Case Note & Summary
The Municipal Corporation of Greater Mumbai (the Corporation) and its Municipal Commissioner filed a writ petition under Article 226 of the Constitution challenging an interim order passed by the Industrial Court, Mumbai on 20 October 2011 in Complaint (ULP) No.326 of 2011. The Industrial Court had allowed an application by Municipal Mazdoor Union (the Union) and directed the Corporation to pay ex-gratia of Rs.11,000 to the Union's members, restraining the Corporation from denying such payment on the ground that the employees participated in a strike on 19 and 20 September 2011. The dispute arose after the Corporation issued a circular dated 15 October 2011 granting ex-gratia to all full-time regular employees but explicitly excluding those who had taken part in the strike. The Union filed a complaint alleging unfair labour practices under Section 28(1) read with Items 5 and 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act), contending that the exclusion was arbitrary and discriminatory. The Union argued the ex-gratia was for the financial year 2010-11, the strike occurred later, and there was a longstanding practice of paying bonus/ex-gratia without discrimination, which had ripened into an implied agreement. Pending the complaint, the Union sought interim relief under Section 30(2) of the MRTU & PULP Act. The Corporation opposed, asserting that ex-gratia was purely a matter of grace, not a legal right; it was not statutory or contractual; the employees had violated an injunction against striking; and denying payment to all strikers irrespective of union was uniform and not favouritism. The Industrial Court, after considering affidavits, found prima facie that the Corporation had committed an unfair labour practice under Item 5 of Schedule IV (showing favouritism or partiality) and granted interim relief directing payment. The Corporation then filed the present writ petition, raising several contentions: ex-gratia is gratuitous, no statutory right under the Payment of Bonus Act (because of exemption under Section 32(iv)), no award or settlement under the Industrial Disputes Act, and the denial was justified as a consequence of violating a court order. It argued the Industrial Court did not record finding on Item 9, the interim order amounted to final relief, and the tests for customary bonus were not met. The Union countered that the case was squarely covered by the decision in BEST v. BEST Kamgar Sena (1986), where denial of ex-gratia to striking workers was held unfair, and that the Industrial Court's order was correct. The High Court (single judge, R.G. Ketkar, J.) dismissed the writ petition on 2 December 2011. It held that the Industrial Court had rightly applied the law, that the interim order did not cause prejudice to the Corporation, and that no interference was warranted under Article 226. The Court implicitly affirmed that excluding striking employees from an ex-gratia payment constituted a prima facie unfair labour practice under Item 5. The petition was dismissed with no order as to costs.
Headnote
A) Labour Law - Ex-gratia Payment - Nature and Right - Ex-gratia payment can be a matter of right if there is a longstanding practice of uniform payment without discrimination - Denial to striking employees while paying to non-strikers constitutes unfair labour practice under Item 5 of Schedule IV of Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 - The Union contended that ex-gratia for the year 2010-11 could not be denied for a strike in September 2011; the Corporation claimed it was a gratuitous payment - Held that the Industrial Court correctly found prima facie case of unfair labour practice under Item 5 (Paras 3, 6-7). B) Labour Law - Unfair Labour Practice - Item 5 of Schedule IV - Favouritism or partiality to one set of workers regardless of merit - The exclusion of employees who participated in strike from ex-gratia payment while granting it to others was discriminatory - The Corporation argued it applied uniformly to all striking employees, but the Tribunal found prima facie unfair labour practice - Held that the denial was not justified (Paras 3, 6-7). C) Labour Law - Interim Relief - Section 30(2) - Power of Industrial Court to grant interim relief - Tribunal can grant relief that may be final in nature if a strong prima facie case exists - The High Court upheld the interim order directing payment of ex-gratia as it did not cause prejudice to the Corporation (Paras 8-9). D) Precedent - Applicability of BEST v. BEST Kamgar Sena - Denial of ex-gratia to striking workers held to be unfair labour practice - In that case, after trial, the Court found it discriminatory - Here at interim stage, the principle applies - Held that the decision is binding (Para 8).
Issue of Consideration
Whether the denial of ex-gratia payment to employees who participated in a strike constitutes an unfair labour practice under Item 5 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, and whether the Industrial Court was justified in granting interim relief directing such payment.
Final Decision
The High Court dismissed the writ petition, upholding the Industrial Court's order. It found no infirmity in the interim order which correctly applied the law on prima facie unfair labour practice. The Court held that the Industrial Court's direction to pay ex-gratia did not cause prejudice to the Corporation and no interference was warranted under Article 226.
Law Points
- ex-gratia payment
- unfair labour practice
- Item 5 Schedule IV MRTU & PULP Act
- interim relief
- discrimination
- customary bonus
- binding precedent
