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1984 DIGILAW 755 (ALL)

Uttar Pradesh State Electricity Board, Lucknow v. Third Labour Court, Kanpur

1984-09-19

S.K.DHAON

body1984
JUDGMENT S.K. Dhaon, J. - This petition, at the instance of the Uttar Pradesh State Electricity Board (hereinafter referred to as the Board) stems from proceedings under S. 33 C (2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Central Act), initiated by respondents 2 to 14 (hereinafter referred to as the workmen). The Labour Court at Kanpur, has, by the impugned order, directed the Board to pay to the workmen increased overtime wages from 1 April 1969 to 31 March 1974. 2. The Government of India set up a Central Wage Board for Electricity undertakings to determine the service conditions, etc., of the employees working therein. The Wage Board gave its recommendations on 19 December 1969. On 13 July 1970, the Government of India accepted the recommendations of the Wage Board. The State Government implemented the recommendations of the Wage Board by issuing an order under S. 3 of the Uttar Pradesh Industrial Disputes Act, 1947 (hereinafter referred to as the Uttar Pradesh Act) which was published in the official gazette on 11 February 1971 followed by a notification, dated 18 June 1971. In this petition we are really concerned with the order as contained in the notification, dated 18 June 1971. 3. One of the items of the Government order as contained in the said notification was that the minimum wage of an unskilled worker employed in the electricity undertaking was raised from Rs. 148 to Rs 155 per month. The Government order came into operation on 18 June 1971, and was to be effective for a period of five years with effect from 1 April 1969. The workmen (respondents 2 to 14)who were in the employment of the Board, on 18 June 1971, on 27 March 1979, made a joint application purporting to be under S. 33 C (2) of the Central Act to the Labour Court with the prayer that they should be paid increased overtime wages from 1 April 1969 to 31 March 1974, on the ground that their wages stood increased from 1 April 1969. The Labour Court, by the impugned order, accepted the prayer in the application made by the workmen. 4. Section 59 of the Factories Act, 1948 entitles a worker to wages at the rate of twice his ordinary rate of wages for putting any overtime work. The Labour Court, by the impugned order, accepted the prayer in the application made by the workmen. 4. Section 59 of the Factories Act, 1948 entitles a worker to wages at the rate of twice his ordinary rate of wages for putting any overtime work. For the purposes of S. 33C(2) of the Central Act, the existing right to extra wages for overtime work or the entitlement to get the extra wages for overtime work computed or calculated on the basis of ordinary rate of wages flew from that provision alone. Therefore, was any increase in the ordinary rate of wages of the respondents workmen effected between 1 April 1969 and 31 March 1974, is the question to be determined. The validity of the aforementioned two notifications has not been challenged on any ground. 5. Paragraph 11 of the order as contained in the notification of 18 June 1971, provided that the order shall come into force with immediate effect and shall in respect of the matter entered by it, bind the management and the workmen of the electricity undertakings in this State over a period of five years with feet from 1 April 1969. Paragraph 14 of the order said that revised wages of workmen was result of the said order shall be paid by the management from the first wage period beginning in June 1971 payable in July 1971. 6. From a combined reading of the two paragraph it is apparent that there should be no difficulty in coming to the conclusion that increase in the ordinary wages of the workmen came into existence from 18 June 1971. It is not in dispute that the workmen have been paid by the Board the arrears of the wages at the increased rate of Rs. 155 per month with effect from 18 June 1971. It is also admitted that, in fact, the workmen have been paid by the Board additional amount calculated at the rate of enhanced sages from 1 April 1969 to 18 June 1971. 7. The problem centres round the question whether any increase in the wages of the workmen could be effected by the State Government between 1 April 1969 and 18 June 1971, by exercising its powers under section 3 of the Uttar Pradesh Act. 7. The problem centres round the question whether any increase in the wages of the workmen could be effected by the State Government between 1 April 1969 and 18 June 1971, by exercising its powers under section 3 of the Uttar Pradesh Act. Could the notification " create a new obligation or impose a new duty" upon the Board in respect of services already rendered by the workmen. An answer in the affirmative alone will result in the increase of wages from a date anterior to 113 Jane 1971. It is well known that there is a presumption in favour of the prospectivity of any legislative provision or action taken under it, unless a particular statute either expressly or by necessary intendment provides for a retrospective operation. The known exception is in the case of a procedural provision. 