ORDER Isaac, J. 1. This is a petition under Article 226 of the Constitution to quash an award, Ext. P-1 dated 26th November 1971 of the Industrial Tribunal, Alleppey in a dispute which arose between the petitioner and its workmen, consisting of two sections, which may be called the Staff and the Labour. The staff is represented by the first respondent, while the labour is represented by four trade unions who are respondents 2 to 5. 2. The Governor of Kerala issued the Kerala Industrial Employees Payment of Gratuity Ordinance, 1969 providing for the payment of gratuity to the employees in factories, plantations and other establishments in the State. The Ordinance came into force on 10th December 1969. It was replaced by the Kerala Legislature by the Kerala Industrial Employees Payment of Gratuity Act, 1970 (hereinafter referred to as the Gratuity Act) which came into force on 18th February 1970. Section 4 of the Gratuity Act provided, among other things, for payment of gratuity to an employee on his superannuation. This term is defined in section 2 (i) of the Gratuity Act as follows: "(i) Superannuation means the termination of the services of an employee by the employer when the employee reaches the age of 60 years or such other age, if any, fixed in the contract of service;"� The Ordinance also contained similar provisions. Sometime after the Ordinance came into force, the petitioner terminated the services of two staff employees, Sri Edgar Periera and Sri V. I. Idiculla on superannuation, when they reached the age of 58 years. The first respondent then wrote to the petitioner, by Ext. P-5 dated 10th February 1970, stating that, though under the agreement which then prevailed, the age of superannuation was 58 years, the employees were entitled to continue in service till the age of 60 years under the 'Gratuity Bill', and requesting the petitioner to reconsider their case. The labour section of the workmen also made such a claim. Thus a dispute arose between the petitioner and both sections of its workmen. The Government of Kerala referred the following issues for the adjudication of the Industrial Tribunal, Alleppey: 1. Age of superannuation. 2. Whether the termination of services of Sri Edgar Periera and Sri V. I. Idiculla is justifiable and, if not, to what relief they are entitled.
Thus a dispute arose between the petitioner and both sections of its workmen. The Government of Kerala referred the following issues for the adjudication of the Industrial Tribunal, Alleppey: 1. Age of superannuation. 2. Whether the termination of services of Sri Edgar Periera and Sri V. I. Idiculla is justifiable and, if not, to what relief they are entitled. The petitioner contended that there was contract of service between the petitioner and its workmen under which the age of superannuation was 58 years, and that the petitioner was entitled to terminate the services of its workmen when they reached the said age. Some of the respondents admitted that the contract of service fixed the age of superannuation as 58 years, and yet the workmen were entitled to continue in service till the age of 60 years by virtue of the relevant provisions in the Gratuity Act. The remaining respondents contended that there was no contract of service in force, and that the workmen were, therefore, entitled to go till 60 years. The Industrial Tribunal found that there was binding agreement between the parties, under which the age of superannuation was 58 years. Still it held that by virtue of the second proviso to section 4 of the Gratuity Act, the workmen were entitled to have 60 years as the age of superannuation. Accordingly, it also held that the superannuation of the two workmen as the age of 58 years was wrong, and directed the petitioner to pay them gratuity in respect of two years, and half the emoluments due to them for the said period in lieu of reinstatement in service. 3. Counsel for the respondents were not prepared to support the reason stated by the Industrial Tribunal for its conclusion. The contention urged by them before me was that there was no contract of service in force regarding the age of superannuation, and that, therefore, the workmen were entitled to continue till the age of 60 years. Before I examine this contention, I shall deal with the reason stated by the Tribunal, though the respondents did not support it. Section 4 of the Gratuity Act reads as follows: "4. Payment of gratuity.
