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TMI Blog2014 (1) TMI 1912X X X X Extracts X X X X X X X X Extracts X X X X ..... unt 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, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta Sangathan, Kanpur is a small splinter group of workmen, who have received all the benefits under the agreement providing lay-off dated 13.4.2007. They have tried to disturb the peaceful functioning of the company by getting themselves registered under the Trade Union Act, which was successfully challenged by the company in Writ Petition No.5903 of 2008. The writ petition was allowed by this Court on 23.4.2008 quashing the registration certificate in favour of LML Mazadoor Ekta Sangathan, Kanpur. The agreement dated 13.4.2007 providing for lay off of some of the workmen was entered into during the conciliation proceedings with the workmen through their union-Lohiya Machines and LML Karamchari Sangh and was signed by the representatives of the employer and employees and the Additional Labour Commissioner Conciliation Officer, Kanpur Region, Kanpur. The agreement provided for withdrawing the strike with immediate effect on which the company lifted the lock out w.e.f. 15.4.2007, provided for taking such number of workmen depending upon the market requirements and orders of work, and employment in phases on departmental seniority basis and for lay off of all other workmen. It was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allegation that there is no industrial dispute and none apprehended which could be subject matter of reference for adjudication to the Industrial Tribunal under Section 10 of the Act. Here it is a question of jurisdiction of the Industrial Tribunal, which could be examined by the High Court in its writ jurisdiction. It is the existence of the industrial dispute which would clothe the appropriate Government with power to make the reference and the Industrial Tribunal to adjudicate it. If there is no industrial dispute in existence or apprehended, appropriate government lacks power to make any reference. A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication, as the settlement is likely to lead to more lasting peace than an award. Settlement is arrived at by the free will of the parties and is a pointer to there being goodwill between them. When there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducements it could be subject matter of yet another industrial dispute wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessarily recedes to the background. Settlements will encompass all the disputes existing at the time of the settlement except those specifically left out. 26.There can be many splinter groups each forming a separate trade union. Under Section 4 of the Trade Unions Act, 1926 any seven or more members of a trade union can get the trade union registered under that Act. If every trade union having few members is to go on raising a dispute and the State Government making reference again and again the very purpose of settlement is defeated. Once there is a representative union, which in the present case, is the Labour Union, it is difficult to see the role of the Workers' Union. If there are number of trade unions registered under the Trade Unions Act, 1926 not entitled to be registered as representative unions and they raise disputes, industrial peace would be a far cry. Under Section 2(oooo) of the Rajasthan Act 'representative union' means a union for the time being registered as a representative union under the Rajasthan Act (Rajasthan Act XXXIV of 1950). Under Section 9-D of the aforesaid Rajasthan Act any Union which has for the whole of the period of at least th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uate capacity and range of motorcycles and the declining market of geared scooters resulting into substantial losses and constrained liquidity. The company achieved partial financial restructuring in the year 2005. It could not obtain fresh working capital facilities causing heavy losses alleged to be to the tune of more than ₹ 468 crores as on 31.3.2008 as a consequence to the recurring financial losses. The company was declared as a Relief Undertaking under the U.P. Industrial Undertaking (Special Provisions for Prevention of Unemployment) Act 1966 for a limited period, which was extended on 14.6.2005 and thereafter on 23.6.2006. As a result of huge losses the company's net worth was eroded on which the company filed a reference before the Board for Industrial and Financial Reconstruction (hereinafter referred to as BIFR ) under the provisions of Sick Industrial Companies (Special Provisions) Act 1985 (SICA). The BIFR declared the company as a Sick Industrial Company in its proceeding held on 8.5.2007 w.e.f. 31.8.2006 in terms of Section 3 (m) (o) of SICA and appointed the IDBI as the Operating Agency (OA) with directions to prepare a revival scheme in view of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company from time to time, shall stand Laid Off. The workmen so Laid Off shall be entitled to receive Lay Off Compensation (LOC) in terms of the UP Industrial Disputes Act, 1947 in the manner as discussed and decided hereunder. a) That the workmen and the union agree that looking to the precarious financial condition of the Company, the LOC payable to the eligible laid off workmen will be paid in the following manner:- i) That only 50% of the LOC shall be paid to the laid off eligible workmen and remaining 50% shall be payable to them after the Revival Package of the company has been approved by Hon'ble BIFR and the necessary funds foreseen under the Revival Package has been received by the company in the manner as would be set out under the said Revival Package. ii) That the above LOC amount of 50% shall be paid to the Laid Off Workmen by crediting the same to the workmen's respective bank accounts in Indian Overseas Bank, LML Extension Counter, Panki, Kanpur on every 25th of the subsequent month. b) That all the workmen so Laid Off shall have to present themselves every day for marking attendance at the Company's registered office at C-3, Panki Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , PROVIDED that such payment shall only be made to the workmen after the Revival Package of the Company has been approved by the Hon'ble BIFR and the necessary funds foreseen under the Revival Package including for making of severance payment has been received by the company in the manner as would be set out under the said Revival Package. 