Madras High Court
The Tamil Nadu Cooperative vs Joint Commissioner Of Labour on 5 December, 2014
Author: D.Hariparanthaman
Bench: D.Hariparanthaman
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05.12.2014
CORAM
THE HONOURABLE MR. JUSTICE D.HARIPARANTHAMAN
W.P.NOs.7325 AND 7326 OF 2006
The Tamil Nadu Cooperative
Milk Producers Federation Ltd.,
rep. by its Joint Managing Director,
Ambattur, Chennai 600 098. .. Petitioner in both the petitions
Versus
1.Joint Commissioner of Labour,
(Appellate Authority under the
Payment of Gratuity Act, 1972),
Teynampet, Chennai - 600 006. .. Respondent No.1 in both the
writ petitions
2.K.Jayavaradan .. Respondent No.2 in W.P.No.7325/06
2. A.Daniel Thomas .. Respondent No.2 in W.P.No.7326/06
PRAYER : Writ Petitions filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorari calling for records from the first respondent relating to the order dated 31.08.2005 in PGA Nos.34 and 35 of 2005 respectively and quash the same as being illegal, arbitrary and perverse.
* * *
For Petitioner in : Mr.S.Sathish Kumar
both the petitions for M/s.Row and Reddy
For Respondent 1 in: No appearance
both the petitions
For Respondent 2 in: Mr.V.P.Rajendran
both the petitions
C O M M O N O R D E R
The second respondents in both the writ petitions were workmen in the writ petitioner establishment, which was earlier a Company registered under the Companies Act with the name Tamil Nadu Dairy Development Corporation, and the same was fully owned by the Tamil Nadu Government and later became a co-operative society registered under the Tamil Nadu Co-operative Societies Act and it is State under Article 12 of the Constitution.
Background facts of the Writ Petitions :
2.0.The petitioner establishment supplies milk to the residents of Chennai in the brand name of AAVIN, besides carrying out various other functions and the details of the activities of the petitioner are not necessary for deciding the issues involved in these writ petitions.
2.1.There were about 1500 workmen employed by the writ petitioner for its various activities. Majority of the workmen employed by the petitioner were members of the Tamil Nadu Dairy Development Corporation Employees Union (shortly 'the Employees Union'), a Trade Union registered under the Trade Unions Act, 1926.
2.2.The Employees Union resolved various disputes relating to the workmen employed by the petitioner by holding talks with the writ petitioner establishment and also entered into a settlement on 15.02.1980 before the Conciliation Officer under Section 12(3) of the Industrial Disputes Act, 1947 (hereinafter referred to as the I.D.Act) relating to conditions of service of its workmen.
2.3.In the year 1980, on the eve of Deepavali, the Employees Union made a representation to the petitioner establishment seeking payment of 20% bonus to workmen. While so, the petitioner establishment made unilateral declaration of minimum bonus at the rate of 8.33%. This unilateral declaration of minimum bonus was objected to by the Employees Union in its letter dated 17.10.1980. The Employees Union, in the said letter, reiterated its demand made on 18.08.1980 for 20% bonus. The Employees Union also stated that they met the General Manager on 23.09.1980 in this regard. Further, they informed that they would resort to one day token strike, without mentioning any date therein.
2.4.The petitioner establishment came with a response to the said letter in its notice dated 27.10.1980 requesting the workmen not to indulge in strike and if they indulged in strike, they would be held responsible for all the legal consequences.
2.5.While so, the Employees Union came with another letter dated 28.10.1980 to the petitioner establishment reiterating its demand of bonus and also making some other demands, such as, Festival Advance, Promotion to Depot Milk Distributors, Sanction of 20 days CL, Uniform, Rain Coat and Umbrella for the employees in the Marketing Section, etc.,. It was stated in the said letter dated 28.10.1980 that they would go on one day token strike, in support of their demands, on 31.10.1980.
2.6.The Deputy Commissioner of Labour-II, Chennai, the Conciliation Officer under the I.D.Act issued notice dated 30.10.1980 based on the aforesaid notice dated 28.10.1980 advising the Employees Union not to resort to strike on 31.10.1980, as he seized of the matter.
2.7.The strike did not take place on 31.10.1980. The Employees Union postponed the direct action to 01.11.1980. It was also postponed further.
2.8. While so, the Employees Union decided to go on strike in support of its demands for one day as a token measure on 19.11.1980. Admittedly, there was no notice given for the said strike as contemplated under Section 22(1) of the I.D.Act and hence, it was illegal.
2.9. It is the case of the Employees Union that the workmen were denied entry on 20.11.1980, when they reported to duty after participating in one day token strike.
2.10.It is the case of the petitioner establishment that the workmen abandoned their service by participating in an illegal strike for a long period.
2.11.The Employees Union filed W.P.No.860 of 1981 seeking a direction to the Government to refer the industrial dispute relating to non-employment of the large number of workmen for adjudication by the Industrial Tribunal.
2.12.While so, the Government passed G.O.Ms.No.371, Labour and Employment Department, dated 14.02.1983 under Section 10 of the I.D.Act declining to refer the industrial dispute relating to the non-employment of large number of workmen numbering more than 1000 for adjudication by the Industrial Tribunal on the ground that the workmen indulged in illegal strike on 19.11.1980, in contravention of Section 22 of the I.D.Act. Before passing the Government Order, the conciliation officer sent the failure report dated 16.11.1982 under Section 12(4) of the I.D.Act to the Government.
2.13.In view of G.O.Ms.No.371, W.P.No.860 of 1981 was dismissed as infructuous.
2.14.The Employees Union filed W.P.No.4024 of 1983 to quash the aforesaid G.O. and sought for direction to refer the matter to Industrial Tribunal for adjudication. The writ petition was allowed by a learned Single Judge of this Court on 19.12.1983.
2.15.The Government preferred W.A.No.175 of 1984 and the writ petitioner preferred W.A.No.161 of 1984 questioning the order of the learned Single Judge. A Division Bench of this Court rejected the writ appeals by the order dated 02.08.1985 and the same is reported in 1985 II LLJ 532.
2.16.Pursuant to the aforesaid order of this Court, the Government issued G.O.Ms.No.873, Labour and Employment Department, dated 30.04.1985 referring the issue of non-employment of 901 workmen to the Industrial Tribunal for adjudication.
2.17.Later, the Government issued another G.O.Ms.No.1856, Labour and Employment Department, dated 25.09.1986 referring the non-employment of left out workmen, numbering 169, for adjudication by the Tribunal.
2.18.The earlier reference was taken on file in I.D.No.31 of 1985 and the latter reference was taken on file in I.D.No.70 of 1986 by the Industrial Tribunal, Tamil Nadu. Thus, the industrial disputes were relating to non-employment of 1070 workmen.
3.1.When the Industrial Disputes in I.D.Nos.31 of 1985 and 70 of 1986 were pending adjudication, the Government issued a letter in Letter Ms.No.71, Animal Husbandry and Fisheries Department, dated 24.02.1989 to the Managing Director of the petitioner establishment directing to employ 489 persons as fresh recruits, who were dismissed from service for participation in the strike in November 1980.
3.2.Pursuant to the aforesaid direction issued by the Government, settlements were entered into between some workmen individually and the petitioner under Section 18(1) of the I.D.Act providing employment as fresh recruits. After entering into the said settlements, the petitioner made an application before the Industrial Tribunal to pass an interim award in terms of the settlements in respect of those workmen.
3.3.Though the Union objected for such a course, the Tribunal passed the interim award dated 07.10.1989 as prayed for by the petitioner management accepting those settlements as fair and reasonable. The interim award was passed in terms of the settlements entered into between the individual workmen and the petitioner management, in the aforesaid dispute in I.D.Nos.31 of 1985 and 70 of 1986.
