Home » Managing Director, Personnel Officer v. Secretary & Ors., W.P.(C) No. 24729 of 2009 Ker.

Managing Director, Personnel Officer v. Secretary & Ors., W.P.(C) No. 24729 of 2009 Ker.

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

Justice S.Siri Jagan

2009-11-24T00:00:00

W.P.(C) No. 24729 of 2009

Advocates appearing for the Parties : For Petitioner :Sri.A.M.Shaffique (Sr.); For Respondent :Sri.T.C.Mohandas

J U D G M E N T

S.SIRI JAGAN, J.

1. This writ petition arises under the Industrial Employment Standing (Standing Orders) Act, 1946 (hereinafter referred to as the Act). The petitioner is the employer and respondents 1 to 3 are Unions of employees of the petitioner. The 1st and 2nd respondents Unions filed two applications before the 4th respondent-certifying officer, under Section 10 of the Act, for modification of clause 48 of Ext.P1 Standing Orders applicable to the employees of the petitioner, by increasing the age of retirement from 55 years to 58 years and also for addition of a clause regarding prevention of sexual harassment of women employees, which was allowed by the 4th respondent by Ext.P10 order. The petitioner's appeal against the raising of the retirement age in Ext.P10 order was rejected by the 5th respondent appellate authority under the Act, by Ext.P14 order. The petitioner-employer is challenging Exts.P10 and P14 orders in this writ petition. The facts necessary for disposal of this writ petition may be summarised as under.

2. The petitioner's company has units all over India. The service conditions of the employees of these units are governed by standing orders certified under the Act. Ext.P1 is the certified standing orders applicable to the employees of the unit at Palakkad, modification of clause 48 of which is the subject matter of this writ petition. The Standing Orders of three other units of the petitioner at Bangalore are Exts.P2, P3 and P4. In all these Standing Orders the retirement age of the employees is fixed as 55 years. In August/September 2003, by Exts.P5 and P6, respondents 1 and 2 filed applications for two modifications in the Standing Orders applicable to the Palakkad unit to enhance the retirement age of the employees from 55 years to 58 years and to introduce a clause relating to prevention of sexual harassment of women employees. The reasons for seeking the modifications given in Ext.P5 were that the Standing Orders were drafted without considering the situations prevalent, the claims of the workers and without discussions with the Unions' representatives only to benefit the management. They demanded that the same should be modified commensurate with the changed times to benefit the employees also. In Ext.P6, no specific reasons were mentioned. The petitioner opposed the modification regarding retirement age on the following grounds:

(a) The existing retirement age was fixed taking into account the nature of the work performed by the workers;

(b) Being an industry engaged in the manufacture of precision electronic instruments, the work of the establishment called for a high degree of skill and dexterity.

(c) The job requirements are good eye sight, nimbleness of fingers, good memory and speed. Therese qualities would diminish by age affecting the efficiency of the employees and therefore further enhancement of age of retirement of the employees would adversely affect the quality and out put of the products manufactured by the petitioner.

(d) The financial position of the company is very weak, which does not permit the company to shoulder any additional financial burden which would result in enhancement of the age of retirement. The company is progressively incurring heavy losses which has mounted to Rs.273 crores in 2005-06.

(e) The unions had raised a demand for enhancement of the retirement age in their charter of demands which contained several other demands also. In respect of those demands Exts.P7, P8 and P9 memoranda of settlement were entered into wherein it has been specifically provided that all issues not expressly settled therein shall be treated as withdrawn, with a further clause that the unions will not raise any demands during the period of validity of the settlement which involved additional financial commitment to the petitioner.

Before the 4th respondent the unions supported their claims on the following grounds:

(a) In almost all industrial units in Palakkad District, the retirement age of workmen is 58 years. In similar electronic manufacturing units like ITI Palakkad and OEN company, Ernakulam, the retirement age is 58 years.

(b) The model Standing Orders prescribed under the Kerala (Industrial Employment) Standing Orders Rules (hereinafter referred to as the Rules), the retirement age is fixed as 58 years.

