1. The appellant is the writ petitioner.
2. The writ petitioner is the Britannia Biscuit Co. Ltd. Employees' Union represented by its Secretary. The writ petition was filed praying for the issue of a writ of declaration, after calling for the records from the Assistant Commissioner of Labour (Headquarters), Tamil Nadu Labour welfare Fund Buildings, Teynampet, Madras (first respondent) relating to the File D. Dis. No. S4/84421/81, dated 14th October, 1981 (filed along with the petition and marked as Ex. A) as null and void and consequently directing the fifth respondent (The Assistant Commissioner of Labour, Chengalpattu at Madras) in No. 1254/81 dated 6th October, 1981.
3. The allegations of the petitioner-Union are : The petitioner-Union has a substantial following among the workmen in the second respondent-Company. The petitioner-Union has entered into settlements under S. 12(3) of the Industrial Disputes Act (hereinafter referred to in this Judgment as the Act) covering all the workmen before the Conciliation Officer. One such settlement was made on 6th April, 1979 covering 439 casual employees who were working for quite a number of years with the second respondent-Management. By virtue of the settlement dated 6th April, 1979 the 439 casual employees were made temporary workers and were given better service conditions. Since these workmen were retained as temporary workmen for more than two years, the petitioner-Union wrote to the Management on 20th February, 1981 requesting to confirm them. Ultimately, conciliation proceedings were started by the Labour Officer at Chengalpattu. This was intimated by notice dated 30th May, 1981 also stating that the conciliation would begin as and from 15th June, 1981. Apart from the grievance of Keeping of 439 workmen as temporary workmen the petitioner raised several other demands before the Conciliation Officer. On account of intimidation on the part of the Management, the conciliation proceedings did not start as scheduled and therefore the petitioner-Union issued a strike notice by letter dated 2nd July, 1981. Subsequent to this strike notice, the Conciliation Officer, Chengalpattu, started the proceedings of conciliation as and from 26th August, 1981. The proceedings notice was duly issued to the Britannia Industries Employees' Union represented by its General Secretary (third respondent, submitted its remarks before the conciliation Officer by letter dated 15th July, 1981, refusing to agree to any of the petitioner-Union's demands. In those circumstances, the fourth respondent (The Assistant Commissioner of Labour, Chengalpattu at Madras) did not have any other option but to record his 'failure' and he submitted a report accordingly to the Government in A. 1254/81 dated 6th October, 1981 under S. 12(4) of the Act. This report was received by the Government on 15th October, 1981.
4. It is the case of the writ petitioner that the Management, with sinister motive, prepared a cyclostyled agreement without notice to the writ petitioner, that the first respondent (Assistant Commissioner of Labour, Headquarters) at Madras, without notice to the Petitioner-Union, simply signed that agreement so as to give it an effect of a settlement under S. 12(3), that the writ petitioner came to know about the plan of the President of the Petitioner-Union sent a telegram to the Commissioner of Labour, Joint Commissioner of Labour, Deputy Commissioner of Labour and also to the Assistant Commissioner of Labour at Chengalpattu stating that they oppose any agreement retrenching Britannia Industries Employees. Nevertheless, the settlement appears to have been signed by the Assistant Commissioner of Labour (Headquarters) and in accordance with that agreement the Britannia Industries, on 15th October, 1981, wanted to terminate the services of 51 workmen who are all members of the Petitioner-Union. When questioned, the Management stated that by virtue of the settlement under S. 12(3), they would be effecting those terminations.
5. On 17th October, 1981, the petitioner-Union applied to the first respondent for copy of the settlement and obtained the same by October, 1981. The petitioner-Union was shocked to find in that settlement the right given to the Management to retrench 51 workmen and that 51 workmen belong to the petitioner-Union. According to the writ petitioner, the settlement effected on 14th October, 1981 and filed and marked as Ex. A, is contrary to S. 12(3) of the Act. The Assistant Commissioner of Labour (Headquarters), Madras has no power to sign such a settlement, when especially the Assistant Commissioner of Labour, Chengalpattu (fourth respondent) is in charge of the particular area in which the industry is situated and also when especially the fourth respondent has given a 'failure report' to the Government under S. 12(4). The settlement is liable to be quashed since no notice was given to the petitioner-Union which has a large following among the workmen employed by the Management. The first respondent (Assistant Commissioner of Labour, Headquarters, Madras) had not done anything to induce the parties to arrive at a proper and reasonable settlement by acting as a Conciliation Officer and therefore his action in signing the impugned settlement is beyond the powers conferred on him under S. 12(4). The first respondent, without applying his mind, has merely put his signature in the agreement prepared by the Management (second respondent) in collusion with the third respondent (Britannia Industries Employees' Union). The Conciliation proceedings would come to an end only when the Government received the report of the Conciliation Officer and in this case such report was received by the Government only on 15th October, 1981. Therefore, the first respondent, who is a totally different authority, has no power to sign the settlement Ex. A, he having no authority to settle the matter. The act of the first respondent is mala fide since he made farce of a conciliation when in fact no demand was made by the third respondent. The farce of a settlement and conciliation thus effected is nothing but a ruse to eliminate the members of the petitioner-Union who are in service right from 1973 onwards. The Management, in retrenching some of the workmen arbitrarily, has not followed the golden rule of seniority, thus offending S. 25G of the Act and Rule 62 of the Tamil Nadu Industrial Disputes Rules, 1958 (hereinafter referred to in this Judgment as Rules). The signatories to the impugned settlement on behalf of the third respondent were not authorised to sign the same and hence the settlement is contrary to Rule 25 of the Rules. The settlement is against the spirit of Tamil Nadu Act, 46 of 1981 which confers permanency on workmen who had put in 480 days within a period of two years, The state of Tamil Nadu must study the conciliation report and make a decision without regard to the impugned settlement dated 14th October, 1981. With these allegations, the writ petitioner sought for the reliefs which have been set out in the foregoing paragraphs.
6. The second respondent, Management, filed a counter-affidavit denying the averments made in the affidavit filed in support of the writ petition. The contention raised by the second respondent in the counter are : The writ petition filed under Art. 226 of the Constitution against the second respondent is not maintainable. The subject-matter of the writ lies in the realm of contract and not in the realm of statute. A settlement entered into under s. 12(3) results in a new contract coming into existence between the workmen and the Management. The breach of the settlement would be breach of the contract, and not a breach of statue. Therefore, the subject-matter of the writ being contractual in Subject-matter of the writ petition is liable to be dismissed.
7. According to the second respondent, in the counter, the 51 workmen were discharged since they were surplusage. The affected workmen if they are aggrieved, can raise a dispute individually according to the provisions of the Act but the writ petitioner cannot have right to raise such dispute. The discharge effected by the Management is in the interest of the industry and the question involved requires, if at all, a detailed discussion on facts and hence the writ petition is not maintainable.
