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Vikram Tamaskar and ors. Vs. Steel Authority of India Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMadhya Pradesh High Court
Decided On
Judge
Reported in(1982)IILLJ84MP
AppellantVikram Tamaskar and ors.
RespondentSteel Authority of India Ltd. and ors.
Cases ReferredSuraj Narain v. State of M.P.
Excerpt:
.....scheme gets automatically lapsed. - 2. the respondents support the deduction of the petitioners' salaries on the principle of 'no work no pay'.the respondents' case is that though the petitioners attended the site or place of work during the said periods and signed the attendance register, they did not work at all in spite of various warnings with a view to coerce the respondents, to agree to certain demands like a trade union and this conduct of the petitioners delayed the commissioning and completion of various units under the 4.0 mt expansion scheme of the plant. the respondents' case, as stated above, is that the petitioners except for signing the attendance register, did not work at all in a concerted action like a trade union for coercing the respondents to accede to their..........by 'working to rule' on interpreting lawful orders in an unreasonable way, both amount to breach of contract. these general principles are admirably stated in the following passages extracted from the halsbury's laws of england (4th edition, vol. 16):554. performance of duty as condition precedent to remuneration: when the contract of employment is an entire contract, providing for payment on the completion of a definite period of service or of a definite piece of work, it is a condition precedent to the recovery of any remuneration in respect of it that the service or duty shall be completely performed, unless (1) the employer so alters the contract as to entitle the employee to regard it as at an end, in which case the whole sum payable under the contract becomes due; or (2).....
Judgment:

G.P. Singh, C.J.

1. The petitioners are all executives employed in the Bhilai Steel plant by the Steel Authority of India Ltd., a Government company registred under the Companies Act, 1956. The petitioners, grievance in this petition under Article 226 of the Constitution is that the respondents have wrongly deducted their salaries for the periods from 3rd August to 31st August, 1981 and 1st September to 11th September, 1981. The petitioners pray for issuance of a writ of mandamus to the respondents for payment of their salaries for the aforesaid periods. Notice for admission of this petition was issued to the respondents in answer to which a return was filed and the petition was heard on merits.

2. The respondents support the deduction of the petitioners' salaries on the principle of 'no work no pay'. The respondents' case is that though the petitioners attended the site or place of work during the said periods and signed the attendance register, they did not work at all in spite of various warnings with a view to coerce the respondents, to agree to certain demands like a trade union and this conduct of the petitioners delayed the commissioning and completion of various units under the 4.0 MT Expansion Scheme of the Plant.

3. There is a sharp dispute on the question of fact whether the petitioners did the normal work or not. The petitioners' averments in the petition are that they not only attended the place of work and signed the attendance register but also did the normal work and that the slowing down of the progress of the erection of the Plate Mill was for the reason that the electrical overhead trolly cranes were defective. The respondents' case, as stated above, is that the petitioners except for signing the attendance register, did not work at all in a concerted action like a trade union for coercing the respondents to accede to their demands.

4. At the outset, we pointed out to the learned Counsel for the petitioners that the dispute on the question of fact whether the petitioners worked or not, could not conveniently be decided in the writ petition and that the petitioners remedy lay in filing a civil suit for recovery of their salaries. Learned Counsel, however submitted that even assuming that the petitioners did not work and simply attended the place of work and signed the attendance register, they were still entiled to their full salaries and all that the respondents could do was take disciplinary action against them under the Conduct, Discipline and Appeal Rules, 1977. Learned Counsel also submitted that as this argument can be disposed of without going into any question of fact, we should not throw out the petition simply on the ground that there are disputed questions of fact which cannot be conveniently tried in the writ petition. In view of this submission, we will only examine the legal position whether, if the petitioners only attended the site or place of work but did not work at all, the respondents were entitled to withhold the payment of salaries without resorting to any disciplinary action under the said rules

5. The Bhilai Steel Plant was first a unit of the Hindustan Steel Limited, a Government company registered under the Companies Apt. This company made the Conduct, Discipline and Appeal Rules, 1977 which came into force on 15th December, 1977 These rules were applicable to the executives of the Bhilai Steel Plant. The plant was itself later registered as a company bearing the name Bhilai Spat Limited. By the Public Sector Iron and Steel Companies (Restructuring and Miscellaneous Provisions) Act, 1978, the Bhilai Spat Limited stood dissolved and the Bhilai Steel Plant stood transferred to and vested in the Steel, Authority of India Ltd., also a Government company formed and registered under the Companies Act. Section 14 of the aforesaid Act continues the employment of the officers and other employees of the dissolved company under the Steel Authority of India Ltd., upon the same terms and conditions of service. The Conduct, Discipline and Appeal Rules referred to above thus continue to apply to the petitioners.

