IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.14654 of 1996 Date of decision:03.08.2009 Sudesh Kumar and others ....Petitioners versus The Plant Manager, Pfizers Ltd. and another ...Respondents CORAM: HON'BLE MR. JUSTICE K.KANNAN Present: Mr. D.S.Patwalia, Advocate, for the petitioners. Mr. P.K.Mutneja, Advocate, for respondent No.1 --- 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters or not ? 3. Whether the judgment should be reported in the digest ? K.Kannan, J. 1. A plea by the petitioners working in a pharmaceutical Company for being accorded a higher scale of pay on par with Grade-VII Chemical/Chemist on the principle of ‘equal pay equal work’ was the subject of reference to the Labour Court. It did not cut-ice with the Labour Court and the writ petition addresses the same grievance before this Court. 2. The initial objection which the management had raised, even apart from the binding nature of the settlement to persons who were not parties, was that the individual workmen numbering 13 persons cannot raise an industrial dispute under Section 2(k) unless espoused by Union and that even a mere support by the Union later cannot make a reference Civil Writ Petition No.14654 of 1996 - 2 - of individual dispute valid. To this proposition is the decision of Hon’ble Supreme Court in Bombay Union of Journalists and others Versus The ‘Hindu’ Bombay and another-AIR 1963 Supreme Court 318, and affirming the same position was the decision in Workmen of Indian Express Newspaper Private Ltd. Versus The Management of Indian Express Newspaper Private Ltd.-AIR 1970 Supreme Court 737, that held that individual dispute in establishment espoused by outside Union having 25 per cent workmen of concerned establishment could qualify for a transformation of individual dispute to an industrial dispute but the petitioners who represented a far less of percentage cannot have their own individual disputes be treated as industrial dispute. 3. The answer to this objection was sought to be given by the learned counsel appearing on behalf of the workers Shri Patwalia by referring to the decision of the Hon’ble Supreme Court in Workmen Versus Dharam Pal Prem Chand- AIR 1966 SC 182, when the Constitution Bench of the Hon’ble Supreme Court held, referring to Section 2(k) of the Industrial Disputes Act, that before any dispute raised by any person could be said to be an industrial dispute, it must be shown that it was connected with the employment or non-employment of that person. That condition would be taken as satisfied if the dispute was in relation to fairly large body of workmen as in the case which the Hon’ble Supreme Court dealt with referred to a case of dismissal of 18 workmen and in that sense it satisfied the requirement imposed by the fact that the word ‘workmen’ was used in plural in Section 2(k). The Hon’ble Supreme Court held that no hard and fast rule would be laid that unless Civil Writ Petition No.14654 of 1996 - 3 - the grievances of the workmen were espoused by a Union, it cannot qualify for industrial dispute. Referring to the facts of the case, the Hon’ble Supreme Court held that where 18 out of 45 employees had been dismissed and there was no evidence to show that those employees had a union of their own, and that it would be difficult to hold that they cannot raise dispute by themselves in a formal manner. No doubt a Union can raise a dispute but if there was no Union of workmen in any establishment a group of employees would themselves raise the dispute and the dispute then would become an industrial dispute, although it may relate to dismissal of an individual employee. The decision further held that there was always a presumption that the settlement arrived at is just and fair, though a dispute that, on facts, would establish that it was not bona fide or that it was arrived at on account of fraud, misrepresentation, concealment of facts or corruption or other inducement. In such a case, the settlement may not be binding. 4. The dispute raised by the workmen addresses the claim of fairly a handful of persons, when they did not find the Union which had been the party to the 1977 settlement to come to their rescue. A grievance of a class of persons who were aggrieved by the general conditions of labour that prevented them from claiming parity of wages ought not to be understood as taking merely an individual dispute. I reject the contention that reference itself was bad. 5. The scale of pay and higher grade as Grade-VII was pursuant to a settlement between the workmen and the management on 27.05.1977. The settlement came after the offer of the workmen to Civil Writ Petition No.14654 of 1996 - 4 - identifying areas of increasing productivity and working towards higher production. The settlement came in the course of conciliation proceedings and hence the copies of the settlement had been sent to the Commissioner of Labour and the Conciliation Officer as required by law. The settlement provided that any fresh, temporary or officiating employee would be placed in Grade V if he was acting as an Operator and Grade VIII if he was acting as a Shift Chemist. Any such new entrant/promotee employed in Grade V or Grade VIII would not be reclassified to the Grade VI or Grade IX respectively on the basis of seniority alone. At the accomplishment of the partial target, Operators in Grade VI would be reclassified to Grade VII subject to their having completed their matriculation and having contributed in achieving the target. 6. Two important factors could be seen in this memorandum that at that time when incentives were offered by the management for increasing productivity, it had a basis for classifying workmen in two different categories; one, of persons who were actually part of their crew who were participants to the goal for increasing productivity and who could be placed in Grade VI. If the target was achieved they would be qualify for Grade VII. The second classification was with reference to new entrants/promotees who would be placed in Grade V or Grade VIII and they were not entitled to be reclassified to Grade VI on the basis of seniority alone. 