Madras High Court
Eid Parry (India) Ltd vs M.N.Padmanabhan on 26 June, 2008
Author: V.Dhanapalan
Bench: S.J.Mukhopadhaya, V.Dhanapalan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :: 26-06-2008 CORAM THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYA AND THE HONOURABLE MR.JUSTICE V.DHANAPALAN WRIT APPEAL No.698 OF 2001 EID Parry (India) Ltd., P.B.No.12, Dare House, Chennai-600 001. ... Appellant -vs- 1.M.N.Padmanabhan 2.The Labour Officer, Kuralagam, Chennai-600 008. ... Respondents Appeal under Clause 15 of the Letters Patent. For appellant : Mr.A.L.Somayaji, Senior Counsel, for Mr.T.S.Gopalan & Co. For respondent 1 : Mr.R.N.Amarnath For respondent 2 : Mr.M.Dhandapani, Spl.Govt.Pleader. J U D G M E N T
V.DHANAPALAN,J.
Appellant/management has filed this appeal aggrieved over the order, dated 15.12.2000, passed by a learned single Judge in W.P.No.2573 of 1994, whereby the order of the second respondent, in rejecting the first respondent/workman's application for making a reference under Section 2-A of the Industrial Disputes Act, 1947, was set aside.
2. According to the first respondent/workman, he joined service in the appellant company as a Clerk on 18.03.1959 and after working at various places, he was lastly posted at Cuddalore Branch in the Farms Inputs Division; he was a member of E.I.D.Parry Staff Association, a registered trade union; he put in 34 years of service; there was a scheme called Voluntary Retirement Scheme (VRS) introduced by the appellant on 01.06.1993, which was available to the employees, who had completed 10 years of service or 40 years of age, which scheme provided for financial assistance besides normal terminal benefits to employees, who opted to leave the service under the Scheme; through a letter, dated 13.07.1993, he opted for the said Scheme; on 21.07.1993, a settlement between him and the appellant was reached under Section 18 (1) of the Industrial Disputes Act,1947, and the payments towards gratuity, provident fund etc., were made to him by the appellant; thereafter, he sent a letter, dated 21.07.1993, to the appellant, alleging that the application for VRS was obtained under coercion and he was deprived of pension; hence, he raised an industrial dispute under Section 2-A of the Act before the second respondent, claiming that the alleged settlement was not legal and that he was coerced to sign such a settlement and, therefore, he could not be denied pension; the second respondent, by his order dated 03.01.1994, dismissed his claim, stating that the dispute raised by him did not come within the purview of Section 2-A, aggrieved over which, he filed the Writ Petition, which was allowed by a learned single Judge.
3. The appellant, who was the second respondent in the Writ Petition, filed a counter, stating that the first respondent herein was a Clerk under the management; there was a Scheme called VRS put up by the appellant on 01.06.1993, which was available to the first respondent; agreeing to the terms of the Scheme, the first respondent opted for the same; accordingly, the first respondent submitted an application on 13.07.1993 and was informed that he could go to Madras on 21.07.1993 for settlement of amount; apart from gratuity and provident fund, the first respondent was entitled to a sum of Rs.73,368/- and, on the said day, the first respondent also submitted an application for payment of gratuity and a sum of Rs.50,599/- was due to him by way of gratuity; therefore, the petitioner was required to sign a settlement under Section 18 (1) of the Act, placing on record his voluntary retirement and the payment of his dues consequent to voluntary retirement and the same was signed by the first respondent; thereafter, the appellant had given the first respondent a cheque for a sum of Rs.72,112/- and another cheque for a sum of Rs.50,599/- towards gratuity and the same were encashed by the first respondent; however, after receiving the amount, the first respondent sent a letter, dated 21.07.1993, stating that VRS was obtained under coercion and the settlement, dated 21.07.1993, was illegal; therefore, on 20.08.1993, a reply was sent by the appellant, denying the allegation that the settlement was obtained under coercion, for which the first respondent sent a reply, dated 23.08.1993, dictating conditions for joining duty; finally, the appellant sent a reply, dated 07.09.1993, directing the first respondent to report for duty and return all the amounts, which he had received; and, thereafter, on 15.09.1993, the first respondent caused a lawyer's notice, which was duly replied by the appellant, but the first respondent, on 10.11.1993, submitted a petition to the second respondent, purporting to be a one under Section 2-A of the Act, praying that the settlement, dated 21.07.1993, be declared as invalid and for a further direction to the appellant to pay full pension and that the second respondent was justified in taking the view that there was no valid industrial dispute, which could be taken cognizance of under Section 2-A of the Act.
4. Mr.A.L.Somayaji, learned Senior Counsel for the appellant, in his submissions, has strenuously contended that after introduction of Voluntary Retirement Scheme, the first respondent gave an option and, accordingly, he submitted an application to the appellant management on 13.07.1993, stating that he had carefully read and understood the terms and conditions of the Scheme and thereby exercised his option to accept the benefits of the Scheme and retire from the service of the appellant company. According to the learned Senior Counsel, once the first respondent had opted for the Scheme, he could not contend that he had not known the implications of the Scheme. He would also contend that the first respondent had entered into a settlement under Section 18 (1) of the Act and having accepted the terms and conditions of the settlement and agreeing that apart from the amounts disbursed as per the settlement, he would not be eligible or entitled to any other claim of retirement benefits such as retiring allowance (pension) or like, even if other employees were held entitled to retiring allowance or any other retirement benefit by any award or settlement or Court verdict, he could not deviate from the terms and seek for pension, contrary to the settlement reached.
