Holding

Section 20(2)(b) of the 1971 Act and the 15 % deduction under Clause 17 of the settlement are constitutionally valid and do not infringe Articles 19 or 14.

Summary

The Supreme Court examined a challenge by the Balmer Lawrie Workers Union (a non‑recognised union) to the constitutional validity of Section 20(2)(b) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 and to Clause 17 of a settlement that required a 15 % deduction from arrears to fund the recognised union. The Union argued that the provision gave an exclusive right to the recognised union to represent all workmen in industrial‑dispute proceedings, violating Articles 19(1)(a), 19(1)(c) and 14 of the Constitution, and that the deduction was an unlawful exaction not authorised by the Payment of Wages Act. The Court held that Section 20(2)(b) is a valid legislative measure that does not infringe the fundamental freedoms or equality guarantees, noting the safeguard of Section 2A of the Industrial Disputes Act for individual disputes. It further held that the deduction under Clause 17, being part of a mutually agreed settlement, is not a compulsory tax and is permissible. Consequently, the appeal was dismissed and the settlement upheld.

Issues considered

Whether Section 20(2)(b) of the Maharashtra Recognition of Trade Unions Act, 1971, which confers exclusive representation rights on a recognised union, violates Articles 19(1)(a), 19(1)(c) and 14 of the Constitution.
Whether Clause 17 of the settlement, mandating a 15 % deduction from gross arrears for the recognised union’s fund, is unconstitutional as a compulsory exaction not authorised by the Payment of Wages Act.
Whether the deduction amounts to a tax or a permissible quid‑pro‑quo within a settlement.

Legislation cited

Constitution of Indias. Article 14, s. Article 19(1)(a), s. Article 19(1)(c)
Industrial Disputes Act, 1947s. 2A
Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971s. 20(2)(b), s. 21, s. 22
Payment of Wages Act, 1936

Subjects

recognised unionexclusive representationindustrial disputesfundamental rightsArticle 19Article 14trade unionsettlement deductionPayment of Wages Actconstitutional validity

Judgment

492

A · BALMER LAWRIE WORKERS' UNION, BOMBAY AND ANR.

v.

BALMER LAWRIE AND CO. LTD. AND ORS.

B December 21, 1984

[D.A. DESID AND V. KHALID, JJ.]

Constitution of India, 1951, Articles 14, 1' (1) (a) and (c)-Sec. 20,
Mahurashtra Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971 conferring exclusive right on recognised union to represent
c workmen in disputes-Whttht!r ultra virl!s the Constuution.

Milharashtra Reco:nition of Trade Unions and Prevention of Unfair
Practices A.ct 1J11,-se~. 21(2) (b)-E;xclusive Right conferred on recognised
union to represent worknzen In disputes-Co11stitutional validity of-Art: 14 and
19 (!)(a) and (c) of the Constitution.
D Industrial Disputes A.ct-Sel/lement between employer and recognised
union· Provision for deduction of 15% from gross arrears payable to all workmen
including members of unrecognised [Jnion-A1nount to be credited t• recognised
Union's fund-Constitutional validity of-Whether unconstitutional vis-a~vis
workmen of unrecognised Union.

Payment of Wages A.ct-Deduction 11 ade from wages and salary payable
E to an employee-Such deduction not authorised by the Act but by a Settlement-
Consent of Parties for such deduction from wages-Validity and effect of.

Section· 19 of the Maharashtra Recognition of Trade Unions and Preven-
tion of Unfair Labour Practices Act 1971 (1971 Act, for short) provides for
recognition of a union if it complies with certain conditions specified in tbt:
F section. Section 20 enumerates the rights of a recognised union. Clause
(b) of sub-sec. (2) of s.20 confefs an exclusive- right on a recognised union
to represent workmen of an undertaking in certain disputes and makes the
decisio~ or order made in such proceedings binding on all the employees while

G
it denies such right to a workman to appear or act or to be allowed to represent
in any proceeding under the Industrial Disputes Act 1947 except in a proceeding
in which the legality or propriety of an order of dismissal, discharge, removaJ,
retrenchment, termination of service or suspension of an employee is under
..
consideration.

After a strike, the respondent-employer entered into a settlement in
respeCt of a number of pending industrial disputes with its union, which was
H recognised under the 1971 Act. Clause 17 of the Settlt;ment provided that tlle
WORKERS UNIOK •. BALMER J.AWRII! CO. 493

company shaII deduct an amount equivalent to 15% of the gross arrears A
payable under the Sett1en1ent to each employee towards contribution to the
fund of the recognised union. The appellant. a non.recognised union cballenaed
in a writ petition before the High Court the constitutional validity of Clause 17
of tbe Settlement on the grounds, inter alia, (i) that Clause 17 permits a
cOmpulsory exaction not permitted by the Payment of Wages Act from the
arrears payable to the workmen who are not the members of the recognised
.. ---.ii
union; (ii) that section 20 of the 1971 Act is unconstitutional, since (a) it
unquestionably denies to the work.men who are not members of a recognised
union, the fundamental freedom &uaranteed under Article 19 (I) (a) and (c)
•
inasmuch as it inheres the pernicious tendency to compel the workmen to join
the union which has acquired the status of a recognised union even if it
followed a socio-economic or socio·potitical philosophy contrary to the philosophy
of non-members; (b) it denies to the unrecognised union, the right to effecti.
vely participate in any proceeding concerning the workmen of an industrial
undertaking, some of whom have formed a separate trade union and (c) it does
c
not treat all the unions at par as the members of non.recognised union are
compelled to be bound by the action of the recognised union. The Single Judge
of the High Court dismissed the writ petition and the same was affirmed in
•• appeal to the Division Bench of the High Court. Hence this appeal.

Dismissing the appeal by the appellant,
D
HELD : 1.1. In order to appreciate the: controversy between the parties,
a brief review of tbc Scbeme of the 1971 Act would be advantageous. On the

- advent of industrial revolution which aimed at mass production of commodities,
large scale industrial units came to be set up resulting in concentration of
workmen at one place under one employer. Trade union movement represent·
ing the ora:anised labour developed as an adjunct of political party. The
organised Labour as a vote bank was assiduously wooed by political parties. E
Every political party with a view to controlling vote banks set up its labour
wings. Combinations and fragmentations of political parties bad the pernicious
effect on trade unions. Multiplicity of political parties had its spill over in
multiplicity of trade unions seek.in1 to represent workmen in an industrial
undertakine or industry, as the case may be. The fall out of the multiplicity of
unions was inter-union and intra.union rivalry which threatened peaceful
working of the industrial undertaking or the industry, Each union, as the F
unfortunate experience shows, tried to over.reach the rival by making occa-
sionally exhorbitant and untenable demands. The emerging. situation led to
conflict and confrontation disturbing industrial peace and harmony directly
affecting production. Therefore, a need was felt that where there are multiple
unions seeking to represent workmen in an undertaking or in an industry, a
concept of recognised union must be develop~d. In fact, even amongst trade
union leaders there was nCar unanimity that the concept of recognised union as G
the sole bargaining agent must be developed in the larger interest of industrial
peace and harmony. National Commission on Labour also after unanimously
and whole-heartedly expressing itself in favour of the concept of recognised
union and it being clothed with powers of sole bargaining asent with exclusive
right to represent workmen, addressed itself only to the question of the
method of ascertaining which amongst various dval unions must be accorded
the status of a recognised union and it was agreed that the union which H
•

