Workmen of Motipur Sugar Factory (Private) Ltd v Motipur Sugar Factory (1965)

This is one of the two decisions every student of this Unit must have at command on go-slow, and it is the leading authority on a procedural question of very wide importance: what happens when the employer holds no domestic enquiry at all before discharging a workman.

The answer given here is that a defective enquiry and no enquiry stand on the same footing. In either case the employer may come to the Tribunal and justify the discharge on the merits by leading evidence, and the Tribunal then tries the merits itself instead of reviewing a domestic finding. The employer loses the advantage he would have had from a properly held enquiry; he does not lose the case.

Two further propositions come out of it. First, on the scope of a reference: where the reference is in wide and general terms — "whether the discharge was justified" — the Tribunal is entitled to investigate the real ground of the discharge, and is not confined to the reason recited in the notice. Secondly, on go-slow itself: the judgment shows how it is proved, and the method is instructive — not by the impression of witnesses, but by comparing crushing speed over comparable periods with the labour force held constant.

The Court also recorded, in passing, that before its condemnation of the practice in Bharat Sugar Mills Ltd v Shri Jai Singh, it had "not been unusual in the State of Bihar for workmen to give notice of go-slow to employers as if it was a legitimate weapon to be used in matters of dispute". That sentence marks the point at which go-slow ceased to be treated as an industrial weapon at all.

The respondent was a sugar factory, whose crushing season usually started in the first half of November each year. The appeal concerned November and December 1960, and the discharge of 119 workmen employed as cane carrier mazdoors, cane carrier supervisors or jamadars. All of them were seasonal workmen.

From the season 1956-57 the respondent had introduced an incentive bonus scheme, which continued from season to season with changes, the management consulting the workmen at the beginning of each season. The scheme proposed for 1960-61 contained changes which the workmen did not accept. One feature of the scheme was that the crushing of sugar cane per day should be 32,000 maunds. On 7 November 1960 the general secretary of the union suggested alterations, the principal one being that the norm for a day's crushing should be 125,000 maunds before incentive bonus was paid. No agreement was reached.

The factory's case was that the secretary then incited the workmen to go slow. A mild go-slow in the cane carrier department — described by the Court as "the basic department in a sugar mill" — began from the very start of the season on 10 November 1960; and from 27 November 1960 the workmen of that department began, in combination with one another, to go slow deliberately, wilfully and in a planned manner, reducing the average daily crushing to about 26,000 maunds, well below the average of previous seasons. This was said to be technically unsafe and to have created an acute shortage of fuel which might have caused a complete stoppage of the mill and a major breakdown of the machinery.

The notice of 15 December 1960

When the position became serious the respondent issued a general notice on 15 December 1960, put on the notice board with Hindi and Urdu translations, served individually on each workman of the cane carrier department, and copied to the secretary of the union.

The Court analysed the notice as falling into two parts, and the analysis is the key to the case.

The first part set out the facts and made the charge. It stated that, at the instigation of the general secretary of the union, the workmen had from the very beginning of the season failed in their duty to ensure adequate and regular loading of the cane carrier; that with effect from 27 November 1960 they had, in combination with each other, deliberately and wilfully resorted to "a clear 'go-slow' tactics", a fact said to have been openly admitted by the general secretary in the presence of the Labour Superintendent and the Labour Officer, Muzaffarpur, in discussions held in the office of the Assistant Labour Commissioner on 6 December 1960; that the average daily crushing had been deliberately reduced to about 26,000 maunds, of which more than 2,000 maunds was attributable to the newly introduced device of direct feeding of the cane carrier by cane carts weighed during the night and not to any effort of the workmen, so that the actual crushing was "practically something between 23,000 and 24,000 maunds only", which was highly uneconomical and technically unsafe for a factory with an installed crushing capacity of more than 1,200 tons a day; and that about 14,000 bales of extra bagasse kept in stock as reserve had already been consumed in the past twelve days, so that the boilers might at any moment go out of steam for want of bagasse fuel, leading to an abrupt stoppage of the mills and finally a major breakdown of machinery.

