* THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN +Writ Petition No.18917 OF 1998 % Dated 13.03.2008 # Retired Employees Association …. Petitioner Vs. $ 1. The Govt. of A.P. rep. by the Principle. Secretary, Women’s Development Child Welfare & Labour (Lab.I) Department, A.P. Secretariat Hyderabad and 4 others …. Respondents ! Counsel for the petitioner: Sri M.Pandu Ranga Rao ^ Counsel for the respondents: Sri K.Kasturi <GIST: > HEAD NOTE: ? Cases referred [1] 2000(1) LLJ 1583 2 AIR 1960 SC 1223 3 (1976) 3 SCC 433 4 1999(2) LLJ 851 5 2007(2) LLJ 887 6 2000 LLR 1105 7 2003(2) ALD 221 8 2002(1) LLN 1144 9 1962(2) LLJ 200 10 2001(2) LLJ 1084 111958(1) LLJ 500 121958(1) LLJ 500 131965 (2) LLJ 175 141971(2) LLJ 479 151995(2) LLJ 790 16AIR 1985 SC 915 17AIR 1985 SC 860 18AIR 1978 SC 1088 191989(2) LLJ 558 20AIR 1964 Supreme Court 1617 21AIR 1953 Supreme Court 53 22AIR 1970 Supreme Court 1205 231989(2) LLJ 558 242000(1) SCC 371 25AIR 1972 SC 1680 26AIR 1972 SC 2240 27AIR 1952 Calcutta 808 28AIR 1954 SC 596 29AIR 1965 SC 1992 30AIR 1952 Madhya Bharat 105 (Indore bench) 31AIR 1956 Punjab 201 32AIR 1953 Calcutta 653 331991(3) SCC 368 THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.18917 of 1998 ORDER: The dispute which the petitioner Association seeks a reference, to the Industrial Tribunal for its adjudication, is their demand for extension of pensionary benefits to their members, all of whom retired from the services of the third respondent company prior to 24.08.1986. The Government, by its order dated 4.3.1998, declined to make the reference holding that a retired workman was not a “workman” within the meaning of Section 2(s) of the Industrial Disputes Act, that the demand of retired employees did not fall within the definition of ‘industrial dispute’ and that the dispute raised by the petitioner, an association of retired employees, could not be entertained under the provisions of the Industrial Disputes Act (hereinafter referred to as the “Act”). The Government further informed the petitioner that, as an industrial dispute would arise only in case of a difference between the employer and their workmen and since the Association did not represent any employee in service, it had formed an opinion that there was neither a dispute in existence, nor was a dispute apprehended, and that the matter in dispute did not merit reference. Aggrieved thereby, the present writ petition. Facts, in brief, are that the petitioner, an association of retired employees of the ILTD Division of ITC Limited, has been seeking extension of pensionary benefits under the “Platinum Jubilee Fund Monthly Pension Scheme” announced by the Chairman of ITC Limited on 24.10.1986. The pension scheme was made applicable to all non-seasonal employees on the pay rolls of the company as on 24.8.1986 and not for those who had retired from the service of the company prior thereto. In the charter of demands dated 31.3.1990, as item 9(a) and (b), the Union, representing employees of the ILTD Division, demanded that all clerical/class ‘A’ workmen be paid 1/3rd of their last drawn wages as pension subject to a minimum of Rs.375/- per month on their reaching the age of superannuation/retirement/resignation/discharge/death etc., till they were alive and to the widow or children thereafter. The demand raised by the Union of the workmen was not accepted by the third respondent. The retired employees later formed themselves into an association and continued the dispute raised earlier by the Union of workmen. The Deputy Commissioner of Labour, Guntur took up the matter for conciliation and, thereafter, sent his failure report to the Government. The Petitioner– Association filed W.P.No.4094 of 1994 before this Court seeking reference of the dispute for adjudication by the Industrial Tribunal. While the writ petition was pending before this Court the Government, vide memo dated 24.3.1994, opined that the dispute did not merit reference. The reason for its refusal was that retired employees could not raise any demand with their previous employer as an employer-employee relationship no longer existed. The said order was set aside by this Court and the Government was directed to refer the dispute to the Industrial Tribunal. Aggrieved thereby, the 3rd respondent filed W.A. No. 904 of 1994. The Division Bench, by its order dated 14.12.1995, directed the Government to reconsider the request of the workmen after applying its mind to the material on record and take an appropriate decision whether or not the dispute should be referred for adjudication under Section 10 of the Act uninfluenced by its earlier decision in its memo dated 24.3.1994 or by the observations of this Court in W.P. No. 4094 of 1994 dated 13.4.1994. Thereafter the Government, vide memo dated 04.03.1998, rejected the petitioners’ request for reference resulting in their invoking