7. All the petitioners were admittedly new entrants and they were not parties to the settlement nor were they members of the Union Civil Writ Petition No.14654 of 1996 - 5 - with which the management had entered into the settlement. They did not make any issue out of the terms after the entry and after the settlement period a fresh memorandum had also been drawn up on 18.09.1986 (hereinafter called ‘the 1986 settlement’). Even by that time, all the workmen had joined and while referring to the applicability of the new settlement, it included all permanent workman who were in the Company’s employment as on date of signing of the settlement and who signified their acceptance to the settlement in totality. The 1986 settlement also declared through clause 2 that it was in full and final settlement of all the demands raised by the Union. The settlement was to remain in force 31.12.1989. Clause 3 of the General Provisions further provided that the Union and the workmen agreed not to raise or pursue any dispute in respect of any demands involving financial burden or otherwise on the Company during the period of operation of this settlement. The petitioners again accepted the terms of the settlement and did not make any issue about the right to be entitled to be classified in Grade VI or progression that it might make possible to Grade VII. Schedule 1 of the settlement set out the classification of persons as per their various grades and admittedly the petitioners had been cast in grade V in their capacity as operators. Grade VII referred to higher scales of pay that included senior operators, that is, those persons who had been scaled up after being parties to the 1977 settlement. After the expiry of the settlement period, all the petitioners made a demand for being upgraded to grade VII on the ground that they were performing the same work as Grade VII operators and that they were entitled to equal Civil Writ Petition No.14654 of 1996 - 6 - pay on the basis of equal work that they were discharging. The workmen referred to the fact that the management had contended that different grades and scales had been provided for Chemical Operators as 'cushion for upgrading the suitable operators in the higher grade to avoid stagnation' and it had also admitted that the plant which was operating in three shifts were utilizing the services of all the Chemical Operators who discharged similar type of work. This latter part of admission was the justification for the claim of the petitioners that they were entitled to be classified in Grade VII and also admitted to their scales. 8. Aware, as they were, that the differentiation that provided for different grade had been a bye- a product of 1977 settlement and carried through in 1986, the petitioners contended that they were not parties to the settlement and hence they were not bound. Shri Patwalia, learned counsel appearing for the petitioners, sought to derive strength from the decision in Hon’ble the Supreme Court in The Jhagrakhan Collieries (P) Ltd. Versus Shri G.C.Agrawal, Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court, Jabalpur and others-(1975)3 Supreme Court Cases 613, that a settlement arrived at conciliation proceedings would not bind persons who are not parties to the settlement, if the Conciliation Officer was not duly appointed and if under Section 18(1), it would bind only parties to the settlement. According to them, neither Section 18(1) which binds only the parties to settlement nor Section 18(3) which could be applied in cases where settlement was in the presence of Conciliation Officer would apply since they were not members of the Union or actual signatories to the Civil Writ Petition No.14654 of 1996 - 7 - settlement. Responding to the argument that the petitioners had not been parties in the 1977 settlement, Shri Mutneja, learned counsel for the management would contend that 1986 settlement retained similar classification and they had not objected to the same. The learned counsel for the petitioner would have two fold contentions namely (i) the demand was made after the settlement period mentioned in the year 1986 and (ii) the terms were unconscionable and against the constitutional mandate secured under Article 39 that declared a policy of equal pay equal work and hence they are entitled to ask for what the Constitution protected. They relied on the decision in Dr. Nitin Gupta Versus Post Graduate Institute of Medical Education and Research, Chandigarh-2007 (2) SCT 434, that held that if the terms of employment of service were found to be detrimental to the employees, unconscionable, unfair and unreasonable, being against the principle of distributive justice in context of parts III and IV of the Constitution, they would be violative of Article 14 of the Constitution and hence, not enforceable. 9. Predictably, the entire arguments of the counsel supporting the management point of view is that the principle ‘equal pay equal work’ ought not to be applied mechanically for the only reason that similar work was being performed by the persons drawing lower scale of pay with persons who drew a higher scale of pay in terms of settlement. There were other grounds which were important, namely, particular considerations that they were participants to a commitment for increasing productivity and hence offered an olive branch for higher scale for Grade VI with a further progression to Grade VII. The learned counsel Shri Civil Writ Petition No.14654 of 1996 - 8 - Mutneja appearing for the management draws out a distinction to the fact that if the petitioners had been actually in the employ of the management at the relevant time when a settlement had been made but they had not joined as parties to the settlement, it would be possible for them to contend that Section 18(1) would apply. However, in cases where they were not even employees of the factory at the relevant time and the settlement had been brought before they were taken on board, they cannot ignore the terms and commitment which the management had with its earlier set of employees that had stayed with them. According to him, the 1977 settlement itself provided clearly that the new entrants would not to qualify for reclassification in Grade VI only on the basis of seniority or that they cannot move up to Grade VII. Such a clause which was consciously incorporated in the year 1977 would definitely operate as being fair although the petitioners were not