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Workers of Buckingham and Carnatic Co., by the Binny and Buckingham and Carnatic Co., Employees Union Vs. Commissioner of Labour and Chief Conciliation Officer and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Case NumberWrit Petn. Nos. 598 and 631 of 1963
Judge
Reported inAIR1964Mad538
ActsIndustrial Disputes Act, 1947 - Sections 2, 4, 12, 12(1), 12(2), 18, 18(1), 18(3), 20, 20(1), 36 and 86; Madras Industrial Disputes Rules - Rule 22
AppellantWorkers of Buckingham and Carnatic Co., by the Binny and Buckingham and Carnatic Co., Employees Unio
RespondentCommissioner of Labour and Chief Conciliation Officer and ors.
Appellant AdvocateS. Govind Swaminathan, Adv. for ;B. Lakshminarayana Reddi, ;S. Mohan Kumaramangalam, Adv. for ;K.V. Sankaran and ;K. Ranganathan, Advs.
Respondent AdvocateAdv. General, ;The Addl. Govt. Pleader, ;K. Rajah Iyer, Adv. for ;King and Partridge and ;B.R. Dolia, Adv. for ;Aiyar and Dolia
DispositionPetition dismissed
Cases ReferredManagement T. S. T. Co. v. Industrial Tribunal
Excerpt:
labour and industrial - settlement - sections 2, 4, 12, 18, 20, 36 and 86 of industrial disputes act, 1947 and rule 22 of madras industrial disputes rules - petition questioning applicability of settlement between respondent union and management - till last moment petitioner prepared to accept what ever considered to be reasonable - conciliation agreement in respect of common matters pertaining to employees though settled between one union and management binding under section 18 (3) on all employees irrespective of fact that certain employees were not members of union which signed settlement - held, settlement binds entire body of workers - petition dismissed. - - the two bargaining parties failed to reach an agreement. the labour conciliation officer then took the initiative and.....s. ramachandra iyer, c.j.1. these two petitions have been filed by the buckingham and carnatic co.'s employees' union and the madras textile workers' union purporting to act on behalf of the workmen employed by the buckingham and carnatic company ltd., for the issue of a writ of certiorari and mandamus respectively calling in question a settlement of an industrial dispute reached during the course of conciliation proceedings on 30-5-1963, between the management and the workers as represented by the madras labour union, the third respondent herein. before we begin to set out the facts, which have given rise to the present proceedings, we shall first give a few facts regarding the parties to the present dispute. the buckingham and carnatic co., ltd., to be referred to hereafter as the.....
Judgment:

S. Ramachandra Iyer, C.J.

1. These two petitions have been filed by the Buckingham and Carnatic Co.'s Employees' Union and the Madras Textile Workers' Union purporting to act on behalf of the workmen employed by the Buckingham and Carnatic Company Ltd., for the issue of a writ of certiorari and mandamus respectively calling in question a settlement of an industrial dispute reached during the course of conciliation proceedings on 30-5-1963, between the management and the workers as represented by the Madras Labour Union, the third respondent herein. Before we begin to set out the facts, which have given rise to the present proceedings, we shall first give a few facts regarding the parties to the present dispute. The Buckingham and Carnatic Co., Ltd., to be referred to hereafter as the management or as the mills, is running one of the premier textile mills in the State which has been declared to be a public utility service under Section. 2(n)(vi) of the Industrial Disputes Act, 1947 It employs about 13400 persons, about 1000 of whom belong to the Staff Union, are not concerned with the present dispute. The rest of them are industrial workers who do duties in about fifteen departments into which the activities of the company are divided The engineering section is one such department: that employs about 1300 workmen.

2. For quite a long time the majority of the workers in the mills have been members of a union known as the Madras Labour Union (3rd respondent) who will be referred to as Labour Union. 7794 workers are members of this comparative);' ancient institution, which was formed in the year 1918. The management has recognised ft since 1934 as the representative body of their workers. This is quite in conformity with the criterion laid down for the recognition of labour unions by (he managements, under the Tripartite conclusion!) which require that where there are several unions in an industry or establishment, the one with the largest membership should be recognised

3. Although the Madras Labour Union has on its rolls more than 55 per cent of the total number of workers employed by the management, a majority of the workers in the engineering department have kept themselves out of it having only 436 workers from that department on its rolls.

4. There is another union (petitioner in W. P. 598 of 1963) In which about 808 persons working in the engineering section of the company are members; that is B. and C. Company Employees' Union (which will be referred to hereafter as the Employees Union) the petitioner in the first of the above two cases.

5. The petitioner in the second writ petition, Madras Textile Workers Union has come into existence quite recently after the settlement had taken place. That Union has been registered only on 4-61963, having come into existence a few days earlier. It is claimed that about 1000 workers in the Mills of whom 200 belong to the engineering department seceded from the Madras Labour Union and have come to owe allegiance to the new Union. As this union was not in existence on the material dates, it has no special case of its own apart from supporting the stand taken by the Employees' Union, and so no further reference need be made to it in the course of this judgment The Employees' Union will be referred to in this judgment as the petitioner.

