B.N. Srikrishna, J.
1. This writ petition under Article 226 of the Constitution of India impugns an award of the Industrial Tribunal, Maharashtra, Thane, dated 3rd November, 1993, made in reference (IT) No. 23 of 1989 under the provisions of the Industrial Disputes Act, 1947 (hereinafter for brevity's sake referred to as 'the Act').
2. The petitioner is a Trade Union registered under the Trade Unions Act which represents a section of the workmen employed in the factory of the First Respondent at Thane Belapur Road, District Thane. The Second Respondent is another registered Trade Union which represents another section of the said workmen. The First Respondent is a company which manufactures electrical and electronic goods, inter alia, at its factory in Kalwe which is one of its seven factories situated in India. Some time in the year 1980 the Second Respondent signed a settlement with the management of the First Respondent under which the working hours of the workmen in the Kalwe factory of the First Respondent were reduced from 48 hours to 44 hours per week. The said settlement introduced a system of alternation of a five days week followed by a six days week. There would be 40 hours per week in one week and 48 hours per week in second week or 44 hours per week averaged over a cycle of two weeks. The 1980 settlement expressly stipulated that the reduction in the working hours from 48 hours per week to 44 hours per week was brought down under the clear understanding that the workmen would continue to give the production given by them in 48 hours per week, even while working an average of 44 hours per week. The settlement also empowers the First Respondent to revert to the system of 48 hours per week, after due notice to the Second Respondent Union, it, at any time, it was found that the level of production achieved during 48 hours per week working, prior to 1st November, 1980, was not maintained. The following clauses of the 1980 settlement are material for the purpose of deciding this writ petition.
'1. Working Hours :
(a) Effective December 1, 1980, the working hours shall be reduced from 48 hours per week to an actual average of 44 hours per week on the following basis :
One week of 6 days x 8 hours = 48 hours.
Next week of 5 days x 8 hours = 40 hours.
Total for 2 weeks = 88 hours.
Or Average work per week = 44 hours.
In view of the reduced working hours, the shift timings/schedules shall be changed as per Annexure 'C'.
(b) In view of the above, the Union agrees to maintain the 48 hours level of production in the 44 hours working as has been agreed upon and for this purpose the Union accepts the following :
(i) speed increases of machines as determined by the Management
(ii) increase in the productivity of manual operations
(iii) increase in the machine/man ratio
(iv) staggering of lunch and tea breaks whenever required and possible
(v) modernization/automation wherever possible
(vi) continuous working of departments (full 7 days a week wherever necessary)
(vii) elimination of wasteful practices, e.g.
A. Absenteeism
B. time taken for changing of uniforms
C. time taken for tea breaks
D. time spent away from work place for any other reasons.
(c) In case the 48 hours level of production is not maintained in 44 hours working, the company shall have the right to revert to 48 hours working per week of 6 days with notice to the Union. In that event the clause (b) above shall be in operative.
7. Compensation for workmen in Continuous Process :
With effect from November 1, 1980 workmen on continuous process and ancillary services shall be paid 50% of their normal wages (basic + D. A.) over and above their normal wage when they are called upon to work on Fridays (the present common 'weekly off' day) in line with the Settlement dated January 16, 1970.
11. Leave :
(a) Earned Leave :
The formula for calculating earned leave shall remain unchanged. However, for the purpose of calculating leave entitlement, 26 days will be added to the number of days actually worked by the workmen in the year having regard to the fact that as per clause 1 of this Settlement, the number of working days will be reduced by 26 in a year.
ANNEXURE 'F'
............ The Dearness Allowance is paid on the basis of 26 working days a month. After conversion from 48 hours per week as per Clause 1(a) of the Settlement, the same amount of Dearness Allowance shall be paid on the basis of 24 working days a month.'
3. It is the case of the petitioner Union that, taking advantage of the terms of the settlement and the increase in productivity to be achieved by the workmen under the terms of the said settlement, the First Respondent Company effected a steep increase in productivity without any corresponding increase in the size of the work force, by not filing up vacancies due to natural separation occurring after the 1980 settlement. The petitioner claims that the production volumes rose by more than 50 per cent between 1980 and March 1993 and the value of production at constant prices rose from Rs. 508 million (Rs. 50.8 crore) to over Rs. 800 million (Rs. 80 crore) during the same period and that the productivity per workman at the Kalwe factory, once again calculated at constant prices, had risen from Rs. 0.42 million (Rs. 4.2 lakh)) to Rs. 0.76 million (Rs. 7.6 lakh) between 1980 and 1992-93. During the same period, the number of workmen in the Kalwe factory rose marginally from 1155 workmen in 1981 just 1222 workmen in 1991-92. At Exhibits 'A', 'B', 'C' and 'D' to the petition the petitioner has annexed charts in support its claim that the production and productivity were not only maintained at the previous levels, but were actually increased, sub-sequent to 1980 settlement dispute the lowering of the working hours per week.
4. It is interesting to note that, initially, i.e. prior to the year 1987, the workmen were represented by the Second Respondent Union. In or about August 1987, a substantial section of the workmen broke away from the Second Respondent and formed the petitioner Union. There was a charter of demands put forward by the petitioner Union which resulted in a settlement dated 5th July, 1988. As could be expected in a multi-union situation, the members of the Second Respondent Union refused to accept the terms of the settlement dated 5th July, 1988 (between the petitioner and the First Respondent) and started an agitation for a separate set of better conditions of service. This agitation was opposed by the First Respondent which took up the stand, during the conciliation proceedings and also before the appropriate Government, that the Second Respondent was a minority Union and that there was no warrant to a minority faction of the workmen to agitate for a separate set of conditions of service, in the face of the settlement dated 5th July, 1988 signed between the First Respondent and a vast majority of its workmen. This contention, though vigorously canvassed by the First Respondent at that time, was not accepted by the appropriate Government and the appropriate Government referred the industrial disputes raised by the Second Respondent Union for adjudication vide Reference (IT) No. 23 of 1989. The First respondent attempted to scuttle this reference by challenging its validity before this Court, but its attempt failed. Of all the demands made by the Second Respondent which formed the subject matter of the pending Reference (IT) No. 23 of 1989, the only demand material for our purposes is Demand No. 7, the demand pertaining to working hours. The said demand is in the following terms :-
'Demand No. 7 : Working Hours :
Reduction in working hours of all the workmen of the factory/office from 44 hours per week to 40 hours per week with the five days week.'
