Newer, binding settlements supersede prior benefits, even if not explicitly withdrawn: Gauhati High Court upholds IOCL's discontinuance of personal pay under Section 18 of the Industrial Disputes Act. - 2025-06-03

Gauhati High Court Upholds Discontinuation of Employee Benefit, Cites Superseding Power of New Settlements

Guwahati , Assam – The Gauhati High Court has dismissed a writ petition filed by the Bongaigaon Refinery Employees' Union, upholding the decision of the Indian Oil Corporation Ltd. (IOCL) to discontinue a personal pay of ₹950 per month. Justice N. Unni KrishnanNair affirmed that new, comprehensive tripartite settlements signed by the union effectively supersede all prior agreements, even if a specific benefit from an old agreement is not explicitly mentioned for withdrawal.

The court found no perversity in the 2014 award by the Central Government Industrial Tribunal-cum-Labour Court, which had ruled in favor of the IOCL management.

Case Background

The dispute originated from a "frozen amount/personal pay" of ₹950 per month, established through a 2004 settlement between the Bongaigaon Refinery Employees' Union and the management of the then-separate entity, Bongaigaon Refinery and Petrochemicals Limited ( BRPL ). This pay was a stagnation benefit for employees in the Special Selection Grade (SSG) who were not promoted.

In 2009, BRPL merged with IOCL, and its employees became part of the larger corporation. Following the merger, several new settlements were negotiated between the union and the IOCL management to standardize wages, benefits, and promotion policies. A communication on December 2, 2010, informed the union that the ₹950 personal pay was being discontinued retrospectively from August 2010, which led to the industrial dispute.

Arguments from Both Sides

Bongaigaon Refinery Employees' Union (Petitioner):

* The ₹950 personal pay was an established condition of service and part of the employees' wages.

* The management could not unilaterally withdraw this benefit without issuing a formal notice under Section 9A of the Industrial Disputes Act, 1947.

* The subsequent settlements signed with IOCL did not contain any specific clause that explicitly withdrew or discontinued this particular payment.

Indian Oil Corporation Ltd. (Respondent):

* The new settlements signed in 2010 introduced a new, more beneficial stagnation benefit scheme for the same grade of employees.

* Crucially, the settlement dated September 16, 2010, included a note stating, "Besides the above, no other stagnation benefit shall be permissible to be admissible to workmen in Grade VIII."

* Furthermore, a settlement from October 27, 2010, contained a supersession clause (Clause 2.4) which stipulated:

"This Settlement will supersede the agreement(s), related to any other pay related benefits, arrived between the recognized Union of the erstwhile BRPL and its Management..."

* Since the union leadership was a signatory to these binding tripartite agreements, they were debarred from claiming benefits from superseded, prior agreements.

* The management argued that no notice under Section 9A was required as the change was effected pursuant to a binding settlement.

Court's Reasoning and Judgment

The High Court meticulously reviewed the series of settlements and the findings of the Industrial Tribunal. Justice Nair highlighted pivotal clauses from the post-merger agreements that formed the basis of the decision.

The Court quoted from the September 16, 2010, settlement, emphasizing the clause that created a new stagnation benefit (an additional increment) and the unambiguous note that no other such benefit would be permissible. It also pointed to the October 27, 2010, settlement's clause that explicitly superseded all prior pay-related agreements from the BRPL era.

The judgment noted, “The promotion policy settlement arrived at on 16.09.2010 and the settlement, dated 27.10.2010, having specifically provided that all agreements/ settlements existing in the matter... would stand superseded... this Court is of the considered view that the learned Central Government Industrial Tribunal-cum-Labour Court, Guwahati , had not erred that the subsequent settlements had the effect of discontinuance of the payment of frozen amount/personal pay of Rs. 950/- p.m.”

The Court further held that since the changes were a direct consequence of settlements arrived at under Section 18 of the Industrial Disputes Act, 1947, the management was not required to issue a separate notice under Section 9A.

Final Decision

Concluding that the Industrial Tribunal's award was based on a proper appreciation of the evidence and the binding nature of the settlements, the High Court found no grounds for interference under its writ jurisdiction. The petition was dismissed, confirming that the new, comprehensive settlements had legitimately replaced the old benefit structure.