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South India Corporation and Ors. Vs. All Kerala Cashewnut Factory Workers' Federation, Quilon and Ors. (09.09.1959 - KERHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Case NumberO.P. Nos. 376, 381 and 382 of 1957
Judge
Reported inAIR1960Ker208; (1960)IILLJ103Ker
ActsIndustrial Disputes Act, 1947 - Sections 25A; Factories Act, 1948 - Sections 79
AppellantSouth India Corporation and Ors.
RespondentAll Kerala Cashewnut Factory Workers' Federation, Quilon and Ors.
Appellant Advocate M.K. Nambiar,; S. Narayana Potti,; N. Palpu and;
Respondent Advocate P. Balagangadhara Menon, Govt. Pleader for Ist Respondent and; K.V. Surianarayana Iyer, Adv. General
DispositionPetitions allowed
Cases ReferredJ. K. Iron and Steel Co. Ltd. v. The Iron and Steel Mazdoor Union
Excerpt:
.....establishment and who has not been..........to get one day's leave with wages for every 20 days of work irrespective of the total number of days worked in a year. on the 9th issue the tribunal held that the workers were entitled to one day's leave with wages on onam day. however in stating the conclusion on this issue it was mentioned that two days' leave with wages should be given for onam. the finding on the 13th point is that the workers are entitled to compensation for non-payment at the rate of one day's wage for every four days of non-employment which falls short of 245 working days in an year. these are the findings which are challenged by the petitioners.4. as regards the question of bonus covered by the 2nd and 3rd issues the petitioners in o. ps. 381 and 382 who raised this point stated that the dispute regarding the.....
Judgment:

T.K. Joseph, J.

1. The petitioners in the three petitions seek to have part of an award given by the Industrial Tribunal. Trivandrum, quashed under Article 220 of the Constitution.

2. The facts necessary for the decision of these petitions may he briefly stated; On 24-10-1951 the Government of Travancore-Cochin referred to the Industrial Tribunal certain disputes between the workmen in cashewnut factories represented' by the first respondent, the All Kerala Cashewnut Factory Workers' Federation, Ouilon and 31 owners of cashewnut factories in the State. The order of reference specified 13 issues in dispute between the parties. The Industrial Tribunal, Trivandram the second respondent, gave an award which was published on 20-8-1957. The award in respect of issues Nos. 4, 9 and 13 is questioned by all the petitioners. The petitioner in O. Fs. Nos. 381 and 382 of 1957 further challenge the correctness of the award in respect of bonus. The original petitions thus relate to the award in respect of the following issues:

'(2) Are the workmen entitled to any bonus in excess of what the employers have paid for the year 1125? .

(3) Are the workmen entitled to any bonus in excess of what the employers have paid for the year 1126?

(4) Arc the workmen to be given one day's leave with wage for every twenty days' work Irrespective of any other consideration?

(9) Are the workmen entitled to any sick leave or festival holidays with pay?

(13) Are the workmen entitled to any compensation during the period for which the factories remain closed for reasons beyond the control of the management?'

3. The Industrial Tribunal awarded bonus at varying rates in respect of most of the concerns and disallowed the same in respect of some. On the 4th issue the award stated that the workers were to get one day's leave with wages for every 20 days of work irrespective of the total number of days worked in a year. On the 9th issue the Tribunal held that the workers were entitled to one day's leave with wages on Onam day. However in stating the conclusion on this issue it was mentioned that two days' leave with wages should be given for Onam. The finding on the 13th point is that the workers are entitled to compensation for non-payment at the rate of one day's wage for every four days of non-employment which falls short of 245 working days in an year. These are the findings which are challenged by the petitioners.

4. As regards the question of bonus covered by the 2nd and 3rd issues the petitioners in O. Ps. 381 and 382 who raised this point stated that the dispute regarding the same having been settled between the parties the point was not pressed. It is therefore unnecessary to consider this point.

5. The finding on the 9th issue may be considered next. Sri Balaganjradhara Menon, learned counsel for the respondents conceded that the Tribunal erred in providing for two holidays with wages For Onam. In view of the clear finding in 'the award that the workers were entitled to one day as 'holiday with wages for Onam this appears to be a clerical or accidental error. This will standcorrected 'as one holiday for Onam with wages.