6. The petitioners are employed on monthly salaries They are confirmed employees. They are not industrial workers governed by industrial law. Their salaries are paid on the first of each month. Beyond this, there are no other special terms and conditions of service which may be relevant, except the application of the Conduct, Discipline and Appeal Rules to which reference has already been made.

7. The first question that we have to consider is whether under the general law an employer is entitled to deduct the salary of an employer for any period he did not work at all even though he was not absent. If this question is answered in the affirmative, the next question is whether this right of the employer is taken away by the Conduct, Discipline and Appeal Rules.

8. Under the general law, the performance of service in accordance with the contract of employment is a condition precedent for earning the remuneration or salary. If the contract is indivisible providing for payment on the campletion of a definite period of service or a definite piece of work then no part of the remuneration can be recovered unless the service is completely performed The employee may, however, be entitled to remuneration for the period he actually worked when there is a usage to that effect, or where there is a fresh or implied agreement to that effect, or where the contract has been frustrated, or where it has been so altered by the employer that the employee is entitled to regard it as at an end. If an employee absents from work without just cause or excuse, he commits a breach of the terms of the contract. A refusal to obey a lawful order a refusal to serve the employer faithfully by 'working to rule' on interpreting lawful orders in an unreasonable way, both amount to breach of contract. These general principles are admirably stated in the following passages extracted from the Halsbury's Laws of England (4th edition, Vol. 16):

554. Performance of duty as condition precedent to remuneration: When the contract of employment is an entire contract, providing for payment on the completion of a definite period of service or of a definite piece of work, it is a condition precedent to the recovery of any remuneration in respect of it that the service or duty shall be completely performed, unless (1) the employer so alters the contract as to entitle the employee to regard it as at an end, in which case the whole sum payable under the contract becomes due; or (2) there is a usage that the employee is entitled to remuneration in proportion to the time actually served; or (3) it can be inferred from the circumstances that there has been a fresh agreement between the parties that payment shall be made for service actually rendered under the original contract, or (4) the contract has been frustrated, in which case the employee is entitled to recover from his employer such sum, not exceeding the value of the benefit to the employer of anything done by the employee, as the Court considers just.

579. What amounts to a breach of contract.-There is a breach of the contract of employment whenever the employee absents himself from work without just cause or excuse or leaves his employment without just cause or excuse before the expiration of the agreed term, or, when no term has been fixed for the duration of the contract, without giving duo notice. There is also a breach where the employee wrongfully repudiates the contract, refusing to be bound by it in the ' future; it is immaterial whether his repudiation is express or implied from his conduct, provided his intention to repudiate it is clear.

A refusal to obey a lawful order or a refusal to serve the employer faith fully, by 'working to rule' or interpreting lawful orders in an unreasonable way, both amount to breach of contract.

9. Performance of duty by the employee being a condition precedent for mining remuneration, the remuneration does not become due if there is a substantial breach of the contract on the part of the employee. A breach of contract by the employee also entitles the employer to claim damages, but does not authorise him to forfeit remuneration which has already been earned, i.e., which has become due before the breach, unless there is an express term to that effect [see Halsbury's Laws of England, 4th edition, vol. 16, paragraphs 581 and 583]. The legal position that an employee forfeits remuneration not only when he absents from duty but also-when he wilfully does not discharge his duty, is clearly brought out from the decision of the Court of Appeal ' in Secretary of State v. ASLEF [1972] 2 All E.R. 413. In that case the employees had resorted to 'work to rule'. In that context Lord Denning M.R., observed as follows:

