New Delhi: "Unfair labour practices" alleged
by workers cannot be routinely taken on face value, the
Supreme Court has ruled, stating that they must be interpreted
in the context of globalisation and modern industrialisation.
A bench of justices D K Jain and A K Ganguly, in a
judgement, said the argument of unfair practices can be
accepted only if there is "arbitrariness and unreasonableness"
in the management`s action violating Article 14 (equality) of
"Any unfair labour practice within its very concept
must have some elements of arbitrariness and unreasonableness
and if unfair labour practice is established, the same would
bring about a violation of guarantee under Article 14 of the
The court said, "It is also to be kept in mind that in
the changed economic scenario, the concept of unfair labour
practice is also required to be understood in the changed
"Today every state, which has to don the mantle of a
welfare state, must keep in mind the twin objectives of
industrial peace and economic justice and the courts and
statutory bodies while deciding what unfair labour practice is
must also be cognisant of the aforesaid twin objects," Justice
Ganguly, writing the judgement, said.
The apex court upheld an appeal of Siemens Ltd challenging
the concurrent findings of the labour court and the Bombay
High Court which had quashed the company`s decision to create
a cadre of Junior Executive Officers, to be filled from among
the company`s workmen.
It was the case of the workmen under the Siemens Employees
Union that the promotional scheme amounted to unfair labour
practices as defined under Section 9A of the Industrial
Disputes Act, 1947; and sections 9 and 10 of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971.
Rejecting the workers` plea, the apex court said in the
present case the workers had overwhelmingly applied for the
promotional scheme and there was no question of victimisation
"In the instant case no allegation of victimisation
has been made by the respondent-union in its complaint. In the
absence of any allegation of victimisation it is rather
difficult to find out a case of unfair labour practice against
the management in the context of the allegations in the
"So in the instant case if by way of rearrangement of
work, the management of the appellant-company gives
promotional opportunity to the existing worker that does not
bring about any violation of clause 7 of the said settlement
rather such a rearrangement of work will be in terms of clause
12," the bench said.
According to the apex court, if the job of executive
officers are the same as is done by the existing worker, that
does not bring about such a violation of clause 7 as to
constitute unfair labour practice.
"The Labour Court and the High Court must consider the
said agreement reasonably and harmoniously keeping in mind the
vast changes in economic and industrial scenario and the new
challenges which the appellant-company has to face in the
matter of reorganising work in order to keep pace with the
changed work culture in the context of scientific and
technological development," the apex court said.
The bench said it was not that the management was
punishing any workmen in any manner by introducing the
promotion scheme to which the workers overwhelmingly
"It may be that the number of workmen is reduced to some
extent pursuant to a promotional scheme to which the workmen
readily responded. But no union can insist that all the
workmen must remain workmen perpetually otherwise it would be
an unfair labour practice," Justice Ganguly added.