END TERM PROJECT

Labour Law

CASE ANALYSIS ON

The Bata Shoe Co. (P) Ltd vs D. N. Ganguly & Others 

Submitted to: Submitted by:

Prof. Mahendra Soni Aparajita

Marwah

2017BALLB80
 TABLE OF CONTENTS

BACKGROUND.............................................................................................................................3

BENCH............................................................................................................................................5

NAME & CITATION......................................................................................................................5

MATERIAL FACTS.......................................................................................................................6

ISSUES RAISED.............................................................................................................................9

CONTENTIONS.............................................................................................................................9

PROVISIONS AND DOCTRINES INVOKED...........................................................................11

LITERATURE CITED..................................................................................................................12

JUDGEMENT IN PERSONAM AND JUDGEMENT IN REM..................................................14

CONCLUSION..............................................................................................................................17

ACKNOWLEDGEMENTS...........................................................................................................18
 BACKGROUND

A settlement crystallized out of conciliation proceedings, between appellant company and

workmen on February 18, 1954. Despite the settlement some of the workmen went on strike on
February 23, 1954, which was later called off. The strike was illegal due to the pendency of
settlement, which is why charge-sheets were filed against the workmen who had participated.
Post a managerial inquiry, 60 of the workmen were dismissed. The conciliation proceeding for
the same had reached an agreement, which was informed to the Labour Commissioner but since
it was found that the union was opposing reinstatement of certain workmen, he proposed to
hold further conciliation proceedings.

The matter was accordingly reported under Section 12(4) of the Industrial Disputes Act, 1947,
since the company was against holding further proceedings. The tribunal passed the order to
reinstate the dismissed workmen on the ground that they had not been shown to have taken
part in violence and there were extenuating circumstances in their case inasmuch as they were
misled to join the strike in order to oust the old office bearers of the union so that others might
be elected in their place, and that though a much larger number of workmen had taken part in
the illegal strike and the union took up the case, only these sixty were eventually dismissed
while the rest were reinstated.

The appellant objected stating that due to a settlement achieved in case of these sixty workmen,
the reference was incompetent in view of section 18 of that Act, and the reference was also
incompetent because what was referred was not an industrial dispute but a dispute between the
employer and its individual workmen. Additionally, the order of reinstatement was unjustified.It
was held that the reference was competent under section 12 because the settlement was without
the seal of approval of the conciliation officer. There was no bad ground in the reference that an
individual dispute was referred to the Tribunal, since the dispute was sponsored by the union and
related to dismissal of a large number of workmen. The tribunal found that there was misconduct
which merited dismissal.
These are two connected appeals by special leave in an industrial matter and relate to the
dismissal of sixty workmen of the appellant-company. The dispute was referred by two
references; one for 31 workmen and one for 29. Both these references were disposed by a
common award. However, since it was 2 references, there are 2 appeals.
 BENCH

Judge:
J. Kalias Nath Wanchoo

Counsels:

 M. C. Setalvad, Attorney-General for India, Nooni Coomar Chakravarti and B. P.

Maheshwari, for the appellant.
 B.C. Ghose and P. K. Chatterjee, for the respondents.

NAME & CITATION

The Bata Shoe Co. (P) Ltd vs D. N. Ganguly & Others 1961 AIR 1158
 MATERIAL FACTS

These are two connected appeals by special leave in an industrial matter and relate to the
dismissal of sixty workmen of the appellant-company. The dispute was referred by two
references; one for 31 workmen and one for 29. Both these references were disposed by a
common award. However, since it was 2 references, there are 2 appeals.

There was a general meeting of the workmen on November 10, 1953, where a no-confidence
motion was passed against the union executives and a new president was chosen. On February 6,
1954, the newly elected president served a strike notice on the management. Eventually the strike
was called off in March and settlement was reached. The appellant alleged that the strike was an
illegal strike as it took place during the currency of a settlement arrived at in the course of
conciliation proceedings with the assistance of the Labour Commissioner who acted as
conciliation officer. Thereafter charge-sheets were served to those who had participated and this
was followed by the a dismissal of 60 workmen, after a managerial inquiry. After that there were
some more conciliation proceedings which failed and let to 2 references made. The tribunal had
the following findings:

“the settlement of February 18, 1954, was a bona fide settlement arrived at during the course of
conciliation proceedings and was therefore binding on the workmen; and consequently the strike
which began on February 23, 1954, was in breach of the terms of the settlement and was
therefore illegal. And that the strike was staged in hot- haste and no reasonable opportunity was
given to the management to reply to the demands made before launching the strike. It also held
that the trouble arose because of the election of Shri Bari and the new office bearers. When
considering the case of these sixty workmen who were dismissed, it held that no charge of
violence was brought home to these workmen and even the charge-sheets which were originally
issued to the workmen did not contain any charge of violence. The tribunal then divided the sixty
workmen into three batches of 47, 11 and 2. In the case of 47 workmen, it held that they must be
assumed to have been served with charge-sheets as they refused to accept them and that proper
inquiry was held into the charges, though in their absence. In the case of 11 workmen, it was of
opinion that charge sheets had not been served on them and therefore any inquiry held in their
absence was of no avail. In the case of two workmen, it held that no attempt was made to serve
any charge-sheet on them.”