8. The Management further contended that the Britannia Industries Employees' Union has been recognized as the proper bargaining agent for the workmen since it represents a substantial and overwhelming majority of the 900 workmen in the factory. The Management has employed about 950 workmen made up of permanent, temporary and casual employees, the last depending upon the exigencies of business availability of raw material and capacity constraints. During the beginning of 1979 the Britannia Industries Employees' Union and the petitioner-Union took up question of regularisation of the casual employees, with the Management. At that time, the Management expressed its inability on various grounds to regularise its casual employees. On 6th April, 1979, a settlement was arrived at the office of the Deputy Commissioner of Labour II. As a result of this settlement, 439 casual employees were made temporary employees. The Management realised that there was no scope for making these temporary employees permanent employees in view of the important fact that its raw material requirements were not available in accordance with business requirements of the Management and that even as it was then, there was a surplus labour force. Further, the policy of the Government of India, to restrict the manufacturing and preparation of foodstuffs made by the Company in its various factories, put constraints upon the Management to go in for more production. In or about March, 1980, the third respondent demanded that the services of the temporary employees should be made permanent. The Management pleaded its inability to do so due to various circumstances and one among them was the policy of the Central Government restricting the manufacture of foodstuffs by the Company. While matters stood thus and bilateral talks were going on between the third respondent-Union and the Management, the petitioner-Union made a demand on the Management by letter dated 20th February, 1981 that all temporary employees should be confirmed. The second respondent-Management further contended that the third respondent-Union is the recognized union and it represents the majority of workers, that the said union by letter dated 7th July, 1981 addressed to the Assistant Commissioner of Labour, Chengalpattu, stated that the Petitioner-Union would have no locus standi to raise an industrial dispute as per the provision of the Act, the bilateral talks were going on between the Management and the third respondent-Union on the issue relating to conferment of permanency in employment on the temporary employees and that finally the Conciliation Officer made a failure report. Even thereafter, the Management continued bilateral talks with the third respondent-Union which talks had been going well before conciliation commenced in respect of the demands. In the bilateral talks between the Management and the third respondent-Union it was made clear that all the temporary employees would be made permanent. While matters stood thus, the third respondent-Union approached the Commissioner of Labour of the Government of Tamil Nadu on 12th October, 1981 and 13th October, 1981 for initiation of conciliation proceedings. As a result of such conciliation proceedings, the impugned settlement came into being.
9. It is the specific case of the Management that the petitioner-Union was aware of the talks between the Management and the third respondent-Union even after conciliation by the fourth respondent was over and also it was aware that conciliation proceedings had been initiated before the first respondent. The petitioner-Management was also aware of the draft settlement arrived at between the Management and the third respondent-Union which had been forwarded to the first respondent and discussed before him. The Management's specific case in the counter is that the petitioner-Union approached the first respondent on 12th October, 1981 and 13th October, 1981 and made submissions to him, that it was aware of the draft settlement that had been drawn up, that its objections were considered by the first respondent in his capacity as Conciliation Officer and that ultimately on 14th October, 1981 the Management and the third respondent-Union appeared before the Conciliation Officer (first respondent) and signed the impugned settlement.
10. The third respondent-Management further submitted in the counter that the petitioner had notice of the conciliation proceedings before the first respondent. Being fully aware of the fact that bilateral talks were going on between the Management and the third respondent-Union on various issues including those relating to conferment of permanency to temporary employees and also knowing that the first respondent was conciliating in the matter, the representatives of the petitioner-Union met the first respondent on 12th October, 1981 and 13th October, 1981 and conveyed to him their objections with reference to the terms of the settlement that had more or less been arrived at between the Management and the majority section of its workmen. Those objections of the petitioner-Union were taken into account by the first respondent and only on being fully satisfied that the majority of the workmen sponsored and supported the impugned settlement and that the same was fair and reasonable, did he affix his signature to the impugned settlement. There is no bar to the first respondent concluding the conciliation proceedings by means of a settlement under S. 12(3) of the Act if he was satisfied that the settlement was fair and reasonable and it had the backing the majority of the workmen employed.
11. The second respondent-Management refuted the allegation of arbitrary nature of discharge alleged by the petitioner-Union and stated that fair-play was adopted in discharging the temporary employees who were in surplus. Even the brother of the General Secretary, who is a signatory to the impugned settlement, was discharged from service as he could not be confirmed as per the rationale arrived at between the third respondent-Union and the Management. In fact, several members of the petitioner-Union stood to gain since they were confirmed and made permanent as a result of the impugned settlement. The workmen for conferment of permanency on the one hand and those for discharge on the other, were selected only after records of past service, attendance and efficiency were looked into.
12. It has been further stated by the second respondent-Management that there is no bar for the first respondent to take up conciliation on an issue regarding bilateral talks which had been going on both before and after the first conciliation talks. The first respondent had jurisdiction to function as Conciliation Officer in respect of the dispute between the workmen and the Management. The workmen selected for permanent employment and those for discharge had been selected from employment records, and it is not correct to say that all senior employees have been discharged. According to the Management, no Act nor even Act 46 of 1981 visualises that the Management should retain on its rolls a surplus labour force. The Management submitted that most of the workmen have accepted the benefit of the settlement and several of the 51 workmen discharged have already raised industrial disputes in accordance with the provisions of the Act and in particular under S. 2A thereof and those disputes are pending conciliation. Hence, disputes are pending conciliation. Hence, according to the Management, the Machinery under the Act has already been set in motion in respect of the non-employment of the aforesaid workmen and therefore the writ petition is liable to be dismissed.
13. The third respondent-Union, which is a party to the impugned settlement, submitted that the entire issue was sorted out amicably between the third respondent-Union and the Management and an agreement was entered into on 14th October, 1981. The Conciliation Officer, before signing the agreement went into the reasonableness, justification and the merits of the terms of the agreement and after having satisfied himself, signed the same. The settlement has been given effect to in all respects and the workmen who were found to be surplus have been discharged as early as 15th October, 1981. On these grounds, the third respondent-Union prayed for the dismissal of the writ Petition.
14. The first and fourth respondents have filed a common counter contending that the Britannia Industries Employees' Union (third respondent) represented to the Honourable Prime Minister of India on 14th April, 1981, under intimation to the union Minister for Labour, and requested them to take necessary action for absorbing 383 employees as permanent workers. In the meantime, the petitioner-Union raised an industrial dispute under S. 2(k) of the Act on the same issue besides some other issues before the Assistant Commissioner of Labour, Chengalpattu at Madras. The conciliation proceedings held before the Assistant Commissioner of Labour, Chengalpattu at Madras ended in failure and hence the Assistant Commissioner of Labour, Chengalpattu at Madras submitted a report to the Government under S. 12(4) of the Act through the Commissioner of Labour on 6th October, 1981. In the meantime, the representation submitted by the third respondent-Union before the Honourable Prime Minister was forwarded to the Commissioner of Labour, Madras, through the Tamil Nadu Government for necessary action. When both the S. 12(4) report and the representation referred to above were under the consideration of the Commissioner of Labour, Madras, the third respondent-Union, which has been accorded recognition by the State Implementation Evaluation Committee and which is the sole bargaining agent, represented to the Commissioner of Labour by letter dated 12th October, 1981 that they have been holding negotiations with the Management on the question of according permanent status to temporary workmen. They further represented that the Officials of the Labour Department should intervene and effect a settlement as they felt that the Government without knowing the representative character of the other Union passed orders in G.O. Ms. No. 845, Labour and Employment, dated 22nd April, 1982 on the conciliation failure sent by the Assistant Commissioner of Labour, Chengalpattu at Madras. At the request of the Management and the third respondent-Union, which is the recognised Union, further conciliatory talks were held before the Assistant Commissioner of Labour (Headquarters) and a settlement providing for permanency of 332 workmen was reached on 14th October, 1981 under S. 12(3) of the Act. This settlement is being questioned by the Petitioner-Union on the ground that the recognized Union (third respondent) has no locus standi to render 51 workers jobless.
15. It has been specifically stated by the first and fourth respondents in the counter that the third respondent-Union addressed the Commissioner of Labour, Madras, on 12th October, 1981, to take steps to protect the temporary workers and to confirm them in view of the State Government's new enactments proposing permanency of workmen who have completed 480 days of service in a period of two years. At the request made by the third respondent Union, a settlement was reached under S. 12(3) of the Act before the Assistant Commissioner of Labour (Headquarters). In order to encourage the principle of 'one union for the industry', the settlement was reached after giving due opportunities to the parties and after ensuring that the terms of the settlement were beneficial to the workmen. The Petitioner-Union which met the Assistant Commissioner of Labour (Headquarters) on the 12th and 13th October, 1981, did not want to be a party to the settlement, and with a view to stall the settlement sent telegrams to the Officials in the Commissioner of Labour's office stating that the settlement should not be finalised.