3.4. The Tribunal passed another interim award dated 07.07.1994 in I.D.Nos.31 of 1985 and 70 of 1986 in terms of the settlements entered into between the individual workmen and the petitioner management under Section 18(1) of the I.D.Act in respect of 47 workmen. It seems, in total, 370 workmen entered into 18(1) settlements, as stated above.
4.1.After hearing both the parties, the Tribunal passed an Award on 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986 holding that the non-employment of the workmen was not justified and ordered reinstatement of those workmen with continuity of service. As far as the backwages were concerned, the Tribunal opined that non-employment period was a long one and restricted the backwages to 25% from the respective dates of reference to the date of reinstatement. The Industrial Tribunal answered the reference accordingly and communicated the award to the Tamil Nadu Government.
4.2.On receipt of the aforesaid award dated 17.02.1997, the same was published by the Tamil Nadu Government in the Tamil Nadu Government Gazette on 30.04.1997 under Section 17(1) of the I.D.Act.
4.3.As per Section 17A(1) of the I.D.Act, the Award shall become enforceable on the expiry of thirty days from the date of the publication.
4.4.As per Section 18(3)(a) of the I.D.Act, the Award is binding on the parties to the industrial dispute.
5.1.In the meantime, the Government issued another letter in Letter Ms.No.20, Animal Husbandry and Fisheries Department, dated 29.01.1997 to the Managing Director of the petitioner establishment with a direction to provide employment to 427 workmen as fresh recruit.
5.2.Pursuant to the aforesaid direction issued by the Government in its letter dated 29.01.1997, the petitioner establishment entered into individual settlement under Section 18(1) of the I.D.Act with the workmen numbering 279. The respondent workmen are among those workmen, who signed such individual settlements.
6.1.While so, the petitioner filed W.P.No.976 of 1998 on 22.01.1998 seeking to modify the award dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986 passed by the Industrial Tribunal that was published in the Tamil Nadu Government Gazette dated 30.04.1997 in terms of the settlement in respect of 279 workmen, who signed 18(1) settlement and whose names were given in Annexure-I to the writ petition and also others, who would enter into 18(1) settlement and also to quash the award in respect of other workers who have not signed the settlement.
6.2.The Union also filed W.P.No.13410 of 1998 insofar as denial of full backwages is concerned. Both the writ petitions were heard together by a learned Single Judge of this Court and orders are yet to be pronounced.
7.While so, the Government issued a letter in Letter No.17035/MP.I/98-5, dated 20.11.1998 directing the petitioner to give continuity of service in respect of the employees, who were taken as fresh recruits pursuant to its earlier letters and accordingly to fix their pay notionally as if they were not dismissed from service.
Facts of these cases :
8.0.The second respondent in W.P.No.7325 of 2006 joined the petitioner establishment on 26.04.1980 as Junior Mazdoor. The second respondent in W.P.No.7326 of 2006 joined the petitioner establishment on 01.01.1980 as Junior Mazdoor.
8.1.The second respondents were denied employment pursuant to their participation in the strike, referred to above, and they were among 1070 employees whose non-employment were referred for adjudication in I.D.Nos.31 of 1985 and 70 of 1986.
8.2.Both the workmen, the second respondents in these writ petitions, entered into individual settlement on 10.03.1997 under Section 18(1) of the I.D.Act, when the Government issued Letter dated 29.01.1997 and they were provided employment. As per the said settlement dated 10.03.1997, they agreed to forgo backwages and attendant benefits.
8.3.The second respondent in W.P.No.7325 of 2006 retired from service on reaching the age of superannuation on 28.02.2003 and the second respondent in W.P.No.7326 of 2006 retired from service on reaching the age of superannuation on 31.01.2001.
8.4.The services rendered by the second respondents from the date of their appointment in the year 1980 till the date of 18(1) settlement, i.e., on 10.03.1997, about 17 years, were not taken into account for the payment of gratuity. Hence, they filed P.G.Nos.25 of 2003 and 248 of 2003 respectively before the Assistant Commissioner of Labour-II, Chennai, the Controlling Authority under the Payment of Gratuity Act, 1972, claiming gratuity for the aforesaid period.
8.5.The Controlling Authority allowed their claim petitions on 23.10.2004 and directed the petitioner establishment to pay gratuity amount of Rs.52,918/- and Rs.43,555/- together with interest respectively to the second respondents, taking into account the aforesaid service also.
8.6.The petitioner establishment deposited the amounts, as ordered by the Controlling Authority under the Payment of Gratuity Act, and filed appeals in P.G.A.Nos.34 and 35 of 2005 respectively before the Appellate Authority, the first respondent herein.
8.7.The appellate authority confirmed the order of the Controlling Authority by a Common Order dated 31.08.2005.
8.8. The Controlling Authority as well as the Appellate Authority rejected the argument of the management that since the workmen individually entered into settlement dated 10.03.1997 under Section 18(1) of the I.D.Act agreeing to join the service as fresh entrants, they could not ask for gratuity for their past service.
8.9.The petitioner establishment filed these writ petitions against that order dated 31.08.2005 of the Appellate Authority.
9. Heard both sides.
Submissions :
10.0.The learned counsel for the petitioner has vehemently contended that the second respondent/workmen entered into individual settlements on 10.03.1997 under Section 18(1) of the I.D.Act with eyes wide open and therefore, the second respondent/workmen are bound by the settlements and not by the Award dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986.
10.1.According to him, as per the individual settlements, the second respondent/workmen gave up the past service for all purposes including for the purpose of gratuity.
10.2.Further, he has submitted that if the individual settlements under Section 18(1) of the I.D.Act that were signed during 1997 are taken into account along with the earlier individual settlements under Section 18(1) of the I.D.Act, which were approved by the Industrial Tribunal by interim awards, majority of the workmen settled the industrial dispute and therefore, the settlements entered into during 1997 shall also be treated as fair and reasonable.
10.3.Placing reliance on the written arguments filed by the petitioner/management before the first respondent / Appellate Authority under the Payment of Gratuity Act, 1972, he has submitted that the award of the Industrial Tribunal became not enforceable and the same shall be ignored.
10.4.He has further submitted that the authorities under the Payment of Gratuity Act have no jurisdiction to decide the validity and fairness of the individual settlements signed by the second respondent/workmen under Section 18(1) of the I.D.Act.
10.5.The learned counsel for the petitioner has also submitted that the workmen abandoned the service and their strike was illegal. In this regard, he placed reliance on para 4 of the memorandum of grounds of appeal made before the first respondent / Appellate Authority.
10.6.The learned counsel for the petitioner has relied on the following judgments of the Apex Court :
(1)Herbertsons Ltd. V. Workmen, reported in (1976) 4 SCC 736 ;
(2)Tata Engineering and Locomotive Co. Ltd. V. Workmen, reported in 1981 (4) SCC 627 ; and (3)National Engineering Industries Ltd. V. State of Rajasthan, reported in 2000 (1) SCC 371.
11.0.On the other hand, the learned counsel for the second respondent/workmen has replied that the workmen did not give up the past service for the purpose of gratuity in the individual settlements dated 10.03.1997 under the I.D.Act and the workmen gave up only backwages and attendant benefits.
11.1.He has submitted that the petitioner gave notional fixation to all the workmen, who signed individual settlement under Section 18(1) of the I.D.Act, as if they were not dismissed from service. Those workmen are similarly situated persons like the second respondents. Those persons were given gratuity on their retirement for their past service and also on higher pay given to them pursuant to the notional fixation. Thus, the petitioner could not object to the impugned order directing the petitioner to pay gratuity for the past service.
