Madras High Court
The Management Of Manali vs The Presiding Officer on 25 March, 2026
Author: D.Bharatha Chakravarthy
Bench: D.Bharatha Chakravarthy
2026:MHC:1226
W.P.Nos.5850, 5851 of 2016 and 2731 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders reserved on : 17.02.2026
Orders pronounced on : 25.03.2026
CORAM :
THE HON’BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.P.Nos.5850, 5851 of 2016 and 2731 of 2023
& W.M.P.Nos.12155 of 2016, 10654, 10655, 35004, 35005, 32589 of 2017,
219 of 2021, 14318, 20262, 20531 of 2022 and 2836 of 2023
In W.P.No.5850 of 2026:-
The Management of
Manali Petrochemicals Limited
Ponneri High Road, Manali
Chennai – 68
Rep.by its Whole Time Director (Works) .. Petitioner
Versus
1. The Presiding Officer
Industrial Tribunal, Chennai -600 104.
2. The Workmen
Rep by The General Secretary, Manali Petrochemicals Employees Union,
Ponneri High Road, Manali, Chennai 68
3. The Workmen
Rep by The General Secretary, Manali Petrochemicals Limited Technical
Employees Union, Madhavaram Milk Colony, Chennai 51
4. T. Sundar, Aged about 46 Years
Emp. No. P10267,
S/o. M. Thiruvengadam,
No.8, First Street, Paari Nagar,
Ambattur, Chennai – 600 053.
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5. P.N. Ramesh, Son of P. Natesan
Aged about 45 years, Emp. No. P10275,
No.32A, Thamaraikulam, I Street,
Periyathoppu, Manali, Chennai – 600 068.
6. N. Gopalakrishnan, 58 years,
Emp. No. P20034,
S/o. C. Nagappa Mudali,
No. F1, First Floor, 1-A, Rajaji Street,
Madhavaram, Chennai – 600 060.
7. A. Nagarajan,
Aged 48 years, Emp. No. P10312,
S/o. S. Arjunan, No. 1-B, Thirukkural Street, Vaidhiyalingam Salai,
Chitlapakkam, Chennai – 600 064.
8. N.G. Rajagopalan,
Aged 50 years, Emp. No. P10425,
S/o. R. Govindarajalu, AP.Akshaya Flats, F3, 12/2, Thulasingam Street,
Perambur, Chennai – 600 011.
9. P. Munusamy,
Aged about 32 years, P10633,
S/o. P.Parthasarathi,
No. 9, Lakshmi Lane, Kumarapuram Street,
Adambakkam, Chennai – 600 088.
10.R. M. Thaneermalai,
Aged about 48 years, P 10160,
S/o. C.T. Ramanathan, No.2B, Yes Yes Villa,
15-B, Reddy Street, Virugambakkam,
Chennai – 600 092.
11.A. Charles Fernandez,
Aged 45 years, P10276, S/o. A. Anthony Samy, Old No. 5, New No.11,
Kakkan Street,
Hindustan Lever Colony, Pammal,Chennai – 600 075.
12.R. Raman,
Aged 31 years, P10629, S/o. K. Rajagopalan,
No.3/2A, East Tank Road, Theradi,
Thiruvottiyur, Chennai – 600 019.
13.T.R. Nagappan,
Aged 50 years, P10039, S/o. S. Thirupathi,
No.16, Thiru-vi-ka Street,
Vinayagapuram, Ambattur – 600 053.
14.E. Machavel,
Aged 51 years, P10328,
S/o. V. Eryali, No. 26, 1st Street, K.V.Puram,
Beach Road, Ernavoor, Chennai – 600 057.
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W.P.Nos.5850, 5851 of 2016 and 2731 of 2023
15.M. Veerappan,
Aged about 39 years, P10542,
S/o. V. Muthu, No.6/684, Marvadi Quarters, Thiru Nagar, 1st Street,
Thiruvotriyur, Chennai – 600 019.
16.R. Shanmuga Sundaram,
Aged 38 years, P10652,
S/o. Late S. Raja, No. 17/18, Peeliamman Koil Street, Kottur, Chennai –
600 085.
17.R. Srinivasan,
Aged 51 years, P10309, S/o. R. Ramani,
No.12A, Third Street, Bharathi Nagar,
Old Perungulathur, Chennai – 600 063.
18.P. Balasubramanian,
P. Balasubramanian, Aged 43 years, P10549,
S/o. M. Pethimuthu, No. 559, K V K Samy Street, Periyar Nagar,
Vyasarpadi, Chennai – 600 039.
19.K. Pothuraja,
K. Pothuraja, Aged about 42 years, P10543,
S/o. R. Krishnan, No. 4, Ganapathy Nagar, Samiyar Madam, Manali New
Town – 600 103.
20.R. Govindasamy,
Aged about 41 years, P10583,
S/o. R. Ramu, No. O/20, A.M. Garden, O Block, Mandaveli, Chennai –
600 028.
21.E. Prithivikumar,
Aged 45 years, P20590, S/o. M. Elangovan,
No.12/3, New Street, Elango Nagar,
Menambedu, Chennai – 600 053.
22.K. Dhanasekar,
Aged about 51 years, P10082,
S/o. J. Kuppuswamy, No.194/89, Sanjivirayon Koil Street, Old
Washermenpet, Chennai – 600 021.
23.R. Subbukutti,
Aged 48 years, P10327, S/o. M. Rajagopalan,
No. 14, V O C Street, KGL Prabhu Nagar,
Minjur – 601 203.
24.N. Jegan,
Aged 40 years, P10628,
S/o. T. Natarajan,
Kolur Village & Post, Ponneri Taluk,
Thiruvallur – 601 205.
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25.C. Asokan,
Aged about 56 years, P10208,
S/o. Late Chitravelu, Plot No. 23, Kamber Street, KGL Prabhu Nagar,
Minjur – 601 203.
26.Mr. R. Murugaiah,
47 years, P20149, S/o. M. Ramiah, Murali Illam, No. 55/95, Sivapatham
First Street,
K.K. Thalai, Madhavaram, Chennai – 600 051.
27.D. Balaji,
Aged 44 years, P10743, S/o. P.K. Damodaran, No.2682, \"B\" Type,
MMDA,
Mathur, Chennai – 600 068.
28.S. Elango,
Aged 46 years, P10211,
S/o.M.Samikannu, No.42, Valluvar Nagar, Minjur – 601 203.
29.K. Varadhan,
Aged 57 years, P10206,
S/o. P. Kannayiram, No. 31, Srinivasa Perumal Koil Street, Periyathoppu,
Manali – 600 068.
30.R. Mani,
Aged 51 years, P10113,
S/o. T. Ramakrishna,
No. 28, 6th Street, Janaki Nagar,
Madhuravoyal, Chennai – 600 095.
31.M. Muthukumar,
aged 53 years, P20469,
S/o. T.S. Murugesan, No. 12/48, Vanniyar Street, Kaladipet, Chennai –
600 019.
32.S. Selvakumaran,
Aged about 45 years, P10446,
S/o. K. Shanmuga Sundaram,
GF2, Ramanujam Flats, No. 70, Fifth Street,
Voltas Colony, Chennai – 600 061.
33.T. Jogidra Kumar,
Aged 41 years, P10560,
S/o. T. Somasekhar, No.6, GST Road, \"B\" Block, B58, III Floor,
Sterling Little Flowers Apartments, Guduvancherry – 603 202.
