R IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE21T DAY OF MARCH2022BEFORE THE HON’BLE MR.JUSTICE N.S.SANJAY GOWDA W.P. No.119764/2020 (L-RES) Between: The Management of Hindalco Industries Ltd., Yamunapura, Belagavi-590 010, Rep. by its Joint President-Unit Head, Shri K. Kumaravel. … Petitioner (By Shri Pradeep Sahukar, Advocate for Shri Suresh S.Gundi, Advocate) And:
1. General Secretary, Indal Employees Union, J-1, Indal Colony, Hindalco Industries Ltd., Belagavi-590 010.
2. General Secretary, The Indian Aluminium Company Workers’ Union, J-5, Indal Colony, Hindalco Industries Ltd., Belagavi-590 010.
3. General Secretary, The Indian Aluminium Company Staff Union, Hindalco Industries Ltd., Belagavi-590 010.
4. Additional Labour Commissioner (Industrial Relation) & Appellate Authority, Under the Industrial Employment (Standing Orders) Act, 1946, Karmika Bhavan, Bannerghatta Road, Bengaluru-560 029. … Respondents (By Shri S.L. Matti, Advocate for C/R1, R2 & R3; Shri V.S. Kalasurmath, HCGP for R4) :
2. : This writ petition is filed under Articles 226 & 227 of the Constitution of India praying to issue a writ of certiorari or any other appropriate writ, order or direction setting aside the final order dated 05.12.2019, passed by the Addl. Labour Commissioner &Appellate Authority under Industrial Employment (Standing Orders) Act, 1946 (respondent No.4) and consequently dismiss the application of the respondent Nos.1 to 3 seeking modification of Clause 26 of the certified standing orders. This writ petition having been heard and reserved for orders on 24.03.2022, coming on for pronouncement this day, the Court made the following:
ORDER1 The undisputed facts leading to the filing of this writ petition are as follows:
2. On 13.04.1971, the Indian Aluminium Company Limited, Belgaum works Standing Orders (for short “the Standing Orders”) were certified as required under S. 5 of the Industrial Employment (Standing Orders) Act, 1946 (for short “the Act, 1946”).
3. The Indian Aluminium Company merged with Hindalco Industries i.e., the present petitioner and as a consequence, the standing orders certified on 13.04.1971 became applicable to the petitioner and its workmen.
4. The Petitioner and its Unions, over a period of time, had entered into Long-Term Settlements which would be valid for a :
3. : specified time. As of 2016, the petitioner had entered into 14 settlements with the trade unions, each of which were in subsistence for an agreed period. These settlements were entered into to prevent the occurrence of a possible industrial dispute between the Management and the Unions and ensure there was industrial peace.
5. In keeping with this practice of entering into another Long-Term Settlement i.e., the XV settlement, negotiations commenced with respondent Nos. 1 to 3, the recognized trade unions. A charter of demands was submitted by the respondent Nos.1 and 2 to the petitioner on 06.10.2016 and by respondent No.3 on 01.12.2016. In these charter of demands, amongst several other demands, one of the demands made by the Unions was that the age of superannuation which had been fixed at 58 years in Clause 26 of the certified standing orders should be enhanced to 60 years.
6. The Management also submitted their proposals to the Unions on 02.01.2017 and thereafter discussions were held between the petitioners and the Unions ultimately all of them approached the Deputy Labour Commissioner to join in on the discussion and the matter was admitted into conciliation by notice dated 14.09.2017. A :
4. : proceeding came to be held on 20.09.2017, on which day, the terms of understanding were finalized and the XV settlement was thus arrived at. The settlement was reduced in the form of a memorandum and was also signed by the petitioner and the three Unions. The memorandum containing the terms of the settlement were set forth by way of 17 Articles. The Memorandum of Settlement also indicated that it had been entered into under S. 18(3) read with S. 12 (3) of the ID Act.
7. Even as these charter of demands were being deliberated upon by the petitioner and the Unions, on 27.03.2017, the State of Karnataka, in the exercise of its powers conferred under S. 15 of the Act, 1946 amended the two model standing orders that it had set out in Schedule I to the Karnataka Employment (Standing Orders) Rules. These model standing orders related to “Workmen excluding clerks and other Ministerial staff” and to “Clerks and other Ministerial staff”.
8. By this amendment to the model standing orders, the age of retirement prescribed as 58 years in the model standing orders was substituted as 60 years for both “Workmen” and also for “Clerks and Ministerial staff”. Thus, the model standing orders :
5. : prescribed by the Act in respect of the State of Karnataka, the age of retirement became 60 years instead of 58 years.
9. It is to be stated here that though a demand had been made for enhancement of the retirement age in the charter of demands, the settlement was, admittedly, silent in respect of the demand that had been made for enhancing the retirement age from 58 years to 60 years. It was not even stated in the settlement as to whether the said demand had been considered or deliberated upon, let alone, state whether it had been granted or refused.
10. The respondent Nos.1 to 3 i.e., the recognized unions, about six months after the settlement, made an application on 14.03.2018 to the certifying authority for modification of the existing standing orders. By this application, a request was made to modify Clause 26 of the standing orders relating to the age of retirement. The request was to enhance the age of retirement from 58 years to 60 years in consonance with the amended model standing orders issued by the State. “26. Superannuation: Every workman shall retire from service on attaining the age of 58 years.” :
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11. It was stated in the application that they had requested the petitioner for modification of the standing orders on 29.03.2017 but the same had been refused by the petitioner on 15.05.2017 and their subsequent representation made on 02.01.2018 was not responded to and they were hence constrained to make the application for modification of the standing orders.
