P L D 1961 Supreme Court 383 (PLP)

CORNELIUS, C. J.-This is an appeal brought by five British Exchange Banks to call in question an award made upon reference under the Industrial Disputes Act to a Tribunal. The award is a very lengthy document covering some 145 typed fuls cap pages, and deals with no less then 15 different demands, bait out of these the appellants challenge the award in respect of only four items, namely, as to housing allowance medical aid and facilities, working hours, and finally the re-instatement of a small number of dismissed employees. It should be mentioned that one of the appellant Banks, namely, the Eastern Bank has closed down its branch at Chittagong. Its business appears to have been taken over by the Chartered Bank which is one of the appellants. but it was shown to us that not all the employees of the Eastern Bank have been absorbed in the staff of the Chartered Bank, and moreover the absorption was on the basis of individual offers of employment on a fresh basis. In other words, it would seem that employment in the Eastern Bank is no longer available since the closure of the branch of that Bank in Chittagong. This affects the case of the re-instatement of one employee, a person named .Abu Nasar Nurun Nabi. In addition to the matters mentioned above, another question was allowed to be raised in the case, namely, whether the reference was not wholly defective by reason of the fact that the order of reference was of a "general Industrial dispute", and the particular points of difference upon which adjudication was made by the Tribunal were ascertained by the Tribunal for himself. Reliance in this connection was placed upon the recent decision of this Court in the case of the Pakistan Match Company Limited ((1959) 1 PSC 8331 :PLD 1959SC337). Mr. Fazlur Rahman for the appellants has urged that in all respects, the present case falls within the principle of the Pakistan Match Com pany's case, while for the respondent Union, it has been urged that on the facts the precedent case is distinguishable. At an earlier stage, the suggestion was made that the law declared in the precedent case needed to be reconsidered, but that has not been pressed before us. We consider that the facts of the present case take it outside the ambit of the principle upon which the reference was found to be wholly defective in the case of the Pakistan Match Company. There, two disputes were referred by the Government, each being, described as a "general industrial dispute". In actual fact, there was only one point of difference between the employers and the employees in each case, before the Conciliation Officer, who had reported failure. On the very day on which the Conciliation Officer made his report, the Provincial Government made an order referring" a general industrial dispute" in each case to a Tribunal with the result that the Tribunal ascertained a large number of points of difference by inviting statements of demands from the employees in each case, and proceeded to adjudicate upon them. The employers in each case protested from the start at the action of the Tribunal in entering into matters which were not in dispute before the Conciliation Officer. In the appeal before this Court, it was urged that the entire reference was bad. The Court found on a number of grounds that the reference was bad, one of the grounds being that it was evident that the Government did not apply its mind to the case before making the order of reference, since it was clear that the Government had not allowed itself any time at all for examining the case. That-was by itself a suffi cient ground for avoiding the reference and it is a ground which does not exist in the present case. For here, it is evident that there were conciliation proceedings based upon a charter of multiple demands, only a few of which had been discussed before a failure report was submitted to the Government. The reference was not made immediately, but after a decent lapse of time, suffi cient to justify the presumption that things were done in the proper way, i e., that the Government had applied its mind to the matter and presumably had become aware that there was a charter of demands. Moreover, in this case the employers have not protested at any stage against the action of the Tribunal in entering into matters included in the charter of demands, although they have protested at matters outside that charter being examined, what is more, after the award was announced, the employers have accept ed a number of the decisions on demands, which have gone against their interest in the sense that added reliefs have been given to the employees. They have only appealed in respect of a limited number of the decisions which prima facia have gone against their interest. In other words, having accepted the jurisdiction of the Tribunal in regard to matters included in the charter of demands, and having gone further in accepting a number of the decisions in relation to these demands, which appear to go against their interests, the employers cannot now be heard to say that the entire reference was bad. We must not be supposed to be lending any approval to the action of the Provincial Government in referring a "general industrial dispute". A number of reasons were given in the judgment of this Court in the, Pakistan Match Company s case for thinking that it is not within the intention of the Industrial Disputes Act that a