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September 2018| Bulletin - R&M Associates. Dr Gubbi S Subba Rao

September 2018| Bulletin - R&M Associates. Dr Gubbi S Subba Rao



· Memorandums of Settlement

· CPI Numbers

· News

· Returns to be sent

· BEA Bulletin

“If opportunity does not knock, then build a door.”



“Settlement” under Section 2(P) of the Industrial Disputes Act, 1947 has only been defined and not recommended. In some Companies where there are Unions or other Companies where there are no Unions, negotiations on various demands start when a Settlement already in operation ends or is about to end.

Till now no one has thought of the obvious that this system will only kill the profitability of any Company earlier than planned.

Settlements could be compared with an athletic performance called “Hop, step and Jump” where you reach the goal earlier than normal.

The standard arguments during the process of negotiations in the concept of agreement or Settlement is that the Unions take the increases given in the last Settlement as a base over which new demands are made or accepted. Demands are regardless of the profitability of the Company, their survival, etc. The only thing that matters in such meetings is survival of Workers, increase in costs of daily necessities, rents, education, clothing and other needs of Workmen with no regard to the survival of the Company for business purpose, for which it was initially started.

Reality is that no Management has till now put their foot down and said enough is enough.

We now in M/s. R&M Associates have always thought, acted and advised “radically” and always stood up for Management prerogatives.

Employment in Government is an example where if an Employee joins in a given time scale for 30 to 40 years as follows-

a. Rs. 5000-15- Rs. 5150 (10 years)

b. Rs. 5150-20- Rs. 5350 (10 years)


c. Rs. 5350-25- Rs. 5600 (10 years)

d. Rs. 5600-35- Rs. 5950 (10 years)

There is no law which states that every Settlement when ended should be substituted by another with increases more than previous Settlement.

In our experience we have seen Companies falling apart because of this practice. After 2 to 3 Settlements when the Companies open their eyes and realize that if demands were to be met they can no longer survive.

Therefore Company would be in their right to protect their interests and put their foot down and say there will be no more Settlements with a big and more and more increases.

Standard increments accepted worldwide is 6%-8% the idea of Settlements have crept in because Managements have yielded meekly so that business can continue at any cost as they are normally afraid of counterproductive methods adopted by Unions such as strike, go-slow, etc. during which Managements are not prepared to quell these unlawful reactions and to clean up the trouble makers but continue to engage in negotiations and yield to such tactics.

This provides Unions and Workmen to continue the process in the feeling that only such violent reactions to the Management’s disagreement with unreasonable demands will yield result.

Managements have to weigh the pros and cons of being firm or to yield depending upon the prognosis of business as only Managements can tell.

There are some Companies making high profits in their business and they can afford to pay high Wages and other benefits which cannot be extended to Workmen in other businesses.

Many Unions and Workmen normally compare/ contrast the Wages and benefits earned in such high paying Companies to their own as Workmen have similar expenses like each other, regardless of which Company they are working, which according to the Workmen is not a point to be considered in all this the Department of Labour is the last resort for Managements as the Department of Labour is only an eye wash and a process in the system to help both the parties release pressures and gain time and the Department of Labour is fully loaded in favour of the Workmen considering themselves as protectors of the downtrodden and between the Management and Workmen, the Workmen are the downtrodden, regardless of the facts.




The Consumer Price Index Number for the Working class of Bangalore Centre, Simla Series (Base Year 1960=100) for JUNE 2018 = 7352 Points



Fees under The Karnataka Shops & Commercial Establishments Act to be remitted online:

The Registration Fees or Renewal Fees to be paid under The Karnataka Shops & Commercial Establishments Act for the purposes of new Registration or amendment or renewal is now required to be remitted through e-payment.

The payment is to be made through the Khajane II payment portal of the Department of Labour @ https://k2.karnataka.gov.in/wps/portal/Khajane-II/Scope/Remittance/Challan Generation



The Karnataka Shops & Commercial Establishments Act – Renewal of Registration Certificate:

Employers, whose establishments are registered under The Karnataka Shops and Commercial Establishments Act, are reminded that they are required to renew the Registration Certificate granted under this Act.

The renewal should be done ninety days before the date of expiry (31st December) of the Registration Certificate i.e., before the 2nd of October 2018.