8. Section 3 (b) of the Uttar Pradesh Act may be read at this stage : "if in the opinion of the State Government it is necessary or expedient to to do for securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community, or for maintaining employment, it nay, by general or special order, make provision (b) for requiring employers, workmen or both to observe for such period, as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order. . . " 9. Paragraph 3 to the preamble of the notification, dated 18 June 1971, may also be extracted : " And, whereas, in the opinion of the State Government it is necessary and expedient for to, maintenance of public order and supplies and services essential to the life of the community and for maintaining employment to make certain amendments in the said order. " It is apparent that the State Government purported to exercise its power under Cl. (b) of S. 3 of the Uttar Pradesh Act for issuing the said notification. In fact, no her clause of that provision could be invoked for that purpose. On the face of it, it would appear that the Legislature wanted S. 3 (b) to be prospective. 10. (b) of S. 3 of the Uttar Pradesh Act for issuing the said notification. In fact, no her clause of that provision could be invoked for that purpose. On the face of it, it would appear that the Legislature wanted S. 3 (b) to be prospective. 10. For culling out an implied intention of the Legislature to give a retrospective operation to a particular statute one of the methods is of looking at the general scope and purview of the enactment under review. In the instant case, we are absolved of the responsibility of exercising our mind in that behalf as the Supreme Court has in Basti Sugar Mills Company Ltd. v. State of Uttar Pradesh, 1978-II L.L.N. 468, considered the matter in detail. In Para. 23, the Supreme Court observed that S. 3 (b) of the Uttar Pradesh Act meets an emergent situation on an administrative basis. It held at page 476: " When `the sequestered vale of life' is in imminent perel of destruction immediate tranquillisers are the desideratum. The escalating danger to law and order, to public safety, to maintenance of supplies essential to the life of the community, the break-down of production and employment - these anti-social consequences of `the madding crowds' ignoble strife' are sought to be controlled by a quick shot in the arm by use of S. 3 (b). It is a balm for the time, not a cure which endures. Indeed, it is an administrative action, not a quasi-judicial determination. We may easily visualise other explosive occasions which traumatise society and so attract S. 3 (b)." In Para. 27, the Supreme Court described S. 3 (at page 477 of 1978-II L.L.N.) : "It is like an executive Magistrate passing a prohibitory order regarding disputed possession or unruly assembly to prevent breach of the peace and making over to a judicial Magistrate to hear and decide who is in actual possession or whether the restriction on movement was right. Or, may be, it is like a magistrate quickly passing orders regarding a possessory dispute leaving it to the Civil Court to adjudicate on valid title. No one can argue that preventive magisterial power, admittedly provisionally and reasonably, is inconsistent with the civil judicial machinery which speaks finally." Earlier in Para. Or, may be, it is like a magistrate quickly passing orders regarding a possessory dispute leaving it to the Civil Court to adjudicate on valid title. No one can argue that preventive magisterial power, admittedly provisionally and reasonably, is inconsistent with the civil judicial machinery which speaks finally." Earlier in Para. 6, the Supreme Court described the contents of the power under S. 3 (at page 470) " This is police power at its sensitive finest when State and society are confronted by the dilemma of do or die. . . ." Thus, as ruled by the Supreme Court, the very nature of the power conferred upon the State Government by the provisions of section 3(b) of the Uttar Pradesh Act are regulatory. Normally, a regulation can be enforced either in praesent or in future. Therefore, the notification of 1971 issued by the State Government in exercise of the' police powers or regulatory powers" cannot be given a retrospective operation. 11. In State of Uttar Pradesh v. Basta Sugar Mils Company, Ltd. A.I.R. 1961 SC 420, the facts were these. On 5 July 1950, the State Government in exercise of the powers conferred by S. 3(b) of the Uttar Pradesh Act issued a notification directing the various sugar factories to pay bonus to their workmen for the year 1948.49 as well as to pay certain amount as bonus for the year 1947-48. The validity of that notification was challenged in this Court at, this Court held that S. 3 (b) of the Uttar Pradesh Act could not be given a retrospective effect. Accordingly, this Court issued an appropriate writ to the State Government not to enforce the said notification. In Para. 4, the Supreme Court observed : "We entirely agree with the learned Judges of the Allahabad High Court that Cl. (b) of S. 3 cannot be given a retrospective effect. But we are unable to agree with them that the State Government in making a direction to the employers to pay bonus for the years in question purported to give a retrospective operation to the provisions of that clause. The order made by the State Government in regard to bonus is to the effect that it shall be paid for the year 1947-48 to those persons who worked during that year and for the year 1948-49 to those persons who worked in that year. The order made by the State Government in regard to bonus is to the effect that it shall be paid for the year 1947-48 to those persons who worked during that year and for the year 1948-49 to those persons who worked in that year. This pay vent was directed to be made within six weeks of the making of the order. By giving this direction the 'state Government did no more than attach a condition to the employment of workmen in the year 1950-51 in sugar factories affected by the order. This is all that it has done Sri Pathak contended that bonus has certain attributes of a wage and wage