6. Issue 13 raises an imporant question, viz., whether the workmen are entitled to compensationduring the period the factories remain closed for reasons beyond the control of the management. It is admitted that a substantial part of the cashewnuts roasted and shelled in these factories is imported from Africa and that the factories invariably close down for three or four months every year when supplies run short. In paragraph 51 of the award the Tribunal observed as follows:

'It cannot be disputed that under the present set up it may not ho possible to work the existing factories all the year round. The non-availability, of sufficient raw-nuts is a factor for consideration and unless conditions improve, from the figures now available it can be seen that there is at present only, enough raw materials to provide work on an average for ten months in a year which may be taken as equivalent to 245 working days''

7. The Tribunal accepted the position that cashewnut industry in the State was a seasonal one. It was however of the view that the workers should be provided with work at least on 245 days in an year and that they should get some compensation if the period of work falls short of 245 days. Sri M.K. Nambiar, learned counsel for the petitioners, urged that such compensation was in the nature of 'Lay off compensation', and that grant of such compensation was therefore to be governed by the provisions contained in Chapter V-A of the Industrial Disputes Act and not by arbitrary notions of social justice. It was further pointed out that this being a seasonal industry the provisions of Sections 25C, 25E were not applicable to the Industry and that the Tribunal therefore had no jurisdiction to award compensation in the absence of a declaration by the Government that the industry was a non-scasonal one. During the pendency of the proceedings before the Tribunal the State Government declared cashewnut industry as a non-seasonal one but the decision was quashed by this Court in O. P. Nos. 275 and 276 of 1956. The Standing _ Orders applicable to all these concerns also provide that there would be no work for three or four months in the year. In this connection, it is useful to refer to the relevant provisions of the Industrial Disputes Act. Chapter V-A deals with 'Lay off and 'retrenchment'. Sections 25C - 25E provide as follows;

'25-C (1) Whenever a workman (other than a badli workman or a casual 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, he shall be paid by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid off:

Provided that the compensation payable to a workman during any period of twelve months shallnot be for more than forty-five clays,

x xxx xx (2) Notwithstanding anything contained in the proviso to Sub-section (1), if during any period of twelve months, a workman, is laid-off for more than forty-five clays, whether continuously or intermittently, and the lay-off after the expiry of the first forty-five days comprises continuous periods of one week or more, the workman, shall, unless there is any agreement to the contrary between him and the employer be paid for all the days comprised in every such subsequent period of lay-off for one week or more compensation at the rate specified in Sub-section (1):

Provided that it shall be lawful for the employer in any case falling within this Sub-section to retrench the workman in accordance with theprovisions contained in Section 25F at any time, after the expiry of the first forty-five days of lay-off and when he does so, any compensation paid to the workman for having been laid-off during the preceding twelve months may be set off against the compensation payable for retrenchment. 25-D. Notwithstanding that workmen in any industrial establishment have been laid-oft, it shall be the duty of every employer to maintain for the purposes of this chapter a muster roll, and to provide for the making of entries therein by workmen who may present themselves for work at the establishment at the appointed time during normal working hours.

25-E., No compensation shall be paid to a workman who has been laid-off -

(I) if he refuses to accept any alternative employment in the same establishment from which he has been laid-off, or in any other establishment belonging to the same employer situate in the same town or village or situate within a radius of five miles from the establishment to which he belongs, if in the opinion of the employer, such alternative employment does not call for any special skill or previous experience and can be done by the workman, provided that the wages which would normally have been paid to the workman are offered for the alternative employment also;

(ii) if he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day;

(iii) if such laying off is due to a strike or slow-ing down of production on the part of workmen in another part of the establishment.'

8. Section 25-A provides that Sections 25C, 25E inclusive shall not apply to industrial establishments which are of a seasonal character or in which, work is performed only intermittently and that it a question arises whether an industrial establishment is of seasonal character Or whether work is performed there only intermittently, the decision of the appropriate Government thereon shall be final. The Tribunal accepted the position that the work-men were not entitled to lay-off compensation under the Act and observed in paragraph 43 of the Award:

'Now I may state at the outset that it is not open to the federation to invoke the provisions of Chapter V-A of the Industrial Disputes Act, 1947 (relating to lay-off compensation) in support of the claim for compensation.'

Nevertheless, compensation was awarded on what the Tribunal held to be principles of social justice.' The short question which therefore arises is whether the Tribunal has jurisdiction to award compensation in a case to which the statutory provision for lay-off compensation is not applicable.

9. Sri Balagangadhara Menon, learned counsel for the respondents, did not dispute the position that the industry being a seasonal one, lay-off compensation as such was not awardable. According to him this is not really lay-off compensation as defined in the Industrial Disputes Act. The word 'lay-off has been defined in the Act as follows:

' '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 reasons to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched:

X X X X X x Provided that if the workman, instead of being given employment at the commencement of any shift for any day is asked to present himself for the purpose during the second half of the shiftfor the day and is given employment then, he shall be deemed to have been laid-off only for one half of that day:

Provided further that if he is not given any such employment even after so presenting himself, he shall not be deemed to have been laid-off for the second half of the shift for the day and shall be entitled to full basic wages and dearness allowance for that part of the day'.

'Retrenchment' has been defined by the Act.

' 'Retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include

(a) voluntary retirement of the workman, or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf or

(c) termination of the service of a workman on the ground of continued ill-health.'