The renewal is done for a period of five years. If the registration certificate has already been renewed earlier and is valid for the year 2019, then the same is not required to be renewed now.

The Renewal fees, to be remitted online, for five years, as per the schedule, are as follows:


Sl. No.

No. of persons employed in the Establishment

Fees for 5 years

(in Rs.)



Shop or Establishment, not employing any person




those employing between 1 and 9 employees




those employing between 10 and 19 employees




those employing between 20 and 49 employees




those employing between 50 and 99 employees




those employing between 100 and 250 employees




those employing between 251 and 500 employees




those employing between 501 and 1000 employees




those employing over 1000 employees




Industrial Adjudicator is not functus officio after the Award has become enforceable as far as setting aside of an ex-parte Award is concerned

The Industrial Adjudicator is empowered to entertain an application as per scheme of the Industrial Disputes Act, 1947 by following the rules of Natural Justice.

The Industrial Disputes Act, 1947 is a welfare legislation intended to maintain industrial peace and harmony.

On receiving an application for setting aside an ex-parte Award, Industrial Adjudicator has to balance equities between the rival parties.

The Industrial Adjudicator has to consider as to whether there was sufficient cause for non-appearance of the Management/ applicant.

In case a party is able to show sufficient cause within a reasonable time for its non-appearance before the Industrial Adjudicator, when it was ex-parte, the Industrial Adjudicator is bound to consider the application for setting aside ex-parte Award and it cannot be rejected on the ground that the Award had already become enforceable.

Certain powers to do justice have to be conceded to the Industrial Adjudicator, i.e ancillary, incidental or inherent and that power cannot be circumscribed by limitation.

Merely because an Award has become enforceable, does not necessarily mean that it has become binding because for an Award to become binding, it should be passed in compliance with Principles of Natural Justice.

An Award passed denying an opportunity of hearing when there was a sufficient cause for non-appearance can be challenged on ground of it being nullity and an Award, which is a nullity, cannot be and shall not be a binding Award.

What is sufficient cause and whether its jurisdiction is invoked within a reasonable time should be left to the judicious discretion of the Industrial Adjudicator.

Any party to the judicial proceedings should get an opportunity of being heard and if such an opportunity has been denied for want of sufficient reason, the Industrial Adjudicator which denied such an opportunity, being satisfied of the sufficient cause and within reasonable time, should be in a position to set rights its own procedure.

The question arising for consideration in this present case was whether the Industrial Tribunal/ Labour Court is functus officio after the Award has become enforceable, and is thus, prevented from considering an application for setting aside an ex-parte Award.

In this case, the Honourable Supreme Court with the assistance of the learned Senior Counsel Mr. Shekhar Naphade, who was acting as Amicus Curiae considered the Chapter IV of The Industrial Disputes Act, 1947, which provides for the “procedure, powers and duties of authorities,” under various provisions of the Act.

Considering the various provisions under the Chapter IV of The Industrial Disputes Act, 1947, the Labour Court/ tribunal is empowered to follow its own procedure as it thinks fit and proper for settlement of an Industrial Dispute in order to ensure Industrial peace and harmony.

If any party fails to attend the Court/ Tribunal without showing sufficient cause for non-appearance, the Court/ Tribunal can proceed ex-parte and pass an ex-parte Award. Any Award ex-parte or otherwise should be sent to the Appropriate Government as soon as it is passed for publication. The Appropriate Government has to publish the said Award within a period of 30 days of the receipt of the Award and the Award becomes enforceable after the expiry of 30 days of its publication.

It has also been held that the Tribunal or other Authorities specified in Section 11 of the Act are not Courts, they have the trappings of a Court and they exercise quassi-judicial functions.

Thus, it has been held that merely an Award has become enforceable does not necessarily mean that it has become binding. For an Award to become binding, it should be in compliance with the Principles of Natural Justice.

The judgement is reported in 2018 LLR 815 in the case of Haryana Suraj malting Ltd V/s Phool Chand. The Judgement is rendered by Honourable Justice Mr. Kurian Joseph, Honourable Justice Mr. Mohan M. Shaantanagoudar and Honourable Justice Mr. Navin Sinha.

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