34.D. Prakash,
Aged 43 years, P10545, S/o. A. Dharmalingam, B-Type, 9/279, 48th
Street, SIDCO Nagar, Villivakkam, Chennai – 600 049.
35.T. V. Manoharan,
Aged 55 years, P20044, S/o.T.R. Varadarajan, No. 4/23, Govindan Street,
Perumal Koil Main Street,Periyasekkadu, Madhavaram, Chennai – 51.
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36.S.P. Veerappan,
Aged 56 years, P10426, S/o. Subban,
Old No. 48/4 (New No. 74), Ellaiamman Koil Street, Kottur, Chennai –
600 085.
37.G.A. Sivaguru,
Aged 51 years, P20496,
S/o A.G. Arunachalam,
No.8-1/1, 80the Street, 18th Avenue,
Ashok Nagar, Chennai – 600 083.
38.N. Ravichandran,
Aged 54 years, Emp. No. P10157,
S/o.S.P. Nagalingam,
No.742/22, T. H. Road, Thiruvotriyur,
Chennai – 600 019.
(R-4 to R-38 are impleaded as
per order of this Court dated 13.04.2017
in WMP. No.21943/2016 in WP. No. 5850/2016)
.. Respondents
In W.P.No.5851 of 2016:-
The Management of
Manali Petrochemicals Limited
Ponneri High Road, Manali
Chennai – 68
Rep.by its Whole Time Director (Works) .. Petitioner
Versus
1.The Presiding Officer
Industrial Tribunal
Chennai – 600 104.
2.Manali Petrochemicals Limited Technical
Employees Union
Rep.by its General Secretary
Sathangadu Village, Manali, Chennai – 600 068.
3.Manali Petrochemicals Union
Rep.by its General Secretary
Ponneri Road, Manali
Chennai – 68. .. Respondents
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In W.P.No.2731 of 2023:-
Manali Petrochemicals Limited
SPIC House, 88, Mount Road
Guindy, Chennai – 600 032
Rep.by its Whole Time Director .. Petitioner
Versus
1.The Commissioner of Labour
O/o. Commissioner of Labour
DMS Compound
Teynampet, Chennai – 600 006.
2.The Deputy Commissioner of Labour -2 (C)
O/o. Deputy Commissioner of Labour (Con-2)
Kuralagam, 3rd Floor, Chennai – 600 108.
3.The Additional Commissioner of Labour
O/o. Additional Commissioner of Labour
DMS Compound, Teynampet
Chennai – 600 006.
4.Manali Petrochemical Employees Union
Rep.by its President
Regd No.1064/CPT
Ponneri High Road, Manali
Chennai – 600 068.
Now at
Plot No.11, 3rd Street
Ambal Nagar, Madambakkam
Chennai – 600 126.
5.Manali Petrochemical Technical Employees Union
Rep.by its General Secretary
Sathangadu Village, Manali
Chennai – 600 068.
Now at No.2/104, Kathan Street
Big Natham, Chengalpet.
6.M.P.L.Employees Union
Rep.by its General Secretary
Regd.No.520/TVR
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W.P.Nos.5850, 5851 of 2016 and 2731 of 2023
Ponneri High Road,
Manali Petrochemicals Limited, Manali
Chennai – 600 068. .. Respondents
Prayer in W.P.No.5850 of 2016 : Writ Petition filed under Article 226 of the
Constitution of India seeking a Writ of Certiorari, calling for the records of the
1st respondent in I.D.No.35 of 2006 and quash its award dated 23.09.2008 and
pass such further or other orders.
Prayer in W.P.No.5851 of 2016 : Writ Petition filed under Article 226 of the
Constitution of India seeking a Writ of Certiorari, calling for the records of the
1st respondent in I.D.No.51 of 2004 and quash its award dated 23.09.2008 and
pass such further or other orders.
Prayer in W.P.No.2731 of 2023 : Writ Petition filed under Article 226 of the
Constitution of India seeking a Writ of Certiorari, calling for the records of the
2nd respondent relating to the impugned order bearing No.RC No.B/664/2021
dated 18.07/2022 and quash the same and pass such further or other orders.
In W.P.No.5850 of 2016:-
For Petitioner : Mr.A.L.Somayaji, Senior Counsel
for Mr.Anand Gopalan
For Respondents : Mr.S.Senthil Murugan
Special Government Pleader for R1
: Mr.Balan Haridas for R2
: M/s D.Bharathi for R3
In W.P.No.5851 of 2016:-
For Petitioner : Mr.A.L.Somayaji, Senior Counsel
for Mr.Anand Gopalan
For Respondents : Mr.S.Senthil Murugan
Special Government Pleader for R1
: Mr.Balan Haridas for R3
: M/s D.Bharathi for R2
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In W.P.No.2731 of 2023:-
For Petitioner : Mr.A.L.Somayaji, Senior Counsel
for Mr.Anand Gopalan
For Respondents : Mr.S.Senthil Murugan
Special Government Pleader for RR1 to 3
: Mr.Balan Haridas for R4
: M/s D.Bharathi for R5
: Mr.C.K.Chandrasekar for R6
COMMON ORDER
These three Writ Petitions are connected and, as such, are taken up and
disposed of by this common order.
A. The Factual Matrix:
2. The factual background in which these Writ Petitions arise is that the
Government of India set up a petroleum refinery unit, currently known as
‘Chennai Petrochemicals Limited’ at Manali. As a result, several private
persons also established related units in and around Manali to make use of
available chemicals and by-products and to benefit from Manali’s proximity to
the port. The petitioner management, namely Manali Petrochemicals Limited,
was one such unit started in 1990, dealing with products such as Propylene
Oxide, Propylene Glycol, and Polyol.
2.1. In the same year, another company named UB Petroproducts Limited
was also established, which competed with the petitioner – management. In 1997, it
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was stated that UB Petroproducts Limited was taken over by Southern
Petrochemical Industries Corporation Limited and was renamed SPIC Organics
Limited (shortened as ‘SPIC’). It is important to note that SPIC is the major
shareholder of the petitioner – management, namely Manali Petrochemicals
Limited, which is part of the SPIC group of companies.
2.2. In the year 2000, the second company mentioned above, namely SPIC,
was also merged with the petitioner-management by an order of this Court in
C.P.No.581 of 2000 dated 20.12.2000. Thereafter, the original Manali
Petrochemicals Limited was referred to as Plant -1, and the merged company’s unit
was called Plant -2. Under these circumstances, as was the regular practice, a wage
revision was effected through a settlement under Section 12(3) of the Industrial
Disputes Act, 1947 (in short ‘the Act’), which was entered into on 09.09.1999,
covering the period of four years from 01.01.1997 to 31.12.2000.
2.3. Since a merger also took place in the same year, it appears that the
workmen and management did not enter into any Section 12(3) settlement for
the wage revision. Manali Petrochemicals Employees Union submitted a charter
of demands, which included a wage revision for the period from 01.01.2001 to
31.12.2004 on 01.04.2000. On 13.12.2002, the management proposed to alter
the service conditions by issuing a notice under Section 9A of the Act,
concerning both Plant -1 and Plant -2, which included reducing the retirement
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age from 60 to 58 years, reducing casual leave from 10 to 7 days, sick leave
from 15 to 7 days, and ordinary leave from 24 to 22 days. Another Section 9A
notice regarding Plant -2 was issued. It was proposed to alter the pension
scheme, while in Plant -1, there was a pension scheme operated by the trust
established under the scheme known as ‘Defined Pension Scheme’, under which
the pension was calculated as follows:-
Last Drawn Basic X No.of Years of Service
Pension amount = ——————————————————-50
2.4. By the 9A notice, it was decided to change the above ‘Defined Pension
Scheme’ to a ‘Defined Contribution Scheme’, under which 12% of basic pay will
be contributed to LIC, and a pension will be paid based on the scheme. Similarly,
with reference to Plant–2, which was already under a defined contribution scheme
where 10% of Basic Pay plus Dearness Allowance was Contributed, it was also
proposed to make this contribution 12% of basic pay alone.
