Case Note & Summary
The litigation arose from a complaint of unfair labour practice filed by the employees of Indorama Synthetics India Limited before the Industrial Court, Nagpur. The employees, who claimed to be elected representatives, alleged that the transfer of workers from the Quality Control Department to other departments without issuing a notice of change under Section 42(1) of the Bombay Industrial Relations Act, 1946 constituted an illegal change and an unfair labour practice under Item No.9 of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971. The parties had entered into several settlements, the last being dated 22 May 2002, which the employees argued fixed the complement of workers in the Quality Control Department at 28. The Industrial Court, by its order dated 10 October 2005, held that the transfer of 5 employees did not amount to unfair labour practice but the transfer of 20 employees did. Both the employer and the employees filed writ petitions challenging parts of this decision. The learned Single Judge of the High Court, on 20 November 2008, allowed the employees’ petition and dismissed the employer’s petition, modifying the Industrial Court’s order. The employer then filed the present Letters Patent Appeals. The main legal issues before the Division Bench were whether the transfer of workers within the establishment without notice under Section 42(1) of the BIR Act constitutes an illegal change or unfair labour practice, and whether such transfer is governed by Item 2 of Schedule III or Items 1 and 2 of Schedule II of the BIR Act. The appellant employer argued, relying on the Supreme Court’s decision in Ashok K. Jha v. Garden Silk Mills, that transfer of workers is covered by Schedule III, making notice unnecessary, and that service conditions remained unchanged. The respondent employees contended that the settlement fixed the complement and any reduction required notice of change, and that the employer could not alter the complement without following the procedure. The Division Bench, per B.R. Gavai, J., accepted the appellant’s submission and applied the ratio of Ashok K. Jha, holding that assignment of work and transfer of workers within the establishment is specifically covered by Item 2 of Schedule III and not by the general items in Schedule II. Therefore, no notice under Section 42(1) was required. The court noted that except three employees, all had accepted promotional benefits. The matter regarding the interpretation of the settlement clauses was being analyzed, but the extracted text of the judgment ends before the final order. Consequently, the final decision and operative directions are not available in the provided text.
Headnote
A) Labour Law – Transfer of Workers – Applicability of Schedules under BIR Act – Bombay Industrial Relations Act, 1946, Schedule II Items 1 and 2, Schedule III Item 2 – The Supreme Court in Ashok K. Jha v. Garden Silk Mills held that assignment of work and transfer of workers within establishment is specifically covered by Schedule III Item 2, and not by Schedule II Items 1 and 2; the Division Bench applied this ratio, finding that the transfer in question was governed by Schedule III and did not attract the notice requirement under Section 42(1) (Paras 7-8). B) Labour Law – Notice of Change – Requirement under Section 42(1) of BIR Act – Bombay Industrial Relations Act, 1946, Section 42(1) – Since transfer of workers within the establishment falls under Schedule III, no notice of change under Section 42(1) was necessary; the employer’s act of transferring employees did not constitute an illegal change, as the specific provision in Schedule III excluded the general items in Schedule II (Para 8-9). C) Labour Law – Interpretation of Settlement – Fixed Complement of Workers – Bombay Industrial Relations Act, 1946, Sections 46(3), 46(5) – The respondents contended that the settlement fixed the complement of workers in the Quality Control Department at 28, and transfer reduced that complement, violating the BIR Act; the court was analyzing Clauses 7, 21 and Annexure 3, noting that an interpretation rendering Schedule III nugatory would be incorrect, and that the settlement must be read harmoniously; however, the extracted text ends before a final conclusion on this point (Paras 10-12).
Issue of Consideration
Whether transfer of workers from one department to another within the establishment without notice under Section 42(1) of the Bombay Industrial Relations Act, 1946 constitutes an illegal change or unfair labour practice under the provisions of the MRTU & PULP Act, 1971, particularly when the complement of workers in the affected department is fixed by a settlement; and whether such transfer falls under Item No.2 of Schedule III or Item Nos.1 and 2 of Schedule II of the BIR Act.
Law Points
- Transfer of workers within establishment is covered by Item No.2 of Schedule III of Bombay Industrial Relations Act
- 1946
- and not by Item Nos.1 and 2 of Schedule II
- no notice under Section 42(1) required for such transfer
- specific item in Schedule III excludes general items of Schedule II
- change in complement does not per se attract unfair labour practice if service conditions remain unchanged
- interpretation of settlement clauses must harmonize all provisions
