M/s North Brook Jute Co. Ltd. and Another v. Their Workmen

Case Analysis

M/s North Brook Jute Co. Ltd. and Another v. Their Workmen

June 24, 2025

A) ABSTRACT / HEADNOTE

The Supreme Court in M/s North Brook Jute Co. Ltd. and Another v. Their Workmen ([1960] 3 SCR 364) ruled in favour of the workmen by holding that the lock-out declared by the employer during the pendency of a reference before the Industrial Tribunal amounted to an illegal lock-out, and the affected workmen were entitled to wages for the period they were absent from work. The judgment extensively dealt with the scope and effect of Sections 9A and 33 of the Industrial Disputes Act, 1947, especially in the context of the introduction of a rationalisation scheme during the pendency of industrial adjudication. The Court clarified that merely taking the consent of a Works Committee for altering service conditions cannot substitute statutory compliance with the Act, particularly when such change prejudicially affects the workmen. It reiterated that any unilateral alteration of conditions of service during adjudication proceedings, even after notice under Section 9A, amounts to a violation of Section 33. The refusal of work by workmen in response to illegal implementation of the rationalisation scheme did not amount to an illegal strike. This judgment strengthened labour rights and clarified employers’ obligations under the Industrial Disputes Act.

Keywords: Illegal lock-out, Rationalisation Scheme, Industrial Disputes Act, Section 33 violation, Workmen’s Wages

B) CASE DETAILS

i) Judgement Cause Title: M/s North Brook Jute Co. Ltd. and Another v. Their Workmen

ii) Case Number: Civil Appeal No. 141 of 1959

iii) Judgement Date: 23rd March 1960

iv) Court: Supreme Court of India

v) Quorum: P.B. Gajendragadkar, K.N. Wanchoo, and K.C. Das Gupta, JJ.

vi) Author: Justice K.C. Das Gupta

vii) Citation: [1960] 3 SCR 364

viii) Legal Provisions Involved: Sections 9A, 33, 33A of the Industrial Disputes Act, 1947

ix) Judgments overruled by the Case: None

x) Case is Related to which Law Subjects: Labour and Industrial Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This case emerged from industrial unrest triggered by the introduction of a rationalisation scheme by the management of North Brook Jute Company and Dalhousie Jute Mills. Despite approval from the Works Committee, the workmen opposed the scheme, alleging it increased their workload without just compensation. The Government referred the dispute to an Industrial Tribunal. Despite the pending reference, the management went ahead and implemented the rationalisation scheme. This led to a refusal by the workers to comply, followed by a declaration of a lock-out by the employer. The critical legal question was whether this lock-out was illegal and whether the workmen were entitled to wages during the period of closure. The Supreme Court had to examine the legality of the employer’s action in light of Sections 9A and 33 of the Industrial Disputes Act, which deal with alteration of service conditions and bar such alteration during pending disputes.

D) FACTS OF THE CASE

The companies proposed a rationalisation scheme aimed at reducing costs by increasing individual workloads and reducing manpower. Though the Works Committee approved this, the workers’ unions strongly opposed it, fearing unfair increases in work without proportional remuneration. A reference was made to the Industrial Tribunal under Section 10 of the Industrial Disputes Act. Despite this, on 16th December 1957, the companies implemented the scheme. The workmen refused the additional duties. The companies immediately declared a lock-out, which lasted till 20th December in most departments and 21st December in the rest. A dispute then arose over payment of wages during this closure. The matter went to the Tribunal again. The Tribunal ruled in favour of the workmen, which led to this appeal.

E) LEGAL ISSUES RAISED

i) Whether the implementation of the rationalisation scheme during the pendency of the reference violated Section 33 of the Industrial Disputes Act.

ii) Whether the refusal of work by the workmen amounted to an illegal strike.

iii) Whether the lock-out declared by the company was legal or amounted to an illegal lock-out.

iv) Whether the workmen were entitled to wages during the period of the lock-out.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for the Petitioners/Appellants submitted that the Works Committee had approved the rationalisation scheme. They contended that the representatives of the workmen had agreed to implement the scheme at a time suitable to the company. Thus, the implementation on 16th December 1957 was lawful.

They argued that the act of implementation was completed by the issuance of notice under Section 9A, and hence the date of change in service conditions was prior to the reference, not violating Section 33. It was submitted that the refusal by the workmen to follow the rationalised scheme amounted to an illegal strike. The management then declared a lawful lock-out in response to this illegal conduct. Therefore, they claimed that the workers were not entitled to any wages for the days they stayed away from work.

The employers further asserted that they had not prejudiced the workers’ conditions materially, and that the scheme was essential for the company’s survival amidst mounting losses. Citing the company’s operational interests, they justified the immediate implementation of the scheme.

G) RESPONDENT’S ARGUMENTS

i) The counsels for the Respondents submitted that the unilateral implementation of the rationalisation scheme, during the pendency of adjudication proceedings, amounted to a violation of Section 33 of the Industrial Disputes Act, 1947. They argued that the Works Committee was only empowered to facilitate harmony and had no authority to approve substantial changes in conditions of employment.

They contended that the scheme altered workload and could result in retrenchment, and thus it directly prejudiced the workers. They rejected the argument that the notice under Section 9A was adequate. According to them, the actual implementation date of the scheme, i.e., 16th December 1957, during pendency of a dispute, constituted a breach of Section 33. They asserted that the refusal to accept the new terms did not amount to an illegal strike, but rather a lawful resistance against an illegal demand.

The counsel emphasized that the lock-out was not bona fide, but a coercive act to force the workers into submission. Therefore, under labour jurisprudence, the workers deserved full wages for the period they were prevented from working.

H) RELATED LEGAL PROVISIONS

i) Section 9A, Industrial Disputes Act, 1947
View provision

ii) Section 33, Industrial Disputes Act, 1947
View provision

iii) Section 33A, Industrial Disputes Act, 1947
View provision

iv) Section 10, Industrial Disputes Act, 1947
View provision

v) Fourth Schedule, Industrial Disputes Act, 1947
View provision

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Court held that approval by the Works Committee could not substitute for the workmen’s independent consent, especially when changes affected their conditions of service adversely. Referring to the Labour Appellate Tribunal’s view in Kemp and Company Ltd. v. Their Workmen, [1955] 1 LLJ 48, the Court affirmed that the Works Committee is not a bargaining agent and only functions to maintain amity between employer and employees.

The Supreme Court further held that the alteration of service conditions became effective not when the notice under Section 9A was given but when the change was actually enforced, which in this case was 16th December 1957. Since this enforcement occurred during the pendency of a reference before the Tribunal, it violated Section 33.

The refusal by the workmen to comply with such unlawful implementation did not amount to an illegal strike. Rather, the declaration of lock-out by the employer in such circumstances was held to be illegal. Therefore, the workmen were entitled to wages for the lock-out period.

b. OBITER DICTA

i) The Court highlighted that Section 33A does not bar the workmen from refusing to comply with illegal alterations. The availability of legal recourse under Section 33A does not imply a duty to submit to unlawful changes during pendency of disputes.

c. GUIDELINES

Consent of the Works Committee does not equal workmen’s consent for changes in service conditions.
Implementation of service changes during pendency of proceedings is prohibited under Section 33.
Issuance of Section 9A notice does not permit premature enforcement of those changes.
A lock-out in response to lawful resistance to illegal changes is ipso facto illegal.
Workers are entitled to wages for periods of illegal lock-out.