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Dalmia Magnesite Corporation, Salem Represented by Its Manager, Mr. K. Srinvasan Vs. the Regional Labour Commissioner (Central), and anr. - Court Judgment

LegalCrystal Citation
SubjectService
CourtChennai High Court
Decided On
Reported in(1981)1MLJ412
AppellantDalmia Magnesite Corporation, Salem Represented by Its Manager, Mr. K. Srinvasan
RespondentThe Regional Labour Commissioner (Central), and anr.
Cases ReferredBombay Union Dyeing and Bleaching Mills v. N.T. More
Excerpt:
- - reading the main definition as well as the explanation i together it is clear that the parliament had while using the word 'actually' before the word 'employed' intended that the employee should have worked for 240 days. absence for any other reason or on account of any other circumstances would clearly have the effect of interrupting the service and the moment such interruption of service occurs the employee would clearly be one who cannot be said to be in as uninterrupted service......to his nominee, or if no nomination has been made, to his hairsxx x x x x(2) for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned.x x x x x x5. section 2(b) states 'completed year of service' means continuous service for one year.6. section 2(i) slates '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--in the case of an employee who.....
Judgment:
ORDER

S. Padmanabhan, J.

1. Tae second respondent Jayapal was in the service of the petitioner, Dalmia Magnesite Corporation, Salem for seven years from 1st September, 1969 to 15th October, 1976 on which date he resigned from service. The petitioner rejected the claim of the second respondent for gratuity on the ground that he had not put in 'Continuous service' as required under the provisions of the Payment of Gratuity Act, 1972 The second respondent filed an application before the Controlling Authority under the Act. The petitioner contended that the second respondent had not actually worked for 240 days excluding the days of absence on account of sickness, accident, leave, lay off, strike or lock out and weekly holidays and therefore, he was not in continuous service as defined under the Act. The Controlling Authority negatived the contention of the petitioner and held that the second respondent was entitled to gratuity for the period of his service. The petitioner preferred an appeal under Section 7(7) of the Act. The Appellate Authority held that a reading of Section 2(c) of the Act would make it clear that interruption caused by leave of any kind whether with wages or without wages should be included in the term of continuous service and that the word 'actually employed' occurring in Explanation I to Section 2(c) of the Act was not the same as actually worked. The Appellate Authority further held that to attract the application of Explanation I under Section 2(c) of the Act one need not actually work for not less than 240 days in a year. In these circumstances, the petitioner has filed this petition for the issue of a writ of certiorari to quash the order passed by the Appellate Authority on 21st February, 1978.

2. It is seen from paragraph 2 of the counter-affidavit that the second respondent was unauthorized absent for 94 days, 92 days, 78 days, 15 days, 28 days, 29 days and 44 days every year on various dates from 16th October, 1969 to 15th October, 1976. In the view of this unauthorised absence Mr. T. S. Gopalan contended that the second respondent had not put in continuous service for each year. Consequently he must have actually worked for at least 240 days to fall within the Explanation I to Section 2(c) of the Act and to qualify himself for gratuity. Mr. Gopalan argued that the view taken by the Appellate Authority that under the Explanation an employee need not actually work for 240 days to be eligible for gratuity and that it would be sufficient it the relationship of master and servant existed for 240 days, is erroneous.

3 On the other hand, Mr. Chandran, the learned Counsel for the second respondent strenuously contended that it was not necessary to fall within Explanation I to Section 2(c) of the Act that an employee should have actually worked for 240 days. So long as the master and servant relationship existed for 240 days, the employee would fall under Explanation I to Section (c) of the Act and he would be eligible for gratuity In this case, the learned Counsel further contended that if the number of holidays, leave with wages and off days are taken into account it would be clear that the second respondent had worked for 240 days.

4. To decide the controversy between the parties it is necessary to refer to the relevant Sections of the Act. Section 4 of the Act reads as follows :--

4(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, ...

(a) On his superannuation; or

(b) On his retirement or resignation; or

(c) On his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of the employee gratuity payable to him shall be paid to his nominee, or if no nomination has been made, to his hairs

XX X X X X

(2) for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned.

