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Gordhandas Khimji (by Haridas Gordhandas, Sole Proprietor) Vs. Labour Court and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1970)ILLJ87Mad
AppellantGordhandas Khimji (by Haridas Gordhandas, Sole Proprietor)
RespondentLabour Court and ors.
Cases ReferredDhanbad v. Rameshwar and Ors.
Excerpt:
.....confirmed by a confirmatory notice. the payment of gratuity must be deemed to be in the nature of retrenchment compensation and the decision of the labour court directing the payment of gratuity as well as retrenchment compensation is illegal and unjustified in law. j, 830 the supreme court has pointed out the difference between gratuity and retrenchment compensation, it is held by the supreme court that gratuity is a kind of retirement benefit like the provident fund or pension, that the gratuity paid to workmen is intended to help them after retirement, whether the retirement is the result of the rules of superannuation or of physical disability, and that the general principle underlying such gratuity schemes is that by their length of service workmen are entitled to claim a certain..........the records of the presiding officer of the labour court, madras, dated 19 october 1965, in the claim petitions and quashing the same.2. the facts in all the four writ petitions are similar and the petitions can be disposed of by a common order. the facts in writ petition no. 441 of 1966 are these. the petitioner-firm had two branches, cue at mangalore and other at madras. the madras branch was a sales depot where sale of timber received from the head office was effected. in the madras branch the petitioner had under its employment seven persons as staff and workmen. the petitioner decided to suspend the sale of timber at madras branch with effect from 1 july 1964. he, therefore, advised the staff and workmen by a telegram on 29 june 1964 that the petitioner was closing down his.....
Judgment:
ORDER

P.S. Kailasam, J.

1. These petitions are preferred by the proprietor of a company which is dealing in timber in Cannanore for the issue of writs of certiorari calling for the records of the presiding officer of the labour court, Madras, dated 19 October 1965, in the claim petitions and quashing the same.

2. The facts in all the four writ petitions are similar and the petitions can be disposed of by a common order. The facts in Writ Petition No. 441 of 1966 are these. The petitioner-firm had two branches, cue at Mangalore and other at Madras. The Madras branch was a sales depot where sale of timber received from the head office was effected. In the Madras branch the petitioner had under its employment seven persons as staff and workmen. The petitioner decided to suspend the sale of timber at Madras branch with effect from 1 July 1964. He, therefore, advised the staff and workmen by a telegram on 29 June 1964 that the petitioner was closing down his Madras business, and that the services of the staff and workmen well be terminated from 30 June 1964. The telegram was confirmed by a confirmatory notice. The claims of the workmen were not settled and there was an attempt at concillation proceedings. Thereafter, the workmen moved the labour court by filing claim petitions under Section 33C of the Industrial Disputes Act. The workman claimed several reliefs, viz,

(1) retrenchment compensation;

(2) gratuity;

(3) bonus for the year 1963-64;

(4) one month's salary in lieu of notice;

(5) leave wages ; and

(6) difference in dearness allowance; as per award from 1960 to date of retrenchment.

The petitioner before the labour court conceded the claim for gratuity and for the month's salary in lieu of notice, but disputed the other claims. The main contention of the petitioner before the labour court was that the industrial tribunal had made an award in IT, No. 1 of 1960 on 15 March 1960 proposing a gratuity scheme in the following terms:

(1) On termination of service by reason of permanent physical disability on medical grounds or by death, fifteen days' basic wages for each completed year of service.

(2) On termination of service by the management except in case of dismissal for misconduct involving moral turpitude or by resignation, for service of more than ten years, fifteen days' basic wages for each completed year of service.

It was contended that the award which dealt with the bonus for the year 1956-57 should be deemed to have enunciated that general principle governing the grant of bonus in subsequent years also.

3. The labour court by its decision on 19 October 1985 granted the claim of the workmen in toto.

4. In these writ petitions the management has questioned the decision of the labour court on the ground that as the dispute is as vegards the claim for retrenchment compensation, the labour court ought to have held that the scheme of payment of gratuity provided in the award of the industrial tribunal in I.T. No. 1 of 1960 is in force. The payment of gratuity must be deemed to be in the nature of retrenchment compensation and the decision of the labour court directing the payment of gratuity as well as retrenchment compensation is illegal and unjustified in law. Though it was submitted that the labour court was in error in granting relief as to bonus for the year 1963-64, compensation for leave wages and the difference in dearness allowance, the objection was not pressed before me. Therefore, the only question that arises for consideration is whether the award in I.T. No. 1 of 1960 which provides for payment of gratuity would disentitle the workers for claiming retrenchment compensation.