12. The certifying authority issued notices to the petitioner, whereupon the petitioner filed its written objections dated 14.06.2018. It was stated therein that the request for modification was untenable, and the petitioner had already challenged the amendment to the model standing orders in W.P. 16100-103 of 2017 which was pending adjudication and hence the application ought not to be entertained. It was also contended that the petitioner had several units throughout the country and if this demand was granted, there would be differing ages of retirement in respect of its units and since the employees were liable for transfer from one unit to the other, there would be no uniformity in retirement ages, and this would result in industrial unrest. It was also stated that the amendment to the model standing orders could not be automatically made applicable to the establishments to which standing orders were already certified. It was also stated that :
7. : increasing the age of retirement would have an adverse impact on the employment prospects of the youth in the country given the high rate of unemployment in the country.
13. It may however be pertinent to state here that in its objections before the certifying authority the petitioner did not object to the increase in the retirement age on the ground that the increase would hamper the productivity of the establishment or that it was undesirable to have elderly employees working in the establishment having regard to the nature of the industry and the work involved in the establishment.
14. The certifying authority on consideration of the application proceeded to overrule the objections and accepted the request. The certifying authority took the view that there was justification in the demand given the increase in life expectancy in the country and also similar increase in the retirement ages had been adopted in various undertakings of the State and the Union. The authority also took the view the management would also benefit from the experience of the employees who had rendered long service, and this was also the rationale behind the modification of the model standing orders by the State. The certifying authority :
8. : accordingly passed an order modifying the standing orders and thereby increased the age from 58 years to 60 years.
15. The Management, being aggrieved, preferred an appeal under S. 6 of the Act, 1946. The appellate authority however concluded that there was no merit in the appeal and proceeded to dismiss the appeal by an order dated 05.12.2019.
16. It is against this order of the certifying authority modifying the standing orders, which has been confirmed by the appellate authority, the present writ petition has been preferred.
17. It would be pertinent to state here that the petitioner management had challenged the amendment to the model standing orders dated 27.03.2017 by filing W.P. Nos.16100-103/2017.This writ petition was heard along with several other writ petitions and was ultimately dismissed by this Court. The management had preferred a writ appeal in W.A.2304-2318/2004. However, in the writ appeal, the petitioner-management was permitted to withdraw the writ petition itself by the Division Bench.
18. Shri Pradeep Sahukar, learned counsel for the petitioner put forth the argument that all the three unions had made a specific demand for enhancing the retirement age from 58 :
9. : years to 60 years in its charter of demands and this demand was not granted and therefore, in the light of the subsequent settlement arrived at between the parties in respect of the other demands which contained a clear stipulation that it would be in force till 31.03.2020 no demand could be raised until time. He stated that the trade unions were debarred from seeking for enhancement of the retirement age by resorting to the procedure prescribed for modification of the standing orders.
19. He submitted that the standing orders were always subject to a settlement arrived at between the management and workmen. He went on to submit that when once several demands were made and a particular demand amongst those demands by the workmen had not been acceded to by the management and a settlement had been arrived at in respect of the other demands, all the demands made including the demands which had not been acceded to would form a part of the settlement. He submitted that since demands made by the trade unions had been refused, the same could not be re-agitated afresh by resort to a demand for modification of the standing orders.
20. He placed great reliance on the judgment of the Hon’ble Apex Court in the case of Barauni Refinery :
10. : PragatisheelShramikParishad Vs. Indian Oil Corporation Ltd. and others reported in AIR1990SC1801 21. In essence, the submission of the learned counsel was that if demand had been raised and the same had not been granted in a settlement proceeding, that refusal of the demand would also be deemed to have been a part of the settlement arrived at and the said demand which had been refused could not be resuscitated by the workmen by seeking for modification of the standing orders.
22. Learned counsel for the respondent, Sri. S.L. Matti, on the other hand, supported the impugned orders and contended that the claim for modification of the standing orders had no relationship with the charter of demands made in a conciliation proceeding and a claim for modification of the standing orders was an independent proceeding which was to be decided on its merit by the certifying authority. He contended that before the certifying authority the management did not put forth any specific objection on the merits or demerits of the claim relating to the enhancement of the retirement age and hence there was no justification to entertain this petition. :
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23. He submitted that the certifying authority and the appellate authority had taken into consideration all the relevant factors relating to the enhancement of the retirement age and had arrived at the conclusion that there was genuine merit and justification for the claim, and they had rightly ordered modification of the standing orders, which did not warrant interference in a writ petition under Article 226 of the Constitution.
24. He submitted that filing of a writ petition challenging the amendment to the model standing orders and thereafter withdrawing the challenge to it, by itself, disentitled the management to oppose the request for modification of the standing orders. He relied upon the various judgments of this Court to indicate that this Court had affirmed the modification of the standing orders relating to the enhancement of the retirement age.
25. To appreciate these arguments, it would become necessary to understand the intent and objective of the Industrial Employment (Standing Orders) Act, 1946 and also that of the Industrial Disputes Act. Firstly, examine whether the provisions of these two acts are designed to be independent of each other or are they designed to complement each other. Secondly, whether the :
12. : operation of the provisions of the Act would override or render the provisions of the other Act inapplicable or superfluous.
