Case: Goodlass Nerolac Paints Limited Vs. Paints Employees' Union

of Section 18 of the Industrial Dispute Act, that settlement becomes applicable to the workers who sign the settlement and accept the terms of the settlement. The court has noted the distinction between a settlement reached because of intervention of the conciliation officer under sub-section 3 of Section 18 of the Act and a settlement reached under sub-section 1 of Section 18. The Division Bench has held that in order that the settlement under sub-section 1 of Section 18 becomes applicable the terms of the settlement have to be accepted by the workers. Paragraphs 7 & 8 of the judgment, in our opinion, are relevant. They read as under:-"Regarding the grievance that there is "unfair labour practice" by the company, the learned counsel for Respondent No.1 is right in contending that both the classes of employees cannot be said to be similarly situated. Since the case does not fall under sub-sec.(3) of S.18 of the Act, but is covered by sub-sect.(1), obviously, the benefits can be extended to those employees who had entered into settlement. Such settlement creates rights in favour of one party, and, at the same time, it creates obligations. If a person does not give an undertaking, which is a part and parcel of the voluntary settlement arrived at between the parties otherwise than in conciliation proceedings, he cannot claim benefits under the said settlement.""8. No doubt, it was contended that under Clause 6 of the settlement, the Company was required to take action, if such action not taken, it is open to the Appellant to take appropriate proceedings in accordance with law. The fact, however, remains that the settlement which was arrived at between the parties, which has been relied upon by the Tribunal as well as by the learned Single Judge, is a settlement under sub-sec.(1) of S.18 of the Act. Obviously, therefore, the employees covered by such settlement under sub-sec.(1) of S.18 is an independent class, and if certain benefits have been granted in favour of those employees, no complaint can be made by the members of the other union, and on that basis, no relief can be granted."8.Now, so far as the question whether the settlement was actually a settlement or purported settlement is concerned, in our opinion, though the learned Counsel appearing for the complainant-union submitted that it was a purported settlement, what is found in paragraph 3(j)(vi) of the complaint shows that even according to the complainant because of the 1987 settlement there was a change in method of work which has been accepted and induced and given effect to by the Appellant-employer. The 1989 settlement is a successor to 1987 settlement as per the pleadings in the above referred paragraph. What is further to be seen is after this settlement was signed it was placed on the notice board. It had clause (7), which reads as under:-"(7) That it is clearly understood that the benefits of this settlement are extended only to those workmen and staff whose names are annexed to this settlement. However, it is provided that should any other workman/ staff show his willingness to give production and efficiency as per clause No.1 and 2 of this settlement the Company shall give to him the interim productivity Allowance prospectively on the same basis and the same conditions as per stipulated in Clause No.3 of this settlement. Such workmen and staff will be made parties to this settlement."9.It is clear from Clause (7) quoted above that any worker who accepts the settlement and signs it by agreeing to give productivity and efficiency is entitled to the benefits of said settlement. In our opinion, therefore, by reading Clause (7) it is clear that this settlement was not restricted to only members of the other union. Any employee by signing the settlement would have become entitled to the benefits of the settlement. It is not the case of the complainant-union in its complaint that any of the terms of the settlement were so designed as to exclude the members of the complainant-union. It is also not the case that any clause in the settlement agreement was included malafidely to harm the interest of the workers. In our opinion, therefore, it cannot be said that the settlement was not a real settlement or that it had any clauses which were included malafidely. It is further to be seen that the learned single Judge has held that the finding recorded by the Industrial court that the employer is guilty of unfair labour practice under items 9 of Schedule IV is not correct and he has set aside that finding. In our opinion, therefore, as a consequence it was for the learned single Judge to consider whether reliefs that have been granted by the Industrial Court can be sustained in the absence of the finding that the employer is guilty of unfair labour practice under item 9 of Schedule IV of the Act.10.In our opinion, the Industrial Court on the overall view of the matter could not have issued directions for extending the benefits of the settlement to the other workers without they signing the settlement. It is further to be seen here that if the learned counsel appearing for the complainant-union is right in submitting that there was no real settlement and it was only a purported settlement, in our opinion, in view of the law laid down by the Supreme Court in the case of R.N. Gosain vs. Yashpal Dhir, referred to above, they are not entitled to claim benefits of the settlement, which according to them is not the real settlement, but only a purported settlement.11.Taking overall view of the matter, therefore, in our opinion, as the settlement had a productivity clause, admittedly workers who were members of the complainant-union had not signed the settlement, though they were made aware of the settlement, the Industrial Court was not justified in issuing the directions for enforcement of that settlement in favour of the members of the complainant-union without they signing the settlement.

