Karnataka High Court Dismisses Grasim's Plea Against Increase In Employees' Retirement Age To 60 Yrs

A division bench of Justice Krishna S Dixit and Justice P Krishna Bhat while dismissing the appeal said, "The Appellant is directed to continue the workmen in its service till they attain the age of 60 years in terms of amendment to Clause 29 of the Certified Standing Orders w.e.f. 17.03.2018."

Further it directed the company to reinstate with continuity of service and full back wages such workmen who retired on or after 17th September, the day on which the writ petition was dismissed, if on medical examination they are not found to be unfit for reemployment.

Such of the retirees falling under the preceding clause but on medical examination are found to be unfit for reemployment shall be paid only 50% of the Back Wages for the period between the date of their retirement and the date on which they are called for medical examination, it ordered.

"The Appellant shall pay 50% of the Back Wages to such of the employees who retired from service on attaining the age of 58 years on or after 17.03.2018, for the period between the date of their retirement and the date on which they attained 60 years or the date of death, whichever is earlier. Moreover, the claim of any other employees who are otherwise entitled to the benefit of amended Clause 29 of Certified Standing Order but do not fit into any of the clauses hereinabove may approach the 2nd Respondent – Deputy Labour Commissioner and work out their grievances. The amount payable by way of Back Wages shall be paid within a period of 60 days and that the delay shall carry interest at the rate of 2% per mensem," it added.

Background:

The State Government amended Entry No. 15–A of Schedule I and thereby enhanced the age of retirement to 60 years by modifying the Model Standing Orders (hereinafter 'MSO') vide the Karnataka Industrial Employment Standing Orders (Amendment) Rules 2017 (hereinafter '2017 Amendment Rules') that came to be gazetted on 28.03.2017.

The Resp. – Union vide representation dated 06.04.2017 had applied to the 2nd Resp.–Deputy Labour Commissioner (hereinafter 'DLC') for the modification of CSO by introducing 60 years in the place of 58, as the age of retirement in tune with 2017 Amendment Rules.

The 2nd Respondent (Deputy Labour Commissioner) vide order dated 17.03.2018 certified the modification to Clause 29 of the CSO and thereby enhanced the age of retirement to 60 years consistent with the said Amendment.

Court Findings:

The bench firstly noted, "Ours is a constitutionally ordained Welfare State. The Statute under which the lis at hands has arisen enacts a 'labour welfare policy' consistent with the provisions of Part – III & Part - IV of the Constitution."

Then it took into account the aspect of increased life expectancy and said, "It is admitted by the appellant that Clause 29 of the CSO prescribed 58 years as the age of retirement way back in the year 1971 and it continued even post 2017 Amendment Rules. It is pertinent to note that, during the said period, the Industrial Employment (Standing Orders) Central Rules 1946 had also not prescribed any age of retirement. The age of superannuation in any employment is prescribed mainly keeping in view the contemporary life expectancy of the working classes and their agility levels in general. What was true of the bygone era becomes untrue of the present, because of the march of time."

It noted that the government has kept in view the marked increase in expectancy of life of people to 69.16 years in 2017 as against 54.69 in 1981 when 58 years was fixed as the age of retirement.

The bench also noted that a challenge to the 2017 amendment to the state rules was challenged in the high court, it was dismissed and appeals against the order were allowed to be withdrawn.

The court also junked the contention of the company that it would cause additional financial burden. The bench said, "We are conscious of the fact that because of elongation of service on account of enhanced age of retirement, the employer may have to shell out some additional amounts which he may otherwise save by recruiting fresh candidates; however, this is one of the inevitables in the realm of service & industry. This assumption again is on the premise that the 'principle of progressive pay scales/wage rates' does obtained in the establishment."

It added, "It is blood & sweat of labour that produce goods & services. That is how wealth of the nation is generated; of course the investment of capital by the employer being a constitutive factor of the industry also cannot be discounted. The arguable additional expenditure if any is a matter of management of industrial finance. It is not the case of Appellant that this idea is unviable. Therefore, an employer cannot chant the mantra of economics to silence the grieving voice of workers for a marginally higher age of superannuation."

Further it opined, "If the employees fit & agile even after attaining the age of 58 years are made to quit the employment in a wholesale way because of unsustainable prescription of superannuation age, that would be unjust, & unreasonable. Workmen continuing in the employment at that age & stage of life is more than needed for obvious reasons, the evening of life hardly having set in. They cannot park their otherwise productive years at a bay, financially unaffected. They cannot roam around in the labour market to sell their sweat. These are costly days and blood avails cheaper than bread. Chances of being gainfully employed post retirement are bleak, given the plausible assumption that there would be no takers for the 'retirees'. In a sense they suffer 'social exclusion'. What they should do on superannuation thus would stare at them as a cruel question and that is humanely answered by the impugned orders, which would grace them with more fruitful years."

The bench also expressed, "Our industrial houses are not the subsidiaries of the East India Company of the bygone century. 'Hire & fire' policy has long ago been buried in the Law Reports. Countenancing the contention of appellant for retaining the very same age of retirement that was fixed in a different fact matrix then obtaining, virtually amounts to disregarding the contemporary socio–economic realities of life."

Upholding the order of the Labour commissioner and the single judge the bench said, "The impugned Orders of the statutory authorities accord with the life realities of the times. The learned Single Judge having considered this aspect of the matter has negatived the said Contention."

Company had an ill motive to get rid of as many workmen as possible on the ground of purported superannuation, by protracting this legal battle.

The bench observed that, "The appellant despite issuance of multiple Notices of hearing, chose to remain absent before the 2nd Resp. – Certifying Authority, even after filing a brief objection statement. An industry of Appellant's stature faking absence before the Authority on the pretext that its challenge to the 2017 Amendment Rules was still pending in a Writ Petition and therefore matter was sub judice is only a lame excuse that fails to impress us."

It added, "Case of the appellant was one of 'non–cooperative absence', giving scope for attributing some ill motive such as the dilatory tactics designed to get rid of as many workmen as possible on the ground of purported superannuation,by protracting this legal battle."

Further it observed, "When the mighty employer is not cooperative, the statutory authorities cannot remain as mute spectators ad infinitum. The conduct of the Appellant borders the zone of un-consionability. The authorities have to grant redressal to the genuine grievances of the vulnerable working class whom the statute intends to protect."

The bench said, "What the Certifying Authority and the Appellate Authority have done in the given circumstances broadly accords with the principal intent and policy content of the legislation. In their action lie the reason & justice. Their actions cannot be faltered."

The bench also dismissed the contention of the appellant of being in the category of hazardous industry. It said "The industry of the Appellant is not registered as involving 'hazardous processes' under the provisions of the Factories Act, 1948."

Accordingly it dismissed the appeal.

Case Title: THE MANAGEMENT OF M/S GRASIM INDUSTRIES LTD v. THE GENERAL SECRETARY HARIHAR POLYFIBERS, EMPLOYEES UNION & Others

Case NO: WRIT APPEAL NO. 100250 OF 2021

Citation: 2022 LiveLaw (Kar) 262

Date of Order: 5TH DAY OF JULY, 2022

Appearance: Senior Advocate PRAMOD N.KATHAVI, FOR Advocates GANGADHAR S HOSAKERI, RACHANA BHARADHWAJ R, H.K.NAGABHUSHAN for appellants; Advocate S.L.MATTI, For C/R1; Advocate G.K.HIREGOUDAR, FOR R2 & R3

Click Here To Read/Download Judgment