Case Note & Summary
The dispute arose from the reorganisation of the marketing organisation of Hindustan Lever Ltd. at its Calcutta Branch, which until September 1966 operated in three divisions (Soaps, Foods, and Toilet Preparations) and was then restructured into two divisions (Main Lines and Speciality Lines). Extensive consultations between the employer and employees did not produce agreement, and the new scheme was introduced on 5th or 6th September 1966. The workers presented themselves for work daily and offered to work according to the old scheme, but they were not given work and were told that wages would not be paid unless they accepted the new scheme. Some workers voluntarily retired, vacancies were not filled, and the industrial dispute concerning the reorganisation was referred to the Third Industrial Tribunal, West Bengal on 30th September 1966. Pending adjudication, seven workers filed applications under Section 33A of the Industrial Disputes Act, 1947, alleging that their service conditions had been adversely changed and that their salary for October 1966 had not been paid. The Tribunal in those applications, presided by a different officer and based on meagre employer evidence, held in favour of the workers by award dated 23rd March 1967, finding that conditions had been changed to their prejudice and that the reorganisation was likely to lead to retrenchment under item 10 of the Fourth Schedule. The main reference was later disposed of on 11th August 1969 by the same Tribunal, again with a different presiding officer and after extensive employer evidence, holding in favour of the employer that the reorganisation was justified. Both parties appealed by special leave to the Supreme Court: the employer challenged the workers' favourable award, and the workers' union challenged the employer's favourable award. The Supreme Court considered whether the reorganisation attracted items 8, 10 and 11 of the Fourth Schedule requiring notice under Section 9A, whether non-payment of wages amounted to an alteration of service conditions justifying Section 33A applications, and the scope of interference under Article 136. The employer contended that reorganisation was within management's right, did not fall under any item, and that the workers' refusal to work under the new scheme disentitled them to wages; the workers contended that the reorganisation was a change in usage, rationalisation likely to lead to retrenchment, and reduction in staff complement requiring notice, and that non-payment was an unlawful alteration. The Court held that on the evidence in the main reference the reorganisation was neither a change in usage under item 8, nor rationalisation under item 10, nor an increase or reduction in number of persons employed under item 11, and hence no notice under Section 9A was required. It further held that voluntary retirement and non-filling of vacancies did not constitute retrenchment under Section 2(oo), and that the employer had the right to organise its work and decide staff complement. However, on the separate evidence in the Section 33A applications, the Court upheld the finding that non-payment of wages while workers were willing to work under the old scheme amounted to an alteration of service conditions requiring notice under Section 9A. The Court ruled that the applications were maintainable despite the scheme being introduced before the Section 10 reference, as the refusal to pay wages was continuous and gave a cause of action de die in diem, and it would be unfair to drive workers to a separate remedy under Section 33C at that stage. Applying the limited scope of Article 136, the Court declined to reassess evidence and affirmed both awards, resulting in a mixed outcome where each party succeeded in part.
Headnote
A) Industrial Disputes - Reorganisation and Notice Requirements - Items 8, 10, 11 of Fourth Schedule - Industrial Disputes Act, 1947, Sections 9A and Fourth Schedule Items 8,10,11 - The marketing reorganisation into two divisions did not constitute a change in usage under item 8, rationalisation under item 10, or increase/reduction in number of persons employed under item 11; therefore no notice under Section 9A was required. Held that the management's reorganisation was justified and did not attract the mandatory notice provisions (Paras 633 D-E). B) Industrial Disputes - Retrenchment and Employer's Right to Organise - Sections 2(oo), 9A, Fourth Schedule Item 10 - Industrial Disputes Act, 1947 - Voluntary retirement of workmen and non-filling of vacancies did not amount to retrenchment as defined in Section 2(oo); employer had the right to decide staff complement and organise work as it pleased. Held that the workers could not bring the matter under item 10 merely because some employees retired voluntarily and vacancies were not filled (Paras 630 A-H, 631 C). C) Constitutional Law - Appeal by Special Leave - Scope of Article 136 - Constitution of India, 1950, Article 136 - The Supreme Court does not ordinarily re-assess evidence; it interferes with findings of fact only if unsupported by any evidence or wholly perverse. Held that findings of the Tribunal on evidence could not be disturbed merely because two views were possible (Paras 628 D-E). D) Industrial Disputes - Alteration of Service Conditions - Non-Payment of Wages During Pendency - Industrial Disputes Act, 1947, Sections 9A, 33A - Refusal to pay wages while workers presented themselves for work and offered to work under old scheme amounted to alteration in conditions of service; continued refusal gave cause of action de die in diem. Held that Section 33A application was maintainable even though reorganisation scheme was introduced before reference under Section 10, and notice under Section 9A was required for this alteration (Paras 634 C-D, 634 G-H, 635 B-C). E) Industrial Disputes - Alternate Remedy - Section 33C vs Section 33A - Industrial Disputes Act, 1947, Sections 33A and 33C - A continued refusal to pay wages was not a solitary instance remediable only under Section 33C; the proceedings under 33A and 33C would be substantially similar and it was unfair at that distance of time to drive workers to a fresh application under Section 33C. Held that Section 33A application was appropriate (Paras 636 B-C, 634 G-H). F) Industrial Disputes - Evidence in Separate Proceedings - Consideration by Appellate Court - Industrial Disputes Act, 1947, Section 33A - Evidence let in during main reference was not part of evidence in applications under Section 33A; the Supreme Court could not take that evidence into account while deciding appeals against the 33A awards. Held that each tribunal's award had to be assessed on the material before it (Para 628 A). G) Industrial Disputes - Notice Under Section 9A - Adverse Effect Requirement - Industrial Disputes Act, 1947, Section 9A and Fourth Schedule Items 8,10,11 - The word 'affected' in Section 9A context refers to workers being adversely affected; unless abolition of a department adversely affected workers, it could not be brought under item 11. Held that no notice was required for reorganisation as no adverse change in conditions was proved, but non-payment of wages independently required notice (Paras 631 A-C, 633 D-E).
Issue of Consideration
Whether reorganisation of marketing divisions fell under items 8, 10 and 11 of Fourth Schedule to Industrial Disputes Act requiring notice under Section 9A; Whether non-payment of wages during pendency of adjudication constituted alteration of service conditions justifying applications under Section 33A; Whether applications under Section 33A were maintainable when reorganisation scheme was introduced before reference under Section 10; Scope of interference under Article 136 of Constitution with findings of fact
Final Decision
Both awards were upheld. In the employer's appeals against the workers' favourable award under Section 33A, the Supreme Court dismissed the appeals and held that non-payment of wages while workers were willing to work under the old scheme amounted to an alteration of service conditions requiring notice under Section 9A. In the workers' appeal against the employer's favourable award on the main reference, the Supreme Court dismissed the appeal and held that the reorganisation did not fall under items 8, 10 or 11 of the Fourth Schedule and did not require notice under Section 9A. The result was mixed: the employer succeeded on the main reference, and the workers succeeded on the Section 33A applications.
Law Points
- Reorganisation not change in usage
- rationalisation or increase/reduction in number employed under Fourth Schedule items 8
- 10
- 11
- Employer has right to organise work and decide staff complement
- Voluntary retirement and non-filling of vacancies not retrenchment under Section 2(oo)
- Under Article 136 Supreme Court does not reassess evidence unless findings perverse
- Non-payment of wages during pendency amounts to alteration of service conditions
- Continued refusal to pay wages gives cause of action de die in diem
- Section 33A application maintainable even if scheme introduced before Section 10 reference
- Notice under Section 9A required only for adverse change in service conditions
