Kumbakonam Electric Supply Corporation Ltd. vs Presiding Officer, Labour Court, Madras and Another

Ramakrishnan, J.—The second respondent in this writ petition, K. Rajagopalan, made a claim u/s 33-C(2) of the Industrial Disputes Act,

before the Labour Court. Madras for the award of RE 45, representing additional bonus of half a month''s basic wages for the year 1960-61 and a

further sum of Rs. 122-50 being the proportionate bonus for seven months'' service which he had put under the management in 1963-64. The

management in question is, the Kumbakonam Electric Supply Corporation Ltd. The Labour Court held both the claims to be established, and

ordered payment of the amount of Rs. 167-50. The petitioner who is the management has filed this writ petition under Article 226 of the

Constitution, for the issue of a writ of certiorari quashing the above order of the Labour Court.

So far as the payment of Rs. 45 is concerned, though objection was taken for payment of the amount, in the affidavit of the writ petitioned when

the writ petition is taken up today for hearing, learned counsel for the petitioner does not press his objection regarding this amount of Rs. 45.

There remains for consideration only the award of the sum of Rs. 122-50 representing the proportionate bonus payable to the second

respondent for the seven months of service which he performed under the management. The second respondent admittedly was employed as a

typist under the Management, and he left service on 31-10-1963. Long afterwards, on 20-10-1964, the workers'' union of this concern and the

Management entered into a settlement, one of whose clauses related to the payment of bonus for 1963-1964 in the following terms :

For the year 1963-64 the management agree to pay bonus equivalent to two months'' basic wages to all permanent monthly paid employees of

the company, as drawn by them in March 1964 and who have been in continuous service from 1st April 1963 to 31st March 1964. Permanent

monthly paid employees who entered the service during 1963-64 will be eligible only for pro rata bonus. The said bonus will be paid on or before

the 26th October 1964.

The main contention urged by the petitioner before me is that the above settlement being one entered into u/s 18(1) of the Industrial Disputes

Act, it is binding only on the parties to the settlement, and the petitioner, having left service long previously on 31-10-1963, could no longer claim

to be represented by the Union, at the time when the agreement was entered into on 20-10-1964, between the Union and the Management. That

this is the correct legal position is made clear by the decision of this High Court in Workers of Buckingham and Carnatic Co. Vs. Commissioner of

Labour and Chief Conciliation Officer and Others, , where a distinction has been drawn between an agreement u/s 18(1), and an agreement u/s

18(3) of the Act arrived at in the course of conciliation proceedings. Stress was made on this distinction and it was held that a settlement of the

present kind funder Section 18(1) ) would bind only the workers who were represented by the Union at the time when the settlement was arrived

at and not the workers who had ceased to be members of the Union at the time when the settlement was arrived at. Obviously, the second

respondent herein, Rajagopalan, had left the employment under the management nearly a year previously viz. on 31-10-1963. It was never his

case that, after leaving the service of the management, he was allowed to continue as a member of the workers'' union. A worker who has left the

employment under the management can no longer be a member of the Union of the workers in that concern. That also is clear. In any event, it was

never Rajagopalan''s case that on 20-10-1964 he continued to be a member of the Union and therefore, the agreement between the Union and the

Management would enure to his advantage. The Labour Court unfortunately has not at all adverted to this aspect of the law. It has assumed that

Clause t (b) of the Terms of Settlement above extracted provides for payment of bonus to all permanent monthly employees who were in service

during 1963-64 according to the period of service and that this agreement does not preclude ex-employees from getting the benefit. But the last

mentioned observation clearly overlooks the provision of the law which restricts such benefit only to the parties to the settlement. Section 33-C(2)

read with Section 18(1) gives the right only to the parties to the settlement to take advantage of the settlement and claim the benefit which is

capable of being computed in terms of money. Therefore, I am of the opinion that the order of the Labour Court has to be quashed, so far as it

directs the payment of Rs. 122-50 to the second respondent. Its order is confirmed in respect of the payment of Rs. 45 to the second respondent.

The writ petition is allowed in part as above. There will be no order as to costs.