16. It was further submitted that the question of Permanency of the workmen was considered in the light of the production capacity of the unit, manpower requirements etc. and it was found that the services of 51 workmen were not required by the Company and so it was agreed between the Management and the Union that these workmen should be paid lumpsum terminal compensation of Rs. 6,500 inclusive of all statutory benefits. Copies of such settlement were handed over to the Union representative on 21st October, 1981 itself. Therefore, respondents 1 and 4 would submit that the workmen who received terminal compensation ceased to be employees of the Company.
17. Respondents 1 and 4 further submitted that once a settlement under S. 12(3) of the Act is reached, the settlement will bind all workmen irrespective of the fact whether the workmen are members of the Union or not. The third respondent, by letter dated 12th October, 1981, requested the Commissioner of Labour to intervene in the dispute. The Assistant Commissioner of Labour (Headquarters) being a State level Conciliation Officer, there is nothing wrong in his settling the dispute by the impugned settlement under S. 12(3). The petitioner-Union had participated in the conciliatory talks held on 12th October, 1981 and 13th October, 1981 and so it is not correct to say that no notice was given to them. The Assistant Commissioner of Labour (Headquarters) signed the settlement only after verifying the reasonableness of the settlement.
18. It is further contended by respondents 1 and 4 that the first respondent, during the course of conciliatory proceedings, had verified the records of the third respondent relating to membership, demands etc. and satisfied himself that the third respondent Union enjoyed convincing majority among the workmen and had been duly authorised to represent the workers. As a matter of fact out of 383 temporary workers, 332 workers have been made permanent. If the parties are aggrieved with regard to the settlement, they have ample with regard to the settlement, they have ample remedy under the Act to take appropriate action. They cannot contend that the settlement itself is null and void. According to these respondents, the settlement is legal, valid and proper and the appellant-Union has not made out any case to come by way of a writ petition under Art. 226 of the Constitution. With these contentions, respondents 1 and 4 prayed for the dismissal of the writ petition.
19. The learned single Judge of our High Court, who heard the writ petition, after elaborately considering the contentions raised by the parties, held that the writ petition is maintainable. On the question whether the impugned settlement has been arrived at in the course of conciliation proceedings, the learned Judge held that the Assistant Commissioner of Labour (Headquarters) has jurisdiction to investigate the dispute and induce the parties to come to an amicable settlement, that the impugned settlement was arrived at between the parties in the course of conciliation proceedings on 14th October, 1981 and that the Assistant Commissioner of Labour (Headquarters) Madras has jurisdiction to hold conciliation with the recognised Union, as he has done in this case. The further findings are that the petitioner Union had participated in the conciliation talks held on 12th October, 1981 and 13th October, 1981, that there is no legal obligation on the part of the Conciliation Officer, viz., the Assistant Commissioner of Labour (Headquarters) to issue notice to the Petitioner-Union, that the conciliation proceedings with one Union will bind the workmen in the whole of the establishment, that the Assistant Commissioner of Labour (Headquarters) after verifying the numerical strength of the recognised Union, arrived at the settlement with the third respondent-Union, that the proceedings before the Assistant Commissioner of Labour (Headquarters) must be deemed to be a continuation of the proceedings initiated by the Assistant Commissioner of Labour, Chengalpattu, and that even assuming that the Assistant Commissioner of Labour, Headquarters had held independent proceedings at the instance of the averments in the counter-affidavit, the representatives of the petitioner-Union were given a hearing by the Assistant Commissioner of Labour, Headquarters, on 12th October, 1981 and 13th October, 1981 and that consequently Rule 23 of the Rules is not attracted to the facts of this case. The learned Judge has further held that the duty of the Conciliation Officer is to induce a party to come to a fair and amicable settlement, that is in this case there was a regular conciliation in accordance with law and that the conciliation in accordance with law and that the conciliation is fair and just. The learned Judge rejected the contention to the effect that 51 workmen were victimized since thy belong to the petitioner Union. The learned Judge was also satisfied on the evidence on record that the third respondent Union enjoys membership of 750 out of 900 odd off the workmen of the Management and that the petitioner-Union has not been able to place any demonstrable evidence that it enjoys the confidence of the majority of the workmen. The 51 workmen who have been ousted, according to the learned Judge, were chosen on definite norms with regard to their performance etc. and hence the settlement cannot be said to be in any way unreasonable or unfair. Even with regard to these 51 workmen, terminal compensation at a very high rate with all other emoluments, has been paid, and hence, according to the learned Judge, the Assistant Commissioner of Labour (Headquarters) was perfectly justified in certifying the settlement as fair and reasonable under S. 12(3) of the Act. As a result of the above findings, the learned Judge, dismissed the writ petition.
20. As against the order of dismissal of writ petition, the present appeal has been filed by the writ petitioner.
21. Mr. N. G. R. Prasad, learned counsel appearing for the appellant, put forth the following contentions :
(i) The Management cannot enter into a settlement under S. 12(3) or S. 18(3) with one unit, when especially most of the terminated employees did not belong to the Union with which the management has entered into the settlement. According to Mr. Prasad, the employees who were affected, should also sign the settlement.
(ii) The Condition Officer, who is the first respondent, has not applied his mind to the settlement, but he simply took the cyclostyled copy of the settlement prepared and had it signed by the Management and the first respondent.
(iii) When the subject-matter of the conciliation is with regard to confirmation or non-confirmation, the Conciliation Officer cannot sign the settlement on a non-issue, i.e. termination from service of some employees.
(iv) The settlement is unfair.
22. Elaborating the above contentions, Mr. Prasad, submitted that a settlement can be only in respect of a collective dispute and not in respect of individual termination as such and that in the light of S. 2A of the Act, a settlement can be effected either by a terminated employee or by the Union to which the terminated employee gives authorisation. We can deal with this aspect of the case in the first instance.
23. Section 2A of the Act reads as follows :
"Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharges, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workmen nor any union of workmen is a party to the dispute."
Section 12 reads as follows :
"1. Where any industrial dispute exists or is apprehended, the Conciliation Officer may, or where the dispute relates to a public utility service and a notice under S. 22 has been given shall hold conciliation proceedings in the prescribed manner.
2. The Conciliation Officer shall, for the purpose of bringing about a settlement of the dispute, without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
3. If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the Conciliation Officer shall send a report thereof to the appropriate Governments or an Officer authorised in this behalf by the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute.
4. If no such settlement is arrived at, the Conciliation Officer shall, as soon as practicable after the close of the investigations, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at.
5. If on a consideration of the report referred to in sub-s. (4), the appropriate Government is satisfied that there is a case for reference to a board, Labour Court, Tribunal or National Tribunal, it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor.
6. A report under this section shall be submitted within fourteen days of the commencement of the Conciliation proceedings or within such shorter period as may be fixed by the appropriate Government :
Provided that, subject to the approval of the Conciliation Officer, the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute."
Section 18 reads as follows :
1. A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.
2. Subject to the provisions of sub-s. (3), an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.
3. A settlement arrived at in the course of conciliation proceedings under the Act or an arbitration award in a case where a notification has been issued under sub-s. (3A) of S. 10A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on -
a) All parties to the industrial dispute;
b) All other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, Arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be records the opinion that they were so summoned without proper cause;
c) Where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;
d) Where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment, or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part."