The reference also contained demands with regard to revision of wage scales, fitment and service conditions, earned leave, sick level, casual leave, paid holidays, medical scheme and cycle loan. All the demands which form the subject matter or Reference (IT) No. 23 of 1989 have been reproduced by the Industrial Tribunal in paragraph 3 of the impugned Award and therefore it is unnecessary to reproduce them all.
5. While Reference (IT) No. 23 of 1989 was pending before the Industrial Tribunal, there was a serious break down of industrial relations between the First Respondent and its workmen represented by the Second Respondent. There were large scale dismissals of activists of the Second Respondent Union, which, in turn raised a number of disputes for reinstatement of its activists. In the mean time, there appeared to be a swift and sudden change in the direction of blowing of the winds, as evidenced by a complete softening of the attitude and a rapprochement between the First Respondent and the Second Respondent.
6. The petitioner did not pursue the demands made in the pending reference, perhaps, because it was satisfied with the terms of its own settlement dated 5th July, 1988, which were operative and binding for a period of three years ending on 5th July, 1991. On 21st December, 1992, the First Respondent filed an application purported to be under Section 33(1)(a) of the Industrial Disputes Act. By the said application the First Respondent's application sought the permission of the Industrial Tribunal to increase the working hours from 44 to 48 hours per week of six working days, thus making the additional weekly off in alternative weeks normal working day as existed prior to December, 1980. A number of grounds were urged in support of the prayer in the application, including an allegation that the workmen had failed to maintain the required levels of production and that increasing the working hours the additional working hours would not affect their working adversely. It was also urged therein that, because the First Respondent had been unable to utilise its existing capacity, it was necessary to increase the working hours, as prayed for, to help the growth and progress of national economy and industrial development. When this application under Section 33(1)(a) of the Act was made, the Second Respondent submitted on the same day the Industrial Tribunal that it was ready and willing to consider the subject matter of the application for increase in working hours. Before the Tribunal could actually make an order and dispose of the application, the petitioner came to learn about the said application and moved the Tribunal on 23rd December, 1992, by an application for being impleaded as Second Party in the pending Reference (IT) No. 23 of 1989 or, alternatively, for being impleaded as an intervener in the said matter. Before this application could be heard and decided, a settlement dated 5th January, 1993, between the petitioner and the First respondent was presented to the Tribunal and the Tribunal was invited by the First and Second Respondents to dispose of the pending reference by an Award in terms of the said settlement. This prayer was, naturally, opposed by the petitioner. By an order dated 12th March, 1993 the Industrial Tribunal held that, though the petitioner could not claim to implead itself to the reference, for the limited purpose of protecting the interest of its member - workmen by opting out of the Award, the petitioner's member workmen should have right of hearing before any Award was made in terms of the settlement dated 5th January, 1993, particularly in the background of First Respondent's application under Section 33(1)(a) of the Act for seeking permission to alter the present working hours. Consequently, by the said order the Industrial Tribunal impleaded the petitioner as a party to the reference and invited the petitioner to participate in the proceedings.
7. By its reply dated 26th March, 1993, the petitioner opposed the prayer made by the First Respondent in its application under Section 33(1)(a) of the Act and also the prayer for making an Award in terms of the settlement dated 5th January, 1993, which the petitioner called a collusive and malafide settlement. The Tribunal thereafter heard the parties without any further evidence being adduced by any party and, by its impugned Award II dated 3rd November, 1993, acceding to the prayer of the First and Second Respondents, made an Award in terms of the settlement dated 5th January, 1993, subject to certain minor modifications. It is this Award which is under serious challenge by the petitioner Union.
8. During the course of the hearing of the application dated 21st December, 1992 before the Industrial Tribunal, the petitioner Union placed on record several statements and charts on the basis of which it was sought to be demonstrated that the settlement was highly prejudicial to the interest of the petitioner Union and workmen and contended that no Award should be made in terms of the settlement dated 5th January, 1993.
9. Mr. Singh, learned Counsel appearing for the petitioner Union, urged the following contentions :
(1) In as much as there was no industrial dispute raised by the First Respondent Employer for increasing the working hours, no Award could have been made by the Tribunal and the Award on the said issue is without jurisdiction.
(2) That the application made by the First Respondent, purportedly under Section 33(1)(a) of the Act, was not maintainable.
(3) Since the demand of working hours referred to the Tribunal for adjudication vide Reference (IT) No. 23 of 1989 was only for reduction of working hours, the Tribunal had no jurisdiction to make an Award for increasing of working hours, as such an Award was neither on the points of reference, nor could be said to be incidental to the points of reference which were to be adjudicated.
(4) That the Tribunal has given very scanty and fallacious reasons for accepting the settlement dated 5th January, 1993, as reasonable and fair. The Award is highly prejudicial to the workmen represented by the petitioner Union and causes them irreparable loss and prejudice.
