1968 (9) TMI 115 - SC - Indian Laws

Whether the Standing orders submitted for certification conformed to the Model Standing orders or not? Held that - Items 5 and 6 are both modifications in Standing Order 11 (vii). In each of these cases the order passed by the Chief Labour Commissioner now impugned shows that he did not rely on any fresh facts material or circumstances which were not available at the earlier stage when the Standing Orders were first certified or first modified. In effect therefore the present order amounts to passing orders different from earlier orders passed by the Appellate Authority on a reconsideration of the same material which was available to both the Authorities. In fact the modification at item No. 1 in Standing Order 9(a) had been specifically disallowed in appeal by the Chief Labour Commissioner in his order dated 12th February 1963 when he first heard the appeal under s. 6 and confirmed the certification of the original Standing Orders. Thus in respect of item No. 1 what the present Chief Labour Commissioner has done is to permit the modification because he considered it reasonable and fair even though on the same material his predecessor had disallowed this very modification on the basis that in his opinion the original. draft Standing Order was fair and reasonable. On the principle enunciated above it is clear that the order of the Chief Labour Commissioner allowing all these four modifications which is not based on any fresh facts material or circumstances is liable to be set aside. As a result I would partly allow the appeal and set aside the order of the Chief Labour Commissioner (Central) permitting modifications mentioned by him in his Order at item Nos. 1 3 5 and 6 relating to Standing Orders 9(a) 12(A) and Il(vii)

Issues Involved:
1. Scope of Section 10(2) of the Industrial Employment (Standing Orders) Act.
2. Reasonableness and fairness of the modifications to the Standing Orders.
3. Applicability of principles analogous to res judicata in industrial matters.
4. Merits of the specific modifications challenged by the appellant.

Detailed Analysis:

1. Scope of Section 10(2) of the Industrial Employment (Standing Orders) Act
The appeal raised the question of the scope of Section 10(2) of the Industrial Employment (Standing Orders) Act, 1946, as amended by Act 36 of 1956. The appellant's counsel argued that the jurisdiction and powers of the authorities to certify modifications are limited to cases where a change of circumstances is established. They contended that principles analogous to res judicata should apply, meaning that without new circumstances or facts, an application for modification should not be maintainable. The court, however, found no express provision in the Act restricting the right to apply for modification only upon proof of a change of circumstances. It emphasized that the Act's amendments in 1956 broadened the scope, allowing both employers and workmen to apply for modifications based on fairness and reasonableness, without necessarily proving a change of circumstances.

2. Reasonableness and Fairness of the Modifications to the Standing Orders
The court examined whether the modifications to the Standing Orders were fair and reasonable. The modifications in question included:
- Standing Order 9(a): Required the employer to give reasons for terminating an employee's service by discharge simpliciter.
- Standing Order 12(A): Imposed a 60-day time limit for the disposal of appeals.
- Standing Order 11(vii): Required the management to offer alternative employment to a workman removed due to physical unfitness.
- Standing Order 11(vii)(c): Required a second show-cause notice before removing a workman from service.

The court noted that the right to contract in industrial matters is no longer absolute, and modifications promoting security of employment and industrial peace are generally considered fair and reasonable. However, it found that the requirement for a second show-cause notice was neither necessary nor proper and would unnecessarily prolong disciplinary inquiries.

3. Applicability of Principles Analogous to Res Judicata in Industrial Matters
The appellant argued that principles analogous to res judicata should apply, preventing re-adjudication of issues already decided unless new circumstances arise. The court acknowledged that while technical rules like res judicata may not strictly apply to industrial adjudication, they are based on sound public policy. However, it emphasized that industrial adjudication should focus on fairness and reasonableness rather than rigidly applying such principles. The court referred to previous decisions indicating that technical considerations of res judicata should not hamper industrial adjudication.

4. Merits of the Specific Modifications Challenged by the Appellant
The court analyzed the specific modifications challenged by the appellant:
- Modification to Standing Order 9(a): The court upheld the requirement for the employer to give reasons for discharge simpliciter, recognizing it as fair and reasonable.
- Modification to Standing Order 12(A): The court upheld the 60-day time limit for disposing of appeals, finding no principle involved that would justify interference.
- Modification to Standing Order 11(vii): The court upheld the requirement for offering alternative employment to workmen removed due to physical unfitness, considering it fair and reasonable.
- Modification to Standing Order 11(vii)(c): The court set aside the requirement for a second show-cause notice, finding it unjustifiable on grounds of reasonableness or fairness.

Conclusion:
The appeal was partly allowed. The court set aside the modification requiring a second show-cause notice but upheld the other modifications, emphasizing the importance of fairness and reasonableness in industrial relations. The finality of the appellate authority's decision under Section 6 was recognized, but the right to apply for modifications under Section 10(2) was upheld without the necessity of proving a change of circumstances.

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