of the nature of  the change  proposed  to be effected; or (b)  within twenty-one days of giving such  notice;".   With the  proviso to the section we are not concerned.   What  is important  to  notice is that in making this  provision  for notice  the  Legislature  was  clearly  contemplating  three stages.  The first stage is the proposal by the employer  to effect  a change; the next stage is when he gives  a  notice and  the  last stage is when he effects the  change  in  the conditions of service on the expiry of 21 days from the date of  the  notice.   The conditions of service  do  not  stand changed,  either when the proposal is made or the notice  is given  but only when the change is actually effected.   That actual change takes place when the new conditions of service are actually introduced. It  necessarily follows that in deciding for the purpose  of s.  33  of  the Act, at what point of time  the  employer  " alters " any conditions of service, we have to ascertain the time when the change of which notice under s. 9A is given is actually effected.  If at the time the change is effected, a proceeding is pending before a Tribunal, s. 33 is  attracted and  not  otherwise.  The point of time  when  the  employer proposes  to change the conditions of service and the  point of time when the notice is given are,equally irrelevant. It  was further contended that in any case,  the  alteration was  not  to  the  prejudice of the  workmen.   How  such  a contention can be seriously made is difficult to 370 understand.   The  whole  basis  of the  scheme  was  so  to allocate the machines to workmen, as to enable fewer workmen to work the machines than the number previously required  so that surplus workmen could be discharged.  The object was to decrease  the  cost of production.  The method  adopted  for attaining  the  object  was to obtain  more  work  from  the workmen for approximately the same wages.  However  laudable the  object be, it cannot be doubted for a moment  that  the scheme  prejudiced the workmen seriously.  Mr.  Fraser,  the company’s  witness,  stated  in  his  evidence  that   while previously  for  every machine in the  batching  department, there  were  two  hands, now there are  two  hands  for  two machines.  In giving the reasons for the introduction of the scheme,  he said " we had surplus labour in both the  mills. The  company was losing heavily.  Till then we  depended  on natural  wastage  and did not think of  rationalisation;  in November last year, the decision was taken to take action on rationalisation.  " Rationalisation  which  was  introduced  had  therefore  two effects-first  that  some workers would become  surplus  and

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would face discharge; and secondly, the other workmen  would have  to  carry  more workload.   The  introduction  of  the rationalisation  scheme was therefore clearly an  alteration of conditions of service to the prejudice of the workmen. The alteration was made on the 16th December, when reference as regards the scheme had already been made and was  pending before the Industrial Tribunal.  The Tribunal has  therefore rightly  held that this introduction was a contravention  of s. 33. Lastly it was contended that even if the introduction of the rationalisation  scheme  was a contravention of  s.  33  the workmen’s remedy lay in applying under s. 33A, and that they were  not  entitled to strike work.  Section  33A  no  doubt gives  the  workmen aggrieved by the  contravention  by  the employer  of s. 33 to apply to the Tribunal for relief;  but the existence of this remedy does not mean that the  workmen were bound to work under the altered conditions of  service, even though these were in clear contravention of law.   When they refused to do the additional work which the 371 rationalisation scheme required them to do, they refused  to do work, which the employer had no right in law to ask  them to  do.   It is difficult to say that this amounted to  a  " strike" by the workmen; but even if it could be said to be a "  strike  "  such  strike  was  certainly  not  illegal  or unjustified. Our  conclusion therefore is that the Tribunal was right  in its  opinion that the closure of the mills by  the  employer amounted to an illegal lock-out, and the workmen, unable to" work  in consequence of the lockout, are entitled  to  wages for the period of absence, used by such lock-out. The appeal is therefore dismissed with costs. Appeal dismissed.