the jurisdiction of this Court under Article 226 of the Constitution of India. Sri M. Panduranga Rao, Learned Counsel for the petitioner, would contend that, since the claim of the workman, who retired prior to 24.08.1986, for being extended the benefits of the pension scheme, formed a part of the charter of demands raised by the Union of workmen of the 3rd respondent company, the said issue constituted an “Industrial Dispute” between the employer and the workmen in relation to the “conditions of labour of any person”. Learned Counsel would contend that the expression “person” in Section 2(k) would include a retired workman also and that the petitioner association had merely continued the dispute raised by the Union earlier. According to the Learned Counsel, the Government could not have taken upon itself the task of adjudicating the dispute nor could it have rejected the request for reference on extraneous grounds and, as the Industrial Dispute related to extension of pensionary benefits to employees of the 3rd respondent who retired from service prior to 24.8.1986, the Government ought to have referred the dispute for adjudication to the Industrial Tribunal. Learned counsel would contend that, since the Government had failed to examine the petitioner’s request for reference in the proper perspective, despite specific directions of this court to do so, a mandamus should now be issued directing them to refer the dispute for adjudication by the Industrial Tribunal and that no useful purpose would be served in now directing them to reconsider this issue all over again. Learned counsel would place reliance on Mukand Ltd Vs. Mukand Staff & Officers Association[1] in this regard. Sri K. Kasturi, Learned Senior Counsel appearing on behalf of the 3rd respondent company, would contend that a retired workman was not a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 and that an Association of retired employees was not entitled to raise a dispute which related to the claim of extension of pensionary benefits for its members, that the Government had rejected the request for reference on just and valid grounds and that the order, rejecting the petitioners request for reference, did not necessitate interference in proceedings under Article 226 of the Constitution of India. Learned Senior Counsel would submit that an identical dispute, raised by the Union of workmen belonging to the 3rd respondent company, had been rejected by the Labour Court, Guntur in I.D. No. 3 of 1990 dated 4.8.1997 and that the said Award has attained finality. Learned Senior Counsel would submit that a settlement was entered into between the third respondent company and the Staff Association, under Section 18(3) of the Industrial Disputes Act, on 30.7.1998 whereunder it was agreed that the settlement would not affect or prejudice the terms and conditions and company’s requirements confirmed and upheld in the Award in I.D.No.3 of 1990 dated 4.8.1997. He would further submit that a similar dispute raised before the Patna Industrial Tribunal, for extending the benefits of pension to workmen who had retired from the services of the third respondent company before 24.08.1986, was eventually dismissed by the Supreme Court and the action of the third respondent, in restricting the benefits of the pension scheme only to such of the employees who were on its rolls on 24.8.1986, was upheld. According to the Learned Senior Counsel, since the dispute raised by the petitioner Association has been conclusively decided by the Supreme Court, a direction to the Government to reconsider the matter, or directing them to make a reference to the Industrial Tribunal, would be an exercise in futility. He would place reliance on State of Bombay Vs. K.P. Krishnan[2], Prem Kakar Vs. State of Haryana[3], Everestee Vs. District Labour Officer[4], Standard Chartered Grindlays Bank Retired Employees Association Vs. Union of India[5], K. Komaraiah Vs. Industrial Tribunal-cum-Addl.Labour Court, Hyderabad[6], I.L. Naidu Vs. Union of India[7], ITC Ltd Workers Welfare Association Vs. Management of ITC Ltd[8], Express Newspapers (P) Ltd Vs. Labour Court, Hyderabad[9] and Lok Nath Attri Vs. State of H.P.