{"id":159112,"date":"1997-12-09T00:00:00","date_gmt":"1997-12-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/p-virudhachalam-ors-vs-the-management-of-lotus-mills-anr-on-9-december-1997"},"modified":"2015-08-27T08:03:24","modified_gmt":"2015-08-27T02:33:24","slug":"p-virudhachalam-ors-vs-the-management-of-lotus-mills-anr-on-9-december-1997","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/p-virudhachalam-ors-vs-the-management-of-lotus-mills-anr-on-9-december-1997","title":{"rendered":"P. Virudhachalam & Ors vs The Management Of Lotus Mills & Anr on 9 December, 1997"},"content":{"rendered":"
Supreme Court of India<\/div>\n
P. Virudhachalam & Ors vs The Management Of Lotus Mills & Anr on 9 December, 1997<\/div>\n
Author: S.B. Majmudar<\/div>\n
Bench: S.B. Majmudar, M. Jagannadha Rao.<\/div>\n
           PETITIONER:\nP. VIRUDHACHALAM & ORS.\n\n\tVs.\n\nRESPONDENT:\nTHE MANAGEMENT OF LOTUS MILLS & ANR.\n\nDATE OF JUDGMENT:\t09\/12\/1997\n\nBENCH:\nS.B. MAJMUDAR, M. JAGANNADHA RAO.\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t      J U D G M E N T
\nS.B. Majmudar, J :\n<\/p>\n
     A\tshort\tbut  an\t  interesting  question\t arises\t for
\nconsideration in  this appeal  by certificate granted by the
\nHigh Court  of Judicature  at Madras under Article 133(1) of
\nthe Constitution of India. It reads as under :-\n<\/p>\n
     “Whether  an   individual\tworkman\t  governed  by\t the
\nIndustrial Disputes  Act, 1947\t(hereinafter referred  to as
\n‘the Act’)  can claim lay-off compensation under Section 25C
\nof  the\t  Act  despite\t a  settlement\t arrived  at  during
\nconciliation proceeding\t under Section 12(3) of the Act by a
\nunion of  which he  is not a member and when such settlement
\nseeks to  restrict the right of lay-off compensation payable
\nto such\t workman as per the first proviso to Section 25-C of
\nthe Act.”\n<\/p>\n
     A few  relevant  facts  leading  to  these\t proceedings
\nrequire to be stated at the outset :-\n<\/p>\n
BACKGROUND FACTS :\n<\/p>\n
     The five  appellants before  us were  employed  at\t the
\nrelevant time  under Respondent No.1 in various departments.
\nRespondent No.1\t was running  a\t textile  mill\twherein\t the
\nappellants were\t employed. The\tsaid textile  mill  remained
\nclosed due  to financial  crisis from 8.8.1976 to 31.1.1978.
\nThe workmen  of the mill raised a dispute pertaining to lay-
\noff during  the aforesaid  period  and\tclaimed\t appropriate
\nwages for the said period. In the conciliation proceedings a
\nsettlement was\tarrived at between the parties on 28.2.1977.
\nFive unions  representing all  the workmen  took part in the
\nconciliation proceedings.  A settlement\t was arrived  at  in
\nthese proceedings between the management on the one hand and
\nthe unions  on the  other. In clause 6 of the settlement, it
\nwas provided  that lay-off  compensation would\tbe  paid for
\nthe days  during which\tthe mill did not function and marked
\nas “no work”. It was also agreed that the compensation would
\nbe paid\t after January\t1981 in instalments and the question
\nas to  the number  of instalments  would be  decided by both
\nparties on  mutual discussion in January 1980. Though it was
\nagreed under  that settlement  in January  1980, the workers
\ninsisted upon  immediate payment  of compensation and raised
\nanother dispute,  Consequently, the  earlier settlement lost
\nits efficacy.  Again in\t the  matter  was  referred  to\t the
\nconciliation officer  who held negotiation. Different unions
\nrepresenting various  categories of workmen took part in the
\nnegotiation. The  union representing  the present appellants
\nalso took  part in  the said negotiation. Ultimately a fresh
\nsettlement was arrived at during conciliation proceedings as
\nper Section 12(3) of the Act on 5.5.1980. Out of five unions
\nrepresenting the  workmen of Respondent No.1 – Textile Mill,
\nfour  unions  signed  the  said\t settlement  but  the  union
\nrepresenting the appellants did not think it fit to sign the
\nsame. The  relevant terms  of the aforesaid settlement under
\nSection 12(3)  of the  Act in connection with the payment of
\nlay-off compensation read as under :-\n<\/p>\n
     “TERMS OF SETTLEMENT ”\n<\/p><\/blockquote>\n
     1.\t  It   is   agreed   that   this
\n     settlement shall  be applicable  to
\n     all  permanent   employees\t of  the
\n     Mills except\n<\/p><\/blockquote>\n
     (a) Watchman\n<\/p><\/blockquote>\n
     (b) Electrical Department workers\n<\/p><\/blockquote>\n
     (c) Staff
\n     in\t respect   of  whom  a\tseparate
\n     settlement has been signed.\n<\/p><\/blockquote>\n
     2. It  is agreed that in respect of
\n     the period\t 8.8.1976  to  7.8.1977,
\n     all  workers   who\t were  laid  off
\n     during that  period shall\tbe  paid
\n     lay-off compensation  for the first
\n     forty-five days of lay off and that
\n     no compensation shall be payable in
\n     respect  of  the  days  of\t lay-off
\n     after  the\t  expiry  of  the  first
\n     forty-five days.\n<\/p><\/blockquote>\n
     3.\t  In is\t further agreed\t that in
\n     respect of\t the period  9.8.1977 to
\n     31.1.1978,\t all  workmen  who  were
\n     laid-off during  that period  shall
\n     be paid  lay off  compensation  for
\n     the first\tforty-five days\t of lay-
