The Dunlop Rubber Co vs Workmen

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 464 of 1964

Decision Date: 10 November 1964

Coram: S.M. Sikri, P.B. Gajendragadkar, M. Hidayatullah, J.C. Shah, R.S. Bachawat

In this case the Supreme Court recorded that the petition was brought by The Dunlop Rubber Co. Ltd. against a group of workmen. The judgment was delivered on 10 November 1964 and the bench consisted of Justices S.M. Sikri, P.B. Gajendragadkar, M. Hidayatullah, J.C. Shah and R.S. Bachawat. The author of the judgment was S.M. Sikri. The citation of the decision is reported as 1965 AIR 1316 and 1965 SCR (2) 414. The factual backdrop involved a domestic enquiry in which the company dismissed several workmen on the basis of a charge described as a “go‑slow” action. The workmen contested the dismissal before the Third Industrial Tribunal, West Bengal, where the Tribunal held that the charge did not expressly refer to “go‑slow” and that the workmen were denied natural justice because they were not permitted to be represented by a person of their choice. The Tribunal consequently set aside the dismissals and ordered reinstatement of the workmen. The company appealed the Tribunal’s award by special leave. The Court noted that the charge relied upon clauses 10(vii) and 10(xvi) of the Operators Standing Orders, which covered insubordination and, inter alia, “go‑slow”. The workmen had been warned by notice that they were “going slow” and in their reply to the charge denied that allegation. The Court therefore concluded that the Tribunal was incorrect in finding that the workmen were not charged with a “go‑slow” offence and consequently could not be found guilty of that charge.

The Court further held that there was no violation of natural justice in the enquiry because the workmen had requested representation by a member of an unrecognised union. The Standing Orders expressly limited assistance to representatives of unions that were registered under the Trade Union Act and recognised by the company. Consequently, the Court found that the workmen had no right to be represented by a person of their choice unless the company, through its Standing Orders, had recognised such a right. The Court relied on the authorities in Kalindi & Ors. v. Tata Locomotives & Engineering Co. Ltd. (1960 3 SCR 407) and Brook Bond India (P) Ltd. v. Subba Raman (1961 11 L.L.J. 417). The civil appeal was numbered 464 of 1964 and was filed by special leave from the award dated 29 September 1962 of the Third Industrial Tribunal in Case No. VIII‑197 of 1960. Counsel for the appellant were A. V. Viswanatha Sastri, Anand Prakash and D. N. Gupta, while counsel for the respondents were N. C. Chatterjee, D. L. Sen Gupta and Janardan Sharma. The judgment was delivered by Justice Hidayatullah. The Court also recorded that the special leave to appeal had been granted on 21 January 1963 against the Tribunal’s award.

On September 29, 1962 the Industrial Tribunal issued an award that reversed the dismissal of twelve workmen employed by the Dunlop Rubber Company. The Tribunal ordered that each of the twelve be reinstated with full continuity of service, but it limited the monetary award to only twenty‑five percent of the back wages for the period they were out of employment, treating that period as though it were a period of leave. The dispute had been referred to the Tribunal by the Government of West Bengal on July 20, 1960 pursuant to section ten of the Industrial Disputes Act, 1947. The workmen had originally been dismissed after a domestic enquiry that began on February 4, 1960 and was conducted ex parte because the workmen chose not to be present. The Tribunal found that the enquiry was procedurally improper, and it ordered that certain witnesses be re‑examined before the Tribunal. After that re‑examination the Tribunal’s verdict was against the Company, which gave rise to the present appeal.