494 SUPREME COURT REPORTS (1985) ! S.C.R.

represents the largest number of workmen working in the undertaking must
acquire the status as that would be in tune with the concept of industrial
democracy. [499H ; SOIB ; 502G-H ; 503A-B ; D-G]

1.2. It is therefore clear that every one was agreed that where there are
multiple unions in an industrial undcrtaking,or an industry, the union having
the lara:e~t membership of the workmen must be clothed with the status of
recognised union and Consequently as the sole bargaining agent. The under-
lining assumption was that the recognised union represents alt the workmeQ in
the industrial undertaking or in the industry. Thus, the 1971 Act was enacted
as its long title shows to provide for the recognition of trade unions for
facilitating collective bargaining for certain undertakings, to state their rights
and obligations, to confer certain powers on unrecognised unions ; to provide
for declaring certain strikes and lockouts as illegal strikes and lock-outs ; to
define and provide for the prevention of certain unfair labour practices ; to
c constitute courts (as independent machinery) for carrying out the purposes of
accOrding recognition to trade unions and for enforcing the provisions relating
to unfair practices etc. [504A-B ; 499E-Fl
..... -:_•
1.3. Status to b~ the sole bargaining agent as a recognised union is a
hard \lr'On battle and need not be permitted to be frittered away by a senti· "'-·
mental approach that where trade unio.n movement has ideological overtones, ;,
i>.
D' such.a provision would compel workmen either to become members of a union,
whose socio-political philosophy is not in tune with bis own Or suffer isolation
as such workman cannot forge a tool of a trade union or even if they forge
one, the employer can ignore it with impunity. The matter cannot be viewed
from· the perspective of same ideloguis but has t9 be examined in the large
perspective of public interest of ·peace and harmony in the industry, healthy
industrial relations and lart,e national interest which eschews strikes, lock·
E outs, conflict and confrontation. [504H ; SOSA-BJ

2.1. Sec. 20, sub.sec. 2 while conferring exclusive right on the recognised
union to represent wo~kmen in any proceeding under the Industrial Disputes
Act. 1947 simultaneou'Sly denying the right to be represented by any individual
workman has taken care to retain the exception as enacted in Sec. 2A of the
Industrial Disputes Act, 1947. This leg;;i.l position is reiterated in Sec. 20(2) (b).
Therefore, while interpreting Sec. 20(2) (b), it must be kept in view that an
F individual workman, .~ho has bis individual dispute with the employer arising
out of his dismissal, 'discharge, retrenchment or termination of service will not
suffer any disadvantage if any recognised union would not espouse his case and
he will be able to pursue his remedy under the Industrial Disput~s Act, 1917.
Once this protection is assured, the question is whether the status to represent
workmen conferred on a i-ecognised union to the exclusion of any individual
workman or one or two workmen and who are not members of the recognised
G union would deny ·10 such workmen the fundamental freedom guaranteed '
under Art. 19(1) (a) and 19(1) (c) of the Constitution. [506B-D]

2.2. The restriction on the right to appear and participate in a proceed·
ing under the Industrial Disputes Act, 1947 to a workman who is not prepared
to be represented by the recognised union in respect of a dispute not personal
to him alone such as termination of bis service does nOt deny him the freedom·
WORKERS UNION V. BALMER LAWRIE CO. 495
of speech and expression or to form an association. Conferring the itatus or
A
recognised union on the union satisfying certain pre·requisitcs which the other
union io; not in a position to s<1tisfy doe$ not deny the right to form association
[506E F]

2.3. Forming an assoi..iatici1 is c.:ntin:ly inJ..::pcndcnt and different from
it~ recognition. R~cognidon of a union confers 1igh.s, duties and obligations,

•, . Non-conf~rring of such rirht<>, duties and obligations 0:1 a union other than
the recognised unio:1 dots not rut it on nn inferior position nor the charge of
discrimination can be enfert«ined. The rne'ubcrs of a non·recognised associa·
tion can fully enj 1Jy their fundaroental frecdo<n of speech and expression as
B

• also to form E1e asS'o..:iation. The L:....>gislaturc h<is, in tact, ta~cn note of the
existing phenomenon in trade unions where there would be unions claiming to
represent workmen in an undertaking or industry other than re<:ognised union.
Sec. 21of19il Act confers son1e specific rights on su.:h non-recognised union~, c
one such being the rig~t to meet and discuss with the employer the grievances
of individu~l workman The Legislature has made a clear distinction between
individ11al 3rievance of a workinan and an intlustr.ial dispute aifecting all or a
large number of workmen. In the case of even an unrec(ignised union, it enjoys
the statutory right to n1cet and discuss the grievance of individual workman
with einp-loyer. It clso enj-.•ys tht- statutory right to appear and participate in a
domestic or deparltnental enquiry in which itsh 1nember is involved. This is D
statutory recognition or an unrecognised union. The exciusion is partial and
the embargo on such unrecognised union or individual workman to represent
workmen is in the large intt:rc:,l of industry, public jnterc:i,;t <ind national
int~rest. Such ..i. pr,.Jvision could not be said to be violative of fundamental
freedom guaranteed under Art. 19(' \(<i) or 19(1)(c) of the Constitution.
[506H; 507A-D]

3. Where a represent ltive union acts in exercise of the powers conferred E
by Sec. 2n(2) it is obligatory upon it to act in a manner as not to discriminate
between it~ men1ber~ :1nd other workmen or the unpertak.ing -who are not its
members. However ..vhen a settlement is roached in a proceeding under the
Industrial Disputes Act in which a representative union has appeared, the same
is to be binding: on all the work1nen of the undertaking This would mean
that neither the representative union nor the employer can di~crin1inate betwee•
members of the reprcs::ntative union and other work.men who are not members.
Both the benefits, advantage<;, disadvantages or liabilities arising out of a
aettlcment in any proceeding under the Industrial Disputes Act to which a
representative union is a party shall be equally applicable to each work.man iE
the undertaking- There shall not be the slightest trace or discriminatio•
between members and non·--members both as regards the advantages and also
as regards the obligations and liabilities. Any other view of Sec. 20{2)(b)
would render it unconstitutional and invalid as being violative of Art. 14.
Equal treatment of members and non-members is implicit in the section and by G
its interpretation this Court only makes it explicit. [51 lF-H ; 512A-B]

(4) It is well kno\\n that no deduction could be made from the wages and
salary payable to a workn1en governed by the Payment of Wage!! Act unless
authorised by that Act. A settlement arrived at on consent of parties ca!I
however permit a deduction as it is the outcome of understanding between the
parties even though such deduction may not be authorised or legally permissble
under the Payment of Wages Act. [512D·E] H
496 SUPREME COURT REPORTS , [1985] 2 S.C.R.