X X X X X X

5. Section 2(b) states 'completed year of service' means continuous service for one year.

6. Section 2(i) slates '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--In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than

(i) 190 days if employed below the ground in a mine, or

(ii) 240 days in any other case except when he is employed in a seasonal establishment

XX X XXX

7. From the above sections it is evident that Section 4(1) creates a right in an employee to get gratuity and it enjoins an obligation on the employer to pay gratuity to an employee on the termination of his employment in one of the modes set out in the section provided the employee has rendered 'continuous service' for not less than five years'. The definition of 'continuous service', states that absence due to sickness, accident, leave, lay-off, strike or lock-out or cessation of work out due to any fault of the employee concerned will net bring about an interruption in Service. In other words a service even though interrupted due to above causes will be deemed to be uninterrupted and falling within the definition of 'continuous service'. To put it differently the days during which an employee is absent for the reasons mentioned is the definition of 'continuous service' will be counted as a part of uninterrupted service. Therefore, if the service of an employee is only interrupted by any of the reasons mentioned is the main definition of continuous service still the said service will be deemed to be uninterrupted and taken to be continuous service. On the other hand, if the service is interrupted by causes other than those which are mentioned in the definition the service will be deemed to be interrupted and the said service will not fall within the definition of 'continuous service'. Explanation I to Section 2(c) of the Act provides for cases where a service is interrupted by reasons other than those mentioned in the main definition of 'continuous service'. Explanation I creates a fiction. Under the said Explanation a person who is not in uninterrupted service for one year shall be deemed to be in 'continuous service' if he has been actually employed by the employer during the 12 months immediately preceding the year for not less than 190 days in case of a person employed below the ground in a mine and 240 days in any other case except when he is employed in a seasonal establishment. Under this Explanation even services which are not uninterrupted for a period of one year tested in the light of the definition, can be deemed by a fiction to be an uninterrupted service provided the employee has been actually employed for not less than 190 days if employed below the ground level in a mine and 440 days in any other case except in the case of a seasonal establishment.

8. In this case, as I have already stated, it is not disputed that the second respondent has been absent unauthorisedly for a number of days during all the seven years he was in the service of the petitioner. In the circumstances, it cannot be said that the second respondent has been in uninterrupted service with the petitioner. It therefore, naturally follows that he has not been in continuous service within the meaning of the main part of the definition of 'continuous service' in Section 2(c) of the Act.

9. Then the question arises whether the second respondent can be deemed to have been actually employed with the petitioner for 240 days within the meaning of Explanation I to Section 2(c) of the Act. The answer to this question will naturally depend on the interpretation to be given to the words 'actually employed'. While it is the case of Mr. Gopalan that to fall within Explanation I to Section 2(c) of the Act the second respondent must have actually worked for 240 days it is the contention of Mr. Chandran, that it will be sufficient if the relationship of master and servant existed for a period of 240 days. On a reading of the whole of Section 2(c) I am inclined to take the view that in order to fall within the Explanation I an employee should have actually worked for 240 days and it will not be sufficient if the relationship of master and servant subsists for 240 days. If an employee has been absent for any number of days only by reason of sickness, accident, leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employee concerned (sic) then his service wilt not be deemed to be uninterrupted and will be taken to be continuous service irrespective of the number of days, for which he has been absent in that year. However, if the employee has been absent for any reason other than the reasons mentioned in the main part of the definition, his services will not be deemed to be uninterrupted and therefore, continuous. It is to provide for cases where an employee has put in only interrupted service for a period of one year, the Explanation I to Section 2(c) of the Act has been introduced to enable him to be eligible to get gratuity notwithstanding the fact that his service was Interrupted. In such cases the Explanation provides that the employee will be eligible for gratuity provided he has been actually employed for 240 days. Reading the main definition as well as the Explanation I together it is clear that the Parliament had while using the word 'actually' before the word 'employed' intended that the employee should have worked for 240 days. Otherwise, the word 'actually' could have been a surplusage. It is one of the principles of interpretation that no word in the statute should be considered to be redundant. If really the Parliament meant that an employee would be entitled to gratuity if he had been employed for 240 days in cases other than mines and for 190 days in the case of mines, there was no necessity for the Parliament to define 'Continuous service' as uninterrupted service and to have included is uninterrupted service, service interrupted by sickness, accident, leave, lay off, strike or a lock oat or cessation of work not due to any fault of the employee concerned.

