Workmen Of The Food Corporation Of India vs Food Corporation Of India

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1985 Supreme(SC) 74

SUPREME COURT OF INDIA
D.A. DESAI, V. BALAKRISHNA ERADI AND V. KHALID, JJ.
Workmen of the Food Corporation of India, Appellant
Versus
M/s. Food Corporation of India, Respondent.
Civil Appeal No.1055 (NL) of 1981, D/ -28-2-1985.The
Advocates appeared
Mr. T.S. Krishnamurthi, Sr. Advocate, Mr. Nandy and Mr. C.S. Vaidyanathan, Advocates with him for Appellants Mr. S.N. Kacker, Sr. Advocate, Mr. S. Chatterjee and Mr. A.K. Panda, Advocates with him, for Respondents.

Advocates:
A.K.PANDEY, C.S.VAIDYANATHAN, S.CHATTERJEE, S.K.NANDY, S.N.KACKAR, T.S.KRISHNAMURTHY IYER

Headnote:
Food Corporations Act, 1964 - Section 13 - Industrial Disputes Act, 1947 - Section 9A, 10, 31(2), 25F - Amending Act 36 of 1956 – Section 6 - Contract Labour Act, 1970 - Constitution of India, 1950 - Article 12, 14 - Corporation - Status of Workmen - Food Corporation of India was set up under an Act of Parliament being Food Corporations Act, 1964 (Act for short) to provide, amongst other, for establishment of Food Corporations for purpose of trading in foodgrains and other foodstuffs and for matters connected therewith and incidental thereto - For performance of functions statutorily prescribed, to undertake purchase, storage, movement, transport, distribution and sale of foodgrains; and other foodstuffs, Corporation has to set up godowns / depots and other storage facilities and to engage labour for handling foodgrains at godowns or in transit - Corporation adopted different methods at different places for employing labour for handling foodgranis - One such depot has been set up by Corporation at Siliguri in West Bengal State - Number of workmen designated as handling Mazdoor were employed at Siliguri Depot - Whether discontinuance of employment of 464 workers of their Siliguri Depot with effect by management of Food Corporation of India is lawful and justified - Whether workmen represented by union and attached to Siliguri Depot were or had become at any point of time workmen of Corporation and whether an illegal change made with regard to their conditions of service by Corporation - Whether workmen covered by reference were workmen of Corporation or employed by contractor and were, therefore, workmen of contractor - Whether once on introduction of direct payment system, workmen acquired status of workmen of Corporation - Whether once some workmen became workmen of Corporation, was it open. to Corporation to induct a contractor and treat its workmen as workmen of contractor – Held, No attempt was made on behalf of respondent-Corporation to urge that any of aforementioned rules would govern conditions of service of workmen involved in dispute - Now after introducing direct payment system agreed to between parties, if Corporation or employer wanted to introduce a change in respect of any of matters set out in Fourth Schedule, it was obligatory to give a notice of change - Item 1 in Fourth Schedule provides: wages, including period and mode of payment - By cancelling direct payment system and introducing contractor, both wages and mode of payment are being altered to disadvantage of workmen - Therefore, obviously a notice of change was a must before introducing change, otherwise it would be an illegal change - Any such illegal change invites a penalty under S. 31(2) of I.D. Act, 1947 - Such a change which is punishable as a criminal offence would obviously be an illegal change - It must be held that without anything more such an illegal change would be wholly ineffective - Award of Tribunal rejecting reference and denying benefit must be quashed and set aside and an award be made that aforementioned 464 workmen who had become workmen of Corporation continued to be workmen employed by Corporation and shall be entitled to all rights, liabilities, obligations and duties as prescribed for workmen by Corporation - A formal award to that effect shall be made by Tribunal - As it Was stated before this Court that these workmen continued to be employed, undoubtedly under contractor since illegal change was introduced, question of paying backwages does not arise - Tribunal, however, must satisfy itself before making final award Whether any workman denied work and consequently wages - Corporation shall pay costs quantified at Rs. 10,000/- to appellant-Union - Appeal allowed.

Judgment

D. A. DESAI, J. :- Vacillation on the part of a public sector undertaking has pushed this trivial dispute to the Apex Court adding to the anxiety and misery on the part of lowest grade workmen and wasteful expenditure on futile litigation.

2. Food Corporation of India (Corporation for short) was set up under an Act of Parliament being the Food Corporations Act, 1964 (Act for short) to provide, amongst other, for the establishment of Food Corporations for the purpose of trading in foodgrains and other foodstuffs and for matters connected therewith and incidental thereto. For performance of the functions statutorily prescribed under S. 13 of the Act namely, to undertake the purchase, storage, movement, transport, distribution and sale of foodgrains; and other foodstuffs, the Corporation has to set up godowns / depots and other storage facilities and to engage labour for handling foodgrains at the godowns or in transit. The Corporation adopted different methods at different places for employing labour for handling foodgranis. One such depot has been set up by the Corporation at Siliguri in West Bengal State. Number of workmen designated as handling Mazdoor were employed at Siliguri Depot. At the relevant time, 464 workmen were attached to this depot. It appears initially a contractor was engaged by the Corporation for handling storage and transit of foodgrains at Siliguri Depot. Subsequently, by negotiations and settlements, the contract system was abolished and the workmen were directly paid the wages, presumably at piece rate for the service rendered by them by the Corporation. A further attempt was made to bring about a basic change in the system by reinducting the intermediary contractor. This attempt to change the status of the workmen from being workmen of the Corporation to becoming the labour employed by the contractor was resisted by Food Corporation of India Workers Union-appellant herein - (Union for short) and it led to negotiations between the Corporation and the Union resulting in a settlement as evidenced by Unions letter dated Jan 18, 1973. Two terms of the settlement may be noticed here. They read as under :

"i) the FCI management agrees to take a final decision by 1-4-73 on the demand of the Union for departmentalisation of the workers working in the Corporations permanent owned large-size godowns, where work goes on all the year round in West Bengal, Bihar, Orissa, Assam and New Delhi.

ii) & iii) ....................................

iv) In the meantime the Food Corporation of India management agrees to introduce the direct payment system to the workers working in their owned godowns as also in the hired godowns at the same stations at which this system is introduced for the owned godowns in the aforesaid States.

...........................

The payment to the workers will be made at the rates at which the contractors are being paid now."

These terms of settlement have been set out in the afore-mentioned letter of the Union. The Managing Director in his reply dated Jan. 20, 1973 confirmed the decision taken as indicated in the letter under reply. It would thus appear that the negotiations ended in a settlement. The Corporation addressed communication No. A-50(38)/72-Labour dated April 28, 1973 to its various Regional Managers in the aforementioned five States pointing out therein that the procedure in respect of direct payment to labourers laid down in the communication shall be followed. The method adopted is that the bills for the piece rate wages payable to handling Mazdoors should be prepared by the Depot Staff, and the Sardar / Mondal would accept payment and sign bills on their behalf and distribute the wages to the handling labour. A copy of this letter was also sent to the Joint Secretary of the Union. By the letter dated Oct 29, 1973 of the District Manager of the Corporation at Siliguri addressed to the Joint Secretary of the Union, the Union was informed to advise the local representatives of the work

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