Transferring an employee of a private industry from one factory to another situated in a different district or State in contravention of the Standing Order applicable to the industry is a fit dispute to be referred to the Labour Court for adjudication, the Madras High Court has said.

Justice K. Chandru made the observation while quashing an order passed by the Secretary, Union Ministry of Labour, last year refusing to refer a dispute raised by Cement and Quarry Workers Union against the transfer of three employees of India Cements Limited in Tirunelveli to its units in Andhra Pradesh and Salem.

The judge rejected the argument of the cement company that there was no illegality in the transfer of the three employees as their terms of appointment stated that they could be transferred to any other unit such as a factory, mine, foundry division already owned or newly acquired by the management.

Only shift transfer

He agreed with the petitioners' counsel that the Standing Order applicable to the cement company only provided for transfer of workers from one shift to another in the interest of the company. It did not give scope for transferring workers from one factory to another.

“The Government of India's refusal to refer the three cases of the workmen for adjudication is clearly erroneous and liable to be interfered with by this court. Hence, a direction is issued to the Union Labour Secretary to refer the cases to the Central Government Industrial Tribunal at Chennai within two months,” the judge said.

He recalled that the Supreme Court in Western India Match Company Limited Vs. Workmen (1974) had said: “In the sunny days of the market economy theory, people sincerely believed that the economic law of demand and supply in the labour market would settle a mutually beneficial bargain between the employer and the workmen.

“This law they venerated as natural law. They had an abiding faith in the verity of this law. But the experience of the working of this law over a long period has belied their faith. Later generations discovered that the workmen did not possess adequate bargaining strength to secure fair terms and conditions of service.

“When the workmen also made this discovery, they organised themselves in trade unions and insisted on collective bargaining with the employer. This created new problems of maintaining industrial peace and production for the society. It was therefore considered that the society has also an interest in the settlement of the terms of employment of industrial labour.

“While formerly there were two parties at the negotiating table— the employer and the workman, it is now thought that there should also be present a third party, the State as representing the interest of the society. The Industrial Disputes Act gives effect to this new thinking.”

“By Section 4, the officer certifying the Standing Order is directed to adjudicate upon the fairness or reasonableness of the Standing Order. The Certifying Officer is the statutory representative of the society. While adjudging the fairness of a Standing Order, the officer should consider and weigh the social interest in the claims of the employer and the social interest in the demands of the workmen.”