AMRIT BANASPATI CO. LTD v. S. TAKI BILGRAMI & Ors.

D Therefore, the model standing orders notified by Government were operative. The notices issued to the workmen on .January 7, 1958 was as follows : "Dear Sir ' regret We that your services will no longer ·be required from 8th February, 1958. This may be treated as one month's notice. to inform you Yours faithfully for New Prahlad Mills, Sd/ Superintendent The letter dated February 10, 1958 sent by the appellant to the Union was as follows : "Dear Sir, . Re: No. N. D. 5090/57, d/7-2-1958 appli- cat10n under rule 53 of B. I. R. Act, Shri S. A. Nayek. E F G H • -,,_I \. ' ___ \ :---~ l AMRIT BANASPATI co. v. BILGRAMI (Vaidialingam, J.) 153 A B c D With to the above we have to in reference form you that Shri Nayak's services were ter minated with notice, owing a month's closure of 3rd shift, which necessitated a reduc in our clerical strength. We may point out from all depart that clerks have been reduced ments, according to juniority and further reduc tions are still contemplated and the cases of other juniors like Shri Sharma and Shah are also such reduction has not effected any increase in work load, and as the individual clerks who are reduced are offered all their legal dues, we submit that notice of change is not necessary. consideration.

As We submit that whatever is done is legal and proper and regret we cannot comply with your request. Yours faithfully Sd/ for New Pralhad Mills, Manager. E Now we will refer to the material provisions of the Act. Section 35 (1) of the Act provides for the pro cedures for framing of standing orders in regard to in Schedule 1 of the Act. Under matters mentioned the model standing orders notified by the sub-s. (5) till standing orders framed Government would F under the section come into operation. We have already referred to the fact that there are no standing orders framed by the appellant Company relating to its industry at the material time. Section 40 the time being in operation shall be standing orders for the employer and determinative of the relations between G his employee in regard to all industria,l matters referred (1) provides to in Schedule I. Item 3 of Schedule I deals with: "Shift working including notice to be given to em ployees of starting, alteration or discontinuance of two or more shifts in a department or departments".

Item 10 in the same Schedule again relates to : "Termination of emploympnt including notice to be given by employer and employee. " H 154 SUPREME COURT REPORTS (1972] l. S.C.R. The model standing order 8 (1) (c) provided that A is started, altered or dis whenever an additional shift continued, seven day notice has to be given, but one month's notice will have to be given if as a result of the the shift any permanent em the discontinuance ployee is likely to be discharged. There is no grievance B that the requisite notice regard- in the case before us ing the stoppage of the third shift has not been given. Similarly, standing order 23 (1) provided ployment of a permanent employee may be terminated . by one month's notice or on payment of one month's have referred to these provisions in order to appreciate the contents of Item 1 of Schedule II with which we are concerned ii1 this appeal. (including all allowance in lieu of notice).

We c ., , in the prescribed Section 42 (1) of the Act provides for an employer intending to effect any change in respect of an industrial D in Schedule II to give notice of such matter specified intention form to the representatives of the employees. The other authorities to whom a copy of such notice is to be given as well as the publication to be given to the said notice are also contained therein. A notice under s. 42 (1) Section 46 (2) prohibits an employer from making any industrial matter mentioned in Schedule change in any II, without giving the notice of change as required by the provisions of sub-section Item l of Schedule II runs as follows : is called "notice of change". E (l) of s. 42. F G "Schedule II (l) Reductions intended to be of permanent or semi permanent character in the number of persons employed or to be employed in any occupation or process or department or departments or in a shift not due to forie majeure.

" indicated We have already industrial in particular, has placed very great reliance on letter dated February,10 1958, for holding that by the appellant Court, terminating the services of the clerks, has really effected a reduction in the clerical strength H of the establishment which has the effect of reducing the Industrial Court goes the posts of clerks. In fact AMRIT BANASPATI co. v. BILGRAMI (Vaidialingam, J.) 155 A further and holds that there is an admission by the letter regarding their reduction in the posts of clerks. The management itself having effected interpretation has found favour with the High Court. the said B of the High Court We are not inclined to1 agree with the learned Judges in the interpretation placed on the letter dated February 10, 1958. The letter which has to be read as a whole clearly indicates that the termination of the serivces of the clerks was necessitated owing to the closure of the third shift and that the reduction in the clerical strength in consequence of such termination has C not resulted in any increase in the work load of others.

This itself clearly shows that the appellant have not reduction in the posts of clerks. On the effected any other hand, they have only effected a retrenchment of the clerks, whom they considered to be surplus, in con sequence of the closure of the third shift. There is a D marked difference between the matters dealt with under Items 3 and l 0 of Schedule I and Item l of Schedule II. this Court Item 1 of Schedule II has come up for consideration in Chaganlal Textile Mills Private before Ltd., v. Chalisgaon Girni Kamgar Union (1). After an E analysis of the contents of Items 3 and I 0 of Schedule I and Item 1 of Schedule II, it has been held that Item l relates only to posts and not to the personnel occupying the posts. Dealing with item No. 1 of Schedule II this Court observes as follows: F G H the language of Item No. contemplates posts. Again, "Furthermore, I of Schedule I clearly refers to a reduction in posts.