Rule 23 of the Rules deals with conciliation proceedings in non-public utility service. Rule 24 deals with submission of statements by the respective parties. Rule 25 is the rule which states how the memorandum of settlement should be drawn and signed. Rule 25(2)(c) deals with an industrial dispute raised by a workman as per the provision in S. 2A and states that the settlement should be signed by the individual workman who raised a dispute under S. 2A.
24. Ex. A, filed in this case, is the memorandum of settlement under S. 12(3) and under Rule 25 of the Rules reached before the Assistant Commissioner of Labour (Headquarters), Madras on 14th October, 1981. The workmen were represented by the Britannia Industries Employees' Union, the third respondent in this case. This document shows that the Assistant Commissioner of Labour (Headquarters), Madras has verified the record of membership of the britannia Industrial Employees' Union (CPT 434) and found that the Union has convincing majority with substantial number of workers as its members and that they are the recognised Union in the Company. It is also clear from that document that the Conciliation Officer, after finding that the terms of settlement are fair and reasonable in totality, approved the settlement with a view to maintain an effective, harmonious and peaceful industrial relations leading to higher productivity, efficiency of the industry and labour productivity. The terms of the settlement are clear that it is binding on all the temporary workmen of the Company who are on the muster rolls of the Company as on the date of signing the settlement and on all those who will be made probationary workmen at the factory at Padi during the period of the settlement unless and otherwise specified. Clause 10 of the settlement spells out that the temporary workmen whose names are not in Annexure II to the settlement but whose names are in Annexure I thereof, are not required for service in the Company and shall not be given employment from the day following the signing of the agreement, and that at the request of the Union each of those workmen shall be paid a lump sum terminal compensation of Rs. 6,500 inclusive of all the statutory eligibilities due to them.
25. Mr. Prasad submitted that subsequent to the introduction of S. 2A, the individual workmen's right has to be protected since he has every right to raise an industrial dispute. The settlement entered into without the signature of the affected workmen cannot bind the affected workmen by invoking S. 18(3)(d). In support of his contention that the settlement Ex. A, will not bind the discharged workmen in as much as they have not subscribed their signature to such a settlement, the learned counsel cited the decision reported in Chemicals & Fibres of India v. D. G. Bhoir [1975-II L.L.J. 168]. In the case, the Supreme Court, dealing with a blanket ban of strikes etc. provided under S. 23 of the Act when conciliation proceedings are pending, held that it is not possible to give such an extended meaning to that provision when especially conciliation proceedings are pending at the instance of an individual workman by virtue of S. 2A. The Supreme Court further held that in respect of such proceedings raised by an individual worker under S. 2A, even in respect of S. 23(b) some limitation should be read confining it to the parties to the proceedings either actually or constructively, as in the case of a union espousing the cause of an individual workman. Proceeding further, the Supreme Court held that it would be too much to expect that the Legislature intended that a lid should be put on all strikes just because the case of a single workman was pending. From this ruling, Mr. Prasad would want to suggest that the settlement entered into affecting individual workmen cannot bind them if they have not subscribed their signature to such settlement. We are afraid, we cannot draw analogy from the above Supreme Court decision in respect of settlement arrived at by recognized Union of an industry. In the above Supreme Court decision, it has been specifically stated :
"That the general body of labour should be prevented from resorting to strike where they had chosen to espouse the cause of a single workman is understandable and reasonable."
In the case on hand, however the recognized Union (third respondent) has initiated the conciliation proceedings and entered into the settlement through the intervention of the Conciliation Officer. We are of the view that the decision, far from supporting the contention of the learned counsel, really supports the binding nature of the settlement on all the workmen of the establishment.
26. Mr. Prasad also cited the decision reported in Workmen of Delhi Cloth & General Mills Ltd. v. Management [1972-I L.L.J. 99]. In this case, the Supreme Court has definitely stated that S. 18(1) does not vest in the Management and the Union unfettered freedom to settle the dispute as they please and clothe it with a binding effect on all workmen or even on all member workmen of the union and that the settlement has to be in compliance with the statutory provisions. In that case, S. 18(1) directly came for discussion and it was found that the provisions of the Act and the Rules had not been complied with in the case of the particular workman and therefore it will not be a bar to the claim of the particular workman as represented by the other union. As far as the present case on hand is concerned, the dispute was raised by the recognized Union and there is absolutely no settlement as envisaged under S. 18(1) of the Act. We are of the view that this decision also cannot be applied to the present case.
27. The next case cited by Mr. Prasad is the one reported in K.C.P. Ltd. v. State (AP.) (45 F.J.R. 484). There, a Bench of the Andhra Pradesh High Court, dealing with S. 2A of the Act on the question whether it offends Art. 19(1)(c) of the Constitution, observed that S. 2A treats an individual dispute as an industrial dispute for the purposes of the Act in certain cases that it does not conflict with the labours' right to have their collective dispute decided under the Act. Proceeding further, the learned Judges observed that S. 2A is intended to protect an aggrieved worker who, though he may have a strong case, could not move the Tribunal for necessary relief as the statute then stood and that the Parliament in those circumstances, in order to remove tyranny to a single worker, whether it is exercised by the workers' union or by the Management, in its wisdom introduced S. 2A in 1965. It has been specifically held in that decision that S. 2A was supplementary to the collective bargaining or did not in any manner affect it, but on the other hand, the individual's freedom is thus guaranteed in order to resolve the disputes arising between an individual worker and the Management and not leave it to the sweet will of the workers' union. Finally the High Court observed that S. 2A is not violative if Art. 19(1)(c) of the Constitution. No doubt, this decision does not directly deal with the point raised by Mr. Prasad. But it is clear from this decision that S. 2A was introduced for the purpose of protecting individual worker and at the same time to see that his grievance is redressed though the union or body of workers would not come to the help of the particular worker. Thus, the mode and method of invoking the jurisdiction of the authorities set up under the Act cannot in our opinion destroy the purpose of S. 18 or 18(3)(d) of the Act.
28. No doubt, as Mr. Prasad has pointed out, S. 2A is an exception to S. 18 which contemplates collective bargaining. But that does not mean that the binding force contemplated under S. 18(3) is destroyed because of the introduction of S. 2A.
29. The next point Mr. Prasad argued is as to whether the settlement arrived at was in the course of conciliation proceedings. According to the learned counsel, the Conciliation Officer, Chengalpattu, has reported failure of conciliation, that the Assistant Commissioner of Labour (Headquarters), Madras, has not jurisdiction to conciliate in the matter and that the conciliation by the latter was behind the back of the appellant-union. It is seen from the Government File that the third respondent-union, by letter dated 12th October, 1981, addressed to the Commissioner of Labour, Madras, requested the Commissioner of Labour to interfere in the dispute that was going on between the third respondent-union and the Management in respect of confirmation of temporary workers numbering 385. On this letter, we find an endorsement directing the Assistant Commissioner of Labour to hear the case at 11 A.M. on 14th October, 1981. On 14th October, 1981, as seen from the Note-file two telegrams were sent by the appellant-union addressed to the Commissioner of Labour, Madras, to the following effect :
"We oppose any agreement retrenching Britannia Industries Workers-Dispute pending Labour Department - INTUC"
These telegrams appear to have been sent on 13th October, 1981 itself. As per the settlement, it is clear the Conciliation Officer, viz., the Assistant Commissioner of Labour (Headquarters), Madras had applied his mind and signed the settlement after satisfying himself that the settlement was to the best advantage of the workers and the industry concerned. It is seen from the settlement that the Assistant Commissioner of Labour (Headquarters), Madras, verified the records of membership of the Britannia Industries Employees' Union (CPT 434) and found that the Union had convincing majority with substantial number of workers as its members and that they are the recognised Union in the Company. The terms of the settlement are binding on all the temporary workmen of the Company who are on the muster rolls of the Company as on date of signing of the settlement and on all those who will be made probationary workmen at the factory at Padi during the period of the settlement unless and otherwise specified .... Various demands were settled under this settlement effected by the Assistant Commissioner of Labour (Headquarters), Madras, and clause 10 thereof reads as follows :-
"The temporary workmen whose names are not in Annexure II to this settlement but whose names are in Annexure I to this settlement are not required for service in the company and shall not be given employment from the day following the signing of this settlement. At the request of the Union each of these workmen shall be paid lump sum terminal compensation of Rs. 6,500 (Rupees six thousand and five hundred only) inclusive of all the statutory eligibilities due to them".
