Settlement Arrived At Though Interim In Conciliation Proceedings Between Workmen And Employer Is Binding On Both Parties: Karnataka High Court

The Karnataka High Court has once again referred for Conciliation the matter regarding re-employment of 80 contract workers of Indian Telephones Limited who have been refused employment since December 2021, though they had been employed in the services for a period of 3 to 38 years.

A single judge bench of Justice Suraj Govindaraj noted that without prejudice to issue of regularization, the management had undertaken in the conciliation proceedings to immediately take back some workers and rest as early as possible. It noted that though this settlement was only interim in nature, its non-compliance halted further progress in the conciliation proceedings.

It is in this context the Court observed,

“In the present case, though discussions were held and recommendation was made by the conciliation officer for taking back a certain number of workers by the 5th respondent, the decision in that regard was made by the 5th respondent. It is therefore required that the 5th respondent adhere to the decision taken during the conciliation proceedings and not deter from it. The settlement whether it is interim or otherwise would have to be adhered to by both the parties so as to enable further progress...If the 5th respondent had complied with the agreement though interim arrived at the settlement talks would have proceeded and probably ended up with final settlement. If the interim settlement is not enforceable, then as observed above, the entire conciliation proceedings would be rendered an empty formality.”

The bench thus concluded that the settlement arrived at though interim by the workmen and the employer (5th respondent) would be binding on both the parties.

It partly allowed the petition filed by Karnataka General Labour Union and said “The petitioner and 5th respondent are once again referred to conciliation. The Conciliation Officer to try and conciliate the difference between the members and 5th respondent.”

The Union had contended that though these workmen have been guised as contract workers, they are in-fact permanent employees of the 5th respondent performing core work of engineers, quality assurance, quality test, lab assistants, data processing, finance, drivers, office assistants, etc. many of whom have been engaged in several defence projects. Moreover, the contractors under whom the workmen are supposed to be working were only name lenders and many contractors came and went, but the workmen continued to render the same service without any interruption.

It was averred that the dispute arose following non-payment of wages amid Covid19 lockdown. The workers formed a Union and filed proceedings under Minimum Wages Act for declaration that they were permanent regular workmen. During the pendency of the proceedings it is claimed the management threatened the members of the Union and some of them were illegally terminated from service.

Petitioner-Union said management had refused to re-employ workmen, even after giving an undertaking in the conciliation proceedings of immediately taking back some and rest as early as possible.

The bench said “Whenever there is any undertaking given either by the employer or the workmen, the same is required to be adhered to by the respective party. The employer having agreed to do so cannot later contend that the Conciliation Officer has pressurised the employer or otherwise. Such a contention, if allowed to be taken by any participant in a conciliation proceeding, would render the entire conciliation process a formality without any scope of resolution of the disputes.”

Noting that the workers have already filed an application for regularisation before the Labour Commissioner (Central), the bench said,

“The question of petitioners and Union and or the workmen seeking for a direction to the employer, who undertakes re-employment of all 80 workers without prejudice to their claims for regularization with payment of wages cannot be considered by this Court. If at all the petitioners and or the workmen can move such application as interlocutory application in the said proceedings to be considered by the said authority, this Court cannot parallelly exercise its power or jurisdiction in such matters.”

In regards to the claim made by the Union, alleging that there are certain violations committed by the employer and that it is required to be prosecuted for under Section 25Q, 25U and 31 of Industrial Disputes Act, the bench held “It would not be proper for this Court to express its opinion on any such violation. What could only be considered by this Court is a direction to be issued to the 3rd respondent (Chief Labour Commissioner) to consider the complaint and pass necessary orders deciding whether to prosecute 5 th respondent or not on the basis of the material placed before it.”

Accordingly it directed the Chief Labour Commissioner to pass necessary orders on the Union's complaint within eight weeks.

Before parting, the bench expressed that the very purpose of conciliation under Industrial Disputes Act is to try and resolve the disputes between the employer and the workmen so as to maintain a conducive atmosphere and further to see to it that the relationship between the employer and the workmen is not strained. “A conciliation officer would be well within its rights to pursue a party to arrive at a settlement, of course agreeing to the settlement or not would be at the sole discretion of the party,” it held.

Case Title: Karnataka General Labour Union And Government of India & others

Case No: WRIT PETITION NO. 9465 OF 2022

Citation: 2023 LiveLaw (Kar) 183

Date of Order: 18-04-2023

Appearance: Advocate Clifton D Rozario for petitioner.

Deputy Solicitor General of India H. Shanthi Bhushan FOR R1/R2.

AGA Bhojegouda T Koller for R3/R4.

Click Here To Read/Download Order