STATE OF TAMIL NADU Vs. NELLAI COTTON MILLS LIMITED
LAWS(SC)-1990-3-56
SUPREME COURT OF INDIA (FROM: MADRAS)
Decided on March 20,1990

STATE OF TAMIL NADU Appellant
VERSUS
Nellai Cotton Mills Limited Respondents


Cited Judgements :-

HINDALCO INDUSTRIES LTD VS. SHIV NARAYAN SINGH [LAWS(ALL)-2007-4-376] [REFERRED TO]
BINNY LIMITED VS. INDUSTRIAL TRIBUNAL [LAWS(KAR)-1995-7-51] [REFERRED TO]
Superintending Engineer VS. Labour Inspector [LAWS(MAD)-2003-12-189] [REFERRED TO]
HINDUSTAN PETROLEUME CORPORATION LTD VS. PRESIDING OFFICER CENTRAL GOVERNMENT LABOUR COURT CUM INDUSTRIAL TRIBUNAL [LAWS(MAD)-2008-7-370] [REFERRED TO]
MANAGEMENT OF TAMIL NADU CIVIL SUPPLIES CORPORATION LTD VS. INSPECTOR OF LABOUR [AUTHORITY UNDER THE INDUSTRIAL ESTABLISHMENTS [CONFERMENT OF PERMANENT STATUS TO WORKMEN] [LAWS(MAD)-2008-7-609] [REFERRED TO]
MANAGING DIRECTOR TAMIL NADU MEDICAL SERVICES CORPORATION LTD VS. TAMIL NADU MEDICAL SERVICES CORPORATION EMPLOYEES WELFARE UNION [LAWS(MAD)-2009-12-593] [REFFERED TO.]
SUPREME COURT ADVOCATES ON RECORD ASSOCIATION S P GUPTA VS. UNION OF INDIA [LAWS(SC)-1993-10-49] [CITED]
DUNGERBHAI MEGHABHAI VS. ARBUDA MILLS LIMITED [LAWS(GJH)-1995-2-66] [REFERRED TO]
MAMUNDIRAJ N VS. BHARAT HEAVY ELECTRICALS LIMITED TRICHY [LAWS(MAD)-1997-11-120] [REFERRED TO]
M VAIRAMUTHU VS. REGIONAL LABOUR COMMISSIONER [LAWS(MAD)-2010-10-79] [REFERRED TO]
MANAGEMENT, HOTEL TAMIL NADU VS. C. ATHIRSTABOOPATHY [LAWS(MAD)-2014-7-48] [REFERRED TO]
P. PARAMASIVAN AND ORS. VS. THE MANAGEMENT OF MADURAI CORPORATION AND ORS. [LAWS(MAD)-2015-9-31] [REFERRED TO]
M. RAJAN AND ORS. VS. OIL AND NATURAL GAS AND ORS. [LAWS(MAD)-2015-11-110] [REFERRED TO]
THE CHAIRMAN,TAMIL NADU ELECTRICITY BOARD VS. THE INSPECTOR OF LABOUR KARUR [LAWS(MAD)-2016-11-47] [REFERRED TO]
G GIRIDHAR PRABHU VS. AGRICULTURAL PRODUCE MARKET COMMITTEE [LAWS(SC)-2001-3-65] [REFERRED]
TATA TEA LIMITED VS. STATE OF TAMIL NADU [LAWS(MAD)-2010-1-367] [REFERRED TO]
OIL AND NATURAL GAS CORPORATION LIMITED VS. PETROLEUM COAL LABOUR UNION [LAWS(MAD)-2011-1-117] [REFERRED TO]
SYNDICATE BANK VS. PRESIDING OFFICER CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL [LAWS(MAD)-2011-3-210] [REFERRED TO]
R LAKSHMI VS. CHIEF ENGINEER [LAWS(MAD)-2012-8-39] [REFERRED TO]
VIJAYA BANK WORKERS ORGANISATION VS. CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL-CUM-LABOUR COURT, MANAGEMENT BY VIJAYA BANK [LAWS(MAD)-2011-9-434] [REFERRED]
MANAGEMENT OF MADRAS ALUMINIUM COMPANY LIMITED VS. DEPUTY CHIEF INSPECTOR OF FACTORIES [LAWS(MAD)-2018-1-341] [REFERRED TO]
THE MANAGEMENT VS. LABOUR INSPECTOR AUTHORITY UNDER THE TAMIL NADU INDUSTRIAL ESTABLISHMENTS [LAWS(MAD)-2018-2-352] [REFERRED TO]
THE SENIOR REGIONAL MANAGER, TAMIL NADU CIVIL SUPPLIES CORPORATION LTD. VS. THE JOINT COMMISSIONER OF LABOUR, TRICHY AND OTHERS [LAWS(MAD)-2018-6-840] [REFERRED TO]
MANAGING DIRECTOR VS. SHANMUGAM [LAWS(MAD)-2019-9-380] [REFERRED TO]


JUDGEMENT

- (1.)The Tamil Nadu government passed an Act called the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 ("the Act") which came into force on 1/01/1982. The Act was to confer permanent status to workmen in various industrial establishments who have put in continuous service for a period of 480 days in a period of 24 calendar months in an industrial establishment. S. 3 is a crucial provision in the Act. It reads as under:
"S.3. Conferment of permanent status to workmen. (1) Notwithstanding anything contained in any law for the time being in force every workman who is in continuous service for a period of four hundred and eighty days in a period of twenty-four calendar months in an industrial establishment shall be made permanent.

(2) A workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or 520 authorised leave or an accident or a strike, which is not illegal, or a lockout or on account of non-employment or discharge of such workman for a period which does not exceed three months and during which period a substitute has been employed in his place by the employer, or a cessation of work which is not due to any fault on the part of the workman.

Explanation: For the purposes of this S. the number of lays on which a workman has worked in an industrial establishment shall include the days on which-

(I) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (Central Act 20 of 1946) or under any other laws applicable to the industrial establishment;

(Ii) he has been on leave with full wages, earned in the previous years;

(Iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(Iv) in the case of a female, she has been on maternity leave, so, however, that the total period of such maternity leave does not exceed twelve weeks. "

(2.)The constitutional validity of the Act was challenged in a batch of writ petitions by various industrial establishments before the High court of Madras. The High court has allowed the writ petitions in part holding, inter alia, as follows:
"The Explanation to S. 3 is incapable of enforcement and must therefore be held to be redundant.

(2) The provisions of S. 3 (2) of the Act are valid except that the clause 'or on account of non-employment or discharge of such workman for a period which does not exceed three months and during which period a substitute has been employed in his place by the employer is void on the ground that it amounts to an unreasonable restriction on the right of the employer.

(3) An apprentice or a badly worker could not be included in the 'workman referred to in S. 3 (1) and (2) of the Act, and they will, therefore, be not entitled to the benefit of S. 3.

(4) The Act will not supersede a settlement between the workers and the employer insofar as it deals with the subject of conferment of permanent status to workmen.

(5) The Act cannot be held to be retrospective in character. "

(3.)On 7/07/1985, the State of Tamil Nadu preferred this appeal challenging the judgment of the High court. During the pendency of the appeal, the State also amended the principal Act in order to obviate the practical difficulties in implementing the provisions of the Act by reason of the judgment of the High court.
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