In the ongoing struggle between capital and labour in gaining control over “work” and “work life”, the use of sanctions by both the parties is a major controversial issue. In a conflict situation, the sanctions used by workers’ organisations are strikes (temporary withdrawal from work) and the counter-measure used by the employers is lockout (temporary stoppage of work). Both of these imply cessation of work but not severance of the relationship of employment. Though not accepted as either a legal, moral, constitutional or ethical right of either of these parties, both strike and lockout are accepted features of industrial conflict resolution process to be adopted as a last resort for a bilateral resolution of the disputes and method of reaching negotiated compromise. As both involve heavy economic and social costs, their use is legally regulated and socially monitored in all the countries. But it is not advisable to totally restrict or prohibit these tools in a democratic nation as total prohibition takes away an important collective right of the parties to industrial relations.

Law and Collective Action

Some publicised instances of abuses of such collective rights as well as compelling economic conditions lead to stricter control by the government and non-tolerance by the society. In the Indian context, it is observed that since the process of liberalisation started in the 1990s, strike and similar collective actions by workers’ organisations have been looked down upon as “anti-developmental and anti-progress” restrictive practices. Judicial pronouncements since then have continuously discouraged and restricted the misuse of the right to strike. However, during all these pronouncements, one fact was accepted that even when the right to strike has to be used mostly sparingly in accordance with legal provisions, when it comes to awarding a punishment to the delinquent worker, due process must be followed, principles of natural justice must be observed and punishment should be proportionate to the guilt of each worker as proved during separate individual inquiries. No “en masse” termination can be ordered by the management without holding inquiries. But a recent Supreme Court judgement has deviated from the past legal position by holding that mass termination of workers by the management when they have resorted to an illegal strike without giving notice of strike is valid as illegal strike may be treated as unauthorized absence. Such termination, when authorized under the certified standing orders, will be valid without holding departmental inquiries. This has cast doubts on the future of workers’ right to take collective action against the management for protecting their rights and interests by taking recourse to measures like flash strike.

Facts of the Case

In Uttar Prdesh State Bridge Corporation Ltd. vs. Uttar Pradesh Rajya Setu Nigam S.Karmachari Sangh (2004-4-SCC-268), the appellant was a government company under the Companies Act, carrying out construction activities in India and abroad. The respondent was a union representing 168 muster roll employees, who were working at the bridge construction unit in Kanpur. The terms and conditions of their service were governed by the standing orders certified under the Uttar Pradesh Industrial Employment (SO) Rules, 1946. One of the rules, Clause L 2.12, provided that “any workman who remains absent from duty without leave or in excess of the period of leave originally sanctioned or subsequently extended for more than 10 consecutive days, shall be deemed to have left the services of the corporation on his own accord, without notice, thereby terminating his contract of service with the corporation and his name will accordingly be struck off the roll”.

From 12 October 1995, the workers stopped attending their jobs as their demands were not accepted by the management in response to which they were given direction for resuming work by an office notice on 16 October 1995. Another order was passed on 18 October invoking SO Clause 2.12 informing the workers that if they do not report for duty for continuous ten days, their names will be removed from the muster rolls. Another such notice was published in a Hindi Newspaper on 28 December 1995, informing the workers about the consequences of their continued absence from work. Ultimately on 19 January 1996 an order of termination was issued to all the 168 workers on the grounds of abandonment of services on their own in terms of CSO Clause 2.12.

On 9 May 1996, the order of the management was challenged in the Lucknow Bench of the Uttar Pradesh High Court by a worker in a writ petition. It was dismissed by the High Court, on the ground that the worker could raise an industrial dispute if he so wishes in the Industrial Tribunal. A second writ was filed by a union of workers in the Allahabad Bench of the High Court, which was allowed by the court.

The learned single judge of the High Court came to the conclusion that the word “absence” did not by itself mean abandonment of service and when an employee went on strike, it was not his intention to abandon the service. It is neither misuse of leave nor overstaying of leave. The relevant CSO also does not provide as to how the question of strike is to be dealt with. Hence, the order of termination for unauthorized absence by the management was quashed since it did not specify the period of absence. The court directed that the workers would be deemed to be in continuous service with all the notional benefits. The company appealed against the order of the single judge but the appeal was rejected by the Division Bench, which upheld the decision confirming that termination of the worker for participating in an illegal strike by treating it as abandonment of service was invalid.

