Labour Law

Associated Cement Companies Ltd. v. Their Workmen

AIR 1960 SC 777; 1960 SCR (3) 157

Citation: AIR 1960 SC 777; 1960 SCR (3) 157
Court: Supreme Court of India
Date: 3 March 1960
Bench: 3-Judge Bench - P.B. Gajendragadkar, A.K. Sarkar and K.C. Das Gupta, JJ.

Facts

An earlier industrial award governed conditions of employment at Associated Cement Companies.
A registered union representing only a minority of the affected workers served notice under Section 19(6) terminating the award.
After the notice period, fresh demands were raised and referred for adjudication.
The employer objected that:
the earlier award had not been validly terminated;
the minority union could not act for the entire body of workers bound by it; and
only a majority union or all employees acting collectively could issue notice.
The Tribunal rejected the preliminary objection.
The employer appealed to the Supreme Court.
The dispute concerned the relationship between:
the wide binding effect of awards under Section 18; and
the right of workers to terminate the award under Section 19(6).

Whether a minority union can issue notice terminating an industrial award.
Whether “any party bound by the award” requires action by every worker or a majority.
Whether an individual worker may terminate the award alone.
What degree of collective action is necessary.

An industrial award may bind a broad class under Section 18, including:
parties to the dispute;
persons employed in the establishment at the time; and
certain future employees.
Section 19(6) permits a party bound by the award to give notice terminating its operative period after the statutory minimum duration.
Workers act collectively in industrial relations.
An individual workman acting entirely alone cannot ordinarily terminate an award binding the entire workforce.
A group of workmen acting collectively may do so:
through a registered union; or
through another genuine collective arrangement.
The group or union need not represent the majority.
Minority collective action can:
raise an industrial dispute; and
terminate an award for the purpose of seeking fresh adjudication.

The employer’s interpretation would make termination practically impossible in establishments with:
several unions;
changing membership;
divided workforce preferences; or
no single majority organisation.
Section 19(6) did not expressly require majority status.
The Court nevertheless rejected the opposite extreme under which one worker could unilaterally end an award governing everyone.
Industrial adjudication is founded upon collective labour relations.
The correct interpretation required an organised group acting collectively.
The minority union satisfied that requirement.
It represented a real section of the employees bound by the award and formally served notice on their behalf.
Once the prescribed notice period expired, the award ceased to remain contractually operative, although its terms could continue as service conditions until replaced.
The fresh dispute was therefore competent.
The Court also explained that majority status affects bargaining strength but is not always a jurisdictional condition.
A minority group may possess legitimate industrial concerns and cannot be permanently prevented from seeking revision merely because another union is larger.
The statutory scheme thus protects both:
stability of awards for their minimum period; and
later collective access to renewed bargaining and adjudication.

The Supreme Court held that a minority registered union could validly issue notice terminating the award under Section 19(6).
A single individual could not ordinarily do so, but a genuine collective group need not represent the majority.
The Tribunal was competent to proceed with the fresh reference.
Use this case for: minority collective representation is sufficient to terminate an award and raise a fresh industrial dispute; numerical majority is not a statutory requirement.