Allahabad High Court
Hawkins Cookers Mazdoor Union Through ... vs Labour Commissioner And Ors. on 7 August, 2007
Equivalent citations: (2008)ILLJ1089ALL
Author: Sunil Ambwani
Bench: Sunil Ambwani
JUDGMENT Sunil Ambwani, J.
1. Heard Shri K.P. Agarwal, Senior Advocate assisted by Km. Sunita Rani Gupta and Shri V.R. Agarwal, Senior Advocate assisted by Shri Vivek Ratan and Shri Piyush Bhargava for the respondents.
2. The 'Hawkins Cookers Mazdoor Union Sathariya, Jaunpur has filed this writ petition through its President Shri Kamaiapati Tripathi for quashing the order dated 23.9.2005 passed by the Labour Commissioner, U.P. Kanpur on a representation made by 'Hawkins Cookers Limited'-respondent No. 4 (the management) to set aside the order dated 8.7.2005 passed by the Conciliation Officer/Assistant Labour Commissioner, Jaunpur. By an amendment allowed by this Court on 16.12.2005, the petitioner has further prayed for quashing the order dated 28.9.2005 passed by the Deputy Labour Commissioner, Varanasi.
3. The petitioner is a registered Union of the workmen affiliated with 'Centre of Indian Trade Union' (CITU), a Central Federation of Trade Unions. The Union submitted a demand letter dated 3.2.2004 to the management for proper classification of the charge sheets, suspension and punishment orders against the workmen who had taken part in trade union activities to increase the wages; dearness allowance; house rent allowance; leave travel allowance etc, on which the Conciliation Officer/Assistant Labour Commissioner, Jaunpur submitted a report to the Additional Labour Commissioner, Varanasi. The management raised an objection that the conciliation proceedings should be held before Additional Labour Commissioner, Varanasi.
4. It is alleged that the management prepared a settlement on 28.4.2005 with signatures of the authorised representative of the management and 8 workmen as representative of the workmen and displayed a notice on 29.4.2005 on the notice board stating that all the workmen desirous of obtaining benefits of the settlement should sign the settlement available with the Personnel Manager/General Manager (Administration). The notice was again displayed on I 2.5.2005 and on 19.6.2005.
5. The settlement dated 28.4.2005 was presented in the conciliation proceedings on 24.5.2005 for registration. The petitioner filed its objections on 4.7.2005. The application for registration was rejected by Additional Labour Commissioner with the findings that the settlement is not in accordance with Section 6(1) of the LP Industrial Disputes Act 1947 (the Act).
6. The management, instead of challenging the order rejecting the registration of settlement, preferred a representation to the Labour Commissioner, L.P. During the pendency of the matter with the Labour Commissioner, L.P. a group of 14 workmen sent a complaint to Additional Labour Commissioner that they do not agree with the terms of settlement. The Labour Commissioner, however, after the issuing notice and hearing the petitioner, rejected the preliminary objections that the Labour Commissioner is not the appellate authority against the refusal of registration by the Conciliation Officer. He observed that the union was not in a position to explain whether the settlement could be signed only by President/General Secretary of the Union and not by the workmen. The Commissioner thereafter recorded a finding that out of 236 workmen, 120 have signed the settlement, which is more than half of the total strength, and that the majority of workmen are in favour of settlement which is for their benefits and was pasted on the notice board for information to all the workmen. The Labour Commissioner set aside the order of the Additional Labour Commissioner and directed him to register the agreement under Section-6-B(3) of the Act.
7. In the counter affidavit, it is stated by Shri V.C. Mahendru, Senior General Manager of Hawkins Cookers Ltd that the 'bi-partite settlement between the Hawkins and the eight representatives of the workmen dated 28.4.2005 was individually signed by majority of 120 workmen out of 237 workmen as on that date and was registered by the Additional Labour Commissioner, Varanasi Region, Varanasi on 28.9.2005. Several individual workmen thereafter applied and obtained benefits under the settlement increasing the total number of workmen in favour of settlement to be 125 out of 235 as on the current date. Hawkins Cookers Mazdoor Union formed and registered on 17.5.2004 has not submitted the list of its members and has not replied to the letter of management with the details of its membership. There was a previous wage settlement between Hawkins and its permanent workmen of Jaunpur plant dated 24.3.2002 for the period from 1.8.2001 and 31.10.2004. The wage settlement expired on 31.10.2004 and that negotiations for the next wage settlement was to commence soon thereafter. The majority of the workmen wanted negotiations through their elected representatives, as per established practice followed in previous three settlements since 1959 when the factory was established. The management is paying the highest wages to the workmen in the industry/region with an average pay of Rs. 9300/- per month. On the demands of the workmen, their representatives negotiated with the management for the settlement dated 28.4.2005, which was registered on 28.9.2005.