10. Before taking up for consideration the contentions raised on behalf of the petitioner Union, it would be necessary to notice a few facts. As on the date of the settlement dated 5th January, 1993, the total number of workmen in the First Respondent factory was 949 out of which about 240 had not accepted the benefits flowing from the impugned Award. These figures do indicate that the objecting minority was substantial and not merely a minuscule of the total complement. After the Award was made by the Industrial Tribunal, the members of the petitioner Union declined to abide by it as a consequence of which they continued to working only for 44 hours per week. When the present writ petition was filed before this Court, the learned Single Judge of this Court, while admitting the petition and granting rule, granted interim relief on terms of prayer (b) staying the operation and implementation of the impugned Award, though it was made clear that the interim order may not come in the way of workmen who wanted to work for 48 hours. An appeal carried to the Division Bench was summarily rejected. The matter was, therefore, carried to the Supreme Court in a Special Leave Petition. On 9th May, 1994, the Supreme Court set aside the orders of the learned Single Judge dated 15th December, 1993, and the Division Bench dated 16th February, 1994. I am informed at the bar that, as a consequence of the said order of the Supreme Court, there being no stay of the impugned Award, all workmen including the workmen represented by the Petitioner Union started working for 48 hours per week in accordance with the terms of the impugned Award.
11. That brings us to the substantive challenge to the Award. Taking the second contention first, Mr. Singh, learned counsel for the petitioner, relied on the judgment of the Division Bench of this Court in Haribhau Shinde & Anr. v. F. H. Lala, Industrial Tribunal, Bombay & Anr. 1970 LIC 664 = AIR 1970 Bom. 2133 and contended that the provisions of Section V would operate only in areas where adjudication had not previously taken place and the terms and conditions of service had not been fixed by Award/Settlement. He contends that it is only with regard to such conditions of service that an employer may have the right of altering the conditions of service in accordance with the provisions of Section 9-A and Section 33(1)(a) of the Act, but, where conditions of service are once settled by an Award, they could only be altered by contract, settlement and/or by award made in a reference made under Section 10 and that there was nothing in the provisions of Sections 9-A and 33 creating extra of new rights in favour of the Employer. Haribhau was also a similar case. There was an Award of the Industrial Tribunal by which the Dearness Allowance payable to the workmen by the employer Company had been increased. After the termination of the said Award, an industrial dispute was raised by the Union for increase of the Dearness Allowance, the said industrial dispute was referred to the Tribunal and was pending before it. During pendency of the said reference the Employer Company issued a notice under Section 9-A of the Act conveying its intention to reduce the Dearness Allowance by 40 per cent., from a stipulated date. The Company applied to the Government to refer the dispute raised to the Industrial Tribunal for its adjudication and, having failed, the company filed an application under Section 33(1)(a) before the Tribunal seeking permission to implement its proposal to reduce the amount of Dearness Allowance payable to its workmen by 40 per cent., or such other percentage as found reasonable. The application was strongly opposed on behalf of the workmen and the Tribunal made an order holding that the application made by the employer therein was maintainable in law under Section 33(1)(a) of the Act, though it felt that it would not be proper to hear and dispose it of in isolation and that it should be heard and disposed of along with the reference itself. This order of the Tribunal was challenged before the Division Bench of this Court. It was urged before the Division Bench that Section 33(1)(a) was specifically intended to confer a right upon the employer to bring about prejudicial change with regard to any condition of service which was itself the subject matter of the pending reference. While in terms negativing this contention, the Division Bench observed :
'Now, the scheme of the Industrial Disputes Act, as observed by the Supreme Court in the cases of : (1959)IILLJ666SC , which we have just noticed, was to maintain status quo as regards the terms and conditions of service between the parties until the terms and conditions were by a contract or a settlement or an adjudication award altered. Needless to state that the question of alteration of the terms and conditions by adjudication in an award must depend upon the reference that may be made by the Government under Section 10 of the Act. Apparently, the position is that in cases in which the Government for the reason which may be germane and relevant refuses to make a reference of a demand for alteration of terms and conditions of service, the employer must be left without any remedy whatsoever. The scheme of the Industrial Disputes Act thus appears to us to have deprived both the employer and the workmen of the liberty to have the terms and conditions of service altered by unilateral action on either side. The employer was not left with liberty to make his own contract regarding the terms of employment, i.e. regarding the right to alter the terms and conditions of service fixed by an award to the prejudice of the workmen without securing a reference under Section 10 of the Act. Similarly, the workman, in spite of his right to agitate in that connection was not left with the liberty to insist upon the revision of the terms and conditions of service in his favour unless he secured the revision by a reference made under Section 10 and the consequent adjudication of demand for revision by award.
