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2012 DIGILAW 1654 (BOM)

Abbott Laboratories v. C. T. D'costa

2012-08-31

A.A.SAYED

body2012
Judgment : 1. The above cross Petitions impugn an order dated 27th October, 2005 passed by the Labour Court, Mumbai in an Application under Section 33C(2) of the Industrial Disputes Act 1986 (hereinafter referred to as “the I.D. Act”) filed by 13 former employees (hereinafter referred to as “the Applicants”) of Abbott Laboratories (I) Ltd. (hereinafter referred to as “the Company”) seeking payment of 12 months wages for lock-out period and 20 months wages in the form of ex-gratia payment by way of settlement of general Charter of Demands. 2. The operative part of the impugned order reads as follows: “1. The application is partly allowed. 2. The Opponents are directed to pay 12 months lock-out wages to all the applicants at the rate of last drawn wages mentioned in the Annexure to the application Exh.U-1. 3. Copy of this order be sent to Government.” 3. Writ Petition No. 64 of 2006 is filed by the Company aggrieved by the direction to pay 12 months wages for lock-out period and Writ Petition No. 2080 of 2006 is filed by the Applicants aggrieved by the denial of 20 months wages in the form of ex-gratia payment by way of settlement of general Charter of Demands. Both the Petitions are being disposed of by this common judgment. 4. The Applicants, in the Application which was filed in the year 2001, claim that during the period 1989 to 1993 they had “retired” under a Voluntarily Retirement Scheme (VRS) and had left the services of the Company. According to the Company however, the Applicants had “resigned” due to personal/domestic difficulties and there was no VRS operating at that time. The fact that the Applicants were paid ex-gratia compensation of Rs. 2 lacs each at the time of leaving the services, is an admitted position. 5. The Company signed a Memorandum of Settlement dated 23-01-1996 with the recognized Union and a Memorandum of Settlement dated 14-02-1996 with the non-recognized Union whereunder it was agreed that the employees who were on the roll of the Company at the relevant time would retire under a VRS Scheme which was introduced (copy whereof was annexed to the Memorandum of Settlement) and accept ex-gratia payments as mentioned therein. In the Memorandum of Settlement it was inter-alia agreed that the names of the employees who opted for VRS would be deleted from the following References viz. In the Memorandum of Settlement it was inter-alia agreed that the names of the employees who opted for VRS would be deleted from the following References viz. (I) Reference No. 35/1992 in respect of lock-out wages for the period January 1987 to March 1988 and (ii) Reference (IT) No. 54 of 1995 in respect of general Charter of Demands. The Application under Section 33C(2) of the I.D. Act was filed by the Applicants by invoking the provisions of the aforesaid Settlement dated 23-01-1996 signed by the Company and the recognized Union (hereinafter referred to as “Settlement of 1996”). The Applicants claimed that they were entitled to 32 months wages, in view of the Settlement of 1996 whereunder benefits were given to the then employees of the Company, though at the relevant time the Applicants were not in employment of the Company. 6. The Application was resisted by the Company by filing Written Statement. The case of the Company was that the Applicants did not have any existing right in their favour for claim of a monetary amount under any settlement, agreement or award. The Application was filed after about 12 years in case of some Applicants and after about 8 years in case of other Applicants. The Application was filed on the erroneous assumption that the employees who retired under the VRS pursuant to the Settlement of 1996 were paid 12 months wages for the lock-out period and 20 months wages in the form of ex-gratia payment by way of settlement of general Charter of Demands. The Company had not introduced any VRS between the years 1989 to 1994, therefore, the case of the Applicants that they had “retired” under a VRS was false. The Applicants had voluntarily “resigned” from the services of the Company on various personal/domestic and other reasons and the Company had as a special case paid lumpsum compensation amount to settle all the claims of the Applicants. The Applicants signed receipts under which they accepted the amount in the full and final settlement of their claim and relinquished their right in respect of any claim of whatsoever nature against the Company. There was no clause under the Settlement of 1996 towards purported 12 months wages for lockout period and 20 months wages in the form of ex-gratia payment towards settlement of general Charter of Demands. 7. There was no clause under the Settlement of 1996 towards purported 12 months wages for lockout period and 20 months wages in the form of ex-gratia payment towards settlement of general Charter of Demands. 7. As indicated earlier, the Labour Court by the impugned order partly allowed the Application and directed the Company to pay 12 months lock-out wages to the Applicants. The claim for 20 months wages in the form of ex-gratia payment by way of settlement of general Charter of Demands was rejected. Both, the Applicants and the Company, being aggrieved by the impugned order of the Labour Court, have filed the above Petitions. 