Allahabad Patrika (P.) Ltd. Vs. Presiding Officer, Labour Court, U.P., Allahabad and ors. - Court Judgment

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labour and industrial - retrenchment compensation - sections 4f and 6n of u. p. industrial disputes act, 1947 - petition challenging award of labour court giving retrenchment compensation - petitioner relied on agreement entered not to give retrenchment compensation -held, retrenchment compensation cannot be refused as provided in section 6n - award of labour court has not exceeded reference made by state government. - - it appears that the retrenched workmen were not satisfied with the agreement and filed conciliation petition, on the failure of which industrial disputes were referred in adjudication case no. the reference order was silent on the question whether the retrenchment agreement is bad or not. but such a condition is clearly absent under section 6n (b) of the act.sunil ambwani, j. 1. heard sri shakti swaroop nigam for the petitioner and sri r.c. dubey for respondents. with the consent of theparties, this writ petition is being finally decided at the admission stage.2. petitioner m/s. allahabad patrika pvt. ltd. is a private limited company and is engaged in the business of publishing/printing newspapers. the publication of news paper was stopped from 8.1.1994 to 25.6.1995. the managemenl of the company reached to an agreement with the workmen in conciliation proceedings before the conciliation officer/dy. labour commissioner on 24.6.1995. under the terms of agreement, which were signed before deputy labour commissioner, allahabad, and registered by him, it was agreed that the publication will resume by taking workmen not less than 170 in number, on the terms and conditions stated in agreement. the management paid the workmen and resumed publication. it appears that the retrenched workmen were not satisfied with the agreement and filed conciliation petition, on the failure of which industrial disputes were referred in adjudication case no. 66 of 1996 and 7 other connected petitions and were referred for adjudication to the industrial tribunal (i), u. p. at allahabad under section 4k of the u. p. industrial disputes act, 1947. the reference required the tribunal to decide whether the termination of services by retrenchment of the workmen were proper and legal and, if not, the relief to which the workmen were entitled.3. justice n.l. ganguly (retired). presiding the tribunal, held that the reference made by the state government was covered within the terms and conditions of settlement agreement. the establishment was closed for about 18 months and it was viable only if the labour force was reduced. it was considered expedient to retain only 170 workmen out of total force of about 200 workmen. the settlement agreement was arrived at between the employers and the recognised union of the workers, namely, allahabad patrika karmachari kalyan sangh and was registered. the reference order was silent on the question whether the retrenchment agreement is bad or not. the concluding portion of the order of industrial tribunal dated 10.6.1999 is quoted as below :'.........the present referenceby the state government under section 4k is misconceived. the state government assumed jurisdiction and arrived at an illegal conclusion that there was illegal retrenchment. such a reference is wholly illegal and not maintainable. after scanning of the evidence. i am of the opinion that the press of the employers remained closed for 18 months on account of financial strain in the employers establishment. it was considered in the interest of establishment and its work that the labour force be reduced and settlement agreement was arrived at which could not legally as ...... in the presentreference, no such a question has been referred for adjudication before this tribunal. in view of the facts and circumstances and discussion of the evidence and law. i am of the view that the workmen are not entitled to any relief. the references are answered in negative against the workers.'4. the respondent-workmen also raised their disputes by filing conciliation petitions, with regard to termination of their services which were referred by the state government under section 4k of the u. p. industrial disputes act, 1947, to the labour court, u. p., allahabad in adjudication case no. 8 of 1996 connected with 10 other cases. the terms of reference were to decide whether the termination of services of the workmen was proper and/or legal and, if not, to what relief the concerned workmen is entitled with other details. the labour court presided by sri j.n. dwivedi, considered the pleadings of the workmen and found that the workmen in adjudication case no. 8 of 1996 has challenged the agreement, and the rest of the workmen stated that they have been paid other dues except the retrenchment compensation. the employer relied upon the agreement dated 24.6.1995, entered into between the parties and signed and registered before the deputy labour commissioner.5. it was submitted on behalf of the workmen before the labour court that the officebearers of their union did not take them in confidence and that no discussions were held or their consent was taken before they entered into agreement. the workmen, however, did not deny that they were members of the said union. the employer relied upon the award dated 10.6.1999 in adjudication case no. 66 of 1996 and 7 other connected cases in support of their defence. only one question was raised and considered before the labour court, namely, whether the workmen were entitled to retrenchment compensation. according to the workmen, the agreement did not restrict or take away the rights of the workmen under section 6n of the u. p. industrial disputes act. 1947. the labour court by the impugned order dated 6.11.2000, published on 21,7.2001, held that the terms of agreement did not provide that the retrenchment compensation shall not be given and thus the workmen have a right to receive retrenchment compensation under section 6 (b) of the act. he concluded that the retrenchment of the concerned 11 workmen was valid under the agreement and that the workmen are not entitled