REVIEW OF JUDGEMENTS IN SELECT CASES , Study notes of Business Administration

Download REVIEW OF JUDGEMENTS IN SELECT CASES and more Study notes Business Administration in PDF only on Docsity! REVIEW OF JUDGEMENTS IN SELECT CASES Let us now review and discuss the judgments pronounced in seven select cases. I. Employment in Hazardous and polluted industries. Case: M.C .Mehta vs. union of India 1987 and subsequent cases, including the Supreme Court decisions on the Delhi’s hazard ous/heavy industries’ relocation case. The Supreme Court ordered the closure or shifting/ relocation of 168 industries from Delhi by 30 November 1996. (This order was subsequently modified on 31 December1996) The government was asked to facilitate the allotment of alternative sites, etc. the judgment lists the rights and benefits of workers employed in these units. It envisages alternative employment with no adverse change in terms and conditions. The retrenched workers, if any, should be paid compensation in terms of Section 25 F(b) and additional compensation over and above this. In several other states too courts have ordered the closure/ relocatio n of thousands of hazardous and polluting industries. In many such cases, the workers affected are to be treated as being under active employment between the dates of the closure and restarting. In another decision on aqua-culture farming, the Supreme Court ordered, on 11 December 1996, the winding – up/ destruction of aqua-culture farms operating within 500 meters of the high tide line of coastal states and awarded six years wages as compensation to the affected workmen, payable by the concerned employers. The judgement defined employers‘ liabilities/obligations and workers‘ rights concerning the regulation of hazardous processes under the Factories Act, 1948. In several other cases, the Supreme Court has Factories Act, 1948 Bhopal tragedy concerning the gas leak at the Union Carbide factory. The relief provided has not reached the affected persons till date (December 2000). An ILO Convention has given workers the right to leave the workplace if they consider it potentially unsafe. II. Contract Labor Case: Air India vs United Labor Union and Others(Supreme court of India, 6 December 1996) If work is considered perennial as per the provisions of the contract labor (Regulation and Abolition) Act, 1970, contract labor should be- prohibited and abolished. The judgement in question held the view that the principal employer is under statutory obligation to absorb contract labor, who are affected by such abolition, as regular employees from the day on which the contract labor system in the establishment, for the work which they were doing, get abolished. The date of engagement of such labor will be the criteria to determine their seniority. Excess workforce, if any, can be retrenched, as per the legal provisions under the Industrial Disputes Act on the principle of last come, first go‘ subject to reappointment as and when vacancies arise. In this case, the Supreme Court upheld the judgement of the Bombay High Court. The supreme Court of India observed that there is no express provision in the Act for the absorption of employees whose contract labor system had been abolished. Yet, it was not the intention of the legislation to be oblivious to the interests of the affected workers. Air India was, therefore, asked to abolish the contract labor system for sweeping, cleaning, dusting and watching the building compulsory education of children affected by the judgement and (employer to provide and state to ensure) alternative employment for adult members of the family whose child is in employment in a factory or a mine or in other hazardous work, in lieu of child. State to create a child labor rehabilitation cum- welfare fund and employer and state to deposit a sum of Rs.20,000 and Rs.5,000 respectively for each child employed in contravention of the provisions of the child Labor (Prohibition & Regulation) Act, 1986. The parent/guardian of the concerned child would be paid monthly interest of the deposit of Rs.25.00. Employment to adult member and payment of deposit in the name of the child would cease if the child were not sent for education. This judgement lists the obligations of the state and the employer, but no t those of the parents, trade unions and other interest groups in society in dealing with child labor. IV. Sexual Harassment at Workplace Case: Visakha & Others vs. State of Rajasthan (Supreme Court of India, 13 August 1997) The Supreme Court upheld the writ petition as a class action by certain social activists and NGOs, concerning the fundamental rights of working women with particular reference to the evil of sexual harassment of women at workplaces. In the absence of a law and based on the contents of international conventions and norms, the Supreme Court issue directions, in the course of its judgments, formulating guidelines and norms which would be binding and enforceable in law until suitable legislation is enacted. The supreme Court directives cover the following aspects; (1) Duty of the employer or other responsible persons in workplaces and other institutions; (2) Definition of sexual harassment; (3) Preventive steps to be taken by employers or persons in charge of the workplace, whether in the public or private sector; (4)Action under criminal proceedings; (5) Provision for disciplinary action; (6) Establishing a compliant mechanism, complaints committee, etc. The directions also deal with third-party harassment, workers‘ initiative and the need for raising awareness. The judgement is welcome. Given the problems in proving harassment, should the Court have also held that the accused be treated as guilty until he/ she is proven innocent? Would it then have opened the floodgate for frivolous complaints. Is the definition of harassment too wide as to have implication for office romance? How are the harassers and harassed to be tackled during/ after the investigations? What are the obligation of the employers in the case of third- party harassment (of employees by customers, outside the company premises, for instance )? Whether and how is the proportionality of the offence and the punishment to be decided? V. Consumer Dispute Over Sudden, Illegal Strikes Case 1: Common cause vs. union of India and Others (National Consumer Disputes Redressal Commission, New Delhi, 9 May 1996) Common cause, an NGO, filled a case under the consumer Protection Act, 1986 seeking action against both Air India and the erring group of members of its staff for disrupting a large number of flights due to a sudden strike resorted to by members of the Indian Flight Engineers‘ Association. Even though there is no contract between the consumers and the Indian Flight Engineers‘ Association, the consumer Protection Act holds the service providers (including staff and trade union) responsible for the hardship and loss to passengers. Section 18 of the Trade Union Act is not a bar to the filling of complaints against trade union under the consumer Protection Act. This verdict of the commission stressed that persons employed on salary in an organization which is rendering a service for a consideration are equally accountable under the provisions of the Consumer Protection Act, 1986 along with the management of the said organization even though there was no privity of contract between the person hiring / availing the service (consumer) and the concerned employee. In several other consumer cases, the trade union has been held liable and asked to pay damages. While the commission did not inflict any punishment on the airline or the association and no compensation was awarded to the petitioner in this case, the following observations were in the judgement: ….we also think it necessary to administer a strong word of caution that in case similar instances of disruption of services by illegal strikes or agitations come to the notice of this Commission, in future on the part of the employees of any organization rendering service to the public for consideration or any association or union of such employees, we will be dealing with the matter in a very strict manner and will have no hesitation to award proper compensation to the consumer who are thereby affected and aggrieved. If however , the disruption in service is the consequence of a strike or agitation legally launched in conformity with the provisions of the law governing industrial and labor relations the employees or their unions, no proceedings under the Consumer Protection Act can be instituted against the employees or their Associations/ Unions. ….Henceforth whenever a strike notice is served by any section of employees or their Trade Union … and the strike appears to be imminent, the Airlines shall insert a publication in all the leading newspapers of the country informing the public about the possibility of there being a strike so that the consumers may not be taken by surprise The exercise of one‘s right should not clash with others‘ rights. In several court cases, the right to protest by agitating workers is questioned if the striking/ agitating workers‘ rights clash with the rights of willing workers and customers who want their work to be carried on without interruption or intimidation. In some instances, the courts have ordered police protection for willing workers/customers. There seem to be inherent restrictions to the rights of workers‘ and employers‘ in employment/industrial relations. VI. Notice of change required for introducing voluntary Retirement Scheme2 Case: KEC International Ltd. Vs Kamani Employees Union & Other (Bombay High Court, 17 April 1998) Justice F.I. Rebello of the Bombay High Court Held that the income tax approved voluntary retirement scheme (VRS) results in the reduction of posts and hence attracts Section 9-A read with Item 11 of the IVth Schedule of the Industrial Disputes Act. This judgement, when appealed, was admitted by a division bench of the Bombay High Court on 22 June 1998 which stayed the operative part of the judgement. Justice Rebello held that : (a) the preamble of the notice for the VRS by the petitioner mentions that there was a need for the company to continuously upgrade the quality of products. Hence item 10 of Schedule IV of the industrial Disputes Act can be attracted, subject to the material that comes on record finally, (b) once the approval is taken under the Income Tax Act the scheme of VRS may necessarily result in a decrease in the existing strength of workers. Therefore, prima facie it must result in the reduction of posts. Hence VRS would be covered by item 11of the IV Schedule of the Industrial Disputes Act, (c) those workmen who have accepted VRS but have en cashed the compensation cheque have been distinguished from workmen who have accepted VRS but have not en cashed the compensation cheque. In the latter category, the complaint of violation of section 9-A of the Industrial Disputes Act is maintainable. Any VRS scheme should be based on the principle that it is for organizational restructuring and only those whose jobs have become redundant should be given the opportunity to apply. If this principle is accepted , then when employees leave under the VRS scheme, there would be a need for work reorganization based, usually, on the principle of work simplification. Thus it will affect the work content/ norms of the remaining workers and attract the provision of notice of change under the Industrial Disputes Act. 1947. While this part of the judgement is founded on logic, the other aspects dealing with the case require examination. The merits of the case should not depend on whether the VRS scheme is with or without income tax exemption. Similarly, the employees‘ right should cease once they receive the compensation cheque for voluntary separation in response to their own request. It should not have made any difference depending on whether or not they have en cashed it. VII. Service Contracts and Stranding Orders Case: Uptron India Ltd vs Shammi Bhan & Other (Supreme Court, 1998) Primarily service rules and regulations, standing orders or contracts of employment govern the law of employer- employee relationship. In the above case, the supreme Court considered that clause 17(g) of the certified standing orders of the company providing that ‗the services o f a workman are liable to automatic termination if he overstays on leave without permission for more than seven days‘ was bad and violative of the principles of natural justice as ‗it does not purport to provide an opportunity of hearing to the employee whose services are treated to have come to an end automatically‘.