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CASE NO.:

Appeal (civil) 5118 of 1992

PETITIONER:

MAHARASHTRA STATE COOPERATIVE COTTON GROWERS' MARKETING FEDERATION LTD. AND ANR.

RESPONDENT:

MAHARASHTRA STATE COOPERATIVE COTTON GROWERS' MARKETING FEDERATION EMPLOYEES UNION AND ANR.

DATE OF JUDGMENT: 24/01/1994

BENCH:

P.B. SAWANT & R.M. SAHAI

JUDGMENT:

JUDGMENT

WITH

Civil Appeal No, 5117 of 1992.

1994(1)SCR 289

The Judgment of the Court was delivered by

SAWANT, J. 1. The crucial question that falls for consideration in the

present case is whether the award dated 31.8.1984 of the Industrial

Tribunal (hereinafter referred to as 'Patankar Award') is applicable to the

seasonal employees involved in the present proceedings. To appreciate the

controversy between the parties, the facts and events which preceded and

succeeded the said award have also to he looked into.

2. The State Government under Section 42 of the Maharashtra Raw Cotton

(Procurement, Processing and Marketing) Act, 1971, appointed the

Maharashtra Cooperative Marketing Federation (hereinafter referred to as

'Marketing Federation'), a cooperative society, as the chief agent to

implement the Cotton Monopoly Procurement Scheme [the 'Cotton Scheme']. The

Marketing Federation was before that date engaged in the marketing of

several commodities. From that date onwards till 31.8.1984, it continued to

act as the chief agent of the State Government for procurement, processing

and marketing of cotton as well. For this purpose it recruited and

maintained a separate section with a separate staff. The staff consisted of

those who were needed throughout the year and those who were needed only

during the season. The cotton trade (which expression will include

procurement, processing and manufacturing of cotton) in Maharashtra is

mostly in Vidarbha, Marathwada and Khandesh region, and commences roughly

in the first week of November and extends upto April of the next year. In

Western Maharashtra, there is hardly any crop of cotton and the season

there commences in August and ends in November of the same year. The Cotton

Scheme introduced by the Government has three aspects, (i) procurement,

(ii) processing and (iii) marketing. The first two activities extend over

four to six months in a year depending upon the extent of the availability

of the crop. The third stage viz., marketing and also the function of

maintenance of accounts are spread over throughout the year. The seasonal

employees are needed only for the first two stages viz., procurement and

processing which last for a limited period as stated above. The seasonal

employees engaged in the said two activities consist of Weighment Clerks,

Seed Clerks, Heap Clerks, Ginning Supervisors, Press Supervisors etc. who

work at the collection centers and the processing centers. On an average,

the seasonal employees are about twice the number of the perennial

employees.

3. It appears that an industrial dispute having arisen between the

employees and the Marketing Federation, the same was referred by the State

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Government for adjudication to the Industrial Tribunal consisting of Shri

G.K. Patankar by the reference order of 30.5.1973. The terms of reference

show that in all 16 demands of the employees were referred to the said

Tribunal and one of the demands with which we are concerned was demand No.

4 relating to permanency. That demand read as follows:

"Demand No, 4: Permanency:- All the workmen who have put in three months

aggregate service for 78 or more working days in aggregate in spite of any

intervening breaks should be immediately confirmed in writing as permanent

workmen,"

4. None of the demands referred to the Tribunal including the aforesaid

demand No, 4 suggested that they related to the seasonal employees. All the

demands were in relation to the perennial employees. The statement of claim

filed in the Reference by the Union on behalf of the workmen, did not also

refer anywhere to the seasonal employees. On the other hand, in relation to

the aforesaid demand for permanency, it referred to all temporary workmen

and specifically pointed out that at that lime, there were about 400

workmen who had put in more than five years' service. But still they were

termed as temporary. It also observed that the work of the Marketing

Federation had increased considerably and it required a large number of

permanent staff, and that the services of the temporary workmen could be

terminated at any time which was inequitable. In its written statement, the

Marketing Federation also proceeded on the basis that all the said demands

related only to the perennial employees. While, however, referring to the

aforesaid demand for permanency, the written statement observed as follows:

"9. With regard to demand No, 4" Permanency" the Federation states all

employees who have completed 3 years of continuous service. The period

mentioned in the statement of claim for all employees who have put in 3

months continuous service for making them permanent is too small a period

to judge the capacity and ability of the employee. The Federation,

therefore, agrees in principle that an employee should not remain temporary

for a long time and 3 months period of service for permanency is too short

for judging the capacity and ability of an employee before he is made

permanent in the organisation.

10, With regard to the contents of para 13 of the statement of claim, the

Federation states that for carrying out the activities of the Federation it

has to employ workmen either on temporary basis or on seasonal basis

depending upon the nature of work load of different activities that the

Federation has to discharge at the instance of the State Government. The

Federation, therefore, feels that no period should be laid down in respect

of purely temporary and in seasonal employment. In the submission,

therefore, of the Federation, the rule of permanency should apply only to

employees who are recruited against the permanent post and it should not

apply to the purely temporary or casual employees or seasonal employees who

have to be recruited in times of emergency."

