IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.02.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NOs.18034 and 19456 of 2010 and M.P.NO.1 OF 2010 Workmen of RSB Transmissions (I) Limited through United Labour Federation rep by its President T.V.Paramasivam C.J.Complex 4th Floor, 149, Thambu Chetty Street, Chennai-600 001. .. Petitioner in W.P.No.18034 of 2010 The Management of RSB Transmissions (I) Limited, G23,G24, Sipcot Industrial Park, Katrambakkam, Irungattukottai, Sriperumpudur Taluk, Kanchipuram District rep by its Head-Commercial & Projects .. Petitioner in W.P.No.19456 of 2010 Vs. 1. Government of Tamil Nadu, rep. By its Secretary, Labour and Employment Department, Fort St. George, Chennai-600 009. 2. The Management of RSB Transmissions (I) Limited, rep by its Managing Director, G23,G24, Sipcot Industrial Park, Katrambakkam, Irungattukottai, Sriperumpudur Taluk, Kanchipuram-602 105. .. Respondents in W.P.No.18034 of 2010 1. The Assistant Commissioner of Labour (Conciliation), Sriperumbudur. 2. United Labour Federation, C.J. Complex, 4th Floor, 149, Thambu Chetty Street, Chennai-600 009 rep by its President. https://hcservices.ecourts.gov.in/hcservices/ 3. Indian National Engineering Employees Union I.N.T.U.C. Bhavan, 270, M.T.H. Road, SIDCO Estate, Ambattur, Chennai-600 098 rep by its President. .. Respondents in W.P.No.19456 of 2010 W.P.No.18034 of 2010 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the first respondent Government to pass orders with regard to the reference of the industrial dispute covered by the conciliation failure report bearing Ref.Na.Ka.No.Aa/1204/09, dated 10.5.2010 to the Industrial Tribunal, expeditiously. W.P.No.19456 of 2010 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus directing the first respondent to call the petitioner and respondents 2 and 3 for conciliation, verify whether the settlement dated 9.7.2010 was accepted by majority of the workmen, whether the terms of the settlement were fair and reasonable and after satisfying himself of the same, subscribe to the settlement, irrespective of participation or non-participation of the second respondent, converting it as one in the course of conciliation under Section 12(3) of the I.D. Act. For Petitioner : Mr.V.Prakash, SC for M/s.K.Sudalaikannu in W.P.No.18034/2010 Mr.S.Ravindran for M/s.T.S.Gopalan & Co. in W.P.No.19456 of 2010 For Respondents : Mr.R.Murali, GA for R-1 in both writ petitions Mr.S.Ravindran for M/s.T.S.Gopalan & Co. for R-2 in W.P.No.18034 of 2010 Mr.V.Prakash, SC for M/s.K.Sudalaikannu for R-2 Mr.C.K.Chandrasekar for R-3 in W.P.No.19456 of 2010 COMMON ORDER While the first writ petition is filed by the trade union seeking for a direction to the first respondent State to pass orders on the conciliation failure report, dated 10.5.2010 sent by the Assistant Commissioner of Labour (Conciliation-1), Chennai at Sriperumbudur for adjudication by the Industrial Tribunal, the second writ petition is filed by the management seeking for a https://hcservices.ecourts.gov.in/hcservices/ direction to the Conciliation Officer to call for the petitioner and the two trade unions including the writ petitioner in W.P.No.18034 of 2010 to verify whether the settlement dated 9.7.2010 was accepted by majority of the workmen, whether the terms of the settlement were fair and reasonable and after satisfying himself of the terms of the settlement to subscribe his initial whether with the consent or non consent of the writ petition in the other writ petition so as to convert it into one of settlement under Section 12(3) of the Industrial Disputes Act. 2.In the first writ petition, notice of motion was ordered on 12.8.2010. On notice from this court, the management has filed a counter affidavit, dated 23.8.2010. Even during the pendency of the first writ petition, the management has filed the second writ petition with the prayer as set out earlier and that writ petition was admitted on 15.9.2010. Pending the writ petition, in the application for interim direction, notice was ordered to the union. In view of the interconnectivity between both the writ petitions, they were directed to be listed together for hearing. For the sake of convenience, the parties are referred to as the trade union, management, conciliation officer and the Government as the case may be. 3.Heard the arguments of Mr.V.Prakash, learned Senior Counsel appearing for Mr.K.Sudalaikannu for the trade union, Mr.S.Ravindran for M/s.T.S.Gopalan & Co. appearing for the management, Mr.R.Murali, learned Government Advocate appearing for the official respondents and Mr.C.K.Chandrasekar, learned counsel appearing for the trade union affiliated to INTUC. 