6. The present dispute is concerned with the wages of workers in the engineering department of the company. Scales of pay of workmen in that department were fixed by arbitration in the year 1957. Subsequently wages were increased from 1-1-1960 suitably to the benefits conferred under the recommendations of the Central Wage Board for Cotton and Textile Industry. These recommendations are to be current till 31-12-1964; but it was recognised by the Board that in the interim period, wages could be increased commensurate with increase in production.

7. During the middle of 1962 there was a dispute between the workers and management in regard to bonus payable by the latter to the former for the year 1961. That was settled by conciliation proceedings in which the management, Employees' Union, the Labour Union and the Staff Union participated.

8. On the 80th day of May 1961, the Madras Labour Union raised an industrial dispute regarding revision of wages of the Workmen employed in the engineering section. The Government declined by its order dated 23-6-1961 to take any action on it, as the workers in that department were being paid as much as other workers in the textile industry; they also held that there was no case for increase of wages till 31-12-1964.

9. Five months later the Employees' Union made a similar demand on behalf of the workers in the same department. This formed the subject-matter of certain conciliation proceedings and the Government after receiving the report of the Conciliation Officer (Labour Commissioner), by its order dated 28-5-1962 held that there was no justification for an increase in wages.

10. A few days later the former union, namely, Labour Union took up again the same question; they even threatened to stage a strike, if their demands were not met. This demand formed again the subject-matter of conciliation proceedings. During the discussions before the Commissioner for Labour, the representative of the management offered to take up the question of re-organisation or the engineering department and also a revision of wages of the workmen therein conformable to such rationalisation, before the end of the year. That offer was recorded. The Government on a consideration of the report of the Conciliation Officer held again that there were no grounds to reconsider their original decision not to refer the dispute for adjudication.

11. The management which was busy with the re-organisation of their other departments could not devote attention to the reorganisation of the Engineering section till 15-3-1963. The Labour Commissioner, interested as he was in the welfare of workmen and in the preservation of industrial peace, reminded the management of their promise by two letters dated 4-2-1963 and 2-4-1963, requesting them to expedite the matter. On the 8th of April, 1963, the management get ready with their scheme and put the same for the suggestions from the Labour Union. On the same day the Employees' Union met; they issued a warning to the management against their entering into any agreement with the Labour Union in regard to demands of workers in the engineering section whom it was claimed, they (the Employees' Union) could alone represent. Just on the previous day, the Union appears to have resolved by a majority to conduct a strike. The management then issued notice informing the workers that the proposals relating to the workmen in the engineering department were ready and had been taken up with the Labour Union and that discussions thereon had started even on the 8th of April, 1963 and advising them not to take any action. There can be little doubt that the Employees' Union for whom the public notice was intended were fully cognisant of the fact that the management had a scheme of rationalisation and they were holding discussions with the Labour Union, which was the recognised body to represent the workers.

12. But the Employees Union persisted in their attitude and by their letter dated 15-4-1963, they issued a notice of an intended strike. That notice did not conform to the provisions of Rule 59 of the Madras Industrial Disputes Rules, and this was pointed out to them by the Labour Commissioner in his reply dated 21-4-1963. He also appealed to the Union not to resort to any strike particularly in view of the national emergency. He said: 'You may await the result of the talks which are shortly to be held at this office in pursuance of the correspondence following the orders already passed by Government on the conciliation reports of the Labour Officer in this matter' The reference in that letter was obviously to the scheme of rationalisation put forward by the management in furtherance of their previous assurance given to the Government.

13. Discussions with the Madras Labour Union proceeded. There were occasions in which it appeared as if the talks would break down. The Labour Commissioner who took up the task of conciliation, had talks with them on the 2nd and 3rd of May, 1963. He had also separate talks with the representatives of the management, of the Labour Union and the Employees' Union. The Labour Union appears to have been very earnest in the matter of bargaining for a settlement most favourable to the workmen. The talks did not, however, proceed smoothly: the two bargaining parties failed to reach an agreement. The Labour Conciliation Officer then took the initiative and invited the parties to meet him on the 29th of May 1963, to see if conciliation could be effected through his good offices. The Employees' Union was also invited for talks on that date. The Labour Union raised objections to the scheme of wages fixed for eight categories of employees and also in respect of acting and promotion allowances. The Conciliation Officer suggested certain improvements to the scheme: those were accepted by the parties. On the following day all the parties were separately appraised of the full details of the scheme, the improvements suggested by the Conciliation Officer and the final acceptance of the same.