26. The Industrial Employment (Standing Orders) Act, 1946 was enacted to require the employers in industrial establishments to formally define the conditions of the employment under them and to have a necessary law which required the employers to define with sufficient precision the conditions of employment under them and ensure that the workmen were informed of them.
27. This Act was applicable in the State of Karnataka in the same form as it was enacted by the Parliament till it was amended by State Act No.12 of 2014. It would be useful to have an overview of the Act as it existed before the Amendment since the standing orders, in this case, had been certified in 1971, when the act was applicable in its originally enacted form.
28. S. 3 of the Act stated that within six months of the Act becoming applicable to the establishment, the employer was required to submit draft standing orders to the certifying authority for its adoption to the establishment. The section also stated that :
13. : draft standing orders submitted should make a provision for every matter set out in the schedule.
29. The schedule to the Act enumerated 11 matters, which were all matters relating to the conditions of employment affecting a workmen. It also mandated that whenever model standing orders were prescribed, the draft standing orders submitted by the employer were required to conform to the said model standing orders. These draft standing orders were also required to be accompanied by a statement containing the particulars of the workmen and the trade union.
30. S.4 of the Act stated that the draft standing orders shall be certifiable under the Act if a provision was made for every matter set out in the schedule applicable to the establishment and the standing orders were otherwise in conformity with the provisions of the Act. The provision thereafter made it obligatory for the certifying authority or the appellate authority to adjudicate on the fairness or reasonableness of the provisions of the standing orders.
31. S. 5 of the Act stated that on receipt of the draft standing orders, the certifying authority was required to forward the :
14. : same to the trade union or if there was no trade union to the workmen, calling upon them to submit their objections which they desired to make to the drafting standing orders within fifteen days.
32. The certifying authority was thereafter required to hear the employer and the trade union or the representative of the workmen and then decide as to whether any modification or addition to the draft standing orders submitted by the employer was necessary to render the draft standing orders certifiable under the Act and it was required to pass an order accordingly. The authority was also required to send an authenticated copy of the standing orders, as modified by him by his order, to the employer and the trade union or the authorized representative of the workmen.
33. An appeal was provided against the certification of the standing orders under S. 6 of the Act and if an appeal was not preferred, the standing orders would come into operation and govern the terms of the employment between the employer and workmen as provided under S. 7 of the Act.
34. S. 10 of the Act stated that the standing orders which were certified under the Act were not liable for modification until the :
15. : expiry of six months from the date on which the standing orders had come into operation.
35. However, sub-section (2) of S. 10 permitted the modification of the standing order after the expiry of six months, either at the instance of the employer or the workmen or the trade union, by the making of an application accompanied by copies of the proposed modification.
36. Sub-section (2) stated that in the event the modification proposed was by agreement between the employer and the workmen or trade union, the certified copy of the agreement was also required to be submitted.
37. Sub-section (3) made it clear that for modification of the standing orders, either at the instance of the employer or by the trade union, the same procedure which had been prescribed for certifying the standing orders for the first time had to be followed.
38. Thus, even if the employer and workmen were to seek a modification of the standing orders by virtue of an agreement, it was still necessary that a certified copy of the agreement be filed along with the application. Further, even if such an agreement was filed, that would not by itself automatically translate into a :
16. : modification of the standing orders because S. 10 (3) mandated that the certifying authority was obliged to follow the provisions applicable for certification of the first standing orders.
39. To put it differently, the certifying authority would be required to hear the employer and the workmen i.e., all the parties who may be affected by the proposed modification and satisfy itself as to whether they were in conformity with the provisions of the Act and were fair and reasonable and only then could he certify it. Thus, the modification of the standing orders, even if it was by an agreement, could not be considered a mere formality or a foregone conclusion.
40. The Act was amended in the year 2014 by the State of Karnataka. As could be gathered from the Statement of Objects and Reasons to the Amending Act, the State had noticed that the earlier procedure prescribed under the Act, in its working, was found to be prolonged and protracted and as a result, the matters connected with the terms of employment were not being properly regulated. The State, therefore, had decided to bring in an element of self- certification after there was a mutual consultation between the employer and employee. It was felt that the standing orders could be adopted by mutual discussion rather than by resorting to the :
17. : long-drawn-out process of certification. The State was of the view that the process of certification would be necessary only when there was a dispute or disagreement about the adoption of any clause or matter set out in the schedule.
41. In other words, as against the earlier regime of “certification” of standing orders, which involved an element of adjudication, a regime of “adoption” of standing orders by mutual consent was being brought in as it would be more beneficial. It was felt that the process of certification should be restricted only to cases where there was a dispute or disagreement between the employer and the workmen.
42. S. 3 of the Act, by Act No.12 of 2014, in its entirety was substituted. This substituted section required the employers, within six months of the Industrial Employment (Standing Orders) (Karnataka Amendment) Act, 2005 becoming applicable to the industrial establishment to prepare the standing orders for the establishment and the said standing orders was required to provide for every matter set out in the schedule which may be applicable it. In fact, it also required that the said standing orders prepared by the employer to be in conformity with the model standing orders that may have been prescribed by the State. Thus, the original :
18. : mandate as envisaged by the Parliament for preparing standing orders, which it required to be in conformity with the model standing orders to the extent practicable was continued even by the State after it substituted S.
