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TMI Blog1981 (9) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... s this settlement which was varied by the settlement of 31st December, 1956. When the settlement of 31st December, 1966 was made, the Motor Production Department of the employer had 425 workmen. The settlement which can be better referred to as the agreement provided extra payment at the rate of 3.5% for 25 units over the basic production of 650 units up to the first target which was fixed at 900 units. Thus if the target of production reached 900 the increase in wages was to be 35%. In the second stage, the target was fixed at the level of 1250 units and the incentive payment was to be 4% for every 25 units over 900. Thus if the target of 1250 was reached, the additional wages would be increased by 56%. In a given case, therefore, if the maximum target was reached at 1250, the maximum production bonus payable to the employees was to be 91%. 3. For reasons which are not material for the purpose of this petition, the recognition of them Engineering Mazdoor Sabha was withdrawn some time in 1968. In September, 1970, 27 more persons were added in the Motor Production Department. The recognised union in 1970 was known as the Association of Engineering Workers (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already pointed out, out of the second agreement. This Letters Patent Appeal came to be disposed of on 26th November, 1975. To certain parts of this judgment I shall refer later. For the present it will suffice to say that having regard to the decision of the Supreme Court, the Division Beach allowed the Letters Patent Appeal, set aside the orders in First Appeal and the suit was dismissed with costs. 7. After the decision of the Supreme Court in the first proceeding arising out of the agreement of 9th January, 1971, a complaint under the Act came to be filed before the Labour Court on 7th October, 1975. The complaint runs into about 20 pages, but, briefly stated, the grievance made in the complaint was that the employer is guilty of an unfair labour practice stated in item 9 of Schedule IV of the Act inasmuch as the employer has refused to implement the agreement of 31st December, 1966. Having regard to the nature of the contentions raised in this petition, it is necessary to reproduce the relevant part of the complaint which in paragraph 13 says as follows : The accused/respondent has failed and/or refused to implement the agreement between the complainant/applicant-un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... get was reached. This has in any event become a condition of service of the workmen employed in the said Kurla Plant and would constitute an agreement between the respondent and the individual workmen. In aid of that claim for incentive beyond the maximum production limit provided by the 1966 agreement, reference was made to the fact that such payments were made between August, 1967 and August, 1970 in respect of workmen of the Motor production Department and that when payment was made over 91%, it was treated as a part of the wages for all purposes such as provident fund contribution of the employee and the employer and gratuity was also paid to the workmen taking into account maximum payment made. In the second complaint, apart from the relief of declaration that the employer had engaged in an unfair labour practice in respect of his workmen, who were the members of the Engineering Mazdoor Sabha, an order was also sought that the employer be ordered and/or directed to implement the individual agreements with the workmen whereby in respect of production over the final target figure the workmen were paid incentive at the same rate as paid for production between the final targe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Court recorded the evidence of two employees and decided both the complaints by a common order. Now the learned Judge of the Industrial Court held that he was not called upon to consider the question whether the agreement of 1966 survives or not, an approach which it is difficult to appreciate because the specific grievance of the workmen who filed the complaint was that the agreement of 31st December, 1966 was not being implemented and surely if the grievance that a certain agreement was not being implemented had to be enquired into, it will necessarily require the consideration of the question whether the agreement survives or not. Apart from that, the employees contended that the agreement of 31st December, 1966 should be given effect to and in so far as these employees were concerned the employer was willing to give effect to the agreement. The question which was posed by the learned Judge of the Industrial Court was whether the company was trying to enforce the agreement of 1971 against these workers who were not the members of the Association of Engineering Workers and he made it expressly clear that I do not, therefore, propose to go into the question whether the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Court which is now challenged by the petitioner-employer in this petition. 10. It is contended by the learned counsel for the petitioner that since there is finding by the Industrial Court that any unfair labour practice was engaged in or as being engaged in by the employer, there is no power or jurisdiction in the Industrial Court to make the impugned order. According to the learned counsel, before the Industrial Court could exercise its jurisdiction under S. 30 of the Act, it had to give a positive finding that the employer was guilty of non-implementation of the agreement of 1966. It is also pointed out that the finding recorded by the Industrial Court that there was an apprehension that the employer was likely to force the employees to accept the agreement of 1971 is contrary to the evidence of the two employees who were the only witnesses examined before the Industrial Court, in so far as the payment made to the employees for the period August, 1967 to August 1970 was concerned. The learned counsel contended that the payment was to be ex gratia and consequently both the complaints should have been dismissed or rejected by the Industrial Court. 11. The argument of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision under any of the provision of the Act. Now, this provision is obviously intended to enable the Court to decide matters which may be incidental to the main complaint of an unfair labour practice alleged by the complainant before the Industrial Court. But if the Industrial Court finds that no unfair labour practice had been proved, it is not possible to find any power in the Court to make an order of an anticipatory nature based on any apprehension that in future any unfair labour practice is likely to be committed. Apart from that, in the instant case, such was never the complaint in the two complaints field before the Industrial Court. 