Copies of the draft settlement incorporating the accepted terms were handed over to the Management, the Labour Union and the Employees' Union. After some discussion, the Labour Union finally accepted the terms of the draft settlement. But the representatives of the Employees' Union who had till then been only urging that their Union should not be left out of negotiations, and that they would accept any terms which the first respondent (Conciliation Officer) would consider as fair and reasonable, declared suddenly that they could not accept the settlement The Labour Union which was satisfied, that the settlement reached was a fair and reasonable one, appended its signature to the settlement. So too the management did on 30-3-1963 in accordance with Section 12(3) of the Act.

14. Conformably to the terms of the settlement the new scheme was brought into force on 1-6-1963. On that day the engineering department worked smoothly. None of the workers dirt anything to indicate a non-acceptance of or a protest against the scheme. On the following day, however, there was a stay in strike by about 400 workers. The management then decided to admit to work only those workers in the engineering section who were agreeable to work on the terms of the revised settlement. A large number of workers agreed to work; others began to follow them day by day with the result that by 14-6-1963 when a lock-out was declared for some other reason, over 400 workers of the engineering department had come to work. In the meanwhile the Employees' Union as well as the newly formed Textile Workers' Union filed those applications under Article 228 of the Constitution challenging the validity of the conciliation proceedings which resulted in the settlement of 30th May, 1963.

15. The learned Advocate General who appeared for the Management did not raise any objection about the maintainability of the writ petition under Article 226 of the Constitution: on the other hand, he intimated that the management were anxious to have an adjudication on the validity of the industrial settlement now impugned. But Mr. Dolia appearing for the Labour Union argued, that no writ in the nature of a certiorari could He to quash the settlement arrived at through the good offices of the Commissioner for Labour, as what was arrived at was purely a contractual arrangement with the help of an administrative authority. This objection does not, however, take note of the existence of the second of the petitions for the issue of a writ of mandamus or other appropriate writ for directing the Commissioner for Labour not to give effect to the settlement. If the settlement arrived at is to be regarded as void, a indeed is the case for the petitioner, there could be no objection to the maintainability of the petition; we, therefore, overrule this preliminary objection.

16. In the affidavit filed in support of the first of the two petitions it has been suggested that the management in collusion with the Labour Union has brought about the settlement. There is, however, no basis for the suggestion. The Union which has on its rolls a number of workers from the engineering department, has been pressing their claims on more than one occasion. It was that Union alone that took a real interest in the rationalisation of the scheme put forward by the management and carried on subsequent negotiations with the help of ,the Conciliation Officer. The Employees' Union had throughout that period been merely watching the proceedings. The Labour Union has at any rate since 1934 been the sole and accredited representative of the workers in all matters of collective bargaining with the management. There is no reason suggested why it was interested in letting them down in the instant case. Admittedly the settlement provides for fixation of scales of wages slightly better than those of similar categories of workers in textile departments in other places as fixed by the Industrial Tribunal. A substantial percentage of workmen will get the benefit of increased wages thereunder: the rest of them will retain their existing scales of wages. No prejudice had, therefore, been caused to the workers by the settlement. The Employees' Union was fully aware of the rationalisation of the proposals and of the talks held by the Labour Union with the management almost from the very beginning. The materials now on record make it clear that the Employees' Union was prepared to leave the responsibility of bargaining to the other Union as the management recognised that alone. We are, therefore, of opinion that the settlement reached on 30-5-1963 with the assistance and through the good offices of the Conciliation Officer was entirely a bona fide one conceived in the interests of the workers concerned in the engineering department.

17. Mr. Govind Swaminathan appearing for the petitioner did not seriously attempt to support the petitioner's case on any ground of improper motive on the part of any of the parties to the bargain Learned counsel attacked the settlement as not having been brought about bona fide in the sense that the bargaining units did not do so with due care and caution with fairness to the workers, at they had not dealt with the petitioner who could alone represent the majority of the workers in the engineering department. It was contended that as the petitioner initiated the dispute, they being thus vitally interested in its outcome, any settlement without their concurrence should be regarded as void and as having no legal effect. Reliance was placed in this connection to certain decisions to support the argument, that as it was competent to a union like the Employees' Union to raise an industrial dispute, a settlement of such dispute consequently without its concurrence would be no settlement at all

In Newspapers Ltd. v. O. P. State Industrial Tribunal, : (1960)IILLJ37SC it was held by the Supreme. Court that it was not necessary that a registered body should sponsor is workman's case to make it an industrial dispute but that it would be sufficient if a body of workmen either acting through their union or otherwise, sponsored the case. That would constitute an industrial dispute. In Buckingham and Carnatic Co., Ltd., Madras v. Buckingham and Carnatic Mills Staff Union, : (1959)IILLJ781Mad this Court held further that in such a case it would not be necessary that it should be backed up by a majority of the total number of employees under a management. On the other hand, where there are several well defined sections having regard to the nature of the work in which they are employed, a dispute raised by a few of the workmen in one of such sections, if that were taken up by a substantial number of persons employed in that section would constitute an industrial dispute,

