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Metal Powder Co. Ltd., Tirumangalam and anr. Vs. the State of Tamil Nadu and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Case NumberW.P. Nos. 5918, 6712, 7495, 7496, 7591, 8623, 8624, and 9088/82, 502, 503, 1336, 2433, 3460, 3596, 3
Judge
Reported in(1985)IILLJ376Mad
ActsIndustrial Disputes Act, 1947 - Sections 2, 3(2), 11A, 18, 22, 23, 24, 25B, 25B(1), 25B(2), 25F, 25N, 25-O and 25-O(2); Factories Act, 1948 - Sections 35; Payment of Gratuity Act, 1972 - Sections 2 and 14; Employees Provident Funds & Miscellaneous Provisions Act - Sections 14B
AppellantMetal Powder Co. Ltd., Tirumangalam and anr.
RespondentThe State of Tamil Nadu and anr.
Cases ReferredWorkmen of Firestone Tyre and Rubber Co. v. Management
Excerpt:
labour and industrial - constitutional validity - sections 2, 3 (2), 11a, 18, 23, 24, 25b, 25b (1), 25b (2), 25f, 25n, 25-o and 25-o (2) of industrial dispute act, 1947, section 35 of factories act, 1948, sections 2 and 14 of payment of gratuity act, 1972 and section 14b of employees provident funds and miscellaneous provisions act - matter related to constitutional validity of tamil nadu industrial establishments act - act was enacted by way of special legislation to confer permanent status to workmen in various industrial establishments who have been put in service for period of 480 days - provision of section 3 (2) valid except clause 'or on account of non-employment of discharge of such workmen for period which does not exceed 3 months and during which period substitute has been.....order1. these writ petitions have been filed by the petitioners challenging the constitutional validity of the tamil nadu industrial establishments (conferment of permanent status to workmen) act, (act 46 of 1981), hereinafter referred to as the act. this act came into force on 1st january, 1982. the statement of objects and reasons of the act shows that a large number of workers in industrial establishments were kept under temporary rolls and were given only consolidated wages, which were far below the occupational wages and did not carry the benefit of dearness allowance paid to permanent employees. similarly, they were denied various other benefits like payment of festival, cyclone and marriage advances, payment of ex-gratia over and above the statutory bonus, supply of uniforms and.....
Judgment:
ORDER

1. These writ petitions have been filed by the petitioners challenging the constitutional validity of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, (Act 46 of 1981), hereinafter referred to as the Act. This Act came into force on 1st January, 1982. The statement of objects and reasons of the Act shows that a large number of workers in industrial establishments were kept under temporary rolls and were given only consolidated wages, which were far below the occupational wages and did not carry the benefit of dearness allowance paid to permanent employees. Similarly, they were denied various other benefits like payment of festival, cyclone and marriage advances, payment of ex-gratia over and above the statutory bonus, supply of uniforms and tea, preference for the dependents of the employees in the matter of employment, etc. The Act, was, therefore, enacted by way of a special legislation, to confer permanent status to the workmen in various industrial establishments, who have put in service for a period of 480 days in a period of 24 calendar months in such establishments.

2. The crucial provision in the Act, which deals with conferment of permanent status to workmen is in S. 3 which reads as follows :

'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 authorised leave or an accident or a strike, which is not illegal, or a lock-out 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 section, the number of days 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 XX of 1946) or under any other law 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.'

In the definition section, the terms 'employer', 'industrial establishment' and 'workman' have been defined. The primary duty of implementing the Act is vested in the Inspectors, who are appointed under S. 4 of the Act. Section 5 lays down the powers and duties of the Inspectors. Under S. 5, the Inspector has the power to enter at all reasonable times and with such assistants, if any, who are persons in the service of the Government or of any local authority as he thinks fit to take with him, any industrial establishment; and make such examination of the industrial establishment and of any registors, records and notices and take on the spot or elsewhere the evidence of such person as he may deem necessary, for carrying out the purposes of the Act. The Inspector is also entitled under S. 5(c) to exercise such other powers as may be necessary for carrying out the purposes of the Act. A penalty is provided for contravention of the provisions of S. 3. Under S. 6, every employer who contravenes the provisions of S. 3 can be punished with fine which may extend to five thousand rupees, and in the case of continuing offence with a further fine which may extend to two hundred rupees for every day after the first during which the offence continues. However, the prosecution for an offence punishable under S. 6 can be instituted only with the previous sanction of the prescribed authority. The prescribed authority is specified in Rule 5 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workman) Rules, 1981. S. 7 of the Act specifies the industrial establishments which are excluded from the operation of the Act. There is power in the Government to exempt conditionally or unconditionally any employer or class of employers or any industrial establishment or class of industrial establishments from the provisions of the Act.

3. Rules have been framed under the Act, known as the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981, hereinafter referred to as the Rules. Rule 3 refers to the powers of the Inspectors. Under that rule, power has been vested in them to do all or any of the things specified in Cls. (i) to (v) therein, for the purpose of giving effect to the provisions of the Act. One of the powers which the Inspector has got is to point out all such defects or irregularities as he may have observed and to give orders for their rectification and to record and furnish to the employer a summary of the defects or irregularities and of his orders. He has also power to prosecute, conduct or defend before a Court any complaint or other proceedings arising under the Act. Rule 4 provides for an obligation on the part of an employer of an industrial establishment to furnish any information which an Inspector may require for the purpose of satisfying himself whether any provision of the Act or the rules made thereunder has been complied with or whether any order of an Inspector has been duly carried out. The employer is also obliged to comply with a demand by the Inspector of any such information made during the course of an inspection, forthwith, if the information is available in the industrial premises or if it is made in writing, within seven days on receipt thereof. Rule 6 refers to maintenance of registers by the employers. Under Rule 6(1), every employer of an industrial establishment shall maintain a register of workmen in Form I and he is obliged to produce the register whenever it is required by the Inspector having jurisdiction over the industrial establishment. Under Rule 6(2), every employer shall compile an up-to-date list in Form I except column (9) thereof at the end of each half-year ending on the thirtieth day of June and thirty first day of December, and exhibit the list prominently at any part of the industrial establishment for perusal of the list by the workmen during working hours on any day. Under Rule 6(3), the employer has to send a copy of the up-to-date list so compiled under a sub-rule (2) to the Inspector concerned within a fortnight from the expiry of the half year ending with June and December of every year with a declaration that the list has been exhibited for the perusal of the workmen of the industrial establishment as required under sub-rule (2). Sub-rule (4) of Rule 6, on which some argument has been made, reads as follows :

'6(4), Any employee who finds his name not entered in the list referred to in sub-rule (2) or finds that the entries have not been made correctly or finding that though entries regarding his service have been made correctly but he has not attested the entries in the register of workmen in Form I may make a representation to the Inspector concerned. The Inspector after examining the representation or after main enquiries may issue suitable directions to the employer for the rectification of the register in Form I or for the issue of orders conferring permanent status to the workmen concerned.'

4. S. 3 of the Act, which has been the subject of vehement attach on behalf of the petitioners, is really in three parts. The substantive provision conferred permanent status to workmen, indicated in sub-s. (1) of S. 3. The effect of S. 3(1) is that notwithstanding anything contained in any law for the time being in force, a workman who is in continuous service for a period of hour hundred and eighty days in a period of twenty-four calendar months in an industrial establishment is required to be made permanent. On the plain terms of the section, initially, the period of twenty-four calendar months must be counted backwards from 1st January, 1982. Any person, who is in continuous service of four hundred and eighty days in a period of twenty-four calendar months proceeding from 1st January, 1982, will, under Act, be entitled to be made permanent. The second part of the S. 3 in sub-s. (2). Sub-s. (2) essentially is in the nature of a definition, indicating what is meant by a workman in continuous service. Sub-section (2) is again in two parts. The opening part of sub-s. (2) equates continuous service with uninterrupted service. It reads :

'A Workman shall be said to be in continuous service for a period if he is, for that period, is uninterrupted service ....'