2.5. On 03.01.2003, the union objected to the above-mentioned change in
service conditions, and on 18.12.2003, a dispute was raised. Similarly, the trade
unions submitted a charter of demands, including a pay revision, on 19.03.2003. On
07.01.2004, the conciliation regarding the dispute raised in connection with 9A
notices failed, and the Conciliation Officer forwarded the failure report to the
Government. On 19.07.2004, the Government, vide G.O.(D)No.361 dated
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W.P.Nos.5850, 5851 of 2016 and 2731 of 202319.07.2004, referred the dispute for adjudication to the Industrial Tribunal,
Chennai, which was taken on file as I.D.No.51 of 2004. Meanwhile, on 10.08.2004,
the conciliation in the dispute relating to the charter of demands, including pay
revision, also failed, and a failure report was again forwarded to the Government.
However, the Government did not issue any orders to refer the dispute for
adjudication. The workmen approached this Court, and by an order dated
06.11.2006 in W.P.No.24921 of 2006, this Court directed the Government to refer
the dispute to the Industrial Tribunal. Subsequently, vide G.O.No.876 dated
12.12.2006, the Government referred the dispute for adjudication, which was taken
on file as ID No. 35 of 2006.
B. Pleadings, Trial & Award in ID No. 51 of 2004:
3. Regarding ID No. 51 of 2004, both trade unions that raised the dispute
filed claim statements on 09.09.2006. They contend that the existing
superannuation age of 60 years, as per the service rules, should not be unilaterally
modified. Lowering the retirement age would negatively affect workers, resulting
in monetary losses and potentially harming their social status. Regarding the
pension, the workmen would face significant losses due to the modified scheme. It
was further contended that, under scheme paragraph No. 10, notice must be given
to the trustees for any alterations, and that there was no resolution from the trust
regarding changes to the scheme. Contentions were also made about the reduction
of leave facilities.
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3.1 The management filed a detailed counter-statement. The counter-
statement explained in detail the amalgamation, sales turnover, and other measures
taken by the company to reduce its financial burden and withstand market
competition arising from liberalisation. Regarding leave, it was pleaded that the
workmen in Plant-1 have been working five days a week, and, even for Plant–2,
when they initially worked six days a week, the schedule was reduced to five days
from May 1997 onwards. Thus, by including 49 days of leave and 52 days of
weekly off, each workman was entitled to 101 days’ wages without work.
Considering that workmen receive wages without working for about eight and a
half days each month, and that the management calculates wages based on its right
to have workmen work up to 48 hours per week, the decision to rationalise leave
benefits by reducing them by 20% was made, and the changes are fair and
reasonable. Regarding the alteration of pension, it was pleaded that the
management voluntarily introduced the pension scheme applicable to both staff and
workmen. Plant –2 did not have such a scheme, but workmen there were provided
superannuation benefits by making a monthly contribution of 10% of Basic Pay and
Dearness Allowance. At the end of their service, the accumulated amount would be
used to purchase an annuity, which would provide a monthly pension. With
declining interest rates on deposits, the purchase rate for annuity-based monthly
pension payments increased significantly. Consequently, many organisations in
Chennai shifted from benefit-based schemes to contribution-based schemes. All
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other units in the group, including the seven chemical units in the Manali industrial
belt, such as Chennai Petroleum Corporation Limited (CPCL) and Madras
Fertilisers Limited, adopted contribution-based schemes, as none of them had
superannuation schemes. To maintain uniformity within the region, it was decided
to follow this trend from 01.04.2003 onwards, with contributions increased to 12%
of Basic Pay, ensuring the purchase of an annuity that would provide a monthly
pension for the workmen’s lifetime.
3.2. Regarding the age of superannuation, in 1990 when the unit was
established, the superannuation age was 60 years. Subsequently, most public and
private sector undertakings reduced the retirement age to 58 years. In all other
similarly situated industries, except Chennai Petroleum Corporation Limited, the
retirement age was only 58 years. By 2002, of the 283 workmen in service, none
were over 55 years old. Reducing the retirement age to 58 years would not have
adverse effects; thus, the decision was made.
3.3 On the said pleadings, the Industrial Tribunal took up the issue for
enquiry. On behalf of the workmen, J.Karthikeyan was examined as W.W.1, and
exhibits W.1 to W.29 were marked. On behalf of the management,
E.N.Rangaswami was examined as M.W.1, R.Raghunathan as M.W.2, and exhibits
M.1 to M.5 were marked.
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3.4. The Industrial Tribunal considered the case of the parties and, by an
award dated 23.09.2008, found that the management is entitled to alter the
conditions by issuing notice under section 9A of the Industrial Disputes Act, 1947.
Regarding the reduction in casual leave, sick leave, and ordinary leave, the
Tribunal tabulated the existing leave and the reduction sought. After considering
the overall circumstances, the Tribunal held that the management’s grievance could
be addressed by increasing working days without disturbing the current leave
pattern. Noting that workers in the industry generally worked six days a week, the
Tribunal decided the working days could be increased by two days to meet the
needs of both parties. Concerning working hours, the Tribunal observed that
workers currently worked 42.5 hours a week, whereas in other companies workers
worked six days a week, and therefore, the management was entitled to increase the
working hours to 48 hours weekly, considering the financial situation. Regarding
the additional two working days, the Tribunal opined that alternating Saturdays—
that is, Saturdays of the first and thi weeks of every month—shall be working days
rd
from 01.12.2008, with working hours of 8 hours on those Saturdays.
3.5. The Tribunal then examined the pension scheme and, after analysis,
found that the superannuation scheme is appropriate and beneficial for the workers
and held that the proposed change is incorrect, providing an answer accordingly.
Regarding the age of superannuation, the Tribunal noted that management had
voluntarily fixed it to 60 years and provided no reasons to reduce it to 58 years. The
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comparison with two other companies, namely Heavy Chemicals Division (HCD)
and Tamilnadu Petroproducts Limited (TPL), was deemed invalid since the
emoluments at TPL were significantly higher. The Tribunal held that the reduction
is unfair and accordingly passed the award.
C. Pleadings, Trial & Award in I.D. No. 35 of 2006:
4. With reference to the other industrial dispute in I.D.No.35 of 2006,
separate claim statements were made by both trade unions on 29.01.2007 and
03.02.2007, respectively. It is pleaded on behalf of the trade unions that while the
strength of the employees has decreased by 50% due to the voluntary retirement
scheme operated by the management, production has increased by 50% and
exceeded the installed capacity. The management has been making cash profits of
Rs. 10.94 crores for the year 2001 to 2002, which increased to Rs. 46.65 crores
during 2005 to 2006. For the year 2006 to 2007, the company posted a profit of
Rs.18 crores, even in the first three quarters. Despite this, the management has
refused to concede the fair and justifiable demands. When the wage revision
discussions took place, they did not offer any interim relief, even though profits
were being made. Nearly 50% increases are granted in each wage settlement.