18. These cases are only authorities for the proposition as to when the industrial dispute as distinguished from an individual dispute can be said to arise. The term 'Industrial Dispute' as defined in the Act means any dispute or difference between employers and employees or between employers and workmen or between workmen and workmen which is connected with the employment or non-employment, of the terms of employment or with the conditions of labour of any person. If a trade union takes up a dispute of the kind referred to though raised only by one or few workmen, it will be an industrial dispute. What is therefore, necessary to constitute an industrial dispute is that it should relate to one of the matters specified in the section and should have been raised at the instance of a body of workers A trade union as such is not referred to in the definition But as a trade union represents its members, the raising or sponsoring of a dispute by it, is regarded as having the backing of its members. Essentially speaking the parties to the dispute will be the management on the one hand and the employees on the other. Vide Manager, Hotel Imperial New Delhi v. Chief Commissioner. Delhi. : (1959)IILLJ553SC

19. Secondly a trade union has a right to represent its members in any enquiry or conciliation of an industrial dispute. See Section 36 of the Act. There can be no doubt therefore that the Employees' Union can on behalf of Its members raise or sponsor an industrial dispute or represent its members' interest in proceedings initiated consequent on an industrial dispute. That is all and what that union would be entitled to

20. But the question in the present case it not whether the Employees' Union is competent to raise an industrial dispute but whether a conciliation settlement with a union (which had an equal right to raise a dispute) that has been recognised by the management, will bind all the workers

21. A conciliation is more or less a matter of negotiation between the parties. The functions of a conciliator is to bring the management and the workers together with a view to enter into discussions on the points in dispute and to discover means of settlement acceptable to both Under the Industrial Disputes Act the Conciliation Office) is an independent agency created with a view to promote industrial peace by making available govern mental facilities in the process of collective bargaining His presence and participation at the discussions does often facilitate an objectivity of approach in the matter of the bargain between the management and the labour. In the words of Sinha, J., in Royal Calcutta Golf Club Mazdui Union v. State of West Bengal, : (1957)ILLJ218Cal the main task of the Conciliation Officer is to go from one camp to the other and find out the greatest common measure of agreement. He has to investigate the dispute and do all such things as he thinks fit for the purpose of inducing the parties to arrive at a fair and amicable settlement of the disputes

22. Therefore when there is an industrial dispute brought up for conciliation at the instance of the one union that union is no doubt the bargaining party But the bargain being made with the assistance of the Conciliation Officer can be expected to be fair to all the workers including those who are not members of the union. It is this principle that distinguishes a mere settlement between one union and the management by direct approach. and a settlement reached after conciliation

23. Further in the present case although there were a number of occasions in which both the Labour Union as well as the Employees' Union raised disputes in regard to wages payable to the workers in the engineering department, those disputes were set at rest by the Government. There was, however, a fresh dispute when the rationalisation scheme was put forward by the management: but that dispute was only with the Madras Labour Union: the Employees' Union which kept itself aloof from the negotiations cannot be deemed to be a party to it. Under the circumstances one can regard the Labour Union alone as having raised an industrial dispute with reference to the rationalisation scheme.

24. Again so far as the management is concerned, one can take it, that it has an obligation only to bargain collectively with its employees That would imply that it should reckon normally with one spokesman on their behalf who could represent the entire body of workers. It was this principle which was accepted at the Tripartite Conclusions which entitled a union which has a majority of its workers on its rolls to recognition by the management in the matter of negotiations

25. To sum up, a defined department in industrial establishments may have a union of its own. Each union will perhaps be competent to raise an industrial dispute on behalf of their members if they are sufficiently large. There is nothing to prevent a management from negotiating with them. A conciliator too might help in that process But at the same time a management will not be bound to recognise any union which has not a majority of its employees on its rolls It can. for its purpose of collective bargaining, recognise a union which has a majority of its employees. It cannot obviously recognise a union which has only a minority of the total number of its employees which might even be a majority in any single department To accept such a principle would give room for abuse and lead to inconvenient results, when, therefore, it negotiates with the recognised union, and so long as negotiations for settlement are conducted bona fide, there it nothing which would invalidate a settlement when it has been done Through the conciliation proceedings

26. But Mr. Govind Swaminathan contends that as what the management did in the present case was to exclude the Employees' Union which was vitally interested in the settlement from the conciliation talks altogether, the negotiations during the month of April being conducted only with the Labour Union. This, it was argued, was contrary to the provisions of Section 36 of the Act which entitles a workman who is a party to a dispute to be represented by the union of which he is a member. There is no substance in this objection. Negotiations for settlement were conducted openly and to the knowledge of the Employees' Union. Every effort was made to consider their representations and apprise them of the various proposals and counter proposals, and till the very last, the Employees Union was willing to accept all that the conciliation officer was prepared to regard as reasonable.