Thus, we find the settlement effect is a package deal and that one among the terms thereof pertains to retrenchment of some of the temporary worker. It is difficult to segregate one clause and uphold the other clauses in the settlement since the settlement as a whole is a package deal between the recognized Union which yields majority in membership of the workers employed in the industry, and the industry as such.
30. Mr. Prasad, citing the decision in Maneka Gandhi v. Union of India , submitted that failure to hear the individual
affected would vitiate the settlement proper. We are afraid, we cannot apply that principle to a settlement which is binding upon all the workers in the establishment as per S. 18(3) of the Act.
31. Mr. Prasad next cited the decision reported in G. Muthukrishnan v. Administrative Manager[1980-I L.L.J. 215] in which a Full Bench of our High Court set aside the award of the Labour Court after observing that the Government on the second time when it interfered with its own order, did not hear the Management and therefore the reference to the Labour Court itself was a nullity. We do not find, this decision has any bearing on the case before us where S. 18(3) comes in operation.
32. The next case cited by Mr. Prasad is the one reported in National Textile Workers' Union etc. v. P. R. Ramakrishnan and others [1983-I L.L.J. 45]. That case arose out of winding up proceedings where the Supreme Court held that the workers must have a say since such winding up would bring about termination of such workers without giving an opportunity of being heard against the making of such an order. Even this decision cannot have any bearing on the facts before us where we have to decide on the applicability of S. 18(3).
33. Yet another decision relied on by Mr. Prasad is the one reported in I.T.C. Employees' Association v. State of Karnataka [1981-I L.L.J. 431], where the Karnataka High Court had occasion to go into the allegation regarding non-application of the mind of the Conciliation Officer in respect of a settlement running to 89 pages with innumerable clauses. The contention that the officer could not have applied his mind within a short space of time to the terms of the settlement and that therefore the conciliation would not be binding on the workers was negatived by the High Court. Even this decision cannot be considered as coming any way near to the facts before us.
34. We do not think it necessary to notice the other decisions cited by Mr. Prasad on the point since they do not deal with S. 18(3) as such and to its binding nature on the workers of an industry in respect of a settlement arrived at by a particular union when there are rival unions in that industry.
35. Mr. N. G. R. Prasad next contended that the settlement has given arbitrary power to the Management and the Management and the Management has sent out senior employees without following the principle of 'last-come first-to-go'. This contention was countered by Mr. K. K. Venugopal appearing for the Management by stating that all the casual labourers were made temporary workers on the same date and therefore the workers cannot claim seniority by clubbing the period during which they worked as casual labourers. In and by the S. 12(3) settlement effected on 6th April, 1979 the Company agreed to make 439 casual workers mentioned in Annexure I thereto as temporary workers with effect from the date of their joining duty. The settlement further states that the workers appearing in that list would be sent letters for joining work by the company to their last-known addressed per the company address asking them to report for work on or before 6th April, 1979.
36. Mr. Prasad pointed out that as early as 20th February, 1981, the appellant-Union has raised the dispute regarding confirmation of temporary workmen and that the settlement, now impugned, cannot be considered as a settlement coming under S. 18(3) since it is only an agreement between the third respondent-union and the Management. To stress this point, learned counsel submitted that the Conciliation Officer has not followed the necessary procedure as per the rules in effecting the conciliation. In support of his contention, Mr. Prasad cited the decision reported in Jhagrakhan Collieries v. G. C. Agrawal (1975 Lab. I.C. 137). In that case, the Supreme Court no doubt held that an implied agreement by acquiescence, or conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party, being outside the purview of the Act, is not binding on such a worker under either sub-s. (1) or under sub-s. (3) of S. 18. The facts of that case would show that there was only an agreement and not a settlement. In the case on hand, the conciliation proceedings, as we have already seen, were started by the third respondent before the Assistant Commissioner of Labour (Headquarters), Madras and the Assistant Commissioner of Labour (Headquarters), Madras after applying his mind to the best interests of the parties concerned, has effected the settlement. In the above-mentioned case, the Supreme Court has specifically held as follow :-
"It is clear from a perusal of S. 18, that a settlement arrived at in the course of conciliation proceedings is binding not only on the actual parties to the industrial dispute but also on the heirs, successors or assigns of the employer on the one hand, and all the workmen in the establishment, present or future, on the other. In extending the operation of such a settlement beyond the parties thereto, sub-s. (3) of the Section departs from the ordinary law of contract and gives effect to the principle of collective bargaining."
"But sub-s. (3) cannot be invoked where it is a finding of the High Court that a settlement arrived at between the employer and the workmen is not deemed a settlement arrived at in the conciliation proceedings."
As far as the present case is concerned, the third respondent-Union approached the Commissioner of Labour, Madras, on the 12th and 13th of October, 1981, for intervention in the matter of retrenchment and for initiation of conciliation proceedings again in view of the intermediate and subsequent developments. The Commissioner of Labour referred the matter for conciliation to the Assistant Commissioner of Labour (Headquarters). During the conciliation proceedings itself it was agreed that all the temporary employees could not be confirmed and the conciliation was effected to sort out minor working difficulties. The Assistant Commissioner of Labour (Headquarters), Madras was seized of the matter and after proper negotiations the impugned settlement was arrived at. It is seen that the appellant-union was aware of the bilateral talks between the Management and the third respondent-union. Even after conciliation by the fourth respondent was over, they were also aware of the draft settlement arrived at between the Management and the third respondent-union which had been forwarded to the first respondent and discussed before him. That is why the appellant-Union approached the first respondent on 12th October, 1981 and 13th October, 1981, as contended in the counter filed by the Management, and made their submissions to him. Thus, the appellant-union, was aware of the talks between the Management and the third respondent-union and was also aware of the draft settlement that had been drawn up. It is also clear from the counter affidavit filed on behalf of the Assistant Commissioner for Labour (Headquarters), Madras, Assistant Commissioner for Labour, Chinglepattu and the State of Tamil Nadu, that the appellant met the Assistant Commissioner for Labour (Headquarters), Madras on 12th October, 1981 and 13th October, 1981 and stated that they did not want to be a party to the settlement. It is further averred that to stall the settlement, the appellant-union has sent telegrams to the officers in the Office of the Commissioner of Labour stating that the settlement should not be finalised. It has also been stated in the counter-affidavit, that the appellant-union had participated in the conciliatory talks held on 12th October, 1981 and 13th October, 1981 and hence, it is not correct to contend that no notice was given to the appellant-union. The above averments have not been countered by way of any reply affidavit by the appellant-union. It has been clearly stated by Mr. C. Chinnaswami, learned Additional Government Pleader, that the Deputy Secretary, who has filed the counter-affidavit, is aware of all the facts and he has averred in the counter-affidavit only after verifying the records and as such, there cannot be anything wrong in it. There is also specific averment to the effect that the Assistant Commissioner for Labour (Headquarters), Madras, has signed the settlement only after verifying the reasonableness of the settlement, which fact is also not controverted by the appellant by way of reply.