3. 43. The substituted provision mandated that the proposed standing orders were required to be discussed with the trade unions or representatives of workmen before its adoption and the employer was required to provide proof of the discussions. It also stated that unless a copy of the adopted standing orders were sent to the certifying authority by registered post and an acknowledgment was obtained and filed, the standing orders adopted would not be effective.
44. Sub-section (4) stated that if there was no dispute about the clauses and matters set out in the standing orders drafted by the employer, then it could be adopted as if it had been certified under the Act, subject to a copy being sent to the certifying authority by registered post acknowledgment. Thus, the amended law permitted the employer and the workmen to discuss and agree upon mutually acceptable terms of employment and on an agreement being arrived at, it could be straight away be adopted. :
19. : An element of self-certification of the standing orders was built in when it was required that they be sent to the certifying authority.
45. However, in cases, where there was a dispute or disagreement regarding the clauses or matter set out in the schedule, the earlier procedure prescribed for submitting the draft standing orders for certification was continued even under the amended sub-section (5) of S.
5. 46. With respect to modification of the standing orders, whether it had been certified or adopted, the earlier procedure of applying for modification, either by the employer or the workmen, was maintained.
47. However, a proviso was added to S. 10 (2) of the Act which stated that the provision for seeking modification which was available under sub-section (2) would be inapplicable in cases where the modification had been mutually agreed upon by the employer and the trade union and adopted as provided under S. 3 (3) and (4) of the Act.
48. Thus, even for modification of standing orders, in respect of cases where there was dispute or disagreement over the clauses, necessarily, the procedure for applying to the certifying :
20. : authority and seeking modifications as prescribed under S. 3 (5) of the Act was made applicable.
49. From an analysis of these provisions, it becomes clear that up to 2014, modifications to the standing orders could be made by agreement, but, even in such cases, an application was required to be made to the certifying authority along with a copy of the agreement and the procedure prescribed for certification that was envisaged for getting the first standing orders certified was to be adhered to. Thus, even if there was an agreement for modifications, the certifying authority had to be approached by an application along with a copy of the agreement and the certifying authority was required to follow the same procedure of hearing both the employer and the workmen, examine whether the modifications were in conformity with the provisions of the Act and were fair and reasonable.
50. However, from 2014, if there had been discussions between the employer and the workmen and there was no dispute between the employer and the workmen about the modifications to the standing orders, the modifications were deemed to be certified subject to the employer providing proof of discussions and a copy of it being sent immediately to the certifying authority. :
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51. The most important factor which can be discerned from an analysis of these provisions is that if there was no dispute about the terms of the standing orders, that is to say, there was consensus about the terms of employment between the employer and the workmen, the standing orders would stand adopted without having to undergo the process of certification. Thus, the crucial aspect of either the certification or modification was that there should have been a consensus between the stakeholders. As a corollary, if there was no consensus, the standing orders could not be modified by the act of the parties, but they were required to approach the certifying authority for certification.
52. It must be kept in mind that the Act fundamentally seeks to define the terms of employment to ensure that both the employer and the workmen were aware of their rights and liabilities arising out of the employment. The legislature was conscious of the fact that an employer may take advantage of the weakness of the workmen and force an agreement down their throat, and it is for this reason that up to the year 2014, even if there was an agreement, the certifying authority was required to examine whether the proposed amendment to the standing orders were in the interest of all the stakeholders. :
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53. It also will have to be kept in mind that the Act enables the State to formulate model standing orders under S. 15 of the Act, 1946. S. 3 (2) of the Act, as it was originally enacted and even after it was amended in 2014 by the State, mandates that the draft standing orders submitted by the employer are required to be in conformity with the model standing orders that may have been prescribed under the Act, subject, of course, to the extent they are practicable to the industrial establishment.
54. In other words, the law mandates that unless there were justifiable and good reasons to deviate from the model standing orders, under normal circumstances, the draft standing orders were required to conform to the model standing orders whenever certification of the standing orders was sought.
55. Learned counsel for the petitioner however sought to contend that a settlement as envisaged under the Industrial Disputes Act would be binding on the workmen and since in this case there was admittedly a settlement, recourse to the Act by way of modification to the standing orders was not permissible.
56. In this context, it would be necessary to clarify the legal position regarding the interplay between the provisions of the :
23. : ID Act and the Industrial Employment (Standing Orders) Act. It will also have to be examined whether a settlement arrived at under the provisions of the Industrial Disputes Act would prevent the workmen from seeking modification of the standing orders under the provisions of the standing orders Act.
57. The Industrial Disputes Act, 1947 was enacted with the object of making a provision for the investigation and settlement of industrial disputes and other certain disputes. Thus, essentially, when an industrial dispute came into existence or was apprehended, the Act contained a mechanism to resolve them.
58. S. 7 of the ID Act provides for the constitution of Labour Courts for adjudication of industrial disputes relating to any matter set out in the second schedule. Item No.1 of the second schedule confers jurisdiction on the Labour Court in matters relating to the propriety or legality of an order passed by the employer under the standing orders. Item No.2 of the second schedule confers jurisdiction on the Labour Court in matters relating to the application and interpretation of the standing orders. Thus, the Labour Courts are conferred with the jurisdiction to adjudicate upon matters in accordance with the standing orders and they are therefore in that sense meant to complement the provisions of the :
24. : Employment Standing Orders Act. The Labour Court has not been empowered to adjudicate upon the validity of a standing order and the provisions of the ID Act, therefore, do not have an overriding effect on the provisions of the Employment Standing Orders Act.