being a matter of contract can only be a term of employment agreed to between the employer and the employees but could not be a condition of employment which could be imposed by a statute or which could be imposed by a Government acting under a statute. We agree that normally wage is a term of contract but it would be futile to say that it cannot be made a condition of employment. The Minimum Wages Act provides for the fixation of a statutory minimum wage payable to a worker in respect of certain types of employments and is an instance of wage being made a condition of employment. That apart, whether wage or bonus is a term of a contract or a condition of employment, it is clear that S. 3 empowers the State Government to require the employers and workmen or both to observe any term or condition of employment for a specified period. Since the law enables the State Government to impose a term, it is apparent that the Legislature which enacted that law did not import into that word a consensual sense. We cannot, therefore, accept the argument that under Cl. (b) it was not open to the State Government to make the payment of bonus to workmen a condition of their employment in future an:l thus augment their past wages." [Emphasis supplied.] 12. It will be thus seen that the Supreme Court ruled that the effect of the notification, dated 5 July 1950, was not that the workmen became ipso facto entitled to receive bonus for the year 1947-48 and for the year 1948-49. It will be thus seen that the Supreme Court ruled that the effect of the notification, dated 5 July 1950, was not that the workmen became ipso facto entitled to receive bonus for the year 1947-48 and for the year 1948-49. The Supreme Court made it clear that the employers were liable to pay bonus to only loose workmen who continued to be in their employment on 5 July 1950, the consideration being that they would render services in future. the workmen, who were actually in the employment in the year 1947-48 and the year 1948-49 but had gone out of the employment prior to 5 July 1950, were not entitled to receive any bonus for the two years. This fact clearly went to show that the provisions of S. 3 (b) of the Uttar Pradesh Act did not have a retrospective operation. Applying this reasoning the conclusion is inevitable that by the notification, dated 18 June 1971, the wages of the workmen concerned, in tree instant case, were act increased with effect from 1 April 1969. 13. Learned counsel for the workman has relied heavily upon the words underlined by me in Para. 4 of the judgment of the Supreme Court in the first Basti Sugar it Mills Company case, AIR 1961 SC 420 , and as quoted above. The argument is that there was an increase in the past wages. The crucial orders are " and thus." If the sentence is read as a while it will be clear that the Supreme Court had drawn a distinction between a legal effect and a practical effect. The Supreme Court emphasised that under S 3(b) of the Uttar Pradesh Act the State Government was empowered to make the payment of the bonus to workmen a condition of their employment in future and then the Supreme Court observed that the practical effect of the exercise of such a power would be that the past wages of the workmen would be augmented. This position was clarified in Para. 5. It was observed: "The effect of that order is merely to require the employer to pay an additional sum of money to his employees as a term and condition of work in future." 14. This position was clarified in Para. 5. It was observed: "The effect of that order is merely to require the employer to pay an additional sum of money to his employees as a term and condition of work in future." 14. The matter engaged the attention of this Court in the case of Hindustan Industries and Machine Manufacturing Company (Private), Ltd. v. State of Uttar Pradesh and others, 1971 L. & I.C. 1154, in a direct form. The precise question was whether S. 3 (b) and the order thereunder issued by the State Government fixing the wage-structure with respect to engineering industries had retrospective operation. A Division Bench of this Court answered the question in the negative. In Para. 14, this Court observed : "One of the tests which, it seems to us, should be decisive of the question in the present case is whether the benefit of the new wage-structure has been confined to workmen continuing in employment on the date of the order or has been extended also to workmen who were no longer in employment of that date. If the right to wages at the revised rates from 1 January 1970, accrues retrospectively an employer would have to pay to every workman employed from that date wages at the revised rates, regardless of whether the workman continues in employment on the date of order. A workman employed in January and February 1970 only would be entitled to claim wages of the revised rates for those months. But if the right is confined to such workmen as are continuing in employment on the date of the order, then the payment of arrears for the period from January 1970 must be understood as constituting in substance a term of employment operative tram the date of the order. It is a term introduced or implied by the law in every contract of employment which existed before the date of the order and continues to subsist thereafter. Every workman employed since January 1970 and continuing iii employment on the date of the order will be entitled to pay from 13 July 1970. ' By the operation of the order my present terms of employment stipulates that in addition to my current wages must be paid an additional amount calculated by reference to the revised rates specified at from January 1970. ' By the