5. We have quoted the aforesaid two paragraphs from the said written

statement verbatim, for an argument has been advanced by the respondent-

Union of workmen, that notwithstanding the fact that the demands as raised

and the statement of claim filed on behalf of the workmen in the Reference

did nowhere refer to the seasonal employees, the reference by the Marketing

Federation to the workmen employed on seasonal basis in the written

statement as above, shows that the industrial dispute referred to the

tribunal and the Tribunal's award related to the seasonal employees as

well. We will deal with this argument at its proper place.

6. Shri Patankar while giving his award on 31.8.1984 disposed of the said

demand for permanency in para 19 of the award in the following cryptic

language: -

19, The next demand is in respect of permanency. It is alleged by the Union

that the workers who have put in three months of aggregate service and have

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put in 78 or more days as working days in spite of any breaks in service,

be made permanent. The Federation opposes this demand and contends that it

is willing to confirm all the employees who have put in three years of

continuous service. Considering, therefore, the arguments advanced for both

the sides, it appears that it would be proper to direct that those

employees who have put in 240 days of continuous service be treated as

permanent employees".

7. It will be apparent from the aforesaid portion of the award, which is

the only direction in the award relating to the said demand that the

direction also did not refer to the seasonal employees. There is no dispute

that after this award, the same system of seasonal employees continued till

the present order dated 14.9.1990 of the Industrial Court with which we are

concerned and from which the present proceedings have arisen. There is also

no dispute that as per the Patankar Award, the temporary perennial

employees were made permanent but the seasonal employees on the date of the

award continued as such without demur. On the other hand, subsequently,

there were four settlements entered into between the Marketing Federation

and the Union of seasonal employees. The first settlement is of 12.6.1980

and related to (i) revision of consolidated salary and annual increment in

the consolidated salary of certain categories of the seasonal employees;

(ii) redesignation of some of the categories of the said employees; (iii)

retention allowance to be paid to them; and (iv) absorption of the seasonal

employees in the permanent vacancies in the perennial posts according to

seniority and merit. It may be mentioned here that the settlements on

increments in the consolidated salary specifically stated that those of the

seasonal employees who had to put in more than three seasons of employment

would be entitled to two increments. So also, the settlement on retention

allowance stated that the seasonal employees on consolidated salary shall

be disengaged at the end of the season, and during the period of non-

employment, they would be entitled to 25 per cent of the monthly wages

prevailing in the past cotton season and that it would not exceed half

month's wages during the year. It, however, mentions that the retention

allowance would be paid to the seasonal employees till they were reemployed

at the commencement of the next cotton season. The next settlement is of

11.12.1981. It spoke of the vacancies of the perennial clerks, stenographer

peons and watchmen at the Head Office and Divisional and Sub-divisional

offices being filled in from the seasonal employees on seniority- cum-merit

basis and the seasonal employees above 58 years of age being not oigible

for such appointments. It also spoke of all vacancies in class HI and IV

cadres of the cotton department of the Marketing Federation being filled in

from among the seasonal employees again on seniority-cum merit basis. It

then spoke of the seasonal employees, excluding watchmen, who had put in

eleven months or more of employment during 1979-80 season including

technical breaks being regularised in the pay-scale of Rs. 130-400/-. That

term of the settlement was clarified by further stating that the said

seasonal employees would be regularised according to Divisional seniority

and on the basis of seniority-cum-merit. The clarification further mentions

that the said appointment would not change the nature of their duties and

they would not be paid retention allowance. The settlement further stated

that excluding the said employees who were regularised, others would be

entitled to the interim hikes of certain amounts in their consolidated

salaries. The settlement also provided that the agricultural graduates from

among the seasonal employees would be suitably trained and appointed as

Graders. This settlement made an important provision for appointment of a

committee to consider the problems of the seasonal employees. The Committee

was to consist of a representative each of the cotton cultivators, the

Marketing Federation, the State Government and the seasonal employees. The

Committee was to submit its recommendation before February, 1982 and the

Stale Government was to take a decision thereon within one month of the

recommendations and implement the acceptable recommendations. The matters

which were to be referred to the Committee were mentioned in the schedule

to the settlement and they were (i) the strength of the seasonal employees

required to be employed in every zone considering the nature of duties,

features of cotton season etc.; (ii) whether the technical breaks were

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necessary in the case of some of the seasonal employees who were then

employed for nine to twelve months; (iii) ways and means to ensure

employment for maximum period for seasonal employees; (iv) the strength of

the permanent, i.e., perennial employees; (v) pay-scales to be granted to

the seasonal employees who were to be regularised and to decide the

modality of annual increment to be granted to them; (vi) the need to change

the then system of paying retention allowance and to suggest change in the

system.