5. In Indian Hume Pipe Company, Ltd. v. its workmen and Anr. 1959 -II L.L.J, 830 the Supreme Court has pointed out the difference between gratuity and retrenchment compensation, it is held by the Supreme Court that gratuity is a kind of retirement benefit like the provident fund or pension, that the gratuity paid to workmen is intended to help them after retirement, whether the retirement is the result of the rules of superannuation or of physical disability, and that the general principle underlying such gratuity schemes is that by their length of service workmen are entitled to claim a certain amount as a retiral benefit, while, on the other hand, retrenchment compensation is not a retirement benefit at all, but compensation paid to a workman on his retrenchment and it is intended to give him some relief and to soften the rigour of hardship which retrenchment inevitably causes. The Supreme Court proceeded to explain that the retrenched workman is suddenly and without his fault thrown on the street and has to face the grim problem of unemployment and the object of retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment. Thus it was explained that the concept on which grant of retrenchment compensation is based is essentially different from the concept on which gratuity is founded. In Brahmchari Research Institute v. its workmen 1969-II L.L.J. 840 the Supreme Court, in constrning the award in that case, held that on the terms of the award it must be held that gratuity provided therein on retrenchment is nothing more nor less than retrenchment compensation provided under Section 25F of the Act and the workmen are only entitled to one or the other whichever is more advantageous to them in view of Section 25J. The award in question was a composite scheme which provided for what is termed as gratuity under three conditions, namely,

(1) where there is retrenchment;

(2) where there is termination of service for any reason other than misconduct; and

(3) where there is resignation with the consent of the management.

In the award though the word ' gratuity ' has been used to cover all the above cases, it is clear that cases of retrenchment as such are also covered by the award and payment to workmen retrenched has been called 'gratuity.' Thus, the decision in Brahmchari case 1959-II L.L.J. 840 (vide supra) was based on the wording of the award, As the Supreme Court itself has observed in the decision, the matter would be different if the scheme in force in any concern or any award provides gratuity which is different in nature from the retrenchment compensation under Section 25F of the Act.

6. In the present case, construing the award in the light of two decisions cited above, it is dear that in Para. 6 of the award the industrial tribunal was considering only the gratuity and net compensation. It is no doubt true, as pointed out by the learned Counsel for the petitioner, that Clauses 2 and 3 refer to termination of service by the management except in case of dismissal for misconduct involving moral turpitude, which would mean termination otherwise than retirement due to superannuation or physical disability. But considering the whole paragraph, it is fairly clear that the intention was not to cover all oases of retrenchment or to exclude the retrenchment benefit available to the workmen. In this case, the proprietor closed down his business, and it is not disputed that the workmen will be entitled to retrenchment compensation. But the question is whether because of the award of the year 1960, which is binding on workmen, awarding retrenchment compensation, the gratuity provided should be taken into account. On a consideration of the entire facts. I am unable to accept the contention of the learned Counsel for the petitioner. The scope of award of the year 1960 was to provide for gratuity and the award was not concerned with the retrenchment compensation. As pointed out by the Supreme Court in Indian Hume Pipe Company, Ltd. v. its workmen and Anr. 1959-II L.L.J. 830 (vide supra) gratuity and retrenchment compensation being entirely different, there is no reason for denying the workers the benefits of both. It was next contended that the dispute as regards payment of gratuity will not fall within the scope of Section 33C(2) of the Industrial Disputes Act. The question is placed beyond all doubt by a very recent decision of the Supreme Court in East India Coal Company, Ltd. (by Chief Mining Engineer), Bararee Colliery, Dhanbad v. Rameshwar and Ors. 1963-I L.L.J. 6 where it was held that Section 33C(2) takes within its purview oases of workmen who claim that the benefits to which they are entitled should be computed in terms of money even though the right to the benefits on which their claim is based is disputed by their employers, and that it is open to the labour court to interpret the award or settlement on which the workmen's right rests. Therefore, It is competent for the labour court to Interpret the award or settlement if the benefit is claimed under an award or settlement. In the result, I do not see any reason for interfering with the order of the labour court. The petitions are dismissed. Costs one set in all the four petitions. Counsel's fee Rs. 200 to be paid to the workmen, respondent 2, in each of the cases.


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