A STUDY ON BOKAJAN CEMENT CORPORATION EMPLOYEES v.

CEMENT CORPORATION OF INDIA LTD – AIR 2004 SC 245

(In Light of Trade Unions Act, 1926)

Labour and Industrial Law

Submitted by

Poulomi Dasgupta

SF0115028

Third Year & Semester VI

National Law University, Assam

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 Content

Table of Cases………………………………………………………Page Number 3

Table of Statutes…….…..…...………………………………...……Page Number 3

Table of Abbreviations …………………..………...……......……....Page Number 3

Introduction…………………………………….……………………Page Number 5

Objectives (s)………………………………..……………………….Page Number 5

Scope and Limitations………………………...……………………...Page Number 6

Research Questions …………………………....................……...…..Page Number 6

Research Methodology…………….........................................…..…..Page Number 6

1.Facts……………..…….........................…….…………………..…Page Number 7

2. Judgement..…………..................………...….………....………Page Number 7-8

3. Case Analysis…...……………………….…….………...……..Page Number 8-13

4. Latest Judicial Position.................................................................Page Number 13

Conclusion...................................................................................Page Number 14-15

Bibliography………...……………………......…...………………....Page Number 16

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Table of Cases

1. Bokajan Cement Corporation Employees Union v Cement Corporation Of India Ltd

2. State Bank of India Staff Association v State Bank of India

3. S Valaiyapathy v Indian Overseas Bank

4. Ashok Dhoble v Bhojraj Dhotke

5. Sibikutty Francis v Kerala State Electricity board ltd

Table of Statutes

1926 – Trade Unions Act

1947 – Industrial Disputes Act

Table of Abbreviations

1 SC Supreme Court
2 Mad. Madras
3 LNN Labour Law Notes

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This project is a case study of Bokajan Cements Corporation Employee Union ltd v Cement
Corporation of India. The pertinent question that is the matter of contention in this case is :

Does of termination of service in an establishment result in cessation of membership of a

trade union?

Now, as held in the judgement in this case, termination of service in an establishment doesn’t
automatically result in the cessation of membership of a trade union. The principle behind
that decision was that since section 6(e) of Trade Unions Act of 1926 only provides for
admission of ordinary members and doesn’t mention anything with regards to cessation of
membership, membership f trade unions cannot be terminated just on the basis of cessation
from employment, as there is no single provision in the trade unions aact, 1926 or even the
constitution of the concerned trade union that talks about cessation of membership on
account of cessation of employment. However, other judicial decisions have presented a
different explanation to the matter of contention, and these judicial decisions, irrespective of
the fact whether they have been upheld or overruled by subsequent judgements , have been
discussed in this project.

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Introduction

The legal focus of Bokajan Cement Corporation Employees Union vs Cement Corporation Of
India Ltd is on the statutory provisions relating to Trade Unions, as specified under the Trade
Unions Act of 1926. The legal issues that this study seeks to explore is related to the
membership of trade unions. To be more precise, this particular study is on matters of
cessation of employment and its impact on the membership of a trade union.

The focal point arising out of this particular case is –

Does the membership of a member of a trade union get revoked on the account of cessation
of employment?

Can dismissal of an employee from his work lead to cessation of his membership to the trade
union?

This case analysis seeks to explore this key issue

Aims & Objectives :

The objective behind this case study is to understand the principles that have been relied on to
come to the decision in the present case. This study also seeks to analyse different
judgements in cases which touched upon the matter of termination of service and its impact
on the membership of trade unions. After a thorough study of the relevant cases, the project
seeks to arrive at a conclusion with regards to the judgement that was delivered in the present
case. The project also seeks to find out whether the present position on this matter upholds
the judgement of this case, or does it move away from the reasoning that was provided in the
present case.

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Scope and Limitations :

The scope of this project is limited to the study of the Trade Unions Act of 1926 and the
Industrial Disputes Act of 1947. The study will be focused on the provisions of the acts
which are relevant to this case and its analysis. Since this study only seeks to understand the
provisions of the relevant acts and the relevant judicial decisions, the study didn’t refer to
sources like books or journals for further commentary on this issue. Therefore, review of
existing literature on this study has not been provided in the project.

Research Questions.

