GLAXO LABORATORIES (INDIA) LTD. , ERNAKULAM v. INDUSTRIAL TRIBUNAL, CALICUT
1975-03-31
K.BASKARAN
body1975
DigiLaw.ai
Judgment :- 1. The main question of law that has been raised in this writ petition by the petitioner, Glaxo Laboratories (India) Ltd., Ernakulam, is whether a notice terminating an agreement issued before the expiry of the period of operation of the agreement would satisfy the requirement under sub-s. (2) of S.19 of the Industrial Disputes Act, 1947 (Act XIV of 1947), hereinafter referred to as the Act, which reads as follows: "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." It also arises for consideration whether one of the parties to the agreement could by conduct waive the right to notice under S.19 (2). 2. The petitioner and the 2nd respondent, Workmen of Glaxo Laboratories (India) Ltd. represented by the Glaxo Laboratories Staff Union, Ernakulam, entered into an agreement, Ext P-2, dated 29th April 1968 and that agreement with respect to service conditions was to be in force till 31st December 1971. On November 1971 the Secretary of the 2nd respondent Union sent Ext. Ml notice to the petitioner; and the material portion of the said notice reads as follows: - "As directed by the General Body, I am forwarding the Resolution passed at the meeting held on 22nd November 1971. Please take this as the notice to terminate the existing settlement." In the resolution attached to Ext. M-1 notice, towards the end it is stated as follows: "this General Body meeting held on 22nd November 1971 as the firs: step, decided to terminate the slid settlement as per sub-clause (2) of S.19 of the Industrial Disputes Act, 1947, and hereby give notice to terminate the said settlement." Ext. M-2 dated 15th December 1971 is the reply to Ext. M-1 sent by the petitioner. It is stated, inter alia, in Ext.
M-2 dated 15th December 1971 is the reply to Ext. M-1 sent by the petitioner. It is stated, inter alia, in Ext. M-2 as follows: - "In the absence of any mention of the specific date, the date of termination of the settlement shall be the date of the notice itself, i. e., 23rd November 1971. Clause.21 of the settlement specifically states that the settlement shall be binding on both the parties for a period including and up to to 31st December 1971 and shall thereafter continue to be in force and binding until terminated by either party, as provided under S.19(2) of the Industrial Disputes Act. Consequently, the Union is precluded from terminating the settlement during the period when the settlement is in operation." Thereafter Ext. M-3 letter dated 21st December 1971 was sent by the 2nd respondent Union; and that was in the form of a clarification of the contents of Ext. M-1 notice dated 23rd November 1971. In the penultimate paragraph of Ext. M-3 what has been stated is as follows: - "It is rather misconstrued to state that the Union has not specified the date of termination of the settlement. We reiterate that the notice to terminate the settlement has been served on Management on 23rd November, and the agreement shall stand terminated two month's from the date of serving this notice. It is needless to clarify that two months from the date of serving notice can only be a date after 31st December 1971, as such it is baseless to state that the Union is precluded from terminating the settlement during the period when the settlement is in operation. Since the agreement will stand terminated on 23rd January 1972. and that we have already submitted our Charter of Demands on 1st December, 1971, we shall be glad if you will take early steps for negotiation of the settlement " This was followed by Ext. M-4 letter dated 7th January 1972, sent by the petitioner, wherein the management contended as follows: "It will, therefore, be seen that your notice dated 23rd November, 1971, terminating the settlement before the expiry of its contractual period is in breach of the law as. well as the provisions of the settlement." ' Subsequently, in the concluding portion of Ext.
M-4 letter dated 7th January 1972, sent by the petitioner, wherein the management contended as follows: "It will, therefore, be seen that your notice dated 23rd November, 1971, terminating the settlement before the expiry of its contractual period is in breach of the law as. well as the provisions of the settlement." ' Subsequently, in the concluding portion of Ext. M-5 letter dated 10th January 1972 written by the 2nd respondent Union, it is stated as follows: "We once again like to mention that by serving the notice of terminating the settlement on 23rd November 1971, we accept that the terms of the settlement is binding on both the parties, not only up to 31st December, 1971 but up to 23rd January 1972." A period of inaction seems to have followed till by Ext. R-1 letter dated 26th July 1972 the 2nd respondent enquired of the petitioner as to when the management intended to negotiate with the Union regarding the Charter of Demands already submitted. Ext. R-2 is the reply sent by the petitioner to Ext. R-1. In Ext. R-2 it is stated, inter alia, as follows: "We sincerely hope you will bear with us for some time and that before long we will be able to enter into negotiations with you " In the concluding paragraph it is also stated: "We must strongly urge you therefore that when the negotiations are held you must realistically examine the position and that these will not be based on the Charter of Demands as submitted" In Ext. R-11 which is a letter dated 15th December 1972 written by the petitioner to the 2nd respondent, it is stated, inter alia, as follows: "and perhaps, you would kindly bear in mind that in terms of the proposals for the new settlement, for the Ernakulam Depot likely to be concluded soon, the number of holidays will be 10, including National Holidays." Ext. R-10 is another letter written by the petitioner on 29th December 1972 to the 2nd respondent, wherein it is stated as follows: "Very soon our Depot Settlement will also be taken up with very good hopes of early settlement" Ext.