[10] “INDUSTRIAL DISPUTE” UNDER SECTION 2(k): WOULD A DISPUTE, RAISED BY A UNION REPRESENTING WORKMEN IN AN ESTABLISHMENT, RELATING TO THE CONDITIONS OF SERVICE OF RETIRED WORKMEN CEASE TO BE AN “INDUSTRIAL DISPUTE” MERELY BECAUSE THE DISPUTE WAS CONTINUED LATER BY AN ASSOCIATION OF RETIRED WORKMEN? Section 2(s) of the Industrial Disputes Act defines workman to mean any person, (including an apprentice), employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and, for the purposes of any proceeding under the Act in relation to an industrial dispute, to include any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment has led to that dispute. Certain categories are excluded from the definition of “workman” and, as none of those excluded categories include an employee who has retired from service, it is unnecessary to refer to those excluded categories. Since Sri K. Kasturi, learned Senior Counsel appearing on behalf of the third respondent, contends that a retired employee is not a workman within the meaning of Section 2(s) of the Industrial Disputes Act and any claim by such an employee, or an association of such employees, would not fall within the definition of an “Industrial Dispute” under Section 2(k), it is necessary to refer to the judgments which he relies upon. In Everestee4, the question which arose for consideration was whether an employee, who had voluntarily retired from service and had accepted the benefits of voluntary retirement, could be treated as a “workman” under Section 2(s) of the Industrial Disputes Act. The Division Bench of the Kerala High Court held:- “…….The definition of ‘Workman’ in Sec. 2(s), in connection with persons employed in an industry, falls in three parts. The first part of the definition gives the statutory meaning of workman. The second part is designed to include something more in what the term primarily denotes. By this part of the definition, persons who have been dismissed, discharged or retrenched in connection with an industrial dispute; or whose dismissal, discharge or retrenchment has led to an industrial dispute. This part specifically excludes the categories of the persons specified in clauses (i) to (iv) of Sec. 2(s). The third part connotes that even if a person satisfied the requirements of any of the first two parts, if he falls in any of the four categories in the third part, he shall be excluded from the definition of ‘workman’. In our opinion, the appellant, having voluntarily tendered his resignation pursuant to a scheme for voluntary retirement, the resignation having been accepted by the management and all the benefits arising out of such resignation has been paid by the management and received by the appellant, he cannot be treated as a ‘workman’ coming under Sec. 2(s) of the Industrial Disputes Act. As already noticed, the definition only includes persons who are presently employed, or who have been dismissed, discharged or retrenched from the service of the employer. In fact, dismissal, discharge or retrenchment is an act of the employer, whereas terminating the contract of service by way of resignation by the workman is his own act. We are, therefore, of the opinion that the claim of the appellant is misconceived and beyond the scope of Sec. 2(s) of the Industrial Disputes Act.” (emphasis supplied)” I n Standard Chartered Grindlays Bank Retired Employees Association5, on the basis of the settlement entered into on 20.11.1997 between the Bank and the Union of Employees, the pension of all retired employees was enhanced on an ad-hoc basis irrespective of their date of retirement. On expiry of this settlement, another settlement was entered into on 10.3.1999 whereby the quantum of monthly pension for various categories of retired employees was raised w.e.f. 1.4.1999 for a period of two years. Certain terms of this settlement was revised by the settlement dated 24.9.2001 and, while enhancing the upper limit from Rs.6000/- to Rs.9000/-, the benefit of enhancement was restricted only to those who retired after 1.11.2001 and not prior thereto. The Association of retired employees of the bank raised a dispute before the conciliation officer, who intimated the Bank. The Bank raised an objection to the locus standi of the Association to raise such a dispute and contended that, since the dispute was not an industrial dispute, it was beyond the jurisdiction of the conciliation officer. The Regional Labour Commissioner advised the Association to approach the Labour Court for appropriate relief, if any, under Section 33(c)(2) of the Industrial Disputes Act. Thereafter, the Association invoked the jurisdiction of the Calcutta High Court for a direction to the Regional Labour Commissioner, (Central), Calcutta to submit his failure report on the conciliation of the Industrial dispute regarding denial of higher pensionary benefits to employees of the respondent bank who retired before November, 1st 2001 and for other consequential benefits. The Calcutta High Court, after referring to the definition of “Industrial dispute” under Section 2(k), and “workman” under Section 2(s), observed:- “……..It appears from the above provision that a retired employee cannot be included in the definition of workman for the purpose of Industrial Disputes Act, 1947. Further, coming back to the provisions of sub-section (k) of Section 2 of the Industrial Disputes Act, 1947, in my opinion, the industrial dispute means and includes any dispute or difference between the employers and workmen. As such the workmen are entitled