A (5) If under ·'a settlen1ent with the representative union some benefits
accrue to the .workmen, and upon a true interpretation of Sec. 20(2)<b), it is
held all encompasSing and therefore binding on all workmen employer alike,
all the benefits wollld be available to the workmen who are not members of the
representative uniOn and who may have formed a rival union. If these work-
men could not be denied the benefits, they would enjoy an unfair advantage if
from the package.. deal covered by the settlement, they draw benefits and abjure
B liabilities. Therefore, a clause like Clause 17 of the Settlement has to be
understood in the context of strengthening the trade union movement and to
free it from financial constraints. Workmen who are members of a union may
pay fee for membership and enjoy the advantage of membership put if by the
action of the representative union all workmen acquire benefit or monetary •
advantage, the members and non-members alike can be made to make common
sacrifice in the large interest of trade union movement and to strengthen the
c trade _union which by its activities acquired the benefits for all workmen.
Payment to trade,'union fund in these circumstances can be styled as quid pro
quo for benefits acquired. It can neither be said to be compulsory exaction
nor a tax. Therefore, there is nothing objectionable in Clause 17 of the
Settlement which directs the employer to deduct 15% of the gross arrears ,,
payable to each employee under the settlement as contribution to the trade-
unioti funds. Thereby the workn1an is not subscribing to the philosophy of
•
rival union but he is merely paying the price of the advantage obtained.
D Another view would make the union . members suffer and the non-members
benefit, a situation which must at all costs be avoidei:i. Therefore clause 17 of
the Settlement would not be invalid despite the lack of consent of the workmen
, ,
__

who are men1bers,. of the appellant union. The settlement having been made
by the representative union, its .right tO represent all workmen would imply the
consent of the members of the rival union. This is the legal consequenee of
the right of the representative union to represent all workmen and the binding
effect of its action. [513G-H; 514A-E]
E
Reg. v. Duffield, 5, Cox's Criminal Case, 404 referred to.

Raja Kulkarni and Ors. v. State af Bombay, [1954] SCR 384, relied upon.

Rum Prasad Vishwakarnia v. The Chairman, Industrial Tribunal, [1964] 3
SCR 196, held in-applicable.
F
Girja Shankdr Kashi Ram v. Gujarat Spinning and Weaving Mills Ltd. [1962}
2 Supp. SCR 890 and Santuram Khudai v. Kimatrai Printers & Processors (P)
Ltd. & Ors., [1978] 2 SCR 387, distinguished.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3527 (NL) of
G 1984.

From the Judgment and Order/decree dated Ju[y 27, 1984 of
the High Court of Bombay in Appeal No. 660 of 1984.
.,
Danial Latifi, V.S. Desai R.S. Sodhi, K.V. Sreekumar, M.N.
H Shroff and Ms: Radha-de' Souza for the Appellants.
WORKERS UNION '· BALMER LAWRIE co. (Desai, J.) 497

M.K. Ramamurthi, Mrs. Urmila Sirur, F.D Damania, A.M. A
Dittia and D.N. Misra or the Respondents.

M.N. Shroff the State of Maharashtra.

Tbe Judgment of the Court was delivered by

DESAI, J Two unions of workmen employed in the first respon- B
dent Company M's Balmer Lawrie & Co. Ltd. ('employer' for short)
• are at logger-heads and their inter-se rivalry has thus landed in this
Court. Appellant Balmer Lawrie Workers Union ('non-recognised
Union' for short) tiled Writ Petition No. 1518 of 1984 in the High
Court of Judicature at Bom'iay challenging the constitutional validity
of Sec. 20 (2\ read with Schedule I of the Maharashtra Recognition
of Trade Union & Pwcent«rn of Unfair Labour Practices Act, 1971
c

... ,
('1971 Act' for 'hurt). r . , this petition, they impleaded the employer
company and the Balmer Lawrie fmployees Union ('Recognised
Union' for short) .

Few facts giving rise to the writ pelltwn may be stated. A
settlement was arrived at between the employer and the recognised D
union resolving a number of industrial disputes pending between them.
Clause 17 of the Settlement reads as under :

"17. Arrears will be paid within two months from the
date of signing of the Settlement. Further, the Company
shall collect from each workman an amount equivalent to E
15% of the gross arrears payable to each employee under
this settlement as contribution to the Union Fund and this
Amount shall be paid to the Union within 3 days of the
payment of arrears by Payee's A/c Cheque."
F
The non-recognised union-the appellant apprehending that if
and when settlement would be arrived at between the employer and
the recognised union, there would be the usual clause for deduction
from amounts payable to the workmen under the settlement for the
benefit of the recognised union. Therefore the non-recognised union
informed the employer not to make any deduction pursuant to the G
settleme:Jt from the arrears payable to the members of the non-recog-
nised union as and when the settlement is arrived at. Correspondence
ensued between the parties which led to the filing of the writ petition
No. 473 of 1984. This writ petition was moved to forestall the settle-
ment if any about any deduction from the payments under the settle-
ment as and when arrived at. An undertaking was given before the H
498 SUPREME COURT REPORTS (1985] 2 S.C.R.
A High Court that the employer would give notice of the settlement, if
it is finally arrived at and will implement the same only a week there-
after.' On this undertaking, the writ petition was withdrawn. There-
after' the "settlement was arrived at which inter-alia included Clause
No. 17 extracted hereinbefore. The non-recognised union filed a
fresh writ petition inter alia contending that Clause 7 permits
a compulsory exaction not permitted by the Payment of Wages Act
B
from the arrears payable to the workmen by the employu, without
the consent of the workmen, who are not the members of the recog-
nised union. It was alleged in the petition that if upon its true cons-
truction Sec. 20 (2) (b) of 1971 Act permits such compulsory exaction
without the consent of the workmen concerned, the same will be
nnconstitutional inasmuch as such union levy would force .and com-
c pel the workmen against their will to join the union which has acqui-
red the ,Status of recognised union. Specific allegation was that Sec.
20 (2) violates the fundamental freedom toform association guaran-
teed by Art 19 (l) (c ). There were other incidental grievances made
in the petition but the main thrust of the petition was against the
..'•
constitutional validity of aforementioned section. The learned Single
Judge dismissed the writ petition and after an unsuccessful appeal to
D
the Division Bench of the High Court this appeal was filed by special
leave.

Mr. Daniel Latifi learned counsel who appeared for the appellant
assisted by Mrs. Radha D. De'souja, the President of non-recognised
. union and also as counsel appearing for non-recognised union urged
E that if Sec. 20 (2) is so interpereted as to mean that the employer or
the recognised union can discriminate between the members of the
recognised union and non-members though workmen of the same
employer, the same is violative of Art. 14 and if it compels the work-
men to join recognised union it is violative of Art. 19 (1) (a) and (c).

Sec. 20 of the 1971 Act enumerates the rights of the recognised
1F union. Sec. 20 (2) reads as under :

"20 (2): Where there is a recognised union for any'
undertaking,-

G (a) that union alone shall have the right to appoint its
nominees to represent workmen on the Works Commit-
tee constituted under Section 3 of the Central Act;

(bl no employee shall be allowed to appear or act or be
H · allowed to be represented in any proceedings under the
WORKERS UNION v. BALl\IER LAWRIE co. (Desai,!.) 499

Central Act (not being a proceeding in which the lega- A
lity or propriety of an order of dismissal, discharge,
removal, r~trenchment, termination of service or suspen-
sion of an employee is under consideration), except
through the recognised union ; and the decision arrived
at or order made, in such proceeding shall be binding
on all the employees in such undertaking ; B

, , and accordingly the provisions of the Central Act, that is to
say, the Industrial Disputes Act, 1947, shall stand amended
• in the manner and to the extent specified in Schedule I."

