Settlement Between Employee Union & Employer Would Not Override Model Standing Orders Unless It Is More Beneficial To Employee : Supreme Court

The Supreme Court observed that any settlement between employee Union and the Employer would not override the Model Standing Order, unless it is more beneficial to the employees.

The employer and workman cannot enter into a contract overriding the statutory contract embodied in the certified Standing Orders, the bench of Justices Abhay S. Oka and Sanjay Karol observed.

In this case, the High Court of Bombay had confirmed the award passed by the Central Government Industrial Tribunal (‘CGIT’) rejecting the demand of the Union for reinstatement with full back wages. In appeal filed before the Apex Court, the issues raised were : (1) Which is the Appropriate Authority empowered to issue the Standing Order(s) under the Industrial Employment (Standing Orders) Act, 1946 ? (2) Whether private agreement/settlement between the parties would override the Standing Order?

As regards first issue, the court found that the Bombay Model Standing Order would be applicable to the parties. As regard the other issue, the court, referring to its earlier rulings observed:

"On various occasions, this Court has observed that the certified standing orders have a statutory force. The Standing Order implies a contract between the employer and the workman. Therefore, the employer and workman cannot enter into a contract overriding the statutory contract embodied in the certified Standing Orders"

The bench noted that the High Court had held that the Model Standing Order is not a statutory provision but, at best, a statutorily imposed condition of service that a settlement or award can alter. Referring to the relevant Clauses of the Bombay Model Standing Order, the court observed:

"A cumulative reading of aforesaid clauses reveals that a workman who has worked for 240 days in an establishment would be entitled to be made permanent, and no contract/settlement which abridges such a right can be agreed upon, let alone be binding. The Act being the beneficial legislation provides that any agreement/contract/settlement wherein the rights of the employees are waived off would not override the Standing Orders."

Therefore, the bench allowed the appeal and set aside the High Court judgment and the award.

Case details

Bharatiya Kamgar Karmachari Mahasangh vs Jet Airways Ltd. | 2023 LiveLaw (SC) 564 | 2023 INSC 646

Headnotes

Labour Law - Model Standing Order - Any settlement, the employee Union enters into with the Employer would not override the Model Standing Order, unless it is more beneficial to the employees - Certified standing orders have a statutory force. The Standing Order implies a contract between the employer and the workman - The employer and workman cannot enter into a contract overriding the statutory contract embodied in the certified Standing Orders. (Para 6-13)

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