Eleven of the twelve dismissed workmen were assigned to the operation known as the Dual Auto Mill, while the twelfth worked on a unit described as the Baby Mill. These twelve workmen together with several others stopped work on January 21, 1960 and were placed under suspension on the dates of January 25 and January 27, 1960. In addition, ten other workmen were dismissed during the same period, but they were subsequently taken back into service after the Government of Bengal intervened on their behalf. The factual background of the incident involved the sequential processing of rubber used by the Company to manufacture rubber goods. First, the Banbury Section mixed rubber with chemicals; the resulting compound was then passed to the Dual Auto Mill, where it was processed further into blocks of rubber called “batches.” Each batch weighed approximately one thousand two hundred and fifty pounds. At the relevant time the Company operated two Dual Auto Mills, each running three eight‑hour shifts. Because each mill required two workmen per shift, a total of twelve workmen were employed to attend the two mills. Each shift allowed a half‑hour meal break and an additional twenty‑minute period for emergencies. The mills were expected to produce, and indeed did produce, seventeen batches per day up to January 12, 1960. The record also mentions a Baby Mill, although the specific purpose of that mill was not clearly documented. One of the dismissed workers, identified as S. R. Sen Gupta (Check No 252), was assigned to the Baby Mill and was classified as a protected worker under the relevant labour legislation. The Company’s workforce was organized into three unions. The largest union, Union No 4145, known as the Dunlop Workers’ Union, had been registered but had not been recognised by the Company. A second union, Union No 729, called the Dunlop Rubber Factory Labour Union, was recognised by the Company. A third union existed but did not figure in these proceedings. Union No 4145 had been formed in 1957 and had succeeded in capturing all elective seats open to the workmen by defeating the candidates presented by Union No 729.

In this case the Court noted that a strong rivalry existed between the two labour unions in the plant, and that the workmen who were eventually dismissed were members of Union No 4145. The Court observed that Union No 4145 had formally demanded a revision of wages and other conditions, a demand that the Company had refused to accept. The Court further recorded that the Baby Mill, the Banbury Mill and the Dual Auto Mills were all staffed by workers who belonged to Union No 4145, with one exception: a worker identified as Raghunandan Das (Check No 100) who was a member of Union No 729 and who was paired on the production line with Chandramma Chaube, one of the dismissed employees. The Court stated that Raghunandan Das was on authorised leave from 12 January to 19 January 1960. Beginning on 12 January the Court found that the output at the Dual Auto Mills fell at every one of the three shifts, with the number of batches produced dropping from seventeen to fifteen and later decreasing further. On 15 January 1960 the Court said that the Company issued written warnings to the workmen, accusing them of deliberately slowing production and declaring that such “go‑slow” conduct amounted to misconduct under clause 10 (XVI) of the Company’s Standing Orders applicable to operators and under clause 18 (C) of the Labour Union Agreement applicable to operators. The warnings instructed the workmen that unless they restored normal output immediately the Company would be compelled to take disciplinary action, and the Court noted that all of the workmen received these letters.

On 19 January Raghunandan Das resumed his duties and was again teamed with Chandramma Chaube. The Court reported that Das then alleged that Chaube was not achieving full output and was taking more time than required during the mixing operations, while Chaube contended that Das was denying him sufficient technical time for the mixtures and that he was objecting to this restriction. The Court added that the workmen received an extra allowance when they produced more than the prescribed quota of batches, and that Das was keen to increase his earnings where possible. The Court further recounted that on 21 January the two workers quarrelled, during which Das verbally abused both Chaube and Union No 4145. In response, members of Union No 4145 threatened to cease work unless Das was removed from the Dual Auto Mill and transferred to another department. The Company’s officers promised to conduct an enquiry but simultaneously asked the workmen to return to their duties. The Court observed that the Union 4145 workmen refused to comply, resulting in the Dual Auto Mills either remaining shut or operating at a level far below capacity. After repeated requests, the Court noted that on 25 and 27 January the workmen were called to the Company office to be served with charge‑sheets; they declined to accept these charge‑sheets and were immediately placed under suspension. The suspended employees comprised the twelve workmen already described together with ten additional individuals previously mentioned. The Court recorded that Mr P K Maitra commenced an enquiry into the charges in the presence of Mr R M Bhandari, who acted as an observer, and that at the outset of the enquiry each workman asked for a representative of Union No 4145 who was “conversant with”.