8. There is no dispute that pursuant to this settlement, a Committee headed

by one Shri Bhuibhar was appointed. Before the report of the said Committee

was received, there was yet another settlement 22.12.1982 between the Union

of the seasonal employees and the Marketing Federation. One of the terms of

the settlement was that the Bhuibhar Committee should submit its report to

the Government within one month of the dale of that settlement and that the

Government should take decision on the said report at the earliest. There

was also a provision made for interim increase in the monthly consolidated

wages of some of the categories of: the seasonal employees. The said

interim relief was to be adjustable while implementing the recommendations

of the Committee. It is obvious from this settlement that it was

necessitated because of the delay in the submission of the report by the

Committee.

9. The Bhuibhar Committee submitted its report on 1.12.1983. Some of the

recommendations and the Government's reaction on the same are relevant for

our purpose. They are mentioned below: -

(1) Since, if the demand of the seasonal employees for employment

throughout the year was accepted the financial burden would fall on the

cultivators and would affect the Cotton Monopoly Procurement Scheme, it was

not proper to provide 12 months' employment to the seasonal employees and

burden the said scheme. The Government accepted this recommendation.

(2) There should be increase in the sanctioned strength of the perennial

employees viz, Clerks, Peons and Watchmen in different zones and at

different Sub-zonal offices. The Government accepted it.

(3) There should be an increase in the sanctioned strength of the seasonal

employees. However, since this aspect required an in depth study, the

matter should be entrusted to a management consultant. The Government

accepted this suggestion.

(4) The seasonal employees should be given pay-scale of Rs.

160-10-210-15-285-EB-20-465. The Government accepted the said pay-scale.

(5) The part-time seasonal employees should be given the pay-scale of Rs.

105-5-.145-10-205-15-210. An annual increment for three years of completed

seasonal employment was also recommended. The Government accepted the

recommendation.

(6) The vacancies in Class III and IV cadres in all offices (including the

cotton and non-cotton department) should be filled in from the seasonal

employees. The Government accepted the recommendation.

(7) In regions other than Western Maharashtra, the seasonal employees

should be given employment for a minimum period of six months, and in

Western Maharashtra, annual plans should be made to make it possible to

furnish employment for a minimum period of six months to them.

10. The Government accepted the recommendation in principle, but also

suggested to the Federation that they make necessary planning for sending

seasonal employees from Western Maharashtra to Vidarbha for a minimum

period of six months.

11. Pursuant to the said report, and the Government's reactions to it, an

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agreement was entered into between the Marketing Federation and the Union

of the seasonal employees on 18.1.1984, In the preamble, it was stated that

the agreement was entered into pursuant to the recommendations of the

Bhuibhar Committee as accepted by the Government and the agreement was to

be effective from 1.11.1982. The agreement also stated that the Government

had suggested that the agreement should ensure that for the next five

years, Cotton Scheme shall not be burdened and it was pursuant to the

aforesaid directive of the State Government that the Marketing Federation

and the seasonal employees' Union had agreed to its terms. Incidentally it

may be stated that it is the same Union, which signed the said agreement,

which is the contesting respondent before us. The agreement then

specifically stated that the Marketing Federation had agreed to implement

the decision of the Government in respect of the recommendations of the

Bhuibhar Committee except recommendation No. 33 which had suggested that

the vacancies in class III and IV cadre in all the offices of the

Federation including the cotton and non-cotton departments should be filled

in from the seasonal employees. Instead the agreement provided that it is

only the vacancies in the cotton department, which will be filled in from

among the seasonal employees. The agreement stated that during the period

of five years, the Union shall not raise any demand tending to impose

additional financial burden on the Cotton Scheme.

12. On 31.8.1984, the present appellant No. 1 viz,, the Maharashtra State

Cooperative Cotton Growers' Marketing Federation Ltd. was constituted for

the first time as a society registered under the Maharashtra Cooperative

Societies Act, 1960 with the express object _f taking over from the

Marketing Federation as the chief agent of the State Government, the Cotton

Monopoly Procurement Scheme. The staff of the Marketing Federation engaged

in the Cotton Scheme was to be taken over by the appellant-Federation.

Accordingly, the entire staff of the Marketing Federation including the

seasonal staff engaged under the Scheme was taken over by the appellant-

Federation on the same terms and conditions. As a result, the appellant-

Federation on the relevant date had perennial staff of about 2200 persons

and seasonal staff of about 4,500 persons.

13. On 27,9.1988, for the first time, certain complaints were filed by the

Union of the seasonal employees, Aurangabad, under the Maharashtra

Recognition of Trade Unions and Prevention of Unfair Labour Practices Act,

1971 (hereinafter referred to as the 'Act'). In the complaints, it was

stated that since as per the Patankar Award, the seasonal employees who had

put in 240 days of service were not made permanent, the appellant-

Federation had committed an unfair labour practice within the meaning of

the said Act. The Industrial Court dismissed the said complaint holding

that the Patankar Award did not apply to the seasonal employees. On

\00728.9.1989 some seasonal employees from Amravati zone made the very: same

complaint under the Act before the Industrial Court, Nagpur, The same was

also dismissed.