The second part stated the action intended. Unless the workmen voluntarily recorded their willingness individually to discharge their duties faithfully and diligently by feeding the cane carrier so as to give a minimum average daily crush of 32,000 maunds, excluding stoppages other than those due to over-loading or under-loading of the cane carrier, they would be considered no longer employed. They were to record their willingness in the office of the Factory Manager by 4 p.m. on Saturday 17 December 1960, failing which they would "stand discharged from the service of the company without any further notice with effect from 18-12-1960", their places being filled by recruiting other labour.

The union's secretary replied the same day, calling the notice "full of maliciously false and mischievous statements", denying that the workmen had adopted go-slow tactics or that he had advised them to, and saying that it was "simply fantastic" to ask a worker to undertake to crush at least 32,000 maunds a day.

The discharge and the reference

Three workmen gave the undertaking; the rest did not. On 17 December 1960 at 5 p.m. the respondent issued a second notice naming 119 workmen of the cane carriers department who had failed to record their willingness "to work faithfully and diligently in accordance with the management's notice dated 15-12-1960", declaring them discharged and struck off the rolls with effect from 18 December 1960, forfeiting their right to occupy their former place of work on pain of prosecution for criminal trespass, and stating that their final accounts would be ready by 4 p.m. on 19 December.

No enquiry was held as required by the Standing Orders before the services were dispensed with. No document headed as a charge-sheet was issued.

A general strike followed, on notice given by the union on 17 December, and continued until 22 December 1960, when it was agreed that the case of the discharged workmen and the question of wages for the strike period would be referred to adjudication. A joint application by both parties was made to Government on 21 December 1960, and on 25 January 1961 the Government referred two questions to the Industrial Tribunal, Bihar:

1. Whether the discharge of the workmen mentioned in the Appendix was justified; if not, whether they should be reinstated and/or are entitled to any other relief.
2. Whether the workmen should be paid wages for the period from 16.00 hours on 18 December 1960 to 8.00 hours on 22 December 1960.

Before the Tribunal the question actually tried was whether there was go-slow between 27 November and 15 December 1960. Both sides led evidence — largely documentary, and drawn from the factory's own past performance. By its award of 11 May 1962 in Reference No. 4 of 1961 the Tribunal found that there had been go-slow, and held the discharge fully justified. The second question was not pressed and was decided against the workmen. The workmen appealed by special leave.

The appellants raised three contentions, and the Court dealt with them in turn:

1. That the Tribunal had misdirected itself as to the scope of the reference: all it had to decide was whether discharge for not giving an undertaking was justified, and it was no part of its duty to decide whether there had been go-slow.
2. That since no charge-sheet had been given and no enquiry held as required by the Standing Orders, it was not open to the employer to justify the discharge before the Tribunal, and the Tribunal had no jurisdiction to go into the merits of the go-slow question.
3. That the finding of go-slow was perverse and reached by ignoring relevant evidence.

All three contentions were rejected and the appeal was dismissed, the parties being left to bear their own costs.

On the scope of the reference

The term of reference was "wide and general". It asked the Tribunal to decide whether the discharge was justified and did not mention the grounds on which the discharge was based; "it is for the tribunal to investigate the grounds and decide whether those grounds justify discharge or not".

The appellants' argument that the Tribunal was confined to the reason recited in the notice of 17 December would, said the Court, be "taking much too technical a view". The two notices of 15 and 17 December must be read together — the later notice expressly referring to the earlier one. Read together, "though the discharge is worded as if it was due to the failure to record their willingness to work faithfully and diligently, it was really due to the workmen concerned using go-slow tactics". The first part of the notice of 15 December contained the charge; the second part told the workmen what they had to crush to avoid it, and indicated that the respondent "was prepared to let bygones be bygones" if an undertaking were given.

