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CASE NO.: Appeal (civil) 5555  of  1999

PETITIONER: M/S NATIONAL TEXTILE CORPORATION (APKKM) LIMITED.

       Vs.

RESPONDENT: SREE YELLAMMA COTTON, WOOLLEN AND SILK MILLS STAFF ASSOCIATION

DATE OF JUDGMENT:       18/01/2001

BENCH: S.V.Patil, S.R.Babu

JUDGMENT:

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     RAJENDRA BABU, J.  :

     The  employees of the appellant-Corporation fall  into three  categories  and  they are (i) technical  persons  and Supervisors,  (ii) ministerial staff and (iii) workmen.   As regards  the  second category of employees a settlement  was entered  into  on 3.9.1979 which was to be effective  for  a period of five years from 1.10.78.  The said settlement also provided that the ministerial staff shall not make any claim or  demand  for  the  revision  of  any  of  the  terms  and conditions  covered  by  the settlement or make  any  demand involving  additional financial burden on the mills  subject however  to  clause 5 of the settlement and a provision  was also made for dearness allowance which would be in force for a  period  of  three years from 1.10.1978.  With  regard  to third  category of employees the appellants entered into two settlements  as a result of which workers agreed to work  on seven-day-a-week- working system from 16.11.1980 thereby the weekly  holiday  stood  changed   and  in  addition  certain increases  in  emoluments have been provided to  them.   The second  category  of employees-ministerial staff  raised  an industrial  dispute which was referred by the Government  of Karnataka on the following two questions :

     (1) whether the appellant is justified in changing the weekly  holidays  of  the  staff members  with  effect  from 16.11.1980?   (2)  Are the employees in the second  category justified in demanding 4 per cent increase in emoluments and payment of Rs.  52.20 per staff member per month at par with the mill workers?

     The  Labour  Court answered both the questions in  the affirmative  and made an award that the increased emoluments to  the second category of workmen will become payable  from 1.10.1983.  The correctness of the said award was challenged in  a  writ  petition filed by the appellant.   The  learned Single  Judge  of  the High Court, while deciding  the  writ petition  held  that  the settlement  dated  3.9.1979  which

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became  effective  from 1.10.78 having been acted  upon  and during  the  subsistence  of the settlement,  the  reference could  not have been made and, moreover, the parity  claimed in  the  emoluments  to  be  paid to  the  workmen  and  the ministerial  staff  forming  separate categories  cannot  be drawn  and,  therefore,  enhancing   the  remuneration  from 1.10.1983  is  untenable  and allowed the writ  petition  by setting  aside  the  award  made by  the  Labour  Court  and rejecting  the  reference  made by the  Government.   On  an appeal,  the  Division Bench of the High Court reversed  the decision  of the learned Single Judge and restored the award made by the Labour Court.  Hence this appeal.

     The  view of the learned Single Judge is commended for acceptance  by  the  learned  counsel  for  the  appellants. Undoubtedly,   the  legal  position  is  that   during   the subsistence  of  a settlement it is not open to any  of  the parties  to raise a dispute.  A settlement once entered into between  the  parties shall be operative until the  same  is terminated  as  provided  in Section 19  of  the  Industrial Disputes  Act, 1947 [hereinafter referred to as the  Act]. The  object  of  such a provision is to ensure that  once  a settlement  is  entered into then industrial peace  prevails according cordialities between the parties during the period agreed upon.  The same position should continue by extension of  the settlement by operation of law.  There is an  option given to either party to terminate the settlement and such a course  having  not  been adopted in the  present  case  the dispute  could not have been raised by the parties.  But  in an  appropriate  case Government may make a reference  under the  Act  on the ground that since the time  settlement  was entered  into  there  has  been   material  change  in   the circumstances.   In  the  present  case,  the  Labour  Court noticed  such a situation arising as a result of the  second settlement  entered into with the workmen that is the  third category  of employees.  In the original settlement  between the parties there has been no provision of working the mills all  seven  days  in a week nor was any  provision  made  in regard  higher  emolument  applicable  to  either  class  of workmen.   The  Labour Court noticed that a gardner who  had been  categorised  as  a member of the  staff  coming  under category  two could get less emoluments than his helper  who comes  under category three and, therefore, in those special circumstances  in  view  of  the   change  in  the   working conditions  the  Labour Court gave relief to  the  employees coming  under second category but from a date on the  expiry of  the  agreed  settlement  entered into  by  the  parties, namely,  1.10.1983.   Section  19  of  the  Act  limits  the variation  of settlement but if there has been any  material change  in the circumstances available in the  establishment of an employer certainly such a situation can not be ignored altogether  to state that settlement alone should be adhered to  whatever be the situation.  If such a settlement  cannot be  worked out in a congenial atmosphere between the workmen and the employer it will be difficult to maintain industrial peace  and  these  aspects are to be borne in  mind  by  the Labour  Court.   We  do not think that  such  considerations would  be  altogether  irrelevant in giving  the  relief  as sought  for  by the respondents and to deny the same on  the short ground of reference not being maintainable.

     Secondly,  on  the  question whether there  should  be parity  in  payment  between the employees  working  in  the establishment  in  different   categories,  ultimately  what decides  the  matter  is a sense of  fairness  in  providing

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different  scales of pay.  If, as stated earlier, a  gardner was  to  get less emoluments by treating him under  category two, his helper were to receive higher emoluments in view of the  second  settlement entered into with category three  to which   Helper   belongs,  the   whole  system   smacks   of arbitrariness  and unfair treatment of different  categories of employees.  What has to be seen ultimately is whether the emoluments that are paid to the second category of employees become unfair in view of increase in the emoluments given to other  classes  of  employees.   By   bearing  in  mind  the increased  work load and the nature of employment the Labour Court took the view that similar increase should be there in the  emoluments.   We  do  not   think,  such  reasoning  is unjustifiable.   Therefore, in the special features of  this case the learned Single Judge of the High Court ought not to have  interfered  with the order made by the  Labour  Court. Therefore, the Division Bench was justified in setting aside the  order made by the learned Single Judge for the  reasons stated  by  us.  We find good reasons to maintain the  award made  by the Labour Court in reversal of the decision of the learned Single Judge in the writ petition.

     For   the  aforesaid  reasons,   this  appeal   stands dismissed.   However, in the circumstances of the case there shall be no order as to costs.