14. Thereafter on 20.4.1990, the respondent-Union filed the present

complaint under the Act before the Industrial Court, Nagpur which has given

rise to the present proceedings. This complaint was heard by another member

constituting the Industrial Court. The grievance made in the complaint was

that those seasonal employees who had worked for 24(1 clays in 1982-83 and

1983-84 were not made permanent and inasmuch as the Patankar Award had

directed the Marketing Federation to make permanent seasonal employees who

had completed 240 days of service, there was an unfair labour practice

under Items 5, 6 and 9 of Schedule IV to the Act. The relief claimed was to

quash the termination of the services of the said employees at the end of

the season and to make the employees permanent from the date they completed

240 days of continuous service in 1983-84 Cotton Season. The further relief

claimed was that the practice of continuing the employees under reference

as seasonal or casual be declared as unfair labour practice and the

direction be issued to the appellants to cease to indulge in it. The

incidental relief claimed was that the appellants should be directed to pay

the arrears of wages and all service benefits to the concerned employees

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treating them as permanent from 1983-84 Cotton Season. The Industrial Court

by its impugned order of 14.9,1990 (i) allowed the said complaint, (ii)

declared that the appellants had engaged in and were engaging in unfair

labour practices as contemplated by Items 5, 6 and 9 of Schedule IV to the

Act, (iii) directed the appellants to cease and desist from indulging in

the said unfair labour practices and (iv) directed them not to terminate

the services of the concerned employees w.e.f. 30.4.1990, (v) directed the

appellants to absorb and make permanent the said employees in compliance

with the provisions of the Patankar Award and the agreement dated 18.1.1984

and also by giving the benefit of the Government letter dated 18.1.1985 and

to grant arrears of wages by processing their cases in the light of the

directions given in the said letter which was referred to by the High Court

in its decision in Shripati Pandurang Khade & Ors. v. Zonal Manager, M.S.

Co-op. Marketing Federation Ltd. Ors., (1987) Mh. LJ 694.

15. The appellants challenged the said order by a writ petition in the High

Court. The learned Single Judge dismissed the petition holding that the

Patankar Award had become final and since it had given the direction to

make permanent even the seasonal employees who had put in the more than 240

days of service, the writ petition had no merit. The Letters Patent Appeal

filed before the Division Bench of the High Court was also dismissed on the

same ground by the impugned decision dated 27.3,1992. It is against the

said decision that the present appeals have come before us.

16. Before we advert to the respective contentions of the parties, it

would be advantageous to clear some conceptions regarding the nature of the

operations involved in the Cotton Scheme, the category of the staff

employed and the character of the seasonal employment under it. Although

some attempt was made before as on behalf of the respondent-Union to show

that the operation of procuring and processing of cotton is carried on

throughout the year, there is nothing on record to support the said

contention. On the other hand, the record shows that out of the three

operations under the Scheme, the procurement and processing of cotton lasts

on an average only for six months from November to April in the principal

cotton regions, viz., Vidharbha, Marathwada and West Khandesh and rarely

extends beyond that period depending upon the cotton crop, In fact, if the

crop is less, the said period even ends earlier. In Western Maharashtra,

where there is scant crop of cotton, the procurement and processing season

lasts only for about four months from August to November. Hence the staff

needed for procurement and processing is only for about six months on an

average but never beyond 7 to 8 months in any year. It is only the

operation of marketing, which goes on throughout the year and for the

marketing as well as for the maintenance of accounts the staff is needed

throughout the year. The seasonal staff is further classified into

permanent, temporary, casual and part-time. The permanent seasonal

employees have scales of wages different from those of the perennial staff.

So also the part-time employees have scales of pay different from those of

the full-time seasonal employees. The permanent seasonal employees are paid

their full wages during the season, i.e., when they are in employment,

according to the scale of pay. They are also paid their annual increments

in that scale. During the off-season, they are paid monthly retention

allowance equivalent to 25 per cent of their monthly salary. In respect of

the said employees, further a seniority list is maintained and this

seniority list is scrupulously adhered 1o while employing them. If there is

any vacancy in the perennial posts, the recruitment is first made from the

seasonal employees according to the said seniority fist. Fn addition, the

following facilities are given to them:

Specified grades and annual increments in the said grades: (ii) Bonus in

accordance with the provisions of the Payment of Bonus Act at the same rate

at which it is paid to the perennial employees; (iii) Leave with wages;

(iv) Casual leave at the rate of one day's casual leave for every month;

(v) Paid holidays or salary in lieu of holidays; (vi) Gratuity in

accordance with the provisions of the Payment of Gratuity Act; (vii)

Benefit of Provident Fund Scheme and Family Pension Scheme; (viii) Festival

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advance for Diwali. Ganapati festivals etc.; (ix) Travelling Allowance and

Daily Allowances as are paid to perennial employees; (x) Dearness

Allowance; (xi) Benefit of Group Accident Insurance Scheme; (xii) Model

standing orders are made applicable mutatis mutandis to give security of

employment; and (xiii) Family Planning incentives; (xiv) Fifteen days'

salary at the end of every season towards overtime work.

