Q: In 2004, I took up employment with an interior designing firm registered under the Partnership Act. The firm had four partners. Till 2008 I had no problem. From January 2009, the firm stopped paying my salary. Whenever I requested the partners to release my salary, I would be asked to bear with them for some time since business was down due to the recession. I was promised that my salary, including arrears, would be disbursed soon. I continued to serve the firm in good faith. In November 2009, the partners told me I had been released from service since the partnership had been dissolved. The firm owes me Rs 3 lakh. Is there any way I can recover my dues?
Name withheld
A: You need not worry about dissolution of the firm. Even though it has been dissolved, the partners of a firm are jointly and severally liable for any debt of the firm and continue to be so even after its dissolution. Your arrear salary surely constitutes a debt of the firm, which the partners of the firm are jointly and individually liable to discharge. You should send a demand notice, if possible a lawyer’s notice, to each of the partners claiming your dues. If your dues are still not paid, you will have to file a money suit against the partners claiming a decree jointly and severally against them in the appropriate civil court having territorial jurisdiction in the matter. If you can prove your claim and obtain a decree, you can execute it against the partners.
Q: I am the secretary of one of the workers’ unions of a public limited company. Certain disputes have arisen between the workmen and management regarding the terms and conditions of service. The management has suggested that instead of referring the disputes to the labour court, the union and the management should jointly refer the disputes to arbitration before a retired High Court judge. I have two queries: (i) Does an arbitral award have the same binding force as the decision of a labour court or tribunal? (ii) What are the remedies available to the workmen if the management does not comply with the award?
Saibal Gupta
A: Under Section 10A of the Industrial Disputes Act, the employer and the workmen by written agreement can refer disputes to arbitration of any agreed person. The arbitrator shall investigate the disputes and submit to the appropriate government the arbitration award. Section 17 of the Act requires publication of such award by the government within 30 days of receipt of the award. Under section 17A, the award becomes enforceable 30 days after its publication. Under Section 18, the award shall be binding on the parties who refer the disputes to arbitration. Thus, in your case, the award shall be binding on the management and will have the same force as that of a decision of a labour court or tribunal. Under Section 29 of the Act, any person who commits a breach of the award is punishable with imprisonment for a term which may extend to six months and / or with a fine of upto Rs 200 for each day that he continues to breach the award.
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