(c) As per the employees Pension Scheme under the Employees Provident Funds and Miscellaneous Provisions Act, an employee would become entitled to pension only after completion of 58 years. Therefore, if the employees are retired at 55 years they would be left with no means of sustenance for 3 years.

(d) The management themselves are allowing some employees to continue upto 58 years for which discretion is vested in the management as per the existing Standing Orders themselves.

Accepting the demand of the unions and rejecting the contentions of the management the 4th respondent directed modification of the Standing Orders as requested by the unions by Ext.P10 order, on the ground that the retirement age of 55 years is not in conformity with the Model Standing Orders in the Schedule to the Rules and if the retirement age is 55 years the employees would have to wait for 3 years to become eligible for pension under the Employees' Pension Scheme. The management challenged Ext.P10 order in Ext.P11 appeal before the 5th respondent. In the appeal, in addition to raising the objections raised before the Certifying Officer, the petitioner also pointed out that a similar demand was raised by the workers of the Bangalore unit of the company, which, although originally allowed by the certifying officer, the Appellate Authority, namely the Industrial Tribunal, Bangalore, set aside the order restoring the retirement age as 55 years. According to the petitioner, since the employees are transferable from one unit to another, if retirement age is different in two units, it would lead to anomalous results when employees are transferred from one unit to another. However, the appeal did not find favour with the 5th respondent who dismissed the same, by Ext.P14 order, relying on the Model Standing Orders and the retirement age in similar industries, the Central Government Service and in services in some other States in India. That led to this writ petition challenging Exts.P10 and P14 orders.

3. I have considered the rival contentions of the parties with reference to the case law cited before me.

4. At the outset I must state that the reasoning adopted by the Certifying Officer and appellate authority that since the age of retirement fixed in the original Standing Orders is not in conformity with the Model Standing Orders, it is necessary to refix the age of retirement in conformity with the Model Standing Orders is wrong in so far as it is against the law laid down by the Supreme Court in Bharat Petroleum Corporation Ltd. V. Maharashtra General Kamgar Union and others, (1999) 1 SCC 626, wherein the law has been stated thus in paragraphs 35 to 38:

"35. The contention of the learned counsel for Respondent 1 that the Standing Orders as made by the appellant must conform to the Model Standing Orders cannot be accepted. It is true that originally the jurisdiction of the Certifying Officer as also that of the appellate authority was very limited and the only jurisdiction available to them under the Act was to see whether the Standing Orders made by the establishment and submitted for their certification conformed to the Model Standing Orders. This required the process of comparison of the Draft Standing Orders with the Model Standing Orders and on comparison, if it was found that the Draft Standing Orders were in conformity with the Model Standing Orders, the same would be certified even if they were not reasonable or fair. The workmen practically had no say in the matter and they would not be listened even if they agitated that the Draft Standing Orders were not fair or reasonable.

36. In 1956, radical changes were introduced in the Act by Parliament as a result of which not only the scope of the Act was widened, but jurisdiction was also conferred upon the Certifying Officer as also the appellate authority to adjudicate upon and decide the question relating to fairness or reasonableness of any provision of the Standing Orders.

37. In the instant case, the Standing Orders as finally certified cannot be said either to be not in consonance with the Model Standing Orders or unreasonable or unfair.

38. The Model Standing Orders, no doubt, provided that a delinquent employee could be represented in the disciplinary proceedings through another employee who may not be the employee of the parent establishment to which the delinquent belongs and may be an employee elsewhere, though he may be a member of the trade union, but this rule of representation has not been disturbed by the Certified Standing Order, inasmuch as it still provides that the delinquent employee can be represented in the disciplinary proceedings through an employee. The only embargo is that the representative should be an employee of the parent establishment. The choice of the delinquent in selecting his representative is affected only to the extent that the representative has to be a co-employee of the same establishment in which the delinquent is employed. There appears to be some logic behind this as a co-employee would be fully aware of the conditions prevailing in the parent establishment, its Service Rules, including the Standing Orders, and would be in a better position, that an outsider, to assist the delinquent in the domestic proceedings for a fair and early disposal. The basic features of the Model Standing Orders are thus retained and the right of representation in the disciplinary proceedings through another employee is not altered, affected or taken away. The Standing Orders conform to all standards of reasonableness and fairness and, therefore, the appellate authority was fully justified in certifying the Draft Standing Orders as submitted by the appellant."