10. The above conclusion of mine is supported by a Bench of the Bombay High Court, in Bombay Union Dyeing and Bleaching Mills v. N.T. More (1980) 1 LLN 352 : 1980 Mah L J 171. where a similar question arose for consideration. There an employees claimed gratuity on the basis that he was in employment for twelve years but the employer paid him gratuity only for four years and contended that for the rest of the service the employee did not actually work for 240 days in a year and that he was absenting himself without leave almost every year and that he would not be entitled to gratuity for the year during which he had not actually worked for 240 days in a year. The Labour Court which was the Controlling Authority negatived the contention of the employer and granted the claim of the employee. The Industrial Court on appeal by the employer held that the employment or being employed had to be interpreted as comprising the subsistence of relationship of employer and employee and not necessarily rendering of actual work or being on duty or performing work. It was the orders of the Labour Court and the Industrial Court that were challenged before the Bombay High Court. It was held as follows:

While the main part of the definition in Section 2(c) of the Payment of Gratuity Act, 1972, deals generally with the concept of 'continuous service' the first Explanation deals only with the case of an employee who is not in uninterrupted service for one year. By that Explanation, in the case of those who are not in uninterrupted service for one year, the legislature has introduced a fiction and by the fiction it is provided that if the employee has been actually employed by an employer within the 2 months immediately preceding the year for not less than 90 days if employed below the ground in mine, or 240 days in any other case except when he is employed in a seasonal establishment, then such employment shall be in continuous service. An artificial meaning has therefore, been given to the words 'continuous service' by fictionally treating an employee who is not in uninterrupted service for one year as being in continuous service provided he is actually employed for the number of days referred to in the Explanation.... It is important to near in mind that in the Explanation the legislature has used the words actually employed'. If it was contemplated by the first Explanation that it was enough that there was a subsisting contract of employment, then it was not necessary for the legislature to use the words actually employed' One cannot attribute redundancy to the legislature and when the legislature has deliberately used the words 'actually employed' in the context of the definition of 'continuous service' it is clear that those words contemplate that the employee who wants to take benefit of the Explanation must show that no had actually worked for 240 days during the period of twelve months immediately preceding the year in question Giving any other meaning for the words 'actully employed' would defeat the purpose of enacting the Explanation. There is intrinsic evidence, in the Explanation itself apart from tae words used that the words 'actually employed' contemplate actual work or actual readying of service. It is therefore, quite dear that for purpose of the first Explanation an employee must show that he has actually rendered service for the number of days spec filed in the Explanation....For the purpose of continuous service or uninterrutped service, absence resulting only in the circumstances specified in tae inclusive part of the definition could be taken into account. Absence for any other reason or on account of any other circumstances would clearly have the effect of interrupting the service and the moment such interruption of service occurs the employee would clearly be one who cannot be said to be in as uninterrupted service. Once the employee falls into the category of those who are not is an uninterrupted service then the only provision which may enable him to get the benefit of gratuity is Explanation I. Explanation I gives only one criterion for deciding whether a person is deemed to be in continuous service. This criterion is that he has to be actuality employed for not less than 240 days, if he is not employed in a seasonal establishment or below the ground in a mine.

11. To sum up 'continuous service' under Section 2(c) of the Act means uninterrupted service for one year. Absence of an employee for reasons mentioned in the main definition of Section 2(c) will not cause interruption in service. If an employee is absent for any other reason or on account of any circumstances other than those mentioned is the main definition in Section 2(c) of the Act, he cannot be said to be in uninterrupted service. In such cases to the eligible to receive gratuity he must fulfil she conditions in Explanation I to Section 2(c) of the Act according to which he must have actually worked for not less than 240 days if he is not employed is seasonal establishment or below the ground in a mine. Tested in the light of the above principles it will be seen that the second respondent worked for 240 days and above only in one year, i. e., in the year 10th October, 1974 to 15th October, 1975 In all other years he has not actually worked for 240 days as required under Explanation I to Section 2(c) of the Act. It therefore, follows that he has not been in 'continuous service' for a period of five years which is necessary to acquire eligibility for the payment of gratuity under Section 4(1) of the Act. The impugned order is therefore, quashed. The writ petition as allowed, but under the circumstances without costs.


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