Eviction Of Air India Employees Due To Privatisation Cannot Be Termed An Industrial Dispute: Bombay High Court

A division bench of Justice SV Gangapurwala and Justice Sandeep V Marne dismissed a batch of writ petitions filed by employee unions of Air India challenging the Central Government’s refusal to refer the dispute to the industrial tribunal.

“right to retain accommodation is governed by stipulations of leave and license agreement. There is specific remedy under the PP Act. No right is created in favour of employee to seek allotment of accommodation. in these peculiar facts and circumstances of the present case as well as for other reasons which are discussed in paragraphs to fallow, we are unable to hold that the dispute relating to housing is capable of being termed as the one connected with employment”, the court held.

Several employees of Air India Limited were allotted residential accommodations as per Air India Housing Allotment Rules, 2017 (Housing Rules). After the Central Government decided to privatise AIL, letters were issued to employees for vacating the allotted accommodations. The conciliation proceedings between employee unions and AIL failed after which the high court permitted the members of the petitioner unions to occupy their allotted accommodation till September 24, 2022 and granted the government liberty to decide whether to refer the dispute to the Industrial Tribunal by September 15, 2022.

The Central Government refused to refer the dispute. The court set aside that decision on the ground that no reasons were given by the Central Government and remitted the matter back to the Central Government for fresh decision. The Central Government on October 12, 2022 again declined to make a reference to the Central Government Industrial Tribunal holding that housing is not a term of employment and therefore the issue cannot be considered an industrial dispute. This order was challenged in the present petitions.

Section 10 of the Industrial Disputes Act, 1947 provides that if the government has the opinion that an industrial dispute exists, it can refer it to a tribunal for adjudication. An industrial dispute is a dispute that is related with the employment or terms of employment or conditions of labour.

The petitioner-unions submitted that housing is an integral part of employment with the respondent companies. From the Housing Rules, the court noted that employees are not granted accommodation as a matter of right. The accommodation is to be given as per availability and house rent allowance is to be stopped after allotment. The court noted that the employees are permitted to retain the accommodation during the tenure of their service and the rules make it clear that housing is a welfare function.

The employees who are allotted accommodations have executed leave and licence agreements in the prescribed format. The court said that the employees have agreed as per the terms of the leave and licence agreements that they are merely licensees in respect of allotted flats and the respondent companies have absolute right under the agreements to determine the same at any time without assigning any reason.

The petitioner unions contended that whether housing is a term of employment or not should not have been decided by the Central Government and should have been left for determination to the industrial tribunal. The court disagreed and said that it would be necessary for the government to first form an opinion as to whether the disputes come within the ambit of “industrial dispute”.

Petitioner-unions contended that industrial dispute includes every dispute which is connected with employment. Hence, it need not be a term of employment. The court said that while there is some connection between allotment of accommodation and employment, it doesn’t mean that everything having even a remote connection with employment would constitute industrial dispute.

The court opined that the employees who have occupied accommodations would not be remediless even upon rejection of the demand for a reference. They can demonstrate their alleged right to occupy the premises before the Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 during the eviction proceedings. They can also challenge the order of Estate Officer before the District Judge of Bombay City Civil Court. The court left all contentions about right of the employees on accommodation open to be decided in the eviction proceedings.

The petitioners also challenged the levy of damage charges of Rs. 15 lakhs in Mumbai. However, the court noted that there is no specific prayer for setting aside the decision of levy of penal rent. The court refused to decide the issue and held that the aspect of recovery of rent can be dealt with in proceedings under the PP Act.

The court noted that total number of flats is 3000 and only 410 employees continue to occupy accommodations out of which 238 have already submitted undertakings to vacate them. The petitioner-unions are only protecting the interest of 142 employees who have not shown willingness to vacate the accommodations, the court said. The court further noted that none of the petitioner-unions have given any details of the exact employees on whose behalf the petitions are filed.

Thus, the court dismissed the petitions. However, it restrained the respondents from recovering penal rent from employees for two weeks from the date of the judgement.

Case no. – Writ Petition (L) No. 34307 of 2022

Citation: 2023 LiveLaw (Bom) 138

Case Title – All India Service Engineers Association v. Union of India and Ors.