A settlement under Section 18 (3) of the Industrial Disputes Act is binding on all parties to the industrial dispute, including the minority union, and emphasizes the importance of collective bargaining and the interest of the vast majority of the workmen.

KUMAR RAJARATNAM, J.

( 1 ) THE writ petition is taken up with the consent of parties.

( 2 ) HEARD Mrs. Mangalamba Rao, learned Counsel for the petitioner, mr. K. Kasturi, learned Counsel for the management, Mr. M. C. Narasimhan, learned Counsel for the respondent and the learned Government advocate for the third respondent.

( 3 ) THE only question that arises for consideration in this writ petition is whether a settlement entered into under Section 18 (3) of the Industrial disputes Act between the recognised union and the management is binding on the minority union.

( 4 ) THE matter relates to shifting of the Hubli Unit to Harihar unit subject to certain benefits being given to the workmen by the management.

( 5 ) THIS Court more or less by an interim order dated 23-2-2000 settled the matter amicably between the petitioner and the first respondent management.

( 6 ) ALTHOUGH that interim order may have brought an end to this litigation it would be appropriate for this Court to deal with the writ petition filed by the petitioner and to state the legal position correctly.

( 7 ) THE second respondent is a registered trade union. It enjoys the majority support of the workmen. The practice was that the union which enjoys the majority support is recognised by the management as the sole collective bargaining agent for a period of three years. The referendum i by the secret ballot is held once in three years to determine which union enjoys the confidence of the workmen.

( 8 ) INDEED, the petitioner-union was the recognised union during the period 1994-96. In 1997, the second respondent on the basis of a referendum enjoyed the majority support of the workmen and was accordingly recognised by the management.

( 9 ) IT is submitted that the respondent-management was engaged in the manufacture of lathes and CMC machines. It has its main factory at harihar where around 1,800 workmen are employed. There is another unit at Hubli which also is engaged in the manufacture of lathes and machines. There are about 448 workers employed at Hubli unit of the respondent-management. The electoral college for the purpose of collective bargaining consists of workmen of Harihar and Hubli units. The majority union is elected on the basis of a referendum. The majority union represents both Harihar and Hubli units. Wage settlements are signed by the majority union which is binding on all the workmen. Therefore, the settled position is that the union elected in the referendum would represent the workmen of Harihar and Hubli unit. There is no separate referendum or recognition for Hubli unit. It is further submitted that the management of the company addressed a letter on 29-5-1999 stating therein that the company had incurred heavy losses and that on a review of the projections of business, it has been found that the hubli unit had become unviable. Further, the management stated that it was impossible for them to run the business unless they wiped out the losses accumulated and consolidated their manufacturing operations at one place. It is further submitted that the management proposed to shift the Hubli unit to Harihar. The respondent-union was invited for bilateral discussions in the matter, at Annexure R-1. It is submitted that the management had addressed another letter to the respondent-union on 28-5-1999 at Annexure R-2. The management had also published a notice informing all the workmen about their proposal to shift the Hubli unit to Harihar for consolidating their business and manufacturing operations. It is further submitted that meetings were held in Harihar and hubli to ascertain the views of the workers and to save the employment of the workmen by avoiding closure of the factory. It is submitted that keeping the employees' interest the respondent-Union agreed in principle for shifting Hubli Unit to Harihar subject to certain favourable package being worked out with the management. This was the unanimous decision of the Committee of the respondent-U

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