The temporary and casual seasonal employees are engaged as and when needed

on account of occasional increase in work and they are paid consolidated

salary.

17. What is further necessary to note is that there is a difference

between seasonal employment and seasonal employees. The employments which

are only seasonal may require only seasonal employees and there are no

perennial employees on their staff. On the other hand, an employment may

have both perennial and seasonal work as in the present case, and hence

require both kinds of workmen. Further, seasonal employees may be permanent

or temporary. The permanent employees are employed from season to season

successively and are entitled on that account for retention allowance and

all other benefits referred to above during the off-season because of their

permanency as seasonal employees which is different from permanency as

perennial employees. The temporary seasonal employees are not obviously

entitled to the said benefits as the permanent seasonal employees since the

temporary employees are not engaged from season to season but only when

there is an increase in work. So is the case with the casual employees.

There arc also part-time seasonal employees and they carry different scales

of wages by the very nature of their employment as pointed out above. The

seasonal employees like the perennial employees also belong to different

categories and grades. As stated above, at the relevant time the perennial

employees of all categories were 2200 whereas the seasonal employees were

4500, We have to stress this aspect because we find that there is a good

deal of confusion by the Tribunal and the Courts below on these aspects of

the matter which has contributed to their erroneous conclusions.

18. Coming now to the contentions of the parties, the appellants urged

before us that the present order of the industrial Court as well as the

decisions of the learned Single Judge and the Division Bench of the High

Court have granted relief to the seasonal employees on the basis that the

Patankar Award had directed the then Marketing Federation to give

permanency also to the seasonal employees who had put in 240 days' work in

a year. This assumption is itself erroneous since the terms of reference,

the statement of claim of the workmen, the written statement filed by the

Marketing Federation and the award would themselves show that the said

Dispute related to, and, therefore, the relief was given in respect of only

the perennial employees. While not disputing the fact that there was no

Specific reference to the seasonal employees in either the terms of refer-

ence or the statement of claim of the workmen or in the award, the

respondent-Union relied upon paragraph 10 in the written statement filed by

the Marketing Federation in the said reference, to urge that since the

Marketing Federation had itself referred to the seasonal employees in the

said paragraph, it had understood the demand for permanency as being

related to the seasonal employees as well. We have quoted earlier the said

paragraph in the written statement of the Federation. That paragraph has to

be read in the context of not only the preceding paragraph (which is also

quoted above) but also in the context of the statement of claim and the

demand made. The relevant demand No. 4 for permanency has also been quoted

by us above. Without mentioning whether it was in respect of perennial or

seasonal employees, it proceeded to state that all the workmen who have put

in three months' aggregate service for 78 or more working days in

aggregate, in spite of any intervening breaks, should be immediately

confirmed in writing as permanent workmen. Since it is not and cannot be

disputed that there is seasonal work under the Cotton Scheme and some

workmen have necessarily to be employed for such work, it is difficult to

hold that the Union had made the said demand also in respect of the

seasonal employees. There is further nothing in the statement of claim

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filed on behalf of the Union in support of the said demand to suggest that

the Union had in contemplation the case of any seasonal employees. On the

other hand, in paragraphs 12 and 13 of the statement of claim, which

related to the said demand, the Union had stated as follows:

"12. It would be rather surprising for any authority to note that such a

gigantic organisation like Federation (employing about 3000 number of

workmen) throughout the State of Maharashtra is having majority of the

workmen as temporary workmen. The Union further points out that there are

about 400 workmen who have put in more than 5 years service but still they

have been termed as "temporary" workmen by the Federation. The Union

further points out that the business of the Federation is stable and has

been continued progressively and, therefore, it is desirable that such of

the workmen who have put in three months aggregate or who have put in 78

days minimum service in aggregate in spite of any should be confirmed as

permanent workmen.

\00713. It is a matter of regret that there are many workmen who have put in

long number of years of service are being continued as temporary workmen,

and, therefore, in the interest of justice, equity and fair play the demand

may be given due consideration by the authorities concerned and more so by

the Federation itself. It is respectfully submitted that the work of the

Federation has increased considerably during last seven years and the new

projects have been coming up every now and then which require a large

number of permanent staff and therefore, it is necessary to make the

workmen permanent as demanded by the Union, The Union further points out

that services of temporary workmen on the ground of being a temporary can

be terminated at any lime in spite of the fact that such workmen has put in

a number of years of service, which is inequitable, unjust and improper and

that under the circumstances, the demand of the Union is just and proper,"