\n     off and  that no compensation shall
\n     be payable\t in respect  of the days
\n     of lay-off\t after the expiry of the
\n     first forty five days.\n<\/p><\/blockquote>\n
     4.\t In   addition\tto  the\t lay-off
\n     compensation payable  under Clauses
\n     (2) and  (3) above\t each  permanent
\n     workman shall  be paid an ex-gratia
\n     sum which\tshall be  calculated  as
\n     follows :\n<\/p><\/blockquote>\n
     The  total\t  of  the   compensation
\n     amount payable  to\t each  permanent
\n     worker under  clauses (2)\tand  (3)
\n     above  and\t  the  ex-gratia  amount
\n     shall be  equal to 67% of the total
\n     lay-off  compensation  payable  for
\n     him in  respect of\t all the days of
\n     lay-off during  the period 8.8.1976
\n     to 31.1.1978.”<\/p><\/blockquote>\n
     It is  not in dispute appellants were in paragraph 1 of
\nthe settlement,\t meaning thereby  they were  covered by\t the
\nsaid settlement. The question is as to whether they would be
\nbound by  the settlement and the terms regarding the payment
\nof retrenched lay-off compensation, when their union did not
\nsign the  said settlement. The appellants on the ground that
\ntheir union had not signed the settlement, filed application
\nunder  Section\t 33C(2)\t of   the  Act\t for  computing\t the
\nappropriate lay-off  compensation payable  to  them  as\t per
\nSection 25C  of the  Act. The Labour Court after hearing the
\nparties allowed\t the said application on the ground that the
\nappellants individually\t had not  entered into any agreement
\nwith the  management and consequently the proviso to Section
\n25C of\tthe Act\t would not come in their way and, therefore,
\nthey were  entitled to\tbe paid 50% lay-off compensation for
\nthe entire  period during which they were laid-off i.e. from
\n8.8.1976 to  31.1.1978 and  the term of the settlement under
\nSection 12(3)  arrived at  during compensation at 67% of the
\npermissible statutory  lay-off\tcompensation  would  not  be
\nbinding on  the appellants. Accordingly, the amounts payable
\nto the appellants were computed by the Labour Court and were
\ndirected to  be paid  by Respondent No.1  by its Order dated
\n30.1.1982.  Respondent\tNo.1  carried  the  matter  in\tWrit
\nPetition being\tNo. 2962  of 1982  in the Madras High Court.
\nThe Court by its impugned judgment dated 11.8.1989 held that
\nthe settlement\tarrived at  during  conciliation  proceeding
\nunder Section  12 (3)  was binding  to all the workmen being
\nparties to  industrial dispute\tas per\tSection 18(3) of the
\nAct and consequently the said settlement could be treated as
\nan agreement  arrived at  between all the workmen as per the
\nfirst proviso  to Section 25C and, therefore, the appellants
\ncould not  claim anything more than what was permissible and
\npayable to  them as  per the binding terms of the settlement
\ndated 5.5.1980.\t The writ  petition of\tRespondent No.1 was,
\ntherefore allowed  and\tthe  claim  petition  under  Section
\n33C(2) as  moved by  the appellants  was dismissed. However,
\nwhile  dismissing   the\t same,\tthe  High  Court  granted  a
\ncertificate under  Article 133(1)  of the  Constitution\t for
\nleave for  appeal to this Court and that is show this appeal
\nwas filed  in this  Court and  has reached the final hearing
\nbefore us.\n<\/p>\n
     CONTENTIONS ON BEHALF OF THE APPELLANTS :\n<\/p>\n
     Learned counsel for the appellants vehemently contended
\nthat Section  25C is  in  Chapter  VA  of  the\tAct  and  it
\nrepresents a  complete code  in itself.\t that the  statutory
\nright given  to the  workmen under Section 25C of Chapter Va
\ncannot be  whittled down,  save and  except by\tan agreement
\nentered into  between the workmen concerned and the employer
\nas provided  by the first proviso to Section 25C of the Act.
\nBut before the provisions of the said proviso are attracted,
\nit should  be shown  that the  workman who  has a  statutory
\nright under  Section 25C has willingly agreed to give up his
\nright by  entering into\t such an agreement with the right by
\nentering into such an agreement with the employer. That such
\nan agreement  was independent of any settlement contemplated
\nunder Section  12(3) of the Act which could have any binding
\neffect under Section 18(3) of the Act. It was submitted that
\non a  conjoint reading of Sections 25C and 25J, it has to be
\nheld that  any inconsistent  in any  other part\t of the\t Act
\nitself would  not whittle  down the right to receive lay-off
\ncompensation as guaranteed to the workman under Section\t 25C
\nof the\tAct and consequently the settlement arrived at under
\nSection 12(3)  of the  Act would not have any adverse effect
\non the\tright of  the  appellants  who\tadmittedly  had\t not
\nentered into  any independent  agreement with the management
\ncurtailing their  right under  Section 25C  of\tthe  Act  to
\nreceive 50% statutory compensation during the entire lay-off
\nperiod. The  contesting Respondent No.1 being served has not
\nthough it fit to appear in these proceedings.
\nSTATUTORY SCHEME :\n<\/p>\n
     In\t order\t to  appreciate\t the  aforesaid\t contentions
\ncanvassed  by\tcounsel\t for  the  appellants,\tit  will  be
\nnecessary to have a look at the statutory scheme of the Act.