Therefore, in a given case, if a person is in uninterrupted service for a period of twenty-four calendar months, then he will be entitled to the benefit of the permanent status provided by the Act. The latter part of sub-s. (2) is an inclusive part and takes into account the possibility that the service of a workman may be interrupted by the events specified in the second part, such as, sickness, authorised leave, an accident, a strike which is not illegal, or a lockout or non-employment or discharge or cessation of work which is not due to any fault on the part of the workman. The object of sub-s. (2) is that interruptions in service resulting from the above mentioned causes will be ignored for the purpose of computing the period of uninterrupted service. The words in the second part of sub-s. (2) commencing with 'including service which may be interrupted on account of sickness ...' has, therefore, the effect of the period of interruptions of service being counted the purpose of computation of the period of four hundred and eighty days prescribed under sub-s. (1) of S. 3.

5. The third part of S. 3 as in the Explanation. The purpose of the Explanation, as will be apparent from the opening words of the Explanation is to artificially include the days which are covered by Cls. (i) to (iv) of the Explanation on which the workman has admittedly not worked, in the number of days on which the workman has worked in an industrial establishment. The effect of the Explanation, therefore, is that even on the days on which the workman has been laid-off, or he has been on leave with full wages, or he has been absent due to temporary disablement caused by accident arising out of and in the course of employment, or in the case of a female, if she has been on maternity leave, which does not exceed a total period of twelve weeks, the workman will be deemed to have worked in the industrial establishment.

6. The main thrust of the argument of the learned Counsel for the petitioners has been directed at sub-s. (2) of S. 3. The argument is that sub-s. (2) of S. 3 is wholly unworkable and no machinery has been provided which will determine the complicated questions which may arise while computing the period of continuous service contemplated by S. 3(2) of the Act. Secondly, according to the learned Counsel, the whole Act must be treated as being unworkable and also amounting to an unreasonable restriction on the right of the employer. The learned Counsel has contended that the petitioner in W.P. No. 5918 of 1982, who is the owner of a textile mill, cannot be made to employ more number of permanent workmen than is warranted by the number of spindles in his mill, because the number of workmen will depend upon the kind of yarn that is produced as well as the availability of cotton at the particular point of time. In addition to this, the learned Counsel has urged that there are subsisting settlements between the employers and the union of employees which regulate the number of workmen as well as the casual workmen and the badlis who can be absorbed as permanent workmen. It is pointed out that sub-s. (1) is intended to operate only 'Notwithstanding anything contained in any law for the time being in force ....', and yet the Inspector under the Act has been directing the petitioner to make certain workers permanent contrary to the settlement. The immediate occasion for the petitioner to file the petition was that the Inspector wants 41 persons besides two other persons, S. Palavesan and N. Sundar to be made permanent, and on failure to obey the directions, the petitioner is under threat of being prosecuted. It is stated in the affidavit that S. Palavesan is a badli and is covered by the settlement dated 23rd January, 1981, and N. Sundar is a casual workman and is covered by the settlement dated 29th July, 1980. Elaborating the argument with regard to the vagueness and the absence of a machinery to determine disputed questions, it was pointed out that sickness was vague term and even the period of unauthorised absence for sickness would be counted for the purpose of computing the period of uninterrupted service. It was urged that when S. 3(2) refers to an accident, there is no indication as to whether an accident which was not in the course of employment is included or not. With reference to the strike, it was stated that even if a strike is legal, it may still be unjustified and yet S. 3(2) requires the period of unjustified strike to be counted for the purpose of continuous service. It was also urged that when S. 3(2) refers to non-employment, the non-employment will also cover suspension, and even where the period of suspension is sought to be treated as continuous service, the provision must be considered as unreasonable. Grievance is also made that the employer is at the mercy of the Inspector who will prosecute the employer even before the liability of the employer is determined. It is argued that an employer shall be required to face prosecution only after his liability is determined in a proper forum, and an employer cannot be faced with a prosecution merely because he has not complied with an order of the Inspector, who has determined certain things when his determination cannot be challenged anywhere under the Act, because there is no provision for appeal.

7. The learned Advocate-General and Mr. Chandran, who appeared on behalf of the State Government, supported the Act as being perfectly valid, and it was contended that there is no vagueness of the concepts included in S. 3(2), that the Inspector appointed under S. 4 was competent to decide any disputed questions which would be raised by the employer and that a proper procedure for the enquiry is laid down under Rule 6(4). According to the learned Advocate-General, the Inspector is empowered to make an enquiry before he issues suitable directions to the employer, and this enquiry will enable the employer to put forth his case, and, therefore, it could not be said that there is no procedure to determine disputes which might be raised by the employer. Mr. Chandran has argued that the order of the Inspector is not a final order and whenever disputes consequent upon the employer refusing to give the necessary benefits to the permanent employees come before the proper forum under the relevant enactment, the employer is entitled to agitate before that authority or forum that the workman is not entitled to the benefits of permanency. It was also pointed out that the absence of provision for appeal does not create any infirmity in the Act.

8. We have also heard Mr. Somayaji with regard to the question of the validity of the Act and Mr. Janakiraman, who has appeared for the Union in Writ Petition No. 10419 of 1983. Authorities have been cited on both sides to which we shall refer later.

9. We shall first deal with the nature and scope of S. 3. The concept of a workman being in continuous service is a well known concept in industrial legislation. It was introduced for the first time in the Industrial Dispute Act, 1947, in S. 2(eee). S. 2(eee) was in existence independently till the amendment of the Industrial Disputes Act by Act 36 of 1964, when the present S. 25B was introduced and the concept originally incorporated in S. 2(eee) was incorporated in S. 25B. The original S. 2(eee) in the 1947 Act read as follows :

'2(eee). 'Continuous Service' means uninterrupted service, and included service which may be interrupted merely on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman.'

This definition of 'Continuous service' has now been brought in sub-s. (1) of S. 25B. It is necessary to reproduce S. 25B, as it stands today. It reads as follows :

'25-B. Definition of continuous service. For the purposes of this Chapter :

(1) 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 authorised leave or an accident or strike, which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;

(2) where a workman is not in continuous service within the meaning of Clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer :

(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -

(i) one hundred and ninety days, in the case of a workman employed below ground in a mine; and

(ii) one hundred and twenty days, in any other case.

Explanation : For the purpose of Clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which -

(i) he has been laid off under an agreement or as permitted by standing orders and under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946) or under this Act or under any other law 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 female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.

If we compare the provisions of S. 25B of the Industrial Disputes Act with S. 3 of the Act, it will appear that S. 3(2) of the Act, which is essentially intended to work out the benefits sought to be conferred by S. 3(1) of the Act, is substantially a reproduction of S. 25B(1) with the addition of the words,

'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.'

after the word 'lock-out' and before the words 'or a cessation of work.' We shall deal later with the effect of this addition.

10. After having reproduced S. 25B(1) of the Industrial Disputes Act in the form of S. 3(2) of the Act, the legislature has also reproduced the Explanation in S. 25B of the Industrial Disputes Act in the form of an Explanation after S. 3(2) of the Act, with a light modification in the opening part of the Explanation. The Explanation in the Industrial Disputes Act reads :

'For the purposes of Clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which :-'

The Explanation in the Act reads :

'For the purpose of this section, the number of days on which workman has worked in an industrial establishment shall include the days on which -'

The difference between the two Explanations is that the opening words of the Explanation in the Industrial Disputes Act are 'For the purposes of Clause (2)', while the opening words of the Explanation in the Act are 'For the purposes of the section.'

