Kiran Raj

The Calcutta High Court has directed the Central Government to refer the dispute concerning the rollback of the retirement age of workmen at the Rupnarayanpur Unit of Hindustan Cables Limited (HCL) to the Central Government Industrial Tribunal (CGIT) under Section 10 of the Industrial Disputes Act, 1947. The court addressed the issue of procedural compliance in the reduction of the retirement age from 60 to 58 years and examined whether the dispute required adjudication before the appropriate industrial tribunal.

The case concerns the modification of the retirement age for workmen at the Rupnarayanpur Unit of HCL. Initially, as per certified industrial standing orders published on July 6, 1964, the superannuation age was set at 58 years, with a provision for an extension of service at the management’s discretion. A tripartite agreement dated June 7, 1974, later extended the retirement age to 60 years for a validity period of three years and two months, subject to approval by the company’s directors.

On May 19, 1998, the Department of Public Enterprises, Government of India, issued a directive instructing all public sector organizations, including HCL, to increase the retirement age of employees from 58 to 60 years. This directive was communicated again by the Ministry of Heavy Industries and Public Enterprises on August 21, 1998. However, financial difficulties arose at the Rupnarayanpur Unit of HCL, leading to a communication dated April 18, 2001, from the Ministry of Heavy Industries and Public Enterprises, instructing a rollback of the retirement age from 60 to 58 years.

A decision to that effect was taken at the 276th meeting of HCL’s Board of Directors on April 9, 2001. Subsequently, a memorandum of settlement was signed on August 28, 2001, between the management and the workmen, restoring the retirement age to 58 years. Despite communications and further developments between 2005 and 2010, several employees continued working until the age of 60.

In 2011, the matter was referred to the Assistant Labour Commissioner, Asansol, for conciliation. A record of the failure of conciliation was made on May 24, 2011, and communicated to the Central Government. In February 2013, HCL was taken over by the Ordinance Factory Board. On September 22, 2014, the Ministry of Heavy Industries issued a directive instructing the rollback of the retirement age from 60 to 58 years, aligning it with the company’s previous practice. The HCL management issued a 60-day notice to implement this change, leading the Workmen’s Union to file a writ petition challenging the directive.

The High Court examined the findings of the learned Single Bench, which had earlier stated that the notice dated December 20, 2014, reducing the retirement age, was not issued in compliance with the procedural requirements prescribed under Rule 34 of the Industrial Disputes Rules, 1957. The judgment stated that “the change of the retirement age from 60 to 58 years of the workmen of the Rupnarayanpur Unit of the appellant is vitiated by applying the principle of procedural ultra vires, since the notice impugned dated 24th December 2013, was not issued by the management in Form E prescribed under Rule 34 of the Industrial Disputes Rules, 1957 (Rules of 1957), and hence violated Section 9A of the Industrial Disputes Act, 1947 (Act of 1947).”

The High Court considered whether the lack of strict compliance with the prescribed format of Form E under Rule 34 would invalidate the notice entirely. The court referred to Manu Saxena v. Union of India (2019) 2 SCC 628, which discussed procedural compliance in labor matters. It was observed that “while it did not follow in letter and word of the prescribed Form E under Rule 34 of the 1957 Rules, it cannot be said that it has caused prejudice to the workmen.”

The judgment referred to Paradeep Phosphates Limited v. State of Orissa & Ors. (2018) 6 SCC 195, stating that “the roll back of retirement age of the workmen construes a privilege within the meaning of 8th Clause of the 4th Schedule of the Act of 1947.” The Supreme Court had noted in that case that “any unilateral withdrawal of such privilege amounts to contravention of Section 9A of the Act and such act of the employer is bad in the eye of the law.”

The High Court examined the refusal of the Central Government to refer the dispute to the CGIT. It referred to A.P. Foods v. S. Samuel & Ors. (2006) 5 SCC 469, stating that “where disputed questions of fact exist, the appropriate remedy lies before the Industrial Tribunal.” The judgment noted that “despite receiving notice of failure of conciliation by the management itself on 14th January, 2011, the Central Government was to take a stand in the impugned notice dated 20th December, 2014 that there was no need for reference of any industrial dispute was wholly incorrect and unsustainable in law.”

The judgment also referenced State Bank of Patiala v. S.K. Sharma (1996) 3 SCC 364, which discussed substantial compliance of procedural requirements. The court observed that “this Court is therefore of the view that the notice dated 20th December 2014 is in substantial compliance with Section 9A and Form E under Rule 34 of the Rules of 1957.”

The High Court directed the Central Government to refer the following issue to the CGIT at Kolkata under Section 10 of the Industrial Disputes Act, 1947:

“This Court directs the Central Government within a period of 30 days from the receipt of the copies of this order and refer the following issues for adjudication under Section 10 of the Industrial Disputes Act to the CGIT at Kolkata.”

It was also observed that

“Whether the rollback of the retirement age by its management and workmen of the Rupnarayanpur Unit of HCL was justified given its financial condition and other issues, and whether the workmen are bound by the same.”

The court stated that “the Central Government may choose to modify the text of the reference as set out hereinabove in any manner that it deems fit and necessary.”

Case Title: The Hindustan Cables Worker’s Union & Ors. v. The Union of India & Ors.
Case Number: F.M.A No. 75 of 2020 and MAT 254 of 2020
Bench: Justice Rajasekhar Mantha and Justice Ajay Kumar Gupta

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