\nThe act\t is  enacted  for  resolving\tindustrial  disputes
\nbetween workmen\t and employer  which would  have  pernicious
\neffect on  industrial peace  and industrial  production\t and
\nwhich would  in their  turn adversely  affect the economy of
\nthe Nation as a whole. The act is enacted to make provisions
\nfor the\t investigation and settlement of industrial disputes
\nfor the\t investigation and settlement of industrial disputes
\nand for\t certain other\tpurposes mentioned in the Act. Under
\nthe  Act,   the\t principal  bargaining,\t (2)  Mediation\t and
\nconciliation, (3)  Investigation, (4)  Arbiration,  and\t (5)
\nAdjudication, The  scheme of the Act shows that adjudication
\nis to  be resorted  to as  the last  alternative. Before any
\nmatter is  referred for adjudication under Section 10 of the
\nAct, there  should be  an attempt  for conciliation. As laid
\ndown by\t this Court  in Herbertsons  Ltd. vs. The Workmen of
\nHerbetsons Ltd.\t & Ors.\t (AIR<\/a> 1977  SC 322)  any  settlement
\nbetween the employer and the employees is placed on a higher
\npedestal that  an ward passed after adjudication. It is easy
\nto visualise  that individual  workmen\thave  by  themselves
\nscant bargaining power. Therefore, their disputes have to be
\nhighlighted by their bargaining agents, namely, their unions
\nrepresenting the  body of  workmen so  that  the  bargaining
\npower of  individual workmen  can get  strengthned.  As\t per
\nSection 36 of the Act, a workman who is a party to a dispute
\nshall be  entitled to be represented in any proceeding under
\nthis Act  by any  member of  the executive  or other  office
\nbearer of a registered trade union of other office bearer of
\na registered  trade union  of which  he\t is  a\tmember.\t The
\nmachinery of  the Act  envisages  resolution  of  industrial
\ndisputes  and\tconflicts  at\tthe   grassroot\t  level\t  by
\nconciliation by\t which settlement  can be arrived at between
\nthe employer  and the  workmen\t and industrial peace can be
\nachieved and industrial strife can be put to an end. The Act
\nenvisages two  types  of  settlements  between\tthe  warring
\ngroups of employer and employees. As defined by Section 2(P)
\nof the\tAct, “settlement”  means a  settlement arrived at in
\nthe course of conciliation proceeding and includes a written
\nagreement  between  the\t employer  and\tworkmen\t arrived  at
\notherwise than\tin the\tcourse of  conciliation\t proceedings
\nwhere such  agreement has been signed by the parties thereto
\nin such\t manner as  may be prescribed and a copy thereof has
\nbeen sent  to an  officer authorised  in this  behalf by the
\nappropriate Government\tand the\t conciliation officer. Thus,
\na settlement  which is\tbased on a written agreement between
\nthe  parties  can  be  arrived\tat  either  in\tconciliation
\nproceedings or even outside conciliation proceedings between
\nthe representatives  of the  workmen on the one hand and the
\nmanagement on  the other. But even if such written agreement
\nsigned by  the parties\tis arrived  at outside\tconciliation
\nproceeding,  it\t  would\t become\t  a  settlement,   once\t the
\nprescribed  procedure\tas  envisaged  by  Section  2(p)  is
\nfollowed. So  far as settlements arrived at in the course of
\nconciliation proceedings  are concerned,  Section 12  of the
\nAct deals  with such  settlements. As  laid down  by Section
\n12(1) where any industrial dispute exists or is apprehended,
\nthe conciliation  officer may,\tor where the dispute relates
\nto a  public utility  service and  a notice under Section 22
\nhas been  given shall,\thold conciliation proceedings in the
\nprescribed manner Sub-section (2) of Section 12 enjoins upon
\nhim for\t the purpose  of bringing  about a settlement of the
\ndispute, without  delay to  investigate the  dispute and all
\nmatters\t affecting  the\t merits\t and  the  right  settlement
\nthereof and  to make  all efforts  as he  thinks fit for the
\npurpose of  inducing the  parties to  come  to\ta  fair\t and
\namicable settlement of the dispute. Then follows sub-section
\n(3) of Section 12 under which settlement in the present case
\nsaw the light of the day. It reads as under :-\n<\/p>\n
     “12 (3).  If a  settlement\t of  the
\n     dispute or of any of the matters in
\n     dispute is arrived at in the course
\n     of\t the  conciliation  proceedings,
\n     the conciliation officer shall send
\n     a report thereof to the appropriate
\n     Government or an officer authorised
\n     in this  behalf by\t the appropriate
\n     Government\t   together    with    a
\n     memorandum of the settlement signed
\n     by the parties to the dispute”.<\/p><\/blockquote>\n
     Sub-sections (4) and (5) of Section 12 lay down that if
\nno settlement  is arrived at, the conciliation officer shall
\nsubmit a  full report to the appropriate Government which if
\nsatisfied that\tthere is a case for reference of the dispute
\nto a  Board, Labour Court, Tribunal or National Tribunal, as
\nthe case  may be, may make such a reference and shall record
\nand  communicate   to  the  parties  concerned\tits  reasons
\ntherefore. So  far as  the settlement arrived at outside the
\nconciliation proceedings  is concerned,\t Section 18(1) deals
\nwith such settlement and lays down that a settlement arrived
\nat by  agreement between  the employer and workmen otherwise
\nthan in\t the course  of\t conciliation  proceeding  shall  be
\nbinding on  the parties to the agreement. Sub-section (3) of
\nsection 18, however, deals with settlement arrived at during
\nconciliation  proceedings  and\tlays  down  that  settlement
\narrived at  in the  course of conciliation proceedings under
\nthis Act,  or  an  arbitration\taward  in  a  case  where  a
\nnotification has  been\tissued\tunder  sub-section  (3A)  of
\nSection 10A  or an  award of  a Labour\tCourt,\tTribunal  or
\nNational  Tribunal  which  has\tcome  enforceable  shall  be
\nbinding on –\n<\/p>\n
     (a)  all parties to the industrial dispute;\n<\/p><\/blockquote>\n
     (b)   all other  parties  summoned\t to  appear  in\t the
\n     proceedings as  parties  to  the  dispute,\t unless\t the
\n     Board, arbitrator,\t Labour Court,\tTribunal or National