11. Now, before we go into the challenge which is made to S. 3(2) of the Act, we must point out that when the Explanation in the Industrial Disputes Act was bodily lifted and incorporated in the Act with the modification of the words in the opening part of the Explanation, the Legislature lost sight of the purpose for which the Explanation was added in the Industrial Disputes Act. The Explanation in the Industrial Disputes Act was not intended to work out the provisions of sub-s. (1) of S. 25B. The purpose of the Explanation in the Industrial Disputes Act is restricted to sub-s. (2) of S. 25B, because the opening words of the Explanation, are : 'For the purpose of Clause (2).' Indeed, it is not well known that the purpose of enacting sub-s. (2) of S. 25B was to give an artificial meaning to 'continuous service.' Sub-s. (2) of S. 25B of the Industrial Disputes Act reads,

'Where a workman is not in continuous service within the meaning of Clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer.'

Therefore, sub-s. (2) would operate only where the workman was not in continuous service as contemplated by S. 25B(1). Where such a workman could not be said to be in continuous service as contemplated by S. 25B(1), the Legislature has created a fiction, which is clearly indicated by the use of the words 'he shall be deemed to be in continuous service,' and this fiction would be given effect to only if the workman satisfied sub-cls. (a) and (b) of sub-s. (2) of S. 25B. Sub-cls. (a) and (b) of sub-s. (2) refer to the days on which the workman has 'actually worked'. Sub-clause (a) reads :

'for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -'

Sub-clause (b) reads :

'for a period of six months, if the workman, during a period of six calendar months, preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than.' We have underlined the three words which occur in sub-cls. (a) and (b). The object of the Explanation, as is clear by the plain terms thereof, was to indicate what days on which the workman has not actually worked can still be treated as days on which he has actually worked, which are the days which have to the included as days on which he has worked, though he has not actually worked, is indication in Cls. (i) to (iv) of the Explanation. The Explanation in S. 25B(2) was, therefore, enacted with a specific purpose. The object was to determine, for the purpose of sub-s. (2), what are the day on which he has actually worked. The concept of a workman having actually worked is foreign to S. 3(1) of the Act. What the Legislature seems to have done is to reproduce the Explanation, as it is, possibly unmindful of the fact that neither in sub-s. (1) nor in sub-s. (2) of S. 3 of the Act, the concept of a workman having actually worked or 'a workman has worked' is to be found. While S. 3(1) and (2) of the Act refers to 'continuous service,' and it is specifically enacted that uninterrupted service will also include service which is interrupted on account of the events specified in S. 3(2), it is difficult for us to see how the Explanation can be given effect to at all, because the purpose of the Explanation will have to be restricted by the terms of the Explanation. It would have been a different matter if the Explanation was intended to include interruption of service on account of events referred to in Cls. (i) to (iv) of the Explanation, which have to be taken into account for the purpose of computing the period of uninterrupted service. But, since the Explanation is unambiguous and refers only to the number of days on which 'a workman has worked', a phraseology, which is not to be found in S. 3(1) or S. 3(2), it is clear that for the purpose of S. 3, the Explanation is wholly redundant.

12. It is true that no part of a statute should normally be held to be redundant, and if possible, effect must be given to every part of the statute. However, though this Explanation is intended to elaborate the meaning of some concept which has occurred earlier, and indeed, that is the purpose of the Explanation to S. 25B(2) of the Industrial Disputes Act, in the absence of anything which is required to be elaborated as contemplated by the Explanation, we must hold that while computing the period of 480 days, the Explanation will have to be wholly ignored.

13. Now, when we come to S. 3(2) of the Act, as we have already pointed out, it is a concept which has not been found incapable of implementation at any time and has stood the test of time since 1947. Not only is the concept of 'continuous service' found in the Industrial Disputes Act, 1947, but we find the same concept in the Payment of Gratuity Act, 1972. In S. 2 Clause (c), 'continuous service' has been similarly defined. It reads :

''Continuous service' means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employee concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.'

Explanation I to the above definition is more or less similar to S. 25B(2) of the Industrial Disputes Act. A careful reading of S. 3(2) of the Act would indicate that the emphasis is not on the number of days on which the workman has worked, but the emphasis is on the subsisting contract of employment between the employer and the workman. When the section refers to service, it refers to the contract of employment being subsisting, and the various events on account of which service can be interrupted would indicate that each one of them, except non-employment and discharge, for the time being, does not result in snapping the ties between the employer and the workman. Though service is interrupted, employment continues, and, therefore, the emphasis is that whoever continues to be in service for a period of 480 days in a period of twenty-four calendar months, inclusive of such breaks or absence as may be brought about by sickness or authorised leave or an accident or a strike which is not illegal or a lock-out, he is entitled to the benefit of permanent status. The first event which brings interruption under S. 3(2) of the Act is sickness. It is coupled with authorised leave. Undoubtedly, if a person falls sick, his employment does not stand terminated. If he is on authorised leave, there is no doubt that he continues to be the employee or the worker, and there is no question of the employment being terminated. Even if there is an accident, which will result in his absence, the service does not stand terminated. Of course, if the long continued absence is such that it is possible to draw an inference of abandonment, then such a long absence would result in termination of employment. Similarly, even a strike does not result in termination of employment. It may be that a strike may result in an employee or workman being liable for disciplinary action. But merely going on strike by itself does not result in termination of employment. The Legislature has, however, for the limited purpose of the conferment of the benefits under the Act allowed only interruption in service as a result of a strike which is not illegal, to be ignored for computing the period of uninterrupted service. The corollary will be that if a strike is illegal, the such strike will amount to a break in continuity of service. Similarly, a lock-out by itself can never result in termination of employment. The last clause in S. 3(2) of the Act refers to a cessation, of work, which is not due to any fault on the part of the workman. It is obvious that if a workman is not responsible for the cessation of work, then the continuity of his service cannot be allowed to be affected. Each one of the above events contemplate a subsisting contract of employment and a subsisting relationship of employee and employer, and when the Legislature in it's wisdom has though fit to bestow the status of permanency on a workman who has been in continuous service, in which the period of absence on account of the reason given sub-s. (2) of S. 3 is also included, then it is difficult to see how such a legislation can be open to challenges on the ground of vagueness, or on the ground of unreasonableness. As a matter of fact, the concept of continuous service is to be originally found in the Factories Act of 1934. S. 49-B of the 1934 Factories Act provided :

'Every worker who has completed a period of twelve months' continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or if a child, fourteen consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under sub-s. (1) of S. 35. .......

Explanation - A worker shall be deemed to have completed a period of twelve months' continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness, accident or authorised leave not exceeding ninety days in the aggregate for all three or by a lock-out, or by a strike which is not an illegal strike, or by a intermittent periods of involuntary unemployment not exceeding thirty days ........'

It is therefore almost over fifty years that the concept of continuous service has been incorporated in statutes.

14. S. 49-B of the Factories Act 1934 was considered by the Supreme Court in Buckingham & Catnatic Company Limited v. their Workers 1953 I L.L.J. 181. The question which fell for consideration was whether on account of a strike the continuity of service of the worker in that case was broken. The Supreme Court held, on the facts of that case, that since the strike was illegal, the workers had lost the benefit of holidays that they would have otherwise got under the rules as contemplated by S. 49-B. In other words, the continuity of service which alone entitled the workers to get holidays under S. 49-B was held to be broken by an illegal strike.

15. In Jeewanlal (1929) Ltd. v. its Workman 1961-I L.L.J. 517, the Supreme Court was concerned with the question as to whether under the gratuity scheme which contained a similar definition of continuous service, unauthorised absence for duty for about 8 1/2 months caused a break in service for purposes of calculating the qualifying period. The gratuity scheme in that case provided for gratuity as follows :

'(1).......... (2) On the termination of his service by the company after five year's continuous service - gratuity at the same rate as above.

(3) On voluntary retirement or resignation of an employee after fifteen years' continuous service - gratuity at the same rate as above.'

It was argued on behalf of the employers that unauthorised absence from work should normally cause break in service, so that if an employee is allowed to resume after such unauthorised absence he should not be entitled to claim that he has been in continuous service in view of the break in his service. Rejecting this contention, the Supreme Court observed as follows : at page 520 of 1961-I-L.L.J. 517.