(underlining supplied)

Model Standing Orders only lay down the basic features which should be contained in a certified Standing Orders. It is not necessary that every minute details of the service conditions in the Model Standing Orders should be incorporated in the Standing Orders before the same can be certified. In fact service conditions of employees differ from State to State, industry to industry and employees to employees depending upon very many factors such as the nature of the industry, the nature of the work assigned to the employees, the working conditions available in that part of the country where the industry is situated, and the like. The scheme of the Act makes it abundantly clear that the employer and the workers can have agreed service conditions in the Standing Orders also provided the same are not against the provisions of the Act, as is clear from sub section (2) of Section 10, which provides that where modifications are proposed by agreement between the employer and workmen, a certified copy of the agreement shall be filed with application for modification. What the certifying officer is to ascertain is whether the Standing Orders conform to all standards of reasonableness and fairness. As the nomenclature itself suggests, Model Standing Orders constitute only a model frame work giving the basic features. In the Standing Orders to be certified the management can include all fair and reasonable service conditions, subject, of course, to the provisions of the Act, the certifiability of which has to be decided by the Certifying Officer based on established principles. Even if the clauses included do not conform to the Model Standing Orders, if the same are fair and reasonable and are not opposed to the provisions of the Act, the same can be certified.

5. Even otherwise, the Model Standing Orders provided in the Schedule to the Kerala Industrial Employees (Standing Orders) Rules do not provide that the age of retirement should be 58 years. Sub clause (3) of Clause 3A of the Model Standing Orders provides thus:

"3A…… (3) Age of Retirement The age of retirement or superannuation of a workman shall be as may be agreed upon between the employer and the workman under an agreement or as specified in a settlement or award which is binding on both the workman and the employer. Where there is no such agreed age, retirement or superannuation shall be on completion of 58 years of age by the workman." That itself shows that the retirement age can be fixed by agreement. In this case, in the Standing Orders as originally certified retirement age was fixed as 55 years as early as in 1968. Since the workmen had not opposed the same, the same was accepted as fair and reasonable by the Certifying Officer. Therefore, there is implied agreement by the workmen for the retirement age so fixed. Further the management has a case that in view of Exts.P7 to P9 memoranda of settlement, which were entered into after conciliation conferences on a charter of demands, which included a demand for raising of retirement age to 58 years, with a clause that all issues settled by the same shall be treated as withdrawn, the retirement age of 55 years should be treated as fixed by agreement. As such, I am of opinion that the clause in the Model Standing Orders cannot be treated as the criterion for deciding the issue either way.

6. The next question that arises for consideration in this case is as to whether a certified standing order can be modified under Section 10 only if the party seeking the modification shows any change of circumstances subsequent to the earlier certification. In the decision of the Supreme Court in Management, Shahadara (Delhi) Shaharanpur Light Railway Co. Ltd., v. S.S.Railway Workers' Union, AIR 1969 SC 513, the Supreme Court had occasion to consider the scope of Section 10 of the Act. Since the decision encompasses every aspect of the scope of the section looking at various angles, which may be useful for future reference also, I am inclined to quote extensively from the same, sacrificing the good old virtue of brevity. The Apex Court held thus on the question: '5. Counsel conceded, and did so rightly, that there is no express provision in any one of these sections restricting the right to apply for modification or the power of the authorities to allow modification only on proof of a change of circumstances. The only limitations to the power are the reasonableness or fairness which of course must be established and the expiry of six months after the date of the standing orders or their last modifications coming into operation. In the absence of any such express restriction we should then ask ourselves whether there is in any of these sections anything which would indicate such a restriction by necessary implication. In that connection the only word which can point to such a restriction, according to counsel, is the word 'final' In Sec. 6 so that the contention reduces itself to this that by making the order of the appellate authority final under Section 6, Parliament intended by necessary implication that the bar of finality can only be removed if new circumstances arise which necessitate or justify modification. xxx xxx xxx xxx