\n     Tribunal, as  the case may be, records the opinion that
\n     they were so summoned without proper cause:\n<\/p><\/blockquote>\n
     (c)   Where a party referred to in clause (a) or clause\n<\/p><\/blockquote>\n
     (b) is  an employer, his heirs, successors or assign in
\n     respect of\t the  establishment  to\t which\tthe  dispute
\n     relates;\n<\/p><\/blockquote>\n
     (d)   Where a party referred to in clause (a) or clause\n<\/p><\/blockquote>\n
     (b) is  composed  of  workmen,  all  persons  who\twere
\n     employed  in   the\t establishment\t or  part   of\t the
\n     establishment, as the case may be, to which the dispute
\n     relates on\t the date of the dispute and all persons who
\n     subsequently become  employed in  that establishment or
\n     part.\n<\/p><\/blockquote>\n
DISCUSSION ON THE POINT FOR CONSIDERATION :\n<\/p>\n
     The aforesaid relevant provision of the Act, therefore,
\nleave no  room for  doubt that\tonce a written settlement is
\narrived\t at   during  the   conciliation  proceedings\tsuch
\nsettlement under Section 12(3) has a binding effect not only
\non the signatories to the settlement but also on all parties
\nto the\tindustrial dispute which would cover the entire body
\nof workmen,  not  only\texisting  workmen  but\talso  future
\nworkmen. Such  a settlement  during conciliation proceedings
\nhas the\t same legal  effect as\tan award of Labour Court, or
\nTribunal or  National Tribunal or an Arbitration award, They
\nall stand  on part.  It is easy to visualise that settlement
\ncontemplated by\t Section 12(3)\tnecessarily means  a written
\nsettlement which would be based on a written agreement where
\nsignatories  to\t  such\tsettlement   sign   the\t  agreement.
\nTherefore,   settlement\t   under   Section    12(3)   during
\nconciliation   proceedings   and   all\t other\t settlements
\ncontemplated   by    Section   2(p)   outside\tconciliation
\nproceedings must  be based  on written\tagreements.  Written
\nagreements would  become settlements contemplated by Section
\n2(p) read  with section\t 12(3) of  the Act  when arrived  at
\nduring conciliation proceedings or even outside conciliation
\nproceedings.   Thus,   written\t agreements   would   become
\nsettlements  after   relevant  procedural   provisions\t for
\narriving  at   such  settlements  are  followed.  Thus,\t all
\nsettlements necessarily\t are  based  on\t written  agreements
\nbetween\t the   parties.\t It  is\t impossible  to\t accept\t the
\nsubmissions of\tlearned\t counsel  for  the  appellants\tthat
\nsettlements  between   the  parties   are   different\tfrom
\nagreements between  the parties. It is trite to observe that
\nall settlements\t must be  based on  written  agreements\t and
\nsuch written  agreements get embeded in settlements. But all
\nagreements may\tnot  necessarily  be  settlements  till\t the
\naforesaid procedure  giving the\t status of  such settlements
\ngets followed.\tIn other words, under the scheme of the Act,
\nall settlements\t are necessarily  to be\t treated as  binding
\nagreements between the parties but all agreements may not be
\nsettlements so\tas to  have binding effect as provided under
\nSection 18(1)  or (3)  if the necessary procedure for giving
\nthem such  status is  not followed  in given  cases. On\t the
\naforesaid scheme of the Act, therefore, it must be held that
\nthe settlement\tarrived Respondent  No.1 – Management on the
\none hand  and the  four out  of 5  unions of  workmen on the
\nother, had  a binding  effect under Section 18(3) of the Act
\nnot only  on the members of the signatory unions but also on
\nthe remaining  workmen who  were represented  by  the  fifth
\nunion  which,  though  having  taken  part  in\tconciliation
\nproceedings, refused to sign the settlement. It is axiomatic
\nthat if\t such settlement  arrived at during the conciliation
\nproceedings is\tbinding to  even future workmen as laid down
\nby Section  18(3) (d),\tit would  ipso facto  bind  all\t the
\nexisting workmen  who are  all\tparties\t to  the  industrial
\ndispute and  who may  not  be  members\tof  union  that\t are
\nsignatories to such settlement\t12(3) of the Act.\n<\/p>\n
     It has  to be kept in view that the Act is based on the
\nprinciple of  collective bargaining for resolving industrial
\ndisputes  and\tfor  maintaining   industrial  peace.\tThus
\nprinciples of  industrial democracy  is the  bed-rock of the
\nAct. The  employer or  a class\tof employers on the one hand
\nand the\t accredited representatives  of the  workmen on\t the
\nother  are   expected  to  resolve  the\t industrial  dispute
\namicably as  for as possible by entering into the settlement
\noutside the  conciliation proceedings of if no settlement is
\nreached and  the dispute  reaches  conciliator\teven  during
\nconciliation proceedings.  In all these negotiation based on
\ncollective bargaining individual workman necessarily recedes
\nin background.\tThe reins  of bargaining  on his  behalf  is
\nhanded over  to the  union representing\t such  workmen.\t The
\nunions espouse\tthe common  cause on  behalf  of  all  their
\nmembers. Consequently,\tsettlement arrived  at b  them\twith
\nmanagement would  bind at  least their\tmembers and  if such
\nsettlement is arrived at during conciliation proceedings, it
\nwould bind  even non-members.  Thus settlements are the live
\nwires under  the  Act  for  ensuring  industrial  peace\t and
\nprosperity.  Section   10(2)  of  the  Act  highlights\tthis
\nposition  by   providing  that\t where\tthe  parties  to  an
\nindustrial dispute  apply in  the prescribed manner, whether
\njointly or  separately, for  a reference of the dispute to a
\nBoard, Court,  Labour Court,  Tribunal or National Tribunal,
\nthe appropriate\t Government, if\t satisfied that\t the persons
\napplying represent  the majority  of each  party, shall make
\nthe reference accordingly. Individual workman comes into the
\npicture\t only\tin  connection\t with  a  limited  class  of
\nindustrial disputes  as indicated  by Section  2A of the Act
\ndealing\t with\tdischarges,  dismissals,   retrenchments  or
\notherwise termination  of services of an individual workman.