8. I have heard Mr. Shaikh, learned Counsel for the Company and Mr. Gehani, learned Counsel for the Applicants. 9. At the outset it is required to be noted that the following facts have not been disputed before the Court: (i) that the Applicants had ceased to be in employment of the Company between the year 1989 to 1993; (ii) that the Application under Section 33C(2) has been filed in the year 2001; (iii) that the claim of Applicant is on the basis of Settlement of 1996 between the Company and the employees who were at the relevant time on the roll of the Company; (iv) that the Applicants at the time of leaving service of the Company were paid lump-sum compensation of Rs. 2 lacs each; (v) that the Applicants have signed receipts stating that the amount of Rs. 2 lacs has been received by them in full and final settlement and satisfaction of all dues and they have no claim of any nature whatsoever against the Company in respect of or arising out of the service; (vi) that there is no specific clause under the Settlement of 1996 or the VRS as regards payment of 12 months wages for the lockout period and 20 months wages in the form of ex-gratia payment towards settlement of general Charter of Demands. 10. In Vijay Kumar & Ors. Vs. Whirlpool of India Ltd. & Ors. 10. In Vijay Kumar & Ors. Vs. Whirlpool of India Ltd. & Ors. [(2008) (1) SCC 119], the Hon'ble Supreme Court summed up the principles enunciated for the exercise of power under Section 33-C(2) as under: “Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied of such benefit can approach Labour Court under Section 33C-(2) of the Act. The benefit sought to be enforced under Section 33-C (2) of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. The difference between a pre-existing right or benefit on one hand and the right or benefit, which is considered just and fair on the other hand, is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33-C(2) of the Act while the latter does not. It cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman as the specific question of the relief granted is confirmed only to the reinstatement without stating anything more as to the back wages. Hence that relief must be deemed to have been denied, for what is claimed but not granted necessarily gets denied in judicial or quasi-judicial proceeding. Further when a question arises as to the adjudication of a claim for back wages all relevant circumstances which will have to be gone into, are to be considered in a judicious manner. Therefore, the appropriate forum wherein such question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made. To state that merely upon reinstatement, a workman would be entitled, under the terms of award, to all his arrears of pay and allowances would be incorrect because several factors will have to be considered, as stated earlier, to find out whether the workman is entitled to back wages at all and to what extent. Therefore, we are of the view that the High Court ought not to have presumed that the award of the Labour Court for grant of back wages is implied in the relief of reinstatement or that the aware of reinstatement itself conferred right for claim of back wages.” 11. Therefore, we are of the view that the High Court ought not to have presumed that the award of the Labour Court for grant of back wages is implied in the relief of reinstatement or that the aware of reinstatement itself conferred right for claim of back wages.” 11. In A.K. Bindal & Anr. Vs. Union of India & Ors. [ (2003) 5 SCC 163 , it was observed by the Hon'ble Supreme Court in para 34 as follows: “This shows that a considerable amount is to be paid to an employee ex-gratia beside the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in the same. It is a package deal of give and take. That is why in the business world it is known as “golden handshake”. The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of again agitating for any kind of his past rights with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employees are still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated.” 12. In Municipal Corporation of Delhi Vs. Ganesh Razak & Anr. [(1995) I CLR 17], a Full Bench of the Delhi High Court relying upon the decision of the Hon'ble Supreme Court in the case of Central Bank of India Vs. In Municipal Corporation of Delhi Vs. Ganesh Razak & Anr. [(1995) I CLR 17], a Full Bench of the Delhi High Court relying upon the decision of the Hon'ble Supreme Court in the case of Central Bank of India Vs. P.S.Rajgopalan [ 1964 (3) SCR 140 ], held that where the very basis of the claim or the entitlement of the workmen to a certain benefit is disputed, there being no earlier adjudication or recognition thereof by the employer, the dispute relating to entitlement is not incidental to the benefit claimed and is, therefore, clearly outside the scope of a proceeding under Section 33-C(2) of the Act. The Labour Court has no jurisdiction to first decide the workmen’s entitlement and then proceed to compute the benefit so adjudicated. It is only when the entitlement has been earlier adjudicated or recognized by the employer and thereafter for the purpose of implementation or enforcement thereof some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court’s power under Section 33-C(2) like that of the executing Court’s power to interpret the decree for the purpose of its execution. 