1. Is there a gap in the existing provisions of the Trade Unions Act of 1926 in matters relating
to termination of service of employees and its impact on the membership of trade unions?

2. Does section 6(e) of Trade Unions Act, 1926, require a broader interpretation?

3. Is the explanation provided in the judgment of the present case sufficient to deal with all
matters related to cessation of employment and its impact on membership of trade unions?

4. What are the relevant judicial positions adopted in other cases where the matter in question
has been discussed? Do they offer a substantial alternative to the principles adopted in the
present?

5. What is the latest judicial position on this matter?

Research Methodology

The research methodology adopted in the study is entirely qualitative in nature. The sources
like bare acts and judgements in online legal databases have been used as reference for the
thorough study of the principles and issues in this case and the other relevant cases,
including the latest judgements on the matter pertaining to this case.

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1. Facts of Bokajan Cement Corporation Employees Union v Cement Corporation Of India
Ltd1:

There was a dispute regarding the election of the office bearers of the Bokajan Cement
Corporation employees union (which will be henceforth addressed as ‘the trade union’) In
response to the dispute, the Assistant Labour Commissioner prepared a list of member of the
trade union in furtherance of the purpose of Annual General Meeting and the elections of the
office-bearers. The issue arose, when the assistant labour commissioner removed many
members from the list, which included 102 contract labourers and the petitioner Shri Pratap
Bora, who was the General Secretary of the trade union, elected to that position by the
mandate in the previous election. The petitioner prayed for the prepared list to be set aside
and for the inclusion of 103 members including himself in a fresh membership list.

2. Judgement-

The learned single judge quashed the list prepared by the Assistant Labour Commissioner
and directed to prepare a fresh membership list. The single judge also held that Shri Pratap
Bora was still a member of the trade union as his dismissal was challenged before the labour
court and in that respect he couldn’t be considered as an outsider. Pratap Bora was to be
treated as the member of the trade union. However, Gauhati High Court set aside the decision
of the learned single judge and held that Pratap Bora, after being dismissed from his job,
couldn’t be treated as a member of the trade union. The Gauhati High Court reached this
decision after relying on section 6 of the Trade Unions Act 1926 and clause 5 of the
constitution of the trade union which granted ordinary membership of the trade union only to

workmen who are actually employed/engaged in employment. Since Shri Pratap Bora was
no longer an employee actually engaged in service after his dismissal, he could not be
considered as an ordinary member of the said trade union. The decision of Gauhati High
Court was challenged before the Supreme Court. After looking at the facts of the case, the
Supreme Court observed that there was no provision in the Trade Unions Act of 1926 which
explicitly stated that the right to continue as a member of a trade union gets revoked on
account of cessation of employment. It also observed that no such provision existed in the
constitution of the trade union which explicitly states that a member of the trade union would
cease to be a member after his employment is terminated. In view of these observations, the

1
(2004)ILLJ197SC

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Supreme Court set aside the impugned judgement of Gauhati High Court and restored the
decision of the single judge. Thereby, it was held that Shri Pratap Bora would continue to be
a member of the said trade union even after his dismissal from service.

3. Case Analysis

The intricacies of the present case can be best understood by discussing the background of
the case. This would include a breakdown of the statutory provisions of Trade Unions Act of
1926 and a broad interpretation of the relevant clauses contained in the constitution of
Bokajan Cement Corporation Employees Union.

Firstly, section 2(h) of Trade Unions Act of 1926 defines Trade Union as –

“ any combination, whether temporary or permanent, formed primarily for the

purpose of regulating the relations between workmen and employers or between
workmen and workmen, or between employers and employers, or for imposing
restrictive conditions on the conduct of any trade or business, and includes any
federation of two or more trade unions.”2

Interpretation of the aforementioned provision would show that the main purpose of a trade
union is to regulate the relations between workmen, between an employer and employees and
between workmen and employees. A trade union would also control the conduct of any trade
or business of an establishment. This provision also provides that a trade union can also be an
amalgamation of two or more registered trade unions.

Section 6 of Trade Unions Act of 1926 states the provisions that are to be contained in the
rules of the trade union for the purpose of registration. Now clause (e) of this section provides
for the admission of ordinary members of the trade union. Section 6 (e) states that the
ordinary members shall be persons who are actually engaged or employed in an industry with
which the Trade Union is connected. It also talks about the admission of the number of
honorary or temporary members as office-bearers required under section 22 of the Act to
form the executive of the Trade Union.

