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2007 Supreme(SC) 277
SUPREME COURT OF INDIA
S. H. Kapadia & B. Sudershan Reddy
Maharashtra State Road Transport CorpPETITIONER
Versus
PremlalRESPONDENT
Appeal (civil) 1046 of 2007
Decided on 27/02/2007
Clauses in industrial settlements relating to the grant of benefits/wages of a time scale and those relating to the absorption of workers into permanent vacancies operate in different fields; thus, a provision for absorption does not supersede a provision for granting benefits.
Headnote:(A) Road Transport Corporation Act, 1950 - Section 45; MRTU and PULP Act, 1971 - Schedule IV, Item 9 - Industrial Settlement - Interpretation of settlement clauses - Conflict between different settlements and resolutions - Benefit of time scale pay versus absorption into service - Whether a later settlement clause on absorption supersedes an earlier clause providing benefits of time scale pay upon completion of prescribed service - If the two clauses operate in different fields, one relating to benefits/wages and the other to absorption subject to vacancy and selection, there is no supersession.
(B) Resolution by Employer - Validity and effect - When a prior settlement clause is cancelled by a resolution but replaced by another provision granting similar benefits upon meeting specific criteria, the employees remain entitled to those benefits subject to the conditions of the new resolution.
Facts of the case:
An employer, a state transport undertaking, had a settlement from 1956 stating that employees working 180 days continuously would be brought on the time scale of pay and receive all associated benefits. This clause was later cancelled by a resolution in 1978, which stipulated that daily wage employees completing 180 days aggregate service in a financial year would be appointed temporarily in ephemeral vacancies on time scale of pay and receive specific benefits. A subsequent settlement in 1985 dealt with the absorption of daily rated workmen, making it subject to selection by a competent committee and the availability of clear vacancies. The dispute arose when daily rated employees sought the benefits of time scale pay and wages, claiming the 1985 absorption clause did not supersede the 1956 benefit clause.
Findings of Court:
The court found that the 1956 settlement clause and the 1985 settlement clause operated in different fields. The former provided for the benefits and wages available to time scale workers, while the latter dealt with the process of absorption into permanent service. Consequently, the absorption clause did not supersede the benefit clause. Additionally, while the 1956 clause was cancelled by the 1978 resolution, that resolution itself provided for the grant of time scale pay benefits to eligible employees who satisfied the aggregate service criteria.
Issues: Whether the clause in the 1985 settlement regarding absorption superseded the clause in the 1956 settlement regarding time scale benefits, and whether the 1978 resolution effectively terminated the rights under the 1956 settlement.
Ratio Decidendi: The court held that provisions relating to the status of an employee (absorption) and provisions relating to the benefits accruing to a workman (wages and benefits of time scale pay) operate in distinct spheres. A clause regarding absorption subject to vacancy and selection cannot supersede a clause granting payment benefits. Where a resolution cancels a settlement clause but provides a substitute mechanism for obtaining benefits, the employees are entitled to those benefits upon satisfying the prescribed criteria.
Result: Civil appeals dismissed.