R-10 is another letter written by the petitioner on 29th December 1972 to the 2nd respondent, wherein it is stated as follows: "Very soon our Depot Settlement will also be taken up with very good hopes of early settlement" Ext. R-4 is the copy of letter No. B-10998/71, dated 21st February 1973 from the District Labour Officer, Alwaye, intimating the petitioner as well as the 2nd respondent that a joint conference of the parties was to be held at 10 a.m. on 2nd March 1973 in the District Labour Office. Ext. R-5 is a copy of the proposal for settlement received from the petitioner by the second respondent Union Ext. R-8 is a copy of the letter sent by the 2nd respondent to the District Labour Officer, Alwaye, on 14th April 1973 intimating him that the mutual discussions with the management held on 9th April 1973 at Madras had failed and requesting him for the resumption of conciliation. Ext. R-9 is a copy of the letter dated 23rd May 1974 written by the petitioner to the 2nd respondent Union granting leave to two of its workers for attending the negotiations held in Madras from 1st to 3rd April, 1974. 3. It is after all these that the dispute arising out of the Charter of Demands dated 1st December 1971 was referred by the Government of Kerala to the first respondent, Industrial Tribunal, Calicut on whose file it was taken a I.D. No. 40 of 1973. Before the 1st respondent Tribunal both the petitioner and the 2nd respondent had filed statements. On a petition filed by the petitioner (management) the 1st respondent Tribunal took up the question of the maintainability and validity of the reference of the dispute as a preliminary point. Ext. P1 is a copy of the preliminary order passed by the 1st respondent on 24th July 1974, whereby the contention of the petitioner (management) was rejected, the 1st respondent Tribunal holding that the petitioner had by its conduct waived the right (to notice?) and that apart, in Ext. Ml notice under S.19 (2) there was sufficient indication that the 2nd respondent intended to terminate the settlement dated 29th April 1968. 4.
Ml notice under S.19 (2) there was sufficient indication that the 2nd respondent intended to terminate the settlement dated 29th April 1968. 4. Counsel for the petitioner submits that the reasoning of the 1st respondent for holding that the agreement dated 29th April 1958 no longer remained in force, and therefore the reference is maintainable, has no legal basis at all. The main ground for this submission is that Ext. Ml notice was issued on 23rd November 1971, whereas the period stipulated in Ext. P2 was to end only on 31st December 1971. In support of this contention that the notice of termination should have been issued only after the expiry of the period of operation of the settlement, counsel relied on a decision of the Andhra Pradesh High Court in Deccan Tile Works v. Their Workmen 1960 (II) L.L.J. 298. The passage relied on reads as follows: - The next contention of Mr. Krishnamurthi is that the management was within its rights in repudiating and putting an end to the agreement. Ext. Al, under S.19 of the Industrial Disputes Act. As pointed out by the learned counsel for respondent Mr. A. Gangadhar Rao, what the section says is that the agreement should be in force for six months and it is only after the expiry of six months that the question of two months' period would arise. The agreement in this case, Ext. Al, was made on 5th June 1957. That being so, it would be in force for six months from that date till 4th December 1957. The notice terminating this agreement was given on 17th November 1957. Obviously the management was not within its rights in terminating and unilaterally repudiating Ext. Al. On this part of the case there is nothing to call for the modification of the view taken by the labour court." Counsel has brought to my notice a passage in State of Kerala v. Antony D'Cruz 1966 (1) LLJ. 373 wherein Govinda Menon, J., has made a reference to the decision of the Andhra Pradesh High Court cited above. The relevant passage reads: "It is not, therefore, open to the union to terminate and unilaterally repudiate the settlement without complying with the provisions contained in S.19 (2) of the Act-vide the decision in Deccan Tile Works v. Their Workmen (1960-II L.L.J. 298).
The relevant passage reads: "It is not, therefore, open to the union to terminate and unilaterally repudiate the settlement without complying with the provisions contained in S.19 (2) of the Act-vide the decision in Deccan Tile Works v. Their Workmen (1960-II L.L.J. 298). There is no case here that any such notice was given." As far as the reference in the decision of the Kerala High Court is concerned, it cannot be said that Govinda Menon, J had considered the question whether the issue of notice terminating the agreement should always be prior to the expiry of the period of operation fixed in the agreement, the case considered being one Where no notice was issued at all The view expressed therein is only the reiteration of the well recognised principle that one of the parties to the agreement cannot unilaterally repudiate it without complying with the provisions of sub-section (2) of S.19 of the Act. It cannot therefore be argued that the view expressed by the Andhra Pradesh High Court in the said decision on the relevant point has either been considered or approved by this Court. Moreover, it is doubtful whether that decision of the Andhra Pradesh High Court goes to the extent of laying down the proposition that for a notice under S.19 (2) of the Industrial Disputes Act to be valid, it should, invariably, have been issued only after the expiry of the period of operation of the agreement or settlement. 5. There is no need of scope for importing the idea that to satisfy the requirements of S.19 (2) of the Act notice terminating the agreement should always be after the expiry of the period of operation of the settlement or agreement in force. On a careful analysis of the sub-section, in my opinion, the requirements for termination of an agreement in force shall stand fulfilled if the following conditions are satisfied. (i) issue of a notice in writing; (ii) conveyance, through the notice, of a clear intention to terminate the agreement; (iii) the termination of the agreement shall be on a date after the expiry of the period of operation agreed upon; and (iv) a period of two months elapses between the date of the issue of notice and the date of termination of the agreement. 6.
