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3. The allegations of the petitioner-Union are : The petitioner-Union has a substantial following among the workmen in the second respondent-Company. The petitioner-Union has entered into settlements under S. 12(3) of the Industrial Disputes Act (hereinafter referred to in this Judgment as the Act) covering all the workmen before the Conciliation Officer. One such settlement was made on 6th April, 1979 covering 439 casual employees who were working for quite a number of years with the second respondent-Management. By virtue of the settlement dated 6th April, 1979 the 439 casual employees were made temporary workers and were given better service conditions. Since these workmen were retained as temporary workmen for more than two years, the petitioner-Union wrote to the Management on 20th February, 1981 requesting to confirm them. Ultimately, conciliation proceedings were started by the Labour Officer at Chengalpattu. This was intimated by notice dated 30th May, 1981 also stating that the conciliation would begin as and from 15th June, 1981. Apart from the grievance of Keeping of 439 workmen as temporary workmen the petitioner raised several other demands before the Conciliation Officer. On account of intimidation on the part of the Management, the conciliation proceedings did not start as scheduled and therefore the petitioner-Union issued a strike notice by letter dated 2nd July, 1981. Subsequent to this strike notice, the Conciliation Officer, Chengalpattu, started the proceedings of conciliation as and from 26th August, 1981. The proceedings notice was duly issued to the Britannia Industries Employees' Union represented by its General Secretary (third respondent, submitted its remarks before the conciliation Officer by letter dated 15th July, 1981, refusing to agree to any of the petitioner-Union's demands. In those circumstances, the fourth respondent (The Assistant Commissioner of Labour, Chengalpattu at Madras) did not have any other option but to record his 'failure' and he submitted a report accordingly to the Government in A. 1254/81 dated 6th October, 1981 under S. 12(4) of the Act. This report was received by the Government on 15th October, 1981.

2. The relevant industrial licence may kindly be submitted to this department for suitable amendment.
Yours faithfully, Sd/-        
S. R. KAPUR DIRECTOR"

The second respondent, as early as 30th August, 1981, has written to the Deputy Commissioner of Labour, Madras, stating that as against the required 761 workmen as on that date, the Management had on the rolls 978 workmen comprising of permanent and temporary workers, that the Management was thus having a total surplus of 217 workmen in the factory, that this surplus workmen should be retrenched in the interest of continued industrial peace and sustained functioning and that the company wished to apprise those problems to its recognised union and to the Deputy Commissioner of Labour, Headquarters, Madras. The second respondent, by letter dated 8th September, 1980, addressed to the Deputy Commissioner of Labour, Headquarters, Madras, referred to the demand made by the third respondent and has stated that the Management would be explaining to the Deputy Commissioner on the demands during the direct discussions. The various other letters relied on by the third respondent would clearly establish the bilateral talks that were going on between the third respondent and the second respondent on the various issues including the one of making temporary workmen as permanent workers and the same was being apprised to the Deputy Commissioner of Labour by the second respondent periodically. While matters stood thus, the appellant initiated the conciliation proceedings before the Labour Officer, Chengalpattu on 30th May, 1981 by letter addressed to him. Even prior to this letter of the appellant date 30th May, 1981, the third respondent had addressed a letter to the Prime Minister of India with copy marked to the Commissioner of Labour, Madras, and others, to regularise 395 temporary workers. Thus it is clear from the above facts that the third respondent which is the recognized Union representing the majority of the workers, was conciliating the question of making temporary workmen as permanent workers much earlier to the letter written by the appellant to the Labour Officer, Chengalpattu. The present impugned settlement is the outcome of such a conciliation and correctly the Assistant Commissioner of Labour, Headquarters, Madras, has effected the settlement in valid conciliation proceedings.

42. Mr. K. K. Venugopal, learned counsel appearing for the second respondent-Management, pointing out the letter received from the Ministry of Industry which we have referred to above, and also submitting that the industry in question is governed by the Industrial Developments Act which fixes the production limit, would submit that the industry cannot burden itself with temporary workmen when especially the production limit has been fixed under the Industrial Development Act. According to Mr. K. K. Venugopal, the conciliation between the Management and the recognized Union regarding retrenchment of temporary workmen started as early as September, 1980, and the several documents filed would clearly establish that the third respondent-Union had entered into several settlements with the second respondent-Management. It was only for the first time on 20th February, 1981 according to Mr. K. K. Venugopal, the appellant-Union which is a minority Union, made a demand for confirmation of temporary workmen. According to the procedure, the learned counsel submitted that the Management has to take into account discipline, attendance and productivity of a workman for confirmation purposes. Learned counsel pointed out the averment in the counter filed by the second respondent-Management wherein it is stated :

50. Thus, the detailed discussion we have made supra will clearly establish that the mode and method of invoking the jurisdiction by the authorities under S. 2A of the Act cannot, in our opinion, destroy the purport of S. 18(3)(d) of the Act, that the management has correctly entered into a settlement under S. 18(3) of the Act, that such a settlement is binding on all the workmen including the 51 discharged workmen as per S. 18(3)(d) of the Act, that the Assistant Commissioner of Labour (Headquarters), Madras has applied his mind before signing the settlement reached between the management and the third respondent, that the issue for conciliation included apart from other things, the discharging of excess labour in the interest of the industry, considering the absorption of 332 temporary workmen out of 383 temporary workmen, and that it can be easily spelt out that the conciliation effected is a fair and binding one.