MANAGEMENT OF KRISHNA RAJENDDRA MILLS LTD. v. PRESIDING OFFICER, LABOUR COURT
1974-11-07
VENKATACHALAIAH
body1974
DigiLaw.ai
( 1 ) THE petitioner in these two writ petitions is Krishnarajendra Mills ltd. It has questioned the correctness of the order passed by the Labour court, Bangalore on two, applications filed by 2and workmen under S. 33c (2) of the Industrial Disputes Act (hereinafter called the Act ). The services of the workmen concerned were terminated by way of retrenchment by the management on 31-10-1964 and they were, paid compensation in accordance with S. 25 (F) of the Act. After the services of the workmen were terminated, a settlement was arrived at between the workmen and the management with regard to the interpretation Off the award made by the tribunal in I. D. 29 of 1961 on the question of gratuity ordered to be paid under the award. The settlement was entered into on 4-9-1965. The terms of the settlement were as follows :" It is agreed that workers entitled to gratuity under the terms of the award of the Hon'ble Indusrtial Tribunal in Mysore, Bangalore, in Ref. No. 29 of 1961, will be paid gratuity as follows- (a) For the total of service of a workman from the date of his joining service upto the date of termination, retirement, resignation, death, retrenchment and permanent disablement due to medical unfitness etc. , the workers will be paid gratuity according to the formula laid down by the Hon'ble Tribunal in Its award in I. D. 29 of 1961. (b) If however, there is accumulation of gratuity at the credit of a workman as per agreement d/1-1-1953, he will be entitled to either the amount of accumulation or the amount of gratuity as calculated as per terms of the award in I. D. 29 of 1961, whichever is higher and not both. (c) Workers who ceased to be in service before 1-10-1961 will be entitled to get only the accumulation at their credit if any, for the period 1-7-1949 to 1-11-1952. (2) It is agreed that workers who are discharged or dismissed for any misconduct with effect from 1-10-1961 are also entitled to gratuity, as per terms of the award in I. D. 29 of 1961 as explained above, with the exception that workers discharged or dismissed for misconduct involving financial loss to the company will not be entitled to gratuity amount to the extent of the loss sustained.
(3) It is agreed that workers who were retired, retrenched, resigned, died or medically unfitted, dismissed or were terminated with effect from 1-10-1961 are entitled to gratuity under the terms of the award in I. D. 29 of 1961, will execute individual letters of consent accepting the terms settled above, to be entitled to payment of gratuity. " ( 2 ) AS the case of the workmen fell within the scope of Cl (3) of the settlement and services of the workmen were terminated after 1-10-61 they called upon the management to pay gratuity also in accordance with the terms of settlement. The management contended that the workmen were not entitled to any amount by way of gratuity in addition to the compensation already paid to them under S. 25f of the Act. Thereupon the workmen filed two applications before the Labour Court, Bangalore, under s. 33c (2) of the Act out of which these two petitions arise. ( 3 ) BY a common order passed on 1-8-1968 the Labour Court, Bangalore, held that the workmen were entitled to gratuity in accordance with the terms of settlement in addition to, the amount of compensation already paid by the management under S. 25f. Aggrieved by the said order the petitioner filed two writ petitions in WPs. 2825 and 2849 of 1968 before this Court. This Court by its order d/6th Dec, 1972, set aside the order passed by the Labour Court on 1-8-1968 and remanded the case to it again to consider it in the light of the observations made therein. In those writ petitions this Court held that the rights of the parties were governed not merely by the award made in I. D. 29 of 1961 but by the settlement entered into by the parties on 4-9-1965 also. After the cases were remanded the labour Court heard both the parties and passed a common order on 31st july, 1973 holding that the workmen were entitled to gratuity in accordance with the terms of the settlement in addition to the amount of compensation paid under S. 25f. Hence these two petitions.
After the cases were remanded the labour Court heard both the parties and passed a common order on 31st july, 1973 holding that the workmen were entitled to gratuity in accordance with the terms of the settlement in addition to the amount of compensation paid under S. 25f. Hence these two petitions. ( 4 ) IT was argued on behalf of the management by Sri T. Rangaswamy iyengar, that under the settlement the workmen whose services were retrenched were entitled to be paid the compensation under S. 25f or gratuity in accordance with the terms of the settlement whichever was higher of the two and not both. He contended that the gratuity payable under the settlement which was entered into between the management the workmen should be treated as an alternative to the amount of compensation payable under S. 25f In support of his contention he relied upon the decision of the Supreme Court m Brahmachari Research Institute v. Its Workmen, AIR. 1960 SC. 257. In that case the Supreme Court was concerned with a case where there was a gratuity scheme provided by an award made under the provisions of the Act. On a true interpretation of the said scheme, as observed by the Supreme Court in para 4 of the said decision, it was obvious that the retrenched workmen could claim gratuity under the award only on account of retrenchment and could not claim it on any of the two other conditions referred to therein. In other words, it was observed by the Supreme Court on a fair and reasonable construction of the award what the retrenched workmen got was only compensation for retrenchment and not any amount by way of gratuity properly so called. In that vietw of the matter the Supreme Court held that the claim off the workmen that they were entitled to both compensation payable under s. 25f and gratuity payable under the award was not sustainable. It should be mentioned here that on the same day the Supreme Court pronounced another judgment in Indian Hume pipe Co Ltd v. The Worfcmen, AIR 1960 SC 251 , in which the true character of retrenchment compensation and gratuity payable to workmen after termination of services was considered in great detail.
