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2010 DIGILAW 1253 (KAR)

Management of Elastrex Polymers Pvt. Ltd. , Bangalore, rep. by Managing Director v. Lakshmanan

2010-12-09

B.SREENIVASE GOWDA, N.KUMAR

body2010
Judgment : 1. This appeal is preferred by the management challenging the order passed by the learned Single Judge, who has affirmed the order of re-instatement, granted continuity of service and also affirmed the payment of 50% of back wages as awarded by the labour court. 2. The Union, to which respondents belong, issued strike notice on September 5, 1997. They also addressed a letter to the Labour and Conciliation Officer, on September 8, 1997. On receipt of the Strike Notice, the workers stopped working. Therefore, management issued individual notices dated September 13, 1997 and September 20, 1997, calling upon the workmen to report for duty. Management also addressed letters to Assistant Labour Commissioner on September 16, 1997, September 19, 1997, September 20, 1997, September 26, 1997 and October 27, 1997. However, the workmen refused to join for duty. They raised an industrial dispute, which was referred to by the Government to the Labour Court on September 28, 1998. In the labour court, workmen filed a memo on February 12, 1999, expressing their willingness to report to duty. The Management did not take them back to duty. However, the management decided to take them back to duty on November 18, 1999 and from that date till now they are working. The labour court conducted enquiry and held, it is the management who refused work and therefore, directed re-instatement of all the workmen. It did not grant continuity of service. However, had awarded only 50% back wages to the workmen. Aggrieved by the same, the workmen as well as the management preferred writ petitions challenging the award of the labour court to the extent it is adverse to their interest. 3. The learned Single Judge, on re-appreciation of the entire evidence on record held, the finding of the labour court that, it is the management who refused work is clearly established, it found fault with the labour court in denying continuity of service and therefore, it granted the same. It also affirmed the finding of the labour court regarding 50% back wages. It is against the said order, the management is in appeal. 4. It also affirmed the finding of the labour court regarding 50% back wages. It is against the said order, the management is in appeal. 4. The learned counsel for the appellant assailing the impugned award contends, when once the labour court records a finding that the workmen are responsible for the sorry state of affairs in the establishment and inspite of letters being sent by the management to them to report to duty, they did not report to duty, on the ground that the management did not take them back to duty, it cannot be held that the Management is liable to pay 50% back wages. It was also contended that the learned single Judge was not justified in setting aside the order of the Labour Court denying continuity of service. 5. Per Contra, learned Counsel appearing for the Workmen submitted, when once it is held that the Management refused employment and directed re-instatement, the payment of back wages is automatic, still, the Labour Court taking note of the conduct of the Workmen prior to the reference has refused 50% back wages. In those circumstances, as the period for which the back wages is ordered is only about two years two months, no case for interference is made out. 6. From the aforesaid facts and the rival contentions, the finding of the Labour Court as well as the learned Single Judge that it is the Management who refused employment is based on legal evidence and do not call for any interference. The Labour Court, without assigning any proper reasons has denied benefit of continuity of service i.e.,, for a period of two years two months. Keeping in mind the nature of dispute and duration, the learned Single Judge was justified, in restoring continuity of service to the Workmen. 7. Now, the dispute revolves round the award of 50% of back wages. In that regard the Labour Court, on appreciation of the legal evidence on record, has recorded a categorical finding to the following effect: “However, in the instant case I am of opinion that for the situation created leading to the present disputes the first party Workmen were also responsible to a great extent. It can be gathered from the facts and circumstances of the case that the Workmen approached the first party union and placed charter of demands before the Management which was not acceptable on its face itself. It can be gathered from the facts and circumstances of the case that the Workmen approached the first party union and placed charter of demands before the Management which was not acceptable on its face itself. In order to see that the Management accepted those demands, the Workmen started holding meeting resulting into lathi charge by the police and they were arrested by the police and then judicial remand from September 8, 1997 to September 11, 1997. The Management was compelled to approach the Civil Court seeking injunction order against, the Workmen and had to seek the protection from the Police with the help of the injunction order obtained from the Court so as to see that the normal manufacturing work in the factory continued. The very fact that the Workmen did not respond to the notice issued by the Management offering work on September 13, 1997 and then on September 20, 1997 by making sincere and positive efforts also reflects upon their conduct. Admittedly, none of the Workmen made any protest either with the Management or with the conciliation Officer in writing that they had reported for duty in response to the said notices and the Management had refused to take them back in service. One more important fact and circumstance to hold the Workmen equally responsible for negative approach in the matter showing their indifference is a fact that a notice at Exhibit, M-2 was issued on behalf of the union to the police concerned with the warning that the workers will go on strike w.e.f. September 8, 1997. This notice on the part of the workers though was not given to the Managements itself and as such no significance in the eye of law still must have given impression to the Management that the Workmen were not interested in reporting for duty. Therefore, keeping in view the latches both on the parts of the Management as well as on the part of the Workmen it appears to me that ends of justice will be met if the first party Workmen are paid 50% of the back wages from the date of refusal as mentioned in points of reference respectively.” 