Therefore, the trade unions contended that the demands were fair.
4.1. A detailed counter affidavit was filed in April 2007 resisting the
workmen’s claim. The fluctuations in the company’s business, including the Gulf
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War in 1990, which resulted in raw material prices increasing by up to 25%, were
explained in detail. The pay parity between Plant 1 and Plant 2 was also addressed.
It is submitted that the Company has been incurring continuous losses, except for a
few years. From 1990 to 2005, the company did not pay any dividends. The losses
accumulated to Rs. 60.78 crore during 2002-2003. There was also an erosion of the
network. Only in 2004 did the Company record a modest profit of Rs. 2.05 crores,
which only partially reduced the accumulated losses. As a result, the Company was
unable to service its substantial paid-up capital of Rs. 114.70 crores. The company
has been undertaking various remedial measures to improve its performance. After
the amalgamation, it is evident that shareholders suffered net losses on their shares.
High competition and low margins necessitated austerity measures. These workmen
are paid fair and reasonable wages and enjoy good working conditions. In March
2007, the monthly wages for the lowest-paid workmen were Rs. 9,338, while the
top cadre earned Rs. 12,654. The company incurred transport costs of Rs. 1,520 per
employee per month and provided a substantial canteen subsidy of Rs. 1,540 per
employee per month. Details about other benefits, such as shoes and uniforms,
were also mentioned. Therefore, it was claimed that the unions’ demands were
unjustified.
4.2 With the above pleadings, the Tribunal took up I.D. No. 35 of 2006 for
enquiry. On behalf of the workmen, J. Karthikeyan was examined as W.W.1 and S.
Thomas as W.W.2. Exhibits W.1 to W.29 were marked. On behalf of the
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management, E. N. Rangaswami was examined as M.W.1 and R. Raghunathan as
M.W.2. Exhibits M.1 to M.53 were marked.
4.3. The Tribunal framed 26 points for consideration, with reference to each
claim. The Tribunal found that the company was incurring losses and no dividends
were announced to shareholders until 2005, when some profits and dividends were
declared. The Tribunal also noted that the management had made earnest efforts to
stop income leakage and unnecessary expenditure, and that employees in Plant – 2
received lower salaries than those in Plant – 1. The Tribunal then examined the
monthly provident fund account, marked as Ex.M.13. The management’s claim
regarding price escalation for raw materials and fuel was supported by Exs.M.16 to
M.20. The Tribunal reviewed the comparative profit and loss statements for the
years 2000–2007. Subsequently, the Tribunal considered the region-cum-industry
principle, observing that, of the six companies, the current management ranked
fourth in wage levels, with two other companies paying lower wages.
4.4. The Tribunal selected TPL and HCD, Manali, as comparable industries
due to their similar business scope and workforce size, considering Ex.M.49 as a
reasonable benchmark. It recognised that TPL, a comparable company, also
reported losses, whereas its management reported profits in 2008. The Tribunal
compared wages at the current management’s Plant – 1 and Plant – 2 with those at
TPL and HCD, establishing a progressive structure for gross salaries for staff in
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Plant – 1 and analyzing monetary effects in detail.
4.5. It also considered Ex.W.29, a draft settlement proposed during
conciliation talks. While finding much of Ex.W.29 justified, it did not accept it
entirely. The Tribunal noted that, from 2005 onward, when the current management
was making a profit, TPL was incurring losses. It then examined Ex.W.29, which
addressed existing pay scales for five tiers of workmen—A, B, C, D, and E—and
the proposed revisions, including further increases in basic pay and fitment. After
reviewing the structure, the Tribunal decided that, like other companies with only
three categories, the five-tier structure in this case could be simplified to three
categories: A, B, and C. It ordered pay revisions as follows: Rs. 1650-100/- for
category A; Rs. 1430-80/- for category B; and Rs. 1270-75/- for category C, with
increases of Rs. 700/-, Rs. 640/-, and Rs. 630/-, respectively. An interim payment
of Rs. 500/- per month was authorised from 01.12.2008. Similar revisions were
made for the technical cadre. The Tribunal found the major salary claims justified
and fixed them accordingly. For other demands, the Tribunal approved claims
where justified, with or without modifications, and passed an award on 23.09.2008.
D. The Subsequent Proceedings & Developments:
5. Aggrieved by both the awards, the management filed Special Leave
Petitions in S.L.P.Nos.28235 of 2008 and 29458 of 2008 before the Hon’ble
Supreme Court of India. While the Supreme Court initially entertained the Special
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Leave Petitions and granted interim orders, on 08.01.2016, when the matters were
heard, the Court permitted the management to withdraw the SLPS and directed
them to approach the High Court to challenge the same awards. Regarding the
award concerning the revision of the pay scale in I.D.No.35 of 2006, it was
recorded that the management agreed to pay a sum of Rs.1 lakh to each workman
within six weeks from that date, vacating the interim relief earlier granted, and also
observed that this Court will decide the writ petitions at an early date.
5.1. Thereafter, the management filed W.P. No. 5850 of 2016 challenging the
award in I.D. No. 35 of 2006 and W.P. No. 5851 of 2016 against the award in I.D.
No. 51 of 2004. During the pendency of the Writ Petitions, the management
claimed that about 160 workmen were promoted. In 2016, when the matter was
referred for mediation, two separate settlements were reached: 34 workmen agreed
and settled the issue with the management. For the period from 01.01.2001 to
31.12.2015, it was agreed that a lump sum would be paid for all claims related to
wage differences. Additionally, for the years 2016 to 2019, the increased wage
structure was agreed upon. The said workmen also consented to reduce the age of
superannuation from 60 to 58 years and to changes in the pension scheme.
Subsequently, 11 workmen left the management’s service. A new wage settlement
under Section 12(3) was signed on 23.09.2021 for the period 2020 to 2023, which
also accepted the superannuation age of 58 years.
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5.2. When the 18 (1) settlement was entered into on 01.09.2021 between the
management and a trade union, namely MPL Employees Union (Registration No.
520/TVR), the management and the said union approached the Deputy
Commissioner of Labour – II (C), Chennai. The settlement was then converted into
one under 12 (3) of the Industrial Disputes Act, 1947, and recorded on 23.09.2021.
Subsequently, the Manali Petrochemicals Employees Union approached the Deputy
Commissioner of Labour – II (C), Chennai, and raised a dispute claiming that, since
the dispute regarding wage revision had been settled by the Industrial Tribunal and
the matter was pending before this Court in W.P. Nos. 5850 and 5851 of 2016, such
a 12(3) settlement, in contravention of the award passed by the Industrial Tribunal,
should not have been recorded. A notice for bilateral talks was issued on
21.04.2022. The management also submitted its detailed reply on 31.05.2022.
Thereafter, on 18.07.2022, the 2 respondent considered that the settlement was
nd
made with the suppression of facts, particularly concerning the award in I.D. No.
51 of 2004 regarding the retirement age. Moreover, the retrospective validation of
the 9 (A) notice without prior approval from the Hon’ble High Court cannot be
approved. As a result, an order was passed to reflect these considerations.