Government should refer a "general indus trial dispute", and be content that the Tribunal should ascertain the points, of disputes for himself. Those reasons need not be repeated here, and are equally valid in relation to the present reference. But what is found here is that a lengthy quasi judicial proceeding was acquiesced in by the party which is now protesting against the jurisdiction of the Tribunal on a preliminary ground, and .the acquiescence has gone to the extent that the employers have actually accepted a number of the decisions which went against them. We do not consider that the circumstances in the present case, particularly those which go in favour of the pre sumption that the Provincial Government had applied its mind to the nature of the dispute, as well as to its details, before mak ing the order of reference, can justify action for the annulment of these entire proceedings upon such a ground as that which formed the basis of the decision in the Pakistan Match Company's case, viz., that the reference was wholly bad because the Govern ment never applied its mind ho the matter before making a reference We accordingly proceed to examine the decisions complained of. A demand for housing allowance had been made by the, workers on a very general ground, namely, that house rents in Chittagong had gone up very greatly on account of the sudden and great increase in the population. The demand of the employees was for house allowance at 10% of the basic pay with a minimum of Rs. 7 for the subordinate staff. It is complained that there was no evidence before the Tribunal as to increase in house rents in Chittagong, and the only instances of other Banks making provision for housing of their employees were those of the State. Bank of Pakistan which provides accommodation, charging 10% of the salary as house rent, and of the National Bank of Pakistan which gives an allowance of 15 % of the basic salary by way of house allowance to its employees. We find on reference to the record that although a considerable number of the employees of the banks were examined as witnesses, only one of them made a statement on the point of house rent, and that was the first witness for the Union, Moslemuddin Ahmad, who is the President of the Union. All he had to say on the point was contained in the following brief passage, viz.:- "Housing is an acute problem in Chittagong and rent is too high for our pay. So we demand housing allowance. It is not included in cost of living index. Even a worse house for a clerk is not available at less than 45 p.m. Minimum comfortable house is not available at below Rs. 75 p. m. So we demand housing allowance of 10% of the pay with a minimum of Rs. 7 per month." It was made clear in the evidence that the cost of housing is includ ed in the Government's living index for the working classes. The similar index for the middle classes among whom clerics are includ ed is prepared by Chittagong Chamber of Commerce, and does not take house rent into account. The point is of importance since the dearness allowance given by these banks is graduated in relation to the cost of living index: It has the effect of adding a supplement of between 80 and 90 % to the basic salary of the staff, according to the indices prevailing at the time of the adjudication and since. It was urged, and we think with force, that Moslem addin Ahmad, the President of the Union, cannot be accepted as an authority on the scale of house rents prevailing in Chittagong. The Banks were paying generous dearness allowance, and in this very adjudication they had accepted an increase in the basic wages of the entire staff with the result that there would be a correspond ing increase in the dearness allowance as well. Therefore, it was urged that in the absence of concrete proof that the cost of hous ing was wholly disproportionate; the Tribunal had no sufficient basis upon which to proceed in allowing as he had done 8% for the clerks and 5% for the subordinate staff. The comparison with other banks had shown that the appellant Banks paid as high wages as any other bank excluding the Habib Bank, and that the instances of the State Bank of Pakistan and the National Bank of Pakistan were not directly in point, as neither of these Banks paid their staff as highly as the appellant Banks did. Mr. Hamidul Haq Chowdhury attempted to support the award under this head on the same grounds as have been advanced by the Tribunal, but to us it seems that the Tribunal has been guided mainly by sympathetic speculation with practically no evidence upon which a general increase in emoluments could at all have been justified. We consider that the materials before the Tribunal were entirely insufficient for allowing these increased emoluments by way of house allowance to the staff of the' appellant Banks, and. that therefore, the award under this head; should be set aside. The second award for consideration is that giving extra medical facilities and here it seems that the Banks may perhaps have failed to appreciate that what has been awarded is not calculated to affect them detrimentally. Mr. Fazlur Rahman's main argument was that the Banks calculate on the basis of having to spend Rs. 2.25 per month on each of their employees by way of-medical relief, and he thought that any scheme by the Tribunal should be adjusted so as to remain within this budget. At the same time he admitted that the experience of the Banks