IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5858     OF 2008      (@ Special Leave Petition (Civil) No.2411 of 2006)

U.P. State Sugar & Cane Development Corporation Limited ...Appellant

Vs.

Chini Mill Mazdoor  Sangh & Others. …Respondents

J U D G M E N T

ALTAMAS KABIR,J.

1. Leave granted.

2. The respondent Nos.2–15, who are  members

of  the  respondent  No.1  Union,  and  had

admittedly  been  employed  under  the

appellant as “seasonal workmen” as defined

in  the  Standing  Orders  governing  the

conditions  of  employment  of  workmen  in

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vacuum pan sugar factories of the State,

raised a claim that although they had been

categorized   as  “seasonal  workmen”  they

had  been  employed  by  the  appellant  not

only  during  the  crushing  season   but

throughout  the  year.   It  is  their

grievance  that  although  their  services

were utilized as permanent workmen  they

were  paid  the  salary  given  to  seasonal

workmen.   They,  therefore,  made  a

representation to the Conciliation Officer

which ultimately resulted in a Reference

made by the State of Uttar Pradesh to the

Labour Court on 3.11.1989.  The terms of

Reference are as follows:

i) Whether 39 employees mentioned in the Schedule ‘Ka’ can be declared permanent by their employer.  If yes,  from  which  date  and  with other details ?;

ii) Whether the 28 workmen mentioned in the Schedule ‘Kha’ are to be given  salary/pay  scales  on  the

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posts  mentioned  against  their names by their employer. If yes, from  which  date  and  with  other details ?”

3. At the very outset it may be recorded that

out of 39 employees, referred to in the

terms of reference, 8 have died or have

retired  from  service;  13  have  been  made

permanent;  4  workmen  have  not  pressed

their  claim  before  the  Labour  Court  and

only  14  workmen,  mentioned  in  Schedule

‘Ka’,  had  continued  with  their  claim

before the Labour Court.

4. It may also be noted that the second term

of  reference  was  not  ultimately  pressed

before  the  Labour  Court,  which  was,

therefore, required to adjudicate only on

the claim of the 14 workmen, who remained

out  of  the  39  workmen,  that  they  were

entitled to be declared permanent by the

appellant herein.

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5. In order to appreciate the claim of the

said 14 workmen it is necessary to look

into the circumstances and the system of

employment  which  prevail  in  the  sugar

industry  in  Uttar  Pradesh  on  account  of

the fact that sugarcane is a seasonal crop

and large numbers of workers are required

by  the  sugar  mills  during  the  crushing

season  which  is  between  the  month  of

October in a given year to the month of

April of the following year, i.e. roughly

for a period of 7 months in a year. During

the remaining part of the year only  such

employees as are required for maintenance

of  the  mill  are  employed  as  permanent

workmen as defined in the above-mentioned

Standing Orders, but there is no bar to

the  sugar  mills  employing  even  seasonal

workmen during the off-season in the mill.

6. The  other  practice  which  is  followed  is

that workmen from different categories, as

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defined  in  the  Standing  Orders,  are

promoted  to  the  next  higher  category  as

and when vacancies occur  and that merely

because  the  workmen  may  be  required  to

perform  other  functions  during  the  off-

season, a claim could not be raised that

such  workmen  would  be  entitled  to  be

categorised in the said higher post in the

hierarchy.   In  order  to  appreciate  the

matter with greater clarity the Standing

Orders  dated  3.12.1958,  as  revised  and

published  on  27.9.1988,  are  reproduced

hereinbelow:

“  Relevant extracts of Standing Orders   

Uttar Pradesh Extraordinary Gazette,  

27  th   September, 1988   

In  pursuance  of  the  provision  of clause  (3)  of  Article  348  of  the Constitution  the  Governor  is  pleased to  order  the  publication  of  the following  English  translation  of notification  No.5692  (HI)/XXXVI-2-110 (HI)-77, dated September 27, 1988:

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No.5692(HI) XXXVI-2-110(HI) – 77, Dated  September 27, 1988

Whereas, the Standing Orders governing the  conditions  of  the  employment  of workmen in vacuum pan sugar factories of  the  State  were  enforced  under Government  notification  No.5436- ST/XXXVI-A/208-ST-58, dated October 3, 1958;  And  whereas,  there  was  persistent demand for revision of the aforesaid Standing  Orders  which  had  become necessary in view of passage of time; Xxxx    xxxx      xxxx    xxxx

B. Classification of workmen 1. Workmen shall be classified as

(i) Permanent, (ii) Seasonal, (iii) Temporary, (iv) Probationers, (v) Apprentices, and (vi) Substitutes.

