1990 PLC 686

WORKERS UNION C.BA. (REGD.), SHAKARGANJ MILLS, JHANG vs SHAKARGANJ

Citation1990 PLC 686

CourtLabour Appellate Tribunal

Judge(s)Sardar Muhammad Abdul Ghafoor Khan Lodhi

ResultAppeal disposed of

AI Summary — generated from this judgment; read the full text below and verify before relying on it.

This appeal arises from an order passed by the Punjab Labour Court accepting a grievance petition under section 34 of the Industrial Relations Ordinance, 1969, which challenged a fresh demand notice involving financial implications issued by the appellant union. The core legal question was whether a fresh demand notice could be legally served and negotiated without prior service of a termination notice under section 40(2) of the Industrial Relations Ordinance, 1969, while a previous settlement had expired by efflux of time. The Labour Appellate Tribunal held that upon the expiry of the agreed period, the settlement comes to an end, and a subsequent demand notice itself serves the purpose of a termination notice, making the demands negotiable. The key principle laid down is that the expiry of a settlement's fixed period terminates the settlement, and a fresh demand notice issued thereafter is legally valid and negotiable even in the absence of a formal prior notice of termination.

Questions settled in this judgment

Does a settlement continue indefinitely after the expiry of the period for which it was made?
Can a fresh demand notice involving financial implications be served without a prior notice terminating the previous settlement under section 40(2) of the Industrial Relations Ordinance, 1969?
Does a demand notice served after the expiry of the period fixed in a settlement serve the purpose of a termination notice?

Laws & provisions referred

Section 34, Industrial Relations Ordinance, 1969
Section 40(2), Industrial Relations Ordinance, 1969

industrial relationsdemand noticesettlementtermination of settlementlabour disputecollective bargaining agent

This is an appeal emerging from the order dated 2-4-1989 recorded by the learned Presiding Officer, Punjab Labour Court No, 5, Sargodha Camp at Faisalabad, whereby the grievance petition brought by the respondent under section 34 of the Industrial Relations Ordinance, 1969, wherein fresh demand notice involving financial implications given by the appellant union was challenged, was accepted.

2. A settlement was arrived at between the parties on 18-4-1988, wherein the period for which the settlement was to remain effective was fixed. On 1-3-1989 a fresh demand notice was served by the appellant upon the respondent involving financial implications. The parties were negotiating on the demand notice but before some decision could be arrived at, the respondent challenged it under section 34 of the Industrial Relations Ordinance, 1969. The ground on which the demand notice was challenged was that since no notice as required by section 40(2) of the Industrial Relations Ordinance, 1969, was served by the appellant terminating the previous settlement, the settlement existed and fresh demand notice could not be legally given. On the expiry of the period of settlement agreed to between the parties, the settlement comes to an end but the benefits derived from the settlement continue till the parties enter into negotiations and reach a conclusion.

But so far as the settlement itself is concerned, it expires on the date on which the period for which it was made comes to an end. Although no notice was served by the appellant, yet notice was served afterwards by the respondent and the parties are under negotiations. The other thing is that in cases where service of notice to terminate a settlement is necessary, the demand notice, if it is served after the expiry of the period fixed in settlement serves the purpose of such a notice and the demand becomes negotiable. So the demand notice served by the appellant was not illegal since it was given after the expiry of the period of settlement agreed to between the parties. The demand notice, therefore, can be negotiated. The appeal is disposed of accordingly.

Cited by 4 cases