NATIONAL TEXTILE CORPORATION (APKKM) LIMITEDversusSREE YELLAMMA COTTON, WOOLLEN AND SILK, MILLS STAFF ASSOCIATION AND ORS

A         NATIONAL TEXTILE CORPORATION (APKKM) LIMITED
                                           v
             SREE YELLAMMA COTTON, WOOLLEN AND SILK,
                 MILLS STAFF ASSOCIATION AND ORS .. ~

                                JANUARY 18, 2001
B
            [S. RAJENDRA BABU AND SHIVARAJ V. PATIL, JJ.]


          Labour Law:

C         Industrial Disputes Act. 1947: Section 19.
          Settlement-Employer entered into settlement with its ministerial staff-
    Settlement provided that the ministerial staff shall not make any claim or
    demand for the revision of any qf the terms and conditions covered by the
    settlement or make any demand involving additional financial burden on the
D   mills-Employer also entered into a settlement with its workmen under which
    they agreed to work on a seven-day-a-week working system thereby the
    weekly holiday stood changed and in addition certain increases in emoluments
    had been provided to them-Ministerial staff raised an industrial dispute
    regarding change of weekly holidays and also demanded emoluments at par
    with the mill workers-Labour court made an award in favour of ministerial
E   staff-However, Single Judge quashed the award-But Division Bench set
    aside this order-Correctness of-Held: During subsistence of settlement no
    parties can raise a dispute-But if there is any material change in the
    circumstances an industrial dispute may be raised and reference may be
    made-Hence, Division Bench justified in setting aside the order of Single
F   Judge.
           The employees of the appellant-Corporation fell into three categories
    and they were (i) technical persons and Supervisors, (ii) ministerial staff and
    (iii) workmen. As regards the ministerial staff the appellant entered into a
    settlement, which was to be effective for a period of 5 years. The settlement
G   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 makes any demand involving additional financial burden on the mills. The
    appellant also entered into a settlement with its workman under which they
    agreed to work on a seven-day-a-week working system thereby the weekly
    holiday stood changed and in addition certain increases in emoluments had
H   been provided to them.
                                         434
                N.T.C. (APKKM) LTD. v. Y.C.W. ANDS. MILLS                  435
     The ministerial staff raised an industrial dispute on the question of        A
change of weekly holiday of the staff members and also sought an increase
in emoluments at par with the mill workers. The Labour Court passed an
award in favour of the ministerial staff. A single Judge of the High Court
quashed the award. On appeal, the Division Bench reversed the order of the
Single Judge. Hence this appeal.                                                  BI
      Dismissing the appeal, the Court

       HELD: I. 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     C
same is terminated as provided in Section 19 of the Industrial Disputes Act,
1947. 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     D
adopted in the present case, the parties could not have raised the dispute. But
in an appropriate case the Government may make a reference under the Act
on the ground that since the time settlement was entered into there has been
a material change in the circumstances. 1437-A-C)

      2. Section 19 of the Act limits the variation of settlement but if there    E
has been any material change in the circumstances available in the
establishment of an employer certainly such a situation cannot be ignored
altogether to state that the 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           F
maintain industrial peace and these aspects are to be borne in mind by the
Labour Court. Such considerations would not 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. (437-F-Gl

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5555of1999.                  G

     From the Judgment and Order dated I I .09. I 998 in Writ Appeal No. I 349
of 1997 of the High Court of Karnataka at Banglore.

     C. L. Narasimhan, Dinesh K. Goswami, Mukesh K. Giri, S. Ravindra Bhat,
Naveen R. Nath and N. Ganapathy, (N.P.) for the appearing parties.                H
    436                      SUPREME COURT REPORTS                   [2001) I S.C.R.

A         The Judgment of the Court was delivered by

          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. l 979 which was to be effective for a
B 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
C which would be in force for a period of three years from I. I0.1978. 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
D referred by the Government of Karnataka on the following two questions :
             (I) 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
E
                  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 I. I 0.1983. The correctness of the said award was
  challenged in a writ petition filed by the appellant. The learned Single Judge
F of the High Court, while deciding the writ petition held that the settlement
  dated 3.9.1979 which 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
G drawn and, therefore, enhancing the remuneration from I. I0.1983 is untenable
  and allowed the writ petition by setting aside the award made by the Labour
  Court and rej<:cting 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.

H         The view of the learned Single Judge is commended for acceptance by
                     N.T.C. (APKKM) LTD. v. Y.C.W. ANDS. MILLS [RAJENDRA BABU, J.] 437

                 the learned counsel for the appellants. Undoubtedly, the legal position is that     A
       "         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
                                                                                                     B
                 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            c
                 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                D
                 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      E
                 coming under second category but from a date on the expiry of the agreed
                 settlement entered into by the parties, namely, I.I 0.1983. 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         F
                 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        G
                 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 different
                sc~les of pay. If, as stated earlier, a gardner was to get less emoluments by        H
     438                      SUPREME COURT REPORTS                  [200 I] I S.C.R.

·A 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
B    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
C    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
D the circumstances of the case there shall be no order as to costs.
     v.s.s.                                                    Appeal dismissed.