North Brook Jute Co. Ltd. v. Workmen AIR 1960 SC 879

NORTH BROOK JUTE CO. LTD. V. WORKMEN AIR 1960 SC 879

Whether the workmen were entitled to the payment of wages for the period during which the mills were closed?
Whether the functions of the Works Committee under the Industrial Disputes Act, 1947, envisage collective bargaining?

The Works Committee’s role is limited to promoting good relations between the employer and the workmen and resolving minor disputes, not deciding significant changes in employment conditions.
The Works Committee cannot supersede the Unions for the purpose of collective bargaining.

A rationalisation scheme in the mills of the Appellant companies was agreed to by the Works Committee and a notice under Section 9A of the Industrial Disputes Act, 1947, was given to the Unions of their workmen.
The workmen objected to the introduction of the scheme and the dispute was referred to the Tribunal by the government.
During the pendency of the dispute, the management of the mills put the rationalisation scheme into operation.
When the workmen refused to do the additional work placed upon them under the scheme, the mills declared a lockout.
After a few days, work was resumed due to settlement between the Unions and the management.
Thereby, another dispute arose with respect to the payment of wages for the period of lockout, which the workmen contended was an illegal one, which was referred to the Tribunal.
The Tribunal held that the workmen were entitled to wages for the period of lockout.
The Tribunal held that the management’s decision to implement the rationalisation scheme was in violation of Section 33 of the Industrial Disputes Act, 1947, and hence the subsequent closure of mills amounted to illegal lockout.
The management appealed against the award of the Tribunal before the Supreme Court by Special Leave Petition.

The Supreme Court upheld the finding of the Tribunal that Section 33 of the Industrial Disputes Act, 1947, had been contravened by the Appellants.
The Supreme Court affirmed that the closure of mills amounted to illegal lockout, and that the workmen were entitled to pay for the period of lockout.
The apex Court held that the Works Committee’s agreement to the rationalization scheme was not binding on the workmen or their union.
The Supreme Court observed that collective bargaining was outside the functions of the Works Committee under Section 3(b) of the Industrial Disputes Act, 1947.
The Supreme Court found that the rationalisation scheme altered the workmen’s conditions of service to their prejudice by increasing the workload and reducing the number of workers.
The Supreme Court dismissed the appeal and upheld the award of the Tribunal.