7. The Act was passed because the legislature thought that in many industrial establishments the conditions of service were not uniform and sometimes were not even reduced to writing. This led to conflicts resulting in unnecessary industrial disputes. The object of passing the Act was thus to require employers to define with certainty the conditions of service in their establishments and to require them to reduce them to writing and to get them compulsorily certified. The matters in respect of which the conditions of employment had to be certified were specified in the schedule to the Act. As the Act stood prior to its amendment in 1956, Section 3 required the employer to submit to the certifying officer draft standing orders proposed by him for adoption in his establishment. Section 4 provided that standing orders shall be certifiable if (a) provision is made therein for every matter set out in the Schedule, and (b) that they were otherwise in conformity with the provisions of the Act. The section, however, expressly provided that it shall not be the function of the certifying officer or the appellate authority to adjudicate upon the fairness or reasonableness of the standing orders. Under Section 5, the certifying officer was required to send a copy of the draft standing orders to the union, if any, or in its absence to the workmen in the manner prescribed together with a notice calling for objections by them, if any, and to give opportunity to the employer and the workmen of being beard and then to decide whether or not any modification of or addition to the draft standing orders was necessary to render them certifiable under the Act. Section 6 provided for an appeal by any person aggrieved by the order passed under S. 5. The appellate authority, whose decision was made final, had the power to confirm or amend or add to the standing orders passed by the certifying officer to render them certifiable under the Act. Though the order passed by the appellate authority was made final under Section 6, Section 10 provided for modification. Sub-section (1) of Section 10 provided that standing orders finally certified under this Act shall not, except on agreement between the employer and the workmen, be liable to modification until expiry of six months from the date on which they or the last modification thereof came into operation. Sub-section (2) read as follows:

"An employer desiring to modify his standing orders shall apply to the Certifying Officer in that behalf…………" Sub-section (3) provided that the foregoing provisions of the Act shall apply in respect of an application under subsection (2) as they apply to the certification of the first standing orders.

8. As the Act stood prior to 1956, there was thus a prohibition against the certifying officer going into the question of reasonableness or fairness of the draft standing orders submitted to him by the employer. His only function was to see that the draft made provisions for all matters contained in the Schedule and that it was otherwise certifiable under the Act. Therefore, though the workmen through the union or otherwise were served with the copy of the draft and had the right to raise objections, the objections could be of a limited character, namely, that the draft did not provide for all matters in the Schedule or that it was not otherwise certifiable under the Act. Even in an appeal under Section 6 the only objections they could raise were limited to the two aforesaid questions. The workmen thus could not object that the draft standing orders were not reasonable or fair. Under Section 10, the right to apply for modification was conferred on the employer alone and in view of sub- section (3) the only consideration which the certifying authority could apply to such modification was the one which he could apply under Sections 4 and 6. Therefore, no question whether the modification was fair or reasonable could be raised. It is thus clear that the workman had very little say in the matter even if he felt that the standing orders or their modifications were either not reasonable or fair. They could, of course, raise an industrial dispute. But that remedy was hardly satisfactory. Such a dispute had to be first sponsored by a union or at least a substantial number of workmen; it had next to go through the process of conciliation and lastly the appropriate Government may or may not be prepared to refer such a dispute to industrial adjudication. Even if it did, the entire process was a protracted one.