''Continuous Service' in the context of the scheme of gratuity framed by the tribunal in the earlier reference postulates the continuance of the relationship of master and servant between the employer and his employees. If the servant resigns his employment, service automatically comes to an end. If the employer terminates the service of his employee, that again brings the continuity of service to an end. If the service of an employee is brought to an end by the operation of any law, that again is another instance where the continuance is disrupted; but it is difficult to hold that merely because an employee is absent without obtaining leave that itself would bring to an end the continuity of his service. Similarly, participation in an illegal strike which may incur the punishment of dismissal may not by itself bring to an end the relationship of master and servant. It may be a good cause for the termination of service provided of course the relevant provisions in the standing orders in the behalf are complied with; but mere participation in an illegal strike cannot be said to cause breach in continuity for the purposes of gratuity. On the other hand, if an employee continues to be absent from duty without obtaining leave and in an unauthorised manner for such a long period of time that an inference may reasonably be drawn from such absence that by this absence he has abandoned service, then such long unauthorised absence may legitimately be held to cause a break in the continuity of service.'

The above observations of the Supreme Court are clear authority for the proposition that even unauthorised absence from service or participation in an illegal strike will not bring about a break in the continuity of service. The observations that an illegal strike does not bring about a break in the continuity of service would not be applicable to the present case, because the legislature has statutorily provided that only a strike which is not illegal will not affect the continuity of service. The effect of such a statutory provision will be that a strike which is illegal will result in a break in the continuity of service.

16. This decision of the Supreme Court has been referred with approval in Lalappa Lingappa v. Laxmi Vishnu Textile Mills 1981-I L.L.J. 308, where the Supreme Court was concerned with the meaning of the terms 'continuous service' and 'actually employed' used in S. 2(c) of the Payment of Gratuity Act, 1972. In paragraph 13 of the judgment, after reproducing the observations which we have extracted above, the Supreme Court pointed out that in S. 2(c) of the Payment of Gratuity Act, the meaning given to the expression 'continuous service' in the decision in Jeewanlal (1929) Ltd. v. its Workmen (supra), was modified by incorporating the words 'not due to any fault on the part of the employee concerned', to give to that expression a restricted legal connotation. The Supreme Court in Sur Enamel and stamping works Ltd. v. their Workmen 1963-I-L.L.J. 367 was concerned with the definition of 'continuous service' in S. 2(eee) of S. 25B of the Industrial Disputes Act, 1947. Referring to the definition in S. 2(eee), the Supreme Court held that before a workman can be considered to have completed one year of continuous service in an industry, it must be shown first that he was employed for a period not less than twelve calendar months and next that during these twelve calendar months he had worked for not less than 240 days. In that case, a worker was employed only for eleven months and the Supreme Court held that though during the said period of eleven months he had worked for more than 240 days, that would not entitle him to get the benefit of S. 25-F of the Industrial Disputes Act. We are referring to this decision, because S. 3(1) requires two ingredients to be satisfied. The workman has to be in employment for a period of 24 calendar months and within such period of 24 calendar months he must be in continuous service for 480 days. Unless these conditions are satisfied the workman will not be entitled to the benefit of S. 3(1). As the Supreme Court held in Sur Enamel & Stamping Works v. their Workmen, (supra), the workman, though he had completed 240 days, was not in service for one year, under S. 3(1) of the Act also it would not be enough for the workman to enable him earn the status of permanent workman only to show that he has been in continuous service for a period of 480 days. He has also further to show that he has been in service for 24 calendar months before he claims the benefits of the Act.

17. An argument has been advanced before us on the authority of the decision of the Supreme Court in Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha 1980-I-L.L.J. 137, that a strike may be perfectly legal, but may be unjustified, and the argument is that even if the strike is unjustified, the workman has been given the benefit of the period of strike being counted as part of the period of continuous service. Undoubtedly, in Gujarat Steel Tubes Case, the Supreme Court referred to the earlier decision in India General Navigation & Railway Company Ltd. v. Their Workmen 1960-I-L.L.J. 561, where the Court observed that if a strike is illegal, it cannot be called 'perfectly justified.' But, the Supreme Court in Gujarat Steel Tubes Case (supra) sought to draw a distinction between a strike which is perfectly justified and one which is unjustified, and between these, according to the Supreme Court, 'the neighbourhood is distant.' The Supreme Court pointed out that mere illegality of the strike does not per se spell unjustifiability. In that case the Supreme Court also observed that where a strike is unjustified, the workmen could be deprived of a part of their wages. Now, illegality of a strike is purely a creation of the statute. A strike becomes illegal, if it is in contravention of the provisions of Ss. 22 to 24 of the Industrial Disputes Act, 1947. When the Legislature has clearly laid down that it is only the period of the illegal strike, which can be excluded for purposes of computing the period of continuous service the argument that the period of strike is legal but unjustified, should also be excluded, cannot be accepted.

18. It appears to us, however, that when the Legislature wanted the period of non-employment or discharge of the worker, which does not exceed three months and during which period a substitute has been employed by the employer, to be taken into account for the purpose of calculating the uninterrupted service, the provisions must be regarded as a wholly unreasonable restriction on the rights of the employer. This part of the Section has really the effect of ignoring the fact that there is not subsisting employment at all in the case of a discharged employee. As already pointed out, one circumstance which is common when reference is made in the earlier part of sub-s. (2) to the several causes for which the employee remains absent, is that the relationship of master and servant subsists inspite of the absence of the employee. However, when there is a discharge of such a workman, the relationship of a master and servant ceases and there is no question of the workman being in service of the employer. Unless that discharge has been held in a proper forum to the illegal or unjustified and it is held that the workman is entitled to reinstatement, it would be wholly unreasonable to require the employer to ignore that discharge and treat such a workman as still being in service. As a matter of fact, this would amount to the Legislature making a contract of employment between a private employer and his employee when a substituting contract of employment has already been terminated. There are enough provisions in the Industrial Disputes Act, 1947, which would enable the validity of the discharge of a workman to be adjudicated upon. If the discharge is wrongful, the Labour Court or an Industrial Tribunal has, under the relevant law, jurisdiction either to order reinstatement or to direct payment of compensation. But, if the discharge is justified, then, to require the employer to treat the discharged employee to be still in continuous service by legislation would, in our view, be wholly unreasonable. The two words 'non-employment' and 'discharge' must, in our view, be read ejusdem generis and what we have said about discharge will also apply to 'non-employment.' An argument was advanced, on the basis an authority of this Court in Kalyanasundaram v. Labour Court : (1966)IILLJ430Mad , that suspension is also non-employment. A learned single Judge of this Court in the said decision has taken the view that suspension amounts to non-employment of a worker, and that in relation to such non-employment, alleged to be devoid of valid reasons, a dispute can be raised. The question raised before the learned single Judge was about the scope of and industrial dispute under S. 2(k). It is well-established that the same expression may have different meanings in different contexts. We are not concerned in this case with the question as the whether the dispute with regard to the validity of a suspension is an industrial dispute within the meaning of S. 2(k) of the Industrial Disputes Act, 1947. We must read the word 'non-employment' in juxtaposition with the work 'discharge,' and non-employment must therefore be construed as some act on the part of the employer which has the effect of terminating the contract of employment. The two expressions 'employment' and 'non-employment' in the definition of 'industrial dispute' were considered by the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay 1949-L.L.J. 245. The Federal Court, referred to these two words, when it was dealing with the question whether an unwilling employer or employee who had no contract of employment could be compelled to be served or serve by the Tribunal, although the employer or the employee was not willing to do so. The question was answered by the Federal Court as follows : at Page 251 of 1949-I L.L.J. 245.

'Having regard to the general words 'in connection with the employment or non-employment' in the definition of industrial dispute, it seems clear that if there arises non-employment by reason of the termination of employment by the employer, it will be within the jurisdiction of the Tribunal to determine whether the termination was justifiable.'

Therefore, the refusal of the employer to employ a workman whose services have been terminated would be covered by the word 'non-employment.'