Does Sec. 20 (2) which confers an exclusive right to represent c
workmen of any undertaking on a onion which acquires the status of
a recognised union under 1971 Act and simultaneously denies the
right to a workman to appear or act or to be allowed to represent in
- ' any proceeding under the Industrial Disputes Act, 1947 ('ID Act' for
short) viobte the fundamental freedo•n to form association guaran-
D
teed by Art. 19 (1) (c).

The 1971 Act was enacted as its long title shows to provide for
the recognition of trade unions [",1r facilitating collective bargaining
for certain undertakings, to state their rights and obligations, to
confer certain po\vers on unrecognised unions ; to provide for decla-
E
ring certain 1trikes and lock-outs as illegal strikes and lock-outs ; to
define and peovide for the prevention of certain unfair labour practi-
ces ; to constitute c.mrt (as independent machinery) for carrying out
the purposes of according recognition to trade unions and for enforcing
the provisions relating to unfair practices etc There is in force in the
State of Maharashtra a comprehensive legislation, Bombay Industrial F
Relations Act, 1946 touching almost all aspects of industrial relations
but it applies only to specified industries. Industries other than specified
industries are governed by Industrial Disputes Act, 1947. This latter
act is not comprehensive in character. There is no provisions for
recognising union vis-a-vis the undertaking or the industry. Unions
of workmen employed by undertakings not governed by Bombay
Industrial Relations Act voiced dissatisfaction over this discrimina- G
tory treatment and the lacuna in the 1947 Act. To bring the provi-
sions of both the acts on par in certain specific areas 1971 Act was
enacted by the State Legislature.

A brief review of the scheme of the 1971 Act would be advanta-
geous. It specifically provides for recognition of unions. A conspectus
of provisions included in Chapter Ill headed recognition of unions H
w
i
![
566 SUPREME COURT REPORTS [1985j :i s.c.R..
A provide that every undertaking wherein 50 or more employes are
employed or were employed on any day of the preceding 12 months
will be governed by the provisions therein set out. Sec. 11 provides
for making of an application for recognition of union. The eligibility
criterion for obtaining the recognition is that the union applying for
the status of a recognised union must have for the whole of the
B period of six calendar months immediately preceding the calendar
month in which it makes the application, a membership of not less than
thirty percent of the total number of employees employed in any under·
taking. The application has to be made to the Industrial Court set up
under the Bombay Industrial Relations Act. On receipt of the appli-
..
cation, the Industrial Court has to cause a notice to be displaced on
c the notice board of the undertaking, declaring its intention to consider.
the said application on a date to be specified in the notice and calling
upon other union or unions, if any, having membership of employee~
in that undertaking and the emp!Jyers and the employees affected by
the proposal to show cau•e why the recognition should n )t be granted.
If after considering all the objections that may have been lodged
pursuant to the notice given as hereinbefore indicatea, the Industrial
D Court comes to the conclushn that the conditions requisite for regis-
tration are satisfied and the union complies with the conditions speci-
fied in Sec. 19, the Industrial Court shall grant recognition to the
applicant union under the Act and issue a certificate in the prescribed
form. At any point of time, there shall not be more than one
recognised union in respect of the same undertaking. Sec. 13 confers
E power on the Industrial Co11rt to cancel the recognition if any of the
circumstances therein set out is satisfactorily established. Sec. 14
provides for resolving the dispute inter se between the recogni,ed'.union
and another union seeking recognition. The obligations and rights
of the recognised union are set out in Secs. 19 and 20 in Chapter IV.
\
F
Mr. Daniel Latifi, learned counsel urged that the embargo placed
by Sec. 20 (2) (b) on any workman to appear or to be represented in
any proceeding under the ID Act 1947 barring those which are speci-
fically excluded save by the recognised union contravenes the funda-
mental freedom guaranteed to the citizens under Art. 19 (I) (a) and
G (c) of the Constitution. Art. 19 (l) (a) guarantees to the citizens fun-
damental freedom of speech and expression and Art. 19 (I) (c)
guarantees fundamental freedom to form association. Tersely put the .,
question is : if a law relating to regulating industrial relations bet-
ween the employer and workmen provides for a sole bargaining
1#.
agent such as the recognised union and simultaneously denies to the
H individual workman the right to appear or to be represented in any
WORKERS UNION v. BALMER LAWRIE co. (Desai, J.) 501

proceeding under the ID Act, 1947, would it contravene the funda- A
mental freedoms guaranteed by Art. 19 (1) (a) and 19 (I) (c) 1

History bears a witness to the long-drawn out unequal fight
between the employer and the employed to be on terms of equality.
A brief resume would be helpful.

.. .
,
On the advent of industrial revolution which aimed at mass
production of commodities, large scale industrial units came to be set
up resulting in concentration of workmen at one place under one
employer. Individual employer has now been replaced by corporations
B

wielding immense economic power. To say that workmen were at the
mercy of the employer is to state the obvious. It was even sacrilegious
to think of a right of a workman qua the emrloyer Till the laissez
faire ruled the roost the State would not interpose itself to protect
c
the under-privileged and weaker partner in the industry and left the
workmen to fend for themselves, the State concerning itself only
with the problem of law and order when a conflict arose between the
employer and the workmen. This was predicated upon an untenable
if not wholly erroneous assumption that as the society has moved from
status to contract, the employer and the workman would by negotia- D
tions churn out a contract mutually beneficial to both. That the parties
were unevenly placed in the matter of contracting was absolutely over
looked. The liberal albeit capitalist English society treated united refusal
of work on the part of workmen as conspiracy and as Jeremy Benthan
put it "the word conspiracy served judges for an excuse for inflicting
punishment without stint on all persons by whom any act was com- E
mitted which did not accord with the Judges' notion concerning the
act in question." Justice Erle in Reg. v. Duffield(1) summed up to the
Jury as under :

"The unlawful combination and conspiracy is to be
inferred from the conduct of the parties. If several persons F
take several steps, all tending towards one obvious purpose,
it is for the jury to say whether these persons have not com-
bined together to bring about that and which their conduct
appears adapted to effectuate."

English Common Law frowned upon combination of workmen G
to achieve common object ; Common Law looked upon combination
as criminal in character. On the enactment of the Trade Unions Act,
1913 in United Kingdom, registered trade union acquired corporate

(1) 5, Cox's Criminal Case, 404. H
-~

.\
SUPREME COURT REPORTS [1985] 2 S C.R.
A i:apacity, entitled to sue and be sue.din its registered name and enter
into contracts as separate entity, separate from its members. This
itatus acquired by the trade unions, would clothe a collective agree-
ment arrived at between the employer and the union with the semb-
lance of legality though Common Law for long refused to recognise
it as enforceable contract. Royal Commission on Trade Unions and
Employer's Association under the Chairmanship of Lord Donovan
('Donovan Commission' for short) .which submitted its report in 1968
proceeded on the basis that collective bargains' are not subject to legal
enforcement and number of arguments were put forth in support of
the proposition. Even though the Commission in concluding portion ..
of paragraph 472 of its report observed that "lndustrywide
bargaining and workshops or plant bargaining are, bow ever,
c cloiely intertwined. To enforce one without the other would
be to distort the effect of our collective system. That system
is .today a patch-work of formal agreements, informal agreements
and custom and practice. No Court, asked to enforce a collective
agreement could disentangle the agreement from the inarticulate
practices which arc its background." Quest of justice by labour,
.victim for· long of exploitation of human being by impersonal juristic
D persons such as corporation. led to the formation of industrial norms
by a legislative enactment generally styled as labour law The main
object of labour Jaw was to be a countervailing force to counter-act
the inequality of bargaining power which is inherent and must be
inherent in the employment relations. As stated by Otto-Khan-Freund
in his Hamalin lecture "this was an attempt to infuse law into a
relationship of command and obedience, in other words in the field
where one enjoys the power to command and other suffers the duty
to obey. To the extent law limits the range·of workers' duty of obe-
dience and enlarges the range of its freedom, Labour Law fulfiJJs one
of its objecll. "('.)
F
In the context of "the political society which we rdolved to
•et up in the post-independent India, on the introduction of universal
adult suffrage by Art. 326 of the Constitution trade union movement
representing the organised labour developed as an adjunct of political
part. Th: organised labour as a vote bank was assiduously wood by
G political parties, Every political party with a view to controlling vote
.banks set up its labour wings. Combinations and fragmentations of
·political parties had the pernicious effect on trade unions. Multipli-