9. In 1956, Parliament effected radical changes in the Act widening its scope and altering its very complexion. Section 4, as amended by Act 36 of 1956, entrusted the authorities under the Act with the duty to adjudicate upon fairness and reasonableness of the standing orders. The enquiry when such standing orders are submitted for certification is now two-fold: (1) whether the standing orders are in consonance with the model standing orders, and (2) whether they are fair and reasonable. The workmen, therefore, can raise an objection as to the reasonableness or fairness of the draft standing orders submitted for certification. By amending Section 10 (2) both the workmen and the employer are given the right to apply for modification and by reason of the change made in Section 4, a modification has also now to be tested by the yardstick of fairness and reasonableness. The Act provides a speedy and cheap remedy available to the individual workman to have his conditions of service determined and also for their modification. By amending Sections 4 and 10, Parliament not only broadened the scope of the Act but also gave a clear expression to the change in its legislative policy. Parliament knew that the workmen, even as the un amended Act stood, had the right to raise an industrial dispute, yet, not satisfied with such a remedy, it conferred by amending Sections 4 and 10 the right to individual workmen to contest the draft standing orders submitted by the employer for certification on the ground that they are either not fair or reasonable, and more important still, the right to apply for their modification despite the finality of the order of the appellate authority under Section 6. Parliament thus deliberately gave a dual remedy to the workmen both under this Act and under the Industrial Disputes Act. This fact has in recent decisions been recognised by this Court. (cf. Bangalore Woollen, Cotton and Silk Co., Ltd. v. Their Workmen, 1968-1 Lab LJ 555 = (AIR 1968 SC 585), Buckingham and Carnatic Co. Ltd. v. Their Workmen, C. A. No. 674 of 1968, D/- 25-7-1968 (SC) and Hindustan Brown Boveri Ltd. v. The Workmen, C. A. No. 1631 of l966 D/- 31-7-1967 (SC)).

10. It will be pertinent, while examining the question whether there is a restriction, as suggested by counsel, to the right to apply for modifications, to bear in mind the change in the legislative policy reflected in the amendments of Sections 4 and 10. It will be noticed that Section 10 does not state that once a standing order is modified and the modification is certified, no further modification is permissible except upon proof that new circumstances have arisen since the last modification. As a matter of fact the legislature has not incorporated any words in the sub-section restricting the right to apply for modification except of course the time limit of six months in sub-section (1). Section 6 no doubt lays down that the order of the appellate authority in an appeal against the order of the certifying officer under Section 5 is final but that finality is itself subject to the right to apply for modification under Section 10 (2). Even so, it was urged that the finality of the order under Sec. 6 was indicative of a condition precedent to the jurisdiction under Sec. 10 (2) to entertain an application for modification on a new set of circumstances having arisen in the meantime. The question is whether such is the position.

11. The finality to the order passed under Section 6 really means that there is no further appeal or revision against that order and no more. This view finds support from Section 12 which lays down that once the standing orders are finally certified, no oral evidence can be led in any Court which has the effect of adding to or otherwise varying or contradicting such standing orders. Section 6, when read with Section 12, indicates that the finality given to the certification by the appellate authority is against a challenge thereof in a Civil Court. But the finality given to the appellate authority's order is subject to the modification of those very standing orders certified by him. As already stated, Section 10 itself does not lay down any restriction to the right to apply for modification. Apart from the right to apply for modification under the Act, the workmen can raise an industrial dispute with regard to the standing orders. There is nothing in the Industrial Disputes Act restricting the right to raise such a dispute only when a new set of circumstances has arisen. If that right is unrestricted, can it be possible that the very legislature which passed both the Acts could have, while conferring the right on the workmen individually, restricted that right as suggested by counsel? To illustrate, a new industrial establishment is set up and workmen are engaged therein. Either there is no union or if there is one it is not yet properly organised. The standing orders of the establishment are certified under the Act. At the time of certification, the union or the workmen's representatives had raised either no objections or only certain objections. If subsequently the workmen feel that further objections could have been raised and if so raised the authority under the Act would have taken them into consideration, does it mean that because new circumstances have since then not arisen, the workmen would be barred from applying for modification? Let us take another illustration. Where, after the standing orders or their modifications are certified, it strikes a workman after they have been in operation for some time that a further improvement in his conditions of service is desirable, would he be debarred from applying for further modification on the ground that no change of circumstances in the meantime has taken place? Where the standing orders provide 10 festival holidays, if counsel were right, the workmen can never apply for an addition in their number as they would be faced with the contention that the festivals existed at the time of the last certification and there was therefore no change of circumstances.

