Case: Brooke Bond India Ltd Vs. The Workmen

the settlement; on such construction it was contended that the office bearers of the Union who signed the agreement were not specifically authorised to do so. This construction of Rule 62(2)(b) was rightly rejected by the Tribunal. But neither Rule 58 of the Central Rules nor Rule 62 of the Bombay Rules contains anything to suggest that any officer of a trade union who is entitled to sign a settlement must be deemed to have had the authority to enter into this settlement. The procedure prescribed by either Rule 58 of the Central Rules or Rule 62 of the Bombay Rules presupposes the existence of a valid settlement, and the question in this case is whether there was such a settlement. Another case relied on by the appellant is The Sirsilk Ltd. and others v. Government of Andhra Pradesh and another, [1963-II L.L.J. 647]. The facts of that case are that after the proceedings before the Tribunal had come to an end and the tribunal had sent its award to government, the parties concerned in the dispute came to a settlement. Section17(1) of the Industrial Disputes Act lays down that every award shall within a period of thirty days from the date of its receipt by the appropriate government be published in such manner as the appropriate government thinks fit. Section 18(1) makes a settlement arrived at between the employer and the workmen otherwise than in the course of conciliation proceedings binding on the parties to the agreement. Under Section 18(3) an award of a Tribunal on publication shall be binding on all parties to the industrial dispute. In Sirsilk case difficulty was felt in giving effect to the settlement because the proceedings before the Tribunal had ended and the Tribunal had sent its award to the government before the settlement was arrived at. This Court held :"The only way in our view to resolve the possible conflict which would arise between a settlement which is binding under Section 18(1) and an award which may become binding under Section 18(3) on publication is to withhold the publication of the award once the Government has been informed jointly by the parties that a settlement binding under Section 18(1) has been arrived at ... In such a situation we are of opinion that the Government ought not to publish the award under Section 17(1) and in cases where Government is going to publish it, it can be directed not to publish the award in view of the binding settlement arrived at between the parties under Section 18(1) with respect to the very matters which were the subject-matter of adjudication under the award."11. We think this decision was relied on only to emphasize that a settlement reached between the parties concerned in the dispute must prevail if it is reached at any time before the publication of the award. That is undoubtedly so, but the question before us is different which is, whether in fact a settlement within the meaning of Section 2(p), of the Industrial Disputes Act was reached. Other questions will arise only after it is found that there was such a settlement in existence. Sirsilk does not therefore afford any assistance to the appellant. The Tribunal in support of the view taken by it relied on a decision of the Delhi High Court, in Hindustan Housing Factory Ltd. v. Hindustan Housing Factory Employees Union and others, (1969) Lab I.C. 1450, the High Court held :".... the contention on behalf of the petitioner-company that the fact that the Memorandum of Settlement was in the prescribed form and was signed by one or more of the office-bearers of the Union is by itself sufficient to make the settlement arrived at between the Management of the petitioner-company and the signatories binding on the Union and all its members, is untenable ....The language of S. 18(1) clearly shows that the settlement will be binding only "on the parties to the agreement". The definition of "settlement" in Section2(p) of the Act also states that "settlement" means a settlement arrived at "between the employer and the workmen". So, normally in order that a settlement between the employer and the workmen may be binding on them, it has to be arrived at by agreement between the employer and the workmen. Where the workmen are represented by a recognised Union, the settlement may be arrived at between the employer and the Union. If there is a recognised Union of the workmen and the constitution of the Union provides that any of its office-bearers can enter into a settlement with the Management on behalf of the Union and its members, a settlement may be arrived at between the employer and such office-bearer or bearers. But, where the constitution does not so provide specifically, the office-bearer or bearers who wish to enter into a settlement with the employer should have the necessary authorisation by the executive committee of the Union or by the workmen. A reading of Rule 58 clearly shows that it presupposes the existence of a settlement already arrived at between the employer and the workmen, and it only prescribes the form in which the Memorandum of settlement should be, and by whom it should be signed. It does not deal with the entering into or arriving at a settlement. Therefore, where a settlement is alleged to have been arrived at between an employer and one or more office-bearers of the Union, and the authority of the office-bearers who signed the Memorandum of Settlement to enter into the settlement is challenged or disputed, the said authority or authorisation of the office-bearers who signed the Memorandum of Settlement has to be established as a fact, and it is not enough if the employer merely points out and relies upon the fact that the Memorandum of Settlement was signed by one or more of the office-bearers of the Union".12. In our opinion the above extract from the judgment of the Delhi High Court states correctly the law on the point.13.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]5. It cannot be disputed that unless the office bearers who signed the agreement were authorised by the executive committee of the union to enter into a settlement or the constitution of the union contained a provision that one or more of its members would be competent to settle a dispute with the management, no agreement between any office bearer of the union and the management can be called a settlement as defined in Section 2(p). There is no provision in the constitution of the Rashtriya Union authorising any office bearer of the union to enter into a settlement with the management. We have referred above to the proceedings of the executive committee. As the Tribunal points out, the resolutions passed by the executive committee do not support the claim that the negotiation committee was empowered to enter into a settlement without seeking ratification from the executive committee. The Tribunal held, in our opinion rightly, that the fact that the agreement was signed by the office bearers of the union does not clinch the matter because the executive committee at no stage had accepted the agreement. In fact no meeting of the executive committee was held before the agreement was signed on March 16, 1978 to consider whether the agreement wasdefinition of "settlement" in Section2(p) of the Act also states that "settlement" means a settlement arrived at "between the employer and the workmen". So, normally in order that a settlement between the employer and the workmen may be binding on them, it has to be arrived at by agreement between the employer and the workmen. Where the workmen are represented by a recognised Union, the settlement may be arrived at between the employer and the Union. If there is a recognised Union of the workmen and the constitution of the Union provides that any of its office-bearers can enter into a settlement with the Management on behalf of the Union and its members, a settlement may be arrived at between the employer and such office-bearer or bearers. But, where the constitution does not so provide specifically, the office-bearer or bearers who wish to enter into a settlement with the employer should have the necessary authorisation by the executive committee of the Union or by the workmen. A reading of Rule 58 clearly shows that it presupposes the existence of a settlement already arrived at between the employer and the workmen, and it only prescribes the form in which the Memorandum of settlement should be, and by whom it should be signed. It does not deal with the entering into or arriving at a settlement. Therefore, where a settlement is alleged to have been arrived at between an employer and one or more office-bearers of the Union, and the authority of the office-bearers who signed the Memorandum of Settlement to enter into the settlement is challenged or disputed, the said authority or authorisation of the office-bearers who signed the Memorandum of Settlement has to be established as a fact, and it is not enough if the employer merely points out and relies upon the fact that the Memorandum of Settlement was signed by one or more of the office-bearers of the Union".In our opinion the above extract from the judgment of the Delhi High Court states correctly the law on the point.