4.The case of the trade union, i.e. United Labour Federation was that the management is manufacturing earth moving equipments. It is an ancilliary unit of the Multi National Company called Caterpillar. There are 350 workers employed there, out of which only 130 workers were permanent and others are treated as contract labours. Though they are labelled as Contract labours, the work extracted from them is similar to that of the work performed by the permanent workers. The contract is sham and nominal and a devise adopted by the management to exploit the workers. The factory is situated at Irungattukottai. Majority of workers are members of their trade union. The trade union raised an industrial dispute on 29.12.2009 regarding charter of demands. The Conciliation Officer, i.e. Assistant Commissioner of Labour, Conciliation-I sent a notice to the management and also held conciliation proceedings. As he could not bring about any mediation, he sent a failure report, dated 10.5.2010 to the State Government. In the failure report, he had also referred to the list of demands found in the charter. The management did not give any reply to those charters. It was recorded that the trade union was represented by its officer bearers and that the management was represented by its Deputy General Manager V.V.Prasad. The conciliated had ended in failure on 26.4.2010. Once the https://hcservices.ecourts.gov.in/hcservices/ conciliation ended in failure and a report has been sent to the State Government, the State Government must make a decision and refer the dispute for adjudication by the Industrial Tribunal. Since more than three months had elapsed from the date of the failure report and there was no reply from the Government, the writ petition came to be filed. 5.However, the case of the management was that like the above trade union, an another trade union, i.e. INTUC had also submitted a charter of demands on 23.3.2010 with the management. After negotiating with that union, a settlement was signed with the officer bearers of the INTUC under Section 18(1) covering 74 workers functioning in the management relating to the service conditions of the workmen. A copy of the said settlement has been marked to the authorities of the Labour Department and that settlement was to be in force till 31.3.2013. The settlement was confined only to the members of the INTUC union who are on the rolls of the company. The extension of benefit of settlement can be given to any workman who gives declaration in writing accepting the terms of settlement and agreeing to be bound by the settlement. The benefits will be given to them only from the date of their giving declaration. After getting the settlement signed with the INTUC union, on the date date, they had also signed an another settlement relating to incentive payment. After signing both the settlements, the management had informed the workers the nature of benefits conferred by the settlement. They had also written a letter to the Conciliation Officer stating about the facts of having reached the settlement. This was informed to the Conciliation Officer by letter, dated 16.7.2010. Thereafter, they wrote a letter on 20.7.2010 asking the Conciliation Officer to initiate conciliation to convert the settlement under Section 18(1) into Section 12(3). Based on the request made by the management, the conciliation officer sent a notice, dated 21.7.2010 to the trade union as well as to the INTUC to appear for a discussion on 26.7.2010. Immediat6ely, within one month, they filed the writ petition with the prayer set out above. 6.Under the provisions of the ID Act, an industrial dispute can be resolved only by two methods either by settlement or by adjudication. The settlement that can be signed between the management and the workmen can either be bipartite or tripartite settlement. It is only in case of tripartite settlement signed under Section 12(3) read with Section 18(3), it will have an expanded operation of covering all the workmen in the establishment whether they are party to the settlement or not. Under Section 12 (2), the Conciliation Officer for the purpose of bringing about the settlement of dispute, without delay must investigate the dispute and all matters affecting the merits and the right of settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute. Under Section 12(3), if a settlement of the dispute or of any of the matters in dispute is arrived at in the course of https://hcservices.ecourts.gov.in/hcservices/ the conciliation proceedings, the conciliation officer shall send a report thereof to the Government together with a memorandum of the settlement signed by the parties to the dispute. 7.Under Section 12(4), if no settlement is arrived at, after the close of the investigation, the conciliation officer should send a report to the appropriate Government setting forth the steps taken for ascertaining the facts and circumstances relating to the dispute. Under Section 12(5), the appropriate Government, on considering the report if it is satisfied that there is a case for reference to a Board, it should make a reference. In case where there is no reference made, it should communicate the parties concerned the reasons thereof. 8.In the present case, the conciliation had taken place at the instance of the trade union. No settlement was arrived before the conciliation officer and a failure report was also sent to the appropriate Government on 10.5.2010. Therefore, only remaining step is for the State Government to pass an order under Section 12(5) read with Section 10(1) of the ID Act. It is during this period, the management had signed a settlement with only one trade union conceding certain demands. There is no dispute that the conciliation officer had sent the failure report to the State Government. Since the conciliation had failed, it is for the appropriate Government to decide whether there is a case for reference. 