6. Counsel for the petitioner has drawn my attention to sub-section (6) of S.19 to contend that this sub-section would go to show that it is only after the expiry of the period of operation stipulated in the agreement that notice of termination could be issued. I find no force in this contention also. No such legislative intendment could be gathered either from the scheme of the Act or from the expressions used in sub-sections (2) or (6) of S.19 of the Act. 7. It is next contended by the counsel for the petitioner that the conclusion of the Tribunal that the petitioner by its conduct has waived its right to notice cannot be sustained in view of the decision of the Supreme Court in Indian Link Chain Manufacturers v. Workmen 1971 (II) L. L. J. 581. In Para.13 of the judgment what the Supreme Court has stated is as follows: "While holding so it nonetheless observed that a notice under S.19 (2) of the Act can also be waived by the party to whom the notice is to be sent. This view of the Calcutta High Court is opposed to the view taken by this Court and most be rejected as not good law because in our view there cannot be any waiver by conduct or implication of the requirement of a written notice which that Court had itself recognised must not be a tacit representation but an express representation in the form of writing terminating the settlement." Counsel for the 2nd respondent submits that while the Supreme Court laid down that the statutory requirement under S.19 (2) of the Act in regard to the issue of notice in writing cannot be waived by tacit representation, but has to be by express representation in the form of writing terminating the settlement, it did not go to the extent of laying down the proposition that the rule of estoppel would not apply to the party to the agreement that by conduct expressly makes the other party believe that it has treated the agreement to have been terminated, and yet, at a later stage, turns round and takes the opposite stand that the agreement continues to be in force.
In support of this argument he referred to the concluding portion of Para.15 of the said Supreme Court judgment, which is as follows: "-...If we view the matter slightly differently, the result is the same, because when both the parties to the dispute proceeded on the specific plea that there was no settlement binding on either of them in respect of the wages and dearness allowance, even prior to conciliation, the Government had no option, on a failure of the conciliation proceedings and on being informed by the written representation of the appellant that there was no settlement in force, to refer the dispute to the Tribunal. The management, therefore, is estopped from now taking the stand that the settlement was not put an end to or that the reference was invalid." No doubt, to constitute a valid termination of an agreement under S.19 (2) has' to be by express representation in writing. However, in a case where the parties to the agreement, after the expiry of the period of operation thereof, proceeded to negotiate for fresh terms, and after tentative proposals and protracted discussions, fail to reach a settlement for a new term, such parties are estopped by express conduct from retreating to fall back upon the old agreement. It is in this context the counsel for the 2nd respondent has taken me through Exts. R-1 to R-11 a perusal of which would go to show that after January 1972 the parties took it for granted that the agreement dated 29 -4-1968 had come to an end and negotiations for fresh settlement of terms were necessary. In fact it had even progressed to the stage of making tentative proposals for the terms of settlement. If, after having proceeded on this assumption for a fairly long period of two or three years the management reverses its stand unilaterally it would result in great prejudice and manifest injustice to the labour due to the time lag. If, without holding further negotiations, the management had taken the stern stand that no question of negotiations for a further period arose without putting an end to the agreement that was already in operation in the manner in which it wanted it, the Union could have complied with that requirement to set at rest the controversy on the legality of the notice, and then immediately bargained to secure the acceptance of their Charter of Demands.
The management after the initial protests, by carrying on negotiations, putting forward proposals, and participating in conciliations, led the Union believe that it also had treated the agreement dated 29-4-1968 to be no longer in force; the negotiations for a new settlement, viewed in the proper perspective, was on the realisation by the parties that the agreement dated 29-4-1968 no longer governed the conditions of service of the workers, and a new agreement was necessary. I am, therefore, of the opinion that not only because it was possible for one of the parties to issue notice even before the expiry of the agreed period of operation of the agreement, on condition that it would take effect only after such period agreed to, but also because the management by its conduct to which reference is made above, it is estopped from contending for the position the 1968 agreement even now holds good. 8. On a careful consideration of the provisions under S.19 of the Industrial Disputes Act and the material placed before the Industrial Tribunal, particularly the documents, Exts.P-1 to P-11 and M-1 to M-5, I am of the view that Ext. P-1 preliminary order passed by the Industrial Tribunal upholding the validity of the reference does not call for interference by this Court under Art.226 of the Constitution. The writ petition, is therefore, dismissed; but without any order as to costs. Dismissed.