\nSave and  except the  aforesaid class  of disputes, which an
\nindividual workman  can\t rest  of  the\tindustrial  disputes
\nincluding disputes  pertaining to  illegal lock out, lay-off
\nand lay-off  compensation have\tto be  filtered through\t the
\nprocess of  collective barganing  and they  are disputes  of
\ngeneral nature\tor class disputes wherein individual workman
\nby himself  has no say. In this connection, it is profitable
\nto keep\t in view  a decision  of three-member  Bench of this
\nCourt in  the case  of Ram  Prasad Vishwakarma\tvs. Chairman
\nIndustrial Tribunal, Patna & Ors.<\/a> [AIR 1961 SC 857] where in
\nDas Gupta,  J, speaking\t for this  Court made  the following
\npertinent observations on the scheme of the Act, at the time
\nwhen Section 2A was not on the statute book :-\n<\/p>\n
     “It is  now  well\tsettled\t that  a
\n     dispute   between\t an   individual
\n     workman and  an employer  cannot be
\n     an industrial dispute as defined in
\n     section  2(k)   of\t the  Industrial
\n     Disputes Act  unless it is taken up
\n     by a  Union of  the workmen or by a
\n     considerable number  of workmen. In
\n     Central Provinces Transport Service
\n     Ltd. vs.  Raghunath Gopal,<\/a> 1956 SCR
\n     956 :  (S) AIR  1957 SC  104),  Mr.
\n     Justice Venkatarama  Ayyar speaking
\n     for the  Court  pointed  out  after
\n     considering  numerous  decision  in
\n     this matter  that the preponderance
\n     of judicial  opinion was clearly in
\n     favour of\tthe view  that a dispute
\n     between an\t employer and  a  single
\n     employee  cannot\tper  se\t  be  an
\n     industrial\t dispute   but\tit   may
\n     become one\t if it\tis taken up by a
\n     union of a number of workmen.
\n     “Notwithstanding that  the language
\n     of Section\t 2(k) it  wide enough to
\n     cover disputes  between an employer
\n     and a  single  employee”.\tobserved
\n     the learned  Judge, “the  scheme of
\n     the Industrial  Disputes  Act  does
\n     appear  to\t  contemplate  that  the
\n     machinery provided\t therein  should
\n     be set  in motion\tto  settle  only
\n     disputes which  involve the  rights
\n     of workmen\t as a  class and  that a
\n     dispute  touching\t the  individual
\n     rights  of\t  a  workman   was   not
\n     intended  to   be\tthe  subject  of
\n     adjudication under\t the  Act,  when
\n     the same  had not\tbeen taken up by
\n     the Union or a number of workmen”
\n     This view which has been reaffirmed
\n     by\t the   Court  in  several  later
\n     decision\trecognises   the   great
\n     importance\t in   modern  industrial
\n     life   of\t collective   bargaining
\n     between   the   workmen   and   the
\n     employers. It  is\twell  known  how
\n     before  the   days\t of   collective
\n     bargaining labour\twas at\ta  great
\n     disadvantage      in      obtaining
\n     reasonable terms  for contracts  of
\n     several from his employer. As trade
\n     unions developed in the country and
\n     collective\t bargaining  became  the
\n     rule   the\t  employers   found   it
\n     necessary and  convenient\tto  deal
\n     with   the\t   representatives    of
\n     workmen,  instead\t of   individual
\n     workman, not only for the making or
\n     modification of  contracts\t but  in
\n     the matter\t of taking  disciplinary
\n     action against  one or more workmen
\n     and as regards all other disputes.