37. Further, Mr. C. Chinnaswami, learned Additional Government Pleader also cited the decision reported in Union of India v. Col. J. N. Sinha wherein the Supreme Court has held that if a
statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the Court cannot ignore the mandate of the legislature or the statutory authority and read with the concerned provision the principles of natural justice. The Supreme Court has further stated that as to whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of the power. Thus, according to Mr. C. Chinnaswami, learned Additional Government Pleader, it is clear that from the nature of the labour legislation and from the purport of S. 18 of the Act, the argument as if the principles of natural justice have been given a go-by, cannot be sustained. We are in complete agreement with the argument advanced by Mr. Chinnaswami in relation to S. 18 of the Act.
38. From these facts it is clear that the objections of the appellant-union were considered by the first respondent in his capacity as the Conciliation Officer and ultimately on 14th October, 1981, the Management and the third respondent-union appeared before the Conciliation Officer and signed the impugned settlement. Further, the Conciliation Officer has specifically averred that either side workers were heard and they are aware of the settlement. Thus, it is clear that a valid and binding settlement was arrived at between the Management on the one hand and the third respondent-union on the other. Such a settlement as per S. 18(3) of the Act is binding upon all the workmen in the establishment.
39. Mr. Somayaji, appearing for the third respondent-union, traced the events that ultimately led to the present settlement impugned by the appellant. On 14th December, 1979, the third respondent demanded of the temporary workmen and also agitated for other service conditions of the employees of the industry. On 6th January, 1981, S. 12(3) settlement was reached between the Management and the third respondent in regard to service conditions. On 20th February, 1981, the appellant union sought for confirmation of temporary workers and this was followed by a notice under Rule 24 dated 15th March, 1981. While matters stood thus, it appears, the third respondent wrote a letter on 14th October, 1981 to the Prime Minister of India with a copy marked to the Commissioner of Labour, Madras, and others, to settle the dispute regarding confirmation of temporary workers and other demands made by the employees of the second respondent. The appellant-union wrote letter to the Labour Officer, Chinglepattu to decide the dispute regarding confirmation of temporary workers. There was also a strike by some of the workers belonging to the appellant-union between 22nd May, 1981 and 25th May, 1981. The Labour Officer, Chinglepattu issued notice to the third respondent and others regarding the conciliation sought for by the appellant-union. On 6th October, 1981, after issue of notice to the respective parties, the fourth respondent reported failure of conciliation. On 12th October, 1981 the third respondent wrote a letter to the Commissioner of Labour, Madras, requesting for conciliation regarding the various issues which included confirmation of the temporary workers also. It was at this stage the appellant sent telegrams to the Commissioner of Labour on 13th October, 1981 opposing any settlement with the third respondent-union by the Management. It is clear from the records that the failure report sent by the Labour Officer, Chengalpattu, was received by the Government only on 15th October, 1981.
40. There is no difficulty in accepting that the third respondent is the recognized Union of the industry and Mr. Somayaji contends that it enjoys the majority of the workers as its members. Therefore, according to Mr. Somayaji, the third respondent has the bargaining power to settle any dispute between the workers and the Management. According to the learned counsel, it is only in the course of valid conciliation proceedings the settlement was reached between the third respondent and the second respondent and therefore the settlement thus reached is binding upon all the workers of the establishment under S. 18(3) of the Act.
41. A reading of the conciliation proceedings and the settlement arrived at clearly establish that the Assistant Commissioner of Labour (Headquarters), Madras had applied his mind and effected the settlement in the best interests of the Management and the Labour. It is clear from G.O.R. No. 930 Labour and Employment, dated 15th October, 1981, that the second respondent-Management is declared a public utility service industry for the purposes of the Industrial Disputes Act initially for a period of six months upto and inclusive of the 8th November, 1981, and this period of six months, by the said G.O., has been extended by six more months commencing from 9th November, 1981. The Commissioner of Labour, by his communication dated B3.11637/78 dated 31st January, 1978, has sent the following letter of recognition to the Management :
"The State Evaluation and Implementation Committee decided at its meeting held on 18th January, 1978 that the Management of Britannia Biscuit Company Limited, Padi, Madras-50 be advised to recognise the Britannia Workers Union (63/CPT) Madras under the Code of Discipline.
You are therefore requested to accord recognition to Britannia Workers Union (Regd. No. 63/CPT), Madras-50 under the Code of Discipline and intimate the date of recognition to this office at an early date."
The Britannia Workers Union (63/CPT) Madras is the same as the third respondent in these proceedings. The Government of India, under the Ministry of Industry, by letter dated 23rd March, 1978 addressed the Britannia Biscuit Company Ltd. (2nd respondent) and directed the Company to reduce the production. The letter reads as follows :-
I am directed to refer to this Ministry letter of even number dated the 21st November, 1977 fixing the productive capacity of your Bombay and Calcutta Units as 8,100 and 15,100 tonnes per annum respectively and to say that the Government has decided to fix the capacity of your Madras Unit for the manufacture of Biscuits as 3,600 (Three Thousand Six Hundred) tonnes per annum on the basis of maximum utilisation of plant and machinery. You are also permitted to combine the capacity for the three plants at Bombay, Calcutta and Madras so as to allow you some flexibility in adjusting your manufacturing activity at these three centres. You should radically reduce your production so that, within a period of three years, the production should not exceed your total licensed capacity.
2. The relevant industrial licence may kindly be submitted to this department for suitable amendment.
S. R. KAPUR
The second respondent, as early as 30th August, 1981, has written to the Deputy Commissioner of Labour, Madras, stating that as against the required 761 workmen as on that date, the Management had on the rolls 978 workmen comprising of permanent and temporary workers, that the Management was thus having a total surplus of 217 workmen in the factory, that this surplus workmen should be retrenched in the interest of continued industrial peace and sustained functioning and that the company wished to apprise those problems to its recognised union and to the Deputy Commissioner of Labour, Headquarters, Madras. The second respondent, by letter dated 8th September, 1980, addressed to the Deputy Commissioner of Labour, Headquarters, Madras, referred to the demand made by the third respondent and has stated that the Management would be explaining to the Deputy Commissioner on the demands during the direct discussions. The various other letters relied on by the third respondent would clearly establish the bilateral talks that were going on between the third respondent and the second respondent on the various issues including the one of making temporary workmen as permanent workers and the same was being apprised to the Deputy Commissioner of Labour by the second respondent periodically. While matters stood thus, the appellant initiated the conciliation proceedings before the Labour Officer, Chengalpattu on 30th May, 1981 by letter addressed to him. Even prior to this letter of the appellant date 30th May, 1981, the third respondent had addressed a letter to the Prime Minister of India with copy marked to the Commissioner of Labour, Madras, and others, to regularise 395 temporary workers. Thus it is clear from the above facts that the third respondent which is the recognized Union representing the majority of the workers, was conciliating the question of making temporary workmen as permanent workers much earlier to the letter written by the appellant to the Labour Officer, Chengalpattu. The present impugned settlement is the outcome of such a conciliation and correctly the Assistant Commissioner of Labour, Headquarters, Madras, has effected the settlement in valid conciliation proceedings.