11.2.The learned counsel for the second respondent/workmen has further submitted that the individual 18(1) settlements that were signed in 1997 were not produced before the Industrial Tribunal that decided I.D.Nos.31 of 1985 and 70 of 1986 to test its fairness and reasonableness and hence, the award passed by the Tribunal is binding on the workmen who signed the settlement during 1997 and also the petitioner, as per Section 17A(1) read with 18(3)(a) of the I.D.Act.
11.3.He has submitted that the petitioner management could have very well approached the Tribunal to reopen the industrial disputes/cases to decide the fairness of those settlements signed in March 1997 and to accept the same as fair and reasonable in respect of those workmen, since the Tribunal retains its jurisdiction till the award became enforceable after one month of the publication of the same in the Tamil Nadu Government Gazette on 30.04.1997.
11.4.The learned counsel for the workmen has further submitted that since the Employees Union has been agitating the industrial dispute from the beginning and the Employees Union alone is the party to the industrial disputes before the Industrial Tribunal, the management shall enter into settlement only with the Employees Union and not with the individual workmen. Entering into such individual settlements with Workmen under Section 18(1) of the Act is illegal and opposed to the very scheme of the I.D.Act.
12.I have carefully considered the submissions made on either side.
13.At the outset, I make it clear that this Court cannot go into the question as to the fairness and reasonableness of a settlement under Section 18(1) of the I.D.Act, while exercising writ jurisdiction under Article 226 of the Constitution. It is for the Industrial Tribunal to record a finding on the fairness and reasonableness of a settlement, if one of the parties to the industrial dispute seeks the Tribunal to an pass Award in terms of the settlement under Section 18(1) of the I.D.Act. When such a finding is questioned before this Court by way of a writ petition, then only this Court could examine the correctness or otherwise of the findings of the Tribunal.
Award binds the parties :
14. The learned counsel for the petitioner/management, as stated above, has vehemently contended that if the 18(1) settlements that were signed during 1997 were taken into account, the majority of the workmen entered into individual settlements and therefore, the award of the Tribunal became not enforceable, though those 1997 settlements were not placed before the Tribunal to test the fairness of those settlements, and the Award of the Tribunal shall be ignored. He took me through the written arguments filed before the Appellate Authority under the Payment of Gratuity Act, 1972, that is found at page No.88 of the typed set of papers, and has submitted that the award of the Tribunal cannot be enforceable in respect of these workmen, though the award was published in the Tamil Nadu Government Gazette. The paragraph (h) of the written arguments is extracted in this regard:
(h) Therefore, the award of the Industrial Tribunal at the relevant time of entering into the settlement and joining of the 1st respondent on 10.03.1997. The award did not become enforceable at all.
15. In my considered view, since the industrial disputes in I.D.Nos.31 of 1985 and 70 of 1986 were adjudicated by the Industrial Tribunal by passing of the Award and the Award, being published in the Tamil Nadu Government Gazette under Section 17(1)of the I.D. Act, the Award is binding the parties to the disputes as per Section 18(3) of the I.D.Act, and the individual settlement entered into between the dismissed workmen and the petitioner under Section 18(1) of the I.D.Act during 1997 and thereafter, would not have binding effect on those workmen, since those settlements were not placed before the Tribunal to consider the fairness of the same. It is well-settled law.
16. Admittedly, in these cases, the individual 18(1) settlements were entered into during 1997 after the Government issued the letter dated 29.01.1997. Those settlements are admittedly not placed before the Tribunal. It is true that the Tribunal passed an award dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986. But the said award was published in the Tamil Nadu Government Gazette on 30.04.1997. Until the expiry of one month after the publication of the award, the Tribunal has jurisdiction on the industrial disputes in I.D.Nos.31 of 1985 and 70 of 1986. Hence, the petitioner could have filed an application before the Tribunal to reopen the case seeking modification of the award insofar as the persons, who signed the settlement are concerned for giving necessary seal of approval to those settlements. Having failed to do so, in my view, the petitioner management cannot rely on those settlements in respect of those persons, who signed those settlements, since those workmen as well as the petitioner management are bound by the Award of the Tribunal, as per Section 18(3)(a) of the I.D.Act.
17.The Tribunal admittedly granted continuity of service. Hence, the second respondent/workmen are entitled to gratuity by counting the past service.
18.At this juncture, it is relevant to take note of the very scheme of the I.D.Act. As per the original scheme of the I.D.Act, the Trade Union or collective body of workmen alone can raise an industrial dispute under Section 2(k) of the I.D.Act relating to various issues, such as, wages including allowances, working hours, dispute relating to shifts and other conditions of service, bonus and all types of punishment imposed on the workmen including the dispute relating to non-employment. An exception was carved out in 1965 by way of the insertion of Section 2A of the I.D.Act. By introducing Section 2A of the I.D.Act, the industrial dispute relating to non-employment of individual workman is deemed to be an industrial dispute, by permitting the individual workman, without the support of other workmen or the Trade Union, to agitate the non-employment before the conciliation machinery and later before the adjudicating authority. Even in the case of non-employment, if the industrial dispute was not raised under Section 2A of the I.D.Act by the individual workman and the industrial dispute relating to non-employment was taken up collectively by a Trade Union, the individual workman concerned with the dispute cannot enter into a settlement with the management thereby defeating the very adjudication, as the Trade Union alone took up the matter for adjudication before the Industrial Tribunal. Such a settlement entered into between the management and the individual workman shall be termed as illegal and shall be ignored, if the industrial dispute relating to non-employment was collectively raised.
19.It is an admitted fact that the industrial dispute relating to the non-employment of large number of workmen was espoused by the Employees Union under Section 2(k) of the I.D.Act. The workmen were dismissed enmasse for participating in the illegal strike organized by the Employees Union. The Employees Union filed W.P.No.860 of 1981 seeking a direction to the Government to refer the industrial dispute relating to the non-employment of large number of workmen. The Employees Union participated in the conciliation proceedings relating to the non-employment of workmen. When the Tamil Nadu Government passed an order under Section 10 of the I.D.Act declining to refer the industrial dispute relating to non-employment of workmen for adjudication, the Employees Union only approached this Court in W.P.No.4024 of 1983 challenging the order of the Government and seeking for a direction to the Government to refer the said industrial dispute to the Industrial Tribunal for adjudication. A learned Single Judge of this Court allowed the writ petition. When the writ petitioner management and the Government questioned the order of the learned Single Judge in W.A.Nos.161 of 1984 and 175 of 1984 respectively, the order of the learned Single Judge was defended by the Employees Union. Thereafter, the Government issued the orders referring the industrial dispute to the Industrial Tribunal and the Industrial Tribunal took it on file in I.D.No.31 of 1985 and 70 of 1986. The Employees Union pursued the cases by filing pleadings and letting in evidence and arguing the cases. In these circumstances, the management cannot enter into any individual settlements with the individual workman under Section 18(1) of the I.D.Act disregarding the Employees Union. If at all the petitioner management was interested in finding a solution to the industrial dispute in I.D.Nos.31 of 1985 and 70 of 1986 by negotiation and settlement, as per the scheme of the I.D.Act, the petitioner shall do it only with the Employees Union. The scheme of the Act provides only such a course. The course adopted by the management in entering into individual settlements with the individual workman under Section 18(1) of the I.D.Act is opposed to the very scheme of the I.D.Act and thus illegal.