A complaint is no doubt now made that a copy of the proposal was given to them only on the 80th of May, though the scheme, as such, was propounded by the management as early as 8th of April, 1963. Factually this is not correct. The Employees' Union must have been aware of the reorganisation scheme almost from the first week of April. What was given to them on the later date was the final draft as agreed to by the management with the Madras Labour Union. There is, therefore, no Justification for the criticism that the negotiations which culminated in the settlement were not bona fide. To our minds, it is very doubtful whether in opposing the settlement the Employees' Union is really influenced by the merits of the case or on account of any genuine grievance of the workers whom they represented. Possibly their attitude might be due to chagrin and disappointment at the management's refusal to recognise their status as a bargaining unit.

27. The next attempt of the learned counsel for the petitioner was to show that the settlement effected on 30-5-1963 was nothing more than an agreement between the two signatories thereto, namely, the management and the Labour Union, which would not bind the members of the petitioner Union. Section 18(3) of the Industrial Disputes Act states that a settlement of an industrial dispute arrived at in the course of conciliation proceedings will be binding not merely on all the parties to the dispute but also on the class of persons mentioned in sub-clauses (b), (c) and (d). It is argued that as there could have been, and indeed there was, no real conciliation in the present case, the provisions of sub-section (1) alone, rather than sub-section (3) would apply.

28. The former provision Sub-section (1)--which was introduced by the Amending Act 36 of 1956 states that a settlement arrived at by agreement between the employer and the workman otherwise than in the course of conciliation proceedings will be binding on the parties thereto alone

29. Before we examine the correctness of the contention, viz., that the settlement in the instant case would bind only the workers, who are members of the Labour Union, we should first refer to one contention raised by the learned Advocate General. It was argued that an agreement come to between the parties to as industrial dispute being the outcome of collective bargaining, would bind all workers although the negotiating unit on behalf of the workers was a union not having the entirety of the workers as members; and that in order that such an agreement to be binding on all the workers, including those outside the contracting Union it was not necessary that it should have the imprimatur of the conciliation officer. The argument was developed thus: Section 2(b) as amended in the year 1956, while defining the word settlement includes within it, not merely a settlement arrived at in the course of conciliation proceedings but one reached outside it, the only requirement being that it should comply with certain specified formalities. Section 18(1) which speaks of settlement refers to an industrial and not to an individual dispute. As an industrial dispute can be raised by a few with the support of a substantial body of workers, it should be inherent in any agreement come to with respect to it, that it must bind all. Therefore, an agreement between one union and the management so long as it is real and bona fide, will be a settlement Under Section 2(p) and would be binding on all the parties, viz., the entire body of workers by virtue of Section 18(1) there is no need even for the conciliation officer's participation in it.

30. We are, however, unable to accept the argument. Section 18(1) in terms makes a settlement arrived at de hors conciliation proceedings, binding only on the parties thereto. That sub-section can refer only to the actual parties to the agreement The mere existence of an industrial dispute, cannot clothe the sponsoring unit with authority to bind all the workers not represented by it. What binds the workers is the conciliation or an adjudication of that dispute through the agency or the authority specified in the Act

31. Section 18(1) was introduced in the year 1956, with a view to remedy a defect in the then existing law. Prior to that amendment, there was so provision to make such settlement binding even on the parties thereto, with the result that the workmen notwithstanding a settlement could raise an industrial dispute on the identical matter agreed upon by their union In Trade Union Law by N. A. Citrine (Second Edition) at page 121 the rule under the common law has been stated to be:

'Under the ordinary law of contract apart from the enactment to be mentioned below the terms of a collective agreement do not automatically become part of the individual contracts of employment which work people enter into with their employers; an employer and an employee are free in law to agree on terms inconsistent with those of a collective agreement, even though they are members of the organisations which have concluded the collective agreement. Only if and so far as the terms of a collective agreement are expressly of tacitly made part of the individual bargain, will they be binding as between employer and employee Because of the difficulty which may he encountered - particularly when the employer is non-federated firm - in proving that by express agreement or by usage the provisions of a collective agreement have become incorporated in the employee's contract of employment, certain enactments in recent years have provided means by which in stated circumstances the terms of a collective agreement can be enforced by or on behalf of an employee against the employer.'

Section 18(1) of the Act is merely intended to cure that defect In the law and to make an agreement come to with reference to an industrial dispute binding on the parties thereto. It is intended to go no further. If it were to be binding on others as well, there is really no need for any reference in subsection (3) to the binding nature of a conciliation settlement As we indicated earlier a conciliation is not the same thing as an adjudication. It is in essence an agreement between capital and labour arrived through the good offices of the Governmental agency The argument of the learned Advocate General really makes no distinction between Sections 18(1) and 18(3) Both a is said will bind all the workers.