9.The Supreme Court in such a case held that in normal course, the matter should be sent for adjudication as it is the only other mode for resolving the dispute available under the Act. In Ram Avtar Sharma and others Vs. State of Haryana and another reported in AIR 1985 SC 915, the Supreme Court held that the Government under Section 10(1) exercises an administrative power. While exercising its power, it cannot reach out the conclusions on merits and a reference is a rule in such circumstances. 10.The Supreme Court further in The M.P. Irrigation Karamchari Sangh Vs. State of M.P. and another reported in AIR 1985 SC 860 held that the Government should not refuse to refer the dispute. In case of illegal refusal, the Court itself can direct reference to be made. Therefore, Mr.V.Prakash, learned Senior Counsel prayed for a direction to the State Government to order reference to the Industrial Tribunal as the members of the trade union for which he represents have refused to accept the terms of settlement. 11.However, Mr.S.Ravindran, learned counsel for the management submitted that no writ in the nature of mandamus will be issued to make a reference. Even after the failure report received by the Government, the majority of the workers had received the benefit. There is no obligation for the Government to refer the dispute. They have also relied upon a judgment of this Court in https://hcservices.ecourts.gov.in/hcservices/ Workmen of Asbestos Cement Ltd., Podanur Vs. Asbestos Cement Ltd., Podanur and others reported in 1965 (II) LLJ 544. He further submitted that the power of the conciliation officer do not come to an end ever after submitting his failure report and he can still conciliate the matter between the parties. For this purpose he relied upon a division bench judgment of Bombay High Court in Association of Chemical Workers Vs. Wahid Ali and others reported in 1980 (1) LLJ 276. 12.He further submitted that the conciliation officer do not become functus officio after submitting his failure report and he can always bring a fresh conciliation. In the absence of any prohibition under the Act, the Conciliation Office can call the parties for further negotiation. For this purpose, he relied upon a judgment of the Andhra Pradesh High Court in Praga Tools Limited, Secunderabad Vs. Praga Tools Limited, Mazdoor Sabha and others reported in 1975 I LLJ 218. The learned counsel also referred to a judgment of the Supreme Court in Rashtriya Chemicals & Fertilizers Ltd. And another Vs. General Employees' Association and others reported in 2007 (5) SCC 273 for contending that the Government under Section 10(1) can pass order free from any fetters. It is only when it finds that the Government refused to make a reference of dispute, the can direct the Government to make a reference. In the present case, the Government is yet to make any decision. For this purpose, he relied upon the following passage found in paragraphs 8 and 9 of the said judgment, which reads as follows: "8.It is now well settled that the High Courts will not straightaway direct the appropriate Government to refer the dispute. It is for the appropriate Government to apply its mind to relevant factors and satisfy itself as to the existence of a dispute before deciding to refer the dispute. We may refer to the following observations of this Court in Steel Authority of India Ltd. v. Union of India6 (Second SAIL case, CLR p.667, para 18) “For the purpose of exercising jurisdiction under Section 10 of the 1970 Act, the appropriate Government is required to apply its mind. Its order may be an administrative one but the same would not be beyond the pale of judicial review. It must, therefore, apply its mind before making a reference on the basis of the materials placed before it by the workmen and/or management, as the case may be. While doing so, it may be inappropriate for the same authority on the basis of the materials that a notification under Section 10(1)(d) of the 1947 Act be issued, although it stands judicially determined that the workmen were https://hcservices.ecourts.gov.in/hcservices/ employed by the contractor. The State exercises administrative power both in relation to abolition of contract labour in terms of Section 10 of the 1970 Act as also in relation to making a reference for industrial adjudication to a Labour Court or a Tribunal under Section 10(1)(d) of the 1947 Act. While issuing a notification under the 1970 Act, the State would have to proceed on the basis that the principal employer had appointed contractors and such appointments are valid in law, but while referring a dispute for industrial adjudication, validity of appointment of the contractor would itself be an issue as the State must prima facie satisfy itself that there exists a dispute as to whether the workmen are in fact not employed by the contractor but by the management. We are, therefore, with respect, unable to agree with the opinion of the High Court. We would, however, hasten to add that this judgment shall not come in the way of the appropriate Government to apply its mind for the purpose of issuance of a notification under Section 10 of the 1970 Act.” 9.The exception to the above is, when the court finds that the appropriate Government refuses (sic refusal) to make a reference of a dispute, is unjustified. In such circumstances, the court may direct the Government to make a reference (Sankari Cement Alai Thozhilalar Munnetra Sangam v. Govt. of T.N.7, V. Veerarajan v. Govt. of T.N.8 and TELCO Convoy Driver’s Mazdoor Sangh v. State of Bihar9.)" 