59. The only provision of the ID Act which has an overriding effect on the Employment Standing Orders Act is S. 25J, which states that the provisions of Chapter VA would have effect notwithstanding anything contained in any law including the standing orders made under the Employment Standing Orders Act. Chapter VA relates to lay-off and retrenchment. Thus, only in relation to a matter related to lay-off and retrenchment, the provisions of the ID act would override the operation of the standing orders. It is therefore obvious that the ID Act and the Employment Standing Orders Act are independent of each other, and one does not override the other (except in cases of lay-off or retrenchment).
60. The Industrial Disputes Act, which was enacted in 1947, a year after the Employment Standing Orders Act was enacted, does not contain any express provision or provisions which, either directly or indirectly, suggest that workmen cannot seek a modification of the standing orders if there is an existing industrial dispute or if there has been a settlement arrived at :
25. : between the workmen and the employer pursuant to an industrial dispute. Since there is no express provision which bars the workmen or the employer from taking recourse to the Employment Standing Orders Act, it is rather clear that both the Acts are independent of each other and are designed to complement each other.
61. Under the Industrial Disputes Act, a settlement has been defined as a settlement which is arrived at during a conciliation proceeding and it also includes a written agreement arrived at between the employer and workmen otherwise, which has been signed by the parties and a copy thereof has been sent to the appropriate government and the conciliation officer.
62. Fundamentally, the concept of a settlement presupposes that both the employer and employee have specifically agreed to settle any contentious issue. For this, the contentious issue between the employer and workmen would have to be deliberated either amongst themselves or through an intermediary such as conciliators/mediators and which has ultimately resulted in a consensus being arrived at. Only on such a consensus being arrived at and a record of it being made by the parties in a legally :
26. : acceptable manner to bind both of them, could it be said that there has been a settlement.
63. It may also be kept in mind that a settlement is arrived at under the Industrial Disputes Act to settle an industrial dispute or an apprehended industrial dispute. An industrial dispute would mean any dispute or difference between the employer and the workmen, which relates to the employment or non-employment or the terms of employment, or the conditions of labour. Obviously, an industrial dispute would occur when there is a difference between the employer and the workmen, and that dispute can be considered as settled only if both parties to the dispute dissolve their differences and arrive at a mutually agreeable position and bind themselves to that mutually agreed position.
64. In the instant case, it is the specific case of the petitioner that a demand was made for enhancement of the age of retirement of the workmen but that was not acceded to. In other words, it is admitted that there was no consensus arrived at regarding the issue of retirement. Therefore, it cannot be said that there was a settlement arrived at regarding the issue of retirement age. :
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65. However, the employer argues that a demand was made and the same was not acceded to and this refusal had been accepted by the workmen by entering into a settlement in respect of other demands and they had thus given up their demand. If this argument were accepted, it would lead to an absurd situation where a demand made and refused would also be a settlement of that demand and which would bind the workmen and employer.
66. In a case where several demands are made and deliberated upon and a settlement was arrived on some of the demands, that would not mean that all the demands made and deliberated upon and over which no consensus had been arrived would also be a settlement. To be a settlement, the parties must have a clear consensus on the issue on which they had differences and had deliberated upon. If there is no consensus on a particular issue even after deliberations, the question of there being a settlement on that issue would never arise.
67. It is to be borne in mind that the provisions of the Industrial Disputes Act provide for a mechanism to resolve the dispute through the involvement of conciliation officers who attempt to conciliate to ensure that differences between the parties are narrowed down and a consensus could be arrived at. :
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68. However, in respect of the Industrial Employment Standing Orders Act, it is to be noticed here that the certifying authority is not expected to or is empowered to conciliate and prod the warring parties into a settlement. The certifying authority is required to examine whether the standing orders are fair and reasonable and are in accordance with the provisions of the Act.
69. Of course, after the Karnataka Amendment made in 2014, if there is no dispute about the draft standing orders or its modification between the parties, the same could be adopted and certified without even the intervention of the certifying authority and he is only required to be informed about the adoption of the standing orders.
70. It is therefore clear that the process of certification of the standing orders under the Industrial Employment Standing Orders Act, 1946 and the process of settlement envisaged under the Industrial Disputes Act are not interrelated and are designed to operate in completely different contexts.
71. Thus, a settlement arrived at as provided under the provisions of the ID Act would not have any bearing on the certified standing orders under the Act, unless one of the terms of the :
29. : settlement was that the parties had agreed upon modification of the existing standing orders in respect of any specified issue. To put it differently, a settlement under the Industrial Disputes Act ipso facto does not modify the certified or adopted standing orders.
72. The Division Bench of this Court in the case of Management of Federal Mogul Goetze India Pvt. Ltd. Vs. Additional Labour Commissioner (Administration) & Appellate Authority under Industrial Employment (Standing Orders) Act, 1946 and others in W.A. No.2771/2019 decided on 25.02.2021, while deciding the question as to whether the settlement agreement between an employer and its workmen would preclude the certifying authority from entertaining a request for modification of the standing orders has stated in paragraph 22 as follows: “22. XXXXX Thus, even otherwise, the settlement agreement is not sacrosanct and inviolable. The settlement can be ignored in exceptional circumstances if it is demonstrably unjust, unfair and if it militates against the spirit and basic postulate of the agreement reached as a result of conciliation. Hence, the first question is answered in the negative.
