Polypharma Pvt. Ltd. vs Kamgar Sabha
2005 Latest Caselaw 1023 Bom

JUDGMENT

Nishita Mhatre, J.

1. The Petition challenges the award of the Industrial Tribunal granting revision in wages and other demands. The demands relate to the monthly rated workmen (hereinafter referred to as 'the staff').

2. An award of the Industrial Tribunal governed the service conditions of the daily rated workmen employed with the Petitioner-company in their two factories. In 1979, the workmen joined a trade union known as Maharashtra General Kamgar Union (for short, hereinafter referred to as 'MGKU'). According to the petitioner, after a long period of labour unrest, a settlement was signed between the union and the management on 20.10.1979. This settlement was in respect of the service conditions including wages, D.A., etc. for the daily rated workmen. The settlement was to be in operation upto 31.12.1979. On 6.1.1981, the MGKU submitted a fresh charter of demands for both the daily rated workmen and the staff employed with the Petitioners. Since no settlement was arrived at, the Union resorted to the machinery constituted under the Industrial Disputes Act and obtained a reference for adjudication of the wage dispute. This reference was made in 1982. The statement of claim, justifying the demands was filed by MGKU on 14.10.1983. A written statement was filed by the Petitioner on 7.3.1983. The petitioner then entered into a settlement on 17.10.1983 with the union relating to the revision in wages, DA and other service conditions of daily rated workmen. The monthly rated staff continued to be governed by the service conditions mentioned in their respective appointment letters. The Petitioner, therefore, mentioned in its written statement that the Reference did not survive in view of the settlement between it and the daily rated workmen. The respondent union claimed that the workmen who are concerned in the reference had ceased to be members of the MGKU and had joined their union. They therefore, filed an additional statement of claim justifying the demands raised on behalf of the workmen in the charter of demands dated 6.1.1981. An additional written statement was also filed by the Petitioner. Preliminary objections were raised by the Petitioner by contending that the reference was misconceived and untenable in law since the charter of demands dated 6.1.1981 was not raised after terminating the earlier settlement dated 30.11.1979. It was also pleaded that the respondent-Kamgar Sabha had no locus to represent the workmen since the dispute was not espoused by them. The Petitioner, therefore, contended that the demand pertaining to the staff was liable to be rejected.

3. In the meantime, the Petitioner settled the dispute with the daily rated workmen on 17.10.1983 by a settlement signed under section 2(p) r/w 18(1) of the Industrial Disputes Act. An award part I was made in 1990 by the Industrial Tribunal finding that the settlement was invalid and not binding on the workmen. This finding is challenged by the Petitioner by filing a writ petition in this Court. The writ petition was rejected and the appeal preferred therefrom was withdrawn.

4. On 9.5.1997, the Petitioner and the Respondent-Kamgar Sabha entered into a settlement in respect of the service conditions of daily rated workmen. The Union, therefore, pursued the reference only qua the monthly rated staff. In the year 2000, the Petitioner offered a certain revision in the service conditions of the staff which was not acceptable to the respondent-Union as payment of consolidated wages was to be continued. The reference, therefore, proceeded only qua the five members of the staff.

5. Evidence of both the Petitioner and the respondent was led. Ultimately, an award was passed on 29.9.2000. The Industrial Tribunal directed that certain benefits available to the daily rated workmen under the settlement of 9.5.1997 should be extended to the staff. Aggrieved by this decision of the Industrial Tribunal, the Petitioner has approached this Court under Articles 226 and 227 of the Constitution of India.

6. Mr. Mokashi, the Advocate appearing for the Pettiioner, has raised the following contentions:

i) The Reference itself was bad since no notice terminating the settlement which was in existence upto 31.12.1980 was issued by the union prior to tendering the charter of demands. Reliance is placed on the judgments in Management of the Bangalore Wollen, Cotton and Silk Mills Co. Ltd. v. Workmen, ; Employers of Tungabhadra Industries Ltd. v. The Workmen, Shukla Manseta Industries Pvt. Ltd. v. The Workmen, 1977.

ii) The Respondent-Union could not continue with the Reference since the dispute raised on behalf of the staff was not espoused by them. It was also submitted that the respondent union had no authority or locus standi to pursue the reference. The Judgment in the case of Deepak Industries Ltd. and Anr. v. State of West Bengal and Ors., 1975 Lab. I.C. 1153 is relied on to buttress this submission.

iii). Since a settlement had been arrived at in 1997, there was no need to proceed with the reference, the service conditions of the staff being governed by their appointment letters.

iv). The award was made without considering the financial position of the company, the burden that it would cast and the industry cum region principle.

v) The Tribunal, having found that the material on record was insufficient to justify the demands, ought not to have awarded any increase in emoluments to the staff.