13.The learned counsel further referred to a division bench judgment of the Kerala High Court in Plantation Employees' Union of South India Vs. Estate Staff Union of South India and others reported in Vol 80 FJR 566. It is for the purpose of contending that the conciliation officer has duty to come to a fair and amicable settlement. If there is an agreement between the employer and the majority union, it can be certified by the conciliation officer and converted it into one of conciliation settlement in which case the said settlement will be binding on all other parties. He referred to the following passage found in page 584 of the said judgment, which reads as follows: "...Following the two Supreme Court decisions referred to above, we are of the opinion that the agreement entered into between a majority union and https://hcservices.ecourts.gov.in/hcservices/ the management can be got certified by the Conciliation Officer and converted into a conciliation settlement provided it is fair and reasonable. We are further of the opinion that when once such an agreement is presented before the Conciliation Officer in the prescribed form, it is his duty to ascertain whether the union which has entered into an agreement is a majority union and commands the support of the majority of the workers in the establishment and whether the agreement is fair and reasonable. On such satisfaction, the Conciliation Officer is bound to certify that agreement as a conciliation agreement so as to bind all the parties to the dispute including the persons who were not parties to the agreement...." In the light of the same, he sought for a direction to the conciliation officer to reconciliate the matter. 14.But, however, this court is not inclined to accept the submissions made by the management. In the present case, the conciliation had already ended in failure and the appropriate Government is yet to make up his mind and pass an order in terms of Section 12(5) read with Section 10(1). The settlement itself only applies to 74 workers covered by the INTUC union. It provides for a further clause for others to accept it by giving it in writing. Therefore, insofar as the management is concerned, the industrial dispute has come to an end. Before the conciliation officer, there is no conciliation pending. Even when the management wrote to the conciliation officer, there was no dispute pending with the conciliation office for him to conciliate. If according to the management, no direction can be given to the State Government to issue an order of reference, in all fairness, the same logic will also apply to the conciliation officer who will be the best Judge to decide the pendency of an industrial dispute. 15.If a section of workers are not happy with the terms of settlement, they are entitled to seek for adjudication of their dispute as that is the only remaining method available for resolving an industrial dispute under the Industrial Disputes Act. This court is not inclined to foreclose that option to the workers represented by the trade union. If ultimately any reference is made, it is always open to the management to contend before the industrial tribunal that the settlement reached by them with the INTUC union is fair and reasonable and that union represents majority of workers and that majority of workers have also accepted the terms of settlement by receiving the benefit and therefore, the tribunal should not adjudicate the dispute and must pass an award in terms of the settlement. That course is always open to them in the light of the long line of decisions of the Supreme Court starting from Herbertsons Limited Vs. Their Workmen reported in 1979 (54) FJR 249. What is their best defence before the Tribunal cannot be a ground to forestall the Government passing an https://hcservices.ecourts.gov.in/hcservices/ appropriate order of reference under Section 10(1). 16.In view of the above, this court is not inclined to entertain the writ petition filed by the management. Accordingly, W.P.No.19456 of 2010 will stand dismissed. W.P.No.18034 of 2010 will stand allowed. The first respondent State Government is hereby directed to pass an order within a period of four weeks from the date of receipt of copy of this order on the failure report sent by the Assistant Commissioner of Labour (Conciliation), dated 10.5.2010 and communicate the result to the petitioners without fail. No costs. Consequently, connected miscellaneous petition stands closed. vvk Sd/- Asst.Registrar /True copy/ Sub.Asst.Registrar To 1. The Secretary, Government of Tamil Nadu, Labour and Employment Department, Fort St. George, Chennai-600 009. 2. The Assistant Commissioner of Labour (Conciliation), Sriperumbudur. + 1 cc to Govt. Pleader Sr.14551 + 1 cc to Mr.K.Sudalaikannu, Advocate SR.14221 + 1 cc to Mr.T.S.Gopalan, Advocate Sr.14008 RSI (CO) RRI/9.3.2011 ORDER IN W.P.NOs.18034 and 19456 of 2010 https://hcservices.ecourts.gov.in/hcservices/