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The Management of E.i.D. Parry Limited Vs. the Industrial Tribunal and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Reported in(1976)2MLJ473
AppellantThe Management of E.i.D. Parry Limited
RespondentThe Industrial Tribunal and anr.
Cases ReferredB.T. Manufacturing Co. v. T.L. Association
Excerpt:
- - it was held at page 839: these provisions clearly indicate that the statutory benefits which, in the opinion of the legislature, are the minimum to which the employees are entitled, cannot create a bar against the employees claim for additional benefit from their employers......so, the settlements cannot be a bar to a claim for a pension scheme. the claim does not affect the gratuity scheme now in existence.' the settlements only prevent the workers from asking for more as gratuity. i do not think that they debar them from claiming a separate retirement scheme the management has filed an additional counter-statement subsequent to the date on which the payment of gratuity act, 19;2 came into force contending that this tribunal would have no jurisdiction to formulate any pension scheme instead of gratuity. this contention in my opinion has no substance.i am constrained to remark that the approach of the tribunal teems to be rather lay than legal. i am afraid, the argument of the management has not been properly appreciated. there is no gainsaying that gratuity is.....
Judgment:
ORDER

S. Mohan, J.

1. This writ petition is for certiorari to quash the award of the 1st defendant--Industrial Tribunal, made in I.D. No. 29 of 1972 dated 11th December 1972.

The short facts are as follows:

2. By G.O. Rt. No. 1518 dated 17th June, I972, the Government of Tamilnadu referred for adjudication two issues between the workmen and the management of E.I.D. Parry Limited, Ranipet. Those two issues are:

1. Whether the demand for extension of accident benefit applicable to the workers who joined service before 1961 to those who joined thereafter is justified and to what relief they would be entitled; and

2. Whether the demand that the workmen who have completed 20 years of service should be given tlie option of pension instead of gratuity is justified and if so, to formulate a scheme.

On receipt of this reference, the Industrial Tribunal took up the matter for adjudication and answered issue No. 1 in favour of the management and as regards issue No. 2 it held that the workmen who had completed 20 years of service would be eligible for a monthly pension at the rate of 25 per cent of their monthly basic salary and 5O per cent of their average monthly deamess allowance drawn during the 12 months' preceding retirement. It further held that a sum of Rs. 1 for every year of service will be further added on to the pension for service in excess of 20 years and that the work-men who had completed 20 years of service would be given the option as above instead of gratuity. It 'v this award that is attacked.

3. Before me Thiru M.R. Narayana-swami, appearing for the writ petitioner, the management E.I.D. Parry Limited, would contend as follows: Reference by the Government itself is incompetent because the matters relating to gratuity were covered by three settlements M3 to M5 which came into effect on 1st April, 1968 and were to be operative for a period of five years and that as the matters was covered by these settlements it would not be open to the workmen to opt or to come out of the settlement and ask for pension instead of gratuity. Properly speaking it is that scheme under the settlement which should govern the rights of the parties. In support of this, the learned Counsel relies on the decisions in Bangalore W.G and Section Mills Company v. Their Workers' : (1968)ILLJ555SC and Employers Thungabhadra Industries Limited v. Workmen : (1973)IILLJ283SC . The next contention is that the Payment of Gratuity Act (C.A. No. 39 of 1972) came into effect on 16th September, Ig72 and by reason of Sections 4, 5 and 14 it would not be possible for the workmen to ask for gratuity other than what is provided for under the Act. Even Section 5 mentions gratuity or pensionary benefits. If it was the case of the workmen that the gratuity that was available under the settlements M3 to M5 were not in accordance with the provisions of the Act, in view of the over-riding effect of Section 14, it should be by way of a separate dispute. But this is not the case here. The third contention is that merely because for the clerical staff pensionary benefits were available under Exhibit M7, it would not straightaway mean the workmen concerned in the writ petition would also be entitled in such claim. Even assuming that they would be entitled to such benefits, the Tribunal instead of framing a scheme in accordance with M7 has chosen to frame a scheme in an arbitrary fashion while at the same time purporting to base its conclusion on M7.