19. We may also point out that a Division Bench of the Delhi High Court in Fedders Lloyd Corporation Pvt. Ltd. v. Union of India : AIR1970Delhi60 has taken the view that the word 'non-employment' used in S. 2(k) of the Industrial Disputes Act, 1947, would include retrenchment as well as refusal to reinstate. The object of the Act was to confer permanent status only on workmen who were in continuous service. However, a person whose services have been terminated, albeit illegally, cannot at all be said to be a person in service, much less in continuous service, and therefore, in our view, to include the period of non-employment or discharge of a workman which does not exceed three months, must be treated as a wholly unreasonable restriction on the right of the employer. Consequently, the circumstance that a substitute should not have been employed if the period is to be excluded, would not make much difference. We are, therefore, of the view that a part of S. 3(2) of the Act consisting of the words 'or on account of the 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' must be held to be bad as amounting to an unreasonable restriction on the right of the employer concerned. This part of S. 3(2) is clearly severable. Severance of this part from the rest of S. 3(2) does not make the section unworkable. Excluding the part of the section which we have found to be bad, S. 3(2) would read as follows :

'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 authorised leave or an accident or a strike, which is not illegal, or a loc-kout ..... or a cessation of work which is not due to any fault on the part of the workman.'

20. Now coming to the ground of vagueness, it is undoubtedly true that a provision of law can be struck down on the ground of vagueness, as held by the Supreme Court in Harakchand v. Union of India : [1970]1SCR479 , wherein para. 18 of the Judgment, the Supreme Court struck down the provisions of S. 27(6) of the Gold (Control) Act, 1968. We are however, unable to see how any part of S. 3(2) of the Act can be held to be vague. The Learned Advocate-General has pointed out that the industrial undertakings to which this Act has been made applicable have to maintain certain registers and the enquiry which the Inspector will make will be based only on the basis of the registers which the employers are required to maintain. If the employer is a factory, which falls in Clause (a) of the definition of 'industrial establishment', then it is pointed out that Rules 87 and 88 of the Tamil Nadu Factories Rules, 1950, require the employer to maintain a register for leave with wages and the worker has to be provided with a Leave Book. If the industrial establishment is a plantation as defined in Clause (f) of S. 2 of the Plantation Labour Act, then under the Plantation Labour Rules, the employer has to maintain a Leave Register. Similarly, in the case of motor transport undertakings, petty industrial undertakings, shops and commercial establishments or catering establishments, the appropriate statutory provisions require the industrial establishments to maintain muster rolls and leave registers. The learned Advocate-General has, therefore, contended that the function of the Inspector consists only of perusing the registers that are maintained by the employers and consequently there is no vagueness about ascertaining the periods required to be ascertained for the purpose of S. 3, Sub-Ss. (1) and (2). It is obvious to us that the factors enumerated in S. 3(2) do not require any long procedure for determination. The absence of the workmen can be ascertained from the registers maintained by the employer. Prima facie, the legality or illegality of a strike can also be ascertained depending upon whether the concerned statutory provisions have been complied with or not. All these can properly become the subject-matter of the enquiry which is contemplated in Rule 6(4) of the Rules. The stand taken by the learned Advocate-General and Mr. Chandran is that the Inspector will given enough opportunity to the employer to put forth his case and produce the necessary material. The latter part of Rule 6(4) clearly provides that, the Inspector, after examining the representation or after making enquiries, may issue suitable instructions to the employer for the rectification of the Register in Form I or for issue of orders conferring permanent status on the workmen concerned. Form I contains the proforma of the Register of Workmen which has to be maintained by the employer. The information incorporated therein is useful for ascertaining whether the workman is entitled to the benefits of the Act. These columns have to be filled by the employer himself and only if there is a doubt about the correctness of the entries in this register, an enquiry will become necessary. Similarly, the Inspector has to be furnished with the necessary details in form II which will enable him to ascertain whether the law is being complied with or not. We do not find there is anything vague or uncertain in the Act or the Rules which will create difficulties in the implementation of the Act, requiring the provisions of the Act to be struck down.

21. Undoubtedly, the Act does not provide for any appeal. Mr. Chidambaram, therefore, very vehemently argued that since no appeal has been provided, the provisions of the Act must be struck down and reliance was placed on two decisions of the Supreme Court. The first is Excel Wear v. Union of India : (1978)IILLJ527SC wherein the Supreme Court struck down the provisions of S. 25-O of the Industrial Disputes Act, 1947, as violative of Art. 19(1)(g) of the Constitution of India. One of the grounds on which the said section was struck down was that S. 25-O(2) did not require giving reasons for the order. It was argued before the Supreme Court that S. 25-O(2) should be so read that it will be incumbent for the authority to give reasons in his order and that such a requirement should therefore be read in the provision. The Supreme Court, however, took the view that intrinsically no provision of Chapter V-B of the Act suggested that the object of carrying on the production can be achieved by the refusal to grant permission although in the Objects and Reasons of the Amending Act such an object seems to be there, although remotely, and secondly, it is highly unreasonable to achieve the object by compelling the employer not to close down in public interest for maintaining the production. In that decision, the Supreme Court has taken the view that the reasonableness has got to be decided both from the procedural and the substantive aspects of law. The decision of the Supreme Court would therefore show that the Supreme Court found that there was a basic infirmity in the provisions of S. 25-O.

22. The learned Advocate-General has contended that the impugned legislation is a welfare legislation intended to bring about an improvement in the conditions of labour and that the permissible action may be so construed as to give effect to the object of the legislature and as far as possible the intention of the legislature should not be allowed to be defeated. He has also referred to the decision of the Supreme Court in Pathumma v. State of Kerala : [1978]2SCR537 in which the Supreme Court has laid down the guidelines on which the question of reasonableness of restriction is to be determined. In that decision the Supreme Court has pointed out that in judging the reasonableness of the restriction imposed by Clause (5) of Art. 19, the Court has to bear in mind the Directive Principles of State Policy and that the restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. It was pointed out that in order to judge the quality of the reasonableness, no abstract or general pattern or fixed principle can be laid down so as to be of universal application and that the same will vary from case to case. We must bear in mind that while enacting the Act, the legislature has taken note of the practice which is prevalent in industrial establishments, viz., that workmen who have been in employment for a long period of time are no being given the benefits which permanent workmen get. They are so prevented from getting these benefits, because they are treated as non-permanent or temporary. It is obvious that this practice has resulted in workmen being deprived of the monetary and other benefits which are incidental to the status of permanent workmen. The legislature is the best judge as to what is the remedy in such a situation. Art. 46 of the Constitution of India requires the State to promote with special care the educational and economic interests of the weaker sections of the people. Workmen who contribute to the production of wealth are entitled to a fair treatment and it is needless to say that if, inspite of their having done work for a large number of days, they are treated as merely temporary workmen, thus depriving them of the benefits which are incidental to permanent employment, there is nothing wrong in the legislature intervening to salvage the situation, and enacting a law whereby a person in continuous service for the stipulated period, is statutorily given the benefit of a permanent status. For the purposes of the benefits under the provisions of Chapter V A of the Industrial Disputes Act, the criterion was work for 240 days in a period of one year of service. The State legislature has given the benefits of permanent status only to workmen who have put in continuous service as computed under S. 3 in a period of 24 calendar months. Prima facie the legislature seems to have proceeded on the footing that if a workman is in service for a period of 24 calendar months, the employer obviously needed the service of such a workman and he should therefore form a part of the regular and permanent complement of the workers in the said establishment. It was, therefore, in the interests of the workers as a class to lay down a criterion for earning the conferment of permanent status. The criterion laid down does not appear to us to be in any way unreasonable. Whether a particular restriction in a statute amounts to an unreasonable restriction or not has to be judged with reference to the object, purpose and the relevant circumstances which necessitated the impugned legislation.