The tribunal therefore set aside the dismissal of the 13 workmen due to the lack of charge-sheet,
and for the remaining 47 the dismissal was set aside since their involvement in the violence
wasn’t proven. and there were extenuating circumstances in their case inasmuch as they were
misled to join the strike in order to oust the old office bearers of the union so that others might be
elected in their place. It was also pointed out that only the 60 were dismissed, even though the
number of actual participants was much larger. There was no justification for this distinction,
which is why it was ordered that they should also be reinstated. Finally, it held that the workmen
were sufficiently penalised, they being out of employment from March 1954 to February 1959
when it made the award and that there was no reason in the circumstances to maintain their
dismissal. Some level of basic level wage was awarded to the 13 who had no charge-sheets.

The appellants had three-pronged submissions: “(i) as a settlement had been arrived at during the
course of conciliation proceedings on September 2, 1954, which specifically dealt with the case
of these sixty workmen, the references were incompetent; (ii) the references were incompetent
because what was referred was not an industrial dispute but a dispute between the employer and
its individual workman; and (iii) the tribunal's order of reinstatement was in any case
unjustified.”

Regarding the dismissal, there were conciliation proceedings held before the Labour
Commissioner, Bihar. The Commissioner had received an objection from the appellant regarding
the proceedings, which alleged illegality of proceedings, and found that the same was baseless.
These efforts continued for some time, after which there were mutual negotiations between the
appellant and workmen to settle the dispute, and eventually it was resolved. The appellant
employed the dismissed workmen and added an additional 110.

However, the 60 dismissed workmen remain dismissed without any benefits. The same was
informed to the Labour Commissioner. Which is why he proposed further conciliation
proceedings, and put it in writing to the government. The appellant protested to the Labour
Commissioner against the holding of any further conciliation proceedings after the agreement of
September 2 and apparently did not attend the meeting fixed for September 6. Nothing further
therefore seems to have taken place in the conciliation proceedings. The matter was reported to
the government under Section 12(4) of the Industrial Disputes Act, No. XIV of 1947. Post which
there were 2 references by the government, 1 for 31 workmen and the other for 29.
 ISSUES RAISED

The court considered the following questions:

 Whether the original settlement arrived at was valid

 Whether the reference was valid
 Whether the order of reinstatement of the Tribunal was valid

CONTENTIONS

The appellants had three-pronged submissions: “(i) as a settlement had been arrived at during the
course of conciliation proceedings on September 2, 1954, which specifically dealt with the case
of these sixty workmen, the references were incompetent; (ii) the references were incompetent
because what was referred was not an industrial dispute but a dispute between the employer and
its individual workman; and (iii) the tribunal's order of reinstatement was in any case
unjustified.”

For the first prong they relied heavily on Section 18 and 19 of the Act, which provided that a
settlement is binding in nature and it would come into force on the agreed upon date,
respectively. The appellant stated that the agreement settlement between the union and the
appellant was binding on nature, and therefore it was not open to the government to make these
references within six months of it. The meaning of the phrase “in the course of conciliation
proceedings” was in question, where the appellant pushed for it to mean the agreement between
2 parties during this period, not necessarily with the assent of the conciliation officer.

The next prong of the argument suggested that the present dispute was not an industrial dispute,
but just a dispute between the employer and its individual workmen. Which is why there was a
lack of jurisdiction for the references. Even though there were a large number of workmen
involved, and the appellant settled with the union to the exclusion of 60 workmen (who would
remain dismissed).
 PROVISIONS AND DOCTRINES INVOKED

The Industrial Disputes Act, 1947

“Section 12: Duties of conciliation officers.-

(1) Where any industrial dispute exists or is apprehended, the conciliation officer may, or where
the dispute relates to a public utility service and a notice under section 22 has been given, shall
hold conciliation proceedings in the prescribed manner.

(2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute,
without delay, investigate the dispute and all matters affecting the merits and the right settlement
thereof and may do all such things as he thinks fit for the purpose of inducing the parties to
come to a fair and amicable settlement of the dispute.

(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of
the conciliation proceedings the conciliation officer shall send a report thereof to the
appropriate Government 1 or an officer authorised in this behalf by the appropriate
Government] together with a memorandum of the settlement signed by the parties to the dispute.