Legal Category Hierarchy
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labour and industrial law
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industrial settlements
- clause interpretation
- cancellation and replacement
- unfair labour practices
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daily wage workers
- absorption and benefits
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industrial settlements
JUDGMENT:
(Arising out of S.L.P.(C) No.24066 of 2003)
WITH
C.A. 1047 of 2007 arising out of S.L.P.(C)No.2533 of 2004
C.A. 1064 of 2007 arising out of S.L.P.(C)No.2551 of 2004
C.A. 1074 of 2007 arising out of S.L.P.(C)No.7219 of 2005
C.A. 1048 of 2007 arising out of S.L.P.(C)No.2548 of 2004
C.A. 1049 of 2007 arising out of S.L.P.(C)No.2656 of 2004
C.A. 1050 of 2007 arising out of S.L.P.(C)No.2652 of 2004
C.A. 1051 of 2007 arising out of S.L.P.(C)No.2547 of 2004
C.A. 1052 of 2007 arising out of S.L.P.(C)No.2552 of 2004
C.A. 1053 of 2007 arising out of S.L.P.(C)No.2650 of 2004
C.A. 1054 of 2007 arising out of S.L.P.(C)No.2542 of 2004
C.A. 1056 of 2007 arising out of S.L.P.(C)No.2539 of 2004
C.A. 1057 of 2007 arising out of S.L.P.(C)No.2658 of 2004
C.A. 1058 of 2007 arising out of S.L.P.(C)No.2648 of 2004
C.A. 1059 of 2007 arising out of S.L.P.(C)No.2544 of 2004
C.A. 1060 of 2007 arising out of S.L.P.(C)No.2543 of 2004
C.A. 1062 of 2007 arising out of S.L.P.(C)No.2536 of 2004
C.A. 1063 of 2007 arising out of S.L.P.(C)No.2565 of 2004
C.A. 1065 of 2007 arising out of S.L.P.(C)No.2653 of 2004
C.A. 1067 of 2007 arising out of S.L.P.(C)No.2546 of 2004
C.A. 1068 of 2007 arising out of S.L.P.(C)No.2654 of 2004
C.A. 1069 of 2007 arising out of S.L.P.(C)No.2646 of 2004
C.A. 1070 of 2007 arising out of S.L.P.(C)No.2541 of 2004
C.A. 1055 of 2007 arising out of S.L.P.(C)No.2647 of 2004
C.A. 1071 of 2007 arising out of S.L.P.(C)No.4390 of 2004
C.A. 1072 of 2007 arising out of S.L.P.(C)No.5632 of 2005
C.A. 1073 of 2007 arising out of S.L.P.(C)No.6093 of 2005
C.A. 1061 of 2007 arising out of S.L.P.(C)No.2538 of 2004
C.A. 1066 of 2007 arising out of S.L.P.(C)No.2645 of 2004
KAPADIA, J.
Leave granted.
A short question which arises for determination in these civil appeals filed by the employer is : whether Clause 49 of 1956 Settlement stood replaced by Clause 19 of 1985 Settlement and by Resolution No.8856 dated 31.8.78 passed by the appellant-Corporation.
Appellant-Corporation is a State Road Transport Undertaking incorporated under Road Transport Corporation Act, 1950. Apart from State Transport Employees Service Regulations framed under Section 45 of Road Transport Corporation Act, 1950, the service conditions of the employees are also regulated by Industrial Settlement signed between the Corporation and various trade Unions representing employees. Several demands were raised in 1956 on behalf of the workmen. One such demand was under Item No.49 of the Demand Notice for abolition of Daily Wage System. It appears that large number of workmen were continued for several years in the Corporation on ad-hoc basis. They were paid daily-wages. Therefore, there were unwarranted interruptions and breaks in their service which ultimately resulted in Unions raising the above demand. Under 1956 Settlement all employees working for 180 days including weekly offs and other holidays continuously, were to be brought on the time scale of pay and they were to be given all the benefits available to the time scale workers. This Settlement was arrived at on 25.4.56. Even after 1956 various settlements were arrived at between the Corporation and its employees. According to the appellant, Clause 49 of 1956 Settlement
was cancelled and revised in the Joint Committee Meeting held on 15.4.1978. According to the Corporation, the Joint Committee was empowered to do so by virtue of Clause 9 of 1968 Settlement. According to the appellant-Corporation, in any event the decision of the Joint Committee dated 15.4.78 stood approved by Resolution No.8856 of the Corporation dated 31.8.1978 under which persons in employment of daily-wages as on 31.7.78 and those who were to be employed on daily-wages thereafter were to be appointed on temporary basis in ephemeral vacancies in time scale of pay as from 31.7.78 or thereafter provided they completed aggregate service of 180 days in any one financial year commencing from 1.4.73 onwards. According to the appellant-Corporation, in 1985 a new