\n     The necessary  corollary to this is
\n     that the  individual workman  is at
\n     no stage  a party to the industrial
\n     dispute independently of the Union.<\/p><\/blockquote>\n
     The Union or those workmen who have
\n     by\t their\t sponsoring  turned  the
\n     Individual\t   dispute    into    an
\n     industrial dispute,  can  therefore
\n     claim to  have a say in the conduct
\n     of\t the   proceedings  before   the
\n     Tribunal.\n<\/p><\/blockquote>\n
     It is  not\t unreasonable  to  think
\n     that Section  36 of  the Industrial
\n     Disputes\tAct    recognises   this
\n     position,\tby  providing  that  the
\n     workman who is a party to a dispute
\n     shall be entitled to be represented
\n     by an officer of a registered trade
\n     union   of\t   which   he\t is    a
\n     member……..”<\/p><\/blockquote>\n
     Consequently, the\tprovisions contained  in  the  first
\nproviso to  Section 35C\t of the\t Act would  also necessarily
\nrequire an  agreement to  be entered  into on  behalf of the
\naffected   class    of\t workmen    by\t their\t  accredited
\nrepresentatives being  office bearers  of their union. It is
\neasy to\t visualise that when lay-off has been imposed by the
\nmanagement in an establishment or in any department thereof,
\nthere entire  body  of\tworkmen\t working  therein  would  be
\naffected  by   lay-off.\t Therefore,   their   grievance\t  in
\nconnection  with  lay-off  compensation\t pertaining  to\t the
\nperiod of  lay-off would  not be  necessarily an  individual
\ngrievance but  would be grievance of the class of workmen as
\na whole\t affected by  such lay-off.  If there  is a  binding
\nsettlement embodying  an agreement  on behalf  of a class of
\nworkmen through\t their\tunion  in  connection  with  lay-off
\ncompensation it\t would\tobviously  be  binding\ton  all\t the
\nmembers of  the\t union\tand  if\t such  settlement  based  on
\nagreement is  arrived at  during conciliation proceedings it
\nwould be  binding to  the entire class of workmen covered by
\nthe industrial\tdispute regarding  lay-off compensation. The
\nIndividual  dispute   regarding\t lay-off  compensation.\t The
\nindividual workman can raise his grievance under Section 25C
\nonly if\t his statutory right of lay-off under Section 25C is
\nnot hedged  on by any binding effect of an agreement entered
\ninto by\t its own  union with  the management,  whether in or
\noutside conciliation  proceedings or  even by  other  unions
\nthat  may  arrive  such\t settlement  during  the  course  of
\nconciliation proceedings.  Then only  individual workman can
\nhave full  play under  Section 25C for vindicating his right
\nof lay-off compensation.\n<\/p>\n
     In Barauni\t Refinery Paragatisheel Shramik Parishad vs.
\nIndian Oil  Corporation Ltd.  & Ors.<\/a>  [AIR  1990  SC  1801],
\nAhmadi, J.  as he  ten was,  speaking for  a  Bench  of\t two
\nlearned Judges of this Court had an occasion to consider the
\nbinding effect\tof  such  a  settlement\t arrived  at  during
\nconciliation proceedings  in the  light of Section 18 of the
\nAct.  The   following  pertinent   observations,   in\tthis
\nconnection, were made :\n<\/p>\n
     ” A  settlement arrived  at in  the
\n     course of\tconciliation proceedings
\n     with a  recognised\t majority  union
\n     will be  binding on  all workmen of
\n     the establishment,\t even those  who
\n     belonging\tto  the\t minority  union
\n     which had\tobjected to the same. To
\n     that extent  it  departs  from  the
\n     ordinary  law   of\t contract.   The
\n     object obviously  is to up-hold the
\n     sanctity  of   settlements\t reached
\n     with the  active assistance  of the
\n     Conciliation   Officer    and    to
\n     discourage an  individual\temployee
\n     or a  minority union from scuttling
\n     the   settlement.\t There\t is   an
\n     underlying\t  assumption\tthat   a
\n     settlement reached with the held of
\n     the Conciliation  Officer\tmust  be
\n     fair  and\t reasonable   and   can,
\n     therefore, safety\tbe made\t binding
\n     not only  on the  workmen belonging
\n     to the union signing the settlement
\n     but also  on others.  That is why a
\n     settlement arrived at in the course
\n     of conciliation  proceedings is put
\n     on part  with an  award made  by an
\n     adjudicatory authority.”<\/p><\/blockquote>\n
     In this  light we\thave now  to  examine  the  relevant
\nprovisions of  the Act dealing with lay-off and compensation
\nto be  paid to\tworkmen for lay-off. Section 25C is found in
\nChapter\t VA   of  the  Act  which  deals  with\tlay-off\t and
\nretrenchment. We  are concerned\t with lay-off in the present
\ncase. Section  25C deals with statutory right of the workmen
\nlaid off  for compensation.  Sub-section (1)  of Section 25C
\nwith the first proviso reads as under :-\n<\/p>\n
     “25C. Right of workmen laid off for
\n     compensation.  –\t(1)  Whenever  a
\n     workman (other than a badll workman
\n     or a  casual workman) whose name is
\n     borne on  the  muster-rolls  of  an
\n     industrial\t establishment\tand  who
\n     has completed  not\t less  than  one
\n     year of continuous service under an
\n     employer  is   laid  off,\t whether
\n     continuously or  intermittently, he
\n     shall be  paid by\tthe employer for
\n     all days  during which  he is  laid
\n     off,  except   for\t  which\t  weekly
\n     holidays\t as    may    intervene,
\n     compensation which\t shall be  equal
\n     to fifty  per cent of the\ttotal of
\n     the  basic\t  wages\t  and\tdearness
\n     allowance\tthat   would  have  been
\n     payable to\t him had  he not been so
\n     laid off:\n<\/p><\/blockquote>\n
     Provided that  if during any period
\n     of twelve\tmonths, a  workman is so
\n     laid off  for more\t than forty-five
\n     days, no such compensation shall be
\n     payable in respect of any period of
\n     the lay-off after the expiry of the
\n     first forty-five  days, if there is
\n     an agreement to that effect between
\n     the workman and the employer.”<\/p><\/blockquote>\n
     It is  of course  true that  sub-section (1) of Section
\n25C lays  down that  if there  is a legal lay-off imposed by
\nthe employer, the permanent workman covered by sweep of sub-
\nsection (1)  of Section\t 25C would be entitled to be paid by
\nway of\tlay-off compensation  50% of  the  total  wages\t and
\ndearness allowances  during the\t relevant period of lay-off.