was that their expenditure had up to the present been within the limit of their expectation. The Tribunal thought that "fixing money value for medical relief does not appear to be always very scientific or methodical though it is very easy for `calculation", and he went on to lay down a scheme of an elaborate nature which would require the engagement of a doctor with the degree of M. B. B. S., either whole-time or part-time to attend at the Bank dispensary or at his own dispensary during office hours, twice a day, and also to attend patients from among the staffs at their residences within the Chittagong Municipal limits upon requisition; without any charge of fee or conveyance and further that all medicines prescribed by the doctor however expensive should be supplied by the Banks free of charge. If the Banks' doctor were not available, the employee would be entitled to treatment by a similarly qualified doctor and to recover the cost upon presentation of bills. Extraordinary surgical and specia list attendance would not be at the Banks' charge, and treat ment for members of the employee's family also would be at the cost of the employee. So far as we can see, this scheme, although it may appear to be elaborate, contains all that is essential, and little that is non-essential, and is calculated to furnish adequate relief to the employees without over-burdening the Banks with expenses. It may well be that the cost of such a scheme will be found in actual practice to be within the expectation of the Banks, i.e., at the rate of Rs. 2.25 per employee per month. The appeal as regards this part of the award is accordingly dismissed. The next decision which is challenged is that relating to hours of working, and on this point it appears that the Tribunal made a comparison of the working hours observed by the various banks before coming to his final conclusion, which was in favour of a uniform 38 hours of work per week excluding the recess, on the following basis, viz. :- Week days 9-30 a. m. to 5-30 p. m. with one hour of recess. Fridays 9 a. m. to 5 p. m. with two hours of recess. Saturdays 9 a. m. to 1 p. m. with no recess. The Banks complained only that the fixed hours of commence ment and closure of work prevent them from adopting a system of staggering under which by rotation certain members of the staff would come to work earlier and leave earlier while other members of the staff might arrive latter and be kept in after office tours, for necessary office work. In the morning, the extra time would be employed in getting the bank in readiness for the day's work when it opens its door at 9-30 a. m. and in the evening the extra time for a few of the employees would be spent in clearing up the work before closing for the night. This is in accordance with the necessities of the Banks, and also with their common practice, and on behalf of the Union, a concession was made before us 'that the Banks may practise staggering for the purpose indicated. On this point therefore, we would modify the award by adding that the Bank's will be at liberty to fix commencing hours of work 'for the necessary number of them staff, earlier than 9-30 a- m. to enable the office to be placed in readiness for the day's work, and also to keep certain members of the staff in after closing hours, in order to clear up the work of the office before closing down, provided that this is done so that the total of 38 hours per week is not exceeded in any case. We may note that although in the grounds of appeal it was complained for the Banks, that 38 hours are too little that point was not pressed before us in the appeal. In the charter of demands the Union had sought reinstate ment "of all victimized workers" without mentioning names, but in the course of the enquiry a large number of cases ware brought up, out of which the Tribunal has found it possible to direct the reinstatement of five persons, namely, P.B. Chakrabarty, A. M. Kazmi, Achinta Chakrabarty, Abu Nasar Nurun Nabi and A. B. Choudhury, Mr. Fazlur Rahman has attacked this award on two grounds. He has firstly argued that to force workers upon an unwilling employer is contrary to the general law as well as to the law of contract, viz., that of master and servant. He has contended that to order reinstatement is beyond the powers of a Tribunal, although he has had to concede that reinstatement has been ordered of dismissed workers by successive Tribunals over a considerable number of years. On this point, Mr. Fazlur Rahman's main reliance was on the argument of Coddard. C. J. in his judgment in the case of R. vs. National Arbitration Tribunal (1947 (2) A E L R 693). The circumstances of that case were exceptional, falling as it did under certain Regulations included in the Defence Regulations of 1939, and the decision appears to turn upon construction of two particular provisions. A case more directly in point is that of the Western India Automobile Association (A I R 1949 F C111). where the question arose as to the reinstatement of certain members of the staff of the Association .who had joined the strike out of which the reference arose. This is an important point to note, as it indicates a direct connection between the strike and the loss of employment by the persons on whose behalf reinstatement was sought. The principal point in the case before the Federal Court of India was whether reinstatement was outside the jurisdiction of the Industrial