Supreme Court Upholds Dismissal of Union’s Appeal Despite Factual Error: All Escorts Employees Union vs. State of Haryana (2018)

Introduction

Date of the Judgment: March 23, 2018
Citation: (2018) INSC 221
Judges: A.K. Sikri, J., Ashok Bhushan, J.

Can a trade union, primarily representing employees of a specific company, extend its membership to workers of a different company? The Supreme Court of India addressed this question in a case involving the All Escorts Employees Union and the State of Haryana. The core issue revolved around whether the union could include employees of Yamaha Motor India, a company that was previously part of the Escorts Group but later became an independent entity. The Supreme Court, while acknowledging a factual error in its previous judgment, ultimately upheld its original decision, dismissing the union’s appeal. The judgment was delivered by a bench comprising Justice A.K. Sikri and Justice Ashok Bhushan.

Case Background

The All Escorts Employees Union, a registered trade union, represented employees of the Escorts Group of Industries, including those of Escorts Yamaha Ltd., a joint venture with Yamaha Motor Company, Japan. In 2001, Escorts Yamaha Ltd. was taken over by Yamaha Motor Company and renamed Yamaha Motor India Private Limited. Consequently, the employees of Yamaha ceased to be employees of an Escorts concern.

The union’s constitution, specifically Clause 4, stipulated that members who left jobs at any Escorts concern in Faridabad would cease to be members of the union. To include the Yamaha employees, the union amended Clause 4. However, the Registrar of Trade Unions, Haryana, refused to approve this amendment. The union challenged this decision in the High Court of Punjab and Haryana, which dismissed their petition on April 20, 2015.

Timeline

Course of Proceedings

The All Escorts Employees Union initially filed a writ petition in the High Court of Punjab and Haryana, challenging the Registrar of Trade Union’s decision to not approve the amendment to Clause 4 of their constitution. The High Court dismissed the petition. Subsequently, the union appealed to the Supreme Court, which initially dismissed the appeals on September 14, 2017. The Supreme Court observed that the workers of Yamaha had formed their own separate union, and hence, the purpose of the amendment stood frustrated. The Supreme Court also noted that Clause 4 was amended in 2007 and approved by the Registrar, which made the 2001 amendment a non-issue. The union then filed applications seeking recall of certain findings of the Supreme Court’s judgment, stating that the 2007 amendment was also withdrawn by the Registrar.

Legal Framework

The case primarily involves the interpretation of the Trade Unions Act, 1926. Specifically, the court considered the following provisions:

• Section 6(e) of the Trade Unions Act, 1926: This section outlines the provisions to be included in the constitution of a registered trade union. Clause (e) states that the constitution must provide for “the admission of ordinary members who shall be persons actually engaged or employed in an industry with which the Trade Union is connected.”
• Section 9A of the Trade Unions Act, 1926: This section mandates that a registered trade union must have not less than ten percent or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as its members.
• Section 22 of the Trade Unions Act, 1926: This section stipulates that not less than one-half of the total number of the office-bearers of every registered Trade Union in an unrecognised sector shall be persons actually engaged or employed in an industry with which the Trade Union is connected.

These provisions of the Trade Unions Act, 1926 ensure that a trade union represents the interests of workers in a specific industry or establishment and that the union has a genuine connection with the workers it represents.

Arguments

The All Escorts Employees Union argued that the amendment to Clause 4 of their constitution was necessary to include the employees of Yamaha Motor India, who were previously part of the Escorts Group. The union contended that the Registrar of Trade Unions should have approved the amendment.

The union also argued that the Supreme Court’s observation in its earlier judgment, stating that the amendment to Clause 4 carried out in the year 2007 has been approved by the Registrar, Trade Union, was factually incorrect. The union submitted that the Additional Registrar, Trade Union, Haryana, had mentioned in his counter-affidavit that the order dated October 21, 2015, was passed whereby the amendment approved vide letter dated November 24, 2007, was withdrawn/cancelled by invoking clause 4 of the General Clauses Act, 1897.

On the other hand, the respondents, including the State of Haryana, argued that the union’s attempt to include Yamaha employees was not valid because the Yamaha workers had formed their own separate union, which was duly registered and recognized by the management of Yamaha. This separate union, known as Yamaha Motor Employees Union, represented the interests of the Yamaha workers. The respondents further argued that the union was not in compliance with the provisions of Section 9A read with Section 22 of the Trade Unions Act, 1926, as they did not have the required number of members from the Yamaha establishment.

The intervenor, All India Yamaha Motor Employees Sabha, supported the respondents, stating that their union was formed for the exclusive benefit of the workmen of the Faridabad Plant of Yamaha. They also stated that all the workers of the said Faridabad Plant are the members of the intervenor Union and they are not being represented by the appellant-Union.