42. Mr. K. K. Venugopal, learned counsel appearing for the second respondent-Management, pointing out the letter received from the Ministry of Industry which we have referred to above, and also submitting that the industry in question is governed by the Industrial Developments Act which fixes the production limit, would submit that the industry cannot burden itself with temporary workmen when especially the production limit has been fixed under the Industrial Development Act. According to Mr. K. K. Venugopal, the conciliation between the Management and the recognized Union regarding retrenchment of temporary workmen started as early as September, 1980, and the several documents filed would clearly establish that the third respondent-Union had entered into several settlements with the second respondent-Management. It was only for the first time on 20th February, 1981 according to Mr. K. K. Venugopal, the appellant-Union which is a minority Union, made a demand for confirmation of temporary workmen. According to the procedure, the learned counsel submitted that the Management has to take into account discipline, attendance and productivity of a workman for confirmation purposes. Learned counsel pointed out the averment in the counter filed by the second respondent-Management wherein it is stated :
"The petitioner union approached the first respondent on 12th October, 1981 and 13th October, 1981 and made their submissions to him. The petitioner union was fully aware of the talks going on between the Management and the third respondent union and that they submitted their views to the first respondent and were also aware of the draft settlement that had been drawn up. Thus their objections were considered by the first respondents in his capacity as Conciliation Officer. Ultimately, on 14th October, 1981, the Management and the third respondent union appeared before the Conciliation Officer respondent No. 1 and signed the impugned settlement."
Learned counsel submitted that there is not reply affidavit filed by the appellant regarding the averment that the appellant approached the first respondent on 12th October, 1981 and 13th October, 1981 and made submissions to him. This, in our opinion, clearly belies the contention of the appellant-Union that they were not aware of any conciliation proceedings before the first respondent and that the proceedings were carried on behind the back of the appellant-Union. The very fact that the appellant has sent telegrams stating that they will not be party to retrenchment for the purposes of settlement, clearly shows that the appellant was aware of the conciliation proceedings before the first respondent. It is also clear from the facts of the case that out of 383 temporary workers, 332 were made permanent and only 51 workers were sent out. It has also been made out that out of the 51 workers, 30 only belong to the appellant-Union and 21 belong to the third respondent-Union. The facts would also reveal that the retrenched workers were given Rs. 6,500 each by way of settlement. Mr. K. K. Venugopal also pointed out that as per Standing Order 25, even a permanent worker can be sent out with one month's notice or salary.
43. In W. I. Automobile Assn. v. Industrial Tribunal Bombay [1949-LLJ 245], it has been succinctly stated :-
"Conversely, if a workman is unwilling to work under a particular employer a trade union may insist on his doing so and the dispute will be about the employment of the workman by the employer and thus become an industrial dispute subject to the award of the Tribunal. Therefore if the bringing about of such relationship is within the jurisdiction of the Industrial Tribunal, because such disputes are covered by the definition of the expression "industrial dispute" there appears no logical ground to exclude an award of reinstatement from its jurisdiction. It can equally direct in the case of dismissal that an employee shall have the relation of employment with the other party, although one of them is unwilling to have such relation."
In the same decision, the Federal Court, dealing with the powers of a Tribunal observed :-
"The award of the tribunal may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law, but the tribunal is not fettered in any way by these limitations. In Volume I of "Labour Disputes and Collective Bargaining" by Ludwig Teller, it is said at page 536 that industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general the creation of new obligation or modification of old ones, While commercial arbitration generally concerns itself with interpretation of existing agreements. In our opinion, it is a true statement about the functions of an industrial tribunal in labour disputes."
The principles enunciated in the above decision clearly show the power of the Union to bind its members in properly constituted conciliation proceedings. The same principles have also been precisely stated in N.T.F. Mills Ltd. v. The 2nd Punjab Tribunal (A.I.R. 1957 SC 329) by the following observations :
"The Industrial Courts are to adjudicate on the disputes between employers and their workmen etc. and in the course of such adjudication they must determine the "rights" and "wrongs" of the claims made, and in so doing they are undoubtedly free too apply the principles of justice, equity and good conscience, keeping in view the further principle that their jurisdiction is invoked not for the enforcement of mere contractual rights but for preventing labour practices regarded as unfair and for restoring industrial peace on the basis of collective bargaining. The process does not cease to be judicial by reason of that elasticity or by reason of the application of the principles of justice, equity and goods conscience."
44. Mr. Somayaji, relying on the principles enunciated in the above Supreme Court and High Court decisions, submitted that once a valid settlement is reached between the Management and the recognized Union an individual worker need not know the implications of the settlement and the settlement so reached is binding on all the workmen unless it is vitiated by mala fides, collusion and corrupt practice. Mr. Somayaji rightly contended that the present dispute is not one raised under S. 2A but a dispute pertaining to employment and non-employment to temporary workers. Learned counsel further submitted that S. 18(3) by implication excludes application of the principles of natural justice. In support of this contention, learned counsel replied on the decision reported in Association of Chemical Workers v. Wahid Ali [1980-I L.L.J. 277]. In that case, one of the contentions was that any settlement by the employer with only one of the two negotiating unions, cannot be said to be a settlement in the course of conciliation. The question that arose for consideration in that case was whether such a settlement can be said to be effective settlement arrived at in the course of conciliation so as to bind the workmen who are not members of the third respondent-Union including those who happen to be the members of the petitioner-Union. The Bench of the Bombay High Court in that case observed that the provisions of S. 18(3) are a complete answer of this contention and that S. 2(p) read with S. 18 contemplates two categories of settlement, one arrived at in the course of the conciliation proceedings and the other arrived at otherwise than in conciliation proceedings. The Bench held that settlement arrived as as a result of the conciliation efforts of the Labour Officer would bind all the workmen of the first respondent who happened to be members of the petitioner-Union even though they were not agreeable to the terms thereof. Proceeding further, the Bench observed :
"However, S. 18(3)(d) appears to have been designed to meet some difficulties implicit in the collective bargaining with a floating army of workmen few of whom may not choose to be the member of any union and, one or more unions may, for reason of its own may not like to reach the settlement. Legislature contemplates making such settlement binding even on such indifferent or unwilling workmen if the Conciliation Officer brings about it bona fide to ensure industrial peace."
The Bombay High Court, after referring to various decisions, observed :
"According to all these cases, it is the intervention of the Conciliation Officer that makes difference to the settlement that is reached in the course of the conciliation proceedings and the one reached otherwise than in conciliation proceedings. The settlement is aimed at securing the industrial peace in the same manner in which the reference to the Industrial Court or arbitration, etc., are aimed at. It is assumed that the Conciliation Officer will not so persuade even one union to settle unless he is satisfied that it is fair and reasonable and it is in the larger interest of the industrial peace and in the interests of the workmen as a whole."
To the same effect is the decision reported in Mysore Sugar Company Employees' Union v. Commissioner of Labour [1968-I L.L.J. 49], where a Bench of the Mysore High Court has observed that the settlement in question in that case was promoted by the State Conciliation Officer and assisted by him and that it had his concurrence on being satisfied that it was fair and reasonable. Hence the High Court cannot decide whether the settlement is a fair and reasonable settlement, and what was necessary was that the State Conciliation Officer should have been satisfied and the High Court was satisfied that he was satisfied about it.