The Court added a point of pleading which is very usable. The reference was made on the joint application of both parties. If the workmen had wished to confine the dispute, "it would have been easy" to frame the item as: "Whether the discharge of the workmen mentioned in the appendix on the ground of their failure to give an undertaking was justified?" The very fact that the matter was put in wide words showed that the parties did not wish to confine it. Both parties had, moreover, understood the dispute to be about go-slow, which is why voluminous evidence was led.

Taking into account the wide terms of the reference, the manner in which it was understood before the Tribunal, and the requirement that it be read along with the two notices — particularly since it was made soon afterwards at the joint application of the parties — the Tribunal was entitled to go into the real dispute, namely whether the discharge was justified on the ground of misconduct in the form of go-slow.

On the absence of an enquiry — the central holding

The Court first disposed of the assertion that there had been no charge. The first part of the notice of 15 December, served on each individual workman, "was certainly a charge". It was true that it was not headed as a charge and did not say that an enquiry would follow, "which is the usual procedure when a formal charge is given"; even so, "there can be no doubt that the workmen concerned knew what was the charge against them".

It then stated the settled position:

"It is now well-settled by a number of decisions of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it."

In such a case the employer "would not have the benefit which he had in cases where domestic enquiries have been held". The entire matter would be open before the Tribunal, which would have jurisdiction not only to go into the limited questions open to it where a domestic enquiry has been properly held — the position in Indian Iron & Steel Co. v Their Workmen — "but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified".

The Court referred to M/s Sasa Musa Sugar Works (P) Ltd v Shobrati Khan, Phulbari Tea Estate v Its Workmen and Punjab National Bank Ltd v Its Workmen, which had been further considered in Bharat Sugar Mills Ltd v Shri Jai Singh, where reference was also made to the decision of the Labour Appellate Tribunal in Shri Ram Swarath Sinha v Belsund Sugar Co. The effect of the omission to hold an enquiry had there been put thus: "the tribunal would not have to consider only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have really been made out".

Three of those cases had arisen on applications under s. 33; but "in principle we see no difference whether the matter comes before the tribunal for approval under s. 33 or on a reference under s. 10". In either case, if the enquiry is defective or none has been held as required by the Standing Orders, "the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper". Phulbari Tea Estate was itself a s. 10 reference, the only difference being that there an enquiry had been held though defectively. "A defective enquiry in our opinion stands on the same footing as no enquiry."

The practical justification given for the rule is the part most worth learning, because it explains the rule rather than merely stating it. If a dismissal without enquiry had to be set aside on that ground alone, "it would inevitably mean that the employer will immediately proceed to hold the enquiry and pass an order dismissing the employee once again". A second industrial dispute would then arise, and on that occasion the employer would be entitled to rely on the enquiry he had by then held and to claim its benefit. The workman would therefore be worse off, and the whole process delayed. Whereas if the employer is put to proving his case on the merits before the Tribunal itself, "that clearly would be to the benefit of the employee". This approach, said the Court, "is consistent with the approach which industrial adjudication generally adopts with a view to do justice between the parties without relying too much on technical considerations and with the object of avoiding delay in the disposal of industrial disputes".

Accordingly, "no distinction can be made between cases where the domestic enquiry is invalid and those where no enquiry has in fact been held".

On the finding of go-slow

Whether there was go-slow between 27 November and 15 December 1960 is a question of fact, and the Court ordinarily does not go into findings of fact unless, for example, the finding is based on no evidence — which was not the case. But "as the case involves the discharge of as many as 119 workmen we have decided to go broadly into the evidence to see whether the finding of the tribunal is patently wrong."

The history. The respondent had complained of go-slow as far back as 1950, when a court of enquiry was constituted and reported that there had been a slow-down for several days in February and March 1950, instigated and sponsored by union leaders. Notices of go-slow were given by the workmen in 1951, 1952, 1954 and 1955, and on some occasions the threats materialised; the management had also complained in 1955, 1957 and 1958, more than once, of go-slow at the cane carrier. "Thus it appears that resorting to go-slow was a common practice in this factory."

