1. The short question of law which these two appeals raise for our decisionrelates to the construction of Sections 3 and 11 of the Kerala IndustrialEstablishments (National and Festival Holidays) Act, 1958 (No. 47 of 1958)(hereinafter called the Act). That question arises in this way. Two complaintswere filed against the appellant, the Tata Oil Mills Company Ltd., by the twogroups of respondents, its workmen, respectively under s. 33A of the IndustrialDisputes Act. These applications alleged that the management of the appellanthad contravened the provisions of s. 33 of the said Act inasmuch as it haddenied its employees leave with wages on Founder's Day and Good Friday in 1962.According to the respondents, they were entitled to have holidays with pay onthe said two days under the terms and conditions of service, and so, theyclaimed that the Tribunal should direct the appellant to give its employeesholidays under the said existing arrangement and should pass other appropriateorders for the payment of wages for the two holidays in question. The appellantdisputed the correctness of the respondents' contention. The Tribunal hasrejected the appellant's plea and has declared that the respondents areentitled to the privilege of paid holidays on Founder's Day and Good Friday in1962. It has also ordered that the appellant should pay the wages to therespondents for those two days and the proportionate salary of the staff membersas soon as the award comes into force. It is against these orders passed by theTribunal on the two complaints preferred before it by the respectiverespondents that the appellant has come to this Court by special leave; and onits behalf, Mr. Pai has contended that in making the award, the Tribunal hasmisconstrued the effect of Sections 3 and 11 of the Act.
2. Standing Order 30 of the Standing Orders of the appellant company makesprovision for leave of all categories. S.O. 30(vi) provides for holidays. It laysdown that the factory will be closed on the following days which will beconsidered as Company Holidays with pay, and will not be counted against thecasual or privilege leave of an employee :
1. New Year Day (1st January).
2. Founder's Day (Saturday nearestto 3rd March)
3. Good Friday
5. Christmas Day (25th December)
3. There is a note appended to this provision which makes it clear that inthe event of the Company being compelled to observe a holiday or holidays forreasons of State such day or days shall not be counted as against the privilegeor casual leave of the employees but shall be treated as a Company holiday orholidays. Thus, it is clear that under the relevant Standing Order, therespondents are entitled to 5 paid holidays every year.
4. After the Standing Orders were framed and certified, there was anagreement between the appellant and the respondents' Union as a result of whichthe appellant agreed to grant a further holiday, and this agreement raised thenumber of total paid holidays in a year to 6. The additional holiday which theI.L.Rappellant thus agreed to give to the respondents was to be given on the daywhen the respondents' Union would celebrate its Union Day. Apparently, thisholiday was analogous to the Founder's Day, the idea underlying the agreementbeing that just as the appellant gave a paid holiday on the Founder's Day, therespondents should be given a paid holiday on the Union Day.
5. It appears that even after this agreement was reached, the respondentsbegan to claim additional holidays; but the appellant was not prepared to makeany addition to the list of holidays. It was prepared to leave the choice ofthe agreed holidays to the employees provided they submitted to the Company anagreed list of such holidays.
6. In 1958, the Act was passed and it came into force on the 29th December,1958. Section 3 of the Act provides
'Grant of National andFestival Holidays -
Every employee shall be allowedin each calendar year a holiday of one whole day on the 26th January, the 15thAugust and the 1st May and four other holidays each of one whole day for suchfestivals as the Inspector may, in consultation with the employer and theemployees, specify in respect of any industrial establishment'.
7. The result of this provision was that every employer to whom the Actapplied had to declare holidays on the 26th January, the 15th August and the1st May and had to give four other holidays according to the decision of theInspector, the requirement of the section being that the Inspector had toconsult the employer and the employees before fixing such other holidays. Inother words, s. 3 statutorily fixed the number of paid holidays at 7; fixedthree out of them and left the decision of the remaining four to the Inspectorwho had to consult the employer and the employees.
8. In pursuance of this provision, the Inspector declared certain holidaysfor the year 1959. Not satisfied with the decision of the Inspector, one of theappellant's employees, Mr. Baskara Menon filed a writ petition in the KeralaHigh Court under Art. 226 of the Constitution challenging the validity of theInspector's decision. In that writ petition, the question about theconstruction of s. 3 of the Act was agitated. In the result, the High Courtheld that the complaint made by the petitioner against the validity of thedecision of the Inspector was not well-founded, and so, the writ petition wasdismissed.
