G. Chandrasekharan Nair Vs. National Textile Corporation and ors. - Court Judgment

K. Sreedharan, J.

1. Petitioner commenced his service as an apprentice under the second respondent in November, 1969. He was absorbed in the regular service as Grade III workman in 1972. At that time, second respondent was under private management. Employees were entitled to continue in service till they attain the age of 60 years. While so, the first respondent took over the management of the second respondent in 1974, on nationalisation. The age of retirement of the members of the staff under the first respondent is 58 years. So, the issue relating to the age of retirement of the members of the staff of the second respondent was settled by a memorandum of settlement dated July 5, 1981. Clause 7 of that settlement entered into between the parties as per Section 18 of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act'), was in the following terms:

'It is agreed that the age of superannuation for all those members of staff who are on rolls as on date shall be 60 years and for those recruited on or after July 5, 1981 shall be 58 years.'

As per the terms of this settlement, petitioner could continue till he attains the age of 60 years. In spite of that settlement, first respondent wanted to reduce the age of superannuation in respect of the members of the existing staff as well to 58 years. That issue was raised at the time of the settlement of the long-term agreement in 1988. The following clause was incorporated in the settlement dated December 22, 1988:

'The age of superannuation of those members of staff who were recruited on or after July 5, 1981, will be 58 years. In respect of those members who were recruited prior to July 5, 1981, both parties agree that the question of what their age of superannuation will be left to the decision of Mr. M.P. Joseph, Labour Commissioner, Kerala, whose decision, both parties further agree, will be final and binding on both the parties'.

2. It is stated that in pursuance of this voluntary agreement entered into between the trade unions representing the workers on the one hand and the management on the other, Mr. M.P. Joseph gave exhibit P-2 decision. As per that decision members of staff who joined service prior to July 5, 1981, will continue in service till they attain the age of 59 years. Depending on that decision petitioner has been asked to retire with effect from the last date of February, 1991, on his completing the age of 59 years on February 17, 1991.

3. The clause incorporated in the settlement dated December 22, 1988, referring the issue relating to the age of retirement to Shri M.P. Joseph, Labour Commissioner, according to counsel is to be considered as an agreement entered into by parties voluntarily. Such an agreement falls under Section 10-A of the Act. In pursuance of that agreement, if the Conciliation Officer is to take a decision, it is argued, that agreement should have been notified by the Government in Official Gazette. Such notification is a pre-condition to enter into an arbitration on the issue referred. The Conciliation Officer thereupon should examine the entire issue and pass an award. That award to be valid, according to counsel, should be notified by the Government in the Official Gazette under Section 17 of the Act. In the instant case, neither the arbitration agreement incorporated in the long-term settlement signed on December 22, 1988, nor the award passed by Shri. M.P. Joseph was notified in the Official Gazette. Consequently, exhibit P-2 decision rendered by Shri M.P. Joseph has no legal sanction. Result, therefore is, it is contended, the long-term settlement entered into between the parties on July 5, 1981, should govern the issue relating to the retirement of the members of the staff.

4. Learned counsel representing the respondent tried to meet the above argument contending that the reference to Shri. M.P. Joseph of the issue relating to the age of superannuation was a term of the long term settlement coming under Section 18 of the Act. The long-term settlement falling within the purview of Section 13 of the Act is binding on all workmen in the concern. Petitioner, an individual workman, cannot dispute that decision which was incorporated in the long-term settlement. Consequently, petitioner cannot question the authority of Shri M.P. Joseph to adjudicate on the issue. The long-term settlement signed on December 22, 1988, further stated that the decision of Shri M.P. Joseph will be final and binding on both the parties. Since that term is binding on the petitioner by virtue of Section 18, it is contended that petitioner cannot challenge the validity of exhibit P-2. Consequently, he has to retire at the age of 59 on the last date of the month in which he completed that age, namely, February 28, 1991.