( 1) See Report the Labour Law! Review Co111mittee, Govt. of Gujarat
H Publicatiou 1'974 Page'·
WORKERS UNION v. BALMER LAWRIE co. (Desai, J.) 503
city of political parties had its spill over in multiplicity of trade unions A
seeking to represent workmen in an industrial undertaking or indus-
try, as the case may be. The fall out of the multiplicity of unions was
inter-union and intra-union rivalry which threatened peaceful working
of the industrial undertaking or the industry. Each union, as the
unfortunate experience shows, tried to over-reach the rival by making
occasionally exhorbitant and untenable demands. The emerging
situation led to conflict and confrontation disturbing industrial peace B
and harmony dir~ctly affecting production. In the first Five Year
Plan it was observed :

"Answer to class antagonism and world conflict will
arrive soon if we succeed iu discovering a sound basis for
human relations in industry. Industrial relations are there- c
fore, not a matter between the employers and employees
alone but a vital concern of the community which may be
expressed in measures for the protection of its larger intere-
£ts."

A need was felt that where t:1ere are multiple unions seeking to D
represent workmen in an undertaking or in an industry, a concept of
recognised, union must be developed. Standing Labour Committee of
the Union of India at its 29,h Session held in July I970 addressed
itself to the question of recognition of trade union by the employer.
In fact even amongst trade union leaders there was near unanimity
that the concept of recognised union ~is the soli.; bargaining agent must E
be developed in the larger interest of industrial peace and harmony.
National Commission on Labour chaired by late Shri P.B. Gajendra-
gadkar, former Chief Justice of India, after unanimously and whole-
heartedly expressing ihlf in favour of the concept of recognised union
and it being clothed with powers of sole bargaining agent with exclu-
sive right to represent workmen, addressed itself only to the question F
of the method of ascertaining which among>t vo rious rival unions must
be accorded the status of a recogni,;ed union. Planting itself firmly in
favour of democratic principle, it was agreed that the union which
represents the largest number of workmen working in the undertaking
must acquire the status as that would be in tune with the concept of
G
industrial democracy. The fissures arose as to the method of
finding out the membership. The Commission had before it two
alternative suggestions for ascertaining the membership (i) verification
of membership by registers and (ii) by secret ballot. As there was a
sharp cleavage of opinion, the Commission left the question of adop-
ting one or the other method in a given case to the proposed Indus- H
504 'SUPREME COURT REPORTS [1985) 2 S.C.R.

A trial Relations Commission which was recommended to be set up if
.,fr the recommendations of the Commission were to be accepted. What
is of importance to us is that every one was agreed that where there
t
~·
are multiple unions in an industrial undertaking or an industry, the
union having the largest membership of the workmen must be clothed
I with the status · of recognised union and consequently as the sole
!~

'B bargaining agent. The underlining assumption was that the recognised
union represent all the workmen in the industrial undertaking or in
the industry. n
It may be mentioned in passing that the Bombay Industrial Rela-
tions Act had incorporated provisions for conferring the status of a
recognised union and despite strident criticism of the method of
c ascertaining membership, the system seems to be working well. The
Act went further and developed the concept of approved union on
which powers were conferred for making reference of an industrial
dispute to the relevant authority for adjudication-a power which under
the Central Act is the close preserve of the appropriate Government.
The oft-repeated grievance voiced by those opposed to the concept of
D recognised union entitled to represent all workmen was that such a
status will concentrate so much power in the hands of the recognised
union that it can work to the disadvantage of those not becoming its
members as also those opposed to the political or social philosophy
of the recognised union and would therefore keep away from it. The
chink in the armous appeared when it was found that a workman
E who is questioning his termination of service, largely a personal
punishment and therefore provides a personal cause of action but
who was not a member of the recognised union was sought to be
thrown out of the court by the representative union appearing to get
the petition dismissed on the specious plea that it alone is entitled to
represent workmen. The Legislature immediately became aware of
F the pitfall and remedied the situation by introducing Sec. 2 (A) in the
Industrial Disputes Act, 1947 which provides that a workman, who
is dismissed, discharged or removed from service or whose service is
otherwise ierminated can espouse his own cause without the help of
a recognised union and yet such a dispute would be an industrial dis-
G pute. This very protection is retained in the impugned provision
Sec. 20 (2) (b ). Status to be the sole. bargaining agent as a recognised
union is a hard won battle and need not be permitted to be frittered
away by a sentimental approach that where trade union movement
has idelogical overtones, such a provision would compel workmen
either to become members of a union, whose socio-political philosophy
H is not in tune with his own or suffer isolation as such workman can-
WORKERS UNION v. BALMER LAWRIE co. (Desai, J.) 505

not forge a to I of a trade union or even if they form one, the emplo- A
yer can ignore it with impunity. ls there any substance either in the
contention or the apprenension voiced ? The matter cannot be viewed
from the perspective of same ideloguis but has to be examined in the
large perspective of public interest of peace and harmony in the
industry, healthy industrial relation; and large national interest which
eschews strikes, lock-outs, conflict and confrontation.
B

Having briefly referred the history of the development of trade
unions, let us turn to the challenge in this case. Mr. Daniel Latifi
contended that Sec. 20 unquestionably denies to the workmen who are
not members of a recognised union the fundamental freedom guaranteed
under Art. 19 (I) (a) and (c). It was urged that the provisions of the
Act inheres the pernicious tendency to compel the workmen to join c
the union which bas acquireJ the status of a recognised union even if
followed a socio-economic or socio-political philosophy contrary to the
philosophy of non-members and that such compulsion denies the free-
dom to form associati,111. It was also submitted that the right to form
association would be an empty formality if the association is not in a
position to effectively participate in any proceeding concerning the D
workmen of an industrial undertaking, some of whom have formed a
seperate trade union. It was stated that either all the unions of the
workmen should be treated on par or at any rate in order to safe-
guard the members of non-recognised union against the imposition of
the will of recognised union, they must be free not to be bound by
the action of the rccogni>ed union It was stated that Sec. :o (2) of E
the 1971 Act denies all these safeguards and therefore it must be
declared unconstitutional.