13. In M/s Siemens Ltd. Vs. Gajanan Vishal Konde & Or. [1993 (66) FLR 198], a learned Single Judge of this Court held that in a situation of a lockout, irrespective of whether the lockout is legal, illegal, justified or unjustified, it cannot be said that there is liability to make payment of wages merely because the contract of employment subsists through in lockout period and the claim for wages is more in the nature of a claim for “wages” within the meaning of Section 2(rr) of the Act. Whether such compensatory payment is due or not is entirely a matter of adjudication of the legal rights and liabilities inter se. It is not all a matter of execution or implementation of an existing rights, which is really, the only function of the Labour Court under Section 33-C(2) of the Act, and therefore, the Labour Court could not have entertained the claim of the Respondents-Workmen under Section 33C-(2) of the Act, inasmuch as the claim was not preceded by any adjudicatory order of the Competent Court or Tribunal holding that notwithstanding the continuing lockout, the workmen were entitled to payment for the period of lockout. 14. In Premier Automobiles Ltd. Vs. PAL VRS Employees Welfare Association & Anr. 14. In Premier Automobiles Ltd. Vs. PAL VRS Employees Welfare Association & Anr. [(2002) 1 LLJ 527], a learned Single Judge of this Court held that the benefit of Section 33-C(2) of the said Act would be available only for those who were considered as workmen. In other words, it would not be available to both who are ex-employees and had availed of the benefits and full payments under the Voluntary Retirement Scheme. It was further held that the person who has tendered his resignation pursuant to the Voluntary Retirement Scheme offered by the management and has received all the benefits arising out of such resignation cannot be treated as a “workman”. After his voluntary separation from the relationship with the management as a workman, he cannot claim to be a “workman” within the meaning of Section 2(s) of the said Act. 15. In Everestee Vs. District Labour Officer [(1999) II CLR 380], a Division Bench of the Kerala High Court held that a person who has tendered his resignation pursuant to the Voluntary Retirement Scheme, and has received all benefits arising out of such resignation cannot claim to be a “workman” after his voluntary separation of the relationship with the management. 16. In applying the principles enunciated in the aforesaid judgments to the present case, it is at the first instance required to be noticed that the basis on which the Applicants claim the amount of wages of 32 months, is the Settlement of 1996 between the Company and the employees (who were at the relevant time on the roll of the Company) and the VRS introduced at that time. The Applicants have admittedly ceased to be in the employment of the Company 3 to 7 years prior to the year 1996. The Applicants have executed receipts stating that they had accepted the amount of Rs. 2 lacs ex-gratia payment in full and final settlement of their claim and satisfaction of all dues and they have no claim of any nature whatsoever against the Company. Curiously, the Application proceeds on the basis that the Applicants had retired under a VRS when there was no such VRS in existence at the relevant time. It is not the case of the Applicants in the Application that at the time of leaving the services of the Company they have received the amount of Rs. Curiously, the Application proceeds on the basis that the Applicants had retired under a VRS when there was no such VRS in existence at the relevant time. It is not the case of the Applicants in the Application that at the time of leaving the services of the Company they have received the amount of Rs. 2 lacs and executed the receipts under any force or coercion. The Applicants had severed ties with the Company and executed the receipts on their own free will. The Applicants chose to accept the amount of Rs. 2 lacs as ex-gratia payment without awaiting the outcome of the pending References and received the said amount 3 to 7 years prior to the Settlement of 1996 and have enjoyed that amount. Pertinently, the Applicants without taking exception to the arrangement arrived at between them and the Company, have claimed parity with the employees who were at the time of the Settlement of 1996 on the roll of the Company. They have not offered to refund the amount of Rs. 2 lacs to the Company and have retained the said amount. In the VRS annexed to the Settlement of 1996, the definition of “employee” is set out. It states -“Employee means a permanent employee in any category other than Directors on the pay roll of the Company on the date of introduction of this scheme...”