to any relief other than the retrenchment compensation under section 6n of the u. p. industrial disputes act. 1947.6. sri shakti swaroop nigam, learned counsel appearing for the petitioner, has challenged the award on the following grounds :(1) the registered settlement was arrived at on 24.6.1995, for retrenchment of workmen for paying their dues. clause iii of the agreement specifically provides for giving emoluments to the retrenched workers and it was provided in clause vi of the agreement that for three years from the date of agreement, the workmen shall not demand anything which would put additional financial burden on the establishment. wholesome package was providedto the retrenchment and if some statutory dues were not paid, the same cannot be held to have been payable to the workmen. (2) the settlements has to be accepted or rejected as a whole and cannot be scanned in bits and pieces to take benefits which were acceptable and to hold other part as invalid. (3) the sanctity of agreement arrived at between the employers and the employees before the conciliation officer through registered union cannot be extended to cover disputes or demand which are not specifically covered by the settlement. (4) the settlement was acted upon and having received the benefits, the workmen did not challenge its validity. (5) a registered settlement between the employer and workmen will override the statutory regulation and cannot be over-reached unless it is held to be unfair and unjust. (6) the principles of res judicata will apply in industrial adjudication and that eight workmen having lost before the industrial tribunal with the same employer, the award was binding upon the other workmen. the labour court has travelled beyond the scope of reference and had ventured into the questions which were covered by the settlement. 7. a perusal of the settlement shows that it was arrived at between m/s. allahabad patrika (p.) ltd. through sri tamal kanti ghosh. director and occupier, sri k.v. mathur, director and manager, and santosh tiwari, general manager, and allahabad patrika karmchari kalyan sangh, allahabad, through northern india patrika, amrit prabhat karmchari sanyukta morcha,7-stanley road. allahabad through its president sri r.k. dev nath, secretary, sri laxmi narain sharma. sri abdul saleem and sri p.k. das, and after several meetings regarding workers agitation, involving the district magistrate, allahabad and deputy labour commissioner. allahabad, the employer and the union agreed in principle to the terms of settlement on 1 1.5.1995 and thereafter on 19.6.1995 agreed to give practical shape to the settlement and that after bipartite and tripartite talks, a settlement was arrived at. the salient features of the settlement were that the employer shall resume publication of newspaper after making arrangement giving opportunity to all workmen and employees by sending notice to all such employees at last available address on 26.6.1995 giving them 15 days time, considering the utility of the establishment, modernization shall be carried out in consultation with the deputy labour commissioner and that accordingly number of employees shall be determined, which shall not be less than 170. clauses 3, 5 and 6 are relevant for the purposes of this writ petition. in clause 3, the employers agreed that after reopening establishment, the retrenched employees shall be paid provident fund, gratuity, earned wages and one months pay within five months of the date of retrenchment. the balance of the payment to the employees, who have retired before the settlement shall also be made by the management by post dated cheques. in clause 4, it was provided that all the legal dues shall be paid within five years of the settlement. the management within three months of the settlement in consultation with the deputy labour commissioner publish a list of the same. so far as possible the employees shall be adjusted in the establishment so that minimum number of employees are affected. in clause 6, the representative of the workmen agreed that for three years of settlement, no demand shall be made for causing any additional burden on the establishment. clause 7 provided foragreement that the employer shall not take any steps to victimise the workmen. clauses 8 and 9 related to commitment of the workmen to work with full devotion and the employer to ensure timely payment of dues. the last of these clauses namely clause 10 provided that the gap of period during which publication was under suspension since january, 1994, shall not be treated to be a break in service. the settlement dated 24.6.1991 was signed in presence of deputy labour commissioner. clause 3 of the aforesaid settlement has come up for interpretation. sri nigam appearing for petitioner submitted that it does not provide payment of any other dues except provident fund, gratuity, earned wages and one month pay and that the word 'retrenched person' and 'one months pay to be paid within five month's from the date of retrenchment' does not mean and include the payment of retrenchment compensation. according to him, the workmen agreed to accept only provident fund, gratuity, earned wages and one month's pay, and thus, they are not entitled to any other payment.8. the settlement shows that the employers agreed to take back the workmen in consultation with deputy labour commissioner which shall not be less than 170. the remaining workmen were to be retrenched. the word 'retrenched' has been specifically used in paragraph 3 of the settlement. retrenchment has been defined in section 2 (s) of u. p. industrial disputes act, 1947, and means termination by the employer of the services of a workman for any reason whatsoever, otherwise than as punishment inflicted by way of disciplinary action, but does not include (i) voluntary retirement of workmen ; or (ii) retirement of workman on reaching the age of superannuation if the contract of employment between employer and workman concerned contains a stipulation in that behalf. section 6n, provides for conditions precedent to retrenchment to workmen and section 6p provides for procedure for retrenchment. section 6n and section 6p of u. p. industrial disputes act, 1947, are quoted as below :'6-n. conditions precedent to retrenchment of workmen.