Judgments :
20.0. At this juncture, it is relevant to consider the judgments, relied on by the learned counsel for the petitioner/management for the proposition that the settlements entered into between the management and the workmen under Section 18(1) of the I.D.Act were approved by the Apex Court in the place of Award, one by one, as hereunder :
I. Herbertsons Limited V. The Workmen of Herbertsons Limited, (1976) 4 SCC 736 :
(i).The settlement signed by the workmen individually was not considered in that case. Further, after passing of the award, a Trade Union said to have represented majority workmen entered into a settlement under Section 18(1) of the I.D.Act with the appellant employer during the pendency of the appeal preferred by the appellant management against the Award before the Apex Court and the same was objected to by another Union. The dispute was relating to wages, Dearness Allowance, gratuity, etc.
(ii).In those circumstances, the Apex Court by an interim order directed the Industrial Tribunal to consider whether the settlement was just and fair. The Tribunal recorded its finding that the settlement was not just and fair. The said finding of the Tribunal was reversed by the Apex Court based on the materials placed before the Tribunal.
(iii).It is also held by the Apex Court in that judgment that it is not possible to scan the settlement in bits and pieces and hold some parts good and acceptable and others bad. The following passage in paragraph 27 of the judgment in Herbertsons's case is extracted in this regard :
27. It is not possible to scan the settlement in bits and pieces and hold some parts good and acceptable and others bad. Unless it can be demonstrated that the objectionable portion is such that it completely outweighs all the other advantages gained the Court will be slow to hold a settlement as unfair and unjust. The settlement has to be accepted or rejected as a whole and we are unable to reject it as a whole as unfair or unjust. .....
(iv). Hence, this judgment could not render any help to the petitioner, particularly, for two reasons, namely (a) it was not a case wherein the management entered into settlement under Section 18(1) of the I.D.Act with individual workman ; and (b) the fairness and reasonableness of the settlement said to have been entered into between the management and the Trade Union, said to have represented majority workmen, was decided by the Industrial Tribunal, pursuant to the interim order passed by the Apex Court in the appeal and later, the said finding of the Industrial Tribunal, pursuant to such interim order, was considered in the appeal.
II. Tata Engineering and Locomotive Co. Ltd. V. Workmen, (1981) 4 SCC 627:
(i).In that case, when the dispute relating to daily rated workmen was pending adjudication, one of the unions entered into a settlement and claimed that 564 out of 635 daily-rated workmen accepted the settlement and the settlement was produced before the Tribunal to pass an award in terms of the settlement. The Tribunal recorded a finding that the settlement was not a fair one. The said finding of the Tribunal was reversed by the Apex Court, considering the materials available therein. The Apex Court, following the Herbertson's case, held in paragraph 10 of the judgment in Tata Engineering's case as follows :
10. ..... A settlement cannot be weighted in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication.
(ii).In that case also, it was a contest between two unions and the Apex Court did not hold anywhere that the employer can enter into an individual settlement with the workman disregarding the Union that espoused the cause of the workmen by raising industrial dispute and conducting the adjudication before the Industrial Tribunal.
III. National Engineering Industries Ltd. V. State of Rajasthan, (2000) 1 SCC 371:
(i).In this case, there were three unions, shortly, Labour Union, Staff Union and Workers Union. On facts, the Apex Court recorded that the Labour Union represents majority of the workmen of the appellant industry. All the three unions raised a dispute before the conciliation officer regarding the charter of demands.
(ii).A settlement under Section 12(3) of the I.D.Act was reached before the conciliation officer between the staff union, labour union on the one hand and the appellant management on the other hand.
(iii).Still the Government made a reference at the instance of the workers Union, when the matter was concluded by way of 12(3) settlement.
(iv).In those circumstances, the Apex Court quashed the reference and held that the settlement entered into under Section 12(3) of the I.D.Act binds not only the parties to the settlement and also binds the entire workforce, as per Section 18(3) of the I.D.Act.
(v).In that case also, the Apex Court never held that the employer could put an end to the adjudication by entering into settlement under Section 18(1) of I.D.Act with individual workman.
(vi).In industrial jurisprudence, a settlement arrived at during the conciliation proceedings is equated to the Award passed by the Labour Court/Industrial Tribunal in the adjudication. The Conciliation Officer under the I.D.Act is duty bound to see before signing the settlement under Section 12(3) of the I.D.Act that the Union, that signs the settlement, represents majority of the workmen and that the terms of the settlement are fair.
21.A reading of the above judgments makes it clear that the said judgments were rendered by the Apex Court in view of the facts and circumstances of those cases as explained above and hence, those judgments could render no assistance to the petitioner management.
22(i).On the other hand, the Apex Court has held in clear terms in K.C.P. Ltd. V. Presiding Officer reported in (1996) 10 SCC 446 that the individual workman cannot have a say in the industrial dispute raised by the Trade Union under Section 2(k) of the I.D.Act, even in the case of non-employment.
22(ii).In K.C.P. Ltd's case, the non-employment of 29 workmen were taken up under Section 2(k) of the I.D.Act by the Trade Union for adjudication before the Labour Court. When the dispute was pending, the Trade Union entered into 18(1) settlement with the management that provides option for workmen for reinstatement with continuity of service or for a lump sum compensation. Some of the workmen objected to the settlement and they insisted the Labour Court to decide their non-employment rejecting the said settlement. When the said settlement entered into with the Trade Union was placed before the Labour Court, the Labour Court accepted the contention of those individual workman and rejected the settlement and proceeded to decide the industrial dispute relating to non-employment of those workmen. The order of the Labour Court was confirmed by a learned Single Judge and thereafter, by a Division Bench. When the matter was taken to the Apex Court, the Apex Court held that the workmen, in the industrial dispute relating to non-employment that was taken up before the Labour Court by the Trade Union, are bound by the settlement signed by the Union and the individual workman can have no say over the industrial dispute. It is only the Trade Union that could decide the issue, particularly, when the industrial dispute was taken up for adjudication by the Trade Union under Section 2(k) of the I.D.Act.
22(iii).In my view, the said judgment squarely applies to the facts of these cases. Paragraph 25 of the said judgment in K.C.P. Ltd case is extracted hereunder:
25.It has to be kept in view that under the scheme of labour legislations like the Act in the present case, collective bargaining and the principle of industrial democracy permeate the relations between the management on the one hand and the Union which resorts to collective bargaining on behalf of its members-workmen with the management on the other. Such a collective bargaining which may result in just and fair settlement would always be beneficial to the management as well as to the body of workmen and society at large as there would be industrial peace and tranquility pursuant to such settlement and which would avoid unnecessary social strife and tribulation on the one hand and promote industrial and commercial development on the other hand. Keeping in view the aforesaid salient features of the Act the settlement which is sought to be impugned has to be scanned and scrutinised. Settlement of labour disputes by direct negotiation and collective bargaining is always to be preferred for it is the best guarantee of industrial peace which is the aim of all legislations for settlement of labour disputes. In order to bring about such a settlement more easily and to make it more workable and effective it may not be always possible or necessary that such a settlement is arrived at in the course of conciliation proceedings which may be the first step towards resolving the industrial dispute which may be lingering between the employers and their workmen represented by their unions but even if at that stage such settlement does not take place and the industrial dispute gets referred for adjudication, even pending such disputes, the parties can arrive at amicable settlement which may be binding to the parties to the settlement unlike settlement arrived at during conciliation proceedings which may be binding not only to the parties to the settlement but even to the entire labour force working in the organisation concerned even though they may not be members of the Union which might have entered into settlement during conciliation proceedings.