Before I examine this contention, I shall deal with the reason stated by the Tribunal, though the respondents did not support it. Section 4 of the Gratuity Act reads as follows: "4. Payment of gratuity. (1) Gratuity shall be payable to an employee" (a) on his superannuation; (b) on his retirement, resignation, retrenchment, discharge or dismissal from service after completion of a minimum period of five years of continuous service; (c) on his death or total disablement due to accident or disease. Explanation. For the purpose of this section, total disablement means such disablement, whether of temporary or permanent nature, as incapacitates an employee for all work which he was capable of performing at the time of accident resulting in such disablement. (2) In case of death of an employee, the gratuity shall be payable to the nominee of the employee or in the absence of a nominee to the family of the employee. (3) In the cases referred to in clauses (a), (b) and (c) of subsection (1) the employer shall pay gratuity to each of his employees at the rate of fifteen days wages based on the last drawn wages for every completed year of service or part thereof in excess of six months: Provided that the maximum amount of gratuity payable to an employee shall not exceed fifteen months wages: Provided further that nothing in this section shall affect the right of any better terms of gratuity or retirement benefits under any award or agreement or contract with the employer:� There are two more provisos to the above section; and they are omitted as they are not relevant for consideration. After quoting the second proviso to the above section, the Tribunal states as follows: "On a strict interpretation of this provision any reasonable person can come to the only conclusion, that if the terms of gratuity or retirement benefits in existence in a concern are not better than the terms of gratuity or retirement benefits as per the Act, then the provisions under section 4 would definitely affect the same meaning that if the terms are not better, then the terms of the Act would apply. Now on a comparison with the terms of the gratuity and retirement benefits of the company as per Exts.
Now on a comparison with the terms of the gratuity and retirement benefits of the company as per Exts. M-1 and M-3 settlements, it can be seen that the provision of Act 6 of 1970 are far better than the terms of Exts. M-1 and M-3 settlements which are as follows: (i) When the scheme in the statute provides workers the right to continue in service till they reach the age of 60, clause 14 of Ext. M-3 provides only 58 years as the age of superannuation.� The Industrial Tribunal has wholly misread the proviso, he relies on for the above conclusion. What the said proviso states is that, if the terms of gratuity or retirement benefits under any award or agreement or contract are better than those provided under section 4 of the Act, the workmen would be entitled to those better terms. That is not the case here; the workmen have not got any better terms under the contract of service. On the contrary, the provision in the contract of service is less advantageous, since the age of superannuation under the contract is 58 years. There cannot be any dispute that the provisions of the Gratuity Act would prevail over the provisions contained in any contract of service, unless expressly saved. The definition of the term 'superannuation' contained in section 2 (i) of the Gratuity Act, which I have quoted earlier, states expressly that superannuation means the termination of service of an employee when he reaches the age of 60 years, or such other age, if any, fixed in the contract of service. Thus the statute expressly enables the management and its workmen to fix by agreement an age of superannuation different from 60 years. Such a fixation is valid, and the second proviso to section 4, which has been relied on by the Tribunal has no application. In this context, it is profitable to notice the definition of the term superannuation� in the Payment of Gratuity Act, 1972 (Central Act XXXIX of 1972), which by virtue of Article 254 of the Constitution, supersedes the Gratuity Act.
In this context, it is profitable to notice the definition of the term superannuation� in the Payment of Gratuity Act, 1972 (Central Act XXXIX of 1972), which by virtue of Article 254 of the Constitution, supersedes the Gratuity Act. Section 2 (r) contains that definition; and it is as follows: (r) superannuation, in relation to an employee, means, (i) the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment; and (ii) in any other case, the attainment by the employee of the age of fifty-eight years. 4. I shall now deal with the important controversy whether there is a contract of service between the petitioner and its workmen fixing the age of superannuation as 58 years. Ext. P-2 dated 3rd June 1963 is a memorandum of settlement between the petitioner and its staff section of the workmen. Clause 10 of Ext. P-2 provides that the retirement age shall be 58 years. Section 19 of the Industrial Disputes Act, 1947 deals with the period of operation of settlements and awards. It reads: 19. Period of operation of settlements and awards. (1) A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute. (2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months, from the date on which the memorandum of settlement is signed by the parties to the dispute and shall continue to be binding on the parties after the expiry of the period aforesaid until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement.
(3) An award shall, subject to the provisions of this section, remain in operation for a period of one year from the date on which the award becomes enforceable under section 17-A; Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit: Provided further that the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit, so however, that the total period of operation of any award does not exceed three years from the date on which it came into operation. (4) Where the appropriate Government, whether of its own motion or on the application of any party bound by the award, considers that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court, or to a Tribunal, if the award was that of a Tribunal, or of a National Tribunal for decision whether the period of operation should not, by reason of any change, be shortened and the decision of Labour Court or the Tribunal, as the case may be, on such reference shall be final. (5) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances, does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award. (6) Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award. (7) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case, may be.� Ext. P-2 provides that it would be in force for three years from its date.