(4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after
the close of the investigation, send to the appropriate Government a full report setting forth the
steps taken by him for ascertaining the facts and circumstances relating to the dispute and for
bringing about a settlement thereof, together with a full statement of such facts and
circumstances, and the reasons on account of which, in his opinion, a settlement could not be
arrived at.”
 LITERATURE CITED

The Court discussed the case of Indian Iron and Steel Co. Ltd. and another v. Their Workmen
[1958] S.C.R. 667. Moreover, learned counsel for the respondents relied on the case of Indian
General Navigation and Railway Co. Ltd. v. Their Workmen [1960] 2 S.C.R. 1. However, the
same was distinguished by the Court. The case stated: “to determine the question of punishment,
a clear distinction has to be made between those workmen who not only joined in such a strike
but also took part in obstructing the loyal workmen from carrying on their work, or took part in
violent demonstrations, or acted in defiance of law and order, on the one hand and those
workmen who were more or less silent participators in such a strike on the other hand.” Which
was not the case in the present dispute.

Similarly, the case of Mckenzie & Co. Ltd vs Its Workmen And Others 1959 AIR 389 was also
used by the Court to understand the situation of the charge-sheets that were notified on the
Company’s notice board. That particular has revolved around Standing Orders that provided that
a notice was to be served upon a workman via verbal communication or by affixing the same on
the company's notice-board and the company had acted in conformity with the Standing Orders
by affixing the notices on its notice-board. Moreover, in the case, the company had first used
post to send notices, wherein some came back unserved. It was after that the company decided to
use the noticeboards. In those circumstances it was held that the company did all that it could
under the Standing Orders to serve the workmen and the affixing of the notices on the notice-
board was sufficient service.

However, the court distinguished the case from the present dispute by stating that the Standing
Orders were different here. They provided that the charged must receive a copy of the charge-
sheet. It is also provided that a workman who refuses to accept the charge-sheet shall be deemed
to have admitted the charge made against him. Moreover, there was nothing in the Standing
Orders that called for affixing the notices on notice boards.

On the same day on which the charge-sheets were sent by registered post it appears that notices
were issued in certain newspapers to the effect that a group of workmen under a common
understanding had engaged in an illegal strike from February 23, 1954, and that all such
workmen were liable to strong disciplinary action and that in consequence they had been charged
under the Standing Orders and Rules of the company and such charge-sheets had been sent to
them individually by registered post acknowledgement due and had also been displayed on the
notice-boards inside and outside the factory gate and they were required to submit the
explanations by March 9, 1954.

The notices did not disclose the names of the workmen who were named in charge-sheets. It can
be observed that these men wouldn’t have had the notice that they were the intended recipients of
charge-sheets, which is why the Court deemed it appropriate to have their names in newspapers
in circulation, along with the charges. Situation could be different if Standing Orders actually
provided for displays on the notice-boards. Since there wasn’t any such provision, this is the
right course of action. Had the appellant attempted to do so, it would have been evident that they
did everything reasonable in their power, but since they didn’t the workmen had no idea of the
charges, and couldn’t adequately prepare to submit their responses. And this is why the Court
sided with the Tribunal for this Point.
 JUDGEMENT IN PERSONAM AND JUDGEMENT IN REM

The Court believed that the tribunal would not have interfered with the order of dismissal, for the
case would be clearly covered by the principles governing the limits of the tribunal's power of
interference with the findings of the managerial inquiry laid down by this Court in Indian Iron
and Steel Co. Ltd. and another v. Their Workmen. Even when the Respondent relied on the case
of Indian General Navigation and Railway Co. Ltd. v. Their Workmen, which stated: “to
determine the question of punishment, a clear distinction has to be made between those workmen
who not only joined in such a strike but also took part in obstructing the loyal workmen from
carrying on their work, or took part in violent demonstrations, or acted in defiance of law and
order, on the one hand and those workmen who were more or less silent participators in such a
strike on the other hand.”

However, the court did not accept their submission. The Court stated that the context of this case
was different. The reasoning of the tribunal therefore that as these 47 workmen had not taken
part in violence the appellant was not justified in dismissing them cannot be accepted on the facts
of this case. And the inquiry and dismissal had happened the proper way. “The other reason
given by the tribunal for setting aside the dismissal is that the appellant had taken back a large
number of other employees who had taken similar part in the illegal strike and had absented
themselves and there was no reason to discriminate between those employees and these 47
workmen.”

There was thus no discrimination when workmen were reinstated, since those who sided with the
union were reinstated. “Reliance in this connection is placed on Messrs. Burn and Co. Ltd. v.
Their Workmen, where, it was observed when dealing with the workmen involved in that case
that it could not be said that mere participation in the illegal strike would justify the suspension
or dismissal particularly when no clear distinction could be made between those persons and the
very large number of workmen who had been taken back into service although they had
participated in the strike.”

