A bench of justices D K Jain and A K Ganguly, in a judgement, said the argument of unfair practices can be accepted only if there is"arbitrariness and unreasonableness"in the management's action violating Article 14 (equality) of the Constitution.
"Any unfair labour practice within its very concept must have some elements of arbitrariness and unreasonableness and if unfair labour practice is established, the same would bring about a violation of guarantee under Article 14 of the Constitution."
The court said,"It is also to be kept in mind that in the changed economic scenario, the concept of unfair labour practice is also required to be understood in the changed context."
"Today every state, which has to don the mantle of a welfare state, must keep in mind the twin objectives of industrial peace and economic justice and the courts and statutory bodies while deciding what unfair labour practice is must also be cognisant of the aforesaid twin objects,"Justice Ganguly, writing the judgement, said.
The apex court upheld an appeal of Siemens Ltd challenging the concurrent findings of the labour court and the Bombay High Court which had quashed the company's decision to create a cadre of Junior Executive Officers, to be filled from among the company's workmen.
It was the case of the workmen under the Siemens Employees Union that the promotional scheme amounted to unfair labour practices as defined under Section 9A of the Industrial Disputes Act, 1947; and sections 9 and 10 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.