Now I quite agree that a man is not bound positively to do more for his employer than his contract requires. He can withdraw his goodwill if he pleases. But what he must not do is wilfully to obstruct the employer as he goes about his business. That is plainly the case where a man is employed singly by a single employer. Take a homely instance, which I put in the course of agrument. Suppose I employ a man to drive me to the station. I know there is sufficient time, so that I do not tell him to hurry. He drives me at a slower speed than he need, with the deliberate object of making me lose the train, and I do lose it. He may say that he has performed the letter of the contract; he has driven me to the station; but he has wilfully made me lose the train, and that is a breach of contract beyond all doubt. And what is more, he is not entitled to be paid for the journey He has broken the contract in a way that goes to the very root of the consideration; so he can recover nothing.

So much for the case when a man is employed singly. It is equally the case when he is employed 'as one of many' to work in an undertaking which needs the service of all. If he, with the others, takes steps wilfully to disrupt the undertaking, to produce chaos so that it will not run as it should, then each one who is a party to those steps is guilty of breach of his contract. It is no answer for any one of them to say I am only obeying the rule book', or 'I am not bound to do more than a 40 hour week ' That would be all very well if done in good faith without any wilful disruption of services; but what makes it, wrong is the object with which it is done. There are many branches of our law when an act which would be otherwise lawful is rendered unlawful by the motive or object with which it is done So here it is the wilful disruption which is the breach. It means that the work of each man goes for naught. It is made of no effect. I ask: is a man to be entitled in wages for his work when he, with others, is doing his best to make it useless? Surely not. Wages are to be paid for services rendered, not for producing deliberate chaos.

10. These observations made by Lord Denning, MR., are apposite in the instant case. If the petitioners deliberately and in a concerted move merely attended the site or place of work during the periods in dispute and did not work at all to coerce the respondents to agree to their demands, they were not entitled to salaries for those periods as they were guilty of breach of contract. The petitioners did not earn their salaries for the said periods as there was complete non-performance by them of their duties. The respondents have only deducted the salaries for the number of days the petitioners did not work and not for the whole of the month and therefore question whether each month constituted a unit and was indivisible does not arise If it were to be held that each month is a unit for earning salary and is indivisible, the respondents would be entitled to whithhold the salaries for the entire months of August and September which has not been done. The respondents have deducted the salaries only for the two periods within these months during which the petitioners did not actually work.

11. The next question is whether there is anything in the Conduct, Discipline and Appeal Rules which has taken away the right of the employer to deduct the salary for the period an employee does not work. Rule 5 of these rules defines misconduct. Clauses (5), (6), (9), (18) and (20) of this Rule, to which reference has been made by the learned Counsel for the petitioners do show that neglect of work, or negligence in the performance of duty, or slowing down of work amounts to misconduct. Rule 23 enumerates penalties which can be imposed on an employee. Recovery from pay or such other amount as may be due to the employee of the whole or part of any pecuniary loss caused to the company by negligence or breach of orders is a minor penalty which can be imposed under cl (d) of Rule 23. The procedure for imposing a minor penalty, consistent which the principles of natural justice, is laid down in Rule 27. Learned Counsel for the petitioners argues that the conduct of the petitioners In not working or in slowing down the work amounted to misconduct and the respondents could have taken action against the petitioners for imposing the minor penalty of recovery of any pecuniary loss from the petitioners' salary after following the procedure of Rule 27, and that it was not open to the respondents to make deduction from the petitioners' salaries. We are unable to accept this contention. The minor penalty to which the learned Counsel has made a reference provides for recovery of pecuniary loss caused to the company. This penalty is entirely different from the employer's right to deduct salary. Recovery of pecuniary loss from pay under the rules is from that pay which the employee has earned. Deduction of salary to which the respondents have resorted to is on the basis that the employees have not earned their salaries. The breach of contract committed by an employee in not working leads to two consequences. The first consequence is that employee does not earn his salary during the period he does not work. The second consequence is that if the employer has bean put to some pecuniary loss by the employee's conduct of not working, the employer gets the right to claim damages. These two consequences are independent and do not overlap. The rules, more specifically the provisions relating to the penalty of recovery from pay due to the employee of the whole or part of any pecuniary loss, have no bearing whatsoever on the first consequence. This penality has relevance only in respect of the second consequence, ie , on the right of the employer to claim damages or recover pecuniary loss. We are, therefore, not prepared to accept the contention of the learned Counsel for the petitioners that the Conduct, Discipline and Appeal Rules disentitle the respondents to deduct salary for the period during which an employee does not work.