45. In Sri Anthony Gomes v. State of West Bengal [1974-II L.L.J. 94], the Calcutta High Court has specifically stated thus :
"Under sub-s. (1), a settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement. Under sub-s. (3), a settlement arrived at in the course of conciliation proceedings under the Act or an arbitration award in a case where a notification has been issued under sub-s. (3) of S. 10A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable, shall be binding on all persons who were employed in the establishment, or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in the establishment or part. In the instant case, there was a conciliation proceeding as the petitioner himself referred the dispute to a Labour Commissioner. Thereafter, it appears from the
affidavit-in-opposition of the respondent, that with the assistance of the Deputy Labour Commissioner, who acted as the Conciliation Officer, all the disputes between management and the workman including the dispute of the petitioners were settled. In terms of sub-s. 3(d) such a settlement will be binding upon all workmen of the company including the petitioner. The petitioner was undoubtedly a party to the dispute although he was not a member of the union. The distinction between sub-s. (1) and sub-s. (3) of the Act is that while under
sub-s. (1) if a settlement is arrived at by agreement between the employer and workmen otherwise than in the course of a conciliation proceeding, it shall be binding only on the parties to the agreement but under sub-s. (3), while such a settlement is arrived at in the course of a conciliation proceeding it will be binding upon all the workmen. The fact that the petitioner was not a member of the union is quite immaterial and does not affect the binding force of the settlement upon all employees. This view finds support from a decision of the Supreme Court in the case of Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakraborty and Others [1961-I L.L.J. 244]. It has been held by the Supreme Court that in order to bind the workmen, it is not necessary to show that the said workmen belonged to the union which was a party to the dispute before the Conciliator and that the whole policy of S. 18 of the Act appears to give an extended operation to the settlement arrived at in the course of conciliation proceedings and that is the object with which the four categories of persons bound by such settlement are specified in sub-s. (3) of S.
18. In a subsequent decision of the Supreme Court in the case of Bata Shoe Co. (P) Ltd. v. D. N. Ganguly and others [1961-I L.L.J. 303], the same view has been expressed. On behalf of the petitioner, reliance has been placed on a decision of the Supreme Court in the case of Workmen of M/s. Delhi Cloth General Mills Ltd. v. The Management [1972-I L.L.J. 99]. I fail to understand how that decision helps the petitioner, for that decision has also reiterated the same principle as in the earlier two decisions referred to above. In The Delhi Cloth General Mills' case, the settlement was arrived not in the course of a conciliation proceeding. But, in the instant case before me as has been stated already, the settlement was arrived at in the course of a conciliation proceeding with the assistance and concurrence of the Conciliation Officer. In view of Clause (d) of sub-s. (3) of S. 18 of the Act, the settlement will be binding upon the petitioner. In these circumstances, the contention of the petitioner that the settlement was not binding upon him cannot be accepted."
The above said decision, in our opinion, applies in all fours to the facts of the case and as such, the conciliation effected and the retrenchment effected will bind the appellant herein effectively.
46. The allegation that the appellant's union members are victimised by retrenching them has to be examined now. We have already held that the Conciliation Officer at Madras, after finding that the third respondent commands 720 workers out of 913 workers of the company and also after finding that it is the only recognised union, negotiated for the settlement by effectively assisting and agreeing for the reasonable propositions evolved between respondents 2 and 3 herein. In spite of the industry having excess labour owing to the fact that the production capacity has been reduced by the directions of the Government of India, Ministry of Industry in Ref. No. 14(18)/77-SCS dated 23rd March, 1978, 332 temporary workers out of 383 had been made permanent. Out of the 51 workers discharged, 30 of them belonged to the appellant union and 21 to the third respondent union. Even in respect of the discharged workmen, it was agreed between the management and the third respondent union that these workmen should be paid lump sum terminal compensation of Rs. 6,500/- each inclusive of all statutory benefits. About 29 discharged workmen have received this lumpsum terminal compensation. The facts of the case clearly reveal that the management taking into consideration the productivity and the manpower required, absorbed 332 temporary workmen as permanent leaving only 51 of them to be discharged. This itself will show that there was no move to deny the benefit of the new enactment conferring the permanent status to be afforded to the temporary workmen.
47. Section 25(f) of the Act deals with the conditions precedent to retrenchment of workmen. It visualises one month's notice to be given in writing indicating the reasons for retrenchment. Section 25(G) of the Act reads as follows :
"25(G). Procedure for retrenchment :- Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category unless for reasons to be recorded, the employer retrenches any other workman."
The criteria for making a workman permanent has been spelt out by a notice issued by the management. In that notice, it has been stated that for making a worker permanent, his record of discipline, record of attendance and productivity and efficiency levels will be taken into consideration. It is submitted on behalf of the management that the 51 workers were discharged after taking all these criteria into consideration and also after granting each workman a lump sum terminal compensation of Rs. 6,500/-. Even apart from this fact, all these 383 casual workers were made temporary workers on 6th April, 1979. 'Casual employment' as implied by the 1979. 'Casual employment' as implied by the term, itself came to an end at the end of each day of casual work and they were not bound to report for work the following day nor was the company bound to accept their services. The number of casual workers employed per day depend upon the daily requirement arising out of the absence of permanent workmen and as per exigencies. Further, as per the Standing Orders of the management, "Casual" has been defined as "one who is engaged on work of a casual nature or to fill a vacancy arising out of a casual nature or to fill a vacancy arising out of unforeseen circumstances and is ordinarily employed on a day-to-day basis." Further, since all these 383 workmen were made temporary on the very same day, it is stated by the management, that there is no question of a particular workman becoming senior to the other. Even apart from these averments, the management has specifically stated that these 51 workmen were discharged on the basis of various materials and criteria envisaged for discharging the workmen. From these facts, we do not think, the argument advanced on the strength of S. 25F and 25G of the Act will hold good. Even apart from this aspect of the case, twenty nine of the discharged workers have accepted the lump sum terminal compensation of Rs. 6,500/- each and they cannot be allowed to agitate the matter once over again. Further, the aggrieved workers have ample remedy to approach the appropriate authorities individually questioning their retrenchment on grounds other than those dealt with by us if they are so advised to take such proceedings.
48. As regards the maintainability of the writ petition, we are in complete agreement with the reasoning and finding given by the learned single Judge of this Court and we also hold that the writ petition as such is maintainable on the facts and circumstances of the present case.
49. Mr. Prasad in his reply, no doubt, reiterated his contention that S. 2A of the Act is an exception to S. 18(3) of the Act, that the Assistant Commissioner of Labour (Headquarters) did not apply his mind before putting his signature on the conciliation proceedings, that the discharge of the 51 workmen is nothing but victimisation and that the 'last-come-first-go' principle has not been followed in the present case. Number of decisions were cited by Mr. Prasad in this connection. We have already dealt with this principle and we do not think it necessary to mulct this judgment with these decisions since identical decisions on this subject have already been discussed by us in paragraphs supra. The suggestion of Mr. Prasad to declare the settlement as a settlement under S. 18(1) of the Act cannot be accepted on the facts and circumstances of the present case.
50. Thus, the detailed discussion we have made supra will clearly establish that the mode and method of invoking the jurisdiction by the authorities under S. 2A of the Act cannot, in our opinion, destroy the purport of S. 18(3)(d) of the Act, that the management has correctly entered into a settlement under S. 18(3) of the Act, that such a settlement is binding on all the workmen including the 51 discharged workmen as per S. 18(3)(d) of the Act, that the Assistant Commissioner of Labour (Headquarters), Madras has applied his mind before signing the settlement reached between the management and the third respondent, that the issue for conciliation included apart from other things, the discharging of excess labour in the interest of the industry, considering the absorption of 332 temporary workmen out of 383 temporary workmen, and that it can be easily spelt out that the conciliation effected is a fair and binding one.
51. In these circumstances, we are inn complete agreement with the reasoning of the learned single Judge of this Court and as such, we dismiss the appeal. However, there will be no order as to costs.
52. Immediately after the judgment was pronounced, Mr. N. G. R. Prasad, learned counsel for the appellant-Union, seeks leave of us to appeal to the appeal to the Supreme Court of India. We have not departed from the well accepted principles, including those countenanced by the Supreme Court of India while dealing with the questions involved and, in our view, there is no substantial question of law of general importance requiring a decision from the Supreme Court. Hence, leave is refused.