8. In the counter affidavit, the management has challenged competency of the petitioner-union to contest the matter. It is stated that the petitioner-union had given a notice under Section 6-S of the Act for strike w.e.f. 20.1 1.2004. The Assistant Labour Commissioner, Jaunpur directed the petitioner-union on 30.10.2004 to refrain from strike and accordingly the Union withdrew the notice on 17.1 1.2004. Thereafter the Assistant Labour Commissioner, Jaunpur issued notice on 11.11.2004 inviting parties for re-conciliation. Since the Union was not giving a valid list of its members, the management suggested to Assistant Labour Commissioner, Jaunpur that a secret ballot be held asking the general body whether they wished to be represented by the Union or the elected representatives as per established practice. The workmen requested the Assistant Labour Commissioner, Jaunpur to organise the secret ballot. It is at this stage that a surprise notice/letter dated 28.10.2004 was received by the management from Labour Department stating that the matter will be heard by the Additional Labour Commissioner, Varanasi Region, Varansi and notifying that the next date of conciliation is fixed on 24.1.2005. The management appeared before the Additional Labour Commissioner, Varanasi. Since the workmen were getting restless, the management asked them to hold elections, and that the general body of the workmen decided on 4.2.2005 to elect eight representatives from amongst them for negotiations. The Assistant Labour Commissioner, Varanasi was notified with the resolution. On 18.2.2005 a letter was submitted by 122 workmen to the management duly signed by them authorising the eight elected representatives to negotiate with the management. The wage settlement was finally negotiated and agreed between the eight elected representatives of the workmen and authorised representatives of the management on 28.4.2005 and a memorandum of settlement was singed in accordance with Section 6-B(1) of the Act providing for settlements outside conciliation proceedings to be effective for three years from 1.1 1.2004 to 3 1.10.2007. A notice was thereafter put on the notice board by the management informing all the workmen with the settlement.
9. It is further stated in the counter affidavit that settlement gave an average benefit of Rs. 1250/- per month to individual workmen increasing the average wage of the workmen to Rs. 10550/- per month. After reading and understanding the settlement, 120 workmen have individually accepted and signed the settlement. A joint application was thereafter given to Additional Labour Commissioner. Varanasi signed by 120 workmen under Section 6-B(2) of the Act read with Rule 26 of the U.P. Industrial Disputes Rules 1957 (the Rules of 1957) for registration.
10. The Additional Labour Commissioner, Varanasi deputed two Labour Enforcement Officers to make inquiries. These officers interviewed I 1 workmen, selected randomly out of 121 workmen and confirmed that the workmen had understood and signed the settlement. The Additional Labour Commissioner refused to register the settlement on 8.7.2005. This refusal was contrary to the provisions of Section 6-B(3) of the Act, which is to be strictly construed. The refusal of registration could only be made on public grounds affecting social justice or if the settlement was brought as a result of collusion, fraud and misrepresentation.
11. The management thereafter made representations to the Labour Commissioner, Kanpur dated 28.7.2005 informing that due to non-registration of the settlement the workmen were not be able to avail the benefits of the wage settlement. The Labour Commissioner was requested to direct his subordinate officer for registration of the bipartite settlement. The Labour Commissioner, Kanpur after giving due notice and hearing the matter on 16.8.2005, and allowing the Union to file its statement on 22.8.2005 and thereafter hearing the matter again on 26.8.2005 passed an order in the administrative capacity on 23.9.2005 directing Additional Labour Commissioner to register the bi-partite settlement. The Additional Labour Commissioner has in compliance with the order registered the settlement on 28.9.2005.
