CASTOPHENE MFG CO Vs. JANAKI GILLUMAL
LAWS(BOM)-1972-2-11
HIGH COURT OF BOMBAY
Decided on February 10,1972

CASTOPHENE MFG.CO. Appellant
VERSUS
JANAKI GILLUMAL Respondents

JUDGEMENT

K.K.Desai, J. - (1.) By a notice, dated August 10, 1965, the petitioner-company intimated 13 of its workmen that they would be laid off for 4 days from Wednesday the 11th to Saturday, the August 14, 1965. By another notice, dated August 14, 1965, the petitioner company gave notice to other 12 workmen that they would be laid off for 4 days from Monday the 16th to Thursday the August 19, 1965. In both the notices the cause mentioned for the lay off was "on account of the non-availability of raw materials". The employees mentioned in the two notices made applications before the Payment of Wages Authority claiming wages for the period of four days mentioned in respect of each of the employees in the above notices. In connection with these claims, on behalf of the petitioner-company, the main contention was that during the period of "lay off" the applicants were not on duty and the company was accordingly not liable to pay any wages for that period. The Payment of Wages Authority had no jurisdiction as the claims would be the subject-matter of an industrial dispute only. In respect of the claims, the case of the petitioner-company was that the "lay off" was for the reasons mentioned in S. 2(kkk) of the Industrial Disputes Act. The claims made by the applicants were, therefore, covered by what is described as "compensation for lay off" in S. 25C of that Act read with S. 25A of that Act. The provisions of that exempted industrial establishments in which more than 50 persons were not employed from any liability to pay compensation for "lay off" (period). The petitioner-company admittedly was not employing more than 50 persons in its establishment. The petitioner-company was in law not liable to pay any amount whatsoever. The claim of the applicants should, therefore, be dismissed. The applications for wages were dismissed by the payment of Wages Authority by a common judgment and order, dated April 13, 1966. Diverse appeals were filed by each of the different applicants against the dismissal of their applications. In this petition we are only concerned with Appeal No. 98 of 1966, which was instituted by the respondent No. 1 in this petition before the Court of Small Causes as an appellate authority prescribed under the Payment of Wages Act. By the appellate judgment and order dated September 13, 1968, Mr. S. D. Patil, Judge of the Court of Small Causes, allowed the appeal of respondent No. 1 and directed the petitioner company to pay the amount determined as arrears of wages for the period of 4 days mentioned in the application of the first respondent. The learned Judge held in favour of the first respondent that : "........... In my view S. 2(kkk) of the Industrial Disputes Act does not vest any right in the employer to lay off the worker, but it simply defines lay off .... there cannot be any inherent right in the employer owning an establishment having less than 50 workers, to lay off his worker ..." He relied on the observations of the High Court of Allahabad in the case of Kanhaiya Lal Gupta v. Ajeet Kumar, [1967 - II L.L.J. 761]. He, therefore, held the Payment of wages Authority had jurisdiction to decide the claim made by the first respondent and reversed the finding of the authority in that connection, and granted the application, for wages.
(2.) On behalf of the petitioner-company Mr. Ramaswami has submitted that the above findings of the appellate Judge are contrary to the scheme relating to the right to compensation for "lay off" as fixed by S. 25C of the Act. In his submission S. 25C was clear in its provision that an employer in whose establishment more than 50 persons were not employed was not liable to pay compensation for "lay off" at any stage. He particularly relied upon the provisions of paragraph (2) of S. 25J and submitted that awarding of compensation in respect of "lay off" periods must be only in accordance with the provisions in S. 25C and that outside of that provision an employer was not fixed with any liability to pay any compensation for "lay off". He submitted that in every situation mentioned in S. 2(kkk) suspension of services of an employee must be held to be "lay off". The right to lay off an industrial employee need not arise from out of any standing order or any other statutory provision or contract. There was accordingly no justification in the findings made by the appellate authority. In support of these submissions, he relied upon the observations of S. T. Desai and Mudholkar, JJ., in the case of K. T. Rolling Mills v. Meher, 64 Bom.L.R. 645. He also relied on the observations of Chagla, C.J., in the matter of Special Civil Application No. 3051 of 1957, decided on January 16, 1958. In reply, Mr. Menon submitted with certain emphasis that unless and until the power to "lay off" was shown to exist in the standing orders or in the contract between the parties or any statute an employer cannot have any right to suspend his employee from service. As was evident from the provisions in S. 25C of the Act, to the petitioner-company which was employing less than 50 employees, the scheme of "lay off" and compensation, therefore, was not applicable. The petitioner-company was accordingly not entitled to lay off its employees at any time. What the petitioner-company called "lay off" was really suspension of the services of the first respondent. Under the law of contract there was no right of suspending services of an employee. In respect of the period of suspension of service in accordance with the contract of service the first respondent was entitled to payment of wages. In support of the above submission, he relied on the observations of the Supreme Court in the case of Workmen of Dewan Tea Estate v. Their Management, [1964 - I L.L.J. 358]; A.I.R. 1964 S.C. 1458. He also relied upon the observation of the High Court of Allahabad in the case of Kanhaiya Lal Gupta v. Ajeet Kumar, [1967 - II L.L.J. 761]. He therefore, submitted that the Payment of Wages Authority had jurisdiction to decide the claim made by the 1st respondent and (sic) reversed the finding of the authority in that connection.
(3.) In connection with these rival submissions, it is first necessary to notice the relevant provisions in S. 2(kkk), S. 25A, S. 25C and 25J of the Act which run as follows : "2(kkk). 'Lay off' (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or for any other reason to give employment to a workman whose name is borne on the muster rolls of stocks or the breakdown of machinery or for any other reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched." "25A. (1) s 25C to 25E inclusive shall not apply - (a) to industrial establishments in which less than fifty workmen on an average per working day have been employed in the preceding calendar month; or (b) to industrial establishments which are of a seasonal character or in which work is performed only intermittently. (2) ............................" "25C. Right of workmen laid off for compensation. - Whenever a workman ... whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid off, whether continuously or intermittently, he shall be paid by the employer for all days during which he is so laid off, ........ compensation ....." "25J. (1) The provisions of this chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law (including standing orders) made under the Industrial Employment (Standing Orders) Act, 1946 : Provided ........ (2) For the removal of doubts, it is hereby declared ...... the rights and liabilities of employers and workmen in so far as they relate to lay off and retrenchment shall be determined in accordance with the provisions of this chapter".;


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