Before the introduction of Sec. 2-A in the Industrial Disputes
Act, 1947 the courts leaned in favour of the view that individual
dispute cannot be comprehended in the expression 'industrial dispute' F
as defined in the Industrial Disputes Act, 1947. Any dispute ·not
espoused by the union for the general benefit of all workmen or a
sizeable segment of them would not be comprehended in the expres-
sion 'industrial dispute' was the courts' view. Often an invidious situ-
ation arose out of this legal conundrum. An individual workman if G
punished by the employer and if he was not a member of the recog-
nised union, the latter was very reluctant to espouse the cause of such
stray workman and the individual workman was without a remedy.
Cases came to light where the recognised union by devious means
compelled the workmen to be its member before it would espouse
their causes. The trade union tyranny was taken note of by the legis- H
,
i
1r:
A
506 SUPREME COURT REPORTS

lature and Sec. 2~A was introduced in the Industrial Disputes Act
1947. by which it was made distinctly clear that the discharge'.
/

[1985} 2 S.C.R.

't d1sm1ssal retrenchment or termination of service of the individual
't workman would be an industrial. dispute notwithstanding that no
other workman or any union of work.man is a party to the dispute.
Sec. 20, sub-sec. 2 while conferring exclusive right on the recognised
8 union to represent workmen in any proceeding under the Industrial
Disputes Act, 1947 simultaneously denying the right to be represen-
ted by any individual workman has taken care to retain the exception
as enacted in Sec. 2 A. This legal position is reiterated in Sec. 20 (2)
(b). Therefore while interpreting Sec. 20 (2) (b) it must be kept in
view that an individual workman, who has his individual dispute
with. the employer arising out of his dismissal, discharge, retrenchment
c or termination of service will not suffer any disadvantage if any
recognised union would not espouse his case and he will be able to
pursue his remedy under the Industrial Disputes Act, 1947. Once this
protection is assured, let us see whether the status to represent
workmen conferred on a recognised union to the exclusion of any
individual workman or one or two workmen and who are not
members of the recognised union would deny to such workmen
D
the fundamental freedom guaranteed under Art. 19 (l) (a) and
19 (l) (c) of the Constitution.
We fail to see how the restriction on the right to appear and
participate in a proceeding under the Industrial Disputes Act, 1947
to a workman who is .not prepared to be represented by the recogni-
E sed union in respect of a dispute not personal to him alone such as
termination of his service denies him the freedom of speech and
expression or to form an association. Conferring the status of recog-
nised union on the union satisfying certain pre-requisites which the
other union is not in a position to satisfy does not deny the right to
form association. In fact the appellant nnion has been registered
F
under the Trade Unions Act and the members have formed their
association without let or hindrance by anyone. Not only that' the
appellant union can communicate with the employer, it is not correct
to say that the disinclination of the workmen to join the recognised
nnion violates the fundamental freedom to form association. It is
G equally not ·correct to say that recognition by an employer is implicit
in the fundamental freedom to form an association. Forming an
association is entirely independent and different from its recognition.
Recognition of a union confers rights, duties and obligations. Non-
conferring of such rights,. duties and obligations on a union other
than the recognised nnion does not put it on an inferior position nor ..>l
H the charge of discrimination can be entertained. The members of a
WORKERS UNION I'. BALMER LAWRIE co. (Desai, J.) 507

non-recognisod association can fully enjoy their fundamental freedom A
of speech and expre:;sion as also to form the association.

The Legislature h"8 in fa;;t taken note of the existing pheno-
menon in trade unions where there would be unions claiming to re-
present workm1n in an und rtaking or !ndustry other than recognised
union. Sec. ~2 of 1971 Act confers some specific rights on such non-
B
recognised uniom, on such being th•, rigt·t to meet and discuss with
the employer the grievances of individual workman. The Legislature
• has made a clear distinction between individual grievance of a work-
man and an individual dispute affecting all or a large number of
workmen. In the case of even an unrecognised union, it enjoys the
statutory right to meet and discuss the grievance of individual work-
man with employer. It also enjoys the statutory right to appear and c
' participate in a domestic or departmc'11tal enquiry in which its member
is involved. This is statutory recognition of an unrecognised union.
The exclusion is partial a'l<l the embargo on such unrecognised union
or individual workman to represent workman is in the large interest
of industry, public interest and national interest. Such a provision
could not be said to be violative of fundamental freeedom guaranteed
under Art. 19 (1) (a) or 19 (1) (c) of the Constitution. D

Having examined the contention on principle, we may now turn

.
""'_... to precedents brought to our notice .

In Raja Kulkarni and Ors. v. State of Bombay('), one of the E
contentions canvassed before the Comtitution Bench was that Sec. 13
of the Bombay Industrial Relations Act, 1946 as it then stood provi-
ded that a union can be registered as a representative union for an
industry in a local area if it has for the whole of the period of three
months next preceding the date of its application, a membership of
not less than 15% of the total number of employees employed in any F
industry in any local area. If the union does not satisfy that condition
and has a membership of not less than 5%, it could be registered as
a qualified union. Rashtriya Mill Mazdoor Sangh was registered as a
representative union while the Mill Mazdoor Sabha was registered as
a qualified union. It was contended on behalf to Mill Mazdoor Sabha
of which the appellants before this Court were the office-bearers that G
the provisions that conferred an exclusive righ' only on the represen-
tative union to represent workmen was violative of fundamental
freedoms guaranted to the members of Mill Mazdoor Sabha

(I) [19541 SCR 384. H
508 SUPREME COURT REPORTS (1985) 2 S.C.R.

A or any other workman who is not a member of the represen-
tative union under Art. 19 \1) (a) and (c) and was also violative
of .Art. 14 inasmuch as the two representatives of workmen were
denied equality before law or the equal protection of laws.
The Constitution Bench repelled the contention observing
that such a provision does not deny either the fundamental
B freedom of speech and expression or the right to form association.
The Court said that it is always open to the workmen who are not
members of the representative union to form their own association or
union and to claim higher percentage of membership so as to dethrone
the representative union and take its place. This decision should have
concluded the matter. Mr. Latifi however, urged that this decision is
of no assistance because it was rendered at a time when sub-sec. (2}
c of Sec. 114 of the Bombay l nd ustrial R~ lations Act, 1946 provided
that where the representative union is a party to a registered agreement
or settlement, submission or award the Provincial Government may
after giving the parties affected an opportunity of being beard by noti-
fication in the Official Gazette direct that such agreeirent, settlement,
subi;nission or award shall be binding upon such other employers and
D employees in such industry or occupation in that local areas as may
be specified in the notification. There was a proviso to sub-sec. (2)
which provided that before giving a direction under sub-sec. (2) the
Provindial .Government may in such cases as it deems fit, make a
reference to the Industrial Court for its opinion. It was urged that
workmen in an industry or in an undertaking, who are not members
E of the representative union would not be bound by a settlement, sub-
mission or award to which representative union alone is a party,
unless the Provincial Government took action under sub-sec. (2) of
Sec. l 14 and there was a further safeguard inasmuch. as before making
such a settlement, submission or award binding on all workmen, a
reference to the Industrial Court for its opinion could be made. It
F was urged that these safeguards are missing inasmuch as Sec. 20 (2)
would/make a settlement or award to which a representative union is
a party binding on all the workmen in to undertaking or the
r
.
industry as the case may be and· therefore the aforementioned
decision can ,be distinguished. We see no merit in this submis-
sion"' This Court did not uphold the vires of the relevant provisions
G
on the ground that there were safeguards for non-members. The
provision was held intra-vires on the broad features of the pro- '
visions that they neither deny the fundamental freedom guaranteed
under Art. 19 (I) (a) nor 19 (I) (c).