(7) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case, may be.� Ext. P-2 provides that it would be in force for three years from its date. So it continued in force till 3rd June 1966; and by virtue of section 19 (2) of the Industrial Disputes Act, it shall continue to be binding on the parties after the expiry of the said period until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. Admittedly the settlement as per Ext. P-2 has not been terminated by either of the parties by giving any written notice. In 1967, two disputes came up for adjudication before the Industrial Tribunal, Alleppey between the petitioner and its workmen. One was I.D. No. 6 of 1967. It related to both the staff and labour section of the workmen; and the issues for adjudication were bonus and wages. The other dispute was I.D. No. 31 of 1957. It related only to the staff section of the workmen. There were 11 issues in that case; and issue No. 5 was about retirement age. Both those disputes were settled between the parties; and the Industrial Tribunal passed an award in terms of the settlement. Ext. P-3 dated 5th June 1969 is a copy of that award. Regarding I.D. No. 31 of 1967, the settlement says, "In view of the above terms of settlement, the Staff Association has agreed not to press any of the issues, viz., issue Nos. 1 to 11."� The reference in the above clause is to the terms of settlement in I.D. No. 6 of 1967. Then there is a general clause at the end of the agreement relating to both these disputes, which is as follows:" "This agreement will be in force up to 31st December 1971, and the unions and the staff association agree that they will not raise any demands involving financial commitment on the part of the company, during the period of operation of this settlement, excepting the question of bonus for the year 1968 and thereafter." 5.
It was contended on behalf of the first respondent that the raising of a dispute after the expiry of the period of a settlement puts an end to the settlement in terms of section 19 (2) of the Industrial Disputes Act. I am unable to accept this contention. What is required by section 19 (2) is a notice in writing of an intention to terminate the settlement. There is nothing to show that such a notice was ever given by the first respondent. Even assuming that the raising of a dispute would amount to termination of a settlement, the withdrawal of that dispute would amount to withdrawal of the notice to terminate the settlement and/or its revival. It is unnecessary to consider these aspects in the instant case. Ext. P-3 shows that both the disputes raised in I.D. Nos. 6 and 31 were settled, and a joint award was passed in terms of that settlement, according to which the first respondent agreed not to press the issue of superannuation, and not raise any such demand up t0 31st December 1971. This means that there is a clear settlement on this issue, according to which the age of superannuation of the staff section of the workmen would be 58 years. Again under section 19 (2) of the Act, this settlement would continue to be binding on the parties even after 31st December 1971 until it is terminated by written notice as mentioned in that sub-section. Sub-sections (3) and (6) deal with the period of operation of an award; and as an award, Ext. P-3 would remain in force until the expiry of the periods mentioned therein. The award forms the contract of service between the parties thereto. Hence in any view of the matter, the age of superannuation of the staff section of the workmen is governed by contract of service according to which it is 58 years. 6. Now I come to the case of the labour section of the workmen. A dispute arose between the petitioner and their workmen in 1962; and it was settled by them as per memorandum of settlement, Ext. P-4 dated 30th June 1964. clause 14 of Ext. P-4 fixed the age of retirement as 58 years; and clause 19 provided that the said agreement would remain in force till 31st January 1965.
A dispute arose between the petitioner and their workmen in 1962; and it was settled by them as per memorandum of settlement, Ext. P-4 dated 30th June 1964. clause 14 of Ext. P-4 fixed the age of retirement as 58 years; and clause 19 provided that the said agreement would remain in force till 31st January 1965. There is no case that this settlement has been terminated after the said date by any written notice as required by section 19 (2) of the Industrial Disputes Act. On the other hand, the general clause appearing at the end of the settlement inserted in the award, Ext. P-3, to which all the workmen were parties, states that, in the light of that settlement, they would not raise any demands involving financial commitment on the part of the management, except regarding bonus during the period that agreement remained in force, namely till 31st December 1971. I have already held that this settlement has not been terminated after the said date by any written notice. In any view of the matter, it follows that the age of superannuation of the labour section of the workmen is also governed by contract of service, according to which it is 58 years. 7. In the result, I hold that the findings of the Industrial Tribunal are illegal and vitiated by a misconstruction of the relevant legal provisions. The impugned award, Ext. P-1, is, therefore, quashed. In the face of the clear provisions of the settlements which remained in force between the parties, I am constrained to observe that the workmen were unjustified in raising this dispute. The contesting respondents will, therefore, pay the costs of the petitioner. Counsel fee is fixed at Rs. 250.