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Settlement Between Workmen & Management Not Binding U/S 18 Industrial Disputes Act If Not Sent To Prescribed Authorities: Rajasthan High Court

By Akshat Bhat      05 April, 2022 10:16 PM      0 Comments
Settlement Between Workmen Management Industrial Disputes

Given the "unequal bargaining power" between an employer and its employees under the Industrial Disputes Act, 1947, the Rajasthan High Court has ruled that the settlement reached between them must be sent to the State Government, the Labour Commissioner, and the conciliation officer concerned for review.

It went on to say that until this criterion is met, the settlement cannot be considered binding on the parties under Section 18(1) of the Industrial Disputes Act, 1947.

While granting the petition, Justice Arun Bhansali made the following observation:

"The provisions are not without reason, inasmuch as on account of unequal bargaining power between the workmen and the management, in case a mutual settlement is arrived at the same becomes binding under the provisions of Section 18 (1) of the Act and, therefore, to ensure that the agreement arrived at is examined by the authority i.e. the Labour Commissioner and the conciliation officer, the same is required to be sent to them and entered in the register of settlement maintained by the conciliation officer."

In this regard, the court noted that there is no indication in the agreement or respondents' reply that the disputed agreement was ever sent to the Labour Commissioner of Rajasthan and/or the conciliation officer, and that it was entered in the register maintained under Rule 75 of the Rajasthan Industrial Disputes Rules, 1958.

The court also decided that the petitioners would be entitled to semi-permanent and permanent status from the date of their initial appointment, as well as the benefit of selection grade upon completion of 9, 18, and 27 years of service, as required by law, which would be reflected in their salary and/or pension entitlement. The court went on to say that after calculating all of the benefits available to the petitioners based on the aforesaid directives, the petitioners would be entitled to the actual monetary benefits starting three years before the writ petitions were filed.

The court also quashed the respondents' action in granting benefits from the alleged date of reinstatement. The court ordered that the respondents complete the exercise within six weeks and that the arrears of monetary benefits be paid to the petitioners within four weeks after that. The court further stated that the respondents may continue to pay the benefits to the petitioners in accordance with the law.

The court also noted that once the award was made and the State obtained a modification in relation to back wages by filing a writ petition, the cross appeals were dismissed along with the State's Special Leave Petition, there was no reason for the State to engage in manoeuvring to deprive the petitioners of their rights under the award made by the Labour Court.

The court went on to say that after the learned Single Judge modified the award, the award made by the Labour Court merged into the order of the High Court, and that the respondents' actions after that amounted to a violation of the Court's directions made in the writ petition and special appeal, which could not be tolerated under any circumstances.

The petitions could not be dismissed due to alleged unexplained delay and laches, according to the court. In this regard, the court stated that, given the petitioners' background of being illiterate, tribal, and belonging to the lower strata of society, and working as Beldar/Coolie and now in advanced age, the petitioners appeared to be oblivious to the respondents' illegality and their rights under the award, and that it was only after the passing of the order in the case of Smt. Balmandi that they became aware of their rights and approached the court. The court did add, however, that in order to balance the equities, the real benefit available to the petitioners can be limited for three years from the time the writ petitions were filed.

The court also noted that none of the judgments relied on by respondents relate to a case where the award was made and then upheld by the Supreme Court. Following that, a supposed agreement was made to deprive the workmen of their rights under the award, and the court concluded that the judgments relied on by respondents did not apply to the facts of the case.

Background of the matter

The petitioners, who are low-wage employees working on the Mahi project's Beldar/Coolie station, were essentially hired in the 1980s. The responders, on the other hand, decided to cancel their services. Later, the Labour Court ordered that they be reinstated with 50% back wages and that the workmen's services be considered continuous. Following that, a single judge bench of this court changed the Award so that 106 workers are entitled to 50% of their back pay from the date of reference to the date of Award, plus interest from the date of reference. This was likewise upheld by the Division Bench, and an appeal was dismissed by the Apex Court.

Meanwhile, the single judge ordered that the Tribunal's Award be implemented on or before November 30, 2000. Following that, the Executive Engineer, Mahi Dam Division - 1, Mahi Project, Banswara, issued an order based on the Award, which was upheld by this Court, and the respondents and Mahi Shramik Sangh reached an agreement declaring the workmen semi-permanent and granting them a pay scale of Rs.2550 - 3200. It was also decreed that the workers will be eligible for financial benefits beginning January 1, 2005. The order was accompanied by the names of the workers, who were restored w.e.f. 1/8/2000 and subsequently were shown as semi-permanent w.e.f. 1/8/2002, based on their date of first appointment. It appears that they were given permanent status after a period of ten years from the date of reinstatement. While a couple of the employees have since retired, the petitioners are nearing the end of their time with the company.

Petitioners requested that respondent revise their pay based on their date of initial appointment, grant semi-permanent and permanent status w.e.f. completing 2 years and 10 years from the date of initial appointment, grant consequential benefits w.e.f. the date they are made semi-permanent and permanent, and grant benefit of selection grade at the end of 9, 18, and 27 years of service based on their date of initial appointment.

Arguments presented

The petitioners' counsel argued that the respondents could not hide behind the agreement because they had violated the labour court's award and the directions given by this Court ordering implementation of the Award. The agreement, on its face, is illegal because it has deprived the petitioners of their entitlement to continuity of service from the date of initial appointment, resulting in a loss of period ranging from 15 to 20 years which would have catered to their needs.

The state's counsel, on the other side, argued that there is no legal impediment or bar to entering into an agreement after the Award has been issued, and thus the plea sought to be raised is without merit. It was also stressed that there has been a significant delay in reaching this Court because the agreement was signed in 2005 and executed later, and thus the petitions are likely to be dismissed due to unexplained delay and laches.

The petitioners were represented by attorneys Kanishk Singhvi and M.A. Siddiqui, while the respondents were represented by attorneys Abhilasha Kumbhat and Ravi Panwar.

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