“A copy of this communication is being sent to all the
signatories of the settlement. Any attempt of the parties to the
settlement dated 23.09.21 to enforce the clauses of the same,
specifically clauses 13 and 17, in the absence of any suitable
modification by the orders of the Hon’ble High Court in
pending writ petitions viz. WP No.5851/2016 and
W.P.No.5850/2016 or any appeal thereof, would be construed
as breach of the Awards of the Hon’ble Industrial Tribunal
dated 23.09.2008 thus attracting penal provisions as provided
under Industrial Dispute Act.”
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5.3. Aggrieved by the same, the management filed W.P.No.2731 of 2023.
E. The Arguments for the Management:
6. Heard Mr.A.L.Somayaji, the learned Senior Counsel appearing on
behalf of the management. The primary submission on behalf of management is
that it must be recognised that the majority of the workmen have already
entered into a settlement with management. The exercise of power by the
Industrial Tribunal is intended to promote industrial peace and harmony. By
relying on the comparative statement of the actual wages that would have
accrued to the employees and the current wage structure following the grant of a
lump sum and the revisions of 2016 and 2019, the learned Senior Counsel
argued that, in similar circumstances- where only a small number of workmen
—11 in this case—continue to persist with a long-standing demand and seek to
disrupt industrial peace, the settlement reached with the majority of employees
should also be extended to such minority workmen. This would ensure parity in
the wage structure and facilitate the industry’s smooth functioning.
6.1. The learned Senior Counsel would submit that this is not even a
suitable case to consider the merits of the award. The respondent – trade unions
are persistently pursuing the case and conducting litigation without even being
certain about which employees still wish to receive the benefits of the award.
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When most employees have already been promoted, many have also been
superannuated, and even among the remaining workmen, the majority have
entered into settlement agreements, the Writ Petitions should be dismissed.
6.2. In fact, the argument is made by pointing out that certain employees
will benefit financially if they opt for the lumps and the subsequent wage
revision. To support these submissions, the learned Senior Counsel referred to
the following Judgments:-
1.Amalgamated Coffee Estates Ltd. and others vs. Their Workmen and
others,1
2.Herbertsons Limited vs. The Workmen of Herbertsons Limited and
Others,2
3.New Standard Engineering Company Ltd vs. N.L.Abhyankar and
Ors,3
5.TATA Chemicals Ltd. vs Workmen Represented by Chemicals
Kamdar Sangh,5
6.Management of Binny Ltd. v. Presiding Officer and Ors., (W.P. Nos.
1471 and 7771 of 1999 and W.P. Nos. 2086, 11091 and 15934 of 1999)
1
1965 (2)LLJ 110
2
1976 (4) SCC 736
3
1978 (2) SCC 133
4
1981 AIR 2163
5
1978 (3) SCC42
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6.3. Alternatively, on the merits of the award regarding wage revision, the
learned Senior Counsel argues that the Tribunal upheld claims other than wage
revision without any discussion or adducing reasons; therefore, the award
should be interfered with. Concerning wage revision, since the Tribunal found
that the management is a loss-making unit, the workers’ demand should have
been rejected. Financial difficulty and capacity are the primary criteria that the
Industrial Tribunal should consider when evaluating wage revision claims.
Given that the petitioner – management was unable to declare dividends and
was incurring cumulative losses, there was no justification for granting any
wage revision.
6.4. Secondly, even assuming that the Tribunal should exercise its power,
the legal basis for doing so is on the region-cum-industry basis. In this case,
although the Tribunal attempted to compare on that basis, it must be noted that
some industries paid wages lower than those of this management, while others
paid more. Without even considering the averages and other perks, which are
much higher than the wages in TPL and HCP, an award was still passed. This
award results in a significant increase, creating an unbearable financial burden
on management. Ultimately, the award is based only on the draft settlement.
When considering the draft settlement, it must be recognised that it was merely
a draft proposal subject to further negotiations. Even if it is taken into account,
it should be taken as such. The clauses are proposed based on a comprehensive
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scenario. The Tribunal cannot isolate specific clauses, alter the amount, or
modify the terms of the draft settlement to issue an award. Such an exercise by
the Tribunal is entirely illegal. In any event, the Tribunal cannot make the
award applicable retrospectively.
6.5. Upon a perusal of the award, it is evident that the Tribunal has
adopted an inconsistent line of reasoning; while, on the one hand, it has
acknowledged the financial incapacity of the Company and the favourable
conditions of service enjoyed by the workmen involved, yet at the same time, it
has issued an award that results in a significant increase in wages.
6.6. Regarding the second award in I. D. No. 51 of 2004, the learned
Senior Counsel argued that the management is primarily aggrieved by the award
concerning the age of superannuation and interference with the pension scheme.
Concerning the age of superannuation, the Tribunal should have considered that
if the region-cum-industry principle is followed, the standard is only 58 years in
comparable industries. Even in relation to the current management, there is a
difference between Plant-1 and Plant-2, as Plant-2 was only 58 years old. The
Tribunal should have taken this into account. In any case, most employees agree
that the age of superannuation should be 58 years.
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6.7. Regarding the pension scheme, it is clear from the original plan that
it was for a specific period, and the management reserved the right to modify it.
To do so, a notice under Section 9A of the Act must be issued, and then the
scheme can be changed. When the subsequent 12 (3) settlement was entered
into, with the majority of workers agreeing to the pension scheme, it can no
longer be contested by the few workers who continue to dispute it. In any case,
the Tribunal should have recognised that the management provided enough
justification for creating parity between Plant I and Plant II and, furthermore,
that, in line with the region-cum-industry principle, the alignment with current
practices in comparable industries. Also, for the new employees appointed later,
the age of superannuation was set at 58 years at the time of their appointment.
6.8. To support his arguments regarding financial capacity and the region-
cum-industry principle, the learned Senior Counsel relied on the following
Judgments.
1.French Motor Car Co. Ltd. Vs. Workmen6,
2.The Silk and Art Silk Mills Association Ltd. Vs. Mill Mazdoor Sabha,7
3.Shivraj Fine Arts Litho Works v. State Industrial Court, Nagpur,8
4.Mukand Ltd. Vs. Mukand Staff & Officers Association,9
5.VVF Employees Union Vs. VVF/India Limited and Another,10
6
(1962) 2 LLJ 744
7
(1972) 2 SCC 253
8
(1978) 2 SCC 601
9
(2004) 10 SCC 460
10
2024 SCC OnLine SC 534
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F. The Arguments for the Workmen:
7. Per contra, Mr.Balan Haridas, the learned counsel appearing on behalf
of the workmen, would submit that when the wage revision was only up to the
year 2000, the management, ever after raising a dispute and passing the award,
kept the workmen at bay by wrongfully filing SLPS directly before the Hon’ble
Supreme Court of India. It was only when the time lapse became unreasonable,
especially in 2019, when the matter was referred for mediation by a Hon’ble
Retired Judge of this Court, that the management, even while mediation was
ongoing, suddenly promised some immediate benefit to certain workmen. Only
a few workmen entered into settlements. Out of 328 employees involved in the
dispute, the individual settlements now concern only 32 employees. Thus, this is
neither a majority nor a fair procedure, and the settlement for lump-sum
payment for the period between 2000 and 2016 cannot be generalised and
imposed on the workmen. There is no dispute from 2016 onwards, as
subsequent wage settlements have been reached. The dispute concerns only the
period 2000 to 2016, during which the management insists on accepting lump-
sum payments. Therefore, he would argue that the first submission made by the
learned Senior Counsel should be rejected.