73. Thus, it is clear that a settlement is neither sacrosanct nor inviolable and can be ignored in certain circumstances. :
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74. In the instant case, it is not in dispute that there were charter of demands raised by the workmen and ultimately, after deliberations, there was a settlement and the same has also been recorded as provided under the Industrial Disputes Act. The question that is raised by the employer is that an issue, which had been raised by the employer cannot thereafter be re-agitated by taking recourse to the process prescribed for modification of the standing orders and that too during the currency of the settlement.
75. As stated above, the provisions of the Industrial Disputes Act and the provisions of the Employment Standing Orders Act, 1946 operate in completely different zones and a settlement arrived at under the Industrial Disputes Act would not result in an automatic modification of the standing orders.
76. In the instant case, admittedly, no consensus had been arrived at regarding the enhancement of the retirement age. In the absence of a specific clause in the settlement specifying the settlement arrived at regarding the enhancement of the retirement age, it cannot be said that there has been a settlement between the employer and workmen on that issue. :
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77. Learned counsel for the Management, however, sought to place reliance on Article 16 of the settlement. Article 16was titled General and contained three clauses. Learned Counsel emphasized on Clause 71 and 72, which read as follows: “71. It is agreed that this settlement is full and final settlement of the demands contained in the Charter of Demands submitted by the Indal Employees Union, Indian Aluminium Company Workers’ Union and Indian Aluminium Company Staff Union, Belagavi on 06.10.2016 respectively and proposals including amendment if any put forth by the Management on 02.01.2017.
72. It is agreed that there shall be no demand for any further increase in wages/salary, allowances or bonus or any other financial or non-financial benefit and that the provisions of this Settlement fully define and limit the obligation and responsibilities of Management for the period covered by this Settlement.
78. As could be seen from Clause 71, the settlement was declared to be a full and final settlement of the demands contained in the charter of demands submitted by the union and the proposals including the amendment if any put forth by the management. This would mean that the settlement was in respect of the demands which were made and upon which a consensus had been arrived at between the parties. This clause declares that the settlement arrived at in respect of the demands which had been settled were final and binding on the parties. This clause cannot be enlarged to :
32. : mean that the trade unions had conceded a demand which they had made by virtue of the refusal of the demand by the employer.
79. In other words, the refusal of the employer to raise the retirement age to 60 years and by continuing for the retirement age to be 58 years, did not amount to a settlement of the issue or that it debarred the trade unions from seeking modification of the standing orders. As stated above, the certified standing orders would not stand amended on a settlement being arrived at and a certain procedure was required to be followed under the Employment Standing Orders Act in order to ensure the standing orders were modified.
80. In fact, even for adopting the standing orders by mutual consent, as per the 2014 State amendment to the Act, the employer and the workmen would still be required to hold discussions and then intimate the certifying authority about the standing orders that they were adopting.
81. Admittedly, in the instant case, even as the negotiations were being held for arriving at the XV Long-term settlement, the employer was before this Court in W.P. 16100- 103/2017 laying a challenge to the amendment made to the model :
33. : standing orders by which the retirement age had been enhanced from 58 years to 60 years. Thus, the question that there was no consensus on the age of retirement was self-evident and therefore the question of this not even being deliberated would also be self- evident.
82. Learned counsel also sought to place reliance on Clause 72 to state that any demand, which would result in a financial or a non-financial benefit would not be made till the subsistence of the period of settlement. He submitted that since the enhancement of the retirement age was undoubtedly a financial benefit, the workmen were estopped from making the said claim till the period of the settlement.
83. As could be seen from Clause 72, the said clause is also a general clause, which deals specifically with a demand for any further increase in wages or salary, allowances, bonus, or any other financial or non-financial benefits. A reading of the entire clause indicates that it can only be in relation to any financial emoluments that the workmen could claim during their employment. This obviously cannot preclude the workmen from seeking for enhancing their retirement age by recourse to the modification of the standing orders provided in the Act. The petitioner cannot utilize the general :
34. : clause, which only clarifies that any issue which has been settled cannot be revived till the expiry of the period of settlement, in order to contend that the trade unions had agreed not to seek for enhancement of the retirement age. The argument of the learned counsel, if accepted, would fundamentally amount to re-writing the entire clause completely out of context.
84. Learned counsel Shri Pradeep Sahukar placed great emphasis on the judgment rendered by the Hon’ble Supreme Court in Barauni Refinery PragatisheelShramikParishad (Supra).In that case, the Hon’ble Supreme Court was dealing with a case in which the certified standing orders had been modified contrary to the terms of the settlement. In that case, in the charter of demands of the Union, there was a demand for enhancing the retirement age from 58 years to 60 years and thereafter on discussions being held a settlement was arrived at in which there were the following two clauses:
"19. The Corporation agrees that such terms and conditions of service as well as amenities and allowances as are not changed under this settlement shall remain unchanged and operative during the period of the settlement.
