A settlement made with a majority union before the conciliation officer will be binding upon the minority union. Where the minority union raised certain demands and no settlement could be arrived at before the conciliation officer, a fresh charter of demands was raised by the majority union and the management accepted the same before the conciliation officer, it was held that the settlement would be binding upon the minority union.

Since a settlement in a very nature of things involves give and take and the settlement which was arrived at through the good offices of the Deputy Labour Commissioner-cum-Conciliation Officer wherein some of the demands made by the workmen during the conciliation were accepted by the management and remaining were given up by workmen, the high court while relying upon the case of Bata Shoe Co. (P) Ltd. Vs. D.N.Ganguli, AIR 1961 SC 1185 has held that there was no scope or justification to hold that the settlement arrived at during the course of conciliation proceedings under section 12 of the Industrial Disputes Act was unfair.1 In another case where a union known as Britannia Biscuit Company Ltd. Employees Union had 750 out of 900 workmen on roll made a settlement with the management, it was held that it was binding on all the workmen unless the same was vitiated with mala fide collusion and malpractices.

2. However, where in a settlement there was no evidence to show that the Union which had entered into the subsequent settlement could represent the workers who raised the dispute, or that they were parties to the dispute, the settlement was held to be not binding.3 The Supreme Court has held that a settlement between the management and the only union will be binding even upon those employees who are not the members of the union.

1. Remington Rand Karmachari Union (Regd.) vs. State of Haryana and Another, 1984I SLR 376.

2. Britannia Biscuit Co. Ltd. Employees Union vs. Asstt. Labour Commissioner (Headquarter), Madras & Others, 1984 I LLJ 349.

3. Security Paper Mills, Hoshangabad vs. R.S. Sharma & Others, 1986 I LLN 678.

4. Ram Pukar Singh & Others vs. Heavy Engg. Corporation, 1995 LLR 201 (SC).

Can every employee claim gratuity under the Act?
--Som Nath, Faridabad

Not necessarily, An employee should be regular one. Where a person is called whenever there is work and paid wages for the work done, he will not be an `employee' within the meaning of Section 2(e) of the Payment of Gratuity Act. It has also been held that a person who is not an employee engaged by way of contract of employment to work continuously from day-to-day but is offered work whenever available and paid wages, he will not be treated as an `employee'.

Velukutty Achhary vs. Harrisons, Malayalam Ltd., 1992 II CLR 989 (Ker. HC).

In addition to regular employees we are engaging some persons on piece rate basis. Do suchpersons have status of employees to be covered under the Employees' Provident Fund Act?
--R.K. Sharma, Bangalore

Yes. Here is a case of a Charitable Trust founded for the uplift of women. The trust supplied raw materials to individual women who came to the Trust and they prepared eatables to be sold by the Trust. The women were paid on a piece-rate basis. The question arose as to whether the Trust was covered by the Employees' P.F. and Miscellaneous Provisions Act. It was held that the individual women who came to the premises of the establishment manufacture eatables out of the raw materials supplied to them by the Trust, and paid on a piece-rate basis, were nothing but workers and the authorities were more than justified in covering the establishment under the provisions of the Act.

It was further held that the device of obliging the women to make an application to become associate members before they were allowed to work on wages at piece-rate could change their status as `employees'. On thebasis of admitted facts and circumstances, there was hardly any doubt that the relationship between the so-called associate members and the Mandal was that of employee and the employer and the authorities took a proper decision to bring them under the provisions of the Act.

Shree Kutchi Visha Oshwal Mahila Mandal vs. Union of India & Others, 1993 I LLJ 77 (Bom. HC) : 1992 LLR 584.

Our industrial establishment is covered by the Employees' Provident Funds Act. We are facing heavy recession resulting into financial crunch to such an extent that we have not been able to pay the wages to our officers and workers. Is an employer laible to make the payment of provident fund contribution when the wages to the employees are not paid?
--Parminder Singh, Chandigarh

It is a well established principle that the initial obligation to pay Employees' Provident Fund contributions is on the employer irrespective of the fact whether wages are paid or not to the employees. Even in cases of a lock-out, strikes,etc. failure to make contributions resulting in default will have to be visited by damages under section 14B of the Employees' Provident Fund and Pension Act, 1952. However, the authority can consider the mitigation of damages as regard to attendant circumstances resulting in delay.

Keeping in view the material on record including strike and sit in dharna etc. by the workers during the relevant period, the Bombay high court quashed the order of the E.P.F. authorities in levying damages for late deposit of contributions.

1. Calicut Modern Spinning & Weaving Mills Ltd. vs. regional Provident Fund Commissioner, 1982 (45) FLR 92 : 1982 I LLN 360 : 1982 Lab. IC 1422: 1982 I Lab. LN 360 : 1982 I ILR 698 : 1982 Lab.LJ 440 (Ker. HC).

2. Vegetables Vitamin Co. Ltd. vs. Regional Provident Fund Commissioner, Maharashtra, Goa & Others, 1995 LLR 244 (Bom. HC).

We are covered by ESI Act. We are engaging contractors and do not have any `privity of contract' with the workers as engaged by the contractor. Whetheremployees engaged by a contractor will be covered by ESI?
--M.L. Johri, Mumbai

The employees as engaged by a contractor in an establishment covered under ESI will have to be enrolled as members of ESI. The definition of an `employee' under the ESI Act expressly provides that an employee will mean any person employed for wages in or in connection with the work of a factory or an establishment to which this Act applies and who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent.

Therefore, the persons employed in supervision work in the godowns would be employees. If the labourers are employed by or through an immediate employer on the premises of the factory against payment of wages in or in connection with the work of the factory and as such answer the description of `employee' as defined under the ESI Act.

1 However, the Supreme Court in its majority judgment has held that the employeesengaged by the immediate employer (contractor) will not be liable to be covered under ESI Act. In this case, the emphasis was held, on the expression supervision.

2 The ESI authorities have their reservation so far as small contractors are concerned.

1. P.D. Vidavatak and Others vs. ESIC, 1971 Lab. IC 874.

2. C.E.S.E. Limited Etc. vs. Subhash Chander Bose and Others, 1992 LLR 81.