8. From the aforesaid finding it is clear, what was conduct of the Workmen before the matter was referred to the Labour Court for adjudication. From the aforesaid finding it is clear, what was conduct of the Workmen before the matter was referred to the Labour Court for adjudication. In this contest, it is necessary to look into the law dealing with the back wages as enunciated by the Apex Court in J.K. Synthetics Ltd., v. K.P. Agarwal and another, 2007 (2) SCC 433 : 2007 (2) LLJ 128 , as follows at pp. 134, 135 & 136 of LLJ: “15. But the manner in which “back wages” is viewed, has undergone a significant change in the last two decades. They are no longer considered to be an automatic or natural consequence of reinstatement we may refer to the latest of a series of decisions on this question. In U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey, 2006 (1) SCC 479 : 2006 (1) LLJ 496, this Court following Allahabad Jal Sansthan v. Daya Shankar Rai, 2005 (5) SCC 124 : 2005 (2) LLJ 847 and Kendriya Vidyalaya Sangathan v. S.C. Sharma 2005 (2) SCC 363 : 2005 (2) LLJ 153 , held as follows: (U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey (Surpa) case). “A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance. Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result, but now with the passage of time, a pragmatic view of the matter is being taken by the Court realizing that an industry may not be compelled to pay to the Workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the Workman was retrenched. The change brought about by the subsequent decisions of the Supreme Court, probably having regard to the changes in the policy globalization, privatization and outsourcing, is evident. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6-N of the U.P. Industrial Dispute Act. While granting relief application of mind on the part of the Industrial Court is imperative. Payment of full back wages cannot be the natural consequence.” In G.N. Haryana Roadways v. Rudhan Singh, 2005 (5) SCC 591 : 2005 (3) LLJ 4 this Court observed at p.8 of LLJ: “There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment i.e., whether after proper advertisement of the vacancy or inviting. Applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the Workman had rendered with the employer. If the Workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a Workman is very small, the award of back wages for the complete period i.e., from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily-wage employment though it may be for 240 days in a calendar year.” 16.) There has also been a noticeable shift in placing the burden of proof in regard to back wages. In Kendriya Vidayala Sangathan v. S.C. Sharma (supra) this Court held 2005 (2) LLJ 153 at p.156: “16. When the question of determining the entitlement of a person to back wages is concerned, the employee has to show that he was not gainfully employed. The initial burden is on him. After and if he places materials in that regard, the employer can bring on record materials to rebut the claim. In the instant case, the respondent had neither pleaded nor placed any material in that regard.” In U.P. State Brassware Corpn. Ltd., v. Uday Narain Pandey (supra) this Court observed 2006 (1) LLJ 496 at p.506: “63. It is not in dispute that the Respondent did not raise any plea in his Written Statement that he was not gainfully employed during the said period. It is now well settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of Section 106 of the Evidence Act or the provisions analogous thereto, such a plea should be raised by the Workman. 17. … …. 18. Coming back to back wages, even if the Court finds it necessary to award back wages, the question will be whether back wages should be award fully or only partially (and if so the percentage). That depends upon the facts and circumstances of each case. any income received by the employee during the relevant period on account of alternative employment or business is a relevant factor to be taken note of while awarding back wages. In addition to the several factors mentioned in G.M. Haryana Roadways v. Rudhan Singh (supra) and U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey (supra). Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. In addition to the several factors mentioned in G.M. Haryana Roadways v. Rudhan Singh (supra) and U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey (supra). Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he has at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Then the burden will shift to the employer. But there is, however, no obligation on the terminated employee to search for or secure alternative employment. Be that as it may.” 9. Therefore, it is clear, no precise formula can be laid down as to under what circumstances, payment of back wages should be allowed, indisputably, it depends upon the facts and circumstances of each case. It would, however, not be (sic) correct to contend that it is automatic it should not be granted mechanically only because the employee is ordered to be reinstated into service. Certainty, the conduct of the Workmen which lead to the dispute and the period for which he was out of employment and other circumstances have to be taken into consideration. In that view of the matter, the finding recorded by the Labour Court clearly demonstrates that the Workmen indulged in strike which lead to lathi charge, Management has to go to the Civil Court to get an injunction and the request of the Management to the Workmen to report to duty was not cared for. In those circumstances we are of the view, the Workmen are not entitled to the back wages as ordered by the Labour Court as well as by the learned single Judge. To that extent, the appeal succeeds. Hence, we pass the following: ORDER (i) The Appeal is allowed in part. (ii) The finding of the Labour Court as well as the learned Single Judge regarding awarding of 50% back wages is hereby set aside. (iii) The order of the learned Single Judge awarding continuity of service as well as the order of reinstatement are confirmed. Parties to bear their own costs.