5. Section 10-A of the Act relates to voluntary reference of disputes to arbitration. In the instant case an industrial dispute existed between the workmen and the first respondent relating to the age of superannuation of the members of the staff of the second respondent. That industrial dispute was referred to Shri M.P. Joseph for his decision as per Clause 12-A of the long-term settlement entered into between the parties on December 22, 1988. The said clause in the long-term settlement can be considered as the written agreement between the workmen and management to refer the dispute to Shri M.P. Joseph for arbitration. That squarely falls within Sub-section (1) of Section 10-A of the Act. In such a situation Sub-section (2) of that section enjoins the parties to execute an arbitration agreement in the manner prescribed by the rules. A copy of that arbitration agreement shall be forwarded to the State Government and the Conciliation Officer. The Government should, within one month from the date of receipt of a copy of that agreement, publish the same in the Official Gazette as enjoined by Sub-section (3) of Section 10-A of the Act. Only thereafter can an arbitrator investigate the dispute and submit to the Government the arbitration award signed by him. Thus it is abundantly clear that the notification of the arbitration agreement in the Official Gazette is a condition precedent for the arbitrator to investigate the dispute. This aspect was considered by the Supreme Court in Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company (1989-II-LLJ-550). The question that arose for consideration was whether non- publication of the arbitration agreement as required by Sub-section (3) of Section 10-A renders the arbitral award invalid and unenforceable. It was observed therein (at page 556):

When a dispute is referred to arbitration, it is, therefore, necessary that the workers must be made aware of the dispute as welt as the arbitrator whose award ultimately would bind them. They must know what is referred to arbitration, who is their arbitrator and what is in store for them. They must have an opportunity to share their views with each other and if necessary to place the same before the arbitrator. This is the need for collective bargaining and there cannot be collective bargaining without involving the workers. The union only helps the workers in resolving their disputes with management, but, ultimately, it would be for the workers to take decision and suggest remedies. It seems to us, therefore, that the arbitration agreement must be published before the arbitrator considers the merits of the dispute. Non-compliance of this requirement would be fatal to the arbitral award'.

6. In the instant case, it is conceded before me that the arbitration agreement to refer the dispute relating to the superannuation of the workmen for decision by Shri M.P. Joseph was never notified by the Government in the Official Gazette. The non-compliance with the requirements of Sub-section (3) of Section 10-A is fatal to the arbitration award. Further, it is also conceded before me that the award given by Shri M.P. Joseph was never published in the Official Gazette as contemplated by Section 17 of the Act. It, therefore, follows that the decision rendered by Shri M.P. Joseph has no legal validity. It cannot in any way affect the service conditions of the members of the staff of the second respondent.

7. The date of birth of the petitioner is July 6, 1107, M.E., corresponding to February 18, 1932, A.D. As per the settlement dated July 5, 1981, he is entitled to continue in service till he completes the age of 60 years, that is, till February 17, 1992. This term of the settlement of 1981 has not been varied or modified in accordance with law. So that settlement controls the issue regarding the age of superannuation. As per the standing orders governing the date of retirement, employees can continue in service till the last date of the month in which he completes the age of superannuation. In this view, the petitioner ought to have continued in service till February 29, 1992. He has been retired with effect from February 28, 1991. This was wrongly done. So, the petitioner must be deemed to be in service. He is entitled to his wages because he was wrongly ousted without complying with the provisions of law. Hence, he must be paid all back-wages and he must be allowed to continue in service till February 29, 1992, unless his services are terminated earlier. His retirement benefits must be computed as if he had been in uninterrupted service till February 29, 1992, if his services are not terminated earlier by due process of law.

8. I direct the State Government to publish the first part of Clause 12-A of the long-term settlement signed by the parties on December 22, 1988, under Sub-section (3) of Section 10-A of the Act within two month from today. Thereafter, Shri M.P. Joseph will investigate the dispute and submit his award to the State Government. On receipt of that award, the State Government will publish it in the Official Gazette as enjoined by Section 17 of the Act without any delay.

9. Original petition is disposed of in the above terms.