It should be mentioned here that on the same day the Supreme Court pronounced another judgment in Indian Hume pipe Co Ltd v. The Worfcmen, AIR 1960 SC 251 , in which the true character of retrenchment compensation and gratuity payable to workmen after termination of services was considered in great detail. ( 5 ) THE gratuity scheme which came up for consideration in Indian hume Pipe Co's case (2) directed the payment of gratuity on the following scale :" (1) On the death of an employee while in the service of company or on his becoming physically or mentally incapable, of further service- 1/2 month's salary or wages for each year of continuous service, to be paid to the disabled employee or if he has died, to his heirs or legal representatives or assigns. (2) On voluntary retirement or resignation of an employee after 15 years Continuous service- 1/2 month's salary of wages for each year of continuous service. (3) On termination of service by the company- 1/2 month's salary or wages for each year of completed service. "the Supreme Court found that the above scheme conferred the benefit of the gratuity payable under it even on workmen whose services had been terminated and who had thereby become entitled to retrenchment compensation also. It was observed by the Supreme Court that compensation payable under S. 25f could not be considered as retirement benefit as it was a payment made to the workmen to enable them to tide over the difficulties which they had to face on their retrenchment. But, on the other hand gratuity was a payment made by way of terminal benefit. It was no doubt observed by the Supreme Court in the course of the decsion that the question whether a retrenched workman would be entitled to both gratuity provided under the scheme and compensation under s. 25f or only the higher of the two would be dependent in a given case upon the terms of agreement or settlement arrived at between the parties. It was argued by Sri T. Rangaswamy Iyengar, learned Counsel for the petitioner, depending upon the above observation, that in these writ petipetitions it had to be held by the Court that the workmen were not entitled to compensation as well as the amount of gratuity payable under the terms of the settlement.
It was argued by Sri T. Rangaswamy Iyengar, learned Counsel for the petitioner, depending upon the above observation, that in these writ petipetitions it had to be held by the Court that the workmen were not entitled to compensation as well as the amount of gratuity payable under the terms of the settlement. ( 6 ) THE above contention urged on behalf of the petitioners cannot be accepted. Cl (3) of the settlement which is extracted above clearly establishes that the workmen who were retrenched with effect from 1-10-1961 were entitled to gratuity under the terms of the award as interpreted by the settlement. If the parties to the settlement intended that the retrenched workmen should not be paid gratuity in addition to the compensation already paid under S. 25f there would have been a recital to the above effect in the settlement. Both the parties knew that the retrenched workmen had already been paid compensation under Sec. 25f. In that situation there was no necessity to introduce Cl (3) referred to above if the intention was that they should not be paid gratuity under the award as explained in the settlement. It is further seen from the recitals of the settlement that gratuity would he payable even to dismissed workmen. A dismissed workmen is not entitled to payment of any compensation it cannot, therefore, he said that the payment of gratuity contemplated under the settlement should be treated as gratuity in the case of dismissed workmen and as compensation in the case of retrenched working. The true character of the amount payable under the settlement is that of gratuity and not of compensation When once that conclusion is reached it has to be held that the workmen in these cases were entitled to payment of gratuity in addition to the amount of compensation paid to them under S. 25f. Tn Mutter and Phipps (India) P Ltd v. K. C. Sud, AIR 1960 SC. 1028 , the Supreme Court had to Interpret a scheme which was more or less similar to the scheme with which we are concerned in these cases.
Tn Mutter and Phipps (India) P Ltd v. K. C. Sud, AIR 1960 SC. 1028 , the Supreme Court had to Interpret a scheme which was more or less similar to the scheme with which we are concerned in these cases. The gratuity scheme in that case was in the following terms :" On the death of an employee while in the service of the company, or on his becoming physically or mentally incapable of further service half a month's basic salary or wages each year of continuous service shall be paid to the disabled employee, or if he has died, to his heirs or legal representatives or assign on voluntary retirement or resignation of an employee after five years continuous service, half a month's basic salary or wages for each year of continuous service. On termination of service by the company, half a month's basic salary or wages for each year of completed service. " ( 7 ) AFTER considering the ratio of the decision in Indian Hume Pipe co's case (2) and Brahmachari Research Institute's case (1), the Supreme court held that under the scheme the workmen were entitled to a double benefit, one under a gratuity scheme and other as retrenchment compensation. It rejected the contention of the management that the workmen were entitled to only one of them. ( 8 ) THE Labour Court was, therefore, right in holding that the workmen in these cases were entitled to payment of gratuity also in addition to the compensation paid to them under S. 25f of the Act. ( 9 ) THESE, writ petitions therefore fail and they are dismissed. Advocate's fee Rs. 100 in each of the petitions. --- *** --- .