21. The Unions agree that during the period of operation of this settlement, they shall not raise any demand having financial burden on the Corporation other than bonus provided that this Clause shall not affect the rights and obligations of the parties in regard to matters covered under Section 9A of the Industrial Disputes Act, 1947. :
35. :
85. As could be seen from the above, the settlement with which the Hon’ble Supreme Court was dealing with, the employer had agreed that the terms and conditions of service as well as the amenities and allowances would not be changed and would be in operation during the period of settlement. Further and more importantly, the Unions therein had also agreed that during the period of operation, they would not raise any demand which imposed a financial burden on the Corporation, except for the issue of bonus provided. Thus, a conjoint reading of Clause 19 and 21, makes it clear that in that case, the Hon’ble Supreme Court was dealing with a settlement in which the employer had clearly agreed that he would not change the terms and conditions of the service and the workmen had also categorically agreed that they would not raise any demand, which had a financial burden on the employer.
86. To appreciate this aspect better, the Clauses relied upon by the petitioner in this case and the clauses that the Hon’ble Supreme Court was dealing with in Barauni Refinery PragatisheelShramikParishad (Supra) would have to be compared which would then establish the obvious inapplicability of :
36. : that decision. The two clauses are therefore reproduced for comparison in a tabular column as under: “71. It is agreed that this settlement is
"19. The Corporation agrees that full and final settlement of the such terms and conditions of demands contained in the Charter service as well as amenities and of Demands submitted by the allowances as are not changed Indal Employees Union, Indian under this settlement shall remain Aluminium Company Workers’ unchanged and operative during Union and Indian Aluminium the period of the settlement. Company Staff Union, Belagavi on 06.10.2016 respectively and proposals including amendment if any put forth by the Management 21. The Unions agree that during on 02.01.2017. the period of operation of this settlement, they shall not raise 72. It is agreed that there shall be no any demand having financial demand for any further increase burden on the Corporation other in wages/salary, allowances or than bonus provided that this bonus or any other financial or Clause shall not affect the rights non-financial benefit and that the and obligations of the parties in provisions of this Settlement fully regard to matters covered under define and limit the obligation and Section 9A of the Industrial responsibilities of Management for Disputes Act, 1947. the period covered by this Settlement.
87. A mere comparison of these two clauses would indicate the stark and glaring differences in the settlement that has been arrived at in this case and the settlement that had been arrived in Barauni Refinery PragatisheelShramikParishad case (Supra). In the settlement clauses involved in the Barauni Refinery PragatisheelShramikParishad (Supra) case, there was an agreement that the terms and conditions of the service would :
37. : remain unchanged and the Union had also agreed that they would not raise any demand, which had a financial burden on the employer. The term financial burden on the employer obviously indicates any demand, which had a financial consequence on the employer. However, in the instant case, the clauses upon which great reliance is placed does not contain any such commitment or undertaking by the workmen that they would not claim or make any demand which would have a financial burden on the employer. What has been agreed in Clause 72 is that there would be no demand for any further increase in the wages/salary/allowance or bonus or any other financial or non-financial benefits. This kind of an undertaking in respect of financial emoluments that the workmen would derive because of the work being extracted from him cannot be extended to bring within its ambit the right of the workmen to seek for modification of the standing orders relating to enhancement of the retirement age. It is therefore clear that the said decision can have no application to this case.
88. The reliance placed on the decision rendered by this Court in the case reported in Kennametal India Ltd., Vs. Kennametal India Employees Association and others reported in 2011-IV-LLJ-163 (Kant) and the decision rendered in the case :
38. : of the Management of M/s. Ultratech Cement Limited Vs. Rajashree Cement General Workers & Staff Union and another in W.P. 204077/2018, disposed off on 16th March 2021, cannot also be of any assistance to the petitioner.
89. In Kennametal’s case (supra), the settlement arrived at between the management and the workmen read as follows: “26.7. Retirement Age The present procedure of a workman getting retired from the services of the Company upon completion of 58 years shall continue. He shall be relieved from the close of his shift hours on the last working day of the month in which the workman completes the superannuation age of 58 years. XXX XXXXXX28 Other demands and grievances The workmen and the KIEA hereby agree: (a) To drop all other demands made by KIEA vide its charter of demands dated 22nd December, 2006 which are not covered by this settlement. (b) Not to raise or pursue during the operation of this settlement any demands involving directly or indirectly any financial burden/commitments on the part of the Management and/or affecting the terms and conditions of employment.
90. As could be seen from the said clauses, the trade union, in the settlement had clearly and categorically agreed to abide by the prevailing prescribed retirement age of 58 years and there was also a clear agreement that the Union was dropping all other demands that it had made in its charter of demands which :
39. : were not covered under the settlement. It had also been agreed that the Union would not raise any demand which would create a direct or indirect financial burden on the employer. That is not the case in the settlement involved in the present case.
91. In Ultra Tech’s case, this Court was considering what was the effect of the model standing orders and the effect of a model standing orders on a settlement that had been incorporated into the standing orders. Admittedly, in the instant case, there was in existence certified standing orders and thus the question of the application of model standing orders being made applicable would not arise. Furthermore, in that case, a settlement arrived at had been incorporated into the standing orders which was sought to be modified on the basis of the model standing orders. In the instant case, it is not the case of either party that the model standing orders would automatically apply. Further, it is also not a case where the parties had incorporated the terms of a settlement into the standing orders which were agreed to be in force for a specified period of time and these standing orders were sought to be modified by virtue of the model standing orders.