\nHowever, because  of the  first proviso to the said section,
\nthe right of the workman to be paid 50% lay-off compensation
\nduring the relevant period of lay-off would be curtailed and
\nrestricted to  45 days only if there is an agreement to that
\neffect between the workman and the employer. The question is
\nwhether there  was such\t an agreement between the appellants
\nand  the   employer.  Learned  counsel\tfor  the  appellants
\nsubmitted that\tfor attracting\tthe first proviso to Section
\n25C(1), there  should be  independent agreement\t between the
\nworkman and  the employer  to that  effect agreeing  not  be
\ndemand lay-off\tcompensation beyond  45 days of the starting
\nof the\tlay-off period.\t It is\tdifficult to appreciate this
\ncontention. An\tagreement restricting  the claim  of lay-off
\ncompensation beyond  the available  period of 45 days can be
\nsaid to\t be arrived  at between\t the workmen on the one hand
\nand the\t employer on the other as there is such an agreement
\nembedded in a binding settlement which has a legal effect of
\nbinding all  the workmen  in the  institution as per Section
\n18(3) of  the Act.  Such building  effect  of  the  embedded
\nagreement in  the written  settlement arrived  at during the
\nconciliation proceeding\t would get telescoped into the first
\nproviso to  Section 25C(1)  and bind all workmen even though
\nindividually they  might not  have signed the agreement with
\nthe management\tor their  union might  to have\tsigned\tsuch
\nagreement with\tthe management\ton  behalf  of\tits  member-
\nworkmen. The  first proviso  to Section\t 25C(1) clearly lays
\ndown that  if there is an agreement for into paying any more
\nlay-off compensation  beyond 45 days between the workman and
\nthe employer,  such an\tagreement has binding effect both on
\nthe employer  and the  workman concerned. Such binding force
\ngets clearly  attracted in  the case  of the  appellants  by
\nvirtue of operation of Section 12(3) read with Section 18 of
\nthe Act\t emanating from the settlement arrived at during the
\nconciliation  proceedings  as  aforesaid.  Learned  counsel,
\nhowever, strongly  relied upon\tSection 25J  of the  Act for
\nisolating the  effect of  Section 18(3) in the present case,
\nSection 25J reads as under :-\n<\/p>\n
     “25J. Effect  of laws  inconsistent
\n     with  this\t  Chapter.  –\t(1)  The
\n     provisions of  this  Chapter  shall
\n     have     effect\t notwithstanding
\n     anything\tinconsistent   therewith
\n     contained\t in    any   other   law
\n     (including\t standing   orders  made
\n     under  the\t  Industrial  Employment
\n     (Standing Orders) Act, 1946) (20 of
\n     1946) :\n<\/p><\/blockquote>\n
     Provided  that   where  under   the
\n     provisions\t of  any  other\t Act  of
\n     rules,  orders   or   notifications
\n     issued  thereunder\t  or  under  any
\n     standing orders or under any award,
\n     contract of service or otherwise, a
\n     workmen is\t entitled to benefits in
\n     respect of\t any matter  to benefits
\n     in respect\t of any matter which are
\n     more favourable  to him  than those
\n     to which he would be entitled under
\n     this   Act;   the\t workman   shall
\n     continue to be entitled to the more
\n     favourable benefits  in respect  of
\n     that matter,  notwithstanding  that
\n     he receives  benefits in respect of
\n     other matters under this Act.
\n     (2) For  the removal  of doubts, it
\n     is\t hereby\t declared  that\t nothing
\n     contained in  this Chapter shall be
\n     deemed to\taffect the provisions of
\n     any other law for the time being in
\n     force in  any State  in so\t far  as
\n     that   law\t   provides   for    the
\n     Settlement of  industrial disputes,
\n     but the  rights and  liabilities of
\n     employers and  workmen in so far as
\n     they  relate   to\tlay-off\t     and
\n     retrenchment shall be determined in
\n     accordance with  the provisions  of
\n     this Chapter.”<\/p><\/blockquote>\n
     It is  difficult to appreciate how the said proviso can
\nbe of  any assistance  to the appellants. All that is stated
\nis that anything inconsistent with the provisions of Chapter
\nVA found  to have  been laid down by any other law including
\nstanding orders\t etc. will  have no effect. Even sub-section
\n(2) of\tSection 25J   is  to  the  same\t effect.  Therefore,
\nSection 25J  overrides any  inconsistent  provision  of\t any
\nother law or otherwise binding rule of conduct and makes the
\nprovisions  of\tChapter\t VA  operative\tof  their  own.\t The
\nsubmission of  learned counsel\tfor the\t appellants in\tthis
\nconnection was\tto  the\t effect\t that  “any  other  law”  as
\nprovided in Section 25J(1) would include even the Industrial
\nDisputes Act,  specially the  provision contained in Section
\n18 thereof.  It\t is  difficult\tto  agree.  Section  nowhere
\nprovides that the provisions of Chapter VA shall have effect
\nnotwithstanding anything inconsistent contained in any other
\nchapter of  the Industrial  Disputes Act  as well  as in any
\nother law.  Such a  provisions is  conspicuously  absent  in
\nSection 25J  (1). If  submission of  learned counsel for the
\nappellants is  accepted, Section  25J(1) will have to be re-
\nwritten by  introducing the additional words therein “in any
\nother part of this  Act or” before the words “any other law”
\nas mentioned  therein. On  the express\tlanguage of the said
\nprovision, therefore,  such an\texercise is contra-indicated
\nis total impermissible.\n<\/p>\n
     In fact,  this Court  in Krishna  District Co-operative
\nMarketing Society  Ltd. vs.  N.V. Purnachandra\tRao  &\tOrs.<\/a>