12. Shri K.P. Agarwal, learned Counsel for petitioner-union submits that the trade union of the workmen registered under the Indian Trade Union Act, 1926 is a body corporate and can represent the workmen employed in the company under Section 6-1(1) of Rule 40. The union contested the registration of the settlement. Section 6-B of the Act makes provision for registration of settlement reached outside the conciliation proceedings. If the settlement is during conciliation proceedings, it becomes binding on all the workmen. The settlement outside the conciliation submitted for registration requires the approval of the conciliation officer. It could be rejected, if it affects social justice or is a result of collusion, fraud and misrepresentation. The conciliation officer had refused to register the settlement on 8.7.2005 (Annexure No. 10 to the writ petition). The Conciliation Officer acts as a persona designata and accepts settlement after application of his mind to the facts, or may refuse a settlement for the reasons given in the Act. The order is final and is not subject to appeal.
13. Shri K.P. Agarwal further submits that the Labour Commissioner may be an authority superior to the conciliation officer but he is not the appellate authority. He could not have set aside the order of the Conciliation Officer and directed the settlement to be registered. It was open to the employer to have challenge the validity of the orders under Article 226 of the Constitution of India by approaching the High Court. The superior administrative authority has no inherent powers to set aside the order of the Additional Labour Commissioner as a conciliation officer is rejecting the settlement.
14. Shri K.P. Agarwal further submits that once a trade union is registered, it gets a right to represent the workmen, and to negotiate the settlement on their behalf. The attempt of an employer to side track the union and to enter into settlement directly with the employer is detrimental to the larger interest of the workmen and violates the principle of collective bargaining. The order passed by the Additional Labour Commissioner was final. He found that the settlement was signed by eight representatives of 120 out of 236 workmen which did not form the majority. Section 6-1 of the Act and Rule 5(2)(b) of the Rules of l957, clearly provides that where an union is not functioning, the workmen can elect five representatives in its general body to negotiate with the employer. The eight representatives were elected by 122 workmen and not by the entire general body of the workmen.
15. Shri V.R. Agarwal appearing for the management, of the other hand, submits that the Union has not submitted list of its members. The general body of the workmen elected the eight representatives and that they were competent to enter into agreement on behalf of the entire body of the workmen. The agreement was highly beneficial to all the workmen. The principle of public policy as well as social justice is in favour of implementing the agreement. The union did not have right to represent the workmen as it was not commanding majority of the general body of the workmen. He further submits that the Labour Commissioner has supervisory powers to correct any legal error committed by the officer subordinate to him. The Additional Labour Commissioner committed gross illegality and that the Labour Commissioner has only corrected the order and has directed the agreement to be registered.
16. A supplementary counter affidavit of Shri Tirath Ram Kashyap, Chief Executive, Jaunpur Plant Hawkins Cookers was filed after serving copy on Shri Sunita Rani Gupta staling therein in para-3 the subsequent developments in the matter. It is stated that as on date (23.3.2007) 183 out of 232 workmen have entered into either settlement and have also received/obtained the benefits available to them under the bi-partite settlement dated 28.4.2005. Shri V.K. Agarwal has relied upon judgments in Tata Consulting Engineers and Associates Staff Union v. Tata Consulting Engineers and Anr. 2002 LLR 433; Dilip P. Mehta v. Mercury Paints and Varnishes Ltd and Ors. 2003 (98) FLR 1024; Maharashtra General Kamgar Union v. Pix Transmission Ltd. 2005 (105) FUR 842; ANZ Grindlays Bank Ltd. v. Union of India and Ors. to support his submission.
17. In Tata Consulting Engineers and Associates Staff Union (supra) the Bombay High Court held that the employees covered by the settlement under Sub-section (i) of Section 8 of Industrial Disputes Act, 1947 form an independent class and if certain benefits have been given to this class, no complaint can be made by the members of the other union.
18. In Dilip P. Mehta v. Mercury Paints and Varnishes Ltd (supra) independent workman challenged the judgment of industrial court dismissing his complaint on the ground that he has been denied benefits payable under a settlement. The management defended the action on the ground that the petitioner did not furnish necessary details in terms of the settlement upholding the decision of the industrial court. The Bombay High Court held that once it is clear that the petitioner did not accept the settlement, no right ace. lies to him. There is no existing right in favour of petitioner to accuse the management adopting unfair labour practice.
19. In Maharashtra General Kamgar Union v. Pix Transmission Ltd (supra) the Bombay High Court held that where there is an agreement between employer and workmen outside conciliation proceedings, the same shall be binding on the parties to the agreement, whereas settlement during the course of conciliation proceedings is binding on all the parties,
20. In ANZ Grindlays Bank Ltd. (supra) the Supreme Court found that the settlement was not entered into either before the conciliation officer or labour court or industrial tribunal and thus it was binding only upon the parties thereto. The federation was not a party to the settlement and could not possibly have any grievance against such settlement.