Gauhati High Court had relied upon section 6 to set aside the verdict given by the single
judge. It held that the right to continue as a member would continue so long as the employee
is actually engaged or employed in the industry. Since Shri Pratap Bora was dismissed from

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Trade Unions Act, 1926, Act no. 16 of 1926, Section 2, Clause H

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his work, going by the provisions of section 6, he couldn’t continue as a member of the trade
union.

However, the Supreme Court had a different interpretation of section 6. According to the
Supreme Court, section 6(e) only talks about admission of ordinary members, nowhere does
it mention the procedure to be followed in case of cessation of employment of a member of a
trade union.

Coming to the constitution of Bokajan Cement Corporation Employees Union, clause 5 of

the constitution talks about membership. It states that any worker employed by the Cement
Corporation of India directly or indirectly throughout shall be eligible for the membership of
the Union provided he/she accepts the constitution, bye laws and discipline of the Union and
pays the stipulated admission fee of Rs. 100 along with stipulated subscription.

Now, the clause mentions only about membership of a worker directly or indirectly employed
by Bokajan Cement Corporation, but nowhere does it mention that cessation of employment
bars an ex-employee from becoming a member of the trade union.

The explanation to section 22 of the trade unions act of 1926 talks about the admission of
honorary member/office bearers of the trade union.

Section 22 provides3 :

1. not less than one-half of the total number of the office-bearers of every registered
trade union in an unrecognized sector shall be persons actually engaged or employed
in an industry with which the trade union is connected.

2. all office-bearers of a registered trade union, except not more than one-third of the
total number of the office-bearers or five, whichever is less, shall be persons actually
engaged or employed in the establishment or industry with which the Trade Union is
connected.

The explanation to Section 22 states that an employee who has retired or has been retrenched
shall not be construed as an outsider for the purpose of holding an office in a Trade Union.
All these provisions indicate that there is no explicit provision in the trade unions act of 1926
that would bar Mr Pratap Bora to continue as a member of the Trade Union.

3
Trade Unions Act, 1926, Act no. 16 of 1926, Section 22

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Talking about the provisions in the Industrial Disputes Act of 1947, section 3 of the act ,
which deals with the works committee states that the representatives of the workmen shall be
chosen from among the workmen who are actually engaged in the establishment, meaning
thereby that only workmen actually employed in the establishment shall have a representative
character.

When read along with section 36 of the Industrial Disputes Act of 1947 which talks about
representation, states that in a dispute, the workmen can be represented by an office-bearer
or executive of a registered trade union or a federation of trade unions, it can be deduced that
the representative character can only be granted persons actually employed in the
establishment.

This was stated paragraph 9 of the Supreme Court judgement in the case of State Bank of
India Staff Association v State Bank of India4 :

" while referring to the provisions of section 36 of Industrial Disputes act, the
provisions of Section 3 of the said Act cannot be overlooked or ignored. The
provisions of the trade union act 1926, have to be harmonised with the relevant
provisions of the industrial disputes act 1947. It has also to be kept in view that the
industrial disputes act is a much later Act, which besides other matters, specifically
concentrates on harmonious relations between the employer and workmen, the dispute
between the two and settlement thereof by negotiations with the Assistance of their
respective representatives”

State Bank of India Staff Association v State Bank of India 5was a case where the matter of
contention arose when the Bank Management chose not to engage in discussions with the
General Secretary of the Associate, who a retired employee of the Bank.

This case is important in the sense that in this case, the Supreme Court held that an employee
after cessation of his employment in a particular establishment cannot represent another
employee in that establishment.

4
(1996)IILLJ288SC

5
1996)IILLJ288SC

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Now, it is a known fact that the objective for creating trade unions is to regulate the relations
between workmen, between an employer and employees and between workmen and
employees. A trade union would also control the conduct of any trade or business of an
establishment.

This provision also provides that a trade union can also be an amalgamation of two or more
registered trade unions, as provided in section 2(h) of the Trade Unions Act of 1926.
Therefore, it can be understood that trade unions have a representative character have the
duty of representing the interests of the workmen in case of any dispute or discussion with the
management of the establishment.

