Case: The Associated Cement Companies Ltd Vs. Their Workmen

2. The present appeal has been brought before this Court by the Associated Cement Companies Limited (hereinafter called the appellant) against their workmen (hereinafter called the respondents), and it arises from an industrial dispute between them which was referred for adjudication to the Industrial Tribunal for the State of Saurashtra by the Saurashtra Government under S. 10(1) of the Act. Several items of demand presented by the respondents constituted the subject-matter of the reference. When the tribunal began its proceedings the appellant raised four preliminary objections against the competence of the reference itself. The tribunal heard parties on these preliminary objections, and by its interlocutory judgment delivered on March 10, 1958, it has found against the appellant on all the points. In the result it set down the reference for further hearing on the merits. It is against this interlocutory judgment and order that the appellant has come to this Court by special leave. Out of the four points urged by the appellant as preliminary objections we are concerned with only one in the present appeal, and that relates to the incompetence of the reference on the ground that the award in question by which the parties were bound has not been duly terminated under S. 19(6) of the Act inasmuch as the union which purported to terminate the said award represents only a minority of workmen bound by it5. Meanwhile it appears that the Cement Employees Union, which represents the majority of the appellants workmen at Porbandar, instead of giving notice of termination under S. 19(6), raised disputes with the appellant and the same were referred to the Conciliation Officer. Efforts at conciliation having failed the conciliation officer made a failure report to the Government of Saurashtra; the Saurashtra Government, however, did not refer the said dispute for adjudication. In the present proceedings this Union has been impleaded and it has supported the demands made by the Cement Kamdar Mandal; in other words, notwithstanding the rivalry between the two Unions, the demands made by the minority union were supported by the majority union, and in fact, in the appeal before us, it is the latter union that has appeared to contest the appeal. The tribunal had dealt with the point of law raised by the appellant under S. 19(6) on the assumption that the Cement Kamdar Mandal which purported to terminate the awards under the said section represents the minority of the workmen employed at Porbandar, and we propose to deal with the point raised in the appeal on the same assumption.

Court's reasoning:
This position is not in dispute. The dispute between the parties centres round the question as to who can issue the notice terminating the award on behalf of workmen who are bound by the award as a result of S. 18 of the Act. What the sub-section requires is that a notice shall be given by any party bound by the award to the other party or parties. To whom the notice should be given may not present much difficulty. Where the award is sought to be terminated on behalf of the employees the notice has to be given to the employer and that is the party entitled to receive notice. Then, as to "the parties" to whom also notices are required to be given, it may perhaps be that the parties intended are those joined under S. 10, sub-s. (5) or under S. 18, sub-s. (2) or are otherwise parties to the dispute; but with that aspect of the question we are not concerned in the present appeal, because notice has been given to the appellant and all the workmen concerned in the dispute have appeared before the tribunal through the two respective unions. The question with which we are concerned and which is not easy to determine is the true interpretation of the word "any party bound by the award." We have already noticed the effect of S. 18, and we have seen how wide is the circle of persons who are bound by the award as a result of the said section. Literally construed, any party bound by the award may mean even a single employee who is bound by the award, and on this literal construction even one dissatisfied employee may be entitled to give notice terminating the award. On the other hand, it may be possible to contend that any party in the context must mean a party that represents the majority of the persons bound by the award. Terminating the award is a serious step and such a step can be taken by a party only if it can claim to represent the will of the majority on that pointHaving regard to this aspect of the matter it would be difficult to hold that "any party bound by the award" can include an individual workman, though speaking literally he is a party bound by the award. In our opinion, therefore, the said expression cannot include an individual workman. We ought to add that this position is fairly conceded by Mr. Sharma for the respondentsThe expression "any party bound by the award" obviously refers to, and includes, all persons bound by the award under S. 18When an award is made it binds the parties for the statutory period under S. 19(3); and even after the expiration of the said period it continues to be binding on the parties under S. 19(6) unless it is duly terminated. The policy of the Act, therefore, appears to be that the smooth working of the award even after the prescribed statutory period should not be disturbed unless the majority of the workmen bound by it feel that it should be terminated and fresh demands should be made. If a minority of workmen or a minority union is allowed to terminate the award it would lead to the anomalous result that despite the willingness of the majority of workmen to abide by the award the minority can create disturbance and raise an industrial dispute and that cannot be within the contemplation of the Legislature when it enacted S. 19(6) of the Act. That in substance is the argument urged before us ; thus presented the argument no doubt appears prima facie attractive : but, in our opinion, it would be unreasonable to accept this construction and impose the limitation of the majority vote in the matter of the termination of the awardIf the majority rule for which the appellant contends is accepted and S. 19(6) is accordingly construed, termination of the award would, we apprehend, become very difficult, if not impossible, in a very large number of cases. It is in this context that the effect of S. 18 has to be borne in mind. As we have already indicated the class of employees bound by the award under S. 18 is very much wider than the parties to the industrial dispute in which the award is made ; the said class includes not only all the persons employed in the establishment at the date of the award but it covers even the subsequent employees in the said establishment. It is, therefore, obvious that if the majority rule is adopted very few awards, if any, could be terminated because very few unions would be able to claim a majority of members on their rolls, and in their present stage of organisation in very few cases would a majority of workmen be able to meet, decide and act together otherwise than through their unions. That is why the majority rule would very seriously prejudice the rights of employees to terminate awards when they feel that they need to be modified or changed. That is one aspect of the matter which cannot be ignored in construing the material words in S. 19(6)11. There is another aspect of the question which is also relevant and which, in our opinion, is against the construction suggested by the appellant. We have already noticed that an industrial dispute can be raised by a group of workmen or by a union even though neither of them represent the majority of the workmen concerned ; in other words, the majority rule on which the appellants construction of S. 19(6) is based in inapplicable in the matter of the reference of an Industrial dispute under S. 10 of the Act. Even a minority group of workmen can make a demand and thereby raise an industrial dispute which in a proper case would be referred for adjudication under S10. It is true that an award pronounced on such reference would bind all the employees under S. 18 ; but logically, if an industrial dispute can be raised by a minority of workmen or by a minority union why should it not be open to a minority of workmen or a minority union to terminate the award which is passed on reference made at their instance ? The anomaly to which the learned Attorney-General refers has no practical significance. If the majority of workmen bound by the award desire that the award should continue and needs no modification, they may come to an agreement in that behalf with their employer, and adopt such course as may be permissible under the Act to make such agreement effective.However that may be, we are satisfied that both logic and fairplay would justify the conclusion that it is open to a minority of workmen or a minority union to terminate the award by which they along with other employees, are bound just as much as it is open to them to raise an industrial dispute under the Act. That is the view taken by the industrial tribunal in the present case and we see no reason to differ from itThat being so, we do not propose to consider the argument based on the said rule and to examine the question as to whether the rule really supports the appellants construction, and if yes, whether it would be valid. The question raised before us must obviously be decided on a fair and reasonable construction of S. 19(6) itself, and the rule in question, even if applicable would not be material in that behalf.We accordingly hold that, on a fair and reasonable construction of S. 19(6), the true position is that, though the expression "any party bound by the award" refers to all workmen bound by the award, notice to terminate the said award can be given not by an individual workman but by a group of workmen acting collectively either through their union or otherwise, and it is not necessary that such a group or the union through which it acts should represent the majority of workmen bound by the award.