to be the parties to a bipartite settlement in between the employers and the workmen under the Industrial Disputes Act, 1947 and it is also open for them to take up an issue of any person including the retired workmen. Because the payment of pension has a direct bearing on substantial interest of the workmen who will enjoy such pension after retirement. But no retired workman can be a party to any dispute or difference with their erstwhile employers…….” (emphasis supplied) I n Lok Nath Attri10, the order of the appropriate Government in rejecting the petitioner’s request for a reference to be made to the Industrial Tribunal was the subject matter of challenge before the Division Bench of the Himachal Pradesh High Court which held that, from the date of resignation of an employee, there was no employer-employee relationship and hence it could not be said that an “industrial dispute exists or is apprehended” or that the appropriate Government had exceeded its jurisdiction in refusing the reference. In I.L. Naidu7, this Court observed that all employees, who had exercised their option for the benefits of voluntary retirement, had on such acceptation severed the employer - employee relationship and had also received and encashed the cheques representing the VRS payments as well as other terminal benefits and, therefore, could not be considered to be the workmen of the company. It is necessary to note that in I.L. Naidu7, the question which fell for consideration before this Court related to the validity of the order of closure of the Lead Smelter Plant of Hindustan Zinc Limited and the observations, referred to hereinabove, made while examining the question whether or not the order of closure was valid, cannot be read out of context as laying down a general principle that in no case can a dispute, relating to payment of the terminal benefits of a retired workman, fall within the definition of an “Industrial dispute” under Section 2(k) of the Act. Similarly, in K. Komaraiah6, a petition was filed by certain workmen aggrieved by the award of the Additional Industrial Tribunal, Hyderabad rejecting their claim for reinstatement into the services of the second respondent company consequent on the revival of the manufacturing activity in their establishment. It is in this context that this Court observed: “……..A person who is a workman for the purpose of the definition under Section 2(s), and for the purpose of industrial dispute under Section 2(k), ceases to be a workman if he is not dismissed, discharged or retrenched employee. If a workman is dismissed, discharged or retrenched he can still be a workman for the purpose of the Act and for the purpose of claiming the benefits under the Act. In the event of closure of an industry, a workman may suffer retrenchment. Though this legal position is disputed by the learned Counsel for the petitioner, the decided cases support the view that in the vent of closure of the unit in accordance with the provision of the Act, the workers are deemed to be retrenched. In view of my holding that though closure of the unit under Section 25- O results in retrenchment of the employee, a employee/workman who has taken voluntary retirement after closure of the unit cannot be said to be retrenched, the point that needs to be considered is what is the reasonable interpretation of the scope of sub-section (2) of Section 25-H. Sub-section (2) of Section 25-H, as amended by the A.P. State legislature, cannot be interpreted in vacuum. It has to be interpreted giving full scope to the words used in the sub-section as well as well as the words as defined in the Act. As already observed by me, a dismissed or discharged or retrenched workman is also a workman but a person who voluntarily retired cannot be a workmen for the same is neither dismissal, removal, discharge nor retrenchment.” (emphasis supplied) Section 2(k) of the Act defines “Industrial dispute” to mean any dispute or difference between employers and workmen which is connected with the employment or with the conditions of labour of any person. The question whether the words “any person” in Section 2(k) would bring within its fold an employee who has retired from service and whether a dispute, relating to the pensionary benefits payable to such workmen, raised by the Union representing the workmen of the third respondent company, and continued thereafter by an association of retired employees, would fall within the definition of “industrial dispute” under Section 2(k) necessitating such dispute being referred to the Industrial Tribunal under Section 10 of the I.D. Act did not arise for consideration in any of the judgments referred to hereinabove. In Mukand Ltd1 the Bombay High Court, after referring to several earlier judgments of the Supreme Court in “Workmen Vs. Management of Dimakuchi Tea Estate Ltd[11], Standard