\n[1987 (4) SCC 9 99 (at 111)] pointed out that the purpose of
\nSection 25J(2)\tin Chapter V of the Industrial Disputes Act,
\n194 was\t to give  overriding effect  to\t the  provisions  of
\nretrenchment  and   lay-off  in\t  Chapter  VA  over  cognate
\nprovisions of  State laws dealing with retrenchment and lay-
\noff. In\t the above  case Venkataramiah, J., (as he then was)
\nobserved :-\n<\/p>\n
     “By   enacting    Section\t 25J(2),
\n     Parliament, perhaps  intended  that
\n     the rights\t and liabilities arising
\n     out  of  lay-off  and  retrenchment
\n     should be\tuniform throughout India
\n     where the\tCentral Act was in force
\n     and did  not wish\tthat the  States
\n     should   have    their   own   laws
\n     inconsistent with the Central law.”\n<\/p>\n
     The above\tpassage also  shows that  Chapter V  was not
\nintended  to  override\tany  provisions\t of  the  Industrial
\nDisputes Act, 1947 itself.\n<\/p>\n
     Once Section  25J(1) is  out of  the  picture,  Section
\n25C(1) will  have to  be read  with the\t proviso and  once a
\nsettlement  is\t arrived  at   between\tthe  parties  during
\nconciliation proceedings  as laid  down by Section 18(3) the
\nbinding effect\tof such\t settlement gets  visited on all the
\nworkmen, as  seen earlier. Consequently the appellants would
\nremain bound  by the settlement which would be treated as an
\nagreement binding  on  them  as\t contemplated  by  the\tsaid
\nproviso. Once  that conclusion is reached no fault can found
\nwith the High Court taking the view on the scheme of the Act
\nthat additional\t benefit which\tthe appellants claimed under
\nthe settlement\tarrived at  under Section  12(3)  read\twith
\nSection 18  of the  Act could  not be computed under Section
\n33C(2) of  the Act  and\t such  application  was,  therefore,
\nrightly held incompetent.\n<\/p>\n
     It is  now time  for us  to refer\tto some decisions of
\nthis Court to which our attention was invited.\n<\/p>\n
     This  Court  speaking  through  Untwalia,\tJ.  held  in
\nWorkmen of  Firestone Tyre and Rubber Co. of India (P) Ltd..
\nEtc. vs.  The Firestone\t Tyre and  Rubber Co<\/a> etc., (1976 (1)
\nL.L.J. 493)  that Chapter  VA of the Act was a complete code
\nand if\tthe workmen  are found\tto have\t been laid  off, the
\nbenefit of  the said  provision\t can  be  attracted.  It  is
\ndifficult to  appreciate how  this decision  can be  of\t any
\nassistance to  the counsel  for the  appellants\t as  in\t the
\naforesaid  case\t  there\t was  no  question  of\tany  binding
\nsettlement between  the parties which had tried to which did
\ntried  to  whittle  down  the  statutory  right\t of  lay-off
\ncompensation as\t per the first proviso to Section 25C of the
\nAct.\n<\/p>\n
     In R.B.  Bansilal Abirchand  Mills\t Co.  Ltd.  vs.\t The
\nLabour Court.  Nagpur &\t Ors. [(1972)  1 SCC 154] this Court
\nwas concerned  with a  question\t whether  application  under
\nSection 33C(2)\tcould be  filled by co-employees who claimed
\nbenefit\t under\t Section  25C\tof  the\t  Act  for   lay-off
\ncompensation even  though those\t workmen had  not filed such
\napplication   earlier.\tEven  in  that\tcase  there  was  no
\nquestion of  any binding  effect  of  any  settlement  under
\nSection 12(3) read with Section 18(3) of the Act.\n<\/p>\n
     In\t Workmen   of  Dewan  Tea  Estate  &  Ors.  vs.\t The
\nManagement [(1964)  5 SCR 548] this Court was concerned with
\nthe question  whether lay-off  compensation could be claimed
\nby the\tworkmen under section 25C even though such claim was
\nnot covered  by the  standing orders.  It was  held that the
\nlay-off compensation  would be permissible only where one or
\nthe other  of the  factors mentioned  by Section  2(kkk)  is
\npresent, and  for  such\t a  lay-off  compensation  would  be
\npermissible only  where one  or the  other  of\tthe  factors
\nmentioned by Section 2(kkkk) is present, and for such a lay-
\noff, compensation  could be  awarded under Section 25C. Even
\nin this\t case the question of binding effect of a settlement
\narrived at  during conciliation\t proceedings and curtailment
\nof right  of workmen laid-off for compensation under Section
\n25C of the Act was not on the anvil of scrutiny.\n<\/p>\n
     In the  Cachar Chah Sramik Union Silchar, Assam vs. The
\nManagement of the Tea Estate of Cachar, Assam<\/a> [(1966 (2) SCR
\n344] it\t was held that even though the management might have
\ngiven ex-gratia\t compensation to  the workmen  laid-off they
\nwere entitled  to claim\t lay-off compensation as per the Act
\nand as\tper the\t relevant  standing  Orders.  The  aforesaid
\ndecision cannot\t advance the case of the appellants as there
\nwas no\tquestion of  any binding  effect of  any  settlement
\narrived at  between the parties which would govern the claim
\nof all\tthe workmen  even though  their union might not have
\nbeen  signatory\t  to  such  settlement\tduring\tconciliation
\nproceedings.\n<\/p>\n
     In the  result this  appeal fails\tand is dismissed. In
\nthe facts  and circumstances  of the  case, there  will e no
\norder as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India P. Virudhachalam & Ors vs The Management Of Lotus Mills & Anr on 9 December, 1997 Author: S.B. Majmudar Bench: S.B. Majmudar, M. Jagannadha Rao. PETITIONER: P. VIRUDHACHALAM & ORS. Vs. RESPONDENT: THE MANAGEMENT OF LOTUS MILLS & ANR. DATE OF JUDGMENT: 09\/12\/1997 BENCH: S.B. MAJMUDAR, M. JAGANNADHA RAO. ACT: HEADNOTE: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-159112","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nP. 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