13. Two employees were examined before the Industrial Court in support of the complaint filed and their evidence will show that they did not make any statement whatsoever about anybody from the side of the employer forcing them to accept payments, according to the agreement of 1971. The first witness was Shantaram Patil and though in cross-examination he had states that after 8th of September, 1975 the terms of the settlement of 1971 had been tried to be enforced against V. J. Deo, S. M. Bhosekar, K. S. Vadke, M. K. Gaikwad and others, D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the employee to accept or reject such request of the employer. If the order of the Industrial Court is read properly, not only is the entire order wholly uncalled for, but it is contrary to the evidence and to a certain extent it is also without jurisdiction because the necessary jurisdictional fact, namely, proof of unfair labour practice did not exist. 16. This was really sufficient to dispose of the petition, but in fairness to an elaborate argument advanced by Mr. Damania, I must deal with his contention that the right to incentive wages beyond 91% must be considered as an implied terms of the agreement of 1966. This argument was obviously intended to challenge the finding given by the Industrial Court that the payment to some employees, who were governed by the 1966 agreement of incentive wages beyond 91% was an ex gratia payment. 17. Now, it has not been disputed that between August, 1967 and August, 1970 the employees, who claimed to be bound by the 1966 agreement, were in fact paid incentive payment in excess of 91%. These payments were made on 8 occasions. It appears that the second complaint specifically was intended to complain of the failure of the employer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and held that the word agreement could also include terms of service agreement, express or implied. Holding that the Standing Orders were expressly made a part and parcel of the service contract between the management and the employees, the Division Bench of Schedule IV cannot but include every clause of the Standing Orders. Having made these observations, the Division Bench further observed as follows. In this context the following passage from page 12 of Sutton and Shannon on Contracts, Sixth Edition is illuminating and can conveniently be quoted : Nevertheless although such contracts are 'more like by-laws than a contract' there is no doubt that this set of rules contains the contract between the members.' In the same way, the worker enters into a contract of employment the terms of which are often derived not from any individual bargain between him and his employer, but (expressly or implication) from the collective agreement between his trade union and the employers. In this way, the collective machinery remedies an inequality of bargaining power between the parties to the individual contract of employment. Even if one were to construe the word agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding Orders constituted conditions of service of the employees. The question in this petition is slightly different. The question is whether any term can be said to be implied in the agreement of 1966 and whether on the facts of the present case, there was an implied term in the agreement which enabled the employees to ask for incentive payment beyond 91%. We are dealing with an agreement which is a consensual document arrived at between the two parties to the document. We must, therefore, first find out the nature of the terms which can be implied in such an agreement and in that context, it is worthwhile referring to certain observations from Halsbury's Laws of England, Volume 8, 3rd Edition, in paragraphs 212 to 214. In paragraph 212, it is observed as follows : Implications of terms. In construing a contract, a term or condition not expressly stated may under certain circumstances, be implied by the Court, if it is clear from the nature of the transaction or from something actually found in the document that the contracting parties must have intended such a term or condition to be a part of the agreement between them. Such an implication must in all cases be founded on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implied, one has to look to the intention of the parties and this intention has to be determined with reference to the point of time when the agreement is entered into because it is an agreement which is made at a particular time which is to be construed in order to find out whether at the time when the contract was made a particular term was contemplated by the parties and it was such that it must be taken as implied for a proper working of the contract. The Court will not imply a term unless it is compelled to do so in order to give effect to the intention of the parties which must be gathered from the written terms of the agreement reduced to writing. 19. Mr. Damania has referred to the observations made in Chitty on Contracts, 24th Edition, Volume I at paragraph 795 and the relevant observations read as follows; It is, however, clear that a term may be implied in any given case from the circumstances of the parties having invariably on former and similar occasions adopted a particular course of dealing ....... Relying on these observations it was urged that on 8 occasions between August, 1967 and August, 1970, additional payments by way of incentive wages in excess o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm should be a part of the agreement. There is nothing which indicates that in 1966 when the agreement was entered into, it was within the contemplation of the parties that any payment in excess of the maximum stipulated under the agreement would be made to the employees. As a matter of fact this would have been left by the parties to be canvassed as an implied term. The parties must, therefore, be held to have intended to agree for only such payments as were expressly provided in the 1966 agreement. 22. It appears that some contention was advanced before the Division Bench which disposed of the Letters Patent Appeal, which arose out of the suit filed by the union challenging the second agreement of August, 1971. The contention raised there was noticed in the following words by the Division Bench : According to Mr. Damania, the basis of the suit is an implied condition of service arising from the fact that the company chose to make incentive payments even on production beyond the target figures fixed by the Settlement . This contention was rejected by the Division Bench firstly, on the ground that the question as to whether there was an implied term was not a pure questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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