5. The mainstay of the learned Senior Counsel is that after the amount is paid and the employee ceases to be under the employment of the company or the undertaking, there is no question of his again agitating for any kind of his past rights with his erstwhile employer, for the reason that if the employee is still permitted to raise a grievance regarding pension, even after he has opted for Voluntary Retirement Scheme and accepted the amounts paid to him, the whole purpose of introducing the Scheme would be totally frustrated.
6. In support of his contentions, the learned Senior Counsel has relied upon the following decisions :
(i) A.K.Bindal and Another v. Union of India and Others, 2003 (5) Supreme Court Cases 163 :
"34. This shows that a considerable amount is to be paid to an employee ex gratia besides 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 his 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 employee is 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."
(ii) An unreported Division Bench decision of this Court in W.A.No.702 of 2001, dated 03.07.2007 :
"5. According to the counsel for the contesting respondents-writ petitioners, the Union illegally closed the dispute without obtaining any finding with regard to the issue for which reference was made. The case of the other employees was not discussed and it was closed. He placed reliance on a Bench decision of this Court in Shaw Wallace & Co.Ltd. v. State of Tamil Nadu, rep.by the Commissioner and Secretary, Labour Department & Ors., reported in 1988 (1) LLJ 177. That was a case in which the Court discussed and determined the power of the Government u/s 10 to refuse to make a reference of a dispute for adjudication. The Court held that the normal rule is that the Government should refer such dispute except in the following circumstances :-
"(a) the claim is very stale ;
(b) the claim is opposed to the provisions of the Act ;
(c) the claim is inconsistent with any agreement between the parties ;
(d) the claim is patently frivolous ;
(e) the impact of the claim on the general relations between the employer and the employee in the region is likely to be adverse ;
(f) the person concerned is not a workman as defined by the Act."
(iii) Everstee v. District Labour Officer, 1999 (2) LLJ 851 :
"9.....In our opinion, the appellant, having voluntarily tendered his resignation pursuant to a scheme for voluntary retirement, the resignation having been accepted by the management and all the benefits arising out of such resignation have been paid by the management and received by the appellant, he cannot be treated as a 'workman' under Sec.2(s) of the Industrial Disputes Act. As already noticed, the definition only includes persons who are presently employed or who have been dismissed, discharged or retrenched from the service of the employer. In fact, dismissal, discharge or retrenchment is an act of the employer, whereas terminating the contract of service by way of resignation by the workman is his own act. We are, therefore, of the opinion that the claim of the appellant is misconceived and beyond the scope of Sec.2 (s) of the Industrial Disputes Act. A perusal of the petition submitted by the appellant before the Labour Officer and also the Original Petition filed before this Court reveals that the appellant had accepted the benefits offered to him in pursuance of the Voluntary Retirement Package announced by the management and on being satisfied about the calculation and the quantum thereof, chose to tender his resignation and thereafter, on diverse dates, received benefits confirming each time that the management had fully and finally settled the accounts, thereby severing the employer-employee relationship once and for all...."
7. Per contra, Mr.R.N.Amarnath, learned counsel for the first respondent, would contend that though the settlement was reached on 21.07.1993, the first respondent did not know Clause 9 of the same, which dealt with terminal benefits, particularly the terms regarding the pension and other retirement allowances. He would further contend that pension being an amount which would be payable only to an ex-employee has an intimate link with termination and, therefore, the reference under Section 2-A cannot be rejected. Finally, the learned counsel would submit that the finding of the learned single Judge that pension has a link with termination was well founded and, therefore, the same cannot be interfered with. Accordingly, he prayed for dismissal of the appeal. To strengthen his arguments, the learned counsel has cited a decision of the Orissa High Court in Joseph Niranjan Kumar Pradhan v. Presiding Officer, Industrial Tribunal, Orissa and Others, 1977 (1) LLJ 36, wherein the petitioner was the proprietor of a business concern and the workman, having previously worked under the State Government and after superannuation, undertook employment under the petitioner and on account of incapacity related to old age and chronic ailment, the workman's services were terminated.
8. To decide the issue involved in this case, it is quite relevant to quote Clause 9 of the Memorandum of Settlement and Sections 2-A, 2 (oo) and 10 of the Industrial Disputes Act,1947, which read as under :
"Clause 9.- The workman hereby agrees that apart from the amounts disbursed as per this settlement, he would not be eligible or entitled to any other claim or retirement benefit such as retiring allowance (pension) or like, even if other employees are held entitled to retiring allowance or any other retirement benefit by any award or settlement or Court verdict."
"Section 2-A. Dismissal etc. of an individual workman to be deemed to be an industrial dispute.- Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute."
"Section 2 (oo) : "retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include -
(a) voluntary retirement of the workman; or
(b) .....
