2023 INSC 646 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4404 of 2023

(Arising out of SLP(C) No. 14886 of 2023)

Bharatiya Kamgar Karmachari Mahasangh …Appellant(s)

Versus

M/s. Jet Airways Ltd. …Respondent(s)

J U D G M E N T

SANJAY KAROL, J.

1. The present appeal arises out of the judgment of the High

Court of Bombay in Writ Petition No. 2657 of 2017, wherein it

confirmed the award dated 30.03.2017 passed b y the Central

Government Industrial Tribunal (hereinafter referred to as ‘CGIT’)

rejecting the demand of the Appellant-Union for reinstatement

with full back wages.

2. The brief facts involved in the case are as follows: The

respondent company operates a commercial airline, flying aircraft

2

for transporting passengers and cargo. The Appellant represents

around 169 workmen temporarily engaged on a fixed -term

contract by the Respondent in various cadres like loader-cum-

cleaners, drivers and operators. The Appellant contends that the

workmen were treated as temporary despite completing 240 days

in service in terms of the Model Standing Order provided under the

Bombay Industrial Employment (Standing Orders) Rules, 1959

(hereinafter referred to as “Bombay Model Standing Order”) and

despite the nature of the work being permanent and regular. The

Trade Union had raised a charter of demands which, after

negotiations, resulted in a settlement dated 02.05.2002. In the

said charter of demands, Bhartiya Kamgar Sena gave up the

demand for the grant of permanency and a comprehensive

settlement dated 02.05.2002 was signed as a package deal that

conferred many benefits on the workmen who gave up the said

demand. The Respondent Company claims that the workers are

not entitled to permanency as per the settlement dated 02.05.2002

entered between the Union and Company. The workmen raised

disputes and the matter landed up for adjudication. However, the

CGIT, in its award dated 30.03.2017, while answering a reference

framed the issue, whether the Union's demand for re-employment

3

/reinstatement with full back wages of these 169 workmen in

service of that first party is just and proper and answered it in the

negative. Relying upon Section 25-H of the Industrial Disputes Act,

1947 it was held that there is no retrenchment since the non-

renewal of fixed term contract did not amount it to be so as

provided under Section 2(oo)(bb) of the said Act. Thus, there was

no question of re-employment of the concerned workmen.

OPINION OF THIS COURT

3. After hearing learned counsel of the parties at great length,

the following issues arise for our consideration:

- Which is the Appropriate Authority empowered to issue the

Standing Order(s) under the Industrial Employment

(Standing Orders) Act, 1946 (hereinafter referred to as ‘The

Act’)?

- Whether private agreement/settlement between t he

parties would override the Standing Order?

ISSUE I

4. The Act applies to every industrial establishment wherein one

hundred or more workmen are employed or were employed on any

day of the preceding twelve months. The expression 'appropriate

4

government' is defined by Section 2(b) of the Act to mean in respect

of industrial establishments under the control of the Central

Government or Railway Administration, or a major port, mine or

oilfield, the Central Government, and in all other cases, the State

Government. Section 2(e) defines the expression 'industrial

establishment'. Under Section 15 of the Act, the appropriate

Government is empowered to make rules for carrying out the

purposes of the Act. In exercise of the powers conferred by Section

15, the then State of Bombay had issued the Bombay Industrial

Employment (Standing Orders) Rules, 1959. Insofar as those

establishments in respect of which the appropriate Government is

the Central Government, the Industrial Employment (Standing

Orders) Central Rules, 1946, stand framed.

5. Insofar as the Respondent Company is concerned, the

appropriate Government is clearly not the Central, but the State

Government since the Respondent is not, within the meaning of

Section 2(b), under the control of the Central Government. The

present case falls under the latter part of the section; thus, the

appropriate Government means the State Government. The

Bombay Model Standing Order would be applicable to the parties.

5

ISSUE II

6. For the adjudication of this issue, it is pertinent to take note

of various judicial pronouncements.

7. On various occasions, this Court has observed that the

certified standing orders have a statutory force. The Standing

Order implies a contract between the employer and the workman.

Therefore, the employer and workman cannot enter into a contract

overriding the statutory contract embo died in the certified

Standing Orders.

8. This Court has succinctly laid down the scope of The Act in

U.P. SEB v. Hari Shankar Jain ,

1 (3-Judge Bench) that it was

specially designed to define the terms of employment of workmen

in industrial establishments, to give the workmen a collective voice

in determining the terms of employment and to subject the terms

of employment to the scrutiny of quasi-judicial authorities by the

application of the test of fairness and reasonableness. It is an Act

giving recognition and form to workmen's hard-won and precious

rights. We have no hesitation in saying that it is a special Act

expressly and exclusively dealing with the schedule-enumerated

conditions of service of workmen in industrial establishments.

1

(1978) 4 SCC 16

6

9. While discussing the letter and spirit of The Act, this Court

in Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd.

2

(3-

Judge Bench) held that:

“11. …it was an act to require employers in industrial

establishments to formally define conditions of

employment under them. The preamble of the Act

provides that it is expedient to require employers in

industrial establishments to determine with sufficient

precision the conditions of employment under them

and to make the said conditions known to workmen

employed by them…… T he Act was a legislative

response to the laissez-faire rule of hire and fire at

sweet will. It was an attempt at imposing a statutory

contract of service between two parties unequal to

negotiate on the footing of equality.