12. The Act is a beneficent piece of legislation and therefore unless compelled by any words in it we would not be justified in importing in Sec. 10 through inference only a restriction to the right conferred by it on account of a supposed danger of multiplicity of applications. The policy of Sec. 10 is clear that a modification should not be allowed within six months from the date when the standing orders or the last modifications thereof came into operation. The object of providing the time limit was that the standing orders or their modifications should be allowed to work for sufficiently long time to see whether they work properly or not. Even that time limit is not rigid because a modification even before six months is permissible if there is an agreement between the parties.

13. The ground for urging that a restriction should be read in Section 10 was the apprehension that since workmen individually have the right to apply for modifications there would be multiple applications which an employer would have to face. Secondly, that an application without a change of circumstances would be tantamount to a review by the same authority of his previous order of certification. It was said that if no restriction is read in Section 10 it would mean that the same authority, who, on satisfaction of the fairness and reasonableness of a standing order or its last modification had certified it would be called upon to review his previous decision on reasonableness and fairness. Such a review, it was argued, is permissible only on well recognised grounds namely, discovery of new and important matter or evidence, a mistake or an error apparent on the face of the record or any other sufficient reason.

14. An application for modification would ordinarily be made where

(1) a change of circumstances has occurred, or

(2) where experience of the working of the standing orders last certified results in inconvenience, hardship, anomaly etc., or

(3) where some fact was lost sight of at the time of certification, or

(4) where the applicant feels that a modification will be more beneficial.

In category (1) there would be no difficulty as a change of circumstances has taken place. But in cases falling under the rest of the categories there will be no change of circumstances. Does it mean that though the implementation of the standing orders has resulted in hardship, inconvenience or anomaly, no modification can be asked for because there is no change of circumstances? As to multiplicity of applications we think that there is no justification for any such apprehension, for, unless there is a justification for modification the authorities under the Act would reject them on the ground that they are frivolous and therefore neither fair nor reasonable, Lastly, as to such an application being a review of the last certifying order an application under Section 10 is not a review. An application for review would be made in the proceedings in which the judgment or order sought to be reviewed is passed. That would not be so in the case of an application under Section 10 (2). Such an application is independent of the proceedings in which the last certifying order was passed and is made in the exercise of an independent right conferred upon the applicant by Section 10 (2). In an application for modification, the issue before the authority would be not as to the reasonableness or fairness of the standing orders or their last modification, but whether the modification now applied for is fair and reasonable. Therefore, the contention that a change of circumstances is a condition precedent to the maintainability of an application under Section 10 (2) or that an application for modification without proof of such a change amounts to review by the same authority of its previous order is not correct.'

(underlining supplied)

Going by that decision, under section 10, what the Certifying Officer is to consider is whether the modification applied for is fair and reasonable. Further, the parties, being human, cannot always foresee the effects of a standing order in practice. If after the certified Standing Orders are brought into force and the same after sometime, are found to work out to the prejudice of either party, it is only fair and reasonable that they should be given an opportunity to seek modification of the same before the Certifying Officer. Such right of modification is also not one sided. That right is available to both employer and the employees. In fact apart from change of circumstances, one can envisage several other similar reasons also which supports a case for modification. Therefore, for seeking modification it is not a necessary condition that there should have been change of circumstances warranting such modification, if the modification sought for is fair and reasonable. Either party can seek a modification before the Certifying Officer, the only condition for the same being that the modification requested for should be fair and reasonable.

7. Like other conditions of service in a standing order, reasonableness and fairness of retirement age depends on many factors such as;

(a) what is the nature of the work of the employees in the establishment ?

(b) what is the nature of the wage structure paid to them?

(c) What are the retirement and other amenities available to them?