23. The learned Advocate-General has also referred to the decision in Mangalore Ganesh Beedi Works v. Union of India : (1974)ILLJ367SC . One of the grounds on which the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 was challenged was that it was unworkable. The Act was a legislation intended to achieve the welfare, benefits and amenities for the labour. The particular provision challenged as unworkable was S. 37(3) of the Act which provided that the provisions of the Maternity Benefit Act, 1961, would apply to every establishment as if such establishment were an establishment to which the 1961-Act had been applied by a notification under S. 2 of the said Act. The proviso to S. 37(3) stated that the Maternity Benefit Act in its application to a home worker shall apply subject to certain modifications. This Court had upheld this contention and said that since a worker in a beedi industry was not required to work regularly for any prescribed period of hours in a day or even day after day for any specified period, from the very nature of the case, provisions of the 1961-Act were unworkable with regard to such home workers. The argument was that, it was difficult to locate home workers. Ss. 4 and 5 of the 1961-Act dealt with prohibition of employment or of work of women prohibited during certain period and the right of payment of maternity benefit. The Supreme Court found that S. 4 of the 1961-Act did not present any difficulty, because it spoke of prohibition of work by a woman in any establishment during six months immediately following the day of her delivery. S. 5(2) also provided that no woman shall be entitled to maternity benefit unless she had actually worked in any establishment for a period of not less than 160 days in the twelve months immediately preceding the date of her expected delivery. The Supreme Court found that there was no difficulty at all with regard to the working of these sections in regard to maternity benefits to women employed in an establishment. Thus, we see that the answer to the question whether a provision is workable or not will really depend on the nature of the provision and the machinery provided in the Act for working out that provision. If some difficulties are experienced in working out a provision, that by itself will not render the provisions unworkable. Besides, as pointed out earlier, the Inspector has to make the enquiry only on the basis of the registers maintained by the employer himself. The questions which are required to be determined for the purpose of implementing S. 3(2) of the Act are not at all complicated. Besides, the decision of the Inspector is a summary decision. Even the status does not make it final and if and when a question arises as to whether the workman is entitled to certain benefits as a permanent workman and a claim is made on the basis of the decision of the Inspector, it is obvious that the decision of the Inspector being summary in nature, the controversy can be properly determined in the appropriate proceedings which may be taken either by the employer or by the workman.

24. Mr. Chidambaram relied on the decision of the Supreme Court in State of Andhra Pradesh v. Raja Reddy : [1967]3SCR28 in which it was held that the Andhra Pradesh Land Revenue (Additional Assessment and Cess Revision Act (Act 22 of 1962) was void. The ground on which the Act was held to be void was that a flat minimum rate of assessment was fixed in the case of dry lands without any reference to the quality or fertility of the soil and in the case of wet lands a minimum wet rate was fixed and it was sought to be justified by correlating it to the ayacut. Further, the whole imposition of assessment was left to the arbitrary discretion of the officers not named in the Act without giving any remedy to the assesses for questioning the correctness of any of the important stages in the matter of assessment. The scheme of classification was also held to have had no reasonable relation to the objects sought to be achieved. This decision was essentially relied upon to show that no higher forum was provided by the Act where the assessment was challenged and therefore the Act was held to be void. Now, as we have already pointed out, apart from the fact that the decision of the Inspector is of a summary nature, the absence of an appellate forum by itself does not make the provision of law invalid.

25. Apart from the arguments of the learned Advocate-General, some authorities have been brought to our notice on this point by Mr. Somayaji and Mr. Janakiraman. In Gammon India Limited v. Union of India 1974-I L.L.J. 489, construing the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 the Supreme Court held that the absence of provisions for appeal was not unreasonable in the context of the provisions of the Act. It was pointed out that the parties, under that Act, were to be heard by the Commissioner of Labour who was specially acquainted with the conditions and the Commissioner of Labour who was specially acquainted with the conditions and the Commissioner of Labour would apply the appropriate standards. In Fatehchand v. State of Maharashtra : [1977]2SCR828 , the Supreme Court noted the contention that under the Maharashtra Debt Relief Act, 1976, there was no provision for an appeal against the order of the authority to whom the debtor could apply for return of the pledged article on the extinguishment of the debt under the Act. Repelling the contention that the absence of right of appeal would create an infirmity in the provisions, the Supreme Court observed in paragraph 51 of the judgment as follows :

'It is true that in several cases this Court has held that a right of appeal is a gesture of statutory fairness in the disposal of cases. Our attention was drawn to the rulings reported as Jyoti Pershad, : [1962]2SCR125 ; Mohd. Faruk, : [1970]1SCR156 and Ganesh Beedi Works, : (1974)ILLJ367SC and other cases bearing on the necessity of a right of appeal, as an incident of fair hearing. We cannot dogmatise, generalize or pontificate on questions of law whose application depends sensitively on the nature of the subject-matter, the total circumstance, the urgency of the relief and what not.'

These observations, in our view, are sufficient to indicate that no provision of law can be struck down merely on the ground that there is no right of appeal provided against the decision of an authority under that Act. Mr. Somayaji has brought to our attention the decision of the Supreme Court in Organo Chemical Industries v. Union of India 1979-II-L.L.J. 416. The provisions of S. 14-B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, were challenged in that case on the ground that no provision for an appeal against the determination by the Provident Fund Commissioner with regard to the damages was provided. The argument was that the absence of any provision for appeal left the defaulting employer with no remedy, and the conferment of arbitrary and uncontrolled power on the Regional Provident Fund Commissioner to quantify damages without a corresponding right of appeal or revision made the provisions contained in S. 14-B per se void and illegal, and was liable to be struck down on that ground. This contention was rejected with the following observations : (at Para 40 at Page 427) of 1979-II L.L.J. 416.

'We are afraid the contention is wholly devoid of substance. Mere absence of provision for an appeal does not imply that the Regional Provident Fund Commissioner is invested with arbitrary or uncontrolled power, without any guidelines. The conferral of power to award damages under S. 14-B is to ensure the success of the measure. It is dependent on existence of certain facts, there has to be an objective determination, not subjective. The Regional Provident Fund Commissioner has not only to apply his mind to the requirements of S. 14-B but is cast with the duty of making a 'speaking order', after conforming to the rules of natural justice.'

Relying on this decision, Mr. Somayaji has argued that we must read the requirement to make a speaking order in Rule 6(4), when Rule 6(4) provides that the Inspector should examine the representation of the employee and must make the necessary enquiries. This argument must be accepted because, when the Inspector has to determine whether the workman is entitled to the benefit of S. 3 and when the employer contests this right, he has to make necessary enquiries and these enquiries must culminate in a speaking order disposing of the contentions of the employer and the workman. Whether it is the workman's case or the employer's case which is accepted, the Inspector will be bound to give reasons as to why he is accepting or rejecting the case of either party. A reference was made by Mr. Chandran to a Division Bench decision of this Court in A. P. Rajendran v. State of Tamil Nadu and Another (W.P. Nos. 3575/82 etc. Batch - Order dated 27th April, 1984) to which one of us (Sathiadev, J.) was a party. In that decision, the Court was called upon to consider the validity of the Tamil Nadu Workers (Conditions of Employment and Miscellaneous Provisions) Act, 1981. The argument there was that an order passed by the prescribed authority under that Act determining the quantum of relief in case of lay-off could not be challenged by way of appeal. The Division Bench followed the decision of the Supreme Court in Gammon India Limited Case.

26. We may also refer to the decision of the Court in K. V. Rajendran v. Deputy Commissioner of Labour 1980-II L.L.J. 275 in which this Court struck down the provisions of S. 25N of the Industrial Disputes Act on the ground that it suffers from arbitrariness and unreasonableness in so far as it did not provide any guidelines. We do not think it necessary to deal with this decision, because, as we have already pointed out, the question as to whether a particular provision of law suffers from the vice of arbitrariness or unreasonableness has to be judged on a totality of factors relevant to the particular statute. Therefore, except to the limited extent indicated above, we do not find that the provisions of S. 3 suffer from either vagueness or unworkability or that they amount to unreasonable restrictions on the right of the employer. In this view of the matter, we need not go into the alternative submission made by Mr. Somayaji that we must read down S. 3(2) of the Act so as to sever it from the vice of arbitrariness or unworkability.