21. The submissions made by learned Counsel for the trade union and the management raise following issues to be considered by the Court:
1. Whether the management can enter into a settlement with a group of workmen which may or may not form majority without inviting the workmen's union to participate in the negotiations?
2. Whether the negotiations held between employer and a group of workmen excluding the registered union violates the principle of collective bargaining ?
3. Whether the Additional Labour Commissioner acted illegally in refusing to register a settlement outside the conciliation proceedings between the employer and a group of workmen?
4. Whether the Labour Commissioner in exercise of his administrative powers can set aside the order of Additional Labour Commissioner acting as Conciliation Officer, refusing to register the settlement and to direct him to register the settlement.
22. A trade union is formed primarily for the purposes of regulating the relations between workmen and employers; or between workmen and workmen; or between employer and employer: or for imposing restrictive conditions on the conduct of any trade or business. The registration of a trade union under the Trade Unions Act, 1926 gives it the authority to look after the welfare of the workmen and also to negotiate with the management represent the workmen, and to enter into any settlement on behalf of the workmen.
23. An individual workman may raise industrial dispute, which may after the conciliation or arbitration, as the case may be, referred by the State Government under Section 4-K of the Act to Labour Court in respect of the matters specified in First Schedule and to Tribunal for adjudication in respect of the matters specified in First Schedule or Second Schedule. A union has right to represent the workman in both the cases. A workman may enter into an agreement with the employer either in the course of conciliation proceedings or outside the conciliation proceedings. Under Section 18(1) of the Industrial Disputes Act 1947, (ID Act 1947) a settlement arrived at by agreement between the employer and the workmen, otherwise than in the course of conciliation proceedings shall be binding to the parties to the agreement. If, however, a settlement has been arrived at under Sub-section (3) of Section 18 of the ID Act 1947, in the course of conciliation proceedings under the Act, or an arbitration award, where a notification has been issued under Sub-section (3-A) of Section 10A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable is binding on all the parties to the industrial dispute. Such an agreement arrived at in the course of conciliation proceedings is also binding on all the persons, who were employed in the establishment or part of the establishment and all persons should subsequently be impleaded in the establishment.
24. A registered union facilitates the negotiation and agreement with the management. It may have the necessary expertise or may engage persons to represent the interest of the workman. The registration of a union in the establishment, however, does not take away right of any workman or group of workmen, which may or may not be in majority, to enter into any settlement with the management, which may be binding upon them. In such case the participation of workman union is not necessary. A management can enter into a settlement with group of workman, which may or may not form majority without inviting the workmen union to participate in the negotiation. Such a negotiation and settlement will not violated the principles of collective bargaining.
25. In National Engineering Industries Ltd. v. State of Raiasthan (2000) 84 FLK 162 (SO the Supreme Court held as under:
Sub-sections (1) and (3) of Section IH divide settlement into two categories i.e. (I) those arrived at outside the conciliation proceedings, and (2) those arrived at in the course of conciliation proceedings. A settlement which belonged to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all the parties to the industrial disputes, to all others summoned to appear in the conciliation proceeding and to all persons employed in the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. A settlement arrived in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. Recognised union having majority of members is expected to protect the legitimate interest of labour and enter into a settlement in the best interest of labour. This is with an object to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to discourage an individual employee or minority union from scuttling the settlement. When a settlement is arrived at during the conciliation proceedings it is binding on the members of the Workers Union as laid down by Section 18(3)(d) of the Industrial Disputes Act. It would also ipso facto bind all the existing workmen who are all parties to the Industrial dispute and who may not be members of Unions that are signatories to such settlement under Section 12(3) of the said Act. The Industrial Disputes Act is based on the principle of collective bargaining for resolving industrial dispute and for maintaining industrial peace. 'The principle of industrial democracy is the bedrock of the Act as pointed out in the case of P. Virudhachalam and Ors. v. Management of Lotus Mills and Anr. In all these negotiations based on collective bargaining individual workmen necessarily recedes to the background. Settlement will encompass all the disputes existing at the time of settlement except those specifically left out.