(c) ....."
"Section 10. Reference of dispute to Boards, Courts or Tribunals.- Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing -
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court, for adjudication; or
(d) refer the dispute or any matter appearing to be connected with or relevant to the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule to a Tribunal, for adjudication."
9. In this context, it is significant to note that the first respondent/workman has ceased to be in employment of the appellant, by opting for Voluntary Retirement Scheme. Further, under Clause 9 of the Memorandum of Settlement, he has agreed that apart from the amounts disbursed as per the settlement, he would not claim any other amounts or retirement benefit such as retiring allowance (pension). It cannot also be the case of the first respondent that he was discharged, dismissed, retrenched or otherwise terminated from the services of the appellant. Hence, he cannot contend that the dispute between him and the employer connected with or arising out of such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute under Section 2-A. Section 2 (oo) is categorical that 'retrenchment' does not include voluntary retirement. Having received the amounts, to which he was entitled under the Scheme, the first respondent cannot also resist the same by saying that he was coerced to opt for the Scheme. That apart, he has not explained the circumstances under which he was coerced. Even assuming that he was coerced to opt for the Scheme, when a letter was written by the first respondent to that effect, the appellant sent a reply, dated 28.08.1993, denying the same, and stating that they had no objection for the first respondent joining duty, provided all the amounts which were received by him were paid back to the appellant. However, the first respondent had not chosen to do so. All these circumstances would certainly go against the first respondent.
10. As per Section 10 of the Act, where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may refer the dispute to a Board for promoting a settlement thereof; or refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or refer the dispute or any matter appearing to be connected with or relevant to the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court, for adjudication; or it may also refer the dispute or any matter appearing to be connected with or relevant to the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule to a Tribunal, for adjudication.
11. To comply with Section 10 for reference to a Board, Court or Tribunal, the existence of a dispute has to be taken into consideration. Section 2-A has been introduced with an object, where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.
12. If the workman claims a matter for reference under Section 2-A, it must be construed that there exists a dispute. However, on an appraisal of the Voluntary Retirement Scheme, dated 01.06.1993; the Settlement, dated 21.07.1993, between the appellant and the first respondent and also Clause 9 thereof, what comes to be known is that the first respondent had agreed that apart from the amounts disbursed as per the settlement, he would not be eligible or entitled to any other claim or retirement benefit such as retiring allowance (pension) or like, even if other employees are held entitled to retiring allowance or any other retirement benefit by any award or settlement or Court verdict. Therefore, in this case, no dispute with regard to pension does exist.
13. The Voluntary Retirement Scheme (VRS), which is sometimes called Voluntary Separation Scheme (VSS), is introduced by the companies and industrial establishments in order to reduce the surplus staff and to bring in financial efficiency. A considerable amount is paid to an employee towards ex gratia besides 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. 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 his again agitating for any kind of his past rights with his erstwhile employer including making any claim with regard to pension.
14. In the case on hand, the first respondent, having opted for VRS and after entering into the Settlement having fully understood the terms of Settlement and particularly Clause 9 thereof and also encashing the amount of Settlement arising thereon, claimed further benefits in the name of pension. If the first respondent is permitted to raise such a grievance even after he has opted for Voluntary Retirement Scheme and accepted the amounts paid to him thereunder, the very object and the purpose of introducing the Scheme will be defeated. As the first respondent has already ceased to be a workman and on cessation of the jural relationship and on claiming the entire amount of settlement and receiving the same, there cannot be any scope to construe that there is a dispute still existing to raise a claim under Section 2-A of the Act. Therefore, this Court has no reason to believe that there exists any dispute in this case. However, the learned single Judge, without going into the entire facts and circumstances of the case, has come to the conclusion that pension being an amount which would be payable only to an ex-employee has an intimate link with termination and, therefore, the reference under Section 2-A cannot be rejected, which, in our considered opinion, cannot be sustained.
15. The Supreme Court, in A.K.Bindal's case, referred to above, has held that once the employees opt to retire under VRS and accept the benefits thereunder, their rights as employees come to an end and, thereafter, they cannot again assert their rights and reagitate their claim for pay revision for pre-retirement period nor can they contend that they opted for VRS under compulsion.
16. In the decision cited by the learned counsel for the first respondent in Joseph Niranjan Kumar Pradhan's case, cited supra, the workman was terminated by the employer because of his incapacity related to old age and chronic ailment, whereas, this is a case where the first respondent voluntarily retired from service, which cannot be construed to be a termination, retrenchment, discharge or dismissal. So, the said decision is not of any help to the first respondent.
17. Following our elaborate discussion in the foregoing paragraphs, this Writ Appeal is allowed, setting aside the order of the learned single Judge. No costs. Consequently, the connected C.M.P.No.6151 of 2001 is closed.
Index : Yes (S.J.M.,J.) (V.D.P.,J.) Internet : Yes 26-06-2008 dixit To The Labour Officer, Kuralagam, Chennai-600 008. S.J.MUKHOPADHAYA,J. AND V.DHANAPALAN,J. dixit W.A.No.698 OF 2001 26-06-2008