92. It is to be stated here that under S. 12A of the Act, the model standing orders would be applicable temporarily from the :
40. : date the act becomes applicable to the establishment and would apply only till the standing orders are certified or adopted. Thus, in law, the model standing orders would not by themselves become applicable to an industrial establishment and they would apply only when the standing orders were yet to be certified or adopted.
93. It should, however, be borne in mind that the draft standing orders submitted for certification or that were discussed with the trade unions for adoption are required to be in conformity with the prescribed model standing orders to the extent practicable as stipulated in S. 3 of the Act. Thus, there is no escape from the fact that the law intends that the certified standing orders should be in conformity with the prescribed Model standing orders.
94. In the present case, the trade unions have sought modifications of the standing orders based on the amendment to the model standing orders. The basic objection to this modification by the employer before the certifying authority was that the trade unions were not entitled to seek for modification in view of the settlement. As already held above, entering into a settlement by itself would not debar the trade unions from seeking modifications. Further in this case there was no express agreement/clause in the settlement that the trade union had agreed for the retention of the :
41. : retirement age as 58 years. Thus, the argument that the trade unions could not seek for modifications to the standing orders cannot be accepted.
95. It should however be clarified that, if there is indeed a settlement in respect of a particular term of employment, an employer could contend before the certifying authority that in view of the specific terms of the settlement, the standing orders should not be modified for a specified period. In such a situation, the certifying authority would not be entitled to ignore the settlement and order for modification.
96. It is to be stated here that the employer, before the certifying authority, did not object to the modification relating to the enhancement of the retirement age on the ground that the continuance of an employee beyond 58 years was not desirable given the nature of the industrial activity being undertaken in the establishment. As already stated above, under normal circumstances, the standing orders would necessarily have to be in conformity with the prescribed model standing orders to the extent that they are practicable when certification is sought for. :
42. :
97. Thus, when the model standing orders were amended and the retirement age was enhanced, it was open for the trade unions to seek a modification of the certified standing orders to bring them in conformity with the model standing orders. As the employer did not cite any specific objection for the enhancement of the retirement age on the ground of undesirability or on account of safety standards, the certifying authority was justified in modifying the standing orders by noticing that the retirement age had been increased in all spheres of employment and there was no extraordinary reason for rejecting the modification. In my view, the certifying authority was absolutely justified in accepting the trade union’s application for modification of the standing orders.
98. The appellate authority has noticed that the certifying authority had afforded an opportunity of hearing to the employer to the proposed modifications and it has also been categorically stated that the employer had no specific objection to the enhanced retirement age and it was only raising legal objections and the certifying authority was therefore justified in granting the modification. The appellate authority has noticed that the certifying authority after taking note of the enhancement of retirement age all across the country had merely followed the norms that had been :
43. : followed all around the country in accepting the modifications to the standing orders. In my view, the appellate authority was absolutely justified in affirming the decision of the certifying authority granting modification to the standing orders.
99. There are no justifiable grounds to interfere with the impugned orders in the exercise of the writ jurisdiction of this Court and hence the petition is dismissed.
100. However, before parting with the case, the following will have to be clarified.
101. Under Section 7 of the Employment Standing Orders Act, the standing orders would come into operation on the expiry of seven days from the date on which the copies of the order of the appellate authority are communicated to the employer and the workmen. In this case, the receipt of the order of the appellate authority cannot be in dispute since the petitioner has filed this petition on 20.01.2020, within 45 days of the order passed by the appellate authority.
102. Thus, it can be safely concluded that the orders of the appellate authority had been received within a week or two of the passing of the orders. It can therefore be assumed that on the :
44. : expiry of seven days from the receipt of the order of the appellate authority, the modifications to the standing orders have become into operation.
103. However, given the length of time that this litigation has consumed and the fact that the petitioner contested the appeal vigorously and was aware of the dismissal of the appeal, it would be proper and appropriate to fix the date of the order of the appellate authority itself as the date from which the modifications to the standing orders would come into effect.
104. The petitioner had the benefit of an interim order, as a result of which, the operation of the modifications to the standing order was stayed. As a result, the workmen who attained the age of 58 years during the pendency of the writ petition would have been deprived of rendering service till they attained the age of sixty years. Since the writ petition is being dismissed, the prejudice caused to the workmen by the grant of the interim order would have to be undone. The workmen would thus be entitled to the following reliefs: (a) The workmen who were made to retire after the order of the appellate authority was made i.e., from 05.12.2019 till the date of this order on the :
45. : ground that they had attained the age of superannuation, would be entitled to be paid by the petitioner-employer all the monetary benefits as if they had continued in employment till they attained the age of 60 years; (b) For those workmen who retired after 05.12.2019 and are yet to attain the age of 60 years, the petitioner-employer shall pay all the monetary benefits for the period in which they were placed out of service and the petitioner-employer shall reinstate them and shall permit them to be in service till they attain 60 years; or (c) It would also, in the alternative, be open for the petitioner-employer to offer monetary sums equivalent to their entitlements in respect of the workmen referred to in the preceding paragraph (ii); (d) The workmen who attain the age of 58 years from the date of this order shall be continued in employment by the petitioner-employer till they attain the age of 60 years as per the modified standing orders. Sd/- JUDGE Vnp*