7. Per contra, Mr. Shaikh, Advocate appearing on behalf of the Respondent-Union, submits that (i) the contention regarding non-issuance of the notice prior to tendering the charter of demands was not pressed before the Tribunal and, therefore, no issue had been framed in that regard; (ii) the award was made applicable only for five persons who are members of the staff and does not cast a huge burden on the Petitioners as is sought to be made out; (iii) if the award is not implemented, the staff would be drawing wages much less than the minimum wages payable to employees of pharmaceutical concerns such as the Petitioner's undertaking.

8. The first submission made by Mr. Mokashi, which goes to the root of the matter is whether a notice is required is to be given under section 19 of the Industrial Disputes Act prior to tendering a fresh charter of demands. In the case of Management of the Bangalore Wollen, Cotton and Silk Mills Co. Ltd. (supra), the Apex Court has held that an intimation regarding the termination of an award must be with reference to a particular date so as to enable the Court to come to the conclusion that the party giving such an intimation had the intention to terminate the award. It has been held that such a certainty regarding the date is essential because the award ceases to be binding on parties two months after its expiry. The two months have to be reckoned from the date of such a clear intimation. In the case of Tungabhadra Industries Ltd. (supra), the Supreme Court was concerned with the issue as to whether merely by serving a charter of demands, it could be inferred that the Union had complied with the requisites of section 19 of giving a notice terminating the previous award. The Apex Court by following the decision in the case of Management of the Bangalore Wollen, Cotton and Silk Mills Co. Ltd. (supra) has held that though there is no particular form in which the notice of termination of an award or settlement is to be given, the intention to terminate the award must be made clear with reference to a particular date by the party who sets up the case of termination of the award. Such a date could be elicited even from the correspondence exchanged between the party and not necessarily a formal letter terminating the award or settlement. In M/s.Shukla Manseta Industries Pvt. Ltd. (supra), the Supreme Court was concerned with a case where a settlement was in existence and a notice terminating that settlement was given in advance, before the settlement expired. The Apex Court has held thus:

22. In the instant case the notice under Section 19(2) was given intimating the intention of the workers to terminate the award on a date when the agreed period would also expire. To repeat, there is no legal bar to give advance intimation about the intention to terminate the settlement on the expiry of the agreed period and to start negotiation for a more favourable settlement immediately thereafter. The only condition that has to be fulfilled by such a notice is that the period of two months from the date of notice must and on the expiry of the settlement and not before it. In a given case it may be even advantageous to the parties who do not want to continue the settlement to strike a new bargain without loss of time so that unnecessary bickerings and resultant industrial unrest do not take place. In an industrial matter we are not prepared to subject a notice under Section 19(2) to the irksome vagaries or tyranny of technicalities of a notice under Section 106 of the Transfer of Property Act.

9. Similarly in the case of Antiseptic Employees Unit v. State, 1970 LAB. I.C. 396, the Madras High Court has held that failure to give notice under section 19 goes to the root of the matter and a reference made in such circumstances would be without jurisdiction. A similar view has been taken by the Calcutta High Court in the case of Hindusthan Paper Corporation v. Government of India and Ors., 1985 LAB. I.C. 95.

10. The submission of Mr. Mokashi is fallacious in the facts and circumstances of the present case. In all the aforementioned cases, there was no dispute that there was an earlier settlement or an award which governed the service conditions of the employees. In the present case, the Petitioner has contended that the service conditions of the staff were governed by their appointment letters. They were not governed by any previous 'settlement' as defined under section 2(p) or 'award' as defined under section 2(b) of the Industrial Disputes Act. When the workmen are admittedly not governed by a settlement or an award, there is no question of issuing any notice terminating the earlier settlement or award. Therefore, the preliminary objection raised by Mr. Mokashi that the dispute regarding the staff was not maintainable is unsustainable.