Tribunal and after, a survey of the authorities and examination of the meaning of the expression "non-employment" occurring in the definition of "industrial dispute" the Court held in favour of the existence of the power. In this case however it is urged that on the facts, the five employees whose reinstatement has been directed do not fall within the scope of the jurisdiction for the reason that their case could not be said to be one of "non-employment" giving rise to a dispute. Each one of these five persons had been dismissed in consequence of their participation in a strike which had taken place five years earlier, in 1952, and since that time they had been completely unconnected with the employments they had previously held. Their places in the Bank's service had been filled by other persons, and for five years that work had been done by such other persons. There was nothing to show that the interval of five years they or any of them pressed to be given back their jobs. Everything tended to show that when in the year 1957, the Union found occasion to raise a charter of demands in relation immediate necessities such as the greatly increased cost of living since 1952, leading to a demand for all round increase of emoluments, facilities such as medical relief etc., they at the same time seized the opportunity to bring up the cases of a large number of employees who in their opinion had suffered at the hands of the employers in the past, on however distant a date. These cases of dismissed employees were added without regard to the existence or otherwise of any connection between their removal from service and the current needs of difficulties which had led the Union to raise the principal points of dispute with the Banks. The argument therefore was that the fact that those five persons who had been dismissed five years earlier and had not been shown to have made any ready attempt in the interval to be restored to their posts, could not by any stretch of imagination be regarded qua service in the Banks, as "non-employed persons". Accordingly, the question as to their being taken back into service could not be regarded as an industrial dispute and for that reason the question of their re-employment was not a matter within the jurisdiction of the Tribunal. The reply made on behalf of the Union was of a general character. Something was sought to be made of the manner in which the strike of 1952 was controlled. It seems that a number of the main organizers were placed under detention by orders of the Government, and stress was laid upon the fact that the Government had refused to refer their grievances to a Tribunal for adjudication, but it was not denied that when the Banks reco mmenced their activities, and the measures of control adopted by the Government had ceased to operate, the dismissed personnel had neither immediately nor after a reasonable interval, taken up the question that their removal from service was irregular, and that they were entitled to be restored to their position. Support was sought for the claim of their re-employment from certain observations contained in the judgment of the Indian Federal Court in the case of the western India Automobile Association already cited. In paragraph 10 of- that judgment, there is a discussion of the meaning of the expression "non-employment" from, which the following passage may be extracted for quotation here : - "`Non-employment' is the negative of 'employment and would mean that disputes of workmen out of service with their employers are within the ambit of the definition. It is the positive or the negative act of an employer, that leads to employment or to non-employment. It may relate to an existing employment or to a contemplated employment or it may r--late to an existing fact of not-employment or a con templated non-employment. The following four illustrations elucidate this point : (t) Au employer has already employed a person and a trade union says `Please do not employ him.' Such a dispute is a dispute as to employment or in connection with employment. (2) An employer gives notice to a union saying that he wishes to employ two particular persons. The union says `no'. This is a dispute as to employ ment arises out of the desire of the employer to employ certain persons. (3) An employer may dismiss a man, or decline to employ him. This matter raises a dispute as to non -employment. (4) An employer contemplates turning out a number of people who are already in his employment. It is a dispute as to contemplated non-employment. `Employment or nun-employment' constitutes the subject-matter of one class of industrial disputes, the other two classes of disputes being those connected with the terms of employment and the con ditions of labour. The failure to employ or the refusal to employ are actions on the part of the employer which would be covered by the term `employment or non-employment'. Reinstatement is connected with non-employment and is there fore within the words of the definition." With respect, some of the propositions are stated in terms with which it is not possible easily to agree. Thus, when it is said that if an employer declines to employ a man, the matter raises a dispute as to non employment, it is permissible to express respectful dissent. In other respects also, there are propositions in this passage which are stated more widely than the occasion required, and so widely that to differ from