27. That brings us to the second argument advanced by Mr. Chidambaram, viz., whether S. 3(2) supersedes the agreements which are already in force between the employer and the workman, so far as the petitioner in W.P. 5918/82 is concerned. There are three settlements dated 29th July, 1980, 23rd January, 1981 and 11th September, 1981 respectively. These settlements dealt with certain rights of the employees. By one of these settlements dated 29th July, 1980 the permanent strength of the workmen was fixed at 260 for 12,000 spindles. It was agreed that casual labour would be engaged in temporary vacancies in the absence of permanent workmen. There was an agreement with regard to the payment of consolidated wages to these casual workers. This agreement was to come into force on 1st July, 1980 and was to be effective for a period of three years. The other settlement dated 23rd January, 1981 covered 15 casual workers who were given the status of badlis. Their wages were fixed providing for progressive increase in their basic wage in future. Then there was the settlement dated 11th September, 1981 which fixed the workload and the basic wages of the permanent workers. It is alleged that these three settlements are still in force and whatever matters are covered by these settlements, would have to be excluded from the purview of the provisions of S. 3. Mr. Chidambaram's argument was also adopted by Mr. Dwarakanathan appearing in W.P. 10419/83. Learned Advocate General as well as Mr. Janakiraman contended that a settlement derives its force from the provisions of the Industrial Disputes Act, 1947, such as S. 18, and therefore the settlements must be treated as law. It appears to us that when the legislature incorporated a non-obstante clause in S. 3(1) and restricted the non-obstante clause only to 'any law for the time being in force,' S. 3(1) must be construed as evincing an intention that S. 3(1) will operate notwithstanding any statutory law to the contrary. Whenever the legislature has intended that either awards or agreements or decrees of courts were to be superseded by legislation, reference was always made in the non-obstante clauses to such agreements. By way illustration, we may refer to S. 14 of the Payment of Gratuity Act, 1972 which reads :

'The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.'

It is obvious that when the legislature has made reference to 'any instrument or contract having effect by virtue of any enactment other than this Act', the legislature had in mind the provisions of S. 18 of the Industrial Disputes Act under which the effect of the settlement between the employer and the workmen was to be provided for. We may also refer to S. 40 of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966. S. 40(1) of the said Act, which is marginally headed, 'Effect of laws and agreements inconsistent with this Act,' reads as follows :

'The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, or contract of service whether made before or after the commencement of this Act .....'

A similar provision is made in S. 37 of the Motor Transport Workers Act, 1961. This section reads as follows :

'The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service which are made before or after the commencement of this Act.'

We are bound to take notice of the legislative practice that where the intention of the legislature is that a law is to have effect notwithstanding any award, agreement or contract of service, such an intention is expressed in clear and unambiguous words. Consequently, in the absence of reference to an award, an agreement or a contract of service in S. 3(1) and restricting the operation of the non-obstante clause in S. 3(1) only to 'anything contained in any law for the time being in force', we must accept the contention of the learned counsel for the petitioner that S. 3 will not supersede a settlement between the employer and the employees in so far as the subject-matter of the settlement is conferment of permanent status to the workmen. What is the nature of the settlement in a given case and how far it covers the subject-matter in respect of which S. 3(1) has been enacted, will have to be determined on the facts and circumstances of each case.

28. An argument was then advanced that workmen who are badlis or apprentices are also sought to be brought within the purview of S. 3(1). We shall first deal with the question as to whether the apprentices are covered by S. 3. Learned counsel for the petitioner has contended that apprentices are learners in the trade and notwithstanding the fact that they are classified as workmen under the Model Standing Orders so far as the conferment of permanent status is concerned, the apprentices will have to be excluded. The Model Standing Orders classify workmen as permanent, probationers, badlis, temporary, casual and apprentices. There is also in force the Apprentices Act, 1961, in which an apprentice is defined as a person who is undergoing apprenticeship training in pursuance of a contract of apprenticeship. S. 4 of the said Act provides for the period of apprenticeship S. 7 provides for the termination of apprenticeship contract. It appears that the subject of apprenticeship is, in the Apprentices Act, dealt with only in S. 2, Clause (c), which speaks of apprenticeship in a designated trade. In that clause, 'Disignated trade' is defined as meaning any trade or occupation or any subject field in engineering or technology which the Central Government, after consultation with the Central Apprenticeship Council, may, by notification in the Official Gazette, specify as a designated trade for the purpose of the Act. The learned Advocate-General and Mr. Somayaji have contended that the Apprentices Act does not exhaust all the categories of apprentices, and such of the apprentices as are not covered by the Apprentices Act will, according to them, become workmen and will be entitled to the benefits of the Act. The argument of the learned counsel of the petitioners became necessary, because the Register of Workmen which is required to be maintained in Form I under Rule 6(1) contains columns to specify the nature of the workmen, Column (4) therein reads :

'Whether Permanent, Temporary, Casual, Badli, or Apprentice (other than those covered under the Apprentices Act, 1961.)'

Now, it appears to us that making a provision for different kinds of workmen in the register which is to be maintained by the employers does not necessarily mean that all those who are included in that register will necessarily be entitled to the benefits of the Act. S. 3(1) refers to a workman being in continuous service. The nature of employment as an apprentice is entirely different from the employment of a regular workman. Strictly speaking, the period of apprenticeship can never be clubbed with the period of service, because an apprentice continues to be a learner until he is absorbed as a regular workman. That an apprentice is not an employee but a learner, is now well established by the decision of the Supreme Court in Employees' State Insurance & Another v. Tata Engineering and Locomotive Company Limited 1976-I-L.L.J. 81. The Supreme Court held in that decision that an apprentice was not a workman for purposes of the Employees' State Insurance Act. The Supreme Court pointed out that in an apprenticeship, the dominant object and intent is to impart on the part of the employer and to accept on the part of the other person learning under certain agreed terms. That certain payment is made during the apprenticeship, by whatever name called and that the apprentice has to be under certain rules of discipline do not convert the apprentice into a regular employee under the employer. Such a person remains a learner and is not an employee. We may also refer to the fact that under the Apprentices Act, it is not incumbent upon the employer to offer any employment to any apprentices who has completed the period of apprenticeship and training in his establishment, nor is it obligatory on the part of the apprentice to accept an employment under the employer. This provision is a recognition of a general concept of apprenticeship that an apprentice is not an employee as such, but is there only to take some training which will make him fit for proper employment.

29. The next argument of Mr. Chidambaram is as regards the inclusion of a badli worker in the term 'workman' in S. 3. The argument is that a badli worker is given work only when some permanent employee is absent, and therefore, he can never be said to be in service as such, much less in continuous service. The concept of a badli worker, which is peculiar to textile mills, is now well recognised. The working of a badli system celaborately brought out in a report the Badli Labour Inquiry Committee in the Cotton Textile Industry in Bombay. The Committee has observed that there is absenteeism in each mill. Therefore, there is a Badli Labour Force in each mill. At the same time, it is also observed that there is absenteeism among the Badlis. It is observed that 70% of the total number of Badlis in some of the mills in Bombay get work almost every day. But, at the same time it is observed that in some of the mills, some of the badlis get work even for less than 20 days in a month. On an average, it was shown that badlis get work for 18 days in a month, and this is because most of the mills are following the practice of providing work by rotation to badlis to ensure fair distribution of work. It is stated that in Tamil Nadu more or less a similar situation prevails. The concept of a badli worker, therefore, implies that he is given work only when some permanent worker is absent. He is employed on an independent contract of employment for that day alone. He cannot, therefore, be strictly called to be a person in service in the sense that there is a subsisting contract of employment throughout the month or throughout the year. The contract of employment comes up only when he is employed on a particular day or on a particular number of days, and there is no further right of badli worker to ask for work on some other day. 'Continuous service' as contemplated by S. 3 of the Act must pre-suppose a contract of employment, and as pointed out in Bombay Union Dyeing and Bleaching Mills v. N. T. More 1980-II L.L.J. 424, which is a decision of the Bombay High Court, a contract of employment between a master and servant is not the same thing as rendering continuous service, and the two are not synonymous. Explaining the concept of employment, the Supreme Court in Chintaman Rao v. State of Madhya Pradesh 1958-II L.L.J. 252 has observed as follows :

'The concept of employment involves three ingredients : (1) employer (2) employee and (3) the contract of employment. The employer is one who employs, i.e., one who engages the services of other persons. The employee is one who works for another for hire. The employment is the contract of service between the employer and the employee whereunder the employee agrees to serve the employer subject to his control and supervisions.'