--no workmen employed in any industry, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until : (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workmen has been paid in lieu of such notice wages for the period of the notice : provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service ; (b) the workmen has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days average pay for every completed year of service or any part thereof in excess of six months, and (c) notice in the prescribed manner is served on the state government. 6-p. procedure for retrenchment. -- where any workman in an industrial establishment, who is a citizen of india, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employers shall ordinarily retrench the workman, who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.' 9. whereas section 6n mandates that no workman employed in any industry shall be retrenched by an employer, until he is given onemonths notice in writing indicating the reasons for retrenchment and the period of notice has expired and the workman has been paid in lieu of notice wages for the period of notice and the workman has been paid entire retrenchment compensation which shall be equivalent of fifteen days average pay for every completed year of service or any part thereof in excess of six month. it is to be noticed that whereas under proviso to section 6n (a) the notice can be waived by an agreement for retrenchment which specifies the date of termination of service, and that there can be agreement between employer and workmen with regard to procedure for retrenchment, the retrenchment compensation cannot be denied even if there is an agreement between employer and workmen.10. clause 3 of the agreement, taking in the context in which the agreement was arrived at and reading it together with all the other clauses of agreement, does not show that the retrenchment compensation was not required to be paid. it did not exclude the payment of retrenchment compensation to the employees. the other payments, namely, provident fund, gratuity earned wages and one month pay are only illustrative in nature. the mention of these payments did not restrict the right of the workman to claim retrenchment compensation, which is a statutory incident of retrenchment, and which cannot be given up even by an agreement.11. clause 6 cannot be read in favour of the employer to deny retrenchment compensation. it has no concern with the payment to be made to the retrenched workmen. it is applicable between the employer and those workmen, who were to be taken back in employment, and provides for a condition that the employees shall not cause any additional burden on the establishment for next three years. the submission of sri nigam that the settlement has to be accepted or rejected as a whole and cannot be scanned in bits and pieces to takebenefits which were acceptable and to hold other part as invalid, is not applicable to the present case. the labour court neither split nor attempted to separate any part favourable to workmen from other part which is not acceptable. all that the court tried to do was to interpret clause 3 in the context of settlement, and read the settlement as a whole. in harbertsons ltd. v. workmen of harbertson ltd. and ors., (1976) 4 scc 736, supreme court held that a voluntary settlement if fair and just, could be allowed to be binding on all the workers even if a very small number of workers were not members of the majority union and in the said context, it held that it was not possible to scan the settlement in bits and pieces and whole part acceptable to any other, is not applicable to the facts of the present case. in viruchachalam and ors. v. management of lotus mills, air 1998 sc 554, same principle was followed. in this case, the agreement quoted in para 2 of the judgment specifically provided that all the workers, who were laid off during that period shall be paid lay-off compensation for the first forty-five days of lay off and that no compensation shall be payable in respect of days of lay off after the expiry of the first forty-five days. similarly in the next clause, the workmen laid off during the period referred in the said clause, were to be paid lay off compensation for the period of first forty-five days of lay off and no compensation was to be paid in respect of lay off after the expiry of first forty-five days. the supreme court held that the agreement as a result of collective bargaining affects all the parties to industrial dispute and will cover the entire body of workmen, which will not only include existing workmen but also future workmen and shall have same legal effect of the award of labour court or tribunal. the supreme court relied upon the proviso to section 25c of industrial disputes act, 1947, which carves out an exception to section 25c(1) and provides that if during the period of 12 months a workman is so laid off for more than forty-five days, no such compensation shall bepayable in respect of lay off after the expiration of first forty-five days if there is an agreement between workmen and employers. it was held that the binding effect of the embedded agreement in the written statement arrived at during conciliation proceedings would get telescoped into first proviso to section 25c(1) and bind all workmen even though individually they might have signed the agreement with the management or their union might not have signed such agreement with the management on behalf of its member workmen.12. it was further contended by sri nigam that the sanctity of the agreement cannot be extended to cover dispute or demand which are not specifically covered by the settlement. i have already held above, that the agreement did not curtail rights of the retrenched workmen to be paid retrenchment compensation, which was to be paid under section 6n (b) of the act. the settlement did not specifically curtail such right nor it could be inferred from the language used in clauses 3, 4 and 6 of the agreement. it is, therefore, incorrect to say that the demand of retrenchment compensation is an extension of the