MONOGRAM MILLS LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The various petitioners have filed these petitions challenging the relevant provisions which have been introduced regarding the joint management councils by the Amending Gujarat Act No. 21 of 1972 Bombay Industrial Relations and Industrial Disputes (Gujarat Amendment Act 1972 hereinafter referred to as the Amendment Act. The petitioners challenge the competence of these provisions of secs. 53A and 53 so far as they apply to these four industries viz. (1) the Cotton Tex tiles (2) the Silk Textiles (3) the Sugar and (4) Textile processing under the relevant order issued by the State Government under sec. 53A on the ground of want of total lack of legislative competence and also as violative of the provisions of Articles 14 and 19(1)(g) of the Constitution The State Government in its affidavit had however pointed out the entire relevant background of this legislation. The Government industrial policy reSolution was passed as early as in 196 envisaging association of labour with the management in this country. A study group had been sent to European countries in 1956 to study the working of similar schemes and to make suitable recommendations for introducing the scheme of the workers participating in the management in our country. The recommendations of the study group were accepted by the 15th Session of the Indian Labour Conference in July 1957. A tripartite conference was set up to work out the details and workable scheme and they were finalized by the two subsequent tripartite seminars on this subject in 1958 and 1960. Under this arrangement the legislative measure was postponed for two years so that the scheme would be introduced voluntarily. The scheme envisaged consultation of labour in certain specified matters sharing information on certain aspects of the undertaking and to assume administrative responsibilities in respect of certain matters such as welfare safety vocational training etc. The scheme was thus envisaged to establish cordial relations between the management and the workers and building of understanding and trust between them and to promote measures leading to substantial increase in productivity securing better welfare and other facilities for the workers and the training of the workers to understand and share responsibility of management and in the light of all these objectives the scheme had been finalised. Various Five years Plans had also contemplate this labour participation in the management being implemented speedily for evolving the industrial democracy. As however this voluntary salutary reform could not all these years be successfully implemented the Government had stated that they had undertaken this legislation by accepting this fundamental principle of workers participation in the management and for that purpose this amendment was introduced. That is why they lave supported validity of this measure as a labour welfare measure and contended that it does not violate any constitutional fetter. So far as we are concerned with those industries governed by the Bombay Industrial Relations Act 194 the relevant amendments which would be material are in the following provisions. Sec. 3(11A) defines the term Council as a Joint Management Council for any undertaking constituted under sec. 53A. Sec. 53A is as follows : (1) If in respect of any industry the State Government is of the opinion that it is desirable in public interest to take action under this section it may in the case of all undertakings or any class of undertakings in such industry in which five hundred or more employees are employed or have been employed on any day in the preceding twelve months by general or special order require the employer to constitute in the prescribed manner and within the prescribed time-limit a Joint Management Council consisting of such number of members as may be prescribed comprised of representatives of employers and employees engaged in the undertaking so however that the number of representatives of the employees on the Council shall not be less than the member of representatives of the employers. Notwithstanding anything contained in this Act the representatives of the employees on the Council shall be elected in the prescribed manner by the employees engaged in the undertaking from amongst themselves: Provided that a list of industries in respect of which no order is issued under this sub-section shall be laid by the State Government before the State legislature within thirty days from the commencement of its first Session of each year. (2) One of the members of the Council shall be appointed as Chairman in accordance with rules made in this behalf.

(2.) Sec. 53B is as follows : The Council shall be charged with the general duty to promote and assist in the management of the undertaking in a more efficient orderly and economical manner and for that purpose and without prejudice to the generality of the foregoing provisions it shall be the duty of the Council (a) to promote cordial relations between the employer and employees; (b) to build up understanding and trust between them. (c) to promote measures which lead to substantial increase in productivity; (d) to secure better administration of welfare measures and adequate safety measures (e) to train the employees in understanding the responsibilities of management of the undertaking and in sharing such responsibilities to the extent considered feasible; and (f) to do such other things as may be prescribed. (2) The Council shall be consulted by the employer on all matters relating to the management of the undertaking specified in sub-sec. (1) and it shall be the duty of the Council to advise the employer on any matter so referred to it. (3) The Council shall be entrusted by the employer with such administrative functions appearing to be connected with or relevant to the discharge by the Council of its duties under this section as may be prescribed (4) It shall be the duty of the employer to furnish to the Council necessary information relating to such matters as may be prescribed for the purpose of enabling it to discharge its duties under this Act. (5) The Council shall follow such procedure in the discharge of its duties as may be prescribed. Rule 61Z-Duties of the Council :It shall be the endeavour of the Council (i) to improve the working conditions of the employees; (ii) to encourage suggestions from the employees; (iii) to assist the administration of laws and agreement; (iv) to serve generally as an authentic channel of communication between the management and the employees; (v) to create in the employees a sense of participation; (vi) to render advice in the general administration of standing orders and their amendment when needed; (vii) to render advice on matters pertaining to retrenchment rationalisation closure reduction in or cessation of operations. Rule 61Z-AAdministrative functions with which the Council shall be entrusted by the employer :- The Council shall be entrusted by the employer with administrative functions in respect of (i) operation of vocational training and apprenticeship schemes; (ii) preparation of schedules of working hours and breaks and of holidays; and (iii) payment of rewards for valuable suggestions received from the employees. Rule 61Z-BMatters in respect if which the Council shall be entitled to receive information :- The Council shall be furnished by the employer with information in respect of (i) general economic situation of the concern (ii) the state of market production and sales programmes; (iii) organisation and general running of the undertaking; (iv) circumstances affecting the economic position of the undertaking; (v) methods of manufacture and work; (vi) the annual balance sheet and profit and loss of statement and connected provisions and explanation; and (vi) long term plan for expansion re-employment etc.

(3.) Briefly stated the petitioners advocates challenged the aforesaid impugned provisions and the order issued by the State Government for constitution of the Joint Management Councils in these four industries on the following five grounds: (1) In pith and substance the impugned legislation does not fall in Entry 22 of labour disputes or in Entry 24 of labour welfare in List 111 but its real subject matter is of either Entry 43 List I of regulations of corporations or Entry 52 List I of controlled industries within the exclusive competence of the Parliament and therefore the impugned provisions lack legislative competence; (2)That the said provisions in sec. 53A and sec. 53B and the Rules 61Z 61 and 61Z-B violate Articles 14 and 19(1)(g) of the Constitution (3) That so far as Rule 61Z-A is concerned it is so wide in its scope that disclosure of information which can be compelled can be even of confidential nature like trade secrets or which sill otherwise he harmful to the undertakings without any seal of secrecy and so it would be ruinous to the management and to that extent the rule would clearly be illegal ultra vires and would violate Arts. 14 and 19(1)(g) as well; (4) That under sec. 53A no such order could be issued without hearing the interests affected and without due application of mind to the necessary condition precedent of disirability of such action in public interest on basis of proper materials so far as these industries are concerned (5) That in any event sec. 53A and sec. 53B suffer from the vice of excessive delegation especially as there were no guidelines or the guideline of public interest was wholly vague and nebulous.