1. Modification of standing orders — Locus of Registered Trade Union — Section 38(2), Maharashtra Industrial Relations Act. (Para 2 , 3 )
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2021 Supreme(SC) 1195
SUPREME COURT OF INDIA
ROHINTON FALI NARIMAN, K.M. JOSEPH, B.R. GAVAI, JJ.
Bank Employees Union - Appellant
Versus
Rajarshi Shahu Govt. Servants Co-Operative Bank Ltd., Kolhapur - Respondent(s)
Civil Appeal No. 2328 of 2021 [@ Special Leave Petition (C) No. 11668 of 2016]
Decided on : 06-07-2021
Important Points
IMPORTANT POINT
The court emphasized that a party to a settlement should not be allowed to question the locus standi of another party at the stage of implementation.
The court emphasized that a party to a settlement should not be allowed to question the locus standi of another party at the stage of implementation.
Subject
Labor Law - Industrial Relations
Act Referred
BOMBAY INDUSTRIAL RELATIONS ACT: S.73(a)
INDUSTRIAL DISPUTES ACT: S.18(1)
Maharashtra Industrial Relations Act: S.38(2)
INDUSTRIAL DISPUTES ACT: S.18(1)
Maharashtra Industrial Relations Act: S.38(2)
Headnote
Registered Trade Union - Locus to Prefer Application to Modify Standing Order - The Maharashtra Industrial Relations Act, 1946, Section 38(2)
Fact of the Case:
The appellant, a Registered Trade Union, sought to modify a standing order regarding the retirement age of bank employees under Section 38(2) of The Maharashtra Industrial Relations Act, 1946. The bank had agreed to alter the retirement age from 55 to 58 years through settlements and an award.
Finding of the Court:
The Industrial Court allowed the bank's appeal, stating that only an employee, as defined under the Act, could apply for an alteration of a standing order. The High Court upheld this decision, but the Supreme Court set it aside, emphasizing that the bank should not be allowed to question the union's locus standi at the stage of implementing the settlements.
Issues: Locus standi of a Registered Trade Union to file an application under Section 38(2) of The Maharashtra Industrial Relations Act, 1946.
Ratio Decidendi: The court held that the technical objection of the union's locus standi cannot be countenanced, as the bank had ratified the settlements and should not be allowed to question the union's locus standi at the stage of implementation.
Final Decision: The Supreme Court set aside the Industrial Court's order and directed that all consequential benefits to the employees be given within six months.
Legal Category Hierarchy
Advocates appeared:
For the Appellant : Mr. Colin Gonsalves, Sr. Adv., Ms. Jane Cox, Adv., Ms. Aparna Bhat, AOR, Ms. Karishma Maria, Adv.
For the Respondent: Mr. Vinay Navare, Sr. Adv., Ms. Gwen Karthika, Adv., Ms. Abha R. Sharma, AOR
For the Appellant : Mr. Colin Gonsalves, Sr. Adv., Ms. Jane Cox, Adv., Ms. Aparna Bhat, AOR, Ms. Karishma Maria, Adv.
For the Respondent: Mr. Vinay Navare, Sr. Adv., Ms. Gwen Karthika, Adv., Ms. Abha R. Sharma, AOR
Table of Contents
2. Locus standi — Distinction between employee and representative union — Right to apply for modification of standing orders under Section 38(2). (Para 4 , 6 , 7 )
3. Implementation of settlements — Technical objections to locus standi — Prohibition against resiling from mutually agreed terms sanctified by award. (Para 8 )
4. Technical pleas of locus standi cannot be countenanced to avoid implementing a settlement solemnly entered into and sanctified by an award. (Para 8 )
5. Appeal allowed — Industrial Court and High Court judgments set aside — Consequential benefits to be granted within six months. (Para 8 )