23.Likewise, in the case in P.Virudhachalam V. Lotus Mills, (1998) 1 SCC 650, a Trade Union entered into a settlement during the conciliation proceedings under Section 12(3) of the I.D.Act with the employer relating to payment of lay off compensation. The workman is bound by the settlement under Section 18(3) of the I.D.Act, since the settlement arrived at during the conciliation proceedings under Section 12(3) of the I.D.Act binds all the workmen. But, the workmen filed petition under Section 33(C)(2) of the I.D.Act claiming compensation as per the I.D.Act. According to the workman, he is entitled to lay off compensation as per the I.D.Act and not as per the settlement. The matter was taken up to the Apex Court. The Apex Court held that the workman is bound by the 12(3) settlement signed by the Union and that the workman cannot complain that he could claim compensation as per the I.D.Act, when the Union entered into a 12(3) settlement under the I.D.Act. It is relevant to extract the following passage in paragraph 9 of the judgment in (1998) 1 SCC 650 in this regard and the same is extracted as hereunder :
9. It has to be kept in view that the Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. Thus principle of industrial democracy is the bedrock of the Act. The employer or a class of employers on the one hand and the accredited representatives of the workmen on the other are expected to resolve the industrial dispute amicably as far as possible by entering into the settlement outside the conciliation proceedings or if no settlement is reached and the dispute reaches the conciliator even during conciliation proceedings. In all these negotiations based on collective bargaining the individual workman necessarily recedes to the background. The reins of bargaining on his behalf are handed over to the union representing such workman. The unions espouse the common cause on behalf of all their members. Consequently, settlement arrived at by them with management would bind at least their members and if such settlement is arrived at during conciliation proceedings, it would bind even non-members. Thus, settlements are the live wires under the Act for ensuring industrial peace and prosperity. ..... 24(i). It is relevant to refer the judgment of this Court in Britannia Biscuit Co. Ltd. Employees' Union V. Assistant Commissioner of Labour, Head Quarters and Others, reported in (1983) II LLJ 181 (Mad).
24(ii).In Britannia Biscuit Company, there were 950 permanent and 439 temporary workmen, both the writ petitioner union as well as Britannia Industries Employees' Union made a demand relating to increase in wages and improvement in conditions of service and also to make 439 temporary workmen permanent.
24(iii).The conciliation proceeding took place. The petitioner union did not sign the settlement, that was signed before the Conciliation Officer under Section 12(3) of the I.D.Act by the Britannia Industries Employees' Union and the management of Brintania Industries Limited. The 12(3) settlement provided increase in wages and also improvement in conditions of service to the entire workforce numbering 950 permanent workmen. 51 temporary workmen were discharged from service and others were made permanent and those discharged workmen were provided with some lumpsum compensation.
24(iv).The petitioner Union filed the writ petition seeking to declare the settlement under Section 12(3) of the I.D.Act as null and void. Without hearing the individual workmen, who were discharged from service, 12(3) settlement cannot be signed was one of the arguments raised on behalf of the petitioner Union.
24(v).On the other hand, the management and the Union that signed the settlement contended that the majority union supported the settlement and that the terms of the settlement are fair and reasonable and beneficial to the workmen in general under the scheme of the I.D.Act, and therefore, the individual workman need not be heard.
24(vi).The said contention was accepted by this Court, following the judgments of the Apex Court, and the writ petition was dismissed. It is relevant to extract the following passage in paragraphs 22 and 28 of the judgment in Britannia Biscuits case (cited supra) :
"22. ..... So far as the individual workmen are concerned it is not necessary that each individual workman should know that implications of a settlement which is know the implications of a settlement which is because industrial jurisprudence is based on collective bargaining and in the matter of collective bargaining and the workmen as individuals do not come into the picture at all. The question whether individual workmen should be given notice or are entitled to know the implications of a settlement entered into between the management and the recognized union was considered by the Supreme Court in Herbertsons, Ltd., v. Their workmen. The Supreme Court in that case observed as follows :
When a recognized union negotiates with an employer, the workers as individuals do not come into the picture. It is not necessary that each individual worker should know the implications of the settlement since a recognized union, which is expected to protect the legitimate interests of labour, enters into a settlements, in the best interest of labour. This would be the normal rule. We cannot altogether rule out exceptional case where there may be allegations of mala fides, fraud or even corruption or other inducements ...."
.......
28. ..... The recognized union was, therefore, confronted with the question whether they should come to an understanding with the management on their demand with regard to making these 439 temporary workmen permanent or face their being retrenched from service. The management was equally interested in purchasing peace. Accordingly, with the assistance of the Assistant Commissioner of Labour, Headquarters, they agreed that 331 workmen should be made permanent and fifty-one workmen should be discharged from service. In fact, the agreement contains a recital that the management has on rolls 950 operatives and as such a minimum of 150 workmen were not required for its operations. ....... Further, the settlement contains clauses with regard to a revision of wages and service conditions; there is a revision of basic wages, dearness allowance, house rent allowance. ....... Taking all the factors into consideration, I am of the opinion that the terms and conditions of the settlement are fair and reasonable and beneficial to the workmen in general. The fact that in the process of bargaining fifty-one workmen happened to be discharged from service cannot go to show that the settlement is neither fair nor reasonable. These fifty-one workmen had no right to be made permanent. Further, each one of them has been given a terminal compensation of Rs. 6,500. 24(vii).The individual has no role in the scheme of the I.D.Act and the right given to individual workman under Section 2A of the I.D.Act would not deter the collective bargaining power of the Union to enter into settlement agreeing to dispense with the services of some of the workmen in a package deal, while benefiting the entire workforce.
24(viii).Applying the said principle, I am of the view that in cases, where the Employees Union took up the industrial dispute relating to non-employment under Section 2(k) of the I.D.Act, it is not permissible to the management to enter into individual settlement under Section 18(1) of the I.D.Act with the workman.
24(ix).If the procedure adopted by the petitioner is approved, the same would go against the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace and the principle of industrial democracy, which is the bedrock of the I.D.Act, would be put at peril.
25. Admittedly, all the workmen, whose cases are referred for adjudication in I.D.Nos.31 of 1985 and 70 of 1986, are members of the Employees Union and they were admittedly dismissed from service for their participation in the illegal strike organised by the Employees Union. Hence, any individual settlement with the dismissed workmen under Section 18(1) of the I.D.Act could not bring an end to the industrial dispute raised by the Employees Union under Section 2(k) of the I.D.Act and such settlements, on the face of it, cannot be acceptable, in view of the decisions of the Apex Court and this Court, referred to above.
Orders of the authorities under the Payment of Gratuity Act, 1972 :
26.0.Now let me come to the orders passed by the authorities under the Payment of Gratuity Act, 1972.
26.1.The Controlling Authority under the Payment of Gratuity Act, 1972, considered the terms of 18(1) settlement dated 10.03.1997 providing employment to the second respondents and came to the conclusion in its orders dated 23.10.2004 that the second respondent in both the writ petitions gave up only backwages and attendant benefits and they did not give up the past service for the purpose of gratuity.
26.2.The Controlling Authority also took into account the award of the Industrial Tribunal dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986 granting continuity of service, besides 25% backwages. The Controlling Authority also relied on paragraph 24 of the interim order dated 22.12.1998 in WMP Nos.1417 of 1998 etc. in W.P.No.976 of 1998, wherein, a learned Single Judge has held that the workmen would lose the past service for fixation of pay as they agreed to forgo attendant benefits and they would also lose backwages as per the individual settlement, but they would not lose the benefit of past service for the purpose of gratuity. The Controlling Authority in its orders extracted the following passage in paragraph 24 of the interim order dated 22.12.1998 in WMP Nos.1417 of 1998 in W.P.No.976 of 1998 as hereunder:
24. It has already been pointed out that the first respondent union has been able to show prima facie that the settlement reached subsequent to the award is not fair or reasonable and infact the workers have been deprived of revision of salary by joining as new entrants. The number of years they had put in earlier is lost. They have also been deprived of leave accumulation bonus, gratuity and other retirement benefits. What they gained is employment and notional fixation of continuity of service for the purpose of gratuity alone. The grievance of the first respondent is perfectly justified in my view. 26.3.Considering the settlement dated 10.03.1997, the award of the Industrial Tribunal dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986 and also interim order dated 22.12.1998 in WMP Nos.1417 of 1998 etc. batch in W.P.No.976 of 1998, the Controlling Authority directed the writ petitioner to pay gratuity, taking into account the past service rendered by the workmen in its orders dated 23.10.2004.