12. In the course of argument, learned Counsel for both the parties referred to a number of cases. The cases are somewhat conflicting in M.K. Bose v. Bank of India 1977-II L.L.J. 285 A.N. Sen, J., of the Calcutta High Court (as he then was) held that unless the employer is empowered or authorised by any Act or under the terms and conditions of the employment to deduct any part of the salary from the salary payable to the employee, he has no power to make any deduction from the salary on a pro rata basis for the time during which he was absent from his desk and participated in demonstrations. This case was followed by another learned Judge of the same High Court in Krishnatosh Das Gupta v. Union of India 1980-I L.L.J. 4. However, in Algemene Bank, Nederland v. Central Govt. Labour Court, Calcutta 1978-II L.L.J. 117, Sabyasachi Mukharji, J., expressly dissented from the view taken by A.N. Sen. J. in M.K. Bose's case. The decision in Algemene Bank's case is not referred to in Krishnatosh Das Gupta's case. In Dharam Singh v. Bank of India, Bombay (1979; Lab. I.C. 1079 it was held by a Division Bench of the Punjab High Court that if an employee obsents from duty for apart of the day, it can be legitimately and rightly held as absence for the whole of the day an the employer is entitled to deduct the wages for the whole of the day. The view so expressed is in line with the view expressed by Sabyasachi Mukharji, J , in Algemene Bank's case. The same view has been taken by a Division Bench of the Madras High Court in V. Ramchandran v. Indian Bank 1979-I L.L.J. 122. The Madras High Court in this case expressly applied the principle of ''no work no pay'. However, a learned Judge of the Madras High Court in Ganesan v. State Bank of India 1981-I L.L.J. 64, has expressed somewhat different view. But in R. Rajamanickam v. Indian Bank 1981-II L.L.J. 367, Ganesan's case was distinguished on the ground of acquiesence of the employer. This case reasserts the principle of 'no work no pay' applied by the Division Bench in V. Ramchandran's case In Apar (Pvt.) Ltd. v. S.R. Samant 1980-II L.L.J. 344, a Division Bench of the Bombay High Court has held that deduction of wages on the allegation that the workers in general had resorted to go slow is not permissible in law, for wages can be deducted only in terms of a statutory provision or in terms of a settlement. For the reasons already stated, we are in respectful agreement with the view taken by Sabyasachi Mukharji, J., on Algemene Bank's case, by the Punjab High Court in Dharam Singh's case and by the Madras High Court in V. Ramchandran's case and R. Rajamanickam's case. Learned Counsel for the petitioner also referred to the case of Suraj Narain v. State of M.P. : AIR1960MP303 , in which it was held that a Government servant's salary cannot be withheld as a matter of punishment without complying with the requirements of Civil Services (Classificition, Control and Appeal) Rules. The action of withholding salary in that case was taken as a matter of punishment under the Gwalior State Rules which had been superseded by the Madhya Bharat Rules. The case is clearly distinguishable on facts.

13. On the assumption on which we have proceeded to decide this case that the petitioners except for going to the site or place of work and signing the attendance register, did not work during the relevant periods in a concerted move to have their demands accepted, the respondents were clearly entitled to deduct the salaries. We cannot therefore, grant any relief to the petitioners under Article 226 of the Constitution. As earlier pointed out by us. we cannot go into the disputed question of fact whether the petitioners worked or whether they only signed the attendance register and did nothing. The disputed question of fact can be conveniently decided only in a civil suit. The petitioner, if they are so advised, can sue the respondent for recovery of their salaries which have been deducted on the basis that they really worked and that there was no concerted action not to work as alleged by the respondents.

14. The petition fails and is dismissed. There will, however, be no order as to costs of this petition.


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