32. It is a recognised rule that the provisions of a statute should be construed in a harmonious manner, there being a presumption against surplusage. Section 18(3) provides specifically for the case of a settlement reached through conciliation. being binding on employees other than the actual parties thereto Clause (d) thereto makes it binding on all persons who were employed on the date of dispute and those that subsequently come to be employed by the management Learned Advocate General argues that this provision is intended only to make the settlement binding on those that were workmen on the date of dispute, though not at the date of conciliation settlement or award, and those that come into employment subsequently To put it in his own graphic way, a backward and forward ambulatory operation of the adjudication is envisaged by Section 18(3) and that it has no reference to the binding nature of collective bargaining even if it be the result of a negotiation by one union alone. We are unable to agree. Id our opinion it is only by virtue of Section 18(3)(d) that the settlement specified in the section becomes binding on persons not actually parties thereto. The normal rule is that no agreement or even a judicial adjudication, will bind persons not parties thereto. A trade union can and does only represent its members When it enters into an agreement with the management, it can do so only on behalf of its members

Sub-section (1) to Section 18 is as we said intended merely to make it binding on the workers represented by it. There is nothing in the section to justify an extended meaning being given to it contrary to the ordinary law that a contract will bind only those that are parties to it. Likewise, Section 18(8)(a) can refer only to the actual parties to the settlement or award. Thus Section 18 makes a distinction between a case of settlement without the aid of the recognised official agency and one arrived at with the help of it or which is the result of an adjudication by a tribunal functioning under the Act. The former will bind only the parties thereto: the latter all the workers whether parties or not. It follows that an agreement between one union and the management without recourse to conciliation proceedings will only bind the members of that union and not others

33. This view is supported by authority vide Bata Shoe Co. (P) Ltd. v. D. N. Ganauli, : (1961)ILLJ303SC . In Ramnagar Cane and Sugar Com. Ltd. v. Jatin Chakravorty, : (1961)ILLJ244SC the Supreme Court while enunciating the policy underlying S 18, made certain observations which we consider might usefully set our even while considering the scope of S 18(1) Gaiendragadkar J. observed:

'Section 18(1) provides that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement; whereas section 18(3) provides that a settlement arrived at in the course of condition proceedings which has become enforceable shall be binding on all the parties specified in clauses (a), (b). (c) and (d) of sub-section (3) Section 18(3)(d) makes it clear that where a party referred to in clause (a) or (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 become subsequently employed in that establishment of part would be bound by the settlement. In other words there can be no doubt that the settlement arrived at between the appellant and the Employees' Union during the course of conciliation proceedings on February 25, 1954, would bind not only the members of the said Union but all work men employed in the establishment of the appellant at that date. That inevitably means that the respondents would be bound by the said settlement even though they may belong to the rivaunion In order to bind the workmen it is not necessary to show that the said workmen belong to the Union which was a party to the dispute before the conciliator The whole policy of Section 18 appears to be to give an extended operation to the settlement arrived at in the course of conciliation proceedings and that is the object with which the tour categories of persons bound by such settlement are specified In Section 18, sub-section (3).' In an earlier case, namely, Associated Cement Companies Ltd., Porbandar v. Their Workmen, 1960 SC 890 : AIR 1960 SC 77 considering the effect of the same section, the Supreme Court observed:

'It is thus clear that though an industrial dispute may be raised by a group of workmen who may not represent all or even the majority of workmen still, if the said dispute is referred to the industrial tribunal for adjudication and an award is made. It binds not only the parties to the dispute or other parties summoned to appear but all persons who were employed to the establishment or who would be employed to future are also governed by the award; in other words, the effect of Section 18 is that an award properly made by an industrial tribunal governs the employer and all those who represent him under S 18(c) and the employees who are parties to the dispute and all those who are included in S 18(b) and (d) The observations must apply with equal force to the binding nature of a settlement arrived at during the course of the conciliation proceedings, as S 18 comprehends such settlement as well.

34. Where the provisions of Section 18(3) do not apply as in the case of an agreement or settlement come to outside conciliation proceedings between a union consisting of only a part of the workers and the management, Section 18(1) will make ft binding on the members of that union alone and not others.

34a. The case for the respondents is that the settlement arrived at on 20-51963 was one come to in the course of conciliation proceedings and would derive its efficacy Under Section 18(3) which would render it binding on the members of the Employees' Union and other workers as well,

35. The operation of Section 18(3) is however sought to be got over on the side of the petitioner by an argument that the settlement in question was not the outcome of any genuine conciliation proceedings and indeed there could not be any under the law.

36. Mr. Govind Swaminathan argued that although several disputes were raised during the years 1961 and 1962 regarding increases of wages of the workers in the Engineering Section, those disputes resulted in nothing as they were not countenanced by the Government when they declined to make a reference Under Section 10. There being thus no pending dispute, the only basis for assuming any such dispute, could be the strike notice issued by the petitioner on 15-4-1963 That notice being invalid, Section 20(1) would not apply and there would in law be no industrial dispute in existence to give authority or scope for the conciliation officer to intervene. So the argument ran. Mr. Sankaran who appeared for the petitioner in the second of the two petitions went even further when he contended that no industrial dispute relating to a public utility concern could ever take place except following the issue of a strike notice or lock-out, etc.

