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F.A.C.T. Employees' Association and Ors. Vs. Management of F.A.C.T. Ltd. and Ors. (27.08.1982 - KERHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1983)ILLJ240Ker
AppellantF.A.C.T. Employees' Association and Ors.
RespondentManagement of F.A.C.T. Ltd. and Ors.
Excerpt:
.....16. the original petition is disposed of with the directions contained in para 14..........settlement and this should not be forgotten in considering the points raised by the 3rd respondent-union. a decision has to be taken in the light of the law laid down in this judgment. hence there will be a direction to the 7th respondent-labour commissioner to take a decision on the representation of the 3rd respondent-union dated 17-6-1982 as expeditiously as possible and, at any rate, within a month from today after affording all the parties concerned a reasonable opportunity of being heard.15. collective bargaining is the birth-right of the working-class in this country with a mixed economy. it is common knowledge that industrial peace in this country is more observed in its breach. sooner or later, there should be a change for the better. the golden rule is, one union for one.....
Judgment:

K.K. Narendran, J.

1. Some nice questions in industrial law arise for consideration in this case. The questions are:

(1) When there is already a conciliation settlement under Section 12 of the Industrial Disputes Act, 1947, for short the Act, can there he an arbitration under Section 10A of the Act? (2) Is an arbitration under Section 10A possible without a written agreement signed by the management and all the unions? (3) If a conciliation settlement provides for an arbitration of the disputes and differences regarding interpretation and implementation of the settlement, what is the scope of that arbitration? (4) By such an informal arbitration can the settlement be annulled or its terms varied? and (5) For such an arbitration should all the unions make a joint request or is it enough that the aggrieved union alone need move for the same

2. The simple facts of the case are: The petitioners and respondents 2 to 6 are the different unions of the employees of the 1st respondent - Fertilizers and Chemicals, Travancore Ltd., a public sector undertaking. The petitioners claim that they represent 2300 out of the 3000 employees of the Udyogamandal Division of the 1st respondent-company. A long term settlement of the disputes between the 1st respondent-company and its employees was reached by conciliation under Section 12 of the Act. This settlement dated 16-5-1982 was with notice to all the unions including the 3rd respondent-union though the 3rd respondent-union did not sign the memorandum of the settlement. The 1st respondent-management began to implement the settlement from 1-6-1982 onwards. The settlement was in full and final settlement of all the demands of the Union in the various memoranda of demands of the unions. The 3rd respondent-union called for a strike without any notice and all the plants were shut down from 4-6-1982 to 16-6-1982. The 7th respondent-Labour Commissioner convened a conference on 16-6-1982 at Trivandrum. The Minister for Labour who was present advised the 3rd respondent-union to seek their remedy under the provisions of the settlement. The 1st petitioner-union gave Ext.P-1 letter to the 7th respondent pointing out that the 3rd respondent-union cannot invoke Clause 26 of the settlement. Then on 21-6-1982 the 7th respondent issued Ext.P-2 notice to the petitioners and the other unions informing them that by letter dated 37-6-1982 the 3rd respondent-union had raised certain issues for his decision and that he proposed to hear the parties on 28-6-1982. The 1st petitioner-union submitted Ext.P-3 preliminary objections pointing out that the 7th respondent had no jurisdiction to hear and decide the issues raised by the 3rd respondent. Similar objections were submitted by petitioners 2 and 3 also. The petitioners requested the 7th respondent to give a decision on the preliminary objections before going into the merits of the case. The 7th respondent orally overruled the preliminary objections and proceeded to go into the merits of the issues. For further hearing, 1-7-1982 was fixed as the date.

3. It was under the above circumstances that the petitioners approached this Court with this original petition. Along with the original petition, the petitioners filed C.M.P. 13209 of 1982. This Court on 1-7-1982 gave an interim direction to the 7th respondent not to proceed with the matter until further orders. The C.M.P. was heard on 7-7-1982 and this Court directed the 7th respondent to give a decision on the preliminary objections of the petitioners. It was also stipulated in the order that the 7th respondent need proceed further with the matter only after orders from this Court,

4. The 1st petitioner submitted a supplementary statement Ext.P-5 before the 7th respondent on 13-7-1982. The 7th respondent conducted a hearing and rejected the preliminary objections by Ext.P-6 decision dated 18-7-1982. Thereupon, the petitioners amended the original petition to challenge Ext.P-6 also. The 3rd respondent filed a counter in C.M.P. No. 15312 of 1982 opposing the amendment. This Court by order dated 9-8-1982 allowed the amendment.

5. The 3rd respondent did not file a counter-affidavit in the O.P. But in the counter-affidavit filed in the C.M.P. for amendment the 3rd respondent has taken the stand that the Labour Commissioner as the Chief Conciliation Officer has the power to call a meeting of the parties to conciliate any dispute in an industrial undertaking.