4. Thiru N.G.R. Prasad, the learned Counsel for the respondent workmen in meeting these contentions would submit that the pensionary benefits are not the subject-matter of the settlements M3 to M5. Therefore, there is no bar in their opting for the pensionary benefits. Of course, the workmen might not have been entitled to more gratuity but where what is asked for is a totally different retirement benefit, certainly the reference is competent. In order to hold that the reference is competent the test which is applied is whether there is identity or whether the settlement would directly answer the subject-matter of reference. It was so laid down in Indian Bank Limited v. Industrial Tribunal : (1963)IILLJ195Mad .

5. Section 5 of Central Act XXXIX of 1972 does not in any manner affect or take away the jurisdiction of the Tribunal. It merely says that it will be open to the management concerned to ask for exemption at the hands of the Government. Under more or less identical circumstances, the Supreme Court had held concerning a case relating to provident fund that gratuity could also be asked for in addition to provident fund, B.T. Manufacturing Co. v. T.L. Association : (1960)IILLJ21SC . Concerning the merits about the scheme framed by the Industrial Tribunal, the submission of the learned Counsel ii that M 7 merely formed the basis but if pensionary benefits were to be awarded on that basis it would be an illusory one and therefore sufficient variation was done by the Tribunal in order to afford real benefit concerning pensionary benefits to the workmen. Even otherwise, according to the learned Counsel, this Court exercising writ jurisdiction cannot interfere concerning merits.

6. Thiru M.R. Naraya naswami, in reply submits that certainly as long as the scheme is pending and in force the workmen cannot ask for additional gratuity. What is contended now is in lieu of gratuity, whether option could be exercised for pensionary benefits. In Sanghvi Jeevaraj v. M.C.G. and K.M.W Union : (1969)ILLJ719SC relating to Bonus Act it has been held, that for such of those industries not covered by the Bonus Act, the Tribunal cannot award bonus under the formulae which existed prior to the passing of the Act. The same principle would apply in the instant case also in that after the passing of the Act if really the grievance of the workmen was that the gratuity as awarded under the three settlements was not in accordance with the provisions of the Central Act XXXIX of 1972 even then the scope of the reference should be totally different and not as the one that it done.

7. Before I proceed to examine the merits of these contentions, I may refer to the award of the Tribunal in issue No. 2. The Tribunal has held:

The settlements do not cover any pension which is also a retirement benefit. That being so, the settlements cannot be a bar to a claim for a pension scheme. The claim does not affect the gratuity scheme now in existence.' The settlements only prevent the workers from asking for more as gratuity. I do not think that they debar them from claiming a separate retirement scheme The management has filed an additional counter-statement subsequent to the date on which the Payment of Gratuity Act, 19;2 came into force contending that this Tribunal would have no jurisdiction to formulate any pension scheme instead of gratuity. This contention in my opinion has no substance.

I am constrained to remark that the approach of the Tribunal teems to be rather lay than legal. I am afraid, the argument of the management has not been properly appreciated. There is no gainsaying that gratuity is a retirement benefit. It has been so laid down in Delhi Cloth and General Mills Company v. Its Workers : (1969)IILLJ755SC In fact, their Lordships of the Supreme Court said, 'gratuity paid to workmen is intended to help them after retirement, on superannuation, death, retirement, physical incapacity, disability or otherwise. The object of providing gratuity scheme is to provide a retiring benefit to the workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer'. If, therefore, gratuity is a retirement benefit what then is the effect of the settlements MS to M5? As seen above, those settlements were to be operative from 1st April, I968, for a period of five years. The reference itself under issue No. 2 is, whether the demand that the workmen who have completed 20 years of service should be given the option of pension instead of gratuity is justified and if so to formulate a scheme. These settlements undoubtedly are binding and operative and they have the same effect as an award of the Tribunal. If that be the true legal position, is it open to the workmen to wriggle out of these settlements by an ingenious device of seeking an option of pension and thereby bypass the settlement. My answer to that would be 'no'. It is here, the two cases cited by Thiru M.R. Narayanaswami are of great assistance to him. It was held in Bangalore W.C. and S. Mills Com. v. Their Workmen : (1968)ILLJ555SC that ' From this it will follow that when there is a subsisting award binding on the parties, the Tribunal will have no jurisdiction to consider the same points in this reference'. Again in Employers Thungabhadra Industries Limited v. Workmen it was held, where the subject-matter of the reference was almost identical with the matters covered by the prior award which had not been properly terminated under Section 19(6) of the Industrial Disputes Act, the second reference was invalid.

