1. Dispute over validity of inter-establishment transfers of workmen under the Industrial Employment (Standing Orders) Act, 1946, involving conflicting Certified Standing Orders and appointment letters. (Para 1 )
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2024 Supreme(SC) 262
SUPREME COURT OF INDIA
B.R. Gavai, Sandeep Mehta, JJ.
M/s. Divgi Metal Wares Ltd. – Appellant
Versus
M/s. Divgi Metal Wares Employees Association & Anr. – Respondents
Civil Appeal No(s). 2032 of 2011 With C.A. No. 2035/2011, C.A. No. 2033 of 2011
Decided On : 21-03-2024
Important Points
IMPORTANT POINT
Nothing contained in Standing Orders can operate in derogation or to prejudice of provisions as provided in contract of service.
Nothing contained in Standing Orders can operate in derogation or to prejudice of provisions as provided in contract of service.
Subject
Labour Law - Industrial Employment (Standing Orders) Act
Act Referred
INDUSTRIAL EMPLOYMENT STANDARD STANDING ORDERS: Cl.20, S.6(2), S.7
Headnote
Industrial Employment (Standing Orders) Act, 1946 – Sections 5, 7 and 10 – Transfer of workmen – Services are transferable to any department or any work offices belonging to company – Whereas Standing Order would cover transfer from one department to another within same unit/factory/office/establishment or from one job of similar nature and capacity to another job of same nature and capacity and also from one job to another similar job or from one shift to another shift – Per contra, terms of appointment and confirmation would permit transfer of an employee to any department or any works or offices belonging to company – Nothing contained in Standing Orders can operate in derogation or to prejudice of provisions as provided in contract of service – Impugned judgment and order quashed and set aside. (Paras 11, 12, 14, 15, 16 and 24)
Facts of the case:
Present appeals challenge judgment and order passed by Division Bench of High Court of Karnataka, Circuit Bench at Dharwad dated 02.02.2009, vide which the appeal filed by respondent No.1 herein, came to be allowed. Similarly, by said order, the Writ Petition filed by Respondent No.1 was also allowed and the Writ Petition appellant herein, came to be dismissed.
Findings of Court:
In view of order dated 03.03.2001 passed by Industrial Tribunal, amendment made in year 1999 had not come into effect in view of the appeal being allowed by Tribunal.
Result : Appeals disposed of.
Legal Category Hierarchy
Table of Contents
2. Whether Standing Orders prohibit inter-establishment transfers and if modifications to such orders were validly implemented despite subsequent appellate reversals. (Para 4 , 5 , 6 )
3. The court found no conflict between appointment letters allowing nationwide transfer and Standing Orders allowing intra-establishment transfer, as the latter does not prohibit the former. (Para 7 , 10 , 11 , 13 , 14 , 16 , 17 , 21 , 23 , 25 )
4. Standing Orders providing for intra-establishment transfers do not prohibit inter-establishment transfers expressly permitted in the contract of service, provided no conflict exists. (Para 11 , 14 )
5. Impugned judgment quashed; transfers held valid; writ petitions dismissed and the award challenging the transfers set aside. (Para 24 , 26 )
6. Does a Standing Order allowing only intra-establishment transfers conflict with an appointment letter allowing transfers to any company establishment in India?
No. Standing Orders governing transfers within an establishment do not prohibit transfers between different establishments if the contract of service expressly permits such transfers. The two provisions operate in different spheres and do not conflict. (Para 10 , 11 , 14 )
7. Can a contract of service provide for rights that are not explicitly mentioned in the Certified Standing Orders?
Yes, particularly when the Standing Orders contain a saving clause stating that nothing in the orders shall operate in derogation of any law or prejudice any right under a contract of service. (Para 14 )
8. When does a modified Standing Order come into operation if an appeal is preferred under the Industrial Employment (Standing Orders) Act?
Under Section 7, if an appeal is preferred, the modified order comes into operation only upon the expiry of seven days from the date the appellate authority's order is sent. If the appeal is allowed and the modification set aside, the original order remains in operation. (Para 18 , 19 , 20 , 21 , 22 )
JUDGMENT :
B.R. GAVAI, J.
1. These appeals challenge the judgment and order passed by the Division Bench of the High Court of Karnataka, Circuit Bench at Dharwad dated 02.02.2009, vide which the appeal filed by the M/s. Divgi Metal Wares Employees Association, which is respondent No.1 herein, came to be allowed. Similarly, by the said order, the Writ Petition No.31808/2003 filed by Respondent No.1 was also allowed and the Writ Petition No.7993/2006 filed by M/s Divgi Metal Wares Ltd., the appellant herein, came to be dismissed.
2. The facts leading to the filing of the present appeals are as under:-
2.1 The appellant is a company which manufactures automobile gears at two factories, one in Pune, Maharashtra and the other at Sirsi, Karnataka. The Respondent No.1 is a Trade Union registered under the provisions of the Indian Trade Unions Act, 1926. The relations between the appellant and the respondents are governed by the Industrial Employment (Standing Orders) Act, 1946 (for short, ‘the said Act’). It is also not in dispute that, it was at the instance of the employer that the Deputy Labour Commissioner and Certifying Officer passed an order on 03.07.1989 thereby certifying the Standing Order. Clause 20 of the Standing Orders reads thus:-
“20. Transfers: An employee shall be liable to be transferred at any time from the unit/factory/office/establishment of the company located anywhere in India or from one department to another within the same unit/factory/office/establishment or from one job of similar nature and capacity to another job of same nature and capacity from one job to another similar job or from one shift to another shift, provided such a transfer does not affect his normal wages. Any refusal to accept a transfer as above will be treated as mis-conduct as per Rule 31.2.1949.”
2.2 It will also be relevant to refer to Clause 31 of the Certified Standing Order. It reads thus:
“Nothing contained in these standing Orders shall operate in derogation of any law for the time being in force or to the prejudice of any right under a contract of service, custom or usage, or an agreement settlement or award applicable to the establishment.”
2.3 It is also not in dispute that Clause 5 of every letter of appointment and Clause 1 of every letter of confirmation in service issued to the workmen contains the following stipulation:-
“Your services are transferable at short notice to any department or any works, offices belonging to the Company. In the event of transfer the terms and conditions stipulated in this letter shall continue to apply, and you will be governed by the rules and regulations of the establishment where your services are transferred.”
2.4 The appeal challenging the Certified Standing Order dated 03.07.1989 came to be filed before the learned Industrial Tribunal which rejected the appeal as time barred vide order dated 06.04.1996. Indisputably, the same order has not been carried forward.
2.5 In the months of April to September, 1998 on account of reduction in orders and lack of sufficient work, 66 workmen from the Sirsi Factory were transferred to Pune Factory. All the workmen were paid in advance for one week’s leave with pay @ Rs.1,000/- towards travel expenses. Though the employees collected the said amount, they did not report at the Pune Factory.
2.6 These workmen, whose services were transferred raised Industrial Disputes vide Nos.42/1998, 2/1999 and 3/1999.
2.7 On the application of the respondent, the Deputy Labour Commissioner and Certifying Officer modified the Certified Standing Orders and deleted the following words from Clause 1 on 30.09.1999:-
“from the unit/factory/office/establishment in which he is working to any other unit/factory/office/establishment of the Company located anywhere in India, or”
2.8 The said deletion came to be challenged by way of an appeal by the appellant before the learned Industrial Tribunal. The learned Industrial Tribunal by the judgment and order dated 03.03.2001 partly allowed the