6. The 2nd respondent-union has filed a counter-affidavit. In the counter-affidavit it has been stated: The conciliation settlement should not be altered by the Labour Commissioner in any manner as it was binding on all and that proceedings under Clause 26 of the settlement may be resorted to if possible to redress the alleged grievances of the 3rd respondent-union. In the present case, when once the conciliation officer has endorsed that a settlement in the interests of the parties to his satisfaction has been arrived at, no more dispute subsists. When the settlement is in force, only recourse to Clause 26 of the settlement can be had. Clause 26 has to be interpreted in such a manner that any of the recognised unions could urge claims regarding interpretation/ implementation if there was any grievance.

7. In Ext.P-6 the 7th respondent has summed up the decision on the preliminary objections as follows:

The arbitration contemplated under Clause 26 of the settlement can also be an informal arbitration, with the aim of at once securing a quick decision and industrial peace. Therefore, the formalities of Section 10A of Industrial Disputes Act, 1947 are not necessary in the instant case and as Labour Commissioner I can entertain the petition of the FACT Engineering Workers Association under Clause 26 of the Long Term Settlement signed on 16-5-1982, except to the extent that I shall be barred from considering Issue No. 1, viz., maintenance of the Principle of Parity between Services and Operation Departments, involving financial commitment which is expressly prohibited under Clause 23 of the settlement.

In giving his views on the points raised, the 7th respondent has stated in Ext.P-6:

The very incorporation of such a clause in the body of the settlement itself is to cut-short the procedures contemplated under Section 10A of the Industrial Disputes Act. The purpose is to achieve industrial peace quickly taking advantage of the trust of all concerned in the Government functionary dealing with industrial relations. Otherwise the arbitrator need not have been specified in the clause.

It is not disputed that a conciliation settlement under Industrial Disputes Act 1947 cannot be changed or altered by an executive decision of the Government or of the Minister. No such thing is attempted here. What was sought to be done was to make use of clause in the settlement itself provided for such contingencies for resolving an otherwise impossible situation.

Referring to the scope of arbitration, the 7th respondent has said:

It is admitted that cautious consideration is warranted on this issue. It is a moot point whether abrogation or deletion of clauses in the settlement could be sought by any party. Only a dispute regarding the interpretation and/or implementation of this settlement is to be referred for the arbitration of the Labour Commissioner. However, implementation is a word with vast meaning capable of encompassing the totality of what is implemented. Besides, even if a party has sought abrogation of a clause, it will be open to the mature of consideration of the arbitrator whether to accept it in toto or not.

8. The learned Counsel for the petitioners-union contended: The issues raised by the 3rd respondent-union involve financial commitment and hence their consideration is clearly barred by Clause 23 of the Settlement. The matters concluded by the long time settlement cannot be reopened in an indirect manner like this. The 3rd respondent not being a party to the settlement cannot invoke Clause 26 of the settlement. Clause 26 can be invoked only by all the unions together. The arbitration provided for by Clause 26 can be only under Section 10A of the Industrial Disputes Act and hence the 7th respondent will get jurisdiction only if the procedure insisted by Section 10A is followed. Instead of deciding the question preliminarily, the 7th respondent has gone into the merits of the controversy and has prejudged the matter. Under Clause 26, only a dispute, difference or controversy regarding the interpretation and implementation of the settlement, the 7th respondent has the power to decide. Extraneous considerations have weighed with the 7th respondent. Exhibit P-6 is without jurisdiction and hence to be quashed. Exhibit P-2 should also be quashed.

9. The learned Counsel for the 1st respondent-management contended: Clause 23 of the settlement prohibits the consideration of any demand ''volving financial commitment except individual grievances, if any, or claim for annual bonus. Hence none of the four points enumerated by the 7th respondent in Ext.P-6 (pages 46 and 47, O.P.) can be considered and decided by the 7th respondent during the period of operation of the settlement. Whether under Section 10A or not, the 7th respondent cannot grant any relief on any of the demands enumerated as important points in Ext.P-6 decision. Only disputes and differences regarding the interpretation or implementation of the settlement can be decided under Clause 26 by arbitration by the 7th respondent. The indication in Ext.P-6 is that the 7th respondent is going to surpass the limited jurisdiction that is conferred on him and hence Ext.P-6 has to be quashed.

10. The learned Counsel for the 2nd respondent contended: Section 10A of the Act conies into play only when there is a dispute. After the settlement, during the period of the settlement there cannot be any dispute pending. The arbitration under Clause 26 can only be in accordance with that clause.

11. The learned Counsel for the 3rd respondent contended: what is provided for in Clause 26 is an informal arbitration and so, the 7th respondent has the power. Under Section 18 of the Act, the settlement is binding on all the unions and hence the 3rd respondent-union also can invoke Clause 26 of the settlement even though the 3rd respondent did not sign the settlement. The aim of the informal arbitration provided for in Clause 26 is to secure industrial peace. The contentions raised in the original petition have nothing to do with the issue in question. There is no reason to interfere with Ext.P-6 decision of the 7th respondent.