SC Quashes HC order

The company filed a Special Leave Petition in the Supreme Court. The Supreme Court, in its judgement, held that the decision of the single judge of the High Court was erroneous and, therefore, should be set aside because as per the facts of the case before the court, the termination order of 168 workers by the company was valid and was in compliance with the CSO Clause 2.12. The apex court arrived at this conclusion on the basis of the argument presented by the company that it was governed not under the Industrial Disputes Act, 1947 but under Uttar Pradesh Industrial Disputes Act (UPIDA), 1947 and unlike the Industrial Disputes Act, the Section 6 S of the said UPIDA requires a notice of strike by the workers of an industrial establishment whenever they wanted to go on strike. The workers or the union never challenged the fact that the company was an industrial establishment. Though the union had exchanged some correspondence with the management of the company for their demands, no notice of strike was given to the management in terms of Section 6-S of UPIDA was the submission of the management. According to the Supreme Court, since the fact of strike was not sufficiently proved before the High Court as no notice of strike was given by the union under the law applicable to the company, the question of legality or otherwise of the strike was not possible to decide. Since the High Court cannot be a forum for decision of questions of fact and since the matter was never debated in an appropriate fact-finding forum like an Industrial Tribunal on the basis of evidence submitted by the parties, the High Court erred in accepting the fact that the workers were on strike, the Supreme Court said. The Supreme Court held that when an alternative remedy in the form of an industrial dispute already exists, the High Court was not an appropriate forum for controversial questions of fact like existence of strike or nature of employment of workers. Since the fact of existence of strike was not established in terms of provisions of UPIDA, there was a possibility that the action of the workers of not resuming their work and not informing the management even after notices were issued to them may be treated as mass absenteeism unconnected with the terms and conditions of service. In such a case, it was not wrong for the management to deal with the action of the workmen in terms of clause 2.12 of CSO, the court said.

The apex court even held that when there is a legal strike, the cessation of work or refusal to continue to work would amount to absence authorised by law but when there is illegal strike, it amounts to unauthorised absence, as under Section 25-B of the Industrial Disputes Act, 1947, which defines continuous service as uninterrupted service, interruption due to legal strike is a permissible interruption. So, whenever there is a legal strike, it is authorised absence but whenever there is an illegal strike it may be treated as an unauthorised absence. In the present case, since there was a clear cut clause under the statutorily certified standing orders regarding punishment for unauthorised absence and since the fact of strike was not established beyond doubt, it was permissible for the management to deal with the action of the workers in terms of Clause 2.12 of CSO and terminate all the workers who remained absent without permission.

The fact that the company had issued two notices calling upon the workers to return to duty and to show cause why the presumption of unauthorized absence should not be drawn in terms of CSO Clause 2.12, was confirmed by the Supreme Court as a sufficient compliance with the principles of natural justice. The union raised the argument that for an illegal strike a separate penalty after a departmental inquiry was provided for under the UPIDA and hence, the action of the company of termination of service on account of illegal strike was not valid. The court rejected the argument on the ground that there was no proof of strike at all, let alone an illegal strike. It held that even when an action is punishable under a statute in a particular way, it does not mean that any other penalty/ punishment cannot be meted out if CSO specifically provides for such action.

Stringent Restrictions on Collective Action?

This judgement raises some important questions as to the access of workers to their collective rights and de facto exercise of the right to strike where other avenues of dealing with management are restricted or non-existent. The order of the Supreme Court in the present case that an illegal strike can be treated as abandonment of service and even when there are statutorily prescribed penalties for illegal strike the management may impose their own penalties sidetracking the statutorily prescribed penalties by the route of certified standing orders may pave the way in future for stringent restrictions on workers’ rights to collective action. A strike, which is not strictly according to the letter of law, becomes an illegal strike and in such case mass termination of workers without any kind of inquiry is permissible, according to this judgement.