It deals with the reduction not of persons employed but with the number of persons employed. There fore it clearly item also refers to the number of persons to be em- ployed. That of course has nothing to do with the retrenchment of persons actually employed. Again, when a notice of change in respect of Item No. 1 of Schedule II is to be given, it is not to be given to any employee but to the representative of the employees which would include a union of em- It could hardly have been intended that ployee&. they would when employees were to be retrenched not be given any notice. " {I) A.LR. 1959 S.C. 722 156 SUPREME COURT REPORTS [1972] l S.C.R. From the above observations, it is clear that unless A there is a reduction in posts. Item 1 of Schedule II will have no application and in consequence there is no necessity to give a notice of change under s. 46 (2) read with s. 42 (I) of the Act. In the ilght of the above principles, if we examine the facts of the case before us, it is clear that on B the closure of the third shift what the employer did was to retrench the employees working in that shift as they were found to be surplus in the establishment.

There fore, it was a case of reduction of persons employed and not one of reduction of the number of persons employed. Hence it is not a case of reduction of posts. c The matter also can be considered from another point of view. Item No. 1 of Schedule II leaving out the por tions which are not necessary for the present case refers to: "reduction intended to be of permanent or semi- permanent character in the number of persons to be employed in a shift. " o the E (2) of the Act. That is, for instance twenty per- F If read in that manner it is clear that the shift is not abolished but is working and the employer effects a reduction in the number of persons employed it may be considered shift. Under such a contingency that the employer has effected a reduction in the posts occupied by the persons whose services have been ter minated, in which case it will be an illegal change unless notice has been given under s.

42 (1) as contemplated by s. 46 sons occupying twenty posts are necessary to work is a shift and if five persons are sent out, that will amount posts, in consequence of which to a reduction of five fifteen persons may be the work load on the remaining more. In these circumstances the act provides for giving a notice of change and under s. 42 (I) copies of such G notice have to be given apart, from the representative of employees, to the Chief Conciliator and other officers mentioned therein. That will be a case of reduction of posts. But when the working of the entire shift is stopped there is no question of a reduction in the number of persons employed in a shift. On a case of termination of employment of all the persons employed in that shift which has been stopped. Such the other hand it is H AMRIT BANASPATI co. v. BILGRAM! (Vaidialingam, J.) 157 A a case will not attract Item No. 1 of Schedule II. To the em ployees whose services have been so terminated, as the consequence of the closure of the entire shift.

Though other remedies are available to them in law, but they cannot invoke Item No. 1 of Schedule II. B E We may also refer briefly to the facts of the case repor in Chaganla/ Mills Textile Private Ltd., v. Chalisgoan Girni Kamgar Union (1) On July 9, 1957 the Company notice that the working of the second shift therein gave in their mill would be discontinued after one month. c On August 9, 1957 the second shift was actually closed in terms of the notice. Fourteen employees, who were not workmen in the sect>nd shift but whose services were necessary to make all arrangements ready for the second to start working, were served with the notice on that their services were terminated. September 1, 1957 0 They were paid retrenchment compensation and other dues according to law. On November 9, 1957 Company gave a notice called "notice of change" that it wished to abolish 27 posts including the posts held by the 14 employees, whose services were terminated by the notice dated November I, 1957.

Even under those circums- that the notice given on Novem tances this Court held ber 1, 1957 terminating the services of 14 employees was only by way of retrenchment and was legal. It was fur ther emphasised that as the said notice was legal, it did not cease to be so because within eight days a notice of change was also given. In the case before us it is not contended that the three clerks to whom notice had been given on January 7, 1958 were not given proper notice and that their dues have not been paid. Nor is it contended that after the admitted closure of the third shift with effect from December 8, 1957 the services of these three clerks did not become surplus is only a that the notice dated January 7, 1958 notice of retrenchment of surplus staff. By that notic<: the appellant has not effected any reduction in posts so as to attract Item No. 1 of Schedule JI, 42 (1) and 46 (2) of the Act.

If that is so, it follows that by terminating the services of the three clerks, the appel- !ant has not made any illegal change within the meanin& of s. 46 of the Act. to the appellant. We G satisfied read with H F ~~~--~~~~~~- (\) A.I.R. 1959 S.C. 722. SUPREME COURT REPORTS [ 1972] 1 S.C.R. In consequence, the judgment and order of the High· Court are set aside and the applications filed on behalf of the three clerks before the Labour Court will stand dismissed. The appeal is allowed. Parties will bear their own costs. A B V.P.S. Appeal allowed.