operation of the order my present terms of employment stipulates that in addition to my current wages must be paid an additional amount calculated by reference to the revised rates specified at from January 1970. The claim is a measure of his present and future entitlement t, wages. The payment of the additional amount is a term governing the workmen's present and future employment ; it does not present a right governing his past employment, if it could have been construed as governing his past employment then as we have already pointed out a workman who was employed for a period from January 1970, but had ceased to be in employment before the date of the order could legitimately come forward to claim arrears at the revised rates. That, we think, would be contrary to the entire scheme prescribed by the order. " Again in Para. 17, this Court observed : "In Bosti Sugar Mills case, AIR 1961 SC 420 ) (vide supra), the supreme Court was called upon to consider a somewhat similar case. There a an order, dated 5 July 1950, under S. 3 (b) required the employers to pay bonus for the year 1947-48 to those persons who had worked during that year and for the year 1948-49 to those persons who had worked in that year and the payment was to be made to workmen in employment on the date of the order. The Supreme Court observed : The payment was directed to be made within six weeks of the making of the order. By giving this direction the State Government did no more than attach a condition to the employment of workmen in the year 1950-51 in sugar factories affected by the order. That is all that it has done'." The Supreme Court held that even though the effect was to argument past wages of the workmen thereby, nevertheless the payment was a condition of their employment in future. It was pointed out on behalf of the employers that the effect of the order was to add a new term of condition with regard to employment for a period which was already over. It was pointed out on behalf of the employers that the effect of the order was to add a new term of condition with regard to employment for a period which was already over. But the supreme Court repelled this contention and added : "The effect of that order is merely to rewire the employer to pay an additional sum of money to his employees as a term of condition of work in future." 15. In sum the provisions of S. 3(b) of the Uttar Pradesh Act and the Government order issued thereunder, namely, the notification, dated 18 June 1971, cannot haven retrospective operation as the Legislature has conferred, 'police powers" or "regulatory powers" and in the exercise of these power prospectivity is inherent whereas retrospectivity is foreign. Besides, the controversy is fully covered by the decision of the Supreme Court in the first Basti Sugar Mills cast [A.I.R. 1961 SC 4201 (vide supra) and by the decision of the Division Bench of this Court in Hindustan Industries and Machine Manufacturing Company (Private), Ltd. [1971 L. & I.C. 1541 (vide supra). 16. It is urged on behalf of the petitioner that the provisions of S. 33C(2) of the Central Act were not attracted at all in connection with the payment of increased overtime wages. This argument is not sound. It is now well settled that the provisions of S. 33C(2) can be invoked by an individual workman for getting any benefit competed or calculated in terms of money. The conviction precedent being that the workman concerned should be entitled to a benefit, that entitlement should either be or duly provided for. Section 59 of the Factories Act confers a statutory right upon a workman to get overtime wages. Therefore, both the ingredients, namely, the entitlement and the provision for such an entitlement are satisfied by the provisions of S. 59 of that Act. Since I have already held that between 1 April 1969 and 18 June 1971, no increase in the wages of the workmen concerned took place, the question of the workmen getting increased overtime wages on the basis of an increase in wages during that period don not arise. However, subsequent to 18 June 1971, an increase in the wages of the workmen was effected. Indeed, there is no challenge to this legal position. However, subsequent to 18 June 1971, an increase in the wages of the workmen was effected. Indeed, there is no challenge to this legal position. The notification of 18 June 1971, was to ensure for a period of five years. The claim of the workmen for increased overtime wages is limited up to the year 1974, well within the period of five gran from June 1971. For the period on or after 1st June 1971 and till 1974, an increase in the wages of the workmen has taken place, and, therefore, the provisions of S. 59 of the Factories Act are squarely attracted. The Labour Court has merely to make an arithmetical calculation to compute the amount payable to the workmen as increased overtime wages from 18 June 1971 to 31 March 1974. 17. The net result is that the Labour Court had no jurisdiction to compute the increased overtime wages from 1 April 1969 to 17 June 1971. It had full jurisdiction to compute or calculate all increased overtime wages from 18 June 1971 to 31 March 1974. 18. The result is that this petition succeeds in part. The impugned order of the Labour Court, dated 23 December 1980, is quashed in so far the computation of amount of increased overtime wages from 1 April 1969 to 17 June 1971, is concerned. The workmen shall not be entitled to receive any increased overtime wages during that period in proceedings under S. 33C(2) of the Central Act. The petitioner shall pay to The concerned workmen increased overtime wages from 18 June 1971 to 31 March 1974. There shall be no order as to costs.