H In Ram Prasad Vishwakarma v. The Chairman, Industrial Tribu-
WORKERS UNION v. BALMER LAWRIE co. (Desai, J.) 509:

na/( 1), an industrial dispute arising out of the termination of service A
of the appellant in that case was espoused by the union and which
was reforred for adjudication to the Tribunal. When the matter was
belore the Tribunal, the appellant workman made an application that
he may be permitted to represent his case by his two colleagues and
at any rate not by the Secretary of the union The Tribunal rejected
the application and after an unsuccessful writ petition the matter came B '
to this Court. It was contended that even though the case of the
appellant was espoused by the union, he was entitled to a separate
representation. Repelling the contention, this Court held that any
individual grievance is not comprehended in the expression 'industrial
• dispute" as defined and the dispute would only acquire the character
of an industrial dispute if espoused by the union and therefore, the
workman would not be entitled to a separate representation. The c
. decision turns on the interpretatiou of expression 'industrial dispute
and before the introduction of Sec. 2-A in the Industrial Disputes
Act, 1947. It does not shed anylight on the issue under discussion.

In Oir}a Shankat Ka1hi Ram v. Gujarat Spinning and Weaving
Mills .Ltd.,(2) the right of the representative union to appear in a D
proceeding under the Bombay Industrial Relations Act to the exclu- -
sion of the workmep likely to Ile adversely affected by the decision of
the court came up for Gonsideration. The representative union and
the employer entered into a settlement for grant of bonus to the
workmen and in consideration thereof the representative union agreed
not to press for any compensation for the workmen discharged by the E
employ,ir. Subsequently 376 persons, who had been in the employ-
ment of the company prior to its closure gave notice under Sec. 42
(!) of the Bombay Industrial Relations Act and claimed compensa-
tion for the period of closure. As the parties failed to arrive at a
settlemimt, an application under Sec. 42 (4) was made to the Labour
Court. During the pendency of this application, the representative r
union rnade appearance before the Labour Court and contended that
the application should be dismissed in view of the compromise which
had been arrived at before the Labour Appellate Tribunal. The
Labour Court accepted the contention and dismissed the application.
rn the appeal to the Industrial Court, it was contended that consider-
ing that no individual workman could be permitted to appear in any
proceeding where representative union appears as representative of
' employees, yet if the action of the representative union was malafide,

(I) [1961] 3 S.C.R. 196.
(2) [1962) 2 Supp. S.C.R. 890. H
510 SUPREME COURT REPORTS [1985) 2 S.C.R.
the Labour Court should not have permitted the representative union
, to app~ar and thereby deny the adversely affected workmen to be
represented and then non-suited at the instance of the representa-
tive union, The Industrial Court dismissed the appeal. A writ
petition to the High Court failed and thereafter the matter was
brought to this Court. After an exhaustive review of the various
provisions of the Bombay Industrial Relations Act, this Court held
that bona fides or the mala fides of the representative union can have
nothing to do with the ban imposed upon appearance of any one
other than a representative union in any proceeding under the Bom-
bay' Industrial Relations Act. The decision goes so far as to suggest
that even where the action of the representative union may be such as
would appear to be· disadvantageous to some workmen yet its action
c has to be judged in the light of the fact that it does not tend to cater
of
to the needs a section of the workmen but the workmen represented
by it as a whole. Incident dly it must be pointed out that the question •
of vires was not raised in this case.

The view taken in Girja Shankar's case was affirmed and appro-
ved in Santuram Khudai v. Kimatrai Printers & Processors (P) Ltd.
& Ors.(') wherein this Court observed that the legislature has clothed
the representative union with exclusive right to appear or act
behalf of the employees in any proceeding under the Bombay Industrial
Relations Act and has simultaneously deprived the individual
r>
..
employee'or workman of the right to appear or act in any proceeding
under the Act where representative union enters appearance or acts
as representative union of employees. The question of vires was not """
.. Ii
raised. ,
•
·. Prima 'facie on the arguments urged and decisions examined, we
are satisfied that there is no substance in the challenge that Sec. 20
(2) (b) upon its true construction violates Art. 19 (1) (a) and (c) of
the Constitution. We must however make it clear that we may keep
this question of constitutionality open for a more detailed argument
and in-depth examination because in this case st the fag end of
. arguments, the parties more or less buried the· hatchet and there was
the spirit of give and take to which we would presently advert.

, . The change in the law made by the introduction of Sec. 2-A ~
in. the Industrial Disputes Act, 1947 has been taken note of by the
State Legislature in introducing a safeguard in Sec. 20 (2) (b) in that ~

j H (!) [1978] 2 $.CR. 387.
WORKERS UNION v. BALMER LAWRIE co. (Desai, J.) 511

an individual workman .who has been either dismissed, discharged, A
removed, retrenched or whose services has beeo terminated in any
manner or who is suspended would be on his own entitled to raise
an industr.ial dispute concerning the termination of his service in any
manner and he would be able to pursue his remedy in a proceeding
arising out of the legality or validity of the order of termination of
service. The representative union would not be able to supplant· the B
workman by its appearance and act to the detriment of the workman
Cases are not unknown where an individuol workman whose services
has been t':rminated and who wanted his cause to be espoused by the
union was not only ignored by the union but occasionally t,he power
• of representative union to exclude the workman from the proceeding
was exercised to the disadvantage of the workman by appearing in
the proceeding and after excluding the workman to so get the proceed- c
ings_ disposed of as to be wholly disadvantageous to the workman
·• and the workman was left without a remedy. Care has been taken to
deny such steam rolling power to the representative union and this posi-
tion is further strengthened by the provisions contained in Sec. 22 of
the 1971A1:t which confers certain rights on unrecognised unions more
especially right to meet and discuss with the employer the grievances of D
an individual member relating to his discharge, removal, retrenchment,
termination of service or suspension as also to appear on behalf of its
members employed in the undertaking in any domestic or departmel)-
tal enquiry held by the employer. This is certainly an advance on the
similar provisions of the Bombay Industrial Relations Act.

Sec. 20 (2) (b) is more or less in pari materia with the provisions
of the Bombay Industrial Relations Act, 1946, The provisions
relating to the status, character, powers and obligations of a represen-
tative union as envisaged in the Bombay Industrial Relations Act,
1946 have been extended to cover industries not governed by that Act
11
but by the Industrial Disputes Act, 1947. Where a representative
union acts in exercise of the powers conferred by Sec. 20 (2) it is
obligatory upon it to act in a manner as not discriminate between
its members and other workmen of the undertaking who are not
its membe,rs. However when a settlement is reached in a proceeding
under the Industrial Disputes Act in which a representation union G
has appeared, the same is to be binding on all the workman of the
undertaking. This would mean that neither the representative union
nor the employer can discriminate between members of the represen-
tative uni·on and other workmen who are not members. Both the
benefits, advantages,· disadvantages or liabilities arising out of a
$el!lement in any proceeding under the Industrial Disputes Act to H
512 SUPREME COURT REPORTS · (1985) 2 S.C.R.
A which a representative union is a party, shall be equally applicable to
each workman in the undertaking. There shall not be the slightest
trace of discrimination between members and non-members both as
regards the advantages and also as regards the obligations and
liabilities. Any other view of Sec. 20 (2) (b) would render. it uncons-
titutional and invalid as being violative of Art. 14. Equal treatment
B of members and non-members is implicit in the section and by its
interpretation we only make it explicit.