37. The latter argument proceeds on a complete misapprehension of Section 12 of the Act and of Rules 22 and 23 of the Madras Industrial Dispute Rules. There exists no doubt a distinction in the matter of commencement, and rules of procedure between, conciliation proceedings with respect to a public utility service and a non-public utility industry. But that does not mean that no industrial dispute can arise in a public utility industry unless there be a notice of strike. Section 12(1) says that where an industrial dispute exists or is apprehended the Conciliation Officer may, or where the dispute relates to a public utility service and a notice Under Section 22 has been given, shall hold conciliation proceedings in the prescribed manner. Under that provision jurisdiction is given to the Conciliation Officer wherever an industrial dispute exists or is apprehended, to initiate conciliation proceedings. Generally speaking, it invests a discretion in him to initiate such proceedings. But no such discretion is given in the case of a public utility service. Where once a strike notice has been given in such a case he will be bound to initiate conciliation proceedings. That cannot obviously mean that in the case of a public utility concern, if there were no strike notice there could not be an industrial dispute or even an apprehension of a dispute.

38. One of the paramount objects of the Industrial Disputes Act is to avoid industrial unrest, to secure industrial peace and to provide a machinery to secure that end. Conciliation is undoubtedly the most desirable way to secure that end. It will be extremely anomalous if one were to hold that while that machinery will be available when there is only an apprehension of an industrial dispute in an ordinary industry, there would be no scope for it in a public utility concern unless the workers give strike notice or the management has taken the extreme step of imposing a lock out.

39. There is, however, no warrant for such a view being taken on the terms of Section 12, where the conciliation officer is given the discretion to initiate conciliation proceedings with respect to all industries, whenever an industrial dispute exists or is apprehended. It follows that the jurisdiction of the Conciliation Officer cannot be confined only to cases where strike notice has been issued in the case of public utility concern.

40. Now turning to the more substantial argument advanced by Mr. Govind Swaminathan, we' are of opinion that Section 20(1) cannot be read as containing an enumeration of all cases where conciliation proceedings could be initiated That provision merely creates a fiction as to the date of the commencement of conciliation proceedings It says that in regard to an industrial dispute where notice of strike is given, it will be deemed to commence on the date on which notice of strike was given In all other cases the date of commencement will be dale on which the Conciliation Officer gives notice of his intention to conciliate

41. Conciliation being necessary in all eases of industrial disputes, whether there exists a threat of strike or not, the statutory machinery should be available for all of them. Section 20(1) provides only for one type of disputes, i.e. where there has been a notice of strike Neither that provision nor Rule 22 can imply that there could be no conciliation with respect to cases where a dispute exists without a strike or threat of a strike. The purpose of Section 20 is merely to fix a date, when the dispute arises with a strike notice. In other cases, there was no need for any statutory fiction as the conciliation proceedings could be said to commence when the conciliator took up the matter On that basis the industrial dispute in this case can be said to have commenced early in May 1968

42. It was, however, argued that factually there had been no industrial dispute in existence so as to vest a jurisdiction in the Conciliation Officer Under Section 12 to bring about a settlement. It is said that as from the year 1961 both the Employees Union and the Labour Union raised disputes in regard to wages of workers in the engineering department, but the Government had turned down their request for reference Under Section 10 or even for an arbitration, the unions did not also pursue the matter. There was therefore, it is said, no dispute, That cannot mean that a dispute did not exist even in a moribund state. Indeed at the time of enquiry by the Labour Commissioner during the close of the year 1962, the management gave an assurance that they would revise the scales of pay in appropriate eases by a scheme of rationalisation That assurance evidently satisfied the workers for the time being. Much therefore depended on the scheme; if it failed to satisfy the workers, as indeed it did, the dispute would undoubtedly revive Indeed the Labour Union took up the matter with the management and during the parleys that followed a fresh dispute in regard to reorganisation ensued V any rate it can be said that the original dispute stood revivified We cannot, therefore, agree with the learned counsel for the petitioner that factually there was no dispute in existence to be conciliated.

43. It was not as if, although it was so contended, that the Madras Labour Union put up a sham fight. From the beginning that Union showed as much earnestness in espousing the cause of the employees in the engineering branch as the Employees' Union: indeed it did even better. It took up for discussion the proposals for reorganisation with the management and the discussion continued for nearly a month till both the parties reached a stage where no further progress could be made. It was then that they went before the Conciliation Officer. There is, therefore, no basis for the contention that there was no pre-existing dispute for that officer to intervene: nor is there any justification for the criticism that the Labour Union merely accepted in to what all the management mid.