'The question is whether the position as ascertained by us above is altered in favour of the employer by granting to him fresh rights under the provisions of Sections 9A and 33 of the Act. It must at once be admitted that the language of these sections and particularly Section 33 gives scope to an argument that the Legislature has envisaged existence of undisputed right in an employer to alter the conditions of service applicable to the workmen to their prejudice. In this connection, it is to be noticed that the original Section 33 in the 1947 Act imposed a total ban and provided that 'no employer shall during the pendency of xxxxx proceedings before a Tribunal xxx, alter to the prejudice of the workmen concerned in the dispute, conditions of service applicable to the xxxx.' This provision was modified as already noticed above and the present Act clearly contemplates that the Tribunal may grant express permission to an employer to alter the conditions of service applicable to the workmen to their prejudice. Under clause (a) of Section 33(1), the permission may relate to any matter connected with the dispute. Under clause (a) of sub-section (2), the employer may alter the conditions of service in regard to any matter not connected with the dispute without even applying for permission of the Tribunal. Similarly, Section 9A contemplates that an employer has a right to serve a notice for change in conditions of service and thus envisages the existence of a right in an employer to alter conditions of service applicable to his workmen. Mr. Vimadalal for the Company, insisted that these provisions clearly recognise the common law right of an employer to asks for a revision of conditions of service to the prejudice of his workmen. He insists that in fact Section 9A does not only envisage but creates a right in the employer to alter conditions of service of workmen after giving the prescribed notice of change. Now, in this connection, having regard to the law as settled by authorities, he had to admit that the lifting of ban under Section 33 does not bring about effectively the alteration in terms of conditions of service as desired by an employer. He admitted that even when permission was granted under Clause (a) of Section 33(1), the workmen would be entitled to raise a dispute regarding prejudicial revision of his conditions of service and the matter would have to be ultimately finally decided only by an adjudication by Industrial Tribunal. He admitted that this would be the position even where a valid notice of change as regards conditions of service was tendered by an employer under Section 9A. These admissions, we apprehend, are result of the appreciation by Mr. Vimadalal of the effect of the law as pronounced in the cases of : (1964)ILLJ19SC , which we have noticed above. In connection with his submissions that Section 33 and S. 9-A created a right in favour of an employer to alter the terms and conditions of service, we are not in a position to disregard the law pronounced by the above authorities that conditions of service as settled by an award would continue to be binding on both the employer and the workmen continuously until they are altered by a contract, a settlement and/or an award made in reference made under Section 10. We have arrived at this conclusion with certain hesitation because of the language in Sections 9A and 33(1) which deal with the manner in which an employer who contemplates alteration of conditions of service may proceed. The provisions in these sections are procedural and, in our view, do not create extra or new rights in favour of an employer. This is clear on the plain language of the sections. This is admitted indirectly on behalf of the Company when it is stated that as soon as an alteration is proposed in the notice under Section 9-A and a permission is granted under Section 33, the workmen would be entitled to raise protest and demand a reference in respect of the alterations proposed by the employer. Above must be the true construction and effect of the provisions in Sections 9A and 33, having regard to the law pronounced by various Courts in connection with the operation of the award after it is terminated under Section 19(6) of the Act.'
In my view, the judgment of the Division Bench in Haribhau's case clearly supports the petitioner's second contention.
12. Mr. Singhvi, learned counsel appearing for the First Respondent, however, contended that Haribhau's case has been wrongly decided. He contends that, barring the consequence of incurring a penal liability, it was open to an Employer to go ahead and make an alteration in the service conditions of the workmen, contrary to the provisions of Section 33. All that would happen was that the workmen would get a right under Section 33A to make a complaint with regard to the prejudicial alteration of service conditions and such a complaint would have to be adjudicated, as if it was a pending reference before the Tribunal in accordance with the provisions of the Act. He contends that once a complaint is made to the Tribunal about a prejudicial alteration in the conditions of service falling within the ambit of Section 33A of the Act while entertaining such a complaint, the Tribunal's jurisdiction is exactly the same as while entertaining a reference under Section 10 and, therefore, logically there would be no difference between a situation where an application is made under Section 3(1)(a) and the Tribunal is invited to grant permission for the implementation of a prejudicial conditions of service, and a situation where upon contravention of provisions of Section 33 the Tribunal adjudicates a complaint under Section 33-A of the Act. He, therefore, contends that what could be done indirectly by forcing the workmen to resort to action under Section 33-A could conceivably be done as well by the Employer by making an application under Section 33(1)(a), since one section is the antithesis of the other. The argument, thus presented, is undoubtedly, attractive and, but for the fact that the Division Bench has considered the same argument and rejected it in Haribhau's case, I might have given it a longer shift. However, in view of the clear observations of the Division Bench in Haribhau's case, I consider myself bound by the law laid down therein and, therefore, I reject this argument made by Mr. Singhvi. (Interestingly, it was Mr. Singhvi who canvassed the contention on behalf of the workmen in Haribhau's case and, after a lapse of 20 years, canvasses vigorously for acceptance of a contrary view! That, of course, is the privilege of counsel!)
13. The First and Third contentions as to jurisdiction urged by Mr. Singh could be coalesced into one. The contention is that the direction in the Award for increasing working hours of the workmen represented by the petitioner was without jurisdiction, since there was no such reference made to the Tribunal. The only demand with regard to working hours which was pending in the reference was that the working hours of all the workmen of the factory/office be reduced from 44 hours per week to 40 hours per week with five days working week. There was no demand pending adjudication before the Tribunal for increase in the working hours. Section 10 of the Act which delimits the jurisdiction of the Industrial Tribunal to adjudicate a reference provides, vide sub-section (4), that where the appropriate Government has specified the points of dispute for adjudication, the Tribunal shall confine its adjudication to those points and matters incidental thereto. I have already pointed out that the point of dispute referred for adjudication, on the subject matter of working hours, was only with regard to reduction of the working hours. In the settlement dated 5th January, 1993, in terms of which a Award has been made. Clause 17 provides as under :-
'17. Working Hours :
It is agreed that the specific Clause regarding Working Hours as per clause 1(a) of the Settlement November 1980 shall be substituted as follows :
'The existing hours of actual average of 44 hours per week shall be increased to 48 hours per week of 6 normal working days. To achieve this, additional weekly offs in alternate weeks shall cease to be weekly offs and shall be normal working days.'
The Working who are entitled to a payment of 50% of additional wages for working on Sundays and alternate closed Saturdays shall be entitled to 75% of additional Wages for working only of Sundays alternate Saturdays being normal working days.'
14. It is thus obvious that the Award, in so far as it increases the working hour, is not based on any point of dispute or issue referred to it. Mr. Singhvi, however, contained that, even if the point of dispute referred to for adjudication was one for reduction in the hours of working would be a matter 'incidental' thereto. The merit of this contention needs to be critically examined.