6. Can a party to a settlement raise a technical objection to locus standi to avoid implementing the agreement?
No. When a settlement is solemnly entered into and sanctified by an award, a party cannot resile from it at the implementation stage by questioning the locus standi of the party moving the application. (Para 8 )
7. How does the court treat technical legal objections versus mutually agreed settlements in industrial disputes?
The court prioritizes the implementation of mutually agreed settlements and awards over technical objections to locus standi, preventing parties from avoiding their agreed-upon obligations through technicalities. (Para 8 )
8. What is the expectation of an employer when a settlement to modify standing orders is reached?
The employer is expected to act as a model employer and facilitate the implementation of mutually agreed settlements, rather than raising technical objections to the locus of the party seeking implementation. (Para 4 , 8 )
JUDGMENT :
R.F.NARIMAN, J.
1. Leave granted.
2. The short question that arises in this appeal is as to whether the appellant – Registered Trade Union -had locus to prefer an application to modify a standing order that applies to the employees of the respondent under Section 38(2) of The Maharashtra Industrial Relations Act , 1946. The brief facts necessary in order to dispose of this appeal are as follows :
The original standing order with which we are concerned, and which stated the age of retirement of the employees of the bank, reads as follows :-
“22(7) Every employee shall retire from service on attaining the age of 55 years, Extension not exceeding one year at a time or three years in all may be given at the discretion of the president.”
3. By two Agreements dated 11.01.2004 and 21.02.2010 which were settlements under Section 18(1) of the Industrial Disputes Act entered into between the respondent and its employees, it was agreed vide Clause 16 of the 2004 settlement and Clause 15 of the 2010 settlement that the retirement age would now be 58 years. A reference was made under Section 73A of The BOMBAY INDUSTRIAL RELATIONS ACT (as it was then styled) to the Industrial Court, which then made an award in terms of the two settlements entered into. This award was dated 10.03.2010. However, when it was pointed out that formalities under the Maharashtra Industrial Relations Act in modifying the standing order 22(7) needed to be gone through in order to implement the two settlements which culminated in an award, the appellant – Registered Union -filed an application on behalf of the employees dated 26.04.2011 under Section 38(2) of the said Act. Armed with the consent letter from various other unions dated 04.09.2012, the application was heard by the Additional Labour Commissioner. The Additional Labour Commissioner, vide his order dated 25.10.2012, recorded as follows :-
“As the employees of the said Bank are also employed in other different local areas of viz. Tasgaon, Kavathe Mahankal, Khanapur, Atpadi, Jath, Shirala, Walwa, Miraj, Palus, Kadegaon talukas and they are represented by Kolhapur District Bank Employees Union, Kolhapur which is the representative and approved union for Banking Industry for the abovesaid local areas, the said union’s views were obtained in accordance with the provisions of sec. 39 (1) of the Bombay Relations Act, 1946. The said union by their letter dated 04/09/2012 conveyed that they have no objection in the matter of settlement of alteration to the said Standing Order.
In accordance with the provisions of section 39 (1) of the Act, the management of the said Bank was requested to file their say in respect of the proposed alteration. The Bank by their communication dt. 19/03/2012 communicated their various objections objecting the union’s proposed alteration, but the management of the Bank could not refute the fact that they have made two settlements dated 11/01/2004 and 21/02/2010 wherein the management Bank has agreed to alter the retirement age of their employees from 55 to 58.
As both the parties i.e. the employees through their representative unions, and also the management of the said Bank have already mutually made the agreements to effect the change in retirement age, I find no difficulty to make the alteration to the Standing Order clause No. 22(7) which will read as under :
Standing Order No. 22 (7) – Every employee shall retire from service on attaining the age of 58 years. Extension not exceeding one year at a time or three years in all may be given at the discretion of the President.”
4. However, an appeal was filed by the Bank in November 2012 against the said order, in which essentially one point was taken up, which was that under Section 38(2) of the Maharashtra Industrial Relations Act , only an employee, as defined under the said Act, could apply to the Commissioner of Labour for an alteration of a standing order and the Registered Union, being separately defined, would therefore have