9. In 1962, the appellant followed the same procedure and got a decision asto the festival holidays from the Inspector and declared that the said holidayswould be observed as paid holidays in the year. At this time, certainindustrial disputes were pending between the appellant and its employeesbelonging both to monthly and daily-rated categories before the IndustrialTribunal at Ernakulam. The respondents felt that the declaration of theholidays made by the appellant for the year 1962 amounted to a contravention ofs. 33 of the Industrial Disputes Act, and so, they filed the two presentcomplaints before the Industrial Tribunal under 33A of the said Act. That, inbrief, is the genesis of the present complaints.
10. We have already noticed the provisions of s. 3 of the Act. Thecontention raised by the respondents before the Tribunal was that the statutoryprovision as to 7 paid holidays prescribes the minimum number of holidays whichthe employer has to give to his employees. This provision, according to therespondents, does not over-ride or abrogate the existing arrangement as to paidholidays. In regard to paid holidays which are common to s. 3 and the presentarrangement, they would, of course, have to be treated as paid holidays, butthe four other festival holidays which the Inspector decides from year to yearwould be in addition to the holidays which the appellant is bound to give tothe respondents under the existing arrangement, and since the appellant haslimited the number of paid holidays to 7 for the year 1962, it has actedcontrary to the terms of employment evidenced by the existing arrangement as topaid holidays and that constitutes the violation of s. 33 of the IndustrialDisputes Act. This contention has been upheld by the Tribunal; and Mr. Paiargues that the view taken by the Tribunal is plainly inconsistent with thetrue scope and effect of s. 3 read with s. 11 of the Act.
11. That takes us to s. 11 of the Act, because this section has to be readalong with s. 3 in determining the validity of the conclusion recorded by theTribunal on the main point of dispute between the parties. s. 11 reads thus :-
'Rights and privileges under other laws, etc., notaffected - Nothing contained in this Act shall adversely affect any rights orprivileges which any employee is entitled to with respect to national andfestival holidays on the date on which this Act comes into force under anyother law, contract, custom or usage, if such rights or privileges are morefavorable to him than those to which he would be entitled under this Act'.
12. This section gives an option to the employees, they can choose to havethe paid holidays either as prescribed by s. 3 or as are available to themunder any other law, contract, custom or usage. In exercising this choice, itmust, however, be borne in mind by the employees that 26th January, the 15thAugust and 1st May have to be taken as three holidays. That is the direction ofs. 3. In regard to the remaining 4, the Inspector decides which days should bepaid holidays. In other words, the statutory requirement is 7 paid holidays. Ifunder the existing arrangement the employees are entitled to have more than 7paid holidays, that right will not be defeated by s. 3 because s. 11 expresslyprovides that if the rights are privileges in respect of paid holidays enjoyedby the employees are more favorable than are prescribed by s. 3, their existingrights and privileges as to the total number of holidays will not be prejudicedby s. 3. The scheme of s. 11 thus clearly shows that s. 3 is not intended toprescribe a minimum number of paid holidays in addition to the existing ones,so that the respondents should be entitled to claim the seven holidaysprescribed by s. 3 plus the six holidays to which they are entitled under theexisting arrangement. If in addition to the three holidays which are compulsoryunder s. 3, the employees are getting, say 3 other paid holidays, then s. 3would step in and would require the employer to give his employees one morepaid holiday, so as to make the number of paid holidays 7. In our opinion, ifSections 3 and 11 are read together, there can be no doubt that the respondents'claim that they should have 7 holidays as prescribed by s. 3 plus 6 holidays asare available to them under the present arrangement is clearly untenable. Inthe present case, the respondents were having six paid holidays. The statutehas fixed the minimum number at 7 paid holidays, and so, since the existingarrangement was less favorable to the employees, the statutory provision willcome to their help and they will be entitled to claim 7 paid holidays in ayear, and that means that s. 3 will be operative. If that be so, the procedurefollowed by the employer in consulting the Inspector and in fixing the list of4 paid holidays for 1962 in addition to the three holidays fixed by the statuteis perfectly consistent with the provisions of s. 3 of the Act. The Tribunalwas, therefore, in error in holding that the appellant had contravened s. 33 ofthe Industrial Disputes Act.
13. In the result, the appeals must be allowed, the orders passed by theTribunal in the two respective complaints set aside, and the two complaintsdismissed. There would be no order as to costs.