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues in the judgment. However, the core issue was whether the All Escorts Employees Union could extend its membership to workers of Yamaha Motor India, given that the Yamaha workers had formed their own separate union. The court also considered whether the factual error in its previous judgment warranted a recall of the findings.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court, while acknowledging the factual error in its previous judgment regarding the 2007 amendment, upheld its decision to dismiss the union’s appeal. The court emphasized that the primary reason for dismissing the appeals was that the workers of Yamaha had formed their own separate union, which was duly registered and recognized by the management of Yamaha.

The Court also highlighted that the appellant-Union’s membership structure did not align with the requirements of Section 9A read with Section 22 of the Trade Unions Act, 1926, as the union did not have the required number of members from the Yamaha establishment.

The Court observed that the workers of Yamaha had formed their own separate Trade Union which is also duly registered with the Registrar, Trade Union and stands recognised by the managment of Yamaha, the very purpose of amending clause 4 stands defeated.

The Court cited Section 6(e) of the Trade Unions Act, 1926, which states that “the admission of ordinary members who shall be persons actually engaged or employed in an industry with which the Trade Union is connected”, and Section 9A of the Trade Unions Act, 1926, which mandates that a registered Trade Union of workmen shall at all times continue to have not less than ten per cent or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as its members.

The Court also cited Section 22 of the Trade Unions Act, 1926, which stipulates that not less than one-half of the total number of the office-bearers of every registered Trade Union in an unrecognised sector shall be persons actually engaged or employed in an industry with which the Trade Union is connected.

The Court held that once it is found that all the workmen of Yamaha are members of the intervenor Union, obviously the appellant-Union is not in a position to comply with the provisions of Section 9A read with Section 22 of the Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the workers of Yamaha had formed their own separate, registered, and recognized union. This indicated that the All Escorts Employees Union did not have a legitimate basis to represent the Yamaha workers. The court also focused on ensuring compliance with the Trade Unions Act, 1926, particularly Sections 6(e), 9A, and 22, which emphasize the connection between a trade union and the industry or establishment it represents. The Court’s reasoning was based on the fact that the purpose of the amendment was frustrated by the fact that the Yamaha workers had their own union.

The Court considered the practical implications of its decision. If the All Escorts Employees Union were allowed to represent the Yamaha workers, it would undermine the purpose of the Trade Unions Act, 1926, which is to ensure that trade unions genuinely represent the interests of workers in a specific industry or establishment.

The Court’s decision was also influenced by the fact that the Yamaha workers themselves had chosen to form their own union, indicating that they did not wish to be represented by the All Escorts Employees Union.

The Court’s decision was based on a careful consideration of the facts, the relevant legal provisions, and the overall purpose of the Trade Unions Act, 1926.

The Court observed, “In this behalf, it would be pertinent to mention that All India Yamaha Motor Employees Sabha has filed intervention application. In this application, it is, inter alia, stated that intervenor Trade Union is formed for the exclusive benefit for the workmen of Faridabad Plant of Yamaha.”

The Court further observed, “As per this clause, ordinary members should be those who are actually engaged or employed in an industry in whcih the Trade Union is connected.”

The Court stated, “Once we find that all the workmen of Yamaha are members of the intervenor Union, obviously the appellant-Union is not in a position to comply with the provisions of Section 9A read with Section 22 of the Act.”

Key Takeaways

• A trade union’s membership should primarily consist of workers employed in the industry or establishment it is connected with.
• If workers of a particular establishment form their own separate union, it undermines the purpose of another union trying to extend its membership to those workers.
• Trade unions must comply with the provisions of the Trade Unions Act, 1926, particularly Sections 6(e), 9A, and 22, to maintain their representative character.
• Factual errors in a judgment may not warrant a recall of findings if the main reasoning remains valid.

Directions

No specific directions were given by the Supreme Court in this judgment.

Specific Amendments Analysis

Not applicable as no specific amendment was discussed in the judgment.

Development of Law

The judgment reinforces the principle that a trade union’s membership should be limited to workers in the industry or establishment with which the union is connected. It also emphasizes the importance of compliance with the Trade Unions Act, 1926, and the significance of workers’ choice in forming their own unions. There is no change in the previous positions of law but the decision clarifies the interpretation of Sections 6(e), 9A and 22 of the Trade Unions Act, 1926.

Conclusion

The Supreme Court dismissed the applications filed by the All Escorts Employees Union, upholding its earlier decision. The Court clarified that despite a factual error in its previous judgment, the core reasoning remained valid: the Yamaha workers had formed their own separate union, and therefore, the All Escorts Employees Union could not extend its membership to them. The judgment underscores the importance of a trade union’s connection to the industry or establishment it represents and its compliance with the Trade Unions Act, 1926.