The interpretation and binding nature of a settlement agreement between management and a union in determining the closure date of a business unit and its impact on the entitlement of employees to benefits.

Manjula Chellur, J.

Heard learned counsel for the appellant as well as the first respondent management.

2. Appellant herein was the successful claimant before the Labour Court and the award of the Labour Court came to be set aside by the learned Single Judge in the Writ Petition, therefore, aggrieved by the same, the employee is before us. The first respondent management was running a furniture business in the name of 'Standard Furniture' at Kozhikode. According to the management, the unit was under lockout in 2002 itself. But, according to the appellant employee, it was in existence upto 22.4.2004. It is not in dispute that the appellant was terminated from service some time before 1999 and by virtue of an award, the management was directed to reinstate him with back wages. However, he could not be reinstated on account of the unit being closed by the management. Therefore, he sought for retrenchment compensation, gratuity and back wages. However, by virtue of an interim order passed in a Writ Petition filed against an order passed under Section 33C (2) of the Industrial Disputes Act, one-fourth of the back wages came to be paid. During the course of arguments, what we understand from the judgment of the learned Single Judge is that learned counsel for the first respondent submitted, they would remit another one-fourth of the amount claimed in the said application by 15.1.2012, therefore, the Writ Petition came to be disposed of holding that the gratuity till date of closure, i.e., 31.12.2002 also has to be looked into apart from contribution made by the employee to the provident fund.

3. So far as the management is concerned, they have not challenged the judgment of the learned Single Judge, however, the appellant has come up in this appeal, who is the employee of the first respondent contending that the date of closure of the unit has to be taken as 22.4.2004 and not 31.12.2002, as he was not a party to the so-called settlement between the management and other workers. He contends that as on the date of pendency of the proceedings before the Labour Court, a settlement was arrived at between the management and some other employees and he was not a party to the settlement, therefore, it is not binding on him. According to learned counsel for the first respondent management, apart from some of the workers, union was also a party to the tripartite settlement and the union has signed the settlement, which is at Exhibit P13.

4. We have gone through the settlement arrived at between the parties. Though the appellant was not a party to the proceedings, since the union had represented, we have to take it as binding on all workers, as the union has represented, in the interest of all the workers. Therefore, we will take the date of closure as 31.12.2002. So far as payment of wages is concerned, already there was a direction in the award of the Labour Court that the appellant has to get back entire back wages, therefore, there was no justification for the learned Single Judge to restrict it to another one-fourth of the back wages instead of full back wages. Learned counsel for the first respondent management submits that this was a judgment based on consent and learned counsel appearing for the worker did agree for the same. Unfortunately, we do not find such intention being spelt out in the judgment of the learned Single Judge.

5. In that view of the matter, we restrict the claim of the appellant only to the back wages and nothing else. Even the back wages has to be paid upto the date of closure, i.e., 31.12.2002 and not 22.4.2004 as claimed by the appellant. We make it clear that the direction of the learned Single Judge was that provident fund has to be paid to the appellant and not to the management.

With these modifications, we dispose of the Writ Appeal.