Paragraph 8 of the Supreme Court judgement in this case stated the following:

" .... The provisions contained in sections 6 and 22 reproduced above relate to the
registration of Trade Union and constitution of the executive of the said Union. The
provisions of sections 6 and 22 indicate that an ordinary or a temporary member may
be an office-bearer, but they nowhere provide that such a member shall have a right to
negotiate with the Management or the Management would be under an obligation to
negotiate with an office-bearer of the Union who is no longer in the employment of
the Industry which the Trade Union is connected.”6

From the reading of the judgement in this case, it can be understood that while an ordinary
member or a temporary member may be an office-bearer, however, if the said member of the
union is no longer employed in the establishment, then he cannot represent the employees of
the establishment in a dispute or discussion with the management.

In simple words, only the employees currently employed in the establishment can have a
representative power to take up matters concerning the interests of the employees with the
management. Therefore , the power of representation shall lie with the serving employees.

6
(1996)IILLJ288SC

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In a more recent case, the Single judge of the Madras High Court in the judgment of S
Valaiyapathy v Indian Overseas Bank7 (a 2013 judgement), stated that for effective
functioning of trade unions and in order to create a healthy working atmosphere in the Trade
Unions, only currently serving employees should serve are the leaders of the Trade Union.
However, on appeal against this judgement, the Division Bench of the Madras High Court
allowed the appeal and let the two retired bank employees to represent the trade union as
office bearers.

In this case the a bank held back from engaging with two retired employees of the bank by
stating that retired employees cannot take part in discussions that involve negotiations with
the bank management regarding any matter pertaining to the relations between an employer
and an employee of the bank.

In the judgment by the Single judge , to protect the rights and interests of the workers and the
management effectively, the judge made the following suggestions to appropriate
governments :

(1) To enforce section 3 of the Industrial Disputes Act of 1947 8, by the appropriate
Governments by constituting Works Committee consisting of representatives of
employers and workmen engaged in the establishment.

(2) To amend the provisions of sections 6 and 22 of the trade unions act of 1926
curtailing outsiders being elected as members as well as office bearers of
association/union.

However , when an appeal was made against the judgement to the Division Bench, it held
that the two retired employees could act as representatives of the bank employees and
negotiate with the bank management with matters pertaining to employer-employee relations.
The reasoning given by the bench was that , since the union at its general council meeting in
July 2010 had unanimously conferred the appellants with honorary membership for the
purpose of being elected to the national executive retrospectively from the date of their
superannuation, they could act as office-bearers of the union and take part in negotiations
with the bank management.

7
2013 ( 5 ) LLN 314 ( Mad. )
8
Act No. 14 of Year 1947 dated 11th. March, 1947

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In another case, Madhya Pradesh High Court in the case of Ashok Dhoble v Bhojraj Dhotke9,
while reviewing the petition of the petitioner regarding rejection of office bearers of Woolen
Mills Employees Union, Chhindwara, on the ground of termination of the service of the
petitioner and by that argument, no longer an employee of the Raymonds Woolen Mills,
Chhindwara, where the labour court came to this decision after relying on the case of State
Bank of India Staff Association v State Bank of India, held that the Industrial Court had
failed to take into consideration, the judgement of Bokajan Cement Corporation Employees
Union v Cement Corporation of India.

The High Court then allowed the petition and remanded it back to the Industrial Court,
Bhopal, for re-deciding the matter, after taking the aforesaid aspects into consideration.

4. Latest Judicial Position-

the latest judgement in the case of Sibikutty Francis v Kerala State Electricity board ltd 10, (a
December 2017 judgement) the Kerala High Court while referring to Industrial Disputes Act
1947, reiterated the judgement by the Supreme Court in the case of State Bank of India Staff
Association v State Bank of India, in which paragraph 9 stated that only workmen engaged in
the establishment can represent other worksmen in a works committee.

In this case the Supreme Court also held that the provisions of Section 3 of Industrial
Disputes Act cannot be overlooked or ignored and that provisions of the Trade Union Act,
1926, have to be read along with the relevant provisions of the Industrial Disputes act, 1947.