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

Explanation:
1[ds]7.Now, if in the light of these rival submissions the record of the case is perused, it becomes clear that the Industrial court has directed extending the benefits of 1989 settlement to all the workers without the workers signing the settlement. Perusal of the judgment of the Division Bench of this court in the case of Tata Consulting Engineers and Associates Staff Union vs. Tata Consulting EngineersAnr., referred to above shows that when there is a settlement signed under1 of Section 18 of the Industrial Dispute Act, that settlement becomes applicable to the workers who sign the settlement and accept the terms of the settlement. The court has noted the distinction between a settlement reached because of intervention of the conciliation officer under3 of Section 18 of the Act and a settlement reached under1 of Section 18. The Division Bench has held that in order that the settlement under1 of Section 18 becomes applicable the terms of the settlement have to be accepted by the workers. Paragraphs 78 of the judgment, in our opinion, are relevant. They read asthe grievance that there is "unfair labour practice" by the company, the learned counsel for Respondent No.1 is right in contending that both the classes of employees cannot be said to be similarly situated. Since the case does not fall underof S.18 of the Act, but is covered byobviously, the benefits can be extended to those employees who had entered into settlement. Such settlement creates rights in favour of one party, and, at the same time, it creates obligations. If a person does not give an undertaking, which is a part and parcel of the voluntary settlement arrived at between the parties otherwise than in conciliation proceedings, he cannot claim benefits under the said settlement.""8. No doubt, it was contended that under Clause 6 of the settlement, the Company was required to take action, if such action not taken, it is open to the Appellant to take appropriate proceedings in accordance with law. The fact, however, remains that the settlement which was arrived at between the parties, which has been relied upon by the Tribunal as well as by the learned Single Judge, is a settlement underof S.18 of the Act. Obviously, therefore, the employees covered by such settlement underof S.18 is an independent class, and if certain benefits have been granted in favour of those employees, no complaint can be made by the members of the other union, and on that basis, no relief can be granted."8.Now, so far as the question whether the settlement was actually a settlement or purported settlement is concerned, in our opinion, though the learned Counsel appearing for thesubmitted that it was a purported settlement, what is found in paragraph 3(j)(vi) of the complaint shows that even according to the complainant because of the 1987 settlement there was a change in method of work which has been accepted and induced and given effect to by theThe 1989 settlement is a successor to 1987 settlement as per the pleadings in the above referred paragraph. What is further to be seen is after this settlement was signed it was placed on the notice board. It had clause (7), which reads asThat it is clearly understood that the benefits of this settlement are extended only to those workmen and staff whose names are annexed to this settlement. However, it is provided that should any other workman/ staff show his willingness to give production and efficiency as per clause No.1 and 2 of this settlement the Company shall give to him the interim productivity Allowance prospectively on the same basis and the same conditions as per stipulated in Clause No.3 of this settlement. Such workmen and staff will be made parties to this settlement."9.It is clear from Clause (7) quoted above that any worker who accepts the settlement and signs it by agreeing to give productivity and efficiency is entitled to the benefits of said settlement. In our opinion, therefore, by reading Clause (7) it is clear that this settlement was not restricted to only members of the other union. Any employee by signing the settlement would have become entitled to the benefits of the settlement. It is not the case of thein its complaint that any of the terms of the settlement were so designed as to exclude the members of theIt is also not the case that any clause in the settlement agreement was included malafidely to harm the interest of the workers. In our opinion, therefore, it cannot be said that the settlement was not a real settlement or that it had any clauses which were included malafidely. It is further to be seen that the learned single Judge has held that the finding recorded by the Industrial court that the employer is guilty of unfair labour practice under items 9 of Schedule IV is not correct and he has set aside that finding. In our opinion, therefore, as a consequence it was for the learned single Judge to consider whether reliefs that have been granted by the Industrial Court can be sustained in the absence of the finding that the employer is guilty of unfair labour practice under item 9 of Schedule IV of the Act.10.In our opinion, the Industrial Court on the overall view of the matter could not have issued directions for extending the benefits of the settlement to the other workers without they signing the settlement. It is further to be seen here that if the learned counsel appearing for theis right in submitting that there was no real settlement and it was only a purported settlement, in our opinion, in view of the law laid down by the Supreme Court in the case of R.N. Gosain vs. Yashpal Dhir, referred to above, they are not entitled to claim benefits of the settlement, which according to them is not the real settlement, but only a purported settlement.11.Taking overall view of the matter, therefore, in our opinion, as the settlement had a productivity clause, admittedly workers who were members of thehad not signed the settlement, though they were made aware of the settlement, the Industrial Court was not justified in issuing the directions for enforcement of that settlement in favour of the members of thewithout they signing the settlement.