(d) What are the climatic conditions of the region where the employees work?

(e) What is the age of superannuation fixed in comparable industries in the same region?

(f) What is the general practice prevailing in the industry in the past in the matter of retiring its employees ?

(see Jeewanlal 1929 Ltd. v. Workmen, AIR 1972 SC 1210).

Except referring to the retirement age of workmen in two other establishments in the region, neither the certifying officer nor the appellate authority has undertaken the requisite exercise of considering these parameters while passing the impugned orders. In such circumstances, normally I should direct reinvestigation by the certifying officer after inspecting the conditions in the petitioner's factory to come to a conclusion whether the age of superannuation should be left at 55 or whether it should be raised to 58 years. But two other circumstances would deter me from adopting that course.

8. The first is the fact that in respect of the Bangalore unit of the petitioner company, identical question was considered by the appellate authority under the Act, namely the Industrial Tribunal, Bangalore and by Ext.P12 order, the appellate authority held that in view of the precarious financial condition of the company, upward revision of the retirement age would put the company into financial liability and therefore, the certifying officer was in error in allowing the modification of the Standing Order in respect of retirement age by raising the same from 55 years to 58 years. As a consequence of the two orders, now the retirement age of employees of the two units are different. Clause 31 of Ext.P1 certified standing order of the establishment provides thus;

"31. Workmen shall be liable to be transferred from one department to another department or from one job to another according to the discretion of the Company. Workmen are also liable to be transferred from the Factory at Palghat to any other establishment or the Company inside or outside the State of Kerala, whether such establishment is in existence at the time of the engagement of the transferred workmen or not."

(underlining supplied)

This shows that employees of the Palakkad unit are transferable to the Bangalore Unit. If the retirement age of the employees of the two units are different, it would cause anomalous results in case of transfer of an employee from the Palakkad unit to the Bangalore unit.

9. The second is a more clinching one in favour of the petitioner. In fact the same is also relied upon in Ext.P12. Admittedly the unions had in their charters of demands, which resulted in Exts.P7, P8 and P9 memoranda of settlement, raised the issue of upward revision of retirement age to 58 years. The memoranda of settlement do not as such contain any reference to the said demand. But clauses 13, 14, 15 and 16 of Ext.P7 state thus:

"13. All other terms and conditions which are not specifically altered or varied by this settlement shall continue to be in force between the parties.

14. This settlement will be full and final settlement of all issues raised in the Charter of Demands.

15. Union and the workmen agree that they shall not during the period of this settlement, either individually or collectively or through their union make any demand or raise dispute involving or resulting either directly or indirectly any financial liability to the Company.

16. Union and workmen agree that they shall not during the period of this settlement resort to any strike, go-slow or intimidation." Clauses 15, 16 and 17 of Ext.P8 state thus:

"15. All other service conditions or benefits which are not specifically altered and varied by this settlement shall continue to remain in force.

16. The Unions and workmen agree that this settlement sets at rest all demands raised in the charter of demands or during discussions, but not specifically referred to in this settlement, such demands shall be treated as having been dropped/not pressed and settled accordingly.

17. Unions and the workman agree that they shall not during the period of this settlement, either individually or collectively or through their union make any demand or raise dispute involving or resulting either directly or indirectly any financial liability to the Company." Again in Ext.P9 also similar clauses have been incorporated as clauses 15, 17 and 18 thus;

"15. All other service conditions or benefits which are not specifically altered or varied by this settlement shall continue to remain in force.

xxx xxx xxx xxx

17. The Unions and workmen agree that this settlement sets at rest all demands raised in the charter of demands or during discussion, but not specifically referred to in this settlement, such demands shall be treated as having been dropped/not pressed and settled accordingly.

