Interpretation of settlement under Section 18(1) and Section 18(8) of the Industrial Disputes Act, 1947 and Sick Industrial Companies (Special Provisions) Act, 1985

ORDER :

1. Leave granted.

2. The appellant seeks to challenge the order of the High Court refusing interference with the order dated 23rd September, 2013 passed by the Labour Court by which the respondent workman has been granted wages for the period from July 2008 to March 2011 with simple interest at the rate of 9% per annum.

3. The core ground of challenge to the aforesaid order is that the aforesaid relief could not have been granted under Section 33-C(2) of the Industrial Disputes Act, 1947 in view of the settlement by and between the Management and the Representative Union of the workmen under which the workmen were entitled to an honorarium i.e. 25% of the basic wages plus D.A. for the period of special leave (during the period of closure of the unit).

4. We have perused the Memorandum of Understanding/Settlement, particularly, the clause relating to the payment of honorarium as referred to above. The Memorandum of Understanding/Settlement became a part of the revival scheme approved by the Board for Industrial and Financial Reconstruction (BIFR) by its order dated 16th January, 2012 in terms of which the Company got revived.

5. Evidently, all the other workmen got benefit in terms of the settlement and the respondent workman herein is the lone employee who has been granted higher benefits in terms of the order of the Labour Court as affirmed by the High Court.

6. If the settlement by and between the Management and the Representative Union of workmen is to be construed to be one under Section 18(1) of the Industrial Disputes Act, 1947 which we are inclined to do the same would bind the respondent workman. In this regard, we have perused the evidence of the respondent workman wherein he does not deny that the Representative Union which was a party to the settlement did not represent his cause. A mere statement in the evidence of the workman that he is not a member of any specific union will not suffice.

7. That apart, if the Memorandum of Understanding/Settlement is a part of the revival scheme approved by the BIFR, the same would also be binding on the workmen under Section 18(8) of the Sick Industrial Companies (Special Provisions) Act, 1985.

8. In the aforesaid circumstances, we are of the view that the Labour Court as well as the High Court was not justified in passing the impugned order. Instead of full wages for the period from July 2008 to March 2011 with simple interest at the rate of 9% per annum, the respondent workman would be entitled to 25% of the wages as per the settlement from the date of special leave till the date of reporting back to duty i.e. July 2008 to March 2011. In the peculiar facts of the case, we are of the view that the workman should be paid interest at the rate of 9% per annum on the said amount. We order accordingly.

9. With the aforesaid modification of the order of the Labour Court as well as the High Court this appeal is allowed to the extent indicated above.