12. Clause 26 of the settlement dated 16-5-1982 reads:

Any dispute, difference, disagreement or controversy of any nature or character regarding the interpretation and or implementation of this settlement shall he referred by either party separately or by the Company and the recognised unions together for arbitration to the Labour Commissioner of the State and his decision shall be final and binding on both the parties.

Clause 23 of the settlement contains the following restriction:

The unions also agree that they will not raise any demand involving financial commitment during the life of operation of this settlement, except individual grievances, if any, or claim for annual bonus.

Adjudication under Section 10, arbitration under Section 10A and conciliation under Section 12 are the remedies the Industrial Disputes Act, 1947 provides for resolving an industrial dispute. When once a dispute is resolved by adjudication, arbitration or conciliation, it goes without saying that no dispute remains and hence no question of resorting to the other two remedies arises. The reason is simple. The reason is that the jurisdiction to adjudicate, arbitrate or conciliate will be there only when there is a dispute. In this case, the dispute was settled by conciliation as early as 16-5-1982. The management began to implement the long term settlement from 1.6.1982 onwards. So, now no question of arbitration under Section 10A of the Act arises. At any rate, the settlement cannot be annulled by resorting to an arbitration under Section 10A. The spirit of conciliation is the foundation of the settlement and the law is that it should bind all the parties at least for the period covered by the settlement. The conciliation was with notice to all the parties including the 3rd respondent-union and under Section 18 the settlement is binding on all the unions even though the 3rd respondent-union did not sign the settlement. The 3rd respondent took part in the conciliation. The conciliation officer has also endorsed that a settlement, in the interests of the parties, to his satisfaction has been arrived at. An arbitration under Section 10A tan be had only by a written agreement signed by all the parties. Here, there is no such agreement and for that reason also no arbitration under Section 10A can be resorted to. The arbitration provided for by Clause 26 of the settlement can be only an informal arbitration for the limited purposes provided for by the clause and will be subject to the other restrictions in the settlement including Clause 23. Because of these limitations, if the 7th respondent cannot go into any of the demands of the 3rd respondent-union, the informal arbitration will only be an exercise in futility. As no industrial dispute can be there during the period of the settlement, the 7th respondent cannot, under the guise of 'resolving an otherwise impossible situation', assume a jurisdiction he has not. Neither the management nor a union of workmen can afford to ignore a settlement. The fundamentals of the industrial law should be respected.

13. Then the further question that remains to be considered is whether the 3rd respondent-union alone can ask for the informal arbitration provided by Clause 26 of the settlement. First of all, it is an informal arbitration. Secondly, the arbitration is only for the limited purpose of resolving disputes and differences regarding the interpretation and implementation of the settlement. The fact that there are a number of unions for the workmen in the establishment and they will have conflicting interests also cannot be forgotten. It is also provided in Clause 23 of the settlement that demands containing individual grievances can be raised during the period of settlement. In the above stale of affairs this Court holds that even though Clause 26 can be interpreted also as disentitling a single union to move for informal arbitration, this clause has to be liberally interpreted as enabling any one of the unions also to move for informal arbitration for the purposes mentioned in Clause 26. It is accordingly held that the 3rd respondent-union can move for an informal arbitration under Clause 26 of the settlement.

14. It seems that this is a much ado about nothing. Some of the observations the 7th respondent has made in Ext.P-6 decision might be capable of creating an apprehension in the petitioners that the 7th respondent may go wrong and illegally interfere with the settlement. Hut will it be possible? Is he going to do it? It is not easy for this Court to come to the conclusion that the 7th respondent-Labour Commissioner is not aware of the limited jurisdiction he has under Clause 26 of the settlement. Not only that, indications are not wanting in Ext.P-6 that the 7th respondent is aware of the limitations of his power under Clause 26. So, this Court is not quashing Ext.P-6 decision, Ext.P-2 being only a notice need not also be quashed. But, at the same time, it is made clear that the 7th respondent-Labour Commissioner should keep in mind the limitations of the power he has under Clause 26 of the settlement and this should not be forgotten in considering the points raised by the 3rd respondent-union. A decision has to be taken in the light of the law laid down in this judgment. Hence there will be a direction to the 7th respondent-Labour Commissioner to take a decision on the representation of the 3rd respondent-union dated 17-6-1982 as expeditiously as possible and, at any rate, within a month from today after affording all the parties concerned a reasonable opportunity of being heard.

15. Collective bargaining is the birth-right of the working-class in this country with a mixed economy. It is common knowledge that industrial peace in this country is more observed in its breach. Sooner or later, there should be a change for the better. The golden rule is, one union for one industry. The question is in the prevailing conditions in this country how can this be achieved and when? If party politics is eliminated from the labour movement, that will no doubt be a change for the better, but

16. The original petition is disposed of with the directions contained in para 14 above. No costs.


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