In the enquiry the workmen insisted that a representative skilled in the art of cross‑examination be present for them. The Company’s Standing Orders permitted representation only by a member of a recognised Union, and the workmen rejected any member of Union No. 729 because that Union was detested by Union No. 4145. Consequently the workmen chose to remain absent from the enquiry, with the sole exception of S. R. Sen Gupta, who attended only to make a personal statement and then withdrew from further participation. The enquiry proceeded ex parte, and Mr P. K. Maitra concluded that the workmen had engaged in a “go slow” practice and were guilty of the charge that had been brought against them. On that basis Mr Maitra recommended dismissal as the appropriate punishment for each of the accused workmen in his report. The Company acted on the recommendation, ordered the dismissal of all twelve workmen, and applied to the Tribunal for permission under section 33 of the Industrial Disputes Act. It also offered each dismissed workman one month’s wages as compensation in order to mitigate the financial loss caused by the dismissal. Subsequently the Government of West Bengal intervened, and at its request the Company agreed to reinstate ten of the dismissed workers, leaving the selection of those ten to Union No. 4145. All the workmen from the Banbury Mill were taken back, while eleven workers from the Dual Auto Mill and S. R. Sen Gupta from the Baby Mill remained dismissed.

The Tribunal later examined the dismissals and concluded that they were improper, directing that the workmen be reinstated to their former positions. In its reasoning the Tribunal held that the Company had not formally charged the workmen with a “go slow” action, but had nonetheless found them guilty of that misconduct. The Tribunal further asserted that the Company was favouring Union No. 729 and was attempting to suppress the Union representing the dismissed workmen. Although the Tribunal characterized the work stoppage as a strike because proceedings were pending before it, it described the strike as peaceful, non‑violent, and therefore only technically illegal. The Tribunal blamed the Company for contributing to the strike by refusing to transfer Raghunandan Das from his assigned workplace. Based on these findings the Tribunal held that dismissal was not justified and therefore affirmed the order that had been impugned. The present Court found that the Tribunal was wrong in almost every conclusion it had reached regarding the dismissals and related matters. Specifically, the Tribunal erred in holding that the workmen had not been charged with a “go slow” action, a finding that would have prevented dismissal on that ground. Under the Company’s Standing Orders, a “go slow” conduct constituted a major misconduct, punishable as a serious breach of discipline. Clauses VIII and XVI of Standing Order 10 expressly dealt with insubordination, failure to obey lawful orders, and with malingering or slowing down of work. Clause VIII covered disobedience of any lawful and reasonable order issued by a superior, while Clause XVI addressed incitement to illegal strikes and deliberately slowing work. The charge‑sheet presented to the workmen read in full: “You are hereby asked to show cause why disciplinary action should be taken against you for the alleged misconduct.”

In this case the charge against the workmen was framed under the Operators Standing Orders, specifically Clauses 10(VIII) and 10(XVI). Those two clauses, as previously noted, address insubordination and, among other matters, the conduct of “going slow.” It was argued before the Court that the expression “go slow” did not appear in the present charge in the same way it had appeared in the charges laid against the workmen at the Banbury mill. The record, however, shows that on 15 January 1960 the workmen had been expressly warned that they were “going slow” and that such conduct was regarded as misconduct under Clause 10(XVI) of the Company’s Standing Orders for Operators. Although Mr Lobo, the drafter of the charge, did not write the words “go slow” in the charge sheet as he had done in the Banbury case, the substance of the charge was nevertheless directed at the alleged “go‑slow” behaviour. The workmen, in their replies to the charge, denied that they were engaging in “go slow.” Moreover, Mr Lobo told the Enquiry Officer that the charge was indeed for “go slow.” The log‑books for the Dual Auto Mills, beginning on 12 January 1960, contain entries that describe the work as “slow work.” The production records demonstrate that, instead of the normal seventeen batches per shift, only fifteen or fewer batches were produced on each shift during that period. This reduction in output indicates a deliberate “go‑slow” action that began as soon as Mr Raghunandan Das went on leave and the Dual Auto Mills came under the exclusive control of Union No 4145. That union regarded the situation as an opportunity to press its demand for higher wages by employing the tactic of “going slow.” The workmen’s explanation that the mixture received from the Banbury mill was too cold and therefore required reheating before it could be processed in the Dual Auto Mills was found to be untrue. They alleged that the cooling resulted from the operation of a new machine called the festooner from 12 January onward. The evidence, however, showed that the festooner had been trial‑run for three months before it was placed in service and had been operating successfully for three months prior to 12 January 1960; consequently, the workmen’s complaint about the machine was unfounded. It is possible, the Court observed, that the Banbury mill operators—who themselves were suspended and dismissed—might have intentionally over‑cooled the mixture by means of their blower in order to delay operations. Nonetheless, whether the cooling originated at the Banbury mill requiring the Dual Auto Mills to reheat the mixture, or whether the Dual Auto Mills themselves delayed production, the underlying motive was the action of Union No 4145 seeking to compel the Company to acquiesce to its wage demands. Finally, the Court noted that after newly trained workmen took over the operation of the Dual Auto Mills, production once again reached the previous level of batches and even exceeded it, despite the continued use of the festooner.