A serious grievance was vioiced by Mr. Lati!i that by the
impugned Clause l 7 of the Settlement, the non-members are subjected
to compulsory exaction for the benefit of the representative union
with whose philosophy the non-members :ire not in agreement and
c they are made to pay to advance a rival philosophy. It was urged that
this is some-thing like a tax for the propogation of a philosophy which
the members of the appellent union consider harmful or disadvan-
tageous to the workmen in general. Clause 17 of the settlement is
already extracted. After a strike, a settlement was arrived at between
the first respondent employer and the second respondent representa-
D tive union, Clause 17 of which mandated the employer to deduct 15%
of the gross arrears payable under the settlement to each employee as
contribution to the union fund. It is well-known that no deduction
could be made from the wages and salary payable to a workman
governed by the Payment of Wages Act unless authorised by that Act.
A settlement arrived at on consent of parties can however permit a
deduction as it is the outcome of understanding between the parties
even though such deduction may not be authorised or legally permis-
sible under the Payment of Wages Act. •
The contention is that where members who form a union pay
the membership fee and receive the benefits or advantages of being
F members of the union yet, persons who are not members of the
union without their consent were forced to part with their earnings
as if paying a tax which is compulsory. If the same is held
permissible under Sec. 20 (2) (b), either the section will be cons-
titutionally invalid or that part of the settlement benig seve-
G rable would be illegal and invalid qua non-members On the face
of it, the contention appears · to be attractive but anyone who
has some understanding and appreciation of the working of a
trade union would be able to fully appreciate the provision like the
one under discussion. Though unfortunate, it is notorious that in
some cases resorting to strike has by itself become an industry and
H the unions invest in the strike by sustaining niorale of the workmen
WORKERS UNION v. BALMER LAWRIE co. (Desai, J.) 513

when during the strike the employer .would deny wages. Jn a case of A
genuine grievances and forced strike, the workmen unable to stand up
for want of wherewithal or cushions, the trade union may help them
sustain their vigour by some monetary assistance during the period pf
strike. When the strike ends in a settlement or where even without a
strike, beni~fits under a settlement are made retro-active and the
arrears are :required to be paid under the settlement, naturally the
B
union in order to vigourously carry on its activities free from financial
constraints would expect the workmen for whose benefit the dispute
was raised which on settlement may bring in monetary benefits to
reimburse itself. As the members and non-members are entitled to
equal treatment under the settlement both can be asked as a condi-
tion of settlement to part with a portion of the benefits towards union
activities. Such deductions can neither be said to be compulsory c
exaction nor a tax. Therefore such a provision of deduction at a
certain rate as agreed between the parties for payment to the unfon,
the same being with the consent and as part of overall settlement
would neither be improper nor impermissible nor illegal.

Mr. Daniel Latifi, however, urged that in. case of non-members, D
the deduction "ould be without their consent, .and therefore has the
nefarious tendency of making non-members pay for the benefit of a
rival union. Expanding the submission, he urged that the trade-union
movemenl has more or less developed as an appendage of the political
parties and therefore each union is influenced by its own parent
identity and therefore the rival union would certainly be expected to E
have a rival parent identity and yet the rival union not having acqui-
red, the status of a representative union would be compelled by the
settlement to contribute to the coffers of the representative union
funds, which would expended to propagate its own philosophy to the
detriment of the rival union. It was urged that this amounts to com-
pelling an individual to contribute against his will for the propogation F
of the cult of an opponent. Maybe, there may be some harsh truth in
the submission. It can not however be examined from a setarian point
or view. The submission has to be examined in the proper perspective·
of the trade union movement. Shorn of embellishment such a pro-
vision would show that benefits and liabilities both must be shared G
equally. If under a settlement· with the representative union some
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benefits accrue to the workmen, and upon a true interpretation of
sec. 20 (2) (b), it is held all encompassing and therefore binding on
all workmen and, the employer. alike, all the benefits would be
availabfo to the workmen who are not members of the represe11tative
union and wbp may have formed a rival union. If these workmc!l · H

J
514 ' SUPREME COURT REPORTS [1985J 2 s.c.R.
A could not be denied the benefits they wiJuld enjoy an unfair advantage
if from the package deal covered by the settlement, they draw benefits
and abjure liabilities. Heads I win and tails you lose could hardly be
a fair and just approach in settling inter-union disputes. Therefore a
clause like Clause 17 of the Settlement has to be ·understood in the
context of strengthening the trade union movement and to free it
B from financial constraints. Workmen who are members of a union
may pay fee for membership and enjoy the advantage of membership
but if by the action of the representative union all workmen acquire
benefit or monetary advanhge, the members and non-members alike
can be made to make common sacrifice in the larger interest of trade
union movement and to strengthen the trade union which by its acti-
vities acquired the benefits for all workmen. Payment to trade union
c fund in these circumstances can be styled as quid pro quo for benefits
acquired. Therefore, we see nothing objectionable in Clause 17 of the
Settlement which directs the employer to deduct 15% of the gross
arrears payable to each employee under the settlement as contribution
to the trade-union funds. Thereby the workman is not subscribing to
the philosophy of rival union but he is merely paying the price of the
advantage obtained. Another view would make the union members
suffer and the non-members benefit, a situation which must at all
costs be avoided. Therefore clause 17 of the Settlement would not
be invalid despite the lack of consent of the workmen who are
members of the appellant union. The settlement having been made
by the representative union its right to represent all workman would
E imply the consent of the members of the rival union. This is the legal
conseque~ce of ihe right of .the representative union to represept ~ll
work~n and the binding effect of it$ actioQ,

Mrs. Radha De 'souza who also appeared along-with Mr,
Daniel Latifi for the appellant-union urged that the refusal of the
representative union to admit all workmen of the first respondent
industrial undertaking had forced those denied membership to form
the appellant union. President of the second respondent representa-
tive uniott was present in the Court and after consulting him Mr.
M.K. Ratnamurthy, learned counsel stated in the Court that all
wi>tkmen ofthe first respondent industrial undertaking are entitled
and are, eligible to be'the members or the representative union and 1
they will be admitted without lei or hindrance on a proper application
being made as members of tlie second respondent representative
union. Mrs. Radha De'souza stated that all the members of the
' - - ' ,_ »,' - ,,

appell~nt-unfon would as early as possible make the necessary appli-
H . cation and the President of the second respondent representativo
WORKERS UNION v. BALMER LAwRIE co. (Desai, 1.) 'SIS·
union stated that all of them will be admitted without any further
scrutiny. On such membership being granted the appellant-union
would stand dissolved. This would certainly go a long way to streng-
then the trade union movement.

Having considered all the aspects of the matter and keeping in ,.
view the interpretation we have placed on Sec. 20 (2) {b} and Clause
B
17 of the settlement dated June 18, 1984 this appeal must fail and is
dismissed with no order as to costs.

Whatever benefits are yet to be paid· to the members of the
appellant-union under the aforementioned settlement shall be paid
within 2 months from today. c

•

M.L.A. Appeal dismissed.

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