8. From this it will follow that the reference itself is incompetent. I am unable to appreciate the argument of Thiru N.G.R. Prasad that the pensionary benefits were not covered by settlement. It was this approach of the Tribunal which I have earlier characterised as rather lay than legal. This argument ignores the fact that the subject' matter of the reference ii whether the workmen could opt for pensionary benefits. There being no question of option, so long as the settlements are binding and operative, it is not correct on the part of the learned Counsel for the respondent to contend that pensionary benefits are not covered by the settlement.

9. In Indian Bank Limited v. Industrial Tribunal : (1963)IILLJ195Mad a question arose before a Bench of this Court as to when the jurisdiction of the local Tribunal would be ousted. In that connection, it was held, an adjudication contemplated by Section 10 is of a dispute and it follows that for the purpose of applying Clause (6) of Section 10, the dispute pending before the Industrial Tribunal and that before the National Tribunal should be the same so that the concerned workers may obtain the relief sought in the local Tribunal from the national Tribunal. Unless there is therefore an identity between the two references, one cannot replace or supersede the other.

10. The question in this case is some what different, namely, in view of the binding nature of the settlement, whether the workmen could seek an option for pensionary benefits and therefore this decision does not lend support to the contention of Thiru N.G.R. Frasad. Even otherwise, I find 'gratuity' is the subject of settlements M3 to M5 and therefore by reference to those schemes the Tribunal would be in a position to hold that the workmen would be governed by those schemes. So looked at from any point of view, I have little hesitation in coming to the conclusion that the reference is totally incompetent.

11. Central Act XXXIX of 1972 came into force on 16th September, 1972. The reference in this case was on 17th June, 1972. Section 4 of that Act says gratuity shall be payable to an employee on the termination of his employment. Section 5 enables the government to exempt any establishment, factory, mine etc by notification where the gratuity or pensionary benefits are not less favourabe than the benefits conferred under that Act. Section I4 contains the over-riding provision that 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.

By reading this section it follows, if the grievance of the workmen is that the gratuity benefits obtainable under the settlements M3 to M5 are in any way inconsistent with the provisions of the Act, that would be a different dispute altogether and even then it would not enable them to seek for an option of pension benefits. This is where the disjunctive clause under Section 5 of the Act, namely, gratuity of pensionary benefits requires to be noted. No doubt, Section 5 is only a provision relating to exemption which could be done by the Government by appropriate notification. Nevertheless, if the Tribunal has no jurisdiction in view of my finding that the reference itself was incompetent, the question whether by reason of Act XXXIX of 1972 the jurisdiction of the Tribunal would be barred is again a matter which ought to have been decided independently, but instead all that the Tribunal said was that there is nothing in the Payment of Gratuity Act which says that gratuity is the only retirement benefit which an employee to whom the Act will apply is entitled to receive. Where the management is obliged to pay gratuity by reason of the Act (more so in view of the settlements covered by M3 to M5 which are undoubtedly binding and operative between the management and the workmen) it is the provision of the Act that will govern. From this point of view also I hold that the award of the Tribunal is illegal.

12. The decision in B.T. Manufacturing Co. v. T.L. Association : (1960)IILLJ21SC at 839 relied on by the learned Counsel for the respondent deals with a different situation altogether. That arose under the Provident Fund Act. It was held at page 839:

These provisions clearly indicate that the statutory benefits which, in the opinion of the Legislature, are the minimum to which the employees are entitled, cannot create a bar against the employees claim for additional benefit from their employers.

The question here is not additional benefits. At the risk of repetition, I say it is to opt for a pensionary scheme while the settlements under M3 to M5 are still binding and valid between the parties. Therefore, this decision has no application to the facts of the present case.

Lastly, turning to the merits, inasmuch as I have already held that the reference itself is incompetent and the award of the Tribunal is illegal, I do not think it necessary to go into the merits. It is needless for me to mention that it will be certainly open to the workmen to terminate the settlements in accordance with the terms of the settlements or in accordance with the provisions of law and thereafter seek for the pensionary benefits, if so advised.

In the result, the rule nisi is made absolute. There will be no order as to costs.


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