(i) A  “Permanent  Workman”  is  one  who  is engaged  on  the  work  of  a  permanent nature  or  permanent  requirement lasting  throughout  the  year  and  has

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completed   his probationary period, if any,

(ii) A  “Seasonal  workmen”  is  one  who  is engaged only for the crushing season and  has  completed  his  probationary period, if any,

(iii) A  “Temporary  Workman”  is  one  who  is engaged  for  meeting  a  temporary  or casual requirement.

xxxx xxxx xxxx K. Special  Conditions  Governing Employment of Seasonal Workmen 1. A  seasonal  workman  who  has worked or, but for illness or any other unavoidable  cause,  would  have  worked under a factory during the whole of the second half of the last preceding season shall be employed by the factory in the current season and shall be entitled to get retaining allowance provided he joins the current season and works for at least one  month.  The  payment  of  retaining allowance shall be made within two months of the date of the commencement of the season. Explanation – Unauthorised absence during the second of the last preceding season of a workman  who has not  been validly dismissed under these Standing Orders and of a workman who has been re-employed by the  Management  in  the  current  season, shall be deemed to have been condoned by the Management. 2. Every  seasonal  workmen  who worked during the last season shall be put up on his old job whether he was in

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the  ‘R’  shift  or  in  any  of  the  usual shifts.

However, if the exigencies of works so require the management may transfer a workman from one job to another job or from one shift to another including the ‘R’ shift, so however, that the number of workman  so  transferred  does  not  exceed five  per  cent  of  total  number  of  the employees  of  the  factory  and  that  the wages and status of such workman is not affected in any way. 3. A  seasonal  workman,  who  is  a retainer shall be liable to be called on duty at any time in the off season and if he does not  report for duty  within 10 days  he  shall  lose  his  retaining allowance for the period for which he was called for duty. 4. Where owing to trade reasons or other reasons necessary for a bona fide Law Off, as given in Standing Order, ‘J’, it becomes necessary for a factory so to do, it may discharge the seasonal workman before the close of the season with the previous permission of the State Labour Commissioner  if he so directs Additional Labour Commission or Regional Additional/ Deputy  Labour  Commissioner  of  the  area after  paying  such  compensation  to  the discharged workman, as may be determined by the authority granting the permission.

True Copy”

7. Accepting  the  case  made  out  by  the  14

employees,  the  Labour  Court  came  to  the

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conclusion that the said workmen had been

engaged during the off season neither for

additional  work  nor  for  temporary  work,

but for the work for which they had been

employed  during  the  crushing  season  and

that  the  nature  of  their  work  was,

therefore,  continuous  despite  the  fact

that there have been a few breaks in their

work during the off season.  The Labour

Court came to the conclusion that the 14

workmen  had  really  been  engaged  for  the

major part of the year and that the breaks

in  service  were  resorted  to  only  to

prevent  them  from  getting  the  benefits

enjoyed by a permanent workman. The Labour

Court  held  that  the  said  workmen  came

within  the  definition  of  permanent

workmen, and were, therefore, entitled to

be declared as permanent.  The concerned

14 workmen were, therefore, declared to be

permanent from the date of the Award and

the  appellant  was  directed  to  give  them

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all the benefits that a permanent workman

was entitled to from the same date. The

Award of the Labour Court was challenged

by the appellant before the High Court in

Writ  Petition  CMWP  No.1263  of  2004.

Accepting the findings of the Labour Court

that  the  14  workmen  had  really  been

performing  their  duties  on  a  permanent

basis,  the  High  Court  chose  not  to

interfere  with  the  Award  of  the  Labour

Court and dismissed the writ petition.

8. The  U.P.  State  Sugarcane  Development

Corporation  Limited  is  now  in  appeal

before  us  questioning  both  the  Award  of

the Labour Court as also the decision of

the High Court in respect thereof.

9. Mr.Upadhyay, learned Advocate who appeared

for the appellant –Corporation, reiterated

the  stand  taken  by  the  appellant  before

the Labour Court and the High Court that

the  work  performed  by  the  respondent

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Nos.2-15 had been wrongly determined to be

of  a  permanent  nature.  It  was  submitted

that  the  said  workmen  had  been  engaged

only  for  the  crushing  season,  but  since

they were not workmen who were involved in

handling  of  the  sugarcane  during  the

crushing season  but were technical hands,

they were also provided with work  in the

mill  during  the  off  season,  not  as  a

matter of right but to provide them with a

livelihood during the off season. It was

urged that both the Labour Court, as well

as  the  High  Court,  misconstrued  the

intention of the appellant in coming to a

finding  that  14  workmen  were,  in  fact,

performing the work of a permanent nature

which  entitled  them  to  the  status  of

permanent worker.  