19. This would show that the Union was concerned with the temporary

perennial workmen and not with seasonal workmen. The Union knew that even

among the perennial workmen there were some permanent and others temporary

and they were espousing the cause of the said temporary workmen. That is

also clear from the fact that the demand is raised in the context of the

alleged requirement of the large number of permanent staff. The Union was

particular in pointing out that the temporary workmen could be terminated

at any time. As regards the seasonal employees, their services are

terminated every year, after every season and they are re-engaged according

to the seniority list for the successive seasons. Therefore, the statement

made in the statement of claim could not even remotely be connected with

the seasonal employees. If at all the meaning of the said two paragraphs is

stretched, it can at best be construed to refer to the temporary seasonal

employees and not to the permanent seasonal employees. In that case, it

would only mean that the Union wanted the temporary seasonal employees to

be made permanent seasonal employees. But that is not how either the demand

or the statement of claim can be read, and we do not read them so. Now

coming to paragraph 10 in the written statement of the Marketing

Federation, in paragraph 9, it showed its willingness to make permanent

those employees who had completed three years of continuous service. This

showed that even the Federation had understood the demand as relating only

to the perennial employees and nut to seasonal employees. In that paragraph

the Federation also pointed out that the Union's demand for making

permanent the employees who had put in three months' continuous service was

not justified since the said period was too short to judge the capacity and

ability of the employee. These statements in paragraph 9 make it clear that

knowing fully well that it had also seasonal employees who had to be

continued from season to season for seasonal work, the Federation could not

have made the statement in connection with the permanent seasonal

employees. Paragraph 10 of the written statement has, therefore, to be read

in that context. In further support of its opposition to the Union's

demand, the Federation went on to point out that it required for carrying

out its activities workmen both on temporary basis and on seasonal basis

depending upon the nature of the workload. It then went on to point out

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that no period should be laid down in respect of such purely temporary and

seasonal employees and the rule of permanency should apply only to

employees who are recruited against the permanent posts and that it should

not apply to purely temporary or casual employees or seasonal employees.

Read as a whole, these statements made in paragraph 10 will also show that

if at all the seasonal employees were in the contemplation of the Marketing

federation, they were the temporary seasonal employees and not the

permanent seasonal employees. By the very nature of their employment, the

temporary seasonal employees can be made permanent only as permanent

seasonal employees and not as permanent perennial employees. In any case,

it is difficult to sustain the argument that the Federation was there

referring to the permanency of the permanent seasonal employees. What is

further, the Patankar Award does not even refer to the seasonal employees.

It also does not make any distinction between the two and give reasons

either to accept or reject the contentions of the parties. It merely

summarises the arguments of the parties and gives a direction, which is

quoted above. The operative portion reads "considering, therefore, the

arguments advanced on both sides, it appears that it would be proper to

direct that those employees who have put in 240 days of continuous service

be treated as permanent employees." The direction can be read either as a

direction to make the temporary perennial employees and temporary seasonal

employees as permanent perennial employees and permanent seasonal employees

respectively or as a direction relating only to the temporary perennial

employees. But in no case, it can be read as a direction to make seasonal

employees as permanent employees as in the nature of things such a

direction could not have been given. There are other reasons why the

Tribunal could not have given such a direction and if such a direction was

given, it would have been highly iniquitous and discriminatory to the

perennial employees - whether temporary or permanent, On the undisputed

fact, that the procurement and processing operations under the Cotton

Scheme do not last for more than 4 to 6 months and in any case not more

than 8 months, to make the seasonal employees permanent and give them all

the benefits of the perennial employees would mean that they would get the

salary and all other benefits throughout the year as the perennial

employees do, without putting in work throughout the year as the latter

have to do. On the admitted fact that there is a need of seasonal employees

and there is no work available to be given to them for a part of the year,

the Cotton Scheme has always to maintain a distinction between the

perennial employees and seasonal employees and has to provide them with

different service conditions though some of the service conditions may be

common. It is the failure to understand the nature of the operations and

the nature of the employment required under the Cotton Scheme, which is

responsible for the impugned decisions of the Industrial Court and the High

Court.

20. Further, the fact that even the seasonal workmen and their Union did

not understand either the said demand adjudicated by Shri Patankar on the

award given by him as referring to the seasonal employees is clear from the

subsequent events to which we have already made a reference. We have

pointed out that after the Patankar Award which was given on 31.8.1984, all

the then seasonal employees continued as seasonal employees throughout, and

the Marketing Federation made only the temporary perennial employees

permanent perennial employees as per the direction of the said Award. None

of the seasonal employees was made permanent except when he was recruited

in the vacancies occuring in the post of permanent perennial employees. But

that was not because of the Patankar Award, It was as per the understanding

between the parties. The Union never raised any objection to the same. In

fact, as pointed out earlier, there were three settlements between the

parties on 12.6.1980, 11.12.1981 and 22.12.1982 which not only did not

speak a word about making any seasonal employee who had put in 240 days of

work, permanent but spoke about all other matters relating to them. The

settlement of 11,12.1981 in fact spoke about the setting up of the

Committee for examining problems of the seasonal employees. The problems

referred to there would show that not only was the system of seasonal

employees to continue but the strength of such seasonal employees was to be

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assessed zonewise. They were to be ensured maximum period of employment

during the season. In fact, oae of the problems which was to be

investigated was whether the technical breaks which were given to employees

who were employed for 9 to 12 months were necessary. This meant that the

Patankar Award had no bearing on the seasonal employees. In fact, the

recommendations made by the Bhuibhar Committee as accepted by the State

Government, showed that the seasonal employees were not on the agenda of

the industrial dispute adjudicated by Shri Patankar.