The Court was satisfied that the workmen had been deliberately reducing the pace of work from 12 January 1960. The Court found that the allegation of a ‘go‑slow’ was included in the charge‑sheet, read together with the warning letter, and that this allegation was fully supported by the evidence. The Court held that this conduct constituted misconduct under Standing Order Number 10 and could not be characterized as a minor offence, contrary to counsel’s argument. The Court explained that the category of minor offences pertains to conduct of a wholly different nature in the workplace. The Tribunal’s view that the workmen had been denied justice because they were not allowed assistance of a representative of their own trade union was rejected. The Court pointed out that the Standing Orders provide that, at such inquiries, assistance may be given only by a representative of a trade union under the Indian Trade Union Act. The union must also be recognised by the employer for its representative to be permitted. The Court held that this demand to be represented by a delegate of their own unrecognised union could not be honoured. The Court referred to its decision in Kalindi and Others v. Tata Locomotive & Engineering Co. Ltd., [1960] 3 S.C.R. 407. It also cited Brook Bond India (P) Ltd. v. Subba Raman, [1961] 11 L.L.J. 417, which holds that a right of representation does not exist unless the employer’s Standing Orders confer that right. The Court observed that refusing representation by any union when the Standing Orders do not grant that entitlement does not invalidate the inquiry. The Court acknowledged that only a rival union enjoyed recognition and that hostility existed between the two unions, which had ignited the strike. In those circumstances, the Court found it unreasonable to expect the workmen to accept representation by a member of the rival, recognised union, and it was foreseeable that the employer would have considered any alternative representation proposed by the workmen. The workmen insisted that any representative must act as a delegate of their own unrecognised union, thereby seeking indirect recognition. The Court concluded that the dispute was pursued by the workmen with the dual purpose of obtaining higher wages and securing recognition of their union. The Court observed that the company was fully aware of the implication of the workmen’s demand for representation by a member of their own union. The Court added that refusing such representation on those terms could not be described as a denial of natural justice or unfair play. The Court noted that, had the workmen asked merely for a representative of their own choosing without invoking Union 4145, the company might have acceded to the request. The Court further said that the company could have asked the workmen to remove any reference to Union 4145 and then permitted a representative of their choice in the circumstances of the dispute. However, the Court stated that it could not say that the Enquiry Officer’s action was illegal or amounted to a denial of natural justice.