26.4.While the Controlling Authority directed the writ petitioner establishment to take into account the past service for the purpose of gratuity, the Controlling Authority directed to pay the amount based on the last wages received by the second respondent at the time of retirement. The Second respondents/workmen in these writ petitions were not given wages by giving notional fixation for the period of non-employment. That is, while the Controlling Authority directed to count the length of past service for the purpose of gratuity, the Authority did not direct the writ petitioner to pay gratuity, based on the correct notional fixation of pay by taking into account the past service. Thus, the Controlling Authority has not redressed the grievance relating to the payment of gratuity in its entirety. Since, the workmen were treated as fresh recruits as per the 18(1) settlement dated 10.03.1997, they were given the pay of the fresh recruit in 1997 when they were taken into service and thus, they were in receipt of lesser wages at the time of retirement. Based on such lesser wages, the petitioner gave gratuity to the respondent/workmen, that too without taking into account the past service.
27.The aforesaid order was taken before the Appellate Authority by the writ petitioner/management under the Payment of Gratuity Act, 1972. The Appellate Authority rejected the appeal. The Appellate Authority, while confirming the orders of the Controlling Authority, held in the common order dated 31.08.2005 in PGA Nos.34 and 35 of 2005 that the second respondents herein are entitled to the gratuity for the past service as per the 18(1) settlement dated 10.03.1987 and also the Award of the Industrial Tribunal dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986.
28(i).Even if the argument of the management is accepted that the settlement dated 10.03.1997 under Section 18(1) of the I.D.Act is binding between the parties and not the Award dated 17.02.1997 in I.D.Nos.31 of 1985 and 70 of 1986, I am of the view that the reading of 18(1) settlement discloses that the second respondent / workmen did not give up their past service for the purpose of gratuity and they gave up only backwages and attendant benefits.
28(ii).A reading of the settlement dated 10.03.1997 makes it clear that the respondent workmen only gave up backwages and attendant benefits. It is relevant to extract clause (2) of the 18(1) settlement dated 10.03.1997 in this regard :
nkw;Twpa bjhHpyhsp jpU/b$atujd; jhd; gzpapy; ,y;yhj fhyk; Kjy; mjhtJ 1980?k; Mz;L etk;gh; khjk; Kjy; g[jpjhf gzpapy; nrUk; njjpf;F Ke;ija ehs; tiuf;Fk; cz;lhd gpd; Cjpak; kw;Wk; ,jur; rYiffs; midj;ija[k; nfhukhl;nld; vd;W xg;g[f;bfhs;fpwhh;/ 28(iii).Even if there is a doubt as to how the 18(1) settlement dated 10.03.1997 has to be construed, I am guided by Hon'ble Mr.Justice V.R.Krishna Iyer. It is relevant to extract the following passage in paragraph 147 of the judgment in Gujarat Steel Tubes Ltd. V. Mazdoor Sabha, reported in (1980) 2 SCC 593 as hereunder :
147. ... Whenever you are in doubt. .. apply the following test. Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him. ... 28(iv).I have no doubt as to the interpretation of 18(1) settlement, as made by the Controlling Authority and the Appellate Authority. Even if there is a doubt, applying the aforesaid principle, as enunciated by the Apex Court, I am of the view that the orders of the authorities under the Payment of Gratuity Act are to be upheld and the writ petitions deserve to be dismissed.
29(i).It was the specific case of the petitioner/management before the Appellate Authority that the Government issued Letter No.17035/MP.I/98-5, dated 20.11.1998 directing the writ petitioner management to grant notional fixation of pay by giving continuity of service for the purpose of pay from the date of their initial appointment as if there was no dismissal, if the workmen entered into another settlement forgoing backwages. Most of the workmen, who joined earlier, pursuant to individual 18(1) settlements forgoing backwages and attendant benefits, signed another settlement forgoing backwages and those workmen were given, notional fixation of pay and they were granted higher pay. On their retirement, both the past service and higher pay were the basis for settlement of gratuity to those workmen. Since the respondents in these writ petitions did not enter into such second settlement, they were neither given the benefit of counting of past service for the purpose of gratuity nor given the higher wages, based on notional fixation of pay for the period of non-employment as given to similarly situated others, who were taken into service based on 18(1) settlement like the second respondent workmen. It is relevant to note that not granting of notional fixation of wages resulted in the lesser payment of gratuity.
29(ii).In my considered view, all the workmen, who entered into 18(1) settlement during 1997 forgoing backwages, pursuant to the Government letter Ms.No.20, Animal Husbandry and Fisheries Department, dated 29.01.1997 constitute one class. Hence, there cannot be discrimination among the workmen, who signed individual settlement in 1997 after the Government Letter dated 29.01.1997 in the matter of grant of continuity of service, even if those settlements are valid.
29(iii).Since the writ petitioner/management granted notional fixation of pay by taking into account the past service also and granted higher pay, in case of other workmen, who signed the second settlement, the same benefit of notional fixation of pay shall also be granted to the second respondents/workmen. Otherwise, the action of the petitioner management is clearly discriminatory.
29(iv).In any event, signing of the second settlement pursuant to Government Letter dated 20.11.1998, forgoing backwages for the purpose of grant of continuity of service is not at all necessary, since all the workmen who signed 18(1) settlement in 1997 including the second respondent/workmen already gave up the backwages.
29(v).When the workman is giving up certain rights, apart from the rights that were already given up in the first settlement, then only another second settlement is necessary. Since the workmen, who signed individual 18(1) settlement in 1997 gave up the basic wages, second settlement giving up backwages is not necessary. That is, signing of second settlement forgoing backwages is redundant, since already backwages was given up by these workmen in the earlier settlement, that was signed during 1997, for getting employment.
29(vi).At the most, whether the workmen who signed 18(1) settlement are also entitled to the backwages could be decided based on the outcome of the order of this Court in W.P.No.976 of 1998 and W.P.No.13410 of 1998. But certainly the respondent/workmen herein cannot be denied neither the counting of their past service for the purpose of gratuity nor the notional fixation of pay for the period of non-employment, that could also have a bearing on the computation of gratuity.
30.Since the petitioner establishment is State under Article 12 of the Constitution, besides paying gratuity amount as ordered by the Authority for the past service, the writ petitioner management shall also pay the gratuity, that is payable to the workmen, as per the Payment of Gratuity Act, by re-fixing their pay from the date of reinstatement by granting notional fixation as given to other similarly situated persons who signed settlement during 1997 along with the second respondent/workmen. For grant of notional fixation, the signing of another settlement foregoing backwages is absolutely not necessary as the second respondent/workmen already agreed to forgo backwages in the settlment dated 10.03.1997. The persons, who signed individual 18(1) settlement in 1997 pursuant to the Government letter dated 29.01.1997 constitute one class and all of the them agreed to forgo backwages and attendant benefits. There cannot be further classification of those workmen to grant the attendant benefits. The denial of such notional fixation on the sole ground that the workmen concerned in these writ petitions did not sign another 18(1) settlement forgoing backwages, as per the letter dated 20.11.1988 of the Government, has no merit, for the simple reason that these respondent/workmen already agreed to forgo backwages in the 18(1) settlement dated 10.03.1997.