21. On the other hand, recommendation 11 made in the said report

categorically stated that the demand made by the seasonal employees

subsequent to the said Award (pursuant to which the committee itself was

appointed) for employment throughout 12 months could not be accepted since

the financial burden would fall on the cultivators and consequently would

affect the Cotton Scheme itself. That recommendation was accepted by the

Government, So also the recommendation 24 stated that the increase in the

sanctioned strength of the seasonal employees at Zonal and Sub-zonal

offices which was suggested to the Committee required indepth study of the

matter. That recommendation was also accepted by the Government.

Recommendations 25 and 27 suggested new pay scales for the full-time and

part-time seasonal employees respectively. The report also suggested the

recruitment of seasonal employees in the vacancies of the perennial

employees. The agreement of 18.1.1984 between the Marketing Federation and

the respondent-Union, which followed the said report, records the relevant

facts. Thus, apart from the agreement of 12.6.1980, agreement dated

11,12.1981 under which the Committee was appointed and the agreement of

.18.1.1984 by which the recommendations of the Committee were accepted,

show that the problems of the seasonal employees were all along kept

separate and were dealt with separately from the problems of the perennial

employees. Had the dispute with regard to the permanency of the seasonal

employees been referred for adjudication to the Industrial Tribunal of Shri

Patankar and had the said Award related to the seasonal employees, there

would have been no need to enter into the agreements of 12.6.1980, 11.12.81

and 22,12.82. There would also have been no need to appoint the special

Committee to study the problems of the seasonal employees including the

problem of their permanency, and there would have been no need for the

agreement of 18.1.1984, which followed the recommendations of the

Committee. We are, therefore, more than satisfied that there is no

substance in the contention of the respondent-Union that either the

Industrial Tribunal of Shri Patankar was called upon to adjudicate the

dispute with regard to the permanency of the seasonal employees or that the

award made by the said Tribunal had directed the seasonal employees who had

put in 240 days of work to be made permanent.

22. As has been pointed out above in fact no such direction could have

been given by the said Tribunal, in the circumstances of the case. The

question whether there was a need of the seasonal employees, and for what

period was essentially a matter of indepth investigation. To answer the

said question, it was necessary to collect facts from each of the Cotton

Zones since the seasons varied from zone to zone, and to assess the need

for each category of workmen for each of the zones and for each of the

processes of procuring and processing of cotton. It was also necessary to

assess the required strength of each of the categories of the seasonal

workmen by taking into consideration the compliment of the perennial

workmen. For this purpose, it is necessary to raise a specific demand for

abolition of the category of the seasonal employees. If such a demand is

referred for adjudication, the adjudicator would have to formulate specific

questions, give opportunity to the parties to lead evidence on each of the

questions and to give his specific findings on them. There cannot be a

common demand for permanency of perennial and seasonal employees, the

nature of their employment being different. As pointed out above, if the

demand is for making temporary seasonal employees permanent seasonal

employees, it would have to be stated so clearly and the finding thereon

has to be in specific terms, On the other hand, if the seasonal employees

have to be made permanent meaning perennial, in the sense that they have to

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be given work for all the 12 months, they would still be temporary

perennial employees, and not necessarily permanent perennial employees.

That is why the demand of the seasonal employees, even before the Bhuibhar

Committee was to give employment to them for 12 months. The demand was not

for making them perennial employees. A demand merely for permanency in

their case in effect involves two demands, viz., (i) to abolish the

seasonal employment and to make it perennial and (ii) after making it

perennial, to make the erstwhile seasonal employees permanent. These are

two different things and it is the omission to understand the significance

of the said difference, which has led to the present confusion.

23. Being faced with this problem, it was urged on behalf of the

respondent-Union that firstly the Marketing Federation as per the decision

of this Court in Maharashtra Slate Cooperative Cotton Growers' Marketing

Federation Ltd. v. Shripati Pandurang Khade and Ors., [1989J Supp. 1 S.C.C.

226, had implemented the decision of the Patankar Award. Secondly, it was

urged that since the appointment letter given to the seasonal employees

shows that the Model Standing Orders framed under the Industrial Employment

(Standing Orders) Act, 1946 were applicable to them and since one of the

Model Standing Orders, viz,, Order No. 4-B reads as under.

"A temporary workman, who has put in 190 days uninterrupted service in the

aggregate in any establishment of a 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 an order in writing signed by the Manager or any other

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."