15. Our Courts have had several occasions to consider as to what would be an 'incidental' matter in the perspective of a reference of an industrial dispute for adjudication and it would be useful to notice some authorities on this issue cited at the Bar.
16. In the Management of Tocklai Experimental Station represented by the Indian Tea Association v. The workmen & Anr., the issue referred for adjudication was 'whether the demand of the employees (Junior Staff) for bonus is justified If so, at what rate should the same be paid ?' While adjudicating on this issue, the Tribunal directed that the workmen should be paid puja bonus at the same rate as the employees working in the I. T. A. at Calcutta are getting. In the appeal under Article 136 of the Constitution, the Supreme Court pointed out that what was referred to it was a demand with regard to bonus - profit bonus as understood in the industrial adjudication - and in awarding payment of puja bonus to the workmen the Tribunal has failed to consider that it was making out an entirely new and inconsistent case for the workmen and granting the said claim without any proof of the relevant facts which would support such a claim and on this reasoning the Award was set aside.
17. The contours of this contention are better illuminated in the judgment of the Supreme Court in Airlines Hotel Pvt. Ltd. Bombay v. Its Workmen : (1961)ILLJ663SC . In this case the Government, while making reference of a dispute as to service charges for adjudication by an Industrial Tribunal under Section 10, refused to refer for adjudication a specific demand for inspection of the accounts. While adjudicating the demand which was referred, the Tribunal made a direction for inspection of the accounts. This order was challenged as wholly without jurisdiction. It was contended before the Supreme Court that the direction given by the Tribunal for inspection of accounts was not by way of decision of matter which was not referred to it, but only as 'incidental' to the dispute as referred for adjudication. Considering the circumstances under which the Government had specifically refused to refer for adjudication the demand for inspection of accounts, the Supreme Court took the view that there was not justification to hold that what could not be done directly because of the said refusal was incidental, and held that the Tribunal had no jurisdiction to give direction as regards inspection of accounts.
18. In Pottery Was Panchayat v. The Perfect Pottery Co. Ltd. & Anr. AIR 1979 SC 1356, one of the points for adjudication was whether the proposed closure by the management of the Perfect Pottery Co. Ltd. Jabalpur, of their Pottery Factory at Jabalpur, with effect from July 1, 1967 was proper and justified. The Tribunal held that it had no jurisdiction to inquire whether the decision of the management to close down the business was proper and justified, but that it was entitled to consider whether, in fact, the business was closed. When the matter came to the Supreme Court, the Supreme Court took the view that the terms of the reference showed that the point of dispute between the parties was not the fact of the closure of its business by the respondent, but the propriety and justification of the respondent's decision to close down the business and that is why to close down the business and that is why the references were expressed to say whether the proposed closure of the business was proper and justified. In other words, by the reference the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business of whether under the pretence of closing the business the workers were locked out by the management. The Supreme Court concluded by holding that the references being limited to the narrow question as to whether the closure was proper and justified, the Tribunals, by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management.
19. To similar effect are the observations of the Supreme Court in Firestone Type and Rubber Co. of India Pvt. Ltd. v. Workmen, 1981 I LLJ 218. There the point of dispute referred was the demand for reinstatement in respect of the workmen raised on the alleged invalidity of the action taken by the management in dismissing the workmen and it was held that the issue of unfair Labour practice or discrimination, by reason of subsequent reinstatement on a permanent basis of some and not all the 25 workmen, was not a matter referred to the Tribunal for adjudication, not it could be said to be in any way connected with or incidental to the right of reinstatement claimed by the 101 workmen from the date of their dismissal.
20. Reference may be made in this connection to the judgment of the Division Bench of our High Court in Sitaram Vishnu Shirodkar v. The Administrator, Government of Goa & Ors. : (1985)ILLJ480Bom and the judgment of the Supreme Court in the Delhi cloth and General Mills Co. Ltd. v. The Workmen & Ors. : (1967)ILLJ423SC . In the Delhi Cloth Mills Case the term of reference raised on issue as to legality and justification of strike and lock-out in the mill. It was held that the Tribunal was confined to decide only the question whether the lock-out was justified or not and could not enlarge the scope of its jurisdiction and decide that there was not strike or lock-out at all.
21. Mr. Singhvi, however, relying on a judgment of the Division Bench of the Patna High Court in Deokinandan Prasad & Ors. v. Presiding Officer and Others 1972 (25) F. L. R. 206 pointed out that the Division Bench of the Patna High Court has taken the view that it is well known proposition of law, so far as disputes pending in Civil Courts are concerned, that a compromise even beyond the scope of the dispute can be recorded by a Civil Court, and that if a agreement was arrived at between the union and the Management, there was no reason to held that the Tribunal cannot adopt that agreement as an Award, merely because the agreement had taken within its ambit certain matters which were not strictly covered by the terms of the reference. With great respect, I am unable to accept the line of reasoning in the said judgment. The Patna High Court appears to have wholly relied on the fact that in a Civil Court the compromise could be recorded even beyond the scope of the dispute in the suit, and not considered a situation where there could be several Unions on the scene. The Patna High Court observes :
'But in regard to the matter of adoption a compromise as a part of the award, after due consideration, I have come to the conclusion that the Tribunal's power is almost at par with that of the Civil Court except in one regard. The matters which are to be considered for recording a compromise in a Civil Court are engrafted in order 23, Rule 3 of the Code of Civil Procedure, which may not include the matter of reasonableness, fairness or its being beneficial to a particular party except when minors are involved. While the Tribunal does not record a compromise as such but adopts it as apart of its award after finding it reasonable, just, fair or in the interest of the workmen, the distinction is appreciable, and, yet I do not feel persuaded to accept the argument put forwarded on behalf of the petitioners that while adopting the agreement as a part of the award, the Tribunal must confine itself to the point referred or the matters incidental thereto. It may well be that the award on pure and simple adjudication could not travel beyond the scope of the reference. But if an agreement is arrived at between a Union and a Management, I see no reason to hold that the Tribunal cannot adopt that agreement as an award merely because the agreement has taken within its ambit certain matters which are not strictly covered by the terms of reference'.