26. There is difference between a settlement arrived at in the course of conciliation proceedings between employer and trade union for the workmen, and the agreement, which has been arrived at outside the conciliation proceedings and has been placed before the authorities under the Act competent for registration of such agreement. Whereas the agreement in the course of conciliation proceedings is binding on all the workmen, the agreement outside the conciliation proceedings registered by the authorities under the Act is binding only on those, who are party to the agreement or those who sign and subscribe to it subsequently. In such case the Court will not look into fact whether the agreement is with the majority of the workmen or that they were represented by a Trade Union of majority of workmen. In the former case the authority is required to look into the welfare of the entire workmen whereas in the later case the authorities competent to register the agreement (which is a contract) are only required to look into the validity of the agreement and to verify the persons, who are party to it. In the agreement outside the conciliation proceedings registered under the Act, the authorities competent to register the agreement are not required to look into the fact whether the agreement is for the benefit of all the workmen and is a just and fair agreement, beneficial to all the workmen.
27. The powers of the Labour Commissioner and the Addl. Labour Commissioner have been divided for administrative convenience. The Conciliation Officer is defined under Section 2(b) of the Act to mean a Conciliation Officer appointed under Section 4(f) of the Act. Such a Conciliation Officer under Section 4(f) has to be notified by the State Government in the official gazette to be Conciliation Officers charged with the duty of mediating and promoting the settlement of industrial disputes in the manner to be prescribed. Under Sub-section (2) of Section 4(f) of the Act, a Conciliation Officer may be appointed for specific area or areas. A Settlement Officer may, under Section 6-B(3) of the Act on receipt of the application for registration of a settlement by an agreement between the employer and employee, otherwise than in the course of conciliation proceedings either :- (i) register the settlement in the prescribed manner or (ii) refuse registration to consider it to be expedient to so do on grounds affecting social justice or if the settlement has been brought as a result of collusion, fraud or misrepresentation. The order is final and has not been made appelable either Act or the rules framed under the Act.
28. The Labour Commissioner may be the head of the department and administratively senior to the Addl. Labour Commissioner. He, however, unless he is so notified and in no case can sit in appeal over the statutory functions discharged by the Additional Labour Commissioner as a notified Conciliation Officer. The orders of the notified Conciliation Officer may be challenged on all the grounds, which may be open to the aggrieved party under Article 226 of the Constitution of India in the High Court. The Labour Commissioner cannot review or correct the orders passed by the notified Conciliation Officer. Wherever the legislation confers powers on anv statutory authorities, the same may be exercised for that purposes oi and in the manner prescribed in the statute. These powers cannot be subject to interference, review or appeal by the authorities, which are not notified but are administratively superior in rank to the statutory authority. In this case the Labour Commissioner did not have the authority to intervene in the matter and to set aside the orders of the Deputy Labour Commissioner, who is notified as Conciliation Officer and to register the agreement under Section 6(b)(3) of the Act with Rule 27 of the rules made under the Act.
29. The Conciliation Officer/ Addl. Labour Commissioner was required to make an enquiry under Rule 27 of the U.P Industrial Disputes Rules. This enquiry was to be limited to find out whether the agreement did not violative of principles of social justice or that it has not been brought as a result of collusion, fraud or misrepresentation. Since there was no industrial dispute raised or was pending conciliation before him in the course of which the agreement was entered into. The agreement was as such binding only on the workmen, who was parties to it. The settlement is confined only to the signatory workmen. Further the grounds on which the Conciliation Officer/Addl. Labour Commissioner rejected the agreement namely that only eight persons had negotiated, was also beyond the scope of enquiry as the workmen signing the agreement could have entered into negotiation with the employer through their representatives. The Conciliation Officer/ Addl. Labour Commissioner overstepped the scope of the enquiry under an erroneous interpretation of law that the agreement would be binding on those workmen, who were not parties to it. The reasoning given by the Conciliation Officer/ Addl. Labour Commissioner is as such fallacious.
30. The writ petition is consequently allowed. The order passed by the Labour Commissioner, U.P. dated 23.9.2003 (Annex. 15) to the writ petition as well as the order passed by the Addl. Labour Commissioner dated 8.7.2005 are set aside. The Addl. Labour Commissioner/ Conciliation Officer. Varanasi Region, Varanasi will pass fresh orders on the settlement, which is now alleged to be signed by 183 out of 232 workmen within a period of six weeks from the date a copy of this order is filed in his office after issuing notice and hearing both the parties in accordance with law.