The seasonal employees were entitled to be made permanent after they had

put in 240 days' uninterrupted service. None of these arguments had any

merit. In Pandurang khade's case the employees involved belonged to Phaltan

Zone in the Western Maharashtra where as stated earlier, the cotton season

does not last for more than 4 months. They had made a complaint before the

Industrial Court on the ground of unfair labour practice by the Marketing

Federation referred to in items 5, 6 and 9 of Schedule IV to the Act. The

Industrial Court had dismissed the said complaint holding that the

grievance made was not covered by the said items but it came under Item 1

of the Schedule and there was no complaint under the said item. The

Industrial Court had also dismissed the complaint as being barred by

limitation. The High Court allowed the writ petition of the respondent-

Union against the said decision and that is how the matter had reached this

Court. It is evident from paragraphs 8, 11 and 12 of the judgment of this

Court that firstly the Court had proceeded on the footing (hat the

expressions 'temporary employees' and 'seasonal employees' were.

synonymous. Secondly, the Court had assumed that before the Industrial

Tribunal of Patankar, there was a demand for the permanency of seasonal

employees and that the Patankar Award had granted permanency to the

seasonal employees. The Court had also proceeded on the footing that since

the letter of the Government dated 9.11.1984 had directed the appellant to

finally absorb all staff employed with the Marketing Federation as on

1.1.1985, the appellant was under an obligation to absorb the six seasonal

workmen concerned therein who had according to the Court, become permanent

pursuant to the Patankar Award. The Court for that purpose also relied upon

the letter dated 18.11985 to which a reference was made by the High Court

in its judgment under appeal in that case to hold that those who had put in

240 days of service were-to be given all the benefits mentioned in the said

letter, whether the employees were perennially or seasonally employed.

24. As has been pointed oat earlier, this Court in Pandurang Khade's case

had proceeded on the footing that the Patankar Award had directed even the

seasonal employees to be made permanent which presumption was not borne out

by the facts. As far as the letter of 9.11.1984 is concerned, it only

speaks of the employees who were with the Marketing Federation to be

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absorbed on the "as is" basis by the appellant-Federation which means that

the perennial and seasonal employees were to be taken over as such

employees only. The letter did not mean that those who were seasonal

employees should be taken over as perennial employees. As far as letter of

18.1.1985 is concerned, it is addressed to one of the employees concerned

in the Pandurang Khade's case. That letter was relied upon both by the High

Court as well as this Court in that case to hold that Patankar Award

applied to the seasonal employees. We have pointed out that the presumption

was contrary to facts and, therefore, the decision was per incuriam. That

letter does not improve the matter. Hence, the reliance placed on the two

letters for contending that the seasonal employees who had put in 240 days

of service were to be made permanent or that the appellant-Federation

had accepted them as perennial permanent employees, is not well merited.

25, The reliance placed by the respondent-Union, therefore, on the fact

that the seasonal employees belonging to the Phaltan Zone were made

permanent although they were jun; to the other seasonal employees to

contend that all the seasonal employees who had put in 240 days of service

should be made permanent is misconceived. The cases of the said employees

having been decided on incorrect facts will have, therefore, to be treated

as isolated instances and cannot be made the basis of the contention that

the seasonal employees who have put in 240 days' work should be made

permanent perennial employees.

26. Coming now to the next contention, viz., that in the appointment letter

of the seasonal employees it has been specifically mentioned that their

conditions will be governed by the Model Standing Orders and Model Standing

Order No. 4-B which is quoted above, requires that the employees who have

put in 240 or more days of service should be made permanent, we are of the

view that the contention has no substance. It must in the first instance be

remembered that the Model Standing Orders do not apply to seasonal

employees. Secondly, the seasonal employees in the present case are

governed by their own service conditions, which as pointed out above, have

in material respects no relation to the service conditions of the perennial

employees who are governed by the said Model Standing Orders. It is,

therefore, incorrect to say that all the Model Standing Orders are

applicable to the seasonal employees. By the appointment letters, the Model

Standing Orders have only been incorporated in the other service conditions

of the seasonal employees only to the extent that the specific service

conditions of the seasonal employees are silent on the aspects covered by

the Model Standing Orders and which orders would necessarily apply to the

seasonal employees. The Model Standing Orders, therefore, are applicable to

the seasonal employees mutatis mutandis. The Model Standing Order No. 4-B

in particular will be inapplicable to the seasonal employees because of the

very nature of their employment and hence it cannot be read into the

service conditions of the seasonal employees. Lastly, a reading of the said

Model Standing Order No. 4-B would itself make it clear that it is

applicable to the perennial employees only. It speaks of temporary workmen

in any establishment of a seasonal nature or in other establishment during

a period of preceding twelve months. Admittedly, the appellant-Federation's

establishment is not of a seasonal nature. It is only some employees

employed therein who are seasonal. Secondly, as far as the employees in the

other establishments spoken of there, are concerned, they can only be such

employees who are employed for perennial work but for some reason or the

other, arc not allowed to complete 240 days in such perennial work. It is,

therefore, clear that the said Model Standing Order does not apply to

seasonal employees. Hence this contention has also to be rejected.

27, In the result, as allow the appeals and set aside the decisions of the

Industrial Court and of the High Court. In the facts and circumstances of

the case, there will be no order as to costs.