31(i). I am of the considered view that even if a workman has made a claim for payment of gratuity before the Controlling Authority / Appellate Authority under the Payment of Gratuity Act, 1972 and such claim is less than the gratuity payable statutorily under the Payment of Gratuity Act, 1972, the Controlling Authority / Appellate Authority is duty bound to direct the employer to pay the amount, that is, payable under the Payment of Gratuity Act, even if the employer resisted the same stating that the workman claimed lesser amount. Even if the workman makes a claim for higher amount than the amount payable under the Payment of Gratuity Act, the authority directs the employer to pay the correct amount. The same principle applies in the case of the claim made by the workman for lesser amount and the authority shall direct the employer to pay the correct amount as per the Payment of Gratuity Act in either case. It is relevant to extract Section 7(4)(a) to (c) of the Payment of Gratuity Act, 1972 as hereunder :
7.Determination of the amount of gratuity-
.....
(4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the Controlling Authority such amount as he admits to be payable by him as gratuity.
(b) Where there is a dispute with regard to any matter or matters specified in Clause (a), the employer or employee or any other person raising the dispute may make an application to the Controlling Authority for deciding the dispute.
(c) The Controlling Authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the Controlling Authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer. 31(ii).A reading of Section 7(4)(a) to (c) of the Payment of Gratuity Act, 1972, makes it very clear that the Controlling Authority shall determine the amount payable to an employee under the Payment of Gratuity Act. Furthermore, the dispute could be raised either by the employee or by the employer relating to determination of gratuity, as per the Payment of Gratuity Act. Therefore, the issue that has to be determined by the Controlling Authority is the actual amount that has to be payable under the Payment of Gratuity Act. In Century Chemicals and Oils (Private) Ltd. V. E.Maragatham, 1998 (2) L.L.N. 583, which arose under the Workmen Compensation Act, the employer questioned the order of Commissioner under the Workmen Compensation Act computing the amount more than the amount that was claimed by the legal heirs of the deceased workmen. The said contention of the employer was rejected by this Court. It is appropriate to extract the following passage in paragraph 20 of the said judgment as hereunder :
20. Learned counsel for the appellant further submitted that the compensation claimed by the claimants is much less than what has been awarded and, therefore, the authority has exceeded in its jurisdiction. The said submission also cannot be accepted. Once it is found that he is a skilled labourer, the Act provides the formula under which the compensation has to be calculated. That compensation will have to be awarded irrespective of the claim. Even if a mistake has been committed by the claimants, the authority is bound to pay due compensation payable on account of the death of the deceased. 31(iii).It is also relevant to take note of Section 14 of the Payment of Gratuity Act, 1972 and the same is extracted hereunder :
14. Act to override other enactments, etc.- The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.
31.(iv).It is also relevant to take note of the judgment of the Division Bench of this Court in Rajamani V. Deputy Commissioner of Labour, 2001 (4) L.L.N. 972. The workmen received lesser amount and issued receipt. The employer contended that the workman agreed to receive lesser amount and issued the receipt. The said contention was rejected by the Division Bench of this Court, though the said contention is accepted by a learned Single Judge. The Division Bench reversed the same and it is appropriate to extract paragraph 8 and the following passage from paragraph 9 of the judgment in 2001 (4) L.L.N. 972 in this regard :
8. There is no need for enquiry as to whether receipt is given voluntarily or compulsorily or whether the employer knows that the amount that is paid is less. Such kind of enquiry is outside the scope of the Act. What is contemplated is liability under Section 4 and determination under Section 7. Once the determination is made taking into account the continuous service under Section 2(a), then there is no scope for paying lesser amount or receiving a lesser amount than the amount provided under the Act. Assuming for the sake of argument that the petitioners have agreed to receive a lesser amount, there cannot be an estoppel against the statutory claim. If there is any such payment binding the workers, that will be not only contrary to the provisions of the Act, but that is illegal, arbitrary and unfair and would be affecting the fundamental rights of the workers to receive their gratuity amount under the Act.
9. ..... Section 14 of the Act says that no instrument, contract, standing order, rule can have force over and above the provisions of the Gratuity Act. We are unable to appreciate the view of the learned Judge that the receipts issued voluntarily accepting the amount cannot be construed to be a contract as we find the receipt as a result of a contract within the definition of the Indian Contract Act. Therefore, such a contract will not have overriding effect on the Gratuity Act. Further, the view of the learned Judge that the petitioners have voluntarily and whole-heartedly received the amount and that the management did not know that they are eligible for higher amount and therefore, it cannot be said to be an agreement cannot be accepted. The knowledge of the management is not relevant and the receipt of lesser amount will not bar for the statutorily protected gratuity.
32.If the aforesaid principle is applicable to a private employer, it would apply in more rigour to the writ petitioner, which is State under Article 12 of the Constitution, and the writ petitioner should behave like a model employer.
Abandonment :
33.The learned counsel for the petitioner has submitted that the workmen abandoned the service by participating in the illegal strike and he relied on paragraph 4 of the memorandum of Appeal filed before the Appellate Authority under the Payment of Gratuity Act, 1972 in this regard. The relevant passage from paragraph 4 of the memorandum of Appeal is extracted in this regard :
4. .... The appellant replied to them on 16.3.82 stating that the workers abandoned their post by staying away for long and the management was not inclined to entertain them in service.
34.He has further submitted that since the workmen abandoned the service by participating in the illegal strike, the Tribunal was not correct in passing the Award reinstating the workmen with continuity of service and 25% backwages. In my view, the plea of the petitioner that the workmen abandoned their service has to be rejected outright, in view of the categorical pronouncement of the Apex Court in the judgment in G.T.Lad V. Chemicals and Fibres India Ltd., reported in AIR 1979 SC 582, wherein, in the identical circumstances, the Apex Court has held, following its earlier judgment in Express Newspapers (P) Limited V. Michael Mark AIR 1963 SC 1141, that if the workmen absent themselves due to strike to enforce their demands, there can be no question of abandonment of employment by them. The relevant passage in paragraph 6 of the judgment in G.T.Lad's case is extracted hereunder in this regard:
6. .... In Express Newspapers (P) Limited V. Michael Mark, (1963) 3 SCR 405 which is on all fours with the present case, it was held that if the employees absent themselves from the work because of strike in enforcement of their demands, there can be no question of abandonment of employment by them. ..... Enmasse Dismissal :
35.Further, the enmasse dismissal of all the workmen for their participation in the illegal strike is disapproved by the Apex Court in Gujarat 1Steel Tubes Ltd. V. Mazdoor Sabha, reported in (1980) 2 SCC 593. This case relates to non-employment of more than 800 workmen and the non-employment was caused due to their participation in illegal strike. The Apex Court has categorically held that individual delinquency has to be gone into, while dismissing the workmen for the participation in the illegal strike. Mere participation in illegal strike cannot be a reason for dismissal of a workman. In the words of the Apex Court, mere participants are dumb driven cattle and those persons cannot be sent out along with others, who took active part in fomenting the trouble and took recourse to violence. The enmasse dismissal for participating in illegal strike was disapproved by the Apex Court in paragraph 131 of the judgment in Gujarat Steel Tubes's case (cited supra).
36.It is true that the strike organized by the Employees Union was illegal for want of notice under Section 22 of the I.D.Act. But, tt was not the case of the petitioner management that the workmen indulged in violence.
