1. In this writ petition, the petitioner-which is an association of Karnataka Bank Employees, duly registered under the Trade Unions Act, 1926, has challenged the orders of the Labour Commissioner, (who is the first respondent herein) dated 24-8-1974 and 19-11-1975 produced as Exts. F and G respectively directing the General Manager of the 2nd respondent Bank to discontinue the practice of collecting Rs. 2 per month from the salary of members of the petitioner-Association in terms of an agreement dated 4-1-1971 between the petitioner and respondent.
2. The petitioner-association consists of a large majority of the employees of the 2nd respondent-Bank. The agreement Ext. A in the writ petition provides for deduction of monthly subscription of Rs. 2 on receipt of a letter of authority from the member-employees.
3. The first respondent (the Commissioner of Labour) though served has not chosen to file any counter and in the circumstances, the facts stated in the writ petition remain unchallenged. After certain correspondence with the petitioner and the Bank, the 1st respondent directed the Bank to stop deduction of Association subscription forthwith since the same did not find favour with the Government.
4. Mr. Mohandas N. Hegde, learned counsel for the petitioner rested his case on S. 23 of the Payment of Wages Act and the two decisions on the interpretation of that Section. The first decision is reported in F. W. Heilgers & Co. v. Nagesh Chandra Chakravarty and the second a decision of this Court in (Mysore Sugar Co. Employees Union v. Commissioner of Labour (1968) I.L. & I.C. 74. The only reasons given by the first respondent for issuing Exts. F and G, which are impugned in this writ petition are that deductions towards union subscription do not find favour with the Government and that S. 7 of the Act prohibits such deductions. This seems to be an extraordinary reason regard belong had to the scheme of the Payment of Wages Act, Section 7 of the payment of Wages Act, provides for certain statutory deductions from the wages of the employees. There is no provision for deduction of the union subscription from the wages of the employees not there is any prohibition for such deduction because it 'does not find favour with the Government' But the members and the Bank have entered into an agreement for the deduction of the membership fee. Such deduction is for the betterment of the employees. It is common knowledge that the workers organise themselves by forming unions with a view to bargain collectively with their employers on various matters touching their service conditions, emoluments, bonus, etc. It is, therefore, necessary for these unions to be self-supporting by taking a nominal subscription from their members only. By their own financial resources the unions can bargain effectively with their the unions can bargain effectively with their employers by retaining their individuality and independent for the various rights conferred on them by innumerable labour laws that are on the statute book. From this point of view a nominal deduction of Rs. 2 from the wages of the members of the association cannot be characterised of the association cannot be characterised as a deduction against the interest of the members of the association. Therefore, the only point that arises for consideration is whether such an agreement as per Ext. A is hit by S. 23 of the Payment of Wages Act. S. 23 of the Payment of Wages Act reads as follows :
'Any contract or agreement, whether made before or after the commencement of this Act, whereby an employed person relinquishes any right conferred by this Act shall be null and void in so far as it purposes to deprive him of such right.'
The interpretation of this section came up for consideration before the Federal Court as well as this Court in the cases referred to above by the learned counsel for the petitioner. In F. W. Heilgers & Co. v. Nagesh Chandra Chakravarty, (supra) the Federal Court while interpreting S. 23 of the Payment of Wages Act, observed as follows :
'In our opinion the whole scheme of the Payment of Wages Act read along with the Industrial Disputes Act, shows that there is nothing to prevent such an agreement being made between an employer and employee, and much less to make such agreement illegal and prohibited by the Payment of Wages Act. Section 23, Payment of Wages Act, also, in our opinion, does not supports the argument of the appellant. It only prevents an employee from contracting away his rights which are given by the Payment of Wages Act. It does not prevent him from entering into an agreement advantages or beneficial to him.'
These observations were made in the context of objection taken by the employer that their agreement with the workmen for payment of bonus was hit by the provisions of Ss. 20 and 23 of the Payment of Wages Act.
5. This Court's decision was rendered in the writ petition filed the employees of the Mysore Suger Company, challenging the settlement between the union and the company which enjoined on the workers not to receive from the company 15% of the total emoluments during the relevant period of one year, subject to the repayment of that sum on a reconsideration of the matter by the company at the appropriate stage. It transpires such a term was introduced in the settlement because of certain adverse trade and economic conditions that prevailed affecting the finances of the company during that particular year; Somnath Iyer, J. speaking for the Court held that :
'However that may be we lean to the view of the impugned settlement is not within the prohibition of S. 23 of the Payment of Wages Act. We take the view that the settlement makes no deduction from the wages claimable from the employed person. As we have already observed, the consent under the impugned settlement by the Association was to abstain from receiving from the company 15% of the total emoluments during the period of one year subject to the payment of that sum of money on a reconsideration of the matter by the company at the appropriate Stage. (1968 1) L. and I.C. - 74.
6. In the light of the decisions of the Federal Court as well as this Court adverted to above the petitioner is bound to succeed.
7. Accordingly, the rule issued is, made absolute and the petition is allowed. The order of the Ist respondent in Exts. F and G are hereby quashed. But in the circumstances if the case, parties are directed to bear their own costs.