Case: Hill Son &amp; Dinshaw Limited Vs. P.G. Pednekar &amp; Others

The respondent workman who was in the employment of the appellant company, was retrenched from employment alongwith other 4 employees vide notice dated 27.4.1995. The respondent workman was given retrenchment compensation of Rs.1,14,115 by cheque and there is no dispute that the workman has accepted and encashed the said cheque. The workman thereafter approached the Transport and Dock Workers Union, which is the appellant in Appeal Lodging No. 519 of 2001 and the Union served notice dated 9.5.1995 to the employer. The union also wrote to the Assistant Labour Commissioner. The appellant company and the union thereafter signed a settlement dated 28.12.1995 under Section 18(1) read with Section 2(p) of the Industrial Disputes Act, 1947; hereinafter referred to as the Act. According to this settlement the appellant company had offered to reinstate 4 out of 5 workmen, as one had expired, including respondent workman with immediate effect with continuity of service. However, the union had given up the claim of the respondent workman and two others on the ground that they were in gainful employment and no more interested in the employment with the employer. It was agreed by the union that the aforesaid 3 workmen would be treated as having lost their lien over the employment with the company and the 4th workman Shri Fernandes who was unemployed would be employed with immediate effect. On 7.6.1996 the respondent workman approached the Asst. Labour Commissioner making a grievance that he had never given up his claim for reinstatement and that he had not given up his lien on employment and the dispute should be referred for adjudication. Accordingly a reference was made to the Central Government Industrial Tribunal. The Tribunal held inter alia that the settlement dated 28.12.1995 is binding on the respondent workman and the reference was answered against the workman.3.Being aggrieved the respondent workman filed a writ petition which was allowed by the learned Judge by the impugned order. The learned single Judge held that under S.18(1) of the Act settlement is intended to be binding only on the signatories or parties to the settlement and as the respondent workman was not signatory to the settlement it was not binding on him. The union which has signed the settlement was not a recognised union and even assuming that the union was recognised union it could not have signed such a settlement giving up the right of the employment of the workman without his consent and without his authority and signature on the settlement. The learned Judge therefore directed theto reinstate the workman and so far as backwages are concerned directed the union to pay the amount of backwages on the ground that the union alone was responsible for the loss of backwages of the workman. The propriety and legality of the said order is impugned in these appeals.

Court's reasoning:
In the present case the union is recognised union under the Code of Discipline in respect of the Dock Workers working in the appellant company. Therefore, the settlement entered into by the Union with the employer would be binding on itstherefore, negotiations take place which have to be encouraged, particularly between labour and employer in the interest of industrial peace andthere is always give and take. The settlement has to be taken as a package deal and when labour has gained in the matter of wages and if there is some reduction in the matter of dearness allowance so far as the award is concerned, it cannot be said that the settlement as a whole is unfair and unjust. It was further observed that it is not possible to scan the settlement in bits and pieces and held some parts good and acceptable and others bad. Unless it can be demonstrated that the objectionable portion is such that it completely outweights all the other advantages gained the Court will be slow to hold a settlement as unfair and unjust. The settlement has to be accepted or rejected as athe instant case it is not disputed that the settlement arrived by the union with the appellant company was not in the course of conciliation proceedings. Therefore, it would be binding on the parties to the agreement namely the appellant company on the one hand and the union representing the respondent workman who was its member. In the circumstances, the respondent workman also would be ordinarily bound by the settlement entered into by his representative union with the company unless it is shown that the said settlement was ex facie unfair, unjust or malafide. No such case was even alleged much less made out by the respondent workman either before the Tribunal or before the learned single Judge. It is interesting to note that before the learned single Judge the only argument put forward on behalf of the respondent workman was that, he was not a party to the settlement and his consent was not taken by the union and, therefore, it was not binding to him. Once it is kept in view that the industrial dispute was raised by the union on behalf of the retrenched workmen including respondent workman, and it was an industrial dispute covered by section 2(k) it cannot be held that the settlement which was entered into under section 2(p) read with section 18(1) of the Act is not binding on the individualShobha Gopal, however, drew our attention to the proviso to section 18(1) (Bombay Amendment) which reads asthat where there is a recognised union for any undertaking under any law for the time being in force, then such agreement not being an agreement in respect of dismissal, discharge, removal, retrenchment, termination of service, or suspension of an employee shall be arrived at between the employer and the recognised union only and such agreement shall be binding on all persons referred to in Clause (c) and Clause (d) of(3) of this section."Ms. Gopal relying upon the words "not being an agreement in respect of dismissal, discharge, removal, retrenchment, termination of service, or suspension of an employee" contended that union has no right to enter into settlement in respect of these categories. The argument is required to be stated only to be rejected. In the first place the settlement is not in respect of any of these categories but it pertains to the right toin terms of SectionGopal then contended that there waswith rule 58 of the Industrial Disputes (Central) Rules, 1957 as the office bearers of the union were not duly authorised by the union to enter into such settlement. She referred to the judgments of the Supreme Court in Workmen of M/s. Delhi Cloth General Mills Ltd. vs. The Management of M/s. Delhi Cloth and General Mills Ltd. 1970 LIC 1407   and Brooke Bond India Ltd. vs. Workmen 1981 II LLJ 184. The above contention was not raised before the trial court or before the learned single Judge. It is impermissible to raise such a contention at this belated stage. In fact the Tribunal has recorded a finding that there was compliance with the rules and the copies of the settlement were sent to the Commissioner of Labour, Conciliation Officer, Secretary of Industries, Energy and Labour Department of the CentralMs. Gopal challenged the settlement by taking recourse to sectionof the Act. This contention is equally without any substance and not tenable. In the present case the reference is in respect of the action of the management in not reemploying the workman and it does not relate to the retrenchment or layoff and, therefore, Chapter VB which contains this provision has no application.