Therefore going by this judgement, it can be concluded for the understanding of the matter
relating to membership of trade unions after cessation of employment, one has to harmonize
the provisions of Trade Unions Act, 1926 and the Industrial Disputes Act. 1947. Going by
that understanding, while interpreting the provisions of section 6 clause e, which only talks
about the membership, but not cessation of membership, we have to look at the provisions in
section 3 of the Industrial Disputes Act, which clearly states that only the workmen currently
engaged in the establishment have a representative character.

9
https://www.casemine.com/judgement/in/56097adfe4b01497113416bb

10
MANU/KE/0630/2018

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Conclusion

After a thorough analysis of all the judgements and principles given by various courts in this
matter, it would be appropriate to deem the judgement of Bokajan Cement Corporation
Employees Union v Cement Corporation of India as open-ended. The final decision of this
case was that since the constitution of the trade union and section 6(e) of Trade Unions Act,
1926 doesn’t have a provision which explicitly deals with cessation of membership, and only
provides for admission of ordinary members, the petitioner was allowed to continue as a
member of the Trade Union. The problem in this judgement arises from the restricted
interpretation of section 6(e) of the Trade Unions Act of 1926, which doesn’t offer any
explanation to the question of the status of membership of a trade union after cessation from
service.

This question was adequately answered in the single judge bench judgement of the 2013
Madras High Court judgement of S Valaiyapathy v Indian Overseas Bank. In the judgement
the Single Judge, recommended amendments to sections 6 and 22 of the Trade Unions Act of
1926 by incorporating explicit provisions for matters related to cessation of membership. The
Court in its judgement observed that for a healthy working environment and effective
functioning of the trade unions, only workmen currently engaged in the establishment should
be given membership of trade unions, as outsiders or ex-employees cannot possibly
understand all the intricacies of the problems and issues that are faced by the workmen. The
reasoning behind that is, since trade unions work as a collective bargaining body to represent
the interests and demands of the currently employed workmen, the members who comprise
the trade unions should have the same representative character in the sense that, they are
people who are currently in service and therefore they understand the grievances of the
serving employees better than an outsider or a former employee.

In view of these observations, the single judge made suggestions for amendments to section
6 and 22 of the Trade Unions Act, 1926, to appropriate governments.

Although, the decision of the single judge was later overruled by the division bench of the
Madras High Court by allowing the retired bank employees to negotiate with the bank
management as office bearers, the principles and issues raised by the single judge in the
matter pertaining to the former employees being a part of the trade union as office- bearers,

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does offer an adequate explanation to the question of cessation of service and its impact on
membership of trade unions.

The latest position on this matter is explained in the December 2017, Kerala High Court
judgement in the case of of Sibikutty Francis v Kerala State Electricity board ltd, where
Kerala High Court reiterated the stand of Supreme Court in the judgement of State Bank of
India Staff Association v State Bank of India, where it was held that the provisions of section
6 and 22 of the Trade Unions Act 1926, have to harmonised with the provisions of section 3
and 36 of the Industrial Disputes Act, 1947.

Therefire, the limited interpretation of section 6(e) should be avoided and the unanswered
question of cessation of membership should be incorporated by expanding the interpretation
of section 6 and harmonising it with section 3 of the industrial disputes Act, which states that
only workmen engaged in the establishment can represent other workmen in a Works
Committee. It was also held that although retired employees can be members of a trade
union, they however, cannot engage in negotiations with the management of the
establishment as a representative of the workmen.

Now, the current position would explain that in the absence of amendment to section 6 of the
Trade Unions Act, one would have to follow the guidelines laid down in the judgement of
State Bank of India Staff Association v State Bank of India, and read section 6 of Trade
Unions Act of 1926, along with section 3 of Industrial Disputes Act of 1947 to get a clear
understanding of the position of law in this matter. A limited interpretation of section 6, as it
was done in the judgement of Bokajan Cement Corporation Employees Union v Cement
Corporation of India, would not offer a satisfactory explanation in matters related to cessation
of employment in cases where the cessation is by the virtue of retirement, resignation or
termination of employment owing to improper conduct, and where the termination of service
has been properly established with no further contentions.

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Bibliography

a. Websites

i. Manupatra online database, http://www.manupatrafast.in/

ii. Casemine legal online database , https://www.casemine.com

b. Bare Acts

i. Universal’s , The Trade Unions Act, 1926 (Act 16 of 1926)

ii. Universal’s , The Industrial Disputes Act, 1926 (Act 14 of 1947)

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