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Jet Airways – Supreme Court ruled that workmen and employers cannot enter into a contract which would override a statute


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Jet Airways – Supreme Court ruled that workmen and employers cannot enter into a contract which would override a statute

The Supreme Court has allowed the demand for the reinstatement of 169 workmen, with full back wages, to the insolvent Jet Airways Ltd. The court was hearing an appeal filed by the Bharatiya Kamgar Karmachari Mahasangh, which was representing the workmen against the airline.

Any settlement entered into between the employee union and the employer will not override the Model Standing Order, unless it is more beneficial to the employees, the Supreme Court held. A Model Standing Order here refers to rules formulated under the Industrial Employment Act for the benefit of workmen.

The dispute pertained to the fact that Jet treated its workmen as temporary workers, even though they had completed 240 days in service. As per the Bombay Model Standing Order provided under the act, the condition for a grant of permanency was satisfied. However, the trade union entered into a settlement with Jet in 2002, whereby the workmen gave up the demand for a grant of permanency in employment, in return for various other benefits. This settlement became the bone of contention between the workmen and Jet, as the airline claimed that the workmen were not entitled to a grant of permanency on account of the 2002 settlement.

While setting aside the orders of the Bombay High Court and the Industrial Tribunal, the apex court said the standing orders have a statutory force and that the workmen and employers cannot enter into a contract which would override the statutory orders embodied in the contract.

Analysing the Bombay Model Standing Order, the court stated 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.

In conclusion, the court ruled that any settlement or agreement inconsistent with certified standing orders would not prevail unless it proved more beneficial to the workers. It held that the Model Standing Order, in this case, took precedence over the settlement from 2002, thereby entitling the workers to the benefits outlined in the standing orders

The fate of these workmen, however, is unclear as Jet is yet to become operational. Even after getting a successful bidder in the Jalan-Kalrock Consortium, through the insolvency process, litigation on the control of the airline continues, with the creditors saying the resolution plan is unworkable. The counsel for Jet had even apprised the court of this development, but the apex court did not express any opinion on the issue, since Jet’s insolvency proceedings were not the subject matter of dispute.


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