7.1. With reference to wage revision, the Tribunal considered the
financial difficulties of the company, its profits, all comparative statements, and
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the region-cum-industry principle. Furthermore, having regard to the draft
settlement proposed by the management, the Tribunal made only minimal
modifications to make it just and reasonable, and, in the interest of justice, the
wages were accordingly fixed. The Industrial Tribunal has the authority to
establish and fix liability between management and workers, taking into account
fairness and industrial peace. No exception can be taken to the exercise of this
authority by the Industrial Tribunal. Regarding the financial difficulties, the
learned counsel argued that only net profit should be considered when
management reports profits based on production by the workers in the relevant
years. Profits are shown after deducting depreciation of fixed assets, among
other factors, and the profit and loss account reflects this by highlighting gross
profits. Courts have consistently held that workers are entitled to participate in
the company’s profits; therefore, their claims should be based on gross, not net,
profits. When gross profit is considered, the company has invariably been
making a profit in all these years.
7.2. As a matter of fact, with the proliferation of the petroleum industry
and allied chemical industry, the profit has increased manifold, and the
management is a huge profit-making industry. If the wages of the relevant years
are compared with those of similar industries, it is evident that they were very
low. In all wage revisions before 2000, the approximate increase ranged
between 50 and 55 per cent. Considering this, it cannot be said that the wage
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revision ordered by the Tribunal is excessive.
7.3 Regarding pensions, the learned counsel argues that switching to the
new scheme will result in workmen receiving less than 25 per cent of their
original pension from the superannuation scheme. While the petitioner–
management has greatly increased output, it has reduced expenditure on
pensions and salaries paid to workers, while increasing benefits to the
executive. This policy of the management constitutes an unfair labour practice.
After considering this and finding no justification for a drastic reduction in
pensions, the Tribunal passed the award.
7.4 Without explicitly mentioning it, a 12 (3) settlement was secretly
recorded with the help of puppet unions, favouring management. Noticing that
the matter is pending before this Court, the Deputy Labour Commissioner
issued the order challenged in W.P.No.2731 of 2023. The workmen still wish to
implement the award.
7.5 Concerning the age of superannuation, even in CPCL, the age is only
60 years. Since the workmen were recruited with the clear understanding that
superannuation would occur at 60 years, there is no justification for reducing
this to 58 years. Such a change would cause serious financial hardship to the
workers. Despite the award, the management has violated it by illegally
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superannuating some workers at age 58. Similarly, they proceeded to alter the
pension scheme. Pensions should be based on gross profit, not net profit.
7.6. For the proposition that only gross profits without deducting taxation
and depreciation should be considered for fixing wages, the learned counsel
relies on the Judgment in Unichem Laboratories Ltd Vs. The Workmen11. The
counsel also references the Judgment in the Silk and Art Silk Mills’
Association Ltd. Vs. Mill Mazdoor Sabha12 to contest the issue of financial
capability. The Judgment in Hydro Engineers (P) Ltd. Vs. Workmen 13 is also
cited. Additionally, the counsel cites the Judgment in Unichem Laboratories
Ltd (cited supra) and in Kamani Metals and Alloys Ltd. Vs. The Workmen14 to
support the argument that the region-cum-industry principle is applicable. To
justify the retrospective application of the award from the date of demand, the
Judgment in Hydro Engineers (P) Ltd. (cited supra) is relied upon to support
the Tribunal’s reasoning in classifying the structure into three categories. The
Judgment in Hindustan Times Ltd. Vs. Workmen15 as the Judgment in Kamani
Metals and Alloys Ltd. (cited supra) are also referenced. The Judgment in
Hindustan Times Ltd, (cited supra) is additionally invoked to support the
proposition that the Tribunal is empowered to grant additional wages and
increments. The judgment of the Hon’ble Delhi High Court in Moolchand
11
(1972) 3 SCC 552
12
(1972) 2 SCC 253
13
(1969) 1 SCR 156
14
(1967) 2 LLJ 55
15
(1964) 1 SCR 234
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Kharaiti Ram Hospital & Ayurvedic Research Institute Vs. Moolchand
Kharaiti Ram Hospital Karamchari Union and Others (W.P.(Civil) No.7553
of 2003 is relied upon to argue that the settlement cannot be enforced on
workers who have not opted to sign it. The learned counsel further relies on the
Constitution Bench Judgment in The Bharat Bank Ltd, Delhi Vs. The
Employees of the Bharat Bank Ltd, Delhi and the Bharat Bank Employees
Union, Delhi16 (1950 AIR SC 188) to demonstrate the nature of the jurisdiction
exercised by the Tribunal.
G. The Discussion & Findings :
8. I have considered the rival submissions from both sides and reviewed
the case’s material records.
H. On Applying Individual Settlements binding on everyone:
9. The first question to be decided in this case is whether the
W.M.P.Nos.10654 and 10655 of 2017, filed respectively in W.P.Nos.5850 and
5851 of 2016, should be allowed, thereby substituting/extrapolating the
settlement/terms dated 06.07.2016 arrived at by the individual workmen as the
award governing all the employees.
9.1. The management’s contention is that, out of the total number of
16
(1950) AIR SC 188
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employees involved in the dispute as of the date the settlement was signed in
2016, there were only 67 employees, of whom 35 had entered into individual
settlements. It is now brought to notice that even more employees have entered
into separate settlements with the management. Therefore, since the majority of
the workmen have settled, the same should be applied to all employees who
have not signed the settlements as well.
9.2. The judgments relied upon by the learned Senior Counsel regarding
the proposition are listed above. When read together, the following principles
emerge:
(i) If the vast majority of employees have entered into a settlement, merely
because a meagre number of employees refused to accept it, the Tribunal need
not decide the emoluments (see paragraph No.10 of Tata Engineering and
Locomotive Company Limited Vs. Their Workmen17).
(ii) The factors to be considered are the lasting industrial peace caused by the
settlement rather than by adjudication, and the cordiality established between
the employer and the labour should not be jeopardised through industrial
adjudication (see paragraph No.25 of Herbertsons Limited Herbertsons
Limited (cited supra) and paragraph No.6 in The Silk and Art Silk Mills
Association Ltd. (cited supra))
17
(1981) 4 SCC 627
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(iii) Uniformity is a factor to be borne in mind (see paragraph No.5 in
Amaalgamated Coffee Estates Limited and Others Vs. Their Workmen and
Others18).
(iv) Collective bargaining is a preferred method of settlement of labour disputes
(see paragraph No.7 of New Standard Engineering Company Vs.
N.L.Abhyankar and Others19).
9.3. Keeping the above principles in mind, if the fact situation in the
present case is considered, firstly, it can be seen that when more than 300
employees are said to have been governed by the Tribunal’s award, merely
because the litigation was pending for a long time and some of the employees
have been promoted, superannuated, etc., the factor regarding the majority of
the employees should not be decided based on the remaining employees on the
date of writ miscellaneous application or as on today. Merely because some
employees have been promoted or superannuated in the meantime, it cannot be
deemed that they have waived their rights arising from the award. Therefore, I
am not able to conclude that settlements have been reached with the majority of
the workmen.
9.4. Secondly, it must be recognised that when the Court referred the
matter for mediation, and when the workmen’s side was collectively present
18
(1965) 4 SCC 736
19
(1978) 3 SCC 42
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before the Hon’ble Mediator, individual employees separately entered into the
settlement. Therefore, it cannot be said that the settlement resulted from
collective bargaining by the majority of employees, which, under normal
circumstances, could be imposed on the minority who are unwilling.