The admission. In a conference with the Assistant Labour Commissioner during the 1959-60 season the union's secretary had accepted that there had been a drop in the cane crushed, and had said that the workmen, being dissatisfied with the incentive bonus scheme, had withdrawn the extra efforts they had been putting in since the scheme was first introduced in 1956-57. He further admitted in evidence that when the 1960-61 scheme was proposed the workmen resolved in a meeting that if the new system were introduced without their consent they would not put in any extra effort beyond the normal crush. The season beginning in November 1960 accordingly "started with the withdrawal of extra efforts by the workmen, which in plain terms means that the workmen were not prepared to do what they had been doing in the previous season".

The measure: crushing speed, not actual crushing. The Court accepted the respondent's contention that the test is the crushing speed for a day of 24 hours, and not the actual crushing per day or the average crushing over a period. Actual crushing depends on many factors, particularly on stoppages; crushing speed per 24 hours is arrived at by excluding stoppages and working out what would have been crushed in 24 hours had there been none. The notice of 15 December, though it did not use the words "crushing speed", had asked for 32,000 maunds excluding stoppages other than those due to over-loading or under-loading of the cane carrier — the exception being the very stoppages attributable to the deliberate action of the cane carrier workmen. The Court thought this explanation "reasonable, for it is impossible to accept that 32,000 maunds were required to be crushed irrespective of stoppages beyond the control of the workmen". The labour force having been more or less the same throughout those years, the question was whether there was a significant drop in crushing speed between 27 November and 15 December 1960; and a significant drop "could only be due to go-slow tactics which have been euphemistically called withdrawal of extra efforts".

The charts. The appellants relied on Ex. W-3, a chart of actual crushing per day from 1954-55 to 1960-61, which the Court held had "nothing to do with crushing speed". The workmen's other chart showed cane crushed, actual crushing days and crushing per day, but not crushing speed, and took no account of stoppages. The respondent's Ex. W-4 showed crushing speed for the seasons 1954-55 to 1959-60, and was "the proper chart". The figures for 1956-57 to 1959-60 were set aside, because incentive bonus schemes were in force in those years; but 1954-55 and 1955-56 were relevant, there being then no incentive bonus and no night weighment of carts. The average crushing speed was 29,784 maunds in 1954-55 and 30,520 maunds in 1955-56. Night weighment of carts, begun in the middle of the 1959-60 season, was admitted to have increased daily crushing — the respondent put the increase at over 2,000 maunds, the union's secretary at about 2,500. On that footing it was "not improper to accept that the crushing speed with night weighment of carts would be in the neighbourhood of 32,000 maunds per day", so the notice had not fixed anything abnormal. That the respondent had been prepared to accept 30,000 maunds during the bonus negotiations was "easily understood, for a proper incentive bonus scheme always fixes a norm slightly lower than the average in order that there may be greater incentive to labour to produce more than the average".

The Factories Act point. The appellants argued that 32,000 maunds per 24 hours was wrongly computed because it did not allow for the half-hour's rest per shift required by s. 55(1) of the Factories Act 1948, so that crushing speed should be worked out on 22½ hours and would come to only 30,000 maunds; they relied on s. 55(2), which permits the State Government to exempt a factory from sub-s. (1) by written order for reasons specified, provided the total number of hours worked without an interval does not exceed six. The respondent relied on s. 64(2)(d), under which the State Government may make rules exempting workers "engaged in any work which for technical reasons must be carried on continuously" from ss. 51, 52, 54, 55 and 56.