7. That as regards the payment of balance 50% Bonus for the year 2003-2005, it has now been finally decided that it shall be paid to the workmen in three equal installments as under:- a. First installment by end of June, 2007 b. Second installment by end of August, 2007 c. Third instalment by end of October, 2007 8. With regard to the workmen, who are rendered surplus including but not limited to the scaling down, suspension of Motorcycle operations and/or any other operations and activities in the plant and/or for any reason whatsoever and/or should their services be not required shall be governed as per the law. 9. That all parties agree that management shall outsource/noncore activities which it deems expedient to vendors and/or by or through contractors. 10. That it has been discussed and agreed between the parties th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the requirements placed in the Act, especially by the amending Act no. 31 of 2001 do not impinge upon the right of the workmen to form one or more Unions, but it only regulates it so far as its registration is concerned. Even without registration under the Act, the Union is entitled to work for the benefit of its members and take proceedings even under the Industrial Disputes Act and allied laws. Therefore, it cannot be said that imposing certain conditions for registration, which have a avowed purpose, the right to form a union is rendered illusory or that those provisions are ultra vires. 36.It is, therefore, clear that when an employee is laid-off he becomes unemployed and the bond of master and servant is snapped though temporarily and the newly added proviso comes into play and thus the registration could not be said to be in accordance with the requirements of the Act. Since nearly all the members of the respondent Union are laid-off employees, therefore, the registration was granted dehors the Statute. 37. For the reasons above, this petition succeeds and is allowed and the impugned registration certificate dated 18.1.2008 is hereby quashed. In the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the writ petition, which was dismissed on 17.9.2010 giving rise to the Special Appeal. 17. On 25.10.2010 this Court passed following orders:- The issue is, as to whether after a settlement which was arrived at, and prima facie the workmen are being paid lay off compensation in terms of the settlement, it was open to the State Government to make a reference as presently involved. Considering this aspect of the matter, we are of the opinion that the matter requires consideration. Hence the special appeal is admitted. The workmen are being paid lay off compensation @ 25%. The settlement provides for lay off compensation. The only issue as raised on behalf of the workmen is whether the settlement which provides for 25% lay off compensation, is in violation of the provisions for lay off compensation as contained in the U.P. Industrial Disputes Act, 1947. Apart from that, there is no other dispute amounting to Industrial Dispute . Therefore, the impugned judgment and order dated 17.09.2010 and the proceedings in reference before the Industrial Tribunal are stayed. Considering the controversy that a large number of workmen are involved, the present special appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Rajasthan (supra) to support his submission on the binding effect of the settlement on all the workmen. 21. Shri Shashi Nandan submits that a reference can be made only if there is genuine and bonafide industrial dispute in existence or in apprehended. The appropriate Government lacks powers to make a reference, if there is a settlement, which is likely to lead to more lasting peace than an award. When there is a dispute that the settlement is not bonafide in nature and that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducement, it could be subject matter of yet another industrial dispute which an appropriate Government may refer for adjudication. He submits that in the present case the settlement arrived at with the help of Conciliation Officer is fair and reasonable and is for the benefit of all the workmen. A splinter group of workmen may not be allowed to upset the settlement and to disturb the industrial peace. The State Government ought to have considered the effect of the settlement and the judgment of this Court before making a reference. 22. Ms. Bushra Maryam, on the other hand, submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Ms. Bushra Maryam that for a settlement to be valid and binding on all the workmen it must be a valid contract under Section 23 of the Indian Contract Act. A settlement, which provides for indeterminate number of workmen to be taken back in employment and for the rest in majority the lay off compensation to be paid in future for which no date is fixed, is against public policy. Such a settlement cannot be made binding on the majority of the workmen, who are still waiting for the promises to be fulfilled. 24. She submits that even if for argument sake the settlement is valid, there is no bar that a fresh settlement may not take place for the benefit of all the workmen with the intervention of Industrial Tribunal in which the Tribunal may ensure the payment of entire lay off compensation to be paid to all the workmen, who were on the working on the date the lockout was declared. 25. Ms. Bushra Maryam submits that deferment of the lay off compensation to future without any fixed date, and further of which the promises has not seen the light of the day for last seven years, is a settlement which was arrived at with a union representing minority of workmen with intention not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In case the settlement is not found to be illegal as it left an unguided discretion to the employer to take back a group of workmen in employment leaving the majority of workmen to be laid off for an indefinite period providing payment of only 50% of the laid of compensation, is not found to be legal and valid, its binding effect on all the workmen would not make the settlement valid for all the workmen for denying a reference. 29. The legal position, that even the workm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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