Vacuum Refining Company of India Ltd Vs. Its Workmen[12], All India Reserve Bank Employees Association Vs. Reserve Bank of India[13], Workmen Vs. Greaves Cotton Company Ltd[14] and Gujarat Electricity Board Thermal Power Station Ukai Vs. Hind Mazdoor Sabha[15], held that the consistent view of the Supreme Court was that a non-workmen could also raise a dispute in respect of a matter affecting their employment, their service conditions etc., where they have a community interest, provided they are direct and are not remote. The conditions of labour of “any person” would bring within its ambit extension of pension to a retired workman. Such a dispute raised by the Union, representing the workmen in an establishment, would be an “Industrial Dispute” under Section 2(k) of the Act. Once a valid “Industrial Dispute” has been raised by the Union, would the mere fact that the dispute was continued later by an Association of retired employees, take it out of the purview of an “industrial dispute” under Section 2(k) of the Industrial Disputes Act? It may not be necessary for this Court to examine this question in a writ petition challenging the action of the Government in refusing to make a reference, as the question whether or not such a dispute is an “industrial dispute” can as well be adjudicated, on a valid reference being made to it, by the Industrial Tribunal. When examined from this angle, there is considerable force in the submission of Sri M. Pandurangarao, learned Counsel for the respondent Union, that the Government had exceeded its jurisdiction in adjudicating this question on merits. FACTORS TO BE BORNE IN MIND BY THE APPROPRIATE GOVERNMENT, IN CONSIDERING WHETHER OR NOT A REFERENCE SHOULD BE MADE, TO THE INDUSTRIAL TRIBUNAL, UNDER SECTION 10(1) OF THE I.D.ACT: In considering the question of making a reference, under Section 10 (1) of the Act, the Government is entitled to form an opinion whether an industrial dispute "exists or is apprehended". Formation of the opinion whether an industrial dispute "exists or is apprehended" is not the same as to adjudicate the dispute itself on its merits. While exercising the power to make the reference the Government cannot delve into the merits of the dispute and take upon itself the determination of the lis. (Ram Avtar Sharma Vs. State of Haryana[16]; M. P. Irrigation Karamchari Sangh Vs. State of M. P.[17]; Shambu Nath Goyal Vs. Bank of Baroda, Jullundur[18]; and Telco Convoy Drivers Mazdoor Sangh Vs. State of Bihar[19]). When the appropriate Government considers the question whether any industrial dispute should be referred for adjudication or not it may consider, prima facie, the merits of the dispute and take into account other relevant considerations which would help it to decide whether making a reference would be expedient or not. If the dispute in question raises questions of law, the appropriate Government should not purport to reach a final decision thereon as that would, normally, lie within the jurisdiction of the Industrial Tribunal. Similarly, on disputed questions of fact, the appropriate Government cannot purport to reach final conclusions, for that again would be in the province of the Industrial Tribunal. But the appropriate Government is not precluded from considering, prima facie, the merits of the dispute when it decides the question whether its power to make a reference should be exercised or not. If the claim made is patently frivolous, or is clearly belated, the appropriate Government may refuse to make a reference. Likewise, if the impact of the claim on the general relations between the employer and the employees in the region is likely to be adverse, the appropriate Government may take that into account in deciding whether a reference should be made or not. Prima facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate Government is entitled to make in dealing with a dispute under Section 10(1) of the Act. (K.P. Krishnan2; Bombay Union of Journalists Vs. State of Bombay[20]). The appropriate Government may determine, prima facie, whether an industrial dispute exists or the claim is bogus or put forth for extraneous and irrelevant reasons not for justice or industrial peace and harmony. (Ram Avatar Sharma16). The function of the appropriate Government is, however, not to go into the merits of the dispute, but to refer such a dispute for adjudication so that industrial relations, between the employer and his employees, may not continue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible. (State of Madras Vs. C.P. Sarathy[21]; Western India Watch Co Vs. Its Workmen[22]). In Telco Drivers Mazdoor Sangh Vs. State of Bihar[23] the Supreme Court observed:- “………Applying the principle laid down by this Court in the above decisions, there can be no doubt that the Government was not justified in deciding the dispute. Where, as in,