agreement. the judgment relied upon by sri nigam in ghandhidham nagar palika v. r.c. israni, 1993 (66) flr 29, is not applicable to the present case.13. it was next contended that the settlement was acted upon and after having taken benefit, the workmen cannot challenge its validity and that the doctrine of estoppel will apply. for this proposition, petitioner has relied uppn wings wear (p.) ltd. v. workmen as represented by wings wear workers lal jhanda union, 1996 llr 802. in the said case, the high court held that after having implemented the agreement, the management will continue to be bound to honour it, and thus, both the parties were estopped from challenging the same at a late stage. in the present case, the agreement was arrived at on 24.6.1995. and that the dispute was raised on 19.12.1995, i.e., within six months of theagreement. there is nothing on record to show nor any evidence was led before labour court that workmen concerned had accepted the amount offered to them in full and final settlement of their dues. sri p.k. das, secretary, northern india patrika, amrit prabhat karmchari sanyukta morcha, who represented 11 workmen in the present case, had in fact given an application before the deputy labour commissioner that the agreement may not be registered in the circumstances, it cannot be said that agreement was acted upon by the concerned workmen and that they are estopped from claiming retrenchment compensation.14. on the fifth contention of the workmen, i have already held that the payment of retrenchment compensation could not be curtailed by an agreement. legislature has specifically provided for valid agreement to over-ride certain provisions of the act, which include the period of notice, fixing date of termination, procedure for retrenchment, etc. but such a condition is clearly absent under section 6n (b) of the act. since the legislature has provided a valid agreement to over-ride the specified rights and liabilities of the employers and the workmen, it could not be held that an agreement under section 4f read with rule 5 (i) will over-ride the provisions of section 6n (b) of the act.15. coming to the last submission, it is contended that the award in adjudication case no. 66 of 1996 and other connected cases given by justice n.l. ganguly, former judge, high court, presiding in industrial tribunal, dated 10.6.1999 will operate as res judicata. although the said reference was in respect of same agreement, the respondents workmen were not party to the proceedings. the issue whether the settlement will deprive the concerned workmen in the said award to the retrenchment compensation was neither raised nor considered. the only argument raised was that the services of the concerned workmen were not validly and legally terminated. relying upon the validityof agreement, the tribunal held thatservices of the workmen rightly cameto an end, and the agreement waslegal and binding on all the workers.since the respondents were not partyto the said adjudication and that thequestion of payment of retrenchmentcompensation was not raised anddecided at all, the award dated10.6.1999, cannot estop the rights ofrespondents. the principle ofconstructive res judicata is notapplicable and did not bar theadjudication which has given thebenefit of retrenchmentcompensation to the respondents.the decision cited by sri nigam inrespect of his submission, namely.workmen of straw board. v. strawboard ., air1974 sc 1132 and the punjab cooperative bank ltd u. r.s. bhatia. air1975 sc 1898, are not applicable to the facts of the present case, in the case of workmen of straw board ., it was held that the matter which was directly and substantially in issue in each case which is of material relevance in determining the question of res judicata whether the matter in dispute in a subsequent case had earlier been directly and substantially in issue between the same party, and the same had been heard and finally disposed of by the tribunal is a condition precedent and will have to be determined before holding in a particular case before attracting the principle of res judicata. in punjab co-operative bank ltd. v. r. s. bhatia (supra), it was held that the question whether respondent is workmen or not decided in proceedings under section 33a will operate as res judicata between the same parties in proceedings under section 33c(2) of the industrial disputes act, 1947.16. it was lastly contended that the award was beyond the terms of reference inasmuch as the reference was confined only to the fact whether the services were validly terminated whereas the labour court has awarded retrenchment compensation to the respondents. in support of this last submission, sri nigam has relied upon union of india v. santriramghosh and ors., 1989 (1) scc 68and secretary k.u.m.s. damoh v.labour court, sagar (m. p.), 2000 (87)flr 629. in the first case, referenceto the board of arbitrator was to giveits finding whether the revised pay is applicable to the post of scientificassistants working in botanicalsurvey of india, the board, however,found two levels of scale of pay, andminimum qualification for each level.it was held that there was no scopefor directing the government to frameproper recruitment rules. in the nextcase, reference was made toadjudicate whether the terminationwas legal and justified. the labourcourt, however, exceeded itsjurisdiction in making the workmenentitled to the wages of particular payscale to a regular employee. thepresent case offers a completelydifferent facts. the payment ofretrenchment compensation wasdirectly linked with the stipulatedtermination of workmen. even if theretrenchment was valid, the denial ofretrenchment compensation did notflow from the agreement and as suchthe payment of retrenchmentcompensation was a consequentialrelief to be awarded by the labourcourt. the question of payment ofretrenchment compensation wasintertwined to the question of validtermination of service, and thus in myopinion, the labour court did not gobeyond the term of reference inawarding retrenchmentcompensation.17. in the facts and circumstances of case the writ petition is devoid of merits and is dismissed. there shall be no order as to costs.