9.5. Thirdly, the fairness of the settlement has to be seen. A settlement
can occur through collective bargaining and by offer and acceptance. In this
case, it can be seen that the primary factor behind some of the workmen settling
is that right from the year 2000, they did not see the colour of the coin. The
management strangely in this case even after the award of the Industrial
Tribunal in the year 2008, chose to directly approach the Hon’ble Supreme
Court of India by way of Special Leave Petitions and the matter was pending
upto 2016. Once again the management had approached this Court and upon
payment of certain ad-hoc amounts, interim orders were granted. When
protracted litigation happens and in the fear of completely losing out some of
the workmen take a decision to go by whatever being offered by the
management, the fairness of it always remains to be in question. If only the
settlement is out of free will and not indirectly forced down the throat of
persons dying of thirst, it can be deemed to be fair so as to be extrapolated and
made binding on others.
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9.6. Furthermore, upon examining the terms, the workmen have not only
relinquished the pay scale fixed by the Industrial Tribunal but also their right to
remain employed until the age of 60 and their pension scheme, which will result
in losing about 75% of the pension they would have originally received. I
observe that, driven by the desire for immediate financial gain, some workmen,
due to their personal circumstances and inability to withstand delays, have
entered into these settlements. Therefore, although the settlements are binding
on individual workmen, their fairness for universal application cannot be
affirmed. For all these reasons, W.M.P. Nos. 10654 and 10655 of 2017 fail, and
the submissions made by the learned Senior Counsel for the management to
apply those settlements uniformly to everyone are rejected.
I. On the Vanity of Award in I.D. No. 35 of 2006:
10. The next issue concerns the Tribunal’s award in I.D. No. 35 of 2006.
The award largely relates to the wage settlement. Extensive arguments are
presented on both sides regarding this matter. The minor part pertains to other
entitlements. Although the learned Senior Counsel argued that there was no
detailed discussion on the other claims, it is generally accepted that many of
these demands have already been satisfied and are minor. Therefore, the fact
that the Tribunal did not provide detailed arguments and reasons again cannot
be accepted, and the validity of the award ultimately depends on the resolution
of the major issue—wage revision.
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10.1. Concerning wage revision, it is well established that the Tribunal’s
jurisdiction is no longer res integra. Under industrial adjudication, the Tribunal
has a unique authority to amend or add to the terms and conditions of the
service contract—an extraordinary power not held by other courts. This
jurisdiction is accurately described by the Constitution Bench Judgment of the
Hon’ble Supreme Court in The Bharat Bank Ltd, Delhi (cited supra) and it is
essential to extract paragraph Nos.109 and 110 of the said Judgment, which read
as follows:-
“109. We would now examine the process by which an
Industrial Tribunal comes to its decisions and I have no
hesitation in holding that the process employed is not judicial
process at all. In settling the disputes between the employers
and the workmen, the function of the Tribunal is not confined
to administration of justice in accordance with law. It can
confer rights and privileges on either party which it considers
reasonable and proper, though they may not be within the terms
of any existing agreement. It has not merely to interpret or give
effect to the contractual rights and obligations of the parties. It
can create new rights and obligations between them which it
considers essential for keeping industrial peace. An industrial
dispute as has been said on many occasions is nothing but a
trial of strength between the employers on the one hand and the
workmen’s organisation on the other and the Industrial Tribunal
has got to arrive at some equitable arrangement for averting
strikes and lock-outs which impede production of goods and
the industrial development of the country. The Tribunal is not
bound by the rigid rules of law. The process it employs is rather
an extended form of the process of collective bargaining and is
more akin to administrative than to judicial function.
110. In describing the true position of an Industrial Tribunal in
dealing with labour disputes, this Court [ Federal Court of
India] in Western India Automobile Assn. v. Industrial Tribunal
[Western India Automobile Assn. v. Industrial Tribunal, (1949-
50) 11 FCR 321 at p. 345 : 1949 SCC OnLine FC 12] quoted
with approval a passage from Ludwig Teller’s well-known
work on the subject, where the learned author observes that :
(AIR p. 120, para 27)
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W.P.Nos.5850, 5851 of 2016 and 2731 of 2023“27. … industrial arbitration may involve the extension of an
existing agreement or the making of a new one, or in general
the creation of new obligation or modification of old ones,
while commercial arbitration generally concerns itself with
interpretation of existing obligations and disputes relating to
existing agreements.”
The views expressed in these observations were adopted in its
entirety by this Court [ Federal Court of India] . Our
conclusion, therefore, is that an Industrial Tribunal formed
under the Industrial Disputes Act is not a judicial Tribunal and
its determination is not a judicial determination in the proper
sense of these expressions.”
(Emphasis supplied)10.2. With reference to the revision of wages and other facilities, the law
in that regard has been summed up in the recent decision of VVF Employees
Union Vs. VVF/India Limited and Another20 and paragraph No.13 is extracted
hereunder for ready reference,
“13. For revision of wages and other facilities, the
standard criteria which is followed by the industrial adjudicator
is to apply industry-cum-region test, which in substance implies
that the prevailing pay and other allowances should be
compared with equally placed or similarly situated industrial
units in the same region. To determine comparability of units
applying the industry-cum-region test, inter alia, the financial
capacity of the employer would be a strong factor. Reliance on
this point has been placed on the cases of French Motor Car
Co. Ltd. v. Workmen, [(1962) 2 LLJ 744], The Silk and Art
Silk Mills Association Ltd. v. Mill Mazdoor Sabha, [(1972) 2
SCC 253] and Shivraj Fine Arts Litho Works v. State Industrial
Court, Nagpur, [(1978) 2 SCC 601].”
(Emphasis supplied)10.3 In the process, even while applying the region cum industry test, the
financial capability of the employer must also be considered, and useful
reference can be made to paragraphs No. 83 to 87 of Mukand Ltd (cited supra)
20
2024 SCC OnLine SC 534
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W.P.Nos.5850, 5851 of 2016 and 2731 of 202310.4. It is further observed that when determining capacity, only the gross
profit should be considered, not the net profit, (see paragraph No.98 of
Unichem Laboratories Ltd (cited supra))
10.5. In the present case, the Tribunal has thoroughly examined the
financial incapacity alleged on behalf of the management on one side. It
considered the wage rates prevailing among the petitioner–management and
other similarly situated industries. The Tribunal also identified comparable
industries by assessing the similarity of activities and organisational structure,
and accordingly recognised the M/S. TPL and HCD, as comparable industries.
In this context, the Tribunal further observed that an attempt at collective
bargaining had been made, including the submission of a draft settlement during
the conciliation process, which did not result in an agreement due to ongoing
differences between the Management and the workmen. Using the clauses in
Ex.W.29 – draft settlement as the basis, and applying the region-cum-industry
test and fairness of the revision, the Tribunal carefully and meticulously arrived
at the revised pay scales and fixed them accordingly. A complete reading of the
award and of paragraph Nos.109 and 110 of the Hon’ble Constitution Bench
Judgment in The Bharat Bank Ltd, Delhi (cited supra), leads to the inescapable
conclusion that the Industrial Tribunal exercised its jurisdiction in accordance
with law.
