CEAT LTD. versus MURPHY INDIA EMPLOYEES UNION

Citation: [2006] SUPP. 1 S.C.R. 295 · Decided: 25-04-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

CEATLTD. 
A 
v. 
MURPHY INDIA EMPLOYEES UNION 
APRIL 25, 2006 
[S.B. SINHA AND P.K. BALASUBRAMANY AN, JJ.] 
B 
c 
Industrial Disputes Act,~ 1947-Section 18-Settlement conferring 
benefits on workmen who were permanent on a specific date-Workmen 
appointed thereafter on temporary basis put on probation by an order given 
retrospective effect from date of appointment-Applicability of settlement to 
such workmen-Held: Settlement had provisions for appointment of 
apprentices, payment of stipend, probation, confirmation and fitment of 
employees which were indicative that it covered not only those who were 
permanent workmen as on the date specified in the settlement and had 
ceased to be workmen but also those who were to be appointed at a later D 
date-Settlement given wider meaning keeping in view its purpose, source 
of dispute and context in which it was made-On successful completion of 
period of probation, impugned workmen acquired status of permanent 
workmen and were entitled to all benefits and privileges of the settlement. 
Bombay Shops and Commercial Establishment Act 1948-Section 38-
E 
B-App/icability of Industrial Employment (Standing Orders) Act, 1946-
Number of workmen in establishment being lower than 50 which was minimum 
stipulated in Section 38-B-Held: This was insignificant since Certified 
Standing Orders framed under Act of 1946 formed part of a settlement 
between workers and management. 
p 
Appellant merged with a company which employed the respondent-
workmen, and consequent thereto issued fresh appointment letters to 
respondents on 1-2-1991. Although the appointments were on temporary basis, 
respondents were put on probation by an order dated 1-5-1991 with effect 
from 1-2-1991. However, on 29-4-1991, a Memorandum of Settlement had G 
been entered into between the appellant and the respondents for resolution 
of disputes arising out of a Charter of Demands of latter. Respondents filed 
a complaint about violation of the terms of the said settlement alleging unfair 
labour practices against appellant. A prayer for payment of same wages as 
295 
H 
296 
SUPREME COURT REPORTS [2006) SUPP. I S.C.R. 
A were paid to the permanent workmen of the company as also a declaration 
that the said workmen had become permanent workmen of the company from 
their respective dates of joining or with effect from 1-2-1991, was also made. 
Appellant contested the complaint. Industrial Court adjudicating the dispute 
in its award held that in terms of the settlement respondent became permanent 
workmen on the expiry of the period of probation of three months, and were 
B thus entitled to the other benefits envisaged thereunder. High Court rejected 
the challenge to the legality of the said award. Hence the present appeal. 
Appellant contended that (i) the benefits of the settlement were given 
only to the permanent workmen who were appointed on 1-2-1991, and these 
C could not be extended to those who were appointed on a temporary basis and/ 
or on probation on that date; (ii) the number of workmen having fallen to less 
than 50, the provisions of Model Standing Orders framed nnder the Industrial 
Employment (Standing Orders) Act 1946 were not applicable. 
Respondents contended that (i) the settlement must be read in its entirety 
D and so read it would also apply to workmen who joined the services on 1-2-
1991; (ii) applicability of the provisions of the Model Standing Orders framed 
under the 1946 Act having been made a part of the settlement, it was 
immaterial as to whether status of the permanent workmen was to be given to 
the respondents from expiry of three months or six months from the date of 
their joining service. 
E 
F 
Dismissing the appeal, the Court 
HELD 1.1. The settlement covers all terms and conditions of service of 
various categories of permanent workmen; and was to apply to all permanent 
workmen who were on the rolls of the company as on 31-12-1990.1307-E, Fl 
1.2. The settlement not only provides for appointment of apprentices, 
who would be governed by the provisions of Apprentices Act, 1961 but also 
for the eligibility criteria therefor in terms whereof the first preference was 
to be given to the sons and daughters of the employees and ex-employees of 
G the company, who had either retired from service or accepted Voluntary 
Retirement Scheme, or expired during service. The eligibility criteria also 
provides that the applicant should complete 18 years of age as on the date of 
applica

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