The Court held that s. 64(2)(d), being a special provision, overrides both sub-ss. (1) and (2) of s. 55. Rules had been framed by the Government of Bihar in 1950 exempting sugar factories from s. 55 for the handling and crushing of cane, subject to the condition that the workers concerned be allowed light refreshment or meals at the place of employment, in a room reserved for the purpose or in a canteen, once during any period exceeding four hours. Noting s. 64(5), under which rules made under the section remain in force for not more than three years, the Court observed that there was nothing to show the 1950 rules had not been renewed and that the continuing application of the exemption was not disputed. The workmen therefore could not claim half an hour's rest per shift, though "a few minutes would be allowed to each individual in turn in each shift for light refreshment or meals in such a way that the work does not stop". Allowing half an hour or so in total, the average crushing speed would come down to "slightly over 31,000 maunds per day, and that is all the adjustment that the appellants can claim".

The figures that decided it. Chart Ex. W-7 showed a crushing speed of 29,859 maunds per day from 10 to 26 November, the period of the mild go-slow, and of 27,830 maunds for 24 hours during the period from 27 November to 15 December 1960. Measured against 32,000 without adjustment, or a little over 31,000 with it, "there is certainly a significant drop"; and there was a significant drop of over 2,000 maunds per day even against the 10-26 November figure. Even taking 30,000 maunds — the figure the respondent had itself offered during the bonus discussions — the drop from 27 November was over 2,000 maunds a day. Where comparisons are made on the basis of crushing speed and the labour force is more or less constant, "other minor factors ... do not matter at all". The Tribunal's conclusion could not be said to be unjustified.

The last argument. It was urged that the workmen were given notice on 15 December and discharged on 17 December without a chance to give the production desired. The Court's answer was that the charge in the notice of 15 December was of go-slow from 27 November; the undertaking was asked for as an improvement for the future, the respondent being "apparently willing to overlook the earlier lapse". And "even assuming that the demand of an undertaking was unjustified, it does appear that the attitude of the workmen was that they would do no better"; in those circumstances they were discharged on the basis of the misconduct consisting of go-slow, which the Tribunal had found proved.

Where an employer dismisses or discharges a workman without holding the enquiry required by the Standing Orders, it remains open to him to justify the action before the Industrial Tribunal by leading all relevant evidence; the Tribunal then decides the merits for itself rather than reviewing a domestic finding, and the employer forfeits only the benefit he would have had from a properly held enquiry. No enquiry and a defective enquiry stand on the same footing, and the principle is the same whether the matter comes up under s. 33 or on a reference under s. 10. Where the reference is framed in wide and general terms, the Tribunal may investigate the real ground of the discharge and is not confined to the reason recited in the order, the relevant notices being read together.

Three things hold the judgment together.

The first is the Court's refusal to let form govern. The discharge order recited a failure to give an undertaking; the substance was a charge of go-slow, made in writing and served on every man affected. The notice was not headed "charge-sheet" and promised no enquiry; but the workmen knew exactly what was alleged against them, and the union's secretary answered the allegation point by point on the same day. Industrial adjudication looks to what the parties actually knew and actually fought about, and both the scope of the reference and the sufficiency of the charge were decided on that footing.

The second is the consequence-based justification of the rule on enquiries. The Court did not reason that the employer has a right to a second chance. It reasoned about what would happen if the contrary rule were adopted — an automatic setting aside, a fresh enquiry, a second dismissal, a second dispute, and this time an employer armed with a domestic finding that the Tribunal could only review on limited grounds. The workman gains nothing from the technical victory and loses the full trial he would otherwise have had. That is why the rule, though it may look like indulgence to a defaulting employer, is defended as being to the employee's benefit.

The third is the method of proving go-slow. Go-slow is difficult to prove precisely because nothing visible happens: no one strikes, no one refuses an order, the men are at their posts. The Court's answer is to find a measure that is insensitive to everything except effort. Actual output will not do, because it moves with stoppages. Crushing speed excluding stoppages will do, provided the labour force is constant and the comparison years are chosen with care — which is why the incentive bonus years were discarded and 1954-55 and 1955-56 preferred, and why the admitted gain from night weighment was added back. The workmen's own euphemism, "withdrawal of extra efforts", was then enough to supply the intention.