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10.6. Regarding the contention about financial difficulty, it must be noted
that for all the years in question- namely, 2001 to 2002, Rs.10.94 Crores; 2002
to 2003, Rs.6.90 Crores; 2003 to 2004, Rs.17.28 Crores; 2004 to 2005,
Rs.37.76 Crores; 2005 to 2006, Rs. 46.65 Crores; and 2006 to 2007, Rs.31.61
Crores- the gross profit earned by the management is evident. The workmen’s
argument is that the financial burden, considering the implications of the award
and the gross profit being 4.3%, cannot be deemed excessive or beyond the
capacity. Even according to management, when this Court directed detailed
calculations, the senior counsel representing management pointed out that, for
some workmen, it might be even more beneficial to adopt the lump-sum
approach and then implement wage increases. Therefore, it appears that the
financial burden is used as a justification for opposing wage settlements.
Throughout the period, 12 (3) settlements have been consistently entered into,
yet in 2000, management could not reach any settlement. It must be recognised
that the management cites its financial situation primarily to avoid collective
bargaining. Consequently, I cannot accept management’s claim that the Tribunal
imposed a huge liability without considering the company’s financial capacity.
10.7. The next question that was argued is, with reference to Ex.W.29, by
contending that the Tribunal cannot tinker with the terms of settlement. It is true
that whenever there is a settlement, the same has to be taken as a whole, and
there cannot be partial acceptance or denial. However, it should be noted that
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the Tribunal was exercising its jurisdiction to determine the pay scale, and
therefore, when it considered the draft agreement as a basis and made
adjustments and improvements where necessary, this principle cannot be
invoked. In fact, the Tribunal took into account the principle of region-cum-
industry, collective bargaining, possible management solutions, and financial
difficulties, piecing together various factors during the exercise. In such an
exercise, the Tribunal’s determination could be challenged even if it merely
adopted the pay scale from TPL or HCD and applied it to the situation. The key
issue is whether the revision granted is fair and proper and does not impose an
undue financial burden on the management, or is based on the whims of the
workmen. If these factors are considered, I find no grounds to interfere with the
well-reasoned award of the Industrial Tribunal.
10.8. Another argument is also presented regarding the application of pay
scales from the date of demand. In certain situations, considering the period of
delay, if the Industrial Tribunal applies the wage structure fixed by it from the
date of the award, it cannot be deemed illegal. A helpful reference in this
context can be made to the Judgment in Hydro Engineers (P) Ltd, (cited supra)
10.9. It is also noted that the learned counsel for the workmen agrees that
from 2016 onwards, all employees will be covered by subsequent wage
settlements between the parties. The dispute pertains only to the period from
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2000 to 2016. For those willing workmen who have already received lump sums
and moved on, the award need not be applied. However, for other workmen
who are still entitled to the award and have not waived their rights, the award
must be enforced. Accordingly, after deducting interim payments made, the
arrears, if any, should be calculated and paid to them. With these observations,
the award in I.D.No.35 of 2006 is affirmed.
J. On the Validity of Award in I.D. No. 51 of 2004:
11. With reference to the award in I.D.No.51 of 2004, firstly, there is no
dispute regarding the working days or the increase in working hours, as no
arguments were made by the management or the workmen on these points. The
two contested issues are, first, the age of superannuation, particularly in Plant –
1, at the time of recruitment of these workers, when the age of superannuation is
specified as 60 years; apart from uniformity, no other reason was given. Second,
it must be noted that even when considering the region and industry, such as
CPCL, one of the major industries, the age of retirement is 60 years.
11.1. Furthermore, in every sector, there is a consistent call to raise the
retirement age, and this is being done because improvements in average life
expectancy, worker productivity, and health standards have improved. There is
no justification for moving in the opposite direction and lowering the retirement
age from 60 years to 58 years.
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11.2. It must also be noted that regarding the pension scheme, there is no
dispute that the existing scheme is a superannuation pension scheme. It was
originally introduced through a 12 (3) settlement. Regarding Plant – 1, it must
be recognised that to alter the scheme, notice must be given in advance to both
the members and the trustees, as per paragraph No.24 of the scheme. Similarly,
for Plant – 2, amendments and modifications can only be made to meet legal
requirements or to provide more benefits or advantages. In this case, this results
in a significant reduction of pension. It is also noted that, in earlier instances,
before the Provident Fund authorities, the management argued that the
superannuation pension scheme was more favourable to the workmen. The
cross-examination of the management witness – M.W.1, E.N. Rangaswami –
reveals that the workmen will now receive only 30% of the original pension
they would otherwise receive.
11.3. For all the above reasons, when the Tribunal has considered the
issue in detail and reviewed the evidence on record, and concluded that the
changes proposed in the conditions via the disputed 9A notices are unjustifiable,
no exception can be taken in this regard.
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K. On the validity of the Order of the Deputy Commissioner of Labour:
12. It is stated that subsequently, there was also a settlement under
Section 12 (3) of the Industrial Disputes Act, 1947. However, the same is also
the subject matter in W.P.No.2731 of 2023. In matters of 12 (3) settlement,
fairness should be paramount, especially when it is to bind even the non-
signatories. Since the question regarding the very scheme is sub-judice before
this Court, and unless the settlement was made with this Court’s due approval
and the workmen having expressly relinquished their rights, it cannot be argued
that the subsequent 12 (3) settlement will override the award of the Industrial
Tribunal.
12.1 In light of the above, I also find no error in the order of the Deputy
Commissioner of Labour, Chennai, keeping the settlement in abeyance, subject
to further orders from this Court. When the award of the Industrial Tribunal is
upheld, it will undoubtedly prevail.
L. The Result:
13. For all the aforementioned reasons, the Writ Petitions are disposed of
on the following terms:
(i) The award of the Presiding Officer, Industrial Tribunal, Chennai, made in
I.D.No.35 of 2006 dated 23.09.2008, is upheld. It is the management’s duty to
grant the pay scales and calculate the emoluments for the period from
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W.P.Nos.5850, 5851 of 2016 and 2731 of 202301.01.2000 to 31.12.2015, while adjusting the interim payments made based on
the directions of the Hon’ble Supreme Court of India and this Court during
interim orders. The balance should be paid to the workmen who were on rolls at
the time of the award and have not waived their rights through individual
settlements. From 2016 onwards, due to subsequent wage settlements, those
will govern the rights of the parties.
(ii) The award of the Presiding Officer, Industrial Tribunal, Chennai, made in
I.D.No.51 of 2004 dated 23.09.2008, remains upheld;
(iii) The order of the Deputy Labour Commissioner dated 18.07.2022 also
remains upheld, and it is declared that for employees who have not explicitly
agreed, the award of the Industrial Tribunal will override the 12(3) settlements.
(iv) No costs. The W.M.P.Nos.10654 and 10655 of 2017 stand dismissed, and
the remaining connected miscellaneous petitions are closed.
25.03.2026
Neutral Citation : Yes/No
Jer
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To
1. The Presiding Officer
Industrial Tribunal, Chennai -600 104.
2.The Commissioner of Labour
O/o. Commissioner of Labour
DMS Compound
Teynampet, Chennai – 600 006.
3.The Deputy Commissioner of Labour -2 (C)
O/o. Deputy Commissioner of Labour (Con-2)
Kuralagam, 3rd Floor, Chennai – 600 108.
4.The Additional Commissioner of Labour
O/o. Additional Commissioner of Labour
DMS Compound, Teynampet
Chennai – 600 006.
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D.BHARATHA CHAKRAVARTHY, J.,
Jer
W.P.Nos.5850, 5851 of 2016 and 2731 of 2023
25.03.2026
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