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High Court Of Calcutta
Ruma Pal
NATIONAL JUTE MANUFACTURING CORPORATION NATIONAL EMPLOYEES UNION - Appellant
Versus
UNION OF INDIA (UOI) - Respondent
Matter 2088 Of 1992
Decided On : 09/14/1993
EMPLOYEES' STATE INSURANCE ACT, 1948 - APPLICABILITY - EMPLOYEES OF NJMC - EMPLOYEES' STATE INSURANCE (CENTRAL) FIRST AMENDMENT RULES, 1992 - VALIDITY - MEDICAL TREATMENT AND ATTENDANCE RULES, 1982 OF NJMC - INTERPRETATION - EXEMPTION FROM THE OPERATION OF THE ACT - SECTION 1 (4) OF THE ACT - INTERPRETATION - SECTION 87 OF THE ACT - SCOPE - SECTION 72 OF THE ACT - APPLICABILITY.
Fact of the Case:
The petitioners, clerical and sub-staff employees of the head office of the National Jute Manufactures Corporation Ltd. (NJMC), challenged the applicability of the Employees' State Insurance Act, 1948 (the Act) to them, arguing that they should continue to enjoy the medical and other benefits granted by NJMC under its Medical Treatment and Attendance Rules, 1982. The respondents, on the other hand, contended that the employees should be governed by the provisions of the Act.
Finding of the Court:
The Court held that the employees of NJMC were not excluded from the purview of the Act by virtue of the proviso to Section 1 (4) of the Act, which excluded factories or establishments belonging to or under the control of the Government whose employees were otherwise in receipt of benefits substantially similar or superior to the benefits provided under the Act. The Court reasoned that NJMC was a company incorporated under the Companies Act, 1956, and was distinct from the Government, and that the mere fact that the majority of NJMC's shares were held by the President of India did not mean that NJMC could be equated with the Government for the purposes of the Act. The Court also held that the extension of the provisions of the Employees' State Insurance Act to employees earning up to Rs. 3,000 per month did not violate Article 14 of the Constitution, as the Legislature had the discretion to decide in what areas and in respect of which factories the Employees' State Insurance Corporation should be established.
Issues: 1. Whether the employees of NJMC were excluded from the purview of the Employees' State Insurance Act, 1948 by virtue of the proviso to Section 1 (4) of the Act? 2. Whether the extension of the provisions of the Employees' State Insurance Act to employees earning up to Rs. 3,000 per month violated Article 14 of the Constitution?
Ratio Decidendi: 1. The Court held that the employees of NJMC were not excluded from the purview of the Act by virtue of the proviso to Section 1 (4) of the Act, which excluded factories or establishments belonging to or under the control of the Government whose employees were otherwise in receipt of benefits substantially similar or superior to the benefits provided under the Act. The Court reasoned that NJMC was a company incorporated under the Companies Act, 1956, and was distinct from the Government, and that the mere fact that the majority of NJMC's shares were held by the President of India did not mean that NJMC could be equated with the Government for the purposes of the Act. 2. The Court held that the extension of the provisions of the Employees' State Insurance Act to employees earning up to Rs. 3,000 per month did not violate Article 14 of the Constitution, as the Legislature had the discretion to decide in what areas and in respect of which factories the Employees' State Insurance Corporation should be established.
Final Decision: The Court directed the Central Government to consider and dispose of the representation made by the petitioners dated April 30, 1992, under the provisions of Section 87 of the Act after giving the petitioners, NJMC and the Employees' State Insurance Corporation an opportunity of being heard, within a period of three months from the date of service of the operative portion of the judgment.
( 1 ) THIS writ application has been filed by the clerical and sub- staff employees of the head office of the National Jute Manufactures Corporation Ltd. (referred to as the "njmc" ). The employees are represented by two unions.
( 2 ) THE question raised in this writ application is whether the employees represented by the petitioners should be governed by the provisions of the Employees' State Insurance Act, 1948, or whether they should continue to enjoy the medical and other benefits which had been granted by NJMC to these employees all along.
( 3 ) BRIEFLY stated, according to the petitioners, the employees should be exempted from the operation of the Employees' State Insurance Act, 1948, and should continue to be granted the benefits under the NJMC's Medical Treatment and Attendance Rules, while the respondents argue to the contrary. Before considering the arguments in support of the rival contentions in detail, the background of relevant facts is as follows:
( 4 ) NJMC was incorporated in June, 1980. At the time of its incorporation the total number of equity shares was 70,000 of which the President of India holds 69,998 and one was held by the then Additional Secretary and Financial Advisor, Ministry of Commerce and Civil Supplies and the other was held by the then Economic Advisor Ministry of Commerce and Civil Supplies. NJMC was formed for the purpose of taking over six mills which are now referred to as its units, namely, National, Kinnison, Alexandra, Union, Khardah and RBHM. Each unit has a jute mill. The head office of all the units is at Calcutta. The petitioners' employees are the clerical and sub- staff at the head office of national unit of NJMC.
( 5 ) ON April 19, 1948, the Employees' State Insurance Act, 1948 (referred to as "the Act"), had come into force. The Rules were framed under Section 95 of the Act known as the Employees' State Insurance Central Rules, 1950. The Act was applicable to the six units prior to their being taken over by NJMC. It continued to apply to the employees of NJMC.
( 6 ) INITIALLY, the provisions of the Act were applicable to employees drawing less than Rs. 500 per month as salary. From time to time the Rules were amended and the coverage was extended to employees with higher salaries.
( 7 ) IN 1982, the Medical Treatment and Attendance Rules, 1982, were formulated for application to the employees of NJMC. Rule 3 (b) (iv) of the 1982 Rules provides that the Rules would not apply to "employees who are governed by the Employees' State Insurance Act, 1948, and/or CGHS". The Rules provided for the comprehensive treatment of employees, reimbursement of cost of medicines, consultation fees, laboratory test, indoor treatment, testing eye sight, etc. Advances were also available to the employees and members of their family, ambulance charges, travelling allowance for treatment were also made available to the employees and their family members.
( 8 ) ACCORDING to the petitioners, on March 30, 1984, pursuant to a charter of demand raised by the unions of NJMC a memorandum of settlement was entered into between NJMC and its employees. According to the petitioners, the settlement provided, inter alia, for the grant of various medical benefits. The settlement expired on March 31, 1988.
( 9 ) ON May 19, 1989, and July 4, 1989, two bipartite agreements were entered into between the unions of NJMC Ltd. , and NJMC after the memorandum of settlement dated March 30, 1984, expired on March 31, 1988. The two memoranda of settlement are identical in all material respects with only the party unions being different Both the agreements came into force with effect from April 1, 1988, and were to remain in force up to March 31, 1992, until such time the parties arrived at a fresh settlement. Clause 17 of the memoranda of settlement provides:"17. Medical benefits.-The existing benefits shall continue. In view of the inordinate rise in the drawal of the medical benefits at all levels, it ha
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