18. Unions and the workmen agree that they shall not during the period of this settlement, either individually or collectively or through their union make any demand or raise dispute involving or resulting either directly or indirectly any financial liability to the Company." The Supreme Court had occasion to consider the effect of similar clauses in a conciliation settlement on the demand for modification of the standing order by upward revision of the retirement age, in Barauni Refinery Pragatisheel Shramik Parishad v. India Oil Corporation Ltd. (1991) 1 SCC 4. In fact, in that decision also there was a general settlement between the management and the unions which contained the following clauses:

"19. The Corporation agrees that such terms and conditions or service as well as amenities and allowances as are not changed under this settlement shall remain unchanged and operative during the period of the settlement.

xxx xxx xxx xxx

21. The Unions agree that during the period of operation of this settlement, they shall not raise any demand having financial burden on the Corporation other than bonus provided that this clause shall not affect the rights and obligations of the parties in regard to matters covered under Section 9-A of the Industrial Disputes Act, 1947." In that case also the certifying officer allowed the modification. The Appellate Authority affirmed the revision with a slight modification. The employer challenged the same before the High Court, which challenge found favour with the High Court, who set aside the modification. Affirming the judgment of the High Court relying on clauses 19 and 21 of the memorandum of settlement, the Supreme Court held thus in paragraphs 9 and 10:

"9. The settlement does not make any specific mention about the age of retirement. Clause 19 of the settlement, however, provides that such terms and conditions of service as are not changed under this settlement shall remain unchanged and operative for the period of the settlement. The age of retirement prescribed by clause 20 of the certified Standing Orders was undoubtedly a condition of service which was kept intact by clause 19 of the settlement. The provisions of the Standing Orders Act to which we have adverted earlier clearly show that the purpose of the certified Standing Orders is to define with sufficient precision the conditions of employment of workman and to acquaint them with the same. The charter of demands contained several matters touching the conditions of service including the one concerning the upward revision of the age of retirement. After deliberation certain conditions were altered while in respect of others no change was considered necessary. In the case of the latter clause 19 was introduced making it clear that the conditions of service which have not been changed shall remain unchanged, i.e. they will continue as they are. That means that the demand in respect of revision of the age of retirement was not acceded to.

10. By clause 21 of the settlement extracted earlier the Union agreed that during the period of the operation of the settlement they shall not raise any demand which would through an additional financial burden on the management, other than bonus. Of course the proviso to that clause exempted matters covered under Section 9-A of the Industrial Disputes Act from the application of the said clause. However, Section 9- A is not attracted in the present case. The High Court was, therefore, right in observing: "when the settlement had been arrived at between the workmen and the company and which is still in force, the parties are to remain bound by the terms of the said settlement. It is only after the settlement is terminated that the parties can raise any dispute for fresh adjudication." The argument that the upward revision of the age of superannuation will not entail any financial burden cannot be accepted. The High Court rightly points out: "workmen who remain in service for a longer period have to be paid a large amount by way of salary, bonus and gratuity than workmen who may newly join in place of retiring men". The High Court was, therefore, right in concluding that the upward revision of the age of superannuation would through an additional financial burden on the management in violation of clause 21 of the settlement. Therefore, during the operation of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannuation would come in conflict with clauses 19 and 21 of the settlement. We are, therefore, of the opinion that the conclusion reached by the High Court is unassailable." The clauses quoted above from Exts.P7, P8 and P9 settlements between the parties in this case are in pari materia with clauses 19 and 21 considered by the Supreme Court. It is not disputed before me that the petitioner company is in dire financial straits. It is also not disputed before me that the last of the settlement was in force at the time of passing the impugned orders. Therefore, the ratio of the decision of the Supreme Court in Barauni Refinery's case (supra) squarely applies to the facts of this case on all fours. Therefore I have no option but to decide this case in accordance with the ratio of that decision. Therefore, following the decision of the Supreme Court, I allow this writ petition and set aside the impugned orders to the extent it allows the modification of clause 48 of Ext.P1 Standing Orders. However, the wages paid to the employees who continued in service by virtue of the interim orders of this Court for the period subsequent to their attaining 55 years shall not be recovered from them. The extended period of service till today shall be treated as extension granted in exercise of the discretion of the management as provided in clause 48 of Ext.P1 Standing Orders.

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