The Management of India Radiators Ltd and Another v. The Presiding Officer and Another
2003-01-03
R.JAYASIMHA BABU
body2003
DigiLaw.ai
Judgment :- The dispute before the Tribunal was regarding the payment of wages for the lock-out period which was from 22.10.1986 to 18.11.1986. That lock-out was declared by the employer on the ground that the workmen had gone on go-slow and there was a fall in the production and further that such action on the part of the workmen was also in contravention of an incentive scheme which inter alia required that the workmen "........ should not resort to any direct action like not working for incentive, before the failure of mutual discussion". It was the case of the employer, and that case was not disbelieved that mutual discussion was in progress at the time the workmen decided to reduce the level of production, and that, some time after the lock-out was declared, the disputes which had led to the go-slow and the subsequent lock-out was in fact resolved amicably. While so amicably resolving the dispute which concerned bonus and also general demands it was agreed that the question of wages for lock-out period would be referred for adjudication. That is how the Tribunal was required to consider the dispute. 2. The case for the workmen was that though they were in fact giving a much higher level of production before the go-slow, they reduced it on 17.10.1986; such a reduction was still not below the norm which had been agreed between the management and the workmen under an incentive scheme, and that, all that the workmen had done was to decline to give an incentive production and work over time. The workmen had, therefore, contended that there was no go-slow, but only that the workmen gave the minimum level of production and that cannot be regarded as amounting to breach of the terms of the incentive scheme. 3. Before the Tribunal, the incentive schemes were marked as exhibits for the management. In respect of one of the companies, the relevant clause has already been referred to, in respect of other Company which was also run by the same management, the clause in the incentive scheme read thus: "It was provided that workmen had agreed to give a minimum of 30% production in all areas and that whenever there is any problem between the management and workmen, they should not "reduce the incentive level of production without fair negotiation of the management for finding a reasonable solution".
The management in the statement filed by it, had also taken the stand that those incentive schemes were formulated in order to motivate the workmen to give a higher level of production and that the base level fixed in the scheme was below the level at which the workmen had been working prior to the introduction of the scheme. 4. The Tribunal held in favour of the workmen on the ground that the management had failed to prove that the incentive scheme was so framed as to fix a norm which was below the level of production that was being given by the workmen before the introduction of the scheme; that the workmen had no legal obligation to maintain a production level higher than the minimum, and that the incentive scheme was not one which obligated them to perform the extra work. The Tribunal took the view that failing to perform the work required for earning the incentive would not amount to their going on an illegal strike and consequently, the lock-out declared could not be regarded as one which was declared as being one consequent to an illegal strike. 5. It must also be noticed here that subsequent to the order of the Tribunal, the parties entered into a settlement under Section 18(1) of the Industrial Disputes Act which inter alia provided for the payment of 75% of the wages for this lock-out period leaving it open to the management to contest the award and the parties agreeing to readjust their rights with regard to the amount paid depending on the outcome of the present petition to set aside the award. It is also necessary to notice the submission made by counsel for the workmen, as also the employer that this factory has stopped working, that none of the the workmen are in the employment of the petitioner any longer, and that even the Union which represented the workmen has ceased to exist. 6. The Tribunal's view that the lock-out is illegal and unjustified rests solely on it's perception that the norm fixed in the incentive scheme was a level of production which was the only level that was legally binding on the workmen and that the workmen had no obligation to work for a higher level and that they were not required to provide the incentive production.
The Tribunal has failed to read the incentive scheme and it is the real purport. The clauses already referred to earlier show in no uncertain terms that the object of the incentive scheme is to maximise the production, that the workmen had agreed to work for such increase in production, and that they had further bound themselves not to refrain from working for that higher level of production even if any disagreements arose with the management during the period when the negotiation for resolving such disputes was in progress. The view of the Tribunal that the workmen had a right to merely give the minimum and no more and still contend that they had done all that was required of them in terms of the scheme that was binding on them is patently incorrect. 7. The object of the Industrial Disputes Act is to provide a machinery for the peaceful resolution of differences between the management and workmen so that even during the currency of the dispute, the work of the industry goes on unhampered and that the levels of production are not brought down by reason of the disputes for resolving which provision is made in the Act by way of settlement by way of mutual negotiations, through conciliation, as also the resolution of disputes through the machinery of arbitration and ultimately by adjudication. The very object of establishing industry is to produce the goods of services and the joint effort of management and labour in the organised industry is aimed at maintaining a level of production which at the best of times should be the optimal level having regard to the resources available and the conditions of the market in which such goods and services are bought or sold. Declining to maintain the higher level of production is, therefore, not a part of the role assigned either to the management, or workmen as a lever in bargaining with each other. The incentive scheme in this case did require the maintenance of a level of production which had taken note of what the workmen was capable of doing and which they admittedly were doing by ensuring the higher level of production which they were giving prior to their own decision voluntarily taken to slow down the production. 8.
The incentive scheme in this case did require the maintenance of a level of production which had taken note of what the workmen was capable of doing and which they admittedly were doing by ensuring the higher level of production which they were giving prior to their own decision voluntarily taken to slow down the production. 8. The action of the workmen in deliberately slowing down the production contrary to the terms of the scheme which was binding on them, the scheme being part of the settlement which had been entered into bilaterally did amount to breach of the requirements of Section 23 of the Act, more particularly, Sub Clause (c) which resulted in the management having the right to regard the lock-out declared by it as legal and justified by reason of the illegal strike resulting from the breach of the terms of the scheme on the part of the workmen. 9. This Court in a matter concerning one of the petitioners herein, in the decision reported in 1998(3) L.L.N. 411 (India Radiators Ltd. Vs. Second Labour Court) had observed thus: "Slowing down" implies the existence of a higher level before slowing down commenced, and falling to the lower level after the slowing down was practised. The lower level of production was in this case, only by reason of the deliberate action of the workmen in not exerting themselves to the level which they were capable and maintained consistently for a long period of time." In this case, there is no doubt about the slowing down, as immediately after lock-out was lifted and the parties resolved the dispute by entering into settlement, original levels of production were immediately restored. 10. The Tribunal was, therefore, in error in holding that the lock-out was unjustified. 11. So far as the relief to the parties is concerned, the finding that the lock-out was justified need not necessarily result in the denial of the wages to the workmen having regard to the subsequent developments. The factory has closed down. The workmen are no longer it's employees. The management has already disbursed to them 75% of the amount payable, such disbursement having taken place as long back as in the year 1996. The period for which the 75% wages was paid was only for a period of nineteen days.
The factory has closed down. The workmen are no longer it's employees. The management has already disbursed to them 75% of the amount payable, such disbursement having taken place as long back as in the year 1996. The period for which the 75% wages was paid was only for a period of nineteen days. Having regard to all these factors, it would not serve the interest of justice, or equity to permit the management to proceed against the workmen for recovery of the amount already disbursed. The impugned award of the Tribunal is, therefore, set aside, but without any right being given to the management to recover any part of the amount already disbursed by it to the workmen pursuant to the settlement arrived at between them on the 25th October, 1996. 12. The writ petitions are allowed. Consequently, W.M.P.Nos. 7064 and 7065 of 1996 are closed.