In our industrial establishment there are 4 unions out of which only one union is a recognized union as it commands majority of workmen ( 680 out of 1000 workforce) .We facilitate the recognized union by deducting union subscription of their members from pay roll under check off system and creidt the amount into unions bank account every month. We have recently signed a memorandum of long term settlement with this union after protracted negotiation under section 18() of the ID act 1947.

The other 3 rival unions raised serious objection for not inviting them for wage negotiation and concluded the settlement . The members of other 3 unions joined together and staged joint agitation in front of Factory’s gate, demanding scraping of settlement and restart afresh a wage negotiation with all 4 unions and arrive at a settlement . Now the workmen owing allegiance to the 3 rival unions are not cooperating in implementing the terms of settlement especially the productivity and incentive commitments of such settlement .

These workmen who are members of 3 rival unions numbering 320 are not accepting the revised wages and are paid wages as per erstwhile settlement . In fact for the past two months we are running dual pay roll one for the recognized union members and other one covering members of the three rival unions . These rival unions take a stand that the productivity and other commitments in the revised settlement is not binding on them and hence they would go by erstwhile settlement.

Admittedly some of the members of the recognized union pay subscriptions to rest of three rival unions also. It may not be out of context to mention that three rival unions are sent written requests at periodic intervals seeking t extend check off facility for collecting subscription from their members and well written request ever year furnishing a list of workmen so as to be recognized as protective workmen . But the management simply ignores such letters .

The management is seriously concerned and raised the matter before conciliation officer for sorting out the settlement . The Conciliation officer sent notice to all 4 unions and management fixing a meeting of conciliation with all stake holders on 2nd July 2019 .

Please advise as to how wriggle out of this tricky situation and ensure industrial peace and smooth productivity?

From India, Chennai
This is common issue in several industrial industrial establishments arising out of multiplicity of union coupled with inter union rivalry.

It is understood that there is dual membership of workmen paying membership subscriptions to different unions . Although you might have collected individual letters of authorization from members of recognized union and facilitate check off system, the 720 membership of recognized union can be challenged by rival unions as a trick to weaken the recognize union and hence not a majority union.

Secondly it is open to members of rival union to refuse to accept revised wages arising out of new wage settlement and hence not to produce as per revised productivity norms . Eventually the management will suffer and industrial tranquil is put to jeopardy .

If it is a only one union concept , there is not an iota of issue in signing a 18(1) settlement ..

In this scenario , it is advisable for management to place its submission before the conciliation officer about the majority membership of the union and furnish the list of members , documents pertaining to month wise payment of union subscription under check off system and represent for converting the existing 18(1) settlement into 12(3) before him .

The Conciliation officer will do a dialogue session with rival unions separately in one or two hearings and finally arrive at a settlement on the same terms of 18(1) settlement to be signed before him and if necessary and if further management has no objection, the other 3 rival unions would be made to become signatories to the settlement . This is a one time arrangement and it is not incumbent on management to recognize all other three rival unions at bilateral level . But the rival unions may try to poke their noses on day to day labour issues especially on productivity implementation matters which you should handle appropriately as they are also signatories to the tripartite settlement.

Now let me dwell on the sanctity of 12(3) settlement

In Bansilal Kishorilal Sahu vs Akola Mazdoor Sangh ((2005) IILLJ 761 Bom) while upholding the sanctity of the tripartite settlement the Bombay High Court opined that any settlement arrived in a conciliation proceeding shall be binding on all the workers especially if they intend to derive benefits out of the settlement. In this case the settlement between the recognized union and the Company in the conciliation proceeding was impugned. The ground of challenge was that the settlement provided that under the voluntary retirement scheme the workers who avail of the benefit will be paid the amount after deduction of 5% to be contributed to the said recognised union.

Case Laws pertaining to 18(1) :

The Supreme Court in Tata Chemicals Ltd. V. Workmen of Tata Chemicals Ltd. represented by Chemical Kamdar Sangh (1978 AIR 828, 1978 SCR (3) 635 = 1978 II LLJ 22 = 1978 (36) FLR 339 = 1978 LIC 637 = 1978(3) SCC 42) held that a settlement arrived not in conciliation proceeding will not bind other unions and shall only be binding on the parties to the settlement. The Court observed: "A bare perusal of the above quoted section would show that whereas a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceeding is binding only on the parties to the agreement a settlement arrived at in the course of conciliation proceeding under the Act is binding not only on the parties to the industrial dispute but also on other persons specified in clauses (b), (c) and (d) of sub-section (3) of section 18 of the Act."

In The Bata Shoe Co. (P) Ltd vs D. N. Ganguly & Others (1961 AIR 1158, 1961 SCR (3) 308) one of the issue before the Supreme Court was whether a reference will be incompetent as because the settlement was arrived at a bipartite level between the union and management. The Court dealt at length the meaning of the course of conciliation proceedings and held that a settlement which is arrived during the course of conciliation proceeding with the concurrence of the Conciliation Officer will have the binding effect or else it will not bar a reference by the appropriate Government.

The analysis of the aforesaid provisos on settlement and the case laws amply demonstrates that a settlement arrived at in the course of conciliation proceeding will be applicable to all workmen including the members of the union who are not a signatory to the agreement, any other minority union, workmen who are not member of the Union and any other persons who subsequently become employed in the establishment.



Industrial Relations and Labour Law consultant

Former Corporate Head - Industrial Relations .MRF Ltd ,Chennai


From India, Chennai
I appreciate the reply given by Mr Senthilkumar. I would like to add that in an organisation where there are more than one unions, it would be necessary to have a referendum and decide who is the principal bargaining agent. In states where there are Acts to recognition of Trade Unions re available, you can refer to the same or there are conventions like ILO which bring about how to recognise trade unions. It will be the union who has more than 50 percentage of members who will be recognised as principal bargaining agent. Though a principal bargaining agent only is the signatory in a settlement, the other unions should also be called for negotiations provided they have 15% of membership.

It is also true that a bipartite settlement is binding on the parties to the settlement and not binding on the other unions. Once you have carried out a referendum, minority unions who do not have 15% of membership shall be totally excluded from negotiation. It is always fair for the management also to recognise those unions who qualify for recognition.

Since the matter has been referred to Conciliation, you can explore the possibility of conducting a referendum by the Labour officer himself.

From India, Kannur
In Tamilnadu there is no piece of legislation for union recognition or for that matter to identify who would hold bipartite negotiation with management for ironing our wage settlement, unlike state like Kerala, Maharashtra , West Bengal and hence the matter is left to vagaries of management to decide the bargaining agent or negotiating union .

From India, Chennai
In such cases, the Code of Discipline accepted by ILO can be followed. The code is similar to the Kerala Act in this direction.
From India, Kannur

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