44. It has been argued that what took place before the Conciliation Officer was a mere discussion about the proposal, there being no need or occasion for that authority, to bring about any settlement of conflicting claims. We shall show presently that this contention has no factual basis. Indeed the evidence is entirely the other way. Before referring to it we have to digress a little as to what it is that a conciliator should do, so as to bring the case within Section 18(3). Referring to Section 18 of the Act the Supreme Court in : (1961)ILLJ303SC held that a settlement in order to be binding should be one reached with the assistance and concurrence of the Conciliation Officer. In the present case the Commissioner for Labour took sustained interest in the matter. He more than once reminded the management of the need to expedite the reorganisation proposals; when he was told that the direct talks between the Labour Union and the management had resulted in a deadlock, he took up the matter, had separate consultations with the management and the , two labour unions. In at least as many as ten points of difference between the parties he was able to persuade the management to accede to the request of the Labour Union.

Mr. Dolia appearing for the Labour Union placed before us, a statement containing the main differences between the management and the workers and how they were settled by the intervention and the kindly offices of the Conciliation Officer. Learned counsel for the petitioner to whom a copy of that statement was given was not prepared to deny that the Commissioner for Labour did not take a significant part in bringing the contending parties to a settlement by suggesting improvements on the proposals put forward by the management. The settlement thus brought about was undoubtedly a right one: for there was in it scope for earning more wages if there be increase in productivity: qualified employees were given places suitable to their talent and there was no reduction of pay to anyone. Designations have been changed no doubt and perhaps the chances of promotion to the unskilled worker were remote. It is claimed that the scheme would benefit a substantial percentage of workers. Be it as it may, it is not as if the Employees' Union who claims to represent the majority of workmen in the Engineering branch were excluded from discussion altogether. The Conciliation Officer gave them more than one opportunity. If they had any grievance they could certainly have told him about its this, they never did.

45. Mr. Govind Swaminathan, however, argued that the Employees' Union had no real opportunity to put forward their grievances as the copy of the draft scheme was put in their hands only on 80-5-1963 by which time everything had been settled. That, as we said earlier is not an accurate statement of the position. The proposals of the management must have been known to that union before the first week of April 1963. What was given to them on 30-5-1963 was the final agreement. It is dear from the affidavit filed by the Conciliation Officer that that Union was till the last moment prepared to accept what ever he considered to be reasonable.

46. From this it would follow that Section 18(3) alone would apply to this case; that makes the settlement binding on all the workers. We have earlier referred to the decision of the Supreme Court in : (1961)ILLJ244SC where a distinction between sub-section (1) and sub section (3) of Section 18 has been brought out. In Erumeli Estate v. Industrial Tribunal, : (1962)IILLJ144Ker Vaidialingam J. observed that a conciliation agreement in respect of common matters pertaining to the employees of the establishment though settled between one union and the management would be binding Under Section 18(3) on all the employees of the establishment irrespective of the fact that certain employees were not members of the union which signed the settlement or on the ground that they were members of some other union which was not a party to the settlement.

Our attention was, however, invited to a recent judgment of Veeraswami, J. in Management T. S. T. Co. v. Industrial Tribunal, : (1962)ILLJ94Mad where the learned judge while recognising that a settlement in the course of conciliation proceedings of a dispute raised by the workmen belonging to a particular union would be binding on all the workmen of the establishment even though the other workmen belonged to another union were not parties to the agreement. .. held that where there were two identical industrial disputes which formed the subject-matter of conciliation before the same Conciliation Officer, there was nothing in the Act to hold that the settlement reached in the course of the conciliation between the management and one set of workers or their union would automatically bring to an end the conciliation pending with reference to the other but identical dispute before the same officer. In the latter case the learned judge held that the settlement would not bind the entirety of the workers. It is unnecessary for the purpose of this case to consider whether that view is correct or not; for, here, there was only one matter for conciliation, namely, that relating to the re-organisation proposals raised by the Labour Union. In such a case where the settlement arrived at was as a result of conciliation, that Union can be held entitled to sign the agreement. Such a settlement would be binding upon the members of the other union as well. There is thus no scope for the application of the principle laid down in : (1962)ILLJ94Mad

But we may in passing observe that the view taken in that case might require further consideration. For one thing the principle laid down appears to be opposed to the rule underlying the sanctity of collective bargaining and of the provisions of Section 18(3) as interpreted by the Supreme Court in : (1961)ILLJ244SC A settlement reached in the course of conciliation proceedings has been placed by the statute on a higher footing than a mere agreement between the parties The fact that one union did not join in such a settlement on the identical subject matter of dispute cannot obviously affect its binding character on all the employees irrespective of their participation or non-participation; the binding nature of the settlement depends on the statute.

47. For the reasons stated above we are of opinion that the settlement entered into in the present case on 30-3-1963 between the management and the Madras Labour Union is a bona fide one resulting as it did through conciliation effected between the parties by the Conciliation Officer, and that it would bind the entire body of workers including the members of the two unions which have filed the present writ petitions Rule nisi will, therefore, be discharged The petitions will be dismissed with costs.


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