37(i).At this juncture, it is also relevant to refer the judgment of the Apex Court in T.K.Rangarajan V. Government of Tamil Nadu and Others, reported in 2003 (3) CTC 557.
37(ii).During the year 2003, the Tamil Nadu Government dismissed enmasse 1,70,241 Government servants invoking the Tamil Nadu Essential Services Maintenance Act for their participation in the illegal strike. The matter was taken up before the Apex Court. The Apex Court directed reinstatement of all the Government Servants, barring the employees, who involved in commission and omission during the strike period. Pursuant to the directions of the Apex Court, all the Government servants, barring 6072 Government servants, were reinstated into service and they were also paid salary for the period of non-employment and also for the strike period. Proceedings were conducted against those 6072 Government servants and they were dismissed from service for their individual delinquency. However, they were also reinstated into service with backwages by the Tamil Nadu Government and they were also paid salary for the period of strike.
37(iii).The Apex Court held in T.K.Rangarajan case and also in Gujarat Steel Tubes case that the employer cannot send out the workman from service enmasse for the simple reason of participation in the illegal strike.
38(i).I am of the view that the Government was not correct in restricting the offer of reinstatement made in their letter dated 24.02.1989 to certain employees alone. The writ petitioner ought to have offered reinstatement to all workmen, barring a few, if those few were facing allegations of grievous misconduct, after the Government referred the industrial disputes for adjudication, as per the judgment of the Apex Court, referred to above, and then the only issue remains in the Industrial Tribunal for adjudication would be backwages for a short period. But when it was decided to give work to some of the workmen in 1989, the Government followed pick and choose policy. It is now known as to why it restricted the offer of reinstatement, that too, as a fresh entrant to only 489 workmen. Further, the writ petitioner never made offer to the Employees Union to negotiate and settle the industrial dispute, while the matter was pending for adjudication. On the other hand, the writ petitioner adopted the illegal course of resorting to signing individual settlement under Section 18(1) of the I.D. Act with dismissed workmen, disregarding the Employees Union. All along, the writ petitioner aggravated the situation and the agony of the workmen continued for decades.
38(ii).Evidently, the petitioner disregarded in full the well-accepted principle of collective bargaining and refused to negotiate and settle the matter with the Employees Union.
38(iii).The action of the writ petitioner in 1989 offering employment only to a section of employees is nothing but showing favoritism to one section of workmen that amounts to unfair labour practice under Clause 9 of the Fifth Schedule read with Section 2(ra) of the I.D.Act and Unfair Labour Practice is prohibited under Section 25-T of the I.D.Act.
39.It is also relevant to note, more importantly, that the then Managing Director, Thiru.A.M.Swaminathan, who was at the helm of affairs of the petitioner management at the relevant time, penned autobiography of his life titled ele;jJ ele;jgo ... xU I/V/v!;/ mYtyh; ele;J te;j ghij/ The following passage in the Chapter Mtpd; ehjd; in the said book would throw a lot of light on the non-employment of the workmen and there is no need to disbelieve the version of the former Managing Director, who, being an I.A.S. Officer, held various important positions in the Government of Tamil Nadu:
////// mg;nghJ Mtpd; epWtd Chpah;fs; jp Obud;W xU bghU ntiy epWj;jj;jpy; <Lgl;L ,Ue;jdh;/ mth;fis ntiy ePf;fk; bra;Jtpl;L ,unthL ,uthfg; g[jpa gy CHpah;fis eph;thfk; epakpj;Jtpl;L ghy; tpepnahfj;ijj; jilapd;wp elj;j Kad;wJ/ ///////////////////// Kjyhtjhf Rkhh; Mapuj;Jf;Fk; nkw;gl;l CHpah;fis xnuaoahf ntiy ePf;fk; bra;jJ vdf;F cld;ghlhf ,y;iy/ Mdhy;. giHa eph;thfKk;. khepy muRk; ,k;Koit vLj;J eilKiwg;gLj;jpa gpwF mijg; gw;wp tpthjpf;f vdf;F chpik ,y;iy khwhf. bjhlh;e;J me;j Koit ehd; mkyhf;f ntz;oa flik ,Ue;jJ/ murpay; fhuz';fspdhy; bjhHpyhsh; r';fj;Jld; vt;tpj rkur Kaw;rpa[k; bjhl';f Koatpy;iy/ bjhHpyhsh;fs; nkiy ePf;fj;ij vjph;j;J cah;ePjpkd;wj;jpy; KiwaPL bra;jdh;/ jPtpu Mnyhridf;Fg; gpd; eph;thfk; vLj;j ,e;j eltof;iff;Ff; fhuznk bjhHpyhsh;fs; jkJ ntiyfis es;sputpy; jhkhfnt Jwe;J brd;wJjhd; (Abandoned) vd;w mog;gilapy; gy thj';fis vGg;gp murpd; rl;lj;Jiw xg;g[jiyg; bgw;W ghy;tsj;Jiw mikr;rh;. Kjyikr;rh; m';fPfhuk; bgw;W ePjpkd;wj;jpy; gjpy; kDjhf;fy; bra;njhk;/ bjhHpyhsh;fSf;fhf. tHf;fkhf thjhLk; ,lJrhhpiar; nrh;e;j jpU/vd;/$p/Mh;/gpurhj; mth;fs; v';fSf;F tHf;fwp"uhft[k;. rhjhuzkhfj; bjhHpyjpgh;fs; rhh;gpy; thjpLk; jpU/g/rpjk;guk; mth;fs; bjhHpyhsh;fs; tHf;fwp"uhft[k; mike;jJ ,t;tHf;fpd; tpndhj';fspy; xd;W/ ////////////////
40.For all the aforesaid reasons, these writ petitions are liable to be dismissed and the orders of the Authorities need no interference and the workmen are entitled to additional amount of gratuity based on the correct fixation of pay for the entire service including the past service.
41.In the normal course, I could have remanded the matter to the Controlling Authority / Appellate Authority to determine the quantum of the amount payable to the second respondent/workmen based on the correct fixation of pay. But I am not inclined to do the same and I am inclined to issue a positive direction to the writ petitioner to undertake the aforesaid exercise, as Hon'ble Justice V.R.Krishna Iyer again guides me in this matter in the same judgment in Gujarat Steel Tubes's case (cited supra). The relevant passage from paragraph 146 of the said judgment is extracted in this regard :
146. In the second chapter of our sum-up, the first thing we decide is that Art. 226, however restrictive in practice, is a power wide enough, in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and, more importantly, this extraordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand. What the tribunal may, in its discretion, do, the High Court too, under Art. 226, can, if facts compel, do. Conclusion :
42.For all the aforesaid reasons, these writ petitions fail and the same are dismissed with a further direction to the petitioner to pay gratuity with interest as per the Payment of Gratuity Act from the date of retirement till the date of payment, to the second respondent / workmen, in addition to the amount, as ordered by the authorities under the Payment of Gratuity Act, 1972, within a period of six weeks from the date of receipt of a copy of this order, by taking into account the notional fixation of pay on their reinstatement on 10.03.1997 and accordingly, fixing the last drawn wages at the time of their retirement. The second respondent/workmen are permitted to withdraw the amount, that is, kept in deposit with the Controlling Authority as a condition for filing appeal before the first respondent. There is no order as to costs.
05.12.2014 Index : Yes Internet : Yes gg To The Joint Commissioner of Labour, (Appellate Authority under the Payment of Gratuity Act, 1972), Teynampet, Chennai - 600 006.
D.HARIPARANTHAMAN, J.
gg W.P.NOs.7325 AND 7326 OF 2006 05.12.2014