10. Mr. Upadhyay also submitted that since the

policy with regard to promotion of workmen

from  one  category  to  a  higher  category

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depended on the vacancies available in the

next higher category, it was a managerial

function,  which  could  not  be  usurped  by

the Labour Court and, in any event, the

concept of redetermining the status of the

workmen,  on  account  of  the  duties

performed by them, did not arise in the

present case.  

11. In support of his submission Mr. Upadhyay

firstly referred to a Constitution Bench

decision  of  this  Court  in  Management  of

Brooke  Bond  India  (P)  Limited  v  Workmen

[(1966)  2  SCR  465],  wherein  while

considering  the  power  of  the  Labour

Tribunals  and  the  management  to  grant

promotions, it was observed:

“Generally  speaking,  promotion  is  a management  function;  but  it  may  be recognized  that  there  may  be occasions when a tribunal may have to interfere with promotions made by the management  where  it  is  felt  that persons  superseded  have  been  so superseded on account of  mala fides or  victimization.  Even  so  after  a

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finding  of  mala  fides  or victimization, it is not the function of a tribunal to consider the merits of various employees itself and then decide whom to promote or whom not to promote.  If  any  industrial  tribunal finds that promotions have been made which are unjustified on the ground of  mala  fides or  of  victimization, the proper course for it to take is to set aside the promotions and ask the management to consider the cases of  superseded  employees  and  decide for itself whom to promote, except of course the person whose promotion has been set aside by the tribunal.”

12. The  other  decision  relied  upon  by  Mr.

Upadhyay is that of this Court in the case

of  The  Hindustan  Lever  Limited  v  The

Workmen [(1974) 3 SCC 510], wherein while

considering the question of an employer’s

right to transfer a workman in the absence

of  victimization,  unfair  labour  practice

or violation of any condition of service,

this  Court  reiterated  its  earlier  views

and  held  promotion  to  be  a  management

function  and  the  Labour  Court  could  not

arrogate to itself such management funtion

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in the absence of findings of  mala fides

or  victimization  or  any  unfair  labour

practice.

13. Mr. Upadhyay submitted that in declaring

the concerned workman to be permanent from

the date of the Award the Labour Court had

arrogated to itself the functions of the

management  which  had  been  held  to  be

beyond the powers of the Labour Court and

the Award was, therefore, liable to be set

aside along with the judgment of the High

Court.

14. Mr. P.K. De, learned Advocate who appeared

for  the  respondents,  supported  the

findings  and  observations  of  the  Labour

Court and the High Court and urged that it

had  been  correctly  found  that  the

respondent  Nos.2-15  had  been  performing

work  of  a  permanent  nature  which  is

required  to  be  performed  throughout  the

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year  and  not  only  during  the  crushing

season.

15. Mr.De submitted that all the said workmen

were  technical  hands  and  not  labour

engaged to perform manual work during the

crushing season. Even during the crushing

season  the  said  workmen  were  engaged  in

maintenance of the machinery in the mill,

which  was  not  a  seasonal  work,  but

entailed maintenance of the mill machinery

throughout the year. Although, it had been

urged on behalf of the appellant that they

were  seasonal  workmen  who  had  been

provided work during the off season, their

work  was  of  a  continuous  nature  which

required the appellant to engage them not

only during the crushing season but also

during the whole year.

16. According to Mr. De, the definition of the

expression  “permanent”  as  used  in  the

Standing  Orders   referred  not  to  the

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employee but to the nature of work being

performed. Since in the instant case the

work performed was of a permanent nature,

which  required  the  services  of  the

respondent Nos. 2-15 throughout the year,

they  had  been  rightly  declared  by  the

Labour  Court  as  permanent  workmen  on

account of the nature of work performed by

them throughout the year.

17. Reliance  was  placed  on  the  decision  of

this  Court  in  Jardine  Henderson  Ltd.  v

Their  Employees  [AIR  1967  SC  515)  which

was  a  case  involving  the  payment  of

gratuity  and  provident  fund  by  way  of

retiring  benefits  and  is  of  little

relevance to the facts of this case. He

also relied on the decision in the Brooke

Bond  Limited  case  (supra)  where  in  the

opening  paragraphs  of  the  judgment  the

Tribunal  had  expressed  the  view  that

although  promotion  was  a  management

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function and had to be left mainly to the

discretion  of  management,  in  an

appropriate case the workman had a right

to demand relief when the just claim of

the senior employees were overlooked.