Section 3(1) refers to a continuous service for a period of 480 days in a period of 24 calendar months. As already pointed out, this only means that there must be an employment for a period of 24 calendar months, and in that period, there must be a continuous service for a period of 480 days. If the contract of service in the case of a badli worker is only of an intermittent nature, then, in our view, it would not be possible to hold that the workman contemplated by S. 3(1) of the Act includes a badli worker.

30. It is true that in P. Joseph v. Loyal Textile Mills 1975-I L.L.J. 498, a badli worker has been held entitled to lay off compensation. But, it cannot be forgotten that the badli workmen fell within the provisions of S. 25B(2), because the reference there was to the actual number of days worked. Accordingly, we hold that a badli worker will not be entitled to the benefits of the Act.

31. It was then argued that the Act must operate only prospectively, which, according to the learned counsel for the petitioners, meant that the period of 480 days has to be computed only after taking into account the period after 1st January, 1982. According to the learned counsel, if the period prior to the Act is taken into account, the Act will become retrospective.

32. The learned Advocate-General contended that taking into account the period of service prior to 1st January, 1982 does not result in retrospective operation of the Act. His argument is that conferment of permanent status is given only after the Act has come into force, though the service with reference to which that status is to be determined is rendered prior to the Act. In such a case, according to the learned Advocate-General, the Act cannot be held to be retrospective. Mr. Somayaji has also pointed out to us than since permanent status is conferred only after the Act comes into force, the Act could never be said to act retrospectively, merely because some event with reference to which the Act operates has occurred earlier, S. 3(1) refers to 'every workman who is in continuous service for a period of four hundred and eight days.' The Act, therefore, is intended to give the benefit of permanency to all workmen who are in continuous service on the day on which the Act has come into force, i.e., on 1st January, 1982. If the benefit of a permanent status is given to workers, who are in service on 1st January, 1982, the Act cannot be said to be retrospective in character.

33. In Varadaraja Pillai v. Salem Municipal Council (85 Law Weekly, 760), dealing with the Madras City Tenants Protection Act, 3 of 1922, and Amending Acts 6 of 1926, 19 of 1955 and 13 of 1960, the Division Bench of this Court have quoted the following passage from the decision in West v. Gwynee (1911) 2 Ch. 1 :

'To my mind the word 'retrospective' is inappropriate, and the question is not whether the Section is retrospective. Retrospective operation is one matter. Interference with existing rights is another. If an Act provides that at a past date the law shall be taken to have been that which it was not, that Act, I understand to be retrospective. That is not this case. The question here is whether a certain provision as to the contents of leases is addressed to the case of all leases or only of the Act. The question as to the ambit and scope of the Act and not as to the date as from which the new law, as enacted by the Act, is to be taken to have been the law. Numerous authorities have been cited to us. I shall not travel through them. To my mind they have but little bearing upon this case. Suppose that by contract between A and B there is in an event to raise a debt from B to A, and suppose that an Act is passed which provides that in respect of such a contract no debt shall arise. As an illustration, take the case of a contract to pay money upon the event of a wager, or the case of an insurance against a risk which an Act subsequently declares to be one in respect of which the assured shall not have an insurable interest. In such a case, if the event has happened before the Act is passed, so that at the moment when the Act comes into operation a debt exists, an investigation whether the transaction is struck at by the Act involves an investigation whether the Act is retrospective. Such as the point which arose in Moon v. Durden (2 Ex. 22). But if at the date of the passing of the Act the event has not happened, then the operation of the Act in forbidding the subsequent coming into existence of a debt is not a retrospective operation, but is an interference with existing rights in that it destroys A's right in an event to become a creditor of B.'

These observations will show that if an Act operates after it has come into force, but for giving effect to the Act, some events which have occurred prior to the Act have to be considered, the Act cannot be said to be retrospective.

34. Another illustration of an Act not being retrospective has to be found in the decision in Workmen of Firestone Tyre and Rubber Co. v. Management 1973-I-L.L.J. 278. That decision dealt with the provisions of S. 11-A, which was introduced in the Industrial Disputes Act with effect from 15th December, 1971. It was held that S. 11-A applied only to disputes which were referred for adjudication after the Section had come into force notwithstanding that the dismissal, which was the subject matter of industrial dispute, had taken place earlier. We are therefore, not satisfied that the Act can be described as retrospective in character.

35. An argument is seriously advanced that S. 6 of the Act vests unbridled power in the Inspector to prosecute an employer without determination of the liability of the employer. This argument followed the earlier argument that the Inspector himself does not have any guidelines to decide the disputes which may arise between the employer and the workmen. We have already pointed our that the guidelines are implicit in S. 3(2) of the Act. What material he will take into consideration is also specified in Rule 6. The registers are required to be maintained by the employers, and they are required to be produced before the Inspector when called for, for ascertaining whether an employee whose name is not entered in the list referred to in Rule 6(2) has been wrongly excluded or not. Now, so far as the prosecution is concerned, it is difficult to accept the argument that a determination of the liability of the employer by any authority other than the Inspector is necessary before the prosecution is launched. The implementation of the Act is entrusted to the Inspector. The Inspector has the power to issue the necessary directions. If these directions are disobeyed, there is power in the Inspector to prosecute. Nothing prevents the employer from challenging the order or the directions of the Inspector in a proper forum, like in a proceeding under Arts. 226 and 227 of the Constitution of India. In so far as the prosecution is concerned, the question as to whether the employer is guilty of a breach of any of the provisions of the Act will have to be decided by the Criminal Court. It is implicit in the trial of the offence when a prosecution is launched that the Inspector will have to prove a breach of the law, and the Criminal Court will be well within its power to determine the validity or the truth of the defence of the employer that the workman not being entitled to the benefits of the Act, he has committed no breach of the law. Mr. Chidambaram expressed some doubt as to whether the Criminal Court trying an employer for the offence, as required by S. 6 of the Act, will be entitled to consider the validity of the defence of the employer. On normal principles which govern the trial for a Criminal offence, a Criminal Court is bound to consider the defence. As already pointed out, the law has not made the determination by the Inspector conclusive and we see no legal impediment in the employer justifying his refusal to confer a permanent status on a workman in the Criminal Court when he is prosecuted.

36. An argument was advanced that there is a likelihood of conflict of decisions, in the sense that a Criminal Court might hold that the employer has committed a breach, while in a proceeding taken to challenge the order of the Inspector or in proceeding taken by the workman to enforce his rights for a permanent status, a decision contrary might be reached. Such a conflict between the decisions of a Criminal Court and Civil Court are implicit in the jurisprudence by which these two proceedings are governed, but that would, however, be no reason for holding that a criminal prosecution cannot be launched unless the Inspector has got all the controversies settled by some independent forum. As a matter of fact, it is not necessary for the Inspector to go further, because the law has given him the summary jurisdiction to determine questions with regard to which a decision might be necessary.

37. Accordingly, in the view which we have taken, we must hold,

(1) 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 badli worker could not be included in the 'workman' referred to in Ss. 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 workers and the employer in so far as it deals with the subject of conferment of permanent status to workmen.

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

The petitions are accordingly partly allowed. There will be no order as to costs.


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