them is in our opinion appro priate. In the judgment however there occurs the following passage, which may be thought to cover the circumstances of the cases before the Indian Federal Court :- "Now, in many cases an industrial dispute starts with the making of number of demands by workmen. If the demands are not acceptable to the employer and that is what often happens it results in a dismissal of the leaders and eventually in a strike. No machinery for reconciliation and settlement of such disputes can be considered effective unless it provides within its scope a solution for cases of employees who are dismissed in such conditions and who are usually the first victim in an industrial dispute. If reinstatement of such persons cannot he brought about by conciliation or adjudica tion, it is difficult, if not impossible, in many cases to restore industrial peace which is the object of the legislation." That was indeed a case where the lenders of the dispute had been dismissed, and there had been a strike in consequence thereof, or at any rate proximately thereto: In such a case the question that these persons would be raising before the Tribunal would be as to their non-employment in consequence of a dispute raised by themselves, which led to the strike, and therefore they could claim that the matter should be adjudicated upon and their non-employment should be brought to an end by an order of reinstatement. It is not conceivable that a State of "non -employment" should be terminated by an order of first appointment. The expression "non-employment" is, to say the least, a peculiar expression in a legal context, although it might be accepted as appropriate in a philosophies disquisition. In our opinion,, the expression has to be given a restricted meaning, and one of the restrictions must be that non-employment must be regarded as a condition following upon a state of employment, and that such non-employment must be the result of incidents or actions which are matters falling within the definition of an industrial dispute. Thus for instance if by change in a system of working which has been resisted by the workers, the employee succeeds in making a number of the employees surplus to hi requirement, and dispenses with their service as redundant, a case would arise where persons who had been employed became non -employed in consequence of an action which was the subject of a dispute between the employers and the employees. Other circu mstances also may be readily conceived in which in consequence of such disputed actions, a state of employment is brought to an end, and the person thus rendered unemployed could claim that his condition of "non-employment" was a matter for adjudication being connected with the main dispute. The only circumstance in which the necessity for such a nexus might perhaps be excused is where the loss of employment and the raising of the main dispute are reasonably close to each other in point of time, so as to raise a presumption that the two incidents had something to do with each other. In the present case, the non-employment of the five persons whose reinstatement was ordered by the Tribunal came about in consequence of the strike of 1952, which is not the subject of the adjudication in the present case. In addition, there is the circumstance that these persons have been unconnected with the Banks' service for the long period of five years, and in that period the matter of their having lost their service has not been maintained as a living issue between them selves and the Banks. It seems clear enough that this matter has been added in a colourable fashion to a number of fresh grievances which formed the main basis of the charter of demands and it is in no sense a true industrial dispute as to non-employment. It should never have been referred- to the Tribunal, and here we take the opportunity of observing upon the importance which attaches to the specification by the Government, when it refer an industrial dispute to a Tribunal, of the matters in controversy. Had the Government applied its mind to the subject of the dispute between the Union and the Banks before making a reference, in the matter of the claim for reinstatement, there would have felt little difficulty in becoming conscious that dismissals which had taken place five years earlier could scarcely be the subject of fresh industrial dispute. In our opinion, the claim for reinstatement of these five workers w is not within the meaning of the expression "industrial dispute", and therefore the Tribunal had no power to adjudicate upon them. The order of reinstatement made by the Tribunal is accordingly set aside. In the result, the appeal succeeds to this extent that the award of the Tribunal in regard firstly to the housing allowance and secondly, to the reinstatement of five dismissed employees is set aside. The Tribunal's award in respect of extra medical faci lities is maintained, and as to the hours of working, the award is modified so as to enable the Banks to stagger the working hours of certain employees to enable some to be called to duty earlier than the specified hours in the morning and others to be retained for duty later than the specified closing hours, but not more than one hour in each case, and not so as to increase the aggregate of working hours per week beyond the 38 hours. In all the circumstances, we leave the parties to bear their own costs. A. H. Order accordingly.