It does not appear that the Patna High Court was considering a multi union situation. It also does not appear from the judgment that the attention of their Lordships was drawn to the fact that, while a compromise would operate against and bind the parties to the suit, by virtue of Section 18(3) of the Act, an Award would bind all the workmen in the industrial establishment irrespective of whether they were members of the Trade Union which was party to the agreement and whether they were before the Tribunal or not. In the face of the provision of Section 10(4) of the Act, as interpreted by the different judgments of the Supreme Court to which a reference has already been made, I am unable to persuade myself to share the view taken by the Division Bench of the Patna High Court Deokinandan's case (supra). I am of the view that the only point of dispute referred to for adjudication the Tribunal was one contained in Demand No. 7, namely :
'DEMAND NO. 7 : WORKING HOURS :
Reduction in working hours of all the workmen of the factory/office from hours per week to 40 hours per week with five days week'.
It was open to the Tribunal to adjudicate this demand and hold either that there was justification for the demand in which case it could have directed reduction of the working hours from 48 hours per week to 44 or such other hours per week as found reasonable. If the Tribunal did not consider the demand as justified, then the only option available to it was to reject the demand. In my view considering the point of dispute as framed vide Demand No. 7, it would be fallacious to say that the demand to increase the working hours from 44 to 48 hours per week is 'incidental' to it, within the meaning of sub-section (4) of Section 10 of the Act. The word 'incidental' is defined in the Oxford English Dictionary (1978 Edition) as under :
'1. Occurring or liable to occur in fortuities or subordinate conjunction with something else of which it forms no essential part; casual.
(b) Of a charge or expense : Such as is incurred (in the execution of some plan or purpose) apart from the primary disbursements.
2. Incidental to : Liable to happen to; to which a thing is liable or exposed. Incidental upon : following upon as an incident.
(b) Given to relation casual incidents, nonce-use.
(B) An incidental circumstances, event charge, expense etc.'
Something is incidental to another, if it occurs or is liable to occur in fortuities or subordinate conjunction with that other entity, of which it forms an essential part and goes hand in hand with it as integral part. It can neither be internecine, nor over-ride the other entity. In the present case, the demand for increasing working hours from 44 hours per week to 48 hours per week was clearly inconsistent with and destructive of the original demand itself and, therefore, I am unable to construe it as being 'incidental' to the main demand which was the point of dispute referred for adjudication to the industrial Tribunal in the pending reference. It is not possible for me to accept the contention strenuously argued by Mr. Singhvi that the demand for increasing the working hours from 44 hours per week to 48 hours per week was incidental to the point of dispute referred for adjudication and, therefore, within the jurisdiction of the Tribunal. Once we reach the conclusion that the issue of increasing the working hours was not referred to the Tribunal in the points of dispute, nor, was incidental to any of the points of dispute referred for adjudication, the law on the subject is clear and it must be held that any Award made on such an issue is without jurisdiction. I am, therefore, of the view that, whatever the manner in which the issue was brought to the forefront, the Tribunal, on the terms of reference pending before it, had no jurisdiction to make an Award directing the increase of the working hours from 44 hours per week to 48 hours per week. The jurisdictional contention of the Petitioner Union is required to be upheld.
22. Mr. Singhvi then contended that, irrespective of the legal technicalities, the Tribunal has applied its mind to the fairness and reasonableness of the terms of settlement dated 5th January, 1993, and that if the Tribunal found it fair and reasonable in respect of an overwhelming majority of workmen, then there should be no interference, particularly when the Tribunal has jurisdiction to consider the terms of such settlement and make it operative against even a section of the workmen who were opposed to it. This contention would require examination of two crucial aspects, namely, (a) whether the Tribunal could have made an Award in the absence of an industrial dispute on any particular issue and (b) on merits, whether the terms of settlement were in any way prejudicial to the workmen who are members of the Petitioner Union.
23. On the first aspect, the law laid down by the Supreme Court in Sindhu Resettlement Corporation Ltd. v. Industrial Tribunal of Gujarat & Ors : (1968)ILLJ834SC is clear. The Supreme court in this case has taken the view that if no dispute had been raised by the employees with the Management, and unilateral request sent to the Government would only be a demand by them and not a industrial dispute between them and employer. The Supreme Court held that an 'industrial dispute', as defined, must be a dispute between employers and employers, and workmen and workmen and that the Government has to come to an opinion that an industrial dispute does exist and that opinion can only be formed on the basis that there was a dispute between the employees and the employer. In other words, except by making a demand, there could be no industrial dispute. The application of the ratio of this case to the facts of the present petition brings into sharp focus the stark realities of the case. Under the 1980 settlement the workmen represented by the Petitioner Union were required to work for average of 44 hours per week. At no point of time, before the settlement dated 5th January, 1993 was presented before the Industrial Tribunal, did the First Respondent Employer make any demand upon its workmen represented by the Petitioner Union for enhancing the working hours from 44 hours per week to 48 hours per week. If the First Respondent had made such a demand and sought a reference of the demand for adjudication, the Government would have been obliged to refer it to the very same Industrial Tribunal before whom reference (IT) No. 23 of 1989 was pending. The Tribunal in turn would have been obliged to hear and dispose it of along with Reference (IT) No. 23 of 1989. As far as the Petitioner's members were concerned, there was no demand against them, at any time that the First Respondent desired to increase the number of their working hours from 44 hours per week to 48 hours per week. Till they were faced with the application made under Section 33(1)(a), the terms of the settlement of 1980 were being implemented vis-a-vis them. The Act was brought on the Statute Book with the special object of adjudication industrial disputes quickly, so that internecine disputes could be resolved in a peaceful and amicable manner without having to bring the wheels of industry to a grinding halt. The keynote of the Act is that all actions shall be bilateral. If either party were to be given liberty to act unilaterally in matters which affect both, it would frustrate the object of the industrial Disputes Act which, as indicated by its preamble, is 'to make provision for the investigation and settlement of industrial disputes'. It would be necessary to construe all provisions of the Act in consonance with this central theme of the Act. Thus construed, it is obvious that a dispute on a issue so seminal in nature as increase in working hours could not have been brought into focus so obliquely, or adjudicated by proxy. I am, therefore, inclined to accept the argument of Mr. Singh that the principle laid down in Sindhu's case (supra) applied squarely to the present case and the Tribunal did not have jurisdiction to adjudicate the issue of increase in working hours.