. The VRS scheme also states that the scheme would be applicable to all the permanent employees of the Company and not employees who have availed of such benefits in the post. Admittedly, the Applicants were not on the pay roll of the Company at the time of the Settlement of 1996 and introduction of the VRS. There was thus, in my opinion, no question of applying that VRS to the Applicants who were not employees of the Company at the relevant time. The Applicants on the one hand and the employees who were covered by the Settlement of 1996 on the other hand, can by no stretch of imagination be said to be similar circumstanced so as to claim parity. The contention as regards discrimination is therefore rather far-fetched. The Applicants on the one hand and the employees who were covered by the Settlement of 1996 on the other hand, can by no stretch of imagination be said to be similar circumstanced so as to claim parity. The contention as regards discrimination is therefore rather far-fetched. In the circumstances, it would not be open for the Applicants, who have ceased to be in the employment, to now turn around and make any monetary claim against the Company merely because a settlement has been arrived at a subsequent point of time between the Company and the employees who were on the roll of the Company at the relevant time. The Applicants, really speaking, would be estopped from making any monetary claim against the Company. 17. Apart from the above, it is by now trite that the scope of proceedings under Section 33C(2) of the I.D. Act is in the nature of execution proceedings and the powers of the Labour Court are limited. There has to be an existing right in favour of the employee. In the present case, there is nothing in the Settlement of 1996 to suggest that the employees who were on the roll of the Company at the relevant time, were paid 12 months wages for the lock-out period or 20 months wages in the form of ex-gratia payment towards settlement of general Charter of Demands. It was in overall settlement arrived at between the Company and the employees covered by the Settlement of 1996. The Court would not read something more in the Settlement of 1996 which is not at all provided therein. It is also required to be noted that the Reference (IT) No. 35 of 1992 in respect of the lock-out wages was ultimately disposed for want of prosecution by an Award dated 29-07-2002. 18 As is held in the case of M/s Siemens Ltd. Vs. R.V. Kode (supra) by a learned Single Judge of this Court, a lock-out may be legal or illegal, and unless the claim in respect of wages of lockout period is adjudicated, the liability of payment of lock-out wages, which is in the nature of compensatory payment, cannot arise and it would not be a matter of execution or implementation of an existing right. In so far as “ex-gratia” payment is concerned, in my opinion, the very nomenclature of the term suggests that there is no legal obligation to make payment and therefore unless there is an agreement, no such liability can be fastened upon the Company in the present case. 19. The entitlement of the Applicants was neither adjudicated upon, nor was there any mention of 12 months lockout wages or 20 months wages in the form of ex-gratia payment towards settlement of general Charter of Demands in the Settlement of 1996. Whenever a VRS scheme is introduced by an employer and certain amounts are paid thereunder to the employees, it would not necessarily mean that the same is relatable to an amount which is owed by the Company to the employees, even though the amount may have been paid by the Company in terms of multiplier of wages. It cannot be assumed that the payments made are towards any particular claim. In the facts and circumstances of the present case, when the very basis of the entitlement is disputed, it cannot be said that the claim of the Applicants of 12 months wages for lock out period and 20 months wages in the form of ex-gratia payment by way of settlement of general Charter of Demands was an incidental claim and in absence of any existing right and/or adjudication of the Applicants' entitlement thereto, the Application clearly fell outside the scope of section 33C(2) of the I.D. Act. Thus, the impugned order directing the grant of 12 months wages for lock-out period cannot be sustained and is required to be set aside. 20. In the result, for foregoing reasons, the following order is passed: (i) Writ Petition No. 64 of 2006 filed by the Company is allowed and rule is made absolute in terms of prayer clause (a) of the Petition. (ii) Writ Petition No. 2080 of 2006 filed by the Applicants is dismissed and rule is discharged. (iii) No order as to costs. 21. It is clarified that the observations in this judgment are for the purposes of the present proceeding which arise from an Application under Section 33C(2) of the I.D. Act and shall not influence any Court/Authority, should the Applicants choose to adopt any other remedy available to them in law to make any claim against the Company. 22. 21. It is clarified that the observations in this judgment are for the purposes of the present proceeding which arise from an Application under Section 33C(2) of the I.D. Act and shall not influence any Court/Authority, should the Applicants choose to adopt any other remedy available to them in law to make any claim against the Company. 22. The Company shall, after a period of 4 weeks from today, be entitled to withdraw the amount deposited by them in this Court pursuant to the interim order dated 18th January, 2006, along with accrued interest.