11. The next submission of the learned advocate for the Petitioner is that the cause of the staff has not been espoused by the respondent-union. According to him, espousal of a dispute means initiation of a dispute. Espousal would not mean prosecution or continuing the representation of workmen in a reference before the Labour Court or Industrial Tribunal. He submits that the membership registers which the Petitioner had sought were not produced by the respondent-union and, therefore, an adverse inference had to be drawn that the respondent did not represent the staff and that the union had no authority to pursue the reference.

12. Espousal of a dispute cannot have a restricted meaning. It cannot be confined to mere initiation of a dispute. The dictionary meaning of the word "espousal" is -"the act of espousing or betrothing; the taking upon oneself of eg. a cause)". Espousal, therefore, would include not only the initiation but also taking up the cause till its logical conclusion. Therefore, this submission of Mr. Mokashi is also without any merit. It is a well settled position of law that subsequent withdrawl of support by a Trade Union will not affect the character of the dispute nor will it take away the jurisdiction of an Industrial Tribunal. What is required to be noticed is whether on the date the reference was made a trade union had espoused the cause. Admittedly, in the present case, the MGKU had sponsored the dispute and continued to do so till the reference was made.

13. A perusal of the award will indicate that the Tribunal has not in clear terms discussed the financial condition of the Petitioner. However, it has considered the statement filed by the Petitioner showing that the Petitioner was making losses. The Tribunal has considered the fact that the settlement of 1997 was made applicable to the daily rated workmen and not the staff who were working in the same organisation. The Tribunal proceeded to give parity to the staff thereby giving them the benefits of the settlement of 1997 including Dearness Allowance @Rs.65/- per day.

14. Mr. Mokashi on instructions states that the Petitioner though in a financially precarious condition would be willing to give all other benefits to the staff under the 1997 settlement except Dearness Allowance. He further contends that the Petitioner's undertaking is a scheduled employment under the Minimum Wages Act and falls in the category of "residuary industry" according to the inspection report of the Inspector of Minimum Wages. He submits that if the award is not quashed the staff would be entitled to wages higher than the minimum wages and this is not a burden which the Petitioner can bear at the present moment.

15. According to the Union, the petitioner is governed by the notification issued for drugs and pharmaceuticals under the Minimum Wages Act and not the one issued for the residuary industry. A statement has been handed in on behalf of the Petitioner showing the salary for the month of June 2005 of the staff members covered by the award. The statement also indicates the minimum wages payable to the residuary industry and for the pharmaceutical industry. If the award is implemented, the wages payable to each of the 5 workman would be between Rs. 4500 and Rs. 6000/- per month. The difference between the minimum wages in the residuary industry and the pharmaceutical industry is only about Rs. 87/-. Without going into the issue as to which notification covers the Petitioner's establishment, in my view, it would be appropriate to uphold the award of the Tribunal. Prior to the award the 5 staff members were drawing consolidated wages as stipulated in their appointment letters, far less than the minimum wages. They are in any event entitled to minimum wages as payment of minimum wages is not dependent on the financial capacity of the employer. The difference between the minimum wages payable, according to the Petitioners, and the wages awarded is only about Rs. 1400/-. In my view, this is not a burden which cannot be borne by the company. The monthly burden cast by the award in respect of the five staff members in excess of the minimum wages is about Rs. 7,000/-per month. There can be no dispute that the sales turnover has increased over the years. In my view, the statement which is at exhibit J to the petition, does not give any indication of the financial position of the company.

16. Mr. Shaikh for the Respondents rightly presses into service the judgment in the case of Greaves Cotton & Co. Ltd. and Ors. v. Workmen, Greaves Cotton and Allied Companies Employees' Union, and urges that there could not be 2 sets of service conditions under one roof. The daily rated workmen are undoubtedly covered by the settlement of 1997. The Industrial Tribunal has merely extended the benefits of this settlement to the staff.

17. In any event, the burden which is imposed is not unbearably high and which cannot be borne by the Petitioner. In such circumstances, I do not see any reason to interfere with the findings of the Tribunal. The issue which really affects the Petitioner is that they have been directed to pay Rs. 52/-per day as Dearness allowance from April 1997 to April 1998 and Rs. 65/-per day thereafter. Admittedly, after the interim orders of this Court, the award is being implemented. The payment of arrears has been stayed. These arrears shall be paid to the workmen within a period of four weeks from today in accordance with the undertaking which they were required to furnish when the Petition was admitted. Interest on this amount will be paid @6% per annum.

18. Rule discharged accordingly. No costs.