….

The intendment underlying the Act and the provisions

of the Act enacted to give effect to the intendment and

the scheme of the Act leave no room for doubt that the

Standing Orders certified under the 1946 Act become

part of the statutory terms and conditions of service

between the employer and his employee and they

govern the relationship between the parties.”

10. In Western India Match Co. v. Workmen

3 (2-Judge Bench),

the Court further held that:

“7. The terms of employment specified in the

Standing Order would prevail over the corresponding

terms in the contract of service in existence on the

enforcement of the Standing Order…..

8. If a prior agreement inconsistent with the Standing

Orders will not survive, an agreement posterior to

and inconsistent with the Standing Order should also

not prevail…..

...

10. In the sunny days of the market economy theory,

people sincerely believed that the economic law of

demand and supply in the labour market would settle

a mutually beneficial bargain between the employer

2

(1984) 3 SCC 369

3

(1974) 3 SCC 330 (hereinafter referred to as ‘WIMCO’)

7

and the workmen. Such a bargain, they took it for

granted, would secure fair terms and conditions of

employment to the workman. This law they venerated

as natural law. They had an abiding faith in the verity

of this law. But the experience of the working of this

law over a long period has belied their faith.

11. …It plainly follows from Sections 4, 10 and 13(2)

that the inconsistent part of the special agreement

cannot prevail over the Standing Order. As long as

the Standing Order is in force, it is binding on the

Company as well as the workmen. To uphold the

special agreement would mean giving a go-by to the

Act's principle of three-party participation in the

settlement of terms of employment. So we are of the

opinion that the inconsistent part of the special

agreement is ineffective and unenforceable.”

11. Placing reliance on WIMCO (supra), this court in Rasiklal

Vaghajibhai Patel v. Ahmedabad Municipal Corpn .

4 (2-Judge

Bench) held that any condition of service, if inconsistent with

certified standing orders, would not prevail, as the certified

standing orders would have precedence over all such agreements.

Any settlement, the employee Union enters into with the Employer

would not override the Model Standing Order, unless it is more

beneficial to the employees.

12. Coming to the facts of the case, the CGIT noted that the

letters issued by the airlines (Respondent herein) to the workmen

aimed to appoint them for a fixed term. Even though their

appointment orders, issued from time to time, extended their

4

(1985) 2 SCC 35

8

appointment period, however, on expiry of such period, their

employment was supposed to end. It is argued that they carried

out work for more than 240 days, which was of a regular and

permanent nature, but since the appointment was for a fixed-term

contract, it would be of no consequence even though they did work

for 240 days or more. The Tribunal observed that the airlines had

no option but to not renew the fixed-term contracts of the workmen

due to a change in Government policy.

13. The High Court, while upholding the order of the CGIT, held

that the mere completion of 240 days would not entitle the

members to claim permanency under the Model Standing Order

given the settlement and, more specifically, Clause 18 thereof. It

further observed that the Model Standing Order is not a statutory

provision but, at best, a statutorily imposed condition of service

that a settlement or award can alter.

14. On all counts, we respectfully disagree with the findings of

the Tribunal and the High Court.

15. Thus, it becomes pertinent to reproduce and analyse relevant

Clauses of the Bombay Model Standing Order, which reads as

follows:

9

“Clause 4C- A badly or temporary workman who has

put in 190 days' uninterrupted service in the

aggregate in any establishment of seasonal nature or

240 days 'uninterrupted service' in the aggregate in

any other establishment during a period of preceding

twelve calendar months, shall be made permanent in

that establishment by order in writing signed by the

Manager, or any person authorised in that behalf by

the Manager, irrespective of whether or not his name

is on the muster roll of the establishment throughout

the period of the said twelve months.”

“Clause 32: Nothing contained in these Standing

orders shall operate in derogation of any law for the

time in force or to the prejudice of any right under the

contract of service, custom or usage or an agreement

settlement or award applicable to the establishment.”

16. A cumulative reading of aforesaid clauses reveals that a

workman who has worked for 240 days in an establishment would

be entitled to be made permanent, and no contract/settlement

which abridges such a right can be agreed upon, let alone be

binding. The Act being the beneficial legislation provides that any

agreement/contract/settlement wherein the rights of the

employees are waived off would not override the Standing Orders.

17. Learned counsel for the Respondent has appraised this Court

of the insolvency proceedings initiated against the Respondent

Company under the Insolvency and Bankruptcy Code, 2016.

However, we refrain from commenting thereupon, for it does not

bear any consequence to the present lis and neither was it a

subject matter of adjudication before the courts/authorities below.

10

18. Given the above discussions, we allow the appeal holding the

Appellant-Union entitled to all benefits per the Bombay Model

Standing Order. The award dated 30.03.2017 passed by CGIT in

Reference No. CGIT-2/56 of 2013 and the judgment dated

10.01.2018 passed by the High Court of Judicature at Bombay in

Writ Petition No. 2657 of 2017 affirming the same are quashed and

set aside.

19. No costs.

.……………J.

(ABHAY S. OKA)

……………..J.

(SANJAY KAROL)

DATED : JULY 25, 2023

PLACE : NEW DELHI