parties to the 1977 settlement. The retention of the classification that disabled the new entrants for being taken into the Grade VI with further possibility to move up to Grade VII in the 1986 settlement to which all the petitioners are parties debarred them from making the present demand, no matter the settlement period itself had expired. The learned counsel refers to the decision in The K.C.P. Ltd. Versus Presiding Officer and others-AIR 1997 Supreme Court 2334, where a 3 member Bench of the Hon’ble Supreme Court held that if a dispute had been raised by the Union on behalf of the class of persons under Section 2(k) of the Industrial Disputes Act and the settlement had been drawn between the management and the Union otherwise than in conciliation proceedings, Civil Writ Petition No.14654 of 1996 - 9 - when such settlement was neither unfair or unjust, the person who had not accepted the settlement would nevertheless be bound by the same terms. This judgment is relied on by the learned counsel to point out that even by proper construction of Section 18(1) that it would bind only to the parties to the settlement, it is not universal in application and it admits of exception where on the ground of fairness and justness, the decision in the settlement would still be binding on the non-parties. 10. Both KCP Limited (supra) and Dharam Pal Prem Chand (supra) were considered in National Engineering Industries Ltd. Versus State of Rajasthan and others-(2000) 1 Supreme Court Cases 371, which held that existence or apprehension of an industrial dispute was a condition precedent for making a reference and while the High Court could entertain a writ petition impugning a reference on the ground of non-existence of an actual or apprehended industrial dispute, the Industrial Tribunal itself cannot examine the validity of the reference. When pursuant to identical charters of demands made by several unions, the management and a representative union reached a conciliation settlement to be operative immediately after the expiry of the previous settlement, the new settlement would become binding on all workmen of the establishment including those belonging to a dissenting minority union. 11. In my view, the petitioners cannot have a remedy, not merely by the fact that the 1977 settlement excluded them in express terms when it provided that new entrants cannot be reclassified in Group VI for a further scaling up to Group VII. While it may be possible to Civil Writ Petition No.14654 of 1996 - 10 - contend that the settlement was fair and therefore although they were not parties it would bind them, it may be noticed that the present claim is on a different basis viz., that they were entitled to a parity of scale. The insistence of Shri Patwalia that the management had at all times conceded that the nature of work, the responsibility and duties of all Chemical Operators were the same is still faulty in that, he failed to notice that a different classification and grading had a bearing to a particular situation when the management and the workmen were making a joint commitment for increasing productivity and the persons that had made the commitment and entered into a settlement in the year 1977 wangled for themselves on the strength of collective bargaining, a provision for a separate classification that was not wholly irrelevant. The principle of ‘equal pay equal work’ admits of several exceptions. In State of Haryana and others Versus Jasmer Singh and others-(1996) 11 Supreme Court Cases 77, a three member Bench of the Hon’ble Supreme Court held:- “The principle of ‘equal pay for equal work’ is not always easy to apply. There are inherent difficulties in comparing and evaluating the work done by different persons in different organizations, or even in the same organization. There may be differences in educational or technical qualifications which may have a bearing on the skills which the holders bring to their job although the designation of the job may be the same. There may also be other considerations which have relevance to efficiency in service which may justify differences in pay scales on the basis of criteria such as experience and seniority, or a need to prevent stagnation in the cadre, so that good Civil Writ Petition No.14654 of 1996 -11 - performance can be elicited from persons who have reached the top of the pay scale. There may be various other similar considerations which may have a bearing on efficient performance in a job. The evaluation of such jobs for purposes of pay scale must be left to expert bodies and, unless there are any mala fides, its evaluation should be accepted.” 12 It must be noticed that the management had admitted that the nature of work of the petitioners were the same as for the senior Chemical Operators. However, the reasons for a different classification were always maintained by the management. It stated that the settlement providing a cushion for upgrading the suitable operators in the higher scale was to avoid stagnation, although Chemical Operators discharged similar type of work. It added that normally senior and experienced workers were amongst all the groups to carry out work efficiently. What the management provided for was a bona fide settlement that allowed for specified recognition of the persons who had assured higher productivity and who were parties to the 1977 settlement. The persistent retention and classification post the settlement period was equally justified and that was why the petitioners themselves did not make an issue pressing for being treated on par in 1986, when a fresh settlement had been made. 13. The claim made by the petitioners seeking for higher scales commensurate in Grade VII is untenable not for the reason as found by the Labour Court that they were bound by 1977 settlement but independently of the settlement, the classification retained by the management providing for higher scales was on justifiable grounds, and the petitioners themselves could not be accommodated in the scheme of Civil Writ Petition No.14654 of 1996 -12 - management policy. The rejection of reference is upheld and the petitioners claim before this Court is rejected as being without merit. The writ petition therefore fails and is dismissed. No costs. (K.KANNAN) JUDGE 03.08.2009 sanjeev