The Court observed that the refusal of the Enquiry Officer to allow the employees to be represented by persons of their own choosing could not be characterised as illegal or as a denial of natural justice. It reiterated that, in domestic enquiries, the employees who are charged should be given a reasonable opportunity to answer the allegations against them. Moreover, the Court stated that, where no standing order expressly prohibits it and no other objection exists, it is desirable to permit the employee to present his case through a representative of his choice. In the present case, however, the Court found that the Enquiry Officer’s decision not to accede to the employees’ request did not create any material defect in the enquiry process. Consequently, the Court held that the outcome of the enquiry could not be successfully challenged in the proceedings before it. The Court further concluded that the two principal grounds on which interference with the dismissal order had been sought did not, in fact, exist. The charge against the workmen was framed under clauses eight and sixteen of Standing Order number ten, and the content of those clauses was clear to the workmen. According to the plan, the workmen had been deliberately reducing productivity from 12 January 1960, when the Dual Auto Mills came under the control of the workers belonging to Union number 4145. The Court noted that the workmen’s demand for representation by a member of their own unrecognised union could not be granted, because the standing orders allowed representation only by a recognised union. The Court also rejected the Tribunal’s argument that the later acceptance of the union’s wage demands could justify the workmen’s illegal strike and their refusal to resume work unless their demands were satisfied.

The Court affirmed that the Company’s order of dismissal was justified. It recorded that the Dual Auto Mills performed a crucial operation in the production of rubber goods and that no batches could be produced without the mill’s output. By engaging in a “go‑slow” and by refusing to return to work when called upon, the workmen slowed the production of every category of product and caused a substantial loss to the Company. The Court observed that the underlying motive for the workmen’s actions was deeper than a personal dispute between Chandramma Chaube and Raghunandan Das or the alleged insults directed by the latter at Chaube and his union. The workmen’s counsel had contended that discrimination existed because workmen at the Banbury Mill had been reinstated while those at the Dual Auto Mills had not. The Court held that any such discrimination, if it existed, stemmed from Union number 4145, which selected the individuals to be taken back into service. The Court reasoned that there must be a reason for the different treatment of the Banbury Mill workmen and suggested, without concluding definitively, that the Banbury Mill workmen may not have been involved in dispatching a cold mixture as alleged, whereas the Dual Auto Mill workers were. Accordingly, the Court found no basis to set aside the Company’s dismissal order.

The Court observed that the Dual Auto Mill workmen were taking more time in performing their own operations, thereby affecting output. The Court noted that the slowdown in production was caused by the Dual Auto Mill operators rather than by the Banbury Mill operators. In other words, although the Banbury Mill workmen also joined the strike, they apparently did not participate in the “go‑slow” tactic. Conversely, the Dual Auto Mill workmen not only initiated the “go‑slow” but also led the broader strike that involved a large number of employees. The Court further held that the workers selected for reinstatement had been chosen by their own Union, and therefore no discrimination by the Company could be inferred. The Court was satisfied that the Tribunal had not been justified in interfering in this matter. The Court criticised the Tribunal for acting as an appellate body, scrutinising the evidence and arriving at its own conclusions without proper basis. The Court was also satisfied that the Tribunal’s conclusions were not supported by the evidence presented in this case. Accordingly, the Court thought that the order issued by the Tribunal should be set aside and that the order issued by the Company should be upheld. The Court expressed regret that the workmen, who had admitted receiving higher wages than those in any other organization, were losing their jobs in an attempt to obtain indirect recognition for their Union. Nevertheless, the Court held that the Company must retain a free hand in managing its internal affairs without external interference. The Court stated that no external agency should impose its will unless the Company’s action is lacking in good faith or is manifestly perverse or unfair. The Court found no indication that the Company’s conduct met such a standard of bad faith, perverse or unfair behavior. The Court also noted that the existence of Union No. 4145, which possessed a larger membership than the recognised Union No. 729, had significantly contributed to the dispute. The Court remarked that companies often favour one Union among several, thereby creating rivalry that disturbs industrial peace. The Court observed that such rivalry frequently has an adverse effect on the Company itself in terms of productivity and harmony. The Court recognized that Union No. 729 was formed in 1950 and Union No. 4145 in 1957, and therefore could not conclude that the non‑recognition of Union No. 4145 was a deliberate act. However, because Union No. 4145 appears to be the stronger of the two Unions, the Court suggested that the Company should seriously consider recognising Union No. 4145 as well. The Court ordered that the appeal succeed and that it be allowed, without making any order regarding costs. Accordingly, the Court allowed the appeal and entered judgment in favour of the appellant with no award of costs.