24. This takes us to the last and final limb of the argument, namely, the merits of the settlement. I may make it clear that though the petition could have been disposed of on the legal issues alone, I have heard the parties and I propose to express my views on this limb of the argument also in the interest of expeditiously deciding the litigation pending before this Court.
25. According to the Petitioner Union, Clauses 2, 7, 17, 19, 20 and 28 of the settlement were prejudicial and, therefore, the Tribunal erred in making an Award in terms of the settlement. As far as the objections with regard to Clauses 2, 7 and 20 are concerned, I may straightaway dispose them off as I find that there is not much substance in the objections which appear to be more in the form of minor grievances. By themselves, they would be insufficient to persuade me to take a different view. However, when we come to a scrutiny of Clauses 17, 19 and 28, it does appear that there is substance in the grievance of the Union. The crux of the grievance is as follows : Under the 1980 settlement, the workmen represented by the Petitioner Union were required to work only on alternate Saturdays, i.e., on 26 Saturdays in a year. Prior to the impugned Award, if they were required to work on any one of 26 days, they were entitled to demand over-time for having worked on the non-working Saturday. By the Award, the Tribunal has, without any compensation to the concerned workmen, directed the workmen to work for additional 26 Saturdays in a year. At Exh. 'D' to the petition, the Petitioner Union was enclosed a chart - which was also produced before the Tribunal - indicating the loss which would be caused to the workmen represented by the Petitioner Union, if, without compensation, they are required to work for additional 26 days in a year. According to the Petitioner Union, there would be a loss in the monthly pay packet to the extent of Rs. 716/- per month. Apart from the loss in the monthly pay packet, it is also pointed out that, under the existing settlement of 1980, the workmen working for 240 days would be entitled to 28 days earned leave, but under the settlement dated 5th January, 1993 the workmen would be eligible only to earned leave at the rate prescribed in the Factories Act, or three days, whichever is higher. This anomalous result follows, because under the 1980 settlement the actual number of working days were reduced from 303 to 277 by reduction of 26 working days in a year. These 26 working days were treated as 'Credit Working Days' an were added to actual working days for the purpose of computing the days of earned leave. Thus, a workman who had worked for 214 days in a year was eligible for earned leave by adding these 26 Credit Working Days and was treated as having completed the minimum requirement of working 240 days to get the benefit of earned leave. This was so in all subsequent slabs, the last one being 266 days and above. By the settlement dated, 5th January, 1993, which was turned into Award, the actual working days were increased from 277 to 303, thereby depriving workmen automatically of the facility of 26 Credit Working Days. A workman would have to work for actual 240 days in a year to make him eligible for earned leave benefits under the Factories Act and the slabs thereafter, the last slab being 265 and above. Thus, in all slabs except the final one, there would be a reduction in the entitlement of earned leave, which the Petitioner Union was computed in terms of money as loss of 16 days leave or loss of 16 days wages amounting to Rs. 344.44 per month. For the same reason, the workmen would be losing casual leave, sick leave, paid holidays in the entire year, or money equivalent of Rs. 86.11 per month. The Petitioner Union points out that the total monetary loss would be Rs. 1146.55 per month, rounded off to Rs. 1150/- per month. On behalf of the First Respondent it is urged that this calculation is erroneous. It is pointed out that overtime rendered would have been available to the workmen, only if 26 Saturdays were actual non-working days. Since the Award makes all Saturdays as working Saturdays, there is no question of the workmen becoming eligible to over-time, according to the Respondents. Similarly, the 'Credit Working Days' facility was made available to the workmen so that they could easily work for 240 days and avail of the facility, but, under the present Award there can be no concept of 'Credit Working Days' facility as the working days are increased to 303 per year and a workman can actually work for 240 days in the year to complete the eligibility condition. It is strongly canvassed by the First Respondent that the settlement is a total package in which several demands have been conceded and that the conditions of service under special heads have been improved, and, therefore, even if the argument of the Petitioner Union is true that under certain other heads the benefits are curtained, the Tribunal was entitled to take an overall view of the settlement and hold that it was fair and reasonable. Relying on the judgments of the Supreme Court in Tata Engineering and Locomotive Co. Ltd. v. Workmen : (1981)IILLJ429SC and in Herbertsons Ltd. v. The Workmen of Herbertsons Ltd. & Ors. AIR 1977 SC 322, it is urged that in collective bargaining there has to be some amount of give and take and where a large number of workmen have accepted the conditions of service in a settlement as a package deal, it would not be permissible to pick and choose the terms. It was also urged that while testing the settlement for reasonableness or fairness before making it a part of the Award, the Tribunal is not bound to adopt the same standard which it might have adopted for adjudicating the Award.
