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2014 (1) TMI 1912 - HC - Indian LawsValidity of reference made by the State Government vide Government Order dated 21.5.2008, suo moto, to the Industrial Tribunal relating to the issue of propriety and legality of the lay off declared on 15.4.2007 and its consequences - Chapter VIII Rule 5 of the Rules of the High Court - validity and effect of the settlement arrived at during the course of conciliation proceedings - HELD THAT - Though learned Single Judge has committed an error in law in holding that the settlement or agreement to be binding must be registered under Section 6-B of the Industrial Disputes Act and has ignored the ratio of the judgment in Herbertsons Limited vs. The Workmen of Herbertsons Limited 1976 (11) TMI 198 - SUPREME COURT as well as the judgment of Supreme Court in National Engineering Industries Ltd vs. State of Rajasthan 1999 (12) TMI 887 - SUPREME COURT , in respect of the validity and effect of the settlement arrived at during the course of conciliation proceedings, he did not commit any mistake on the other count namely that in the circumstances of the case the settlement is not binding on all the workmen of the petitioner-company. The question, whether the agreement is valid, fair and reasonable and whether at such a distance of time, the open ended provisions in the settlement giving the option to the management-employer to take some of the employees at its discretion leaving the remaining employees with only 50% of lay off compensation and which has also not been paid in full or even in part awaiting finalisation of draft resettlement plan before BIFR, is a question, which requires to be considered by the Industrial Tribunal. The reference made by the State Government, as to whether the lay off was legal and valid and if it is held to be illegal and invalid, the benefits to which the laid off workmen are entitled, is a question, which will also require adjudication of the validity of the settlement - the argument, that the settlement is binding upon all the workmen, does not meet the question raised by Ms. Bushra Maryam that the settlement is not valid in law inasmuch as it is unfair, unconscionable and thus against public policy. In the circumstances, even if the settlement, which did not resolve the dispute with all or even majority of workmen and was not conclusive as it provided for only part payment of lay off compensation, when it was entered into on 13.4.2007, treated to be binding on all the workmen, the question whether the circumstances existing today, after seven years still justify its terms to be binding on more than 2500 workmen, which is about 80% of the total number of workmen which were employed on the date of lock-out requires to be examined by the Industrial Tribunal. Even if the settlement dated 13.4.2007 for arguments sake was valid and binding on all the workmen, its effect and consequence on all the workmen cannot be considered to be valid for all times to come and that at this distance of time, when the settlement has not worked out to benefit all the workmen inasmuch majority of workmen being more than 80% of the employees at the time of lock out have not been paid the full laid off compensation and are still waiting for the settlement of such lay off compensation, it cannot be said that there is no bonafide or genuine industrial dispute, which requires to be decided by the Industrial Tribunal. There are no good ground to interfere with the judgement of learned Single Judge by which he has dismissed the writ petition against the reference - Special Appeal is dismissed.
Issues Involved:
1. Propriety and legality of the layoff declared on 15.4.2007. 2. Validity and binding nature of the settlement dated 13.4.2007. 3. Jurisdiction of the State Government to make a suo moto reference to the Industrial Tribunal. 4. Rights of unregistered unions to raise industrial disputes. 5. Payment of layoff compensation to the workmen. Detailed Analysis: 1. Propriety and Legality of the Layoff Declared on 15.4.2007: The layoff declared on 15.4.2007 was challenged by the workmen through their unregistered union, LML Mazdoor Ekta Sangathan, Kanpur. The State Government made a suo moto reference to the Industrial Tribunal on 21.5.2008 to adjudicate the legality and consequences of this layoff. The court found that the ongoing industrial unrest and the circumstances necessitated this reference. 2. Validity and Binding Nature of the Settlement Dated 13.4.2007: The settlement dated 13.4.2007 was reached during conciliation proceedings and was claimed by the employer to be binding on all workmen under Section 18 of the Industrial Disputes Act, 1947. However, the court noted that the settlement was not registered under Section 6-B of the Industrial Disputes Act, which the learned Single Judge initially held against its binding nature. Despite this, the court acknowledged that settlements reached during conciliation are generally binding but emphasized that the fairness, reasonableness, and validity of the settlement, especially given the prolonged non-implementation of its terms, required examination by the Industrial Tribunal. 3. Jurisdiction of the State Government to Make a Suo Moto Reference: The court upheld the State Government's jurisdiction to make a suo moto reference to the Industrial Tribunal. It referenced the Supreme Court's observations in National Engineering Industries Ltd vs. State of Rajasthan, which stated that the High Court can entertain a writ petition if there is no industrial dispute in existence or apprehended. The court found that the ongoing industrial unrest and the partial implementation of the settlement justified the State Government's reference. 4. Rights of Unregistered Unions to Raise Industrial Disputes: The court affirmed that even unregistered unions have the right to raise industrial disputes. This was supported by precedents like Manager, Hotel Imperial, New Delhi vs. the Chief Commissioner, Delhi, and Newspapers Ltd, Allahabad vs. U.P. State Industrial Tribunal. The court noted that the LML Mazdoor Ekta Sangathan, despite being unregistered, could still raise an industrial dispute, and the State Government's suo moto reference further validated this. 5. Payment of Layoff Compensation to the Workmen: The court examined the terms of the settlement regarding layoff compensation, which stipulated that only 50% of the layoff compensation would be paid immediately, with the remaining 50% contingent upon the company's revival approved by BIFR. The court found that the prolonged non-payment and the indefinite nature of the compensation terms rendered the settlement potentially unfair and unconscionable. It emphasized that the Industrial Tribunal should adjudicate whether the layoff and the settlement terms were valid and fair, especially considering the majority of workmen had not received full compensation. Conclusion: The court dismissed the special appeal, affirming the learned Single Judge's decision to allow the State Government's suo moto reference to the Industrial Tribunal. It held that the issues surrounding the layoff, the validity of the settlement, and the rights of the workmen required thorough examination by the Industrial Tribunal to ensure fairness and industrial peace. The court emphasized that the prolonged non-implementation of the settlement terms and the ongoing industrial unrest justified the reference and necessitated adjudication.
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