18. Reference was lastly made to the decision

of  this  Court  in  Workmen  employed  by

Hindustan Lever Limited v. Hindustan Lever

Limited,  [(1984)  4  SCC  392],  where

reference  had  been  made  to  the  earlier

decisions in the Brooke Bond case (supra)

and  the  Hindustan  Lever  Limited  case

(supra) and an observation had been made

that the view taken in the said cases that

promotion  is  a  managerial  function  may

have to be re-examined in an appropriate

case.

19. Mr.  De  contended  that  the  Award  of  the

Labour  Court  was  fully  justified  in  the

facts  and  circumstances  of  the  case  and

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the  High  Court  had  rightly  upheld  the

same.   

20. From the facts as set out hereinabove and

the  submissions  made  by  the  respective

parties,  we  are  left  to  decide  the

question as to whether even in the light

of  the  Tribunal’s  finding  that  the  work

performed by the respondent Nos. 2-15 was

of a permanent nature on account whereof

their  services  were  required  throughout

the year, it could have  declared the said

workmen to be permanent or whether  such

declaration amounted to usurpation of the

management’s  functions  which  were  beyond

its powers.

21. That  there  are  different  categories  of

workers employed in the sugar industries,

and,  in  particular,  during  the  crushing

season,  is  not  disputed  by  any  of  the

parties. It is not denied that apart from

the  permanent  workmen,  the  other

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categories of workmen are employed during

the  crushing  season  which  begins  in  the

month  of  October  in  a  given  year  and

continues  till the month of April of the

following  year.  It  is  the  period  during

which  the  sugarcane  crop  is  harvested,

and, thereafter, transported to different

mills  where  they  are  crushed  for

production of sugar.  Admittedly, as will

appear from Standing Order No.2, a muster-

roll  of  all  employees,  who  are  not

permanent, is maintained by the different

sugar mills and at the beginning of the

crushing  season  the  seasonal  labour  who

had  worked  during  the  previous  crushing

season are asked to join their duties for

the crushing season in their old jobs. It

is also not denied that the pay scales of

the  different  categories  of  workmen  are

different.  

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22. It  has  been  submitted  on  behalf  of  the

appellant  that  even  when  the  seasonal

workmen are employed during the off season

they are paid the same wages  as are paid

to them during the crushing season, which

is one of the basic distinctions between

them and permanent workmen who are on the

rolls of the sugar mills. It is also an

admitted  position  that,  in  terms  of  the

policy  followed  by  the  sugar  mills,

promotions are given from one category to

the next higher category depending on the

number of vacancies as are available at a

given point of time. Even in the instant

case, of the 39 workmen referred to in the

terms  of  reference,  13  had  been  made

permanent by the appellant which supports

the case of the appellant that promotion

is given from one category to the higher

categories  as  and  when  vacancies  are

available  and  that  such  function  was

clearly a managerial function which could

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not  have  been  discharged  by  the  Labour

Court.

23. We  are  in  agreement  with  the  views

expressed  by  the  Constitution  Bench  of

this Court in the Brooke Bond case (supra)

as also those of the three-Judge Bench in

the Hindustan Lever case (supra).  In our

view,  this  is  not  a  case  of  fitment

depending  on  the  nature  of  the  work

performed, but a case of promotion as and

when  vacancies  are  available.  Both  the

Labour Court as well as the High Court do

not appear to have considered this aspect

of  the  matter  with  the  attention  it

deserved and proceeded on the basis that

this was a case where the respondent Nos.

2-15  had  been  denied  their  right  to  be

categorised  as  permanent  workmen  on

account  of  the  nature  of  the  work

performed by them throughout the year. The

High Court has, in fact, merely relied on

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the findings of the Labour Court without

independently  applying  its  mind  to  the

said aspect of the matter.

24. We,  therefore,  accept  the  submissions

advanced  by  Mr.  Upadhyay  and  allow  the

appeal. The Award of the Labour Court and

the Judgment of the High Court impugned in

this appeal, are set aside.   

25. There will be no order as to costs.

_________________J. (ALTAMAS KABIR)

_________________J. (MARKANDEY KATJU)  

New Delhi Dated : 26.9.2008

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