26. A perusal of paragraph 24 and the discussion in the Award on issues 3, 4, 5 and 6 indicates that it was pointedly brought to the notice of the Tribunal that the implementation of the Award in settlement would in effect mean a monetary loss to the workmen. The Tribunal has not come to a contrary finding, but seems to have been impressed by the argument of the First Respondent that the policy of liberalisation of economy and the inability of the First Respondent to completely utilise its capacity led it to adopt the policy of increase in the working hours so as to fully exploit its full production capacity. The Tribunal proceeded to justify the settlement dated 5th January, 1993, by observing :
'Therefore, the settlement, dated 5th January, 1993, being a package deal, it will have to be accepted by the parties as a whole and no part of work force can accept only its beneficial clauses and discard what is not favourable to them'.
In paragraph 30 of the Award, the Tribunal itself found that, as a result of settlement dated 5th January, 1993, as workmen would stand to gain a sum of Rs. 1050/- per month, as against the argument of the Petitioner Union before the Tribunal that there would be net loss of Rs. 1150/- per month. There is no advertence by the Tribunal, much less a finding as to justifiability or otherwise of the other grounds urged by the Petitioner Union. The facile assumption that the workmen would receive Rs. 1100/- per month increase, without there being any extra strain involved on account of increase in the working hours, also does not appear to the justified. Another grievance made by the Petitioner Union is about the final direction made in the impugned Award. It provides that all workmen would be entitled to get benefits including the arrears with retrospective effect from 1st January, 1988, or 5th July, 1991, as the case may be. So far as the workmen represented by the Petitioner Union were concerned, the Tribunal was conscious that this direction would cause some prejudice to them and, therefore, the Tribunal says, in paragraph 32 :
This may cause some prejudice to the workmen who have been working on all Saturdays from 1st February, 1993, vis-a-vis, a small section of workmen who have not so far accepted the settlement. Therefore, in case of the workmen who have not accepted the said settlement so far and not worked on all Saturdays from 1st February, 1993, the company shall adjust their absence on Saturdays towards their privilege leave and if no privilege leave is to the credit of any such workmen, their absence shall be treated as leave without pay or adjusted against the arrears payable to them'.
Mr. Singh made a grievance, and I think justifiably so, that this is double jeopardy for the workmen represented by the Petitioner Union. Not only do they stand to lose under the Award, but, for not having agreed to accept implementation of the terms of the settlement dated 5th January, 1993 - which is any event were not binding upon them - they are also visited with the penalty of having their leave accounts set off against the number of Saturdays on which they did not work, even during the period when the settlement dated 5th January, 1993 was not binding upon them, i.e., from 5th July, 1991 will the Award became enforceable. (I am told that the Award became enforceable on 23rd December, 1993). There is a further jeopardy. As a result of the stay granted by the learned single Judge of this Court, from 15th December, 1993 till stay was vacated by the Supreme Court on 9th May, 1994, the Award being stayed and not binding on the workmen represented by the Petitioner Union as a consequence of which they were not obliged to work on all Saturdays. For this period also, they are likely to be punished by a set-off from their leave account. In my view, this was perhaps an unintended. Yet, this is a harsh and undesirable fall-out of the Award, which vitiates the Award.
27. Mr. Singhvi then urged that the Writ Court should consider the equities of the case and not disturb the Award, if the Tribunal had found it to be fair and reasonable. I have already held that the Award was without jurisdiction. I am also satisfied that the Award causes prejudice to a substantial section of the workmen. I therefore needs to be interfered with.
28. Mr. Gonsalves, learned Advocate appearing for Respondent No. 2, relied on the judgment of the Supreme Court in The Workmen of Government Silk Weaving Factory, Mysore v. The Presiding Officer, Industrial Tribunal, Bangalore & Ors. : (1973)IILLJ144SC . In my view, this judgment really turned on the peculiar facts before their Lordships and renders on assistance to resolve the controversy in the petition.
29. Mr. Singhvi also relied on the judgments in Assam Match Company v. Bijoyal Sen & Ors. : (1973)IILLJ149SC and Tata Iron and Steel Co. v. Their Workmen, (1972) 43 FJR 1. I do not think it is necessary to discuss the facts of these cases in detail, as nothing really turns thereupon.
30. In the result, I am of the view that the impugned Award is without jurisdiction, that the finding of the Industrial Tribunal that the settlement dated 5th January, 1993 is just, fair and equitable has been arrived at without proper application of mind to the facts presented before it and further that the settlement dated 5th January, 1993, does cause prejudice to the workmen represented by the Petitioner Union. In the circumstances, this is fit case where this Court ought to exercise its powers under Article 226 of the Constitution of India and interfere with the Award of the Tribunal. Though it has been held that the Award is without jurisdiction with regard to the demand for increase in working hours, since the settlement dated 5th January, 1993 is said to be a package deal, it would not be proper to quash only that part of the Award and allow other parts to remain in operation. In my judgment, the appropriate course of action would be to quash the Award in its entirely, leaving the Industrial Tribunal to adjudicate the demands pending the Reference (IT) No. 23 of 1989 afresh.
31. In the premises, the writ petition is allowed, rule made absolute and the impugned Award of the Industrial Tribunal, Thane, dated 3rd November, 1993, made in Reference (IT) No. 23 of 1989 is hereby quashed and set aside. The Reference is restored to the file of the Third Respondent Industrial Tribunal. The Third Respondent Tribunal shall as expeditiously as possible hear and dispose of the said Reference in accordance with law.
32. Considering the peculiar facts and circumstances of the case, three would be no order as to costs.
33. Mr. Nerlekar applies on behalf of the First Respondent for stay of the order for a period of six weeks so as to enable the First Respondent to carry the matter in appeal. The operative order stands stayed for a period of six weeks from today.