10. It is argued that Section 25-A of the Act applies only to workmen who are on the muster rolls and who have not been retrenched. Retrenchment pre-supposes the continuance of the industry and there is no question of retrenchment here. The industry has standing order and a copy of the same has been produced by the petitioners. Clause 11(40' of the Standing Orders provides that Cashewnut being a seasonal crop, there will not be work for three or four months in the year. It is not disputed that these Standing Orders are still in force. It is further contended on behalf of the respondents that compensation awarded is for unemployment and not 'lay-off and that the question whether workmen are entitled to compensation for unemployment being one of fact, this court ought not to interfere. I am unable to appreciate the distinction sought to be made out. The shortage of work in the factories for three or four months a year is due to non-availability of raw materials and in my opinion the Industrial Disputes Act ought to govern the matter rather than principles of social justice. Commenting on the expression 'social justice', the Supreme Court has held in Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, (S) AIR 1955 SC 170 at p. 175, as follows:

'Without embarking upon a discussion as to the exact connotation of the expression 'Social Justice we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation'.

This view was followed in J. K. Iron and Steel Co. Ltd. v. The Iron and Steel Mazdoor Union, (S) AIR 1956 SC 231. Bose, J., pointed out that Tribunals were not to adopt the attitude of benevolent despots.

11. The Rule that lay-off compensation should he given to workmen and the exceptions to the rule are all based on principles of social justice and it is not for the Tribunal to add to these statutory provisions. Sri Balagangadhara Menon argued that there was nothing in the Industrial Disputes Act prohibiting Tribunals from granting compensation in cases which may not strictly amount to 'lay-off and that the Tribunal in exercise of its wide powers could award compensation in appropriate cases. In my opinion what has been awarded amounts to 'lay-off compensation.' The Industrial Disputes Act provides when such compensation should be awarded and Tribunals have no jurisdiction to award such compensation in cases not governed by the Act. The statute cannot be circumvented by calling it 'unemployment compensation' or by any other name. In view of Standing Order 11(4)' which ,provides that the normal working of the factory will be for eight or nine months, it cannot be held that an employer should provide work for 245 days in an year and he would be liable on principles of social justice to pay compensation for any period which falls short of it. The decision of the Tribunal on issue No. 13 should therefore be quashed.

12. The only point which remains is that covered by the 4th issue which reads as follows :

'Are the workmen to be given one day's leave with wage for every 20 days work irrespective of any other consideration?'

13. Section 79 of the Factories Act provides that one day's leave with wages for 20 days of work should be given only to workmen who work for 240 days, in an year. The finding of the Tribunal is attacked on the ground that Such being the provision in the Factories Act, the Tribunal has no jurisdiction to impose a greater burden on the employers by directing that irrespective of the total number of days worked in an year, a worker should get one day s leave for every 20 days work. There is no substance in this contention. It has already been stated while considering the question of paying compensation for unemployment that the industry is seasonal in nature. The rule applicable to factories working throughout the year cannot therefore be applied to this industry.

Ons reason which weighed with the Tribunal was that it was possible to apply the provisions in the Factories Act to factories which generally do not provide work for more than 240 days in the year and that there was no justification for depriving the workers of earned holidays with wages merely on the ground that they have not worked for 240 days, in an year. Another reason was that this practice was in vogue in several of these factories. It may at first sight appear that there is inconsistency in applying Section 25-A of the Industrial Disputes Act to these factories so far as the question of lay-off compensation is concerned and not apply Section 79 of the Factories Act to the question of holidays with wages but really there is none. In the former case the Industrial Disputes Act contains specific provision that compensation for 'lay-off does not apply to factories carrying on seasonal industries. It was held that what the Tribunal awarded as compensation for unemployment was really lay-off compensation and Section 25-A of the Industrial Disputes Act operates as a bar to the grant of such compensation in the case of industries of a seasonal character.

Section 79 of the Factories Act is not similar to Section 25-A of the Industrial; Disputes Act. All that Section 79 provides is that a worker who has worked for a period of 240 days or more during a calendar year shall be allowed, during the subsequent calendar year, leave with wages at the rate of one day for 20 days in the case of an adult and one day for 15 days in the case of a child. Every employer is thus bound to grant such leave with wages but there is no provision either in Section 79 or any other section of the Factories Act which operates as a bar to the grant of leave with wages for workers in seasonal industries which from _ their nature cannot be carried on for 240 days in an year. It cannot therefore be held that the Tribunal had no jurisdiction to grant leave with wages irrespective of the total number of working days in a calendar year. The finding on issue (4) does not therefore require modification.

14. It follows from the conclusions reached above that the award requires modification in respect of the following matters.

(1) The workers will get one holiday withwages for Onam and not two;

(2) The finding on issue (3) regarding compensation for period during which the factories remain closed is quashed;

and I order accordingly. The original petitions are allowed to the extent indicated above and are dismissed in other respects. In the circumstances, I direct the parties to bear their costs.


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