In the event there is unreasonable discrimination by an employer then the Industrial Tribunal
may intervene, but only after a due examination of facts and circumstances can a Tribunal
interfere with a properly held managerial inquiry. It is not the appellant which has made the
discrimination; in the present case so far as the appellant is concerned it was prepared to take
back even those who supported Shri Bari and did actually take back a large number of such
workmen. The Court said: “The genesis of the trouble in this case was a dispute within the union
itself which led to the illegal strike, the history of which we have already given. The appellant in
this case was therefore placed in the position that it had to choose between the large
majority of workmen and sixty-one workmen whom the union did not want to be taken back.
It was in these circumstances that the appellant did not take back those sixty-one workmen
out of whom are these forty-seven.” This is why the discrimination charge isn’t yet fully
painted out, the union shares a sufficient amount of blame too.

Since there was a real misconduct (strike during pendency of conciliation) and there was a
proper managerial inquiry, only after which was there dismissal in accordance with Standing
Orders, the interference of the tribunal was unjustified. The Court substantiated: “It may be
that participation in an illegal strike may not necessarily and in every case be punished with
dismissal; but where an inquiry has been properly held and the employer has imposed the
punishment of dismissal on the employee who has been guilty of the misconduct of joining
the illegal strike, the tribunal should not interfere unless it finds unfair labour practice or
victimisation against the employee.”

Regarding the 2 workmen who received no charge-sheets, the Standing orders provided that:
“any workman charged with an offence under these Orders, except in cases of lateness and
absenteeism, shall receive a copy of such charge but in all cases will be given an opportunity of
offering his explanation before any decision is arrived at.”

It is therefore essential to grant them the opportunity to explain, before taking any action against
them. Since that wasn’t done here, the Tribunal was right in its order, and the Court also upheld
that.

Coming to the 11 workmen who had charge-sheets issued, but couldn’t be served upon them and
the inquiry happened without them knowing, Tribunal ordered reinstatement and nullified the
inquiry. The appellant said that their case was the same as the 47 who refused the charge-sheet,
and merited dismissal, and even took the trouble of issuing notices on the notice board and
newspapers. They cited the case of on Mckenzie & Co. Ltd. v. Its Workmen, “where the Standing
Orders provided that notice would be served on a workman by communicating the same orally
to the workman concerned and/or by affixing the same on the company's notice-board and the
company had acted in conformity with the Standing Orders by affixing the notices on its notice-
board. It was found in that case that the company first sent notices by registered post
acknowledgement due to the workmen concerned. When some of the notices came back unserved
the company wrote to the secretary of the union asking for the addresses of the workmen but the
secretary gave no reply to the letter. It was then that the company affixed the notices on the
notice- board both inside and outside the mill-gate. In those circumstances it was held that the
company did all that it could under the Standing Orders to serve the workmen and the affixing of
the notices on the notice-board was sufficient service.”

This is not the case in the present dispute, the Standing Orders only say that the workmen must
receive a copy of the charge, and those who refuse it will be deemed to have accepted the charge.
There is nothing about notice boards and newspapers. In light of the fact that the notices came
back unserved, the proper course was to publish the notices in their names in some newspaper in
the regional language with a wide circulation in Bihar along with the charges framed against
them. It would have been a different matter if the Standing Orders had provided for service of
charge-sheets through their display on the notice-boards of the appellant. Since that was not done
by the appellant, they did not do everything in their power to serve notice and the workmen had
no knowledge of charges against them, and had no chance to submit their explanation. Which is
why the Court upheld the Tribunal’s view here as well.

The court allowed the appeal partly, and set aside the order of reinstatement of the 4 workmen
and dismiss the appeals of the remaining 13.
 CONCLUSION

The settlement from the proceeding between the appellant and the union followed the rules of the
Industrial. This was held binding upon the conciliation officer. Likewise, the Court stated that
even if the settlement was not binding in nature, it would still not be open to references by the
Government.

The argument regarding the invalidity of the reference due to the nature of the dispute being an
individual dispute, was untenable. The facts very clearly show that the strike was held by the
Union, and not individuals. Moreover, there was a large number of workmen dismissed.

“The Court held that in such an instance where the Tribunal had found that there was misconduct
that merited dismissal under the standing orders after a proper managerial inquiry, the Tribunal
was not justified in interfering with the action of the management. The only exception to this rule
would be if there was any evidence of unreasonable discrimination in the matter of rehiring the
employees or any victimization or presence of unfair labour practices..”
 ACKNOWLEDGEMENTS

I would like to express my heartfelt gratitude to my teacher,

Prof. Mahendra Soni

who gave me the golden opportunity to do this enriching project on this case study which has
helped me enhance my knowledge exponentially about the concept; understand the scope in
totem; learn the applicable laws and correlate the present state of affairs worldwide as well in
our country.

His helpful insights in this subject have guided me to make this project.