Delhi District Court
Through vs M/S. Jai Tulsi Garments on 9 December, 2022
IN THE COURT OF GORAKH NATH PANDEY,
ADDL. DISTRICT & SESSIONS JUDGE,
PRESIDING OFFICER : LABOUR COURT - IV,
ROUSE AVENUE COURTS : NEW DELHI.
LIR No.1674/2017
CNR No.DLCT130073312017
IN THE MATTER OF:
Sh. Rakesh,
S/o Sh. Devi Ram,
R/o C-45, Street No.3, Ambika Vihar,
Delhi - 110095
Through:
Shops and Commercial Workers Union (Regd.),
520/B/5, Village Khera, G.T.Road,
near Mansarover Park Metro Station Shahdara,
Delhi - 110095.
......Workman/Claimant
Versus
M/s. Jai Tulsi Garments,
X/2021, Rajgarh Extension,
Gali No.3, near DAV School,
Gandhi Nagar, Delhi - 110031.
Through:
Sh. Raj Kamal Chopra and Sh. Rajender Chopra.
........Management
Date of institution of the case : 23.05.2017
Date of passing the Award : 09.12.2022
Decision : Award Passed
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 1 of 34
AWARD
1. A common reference vide
no.F.24(48)/E/Lab./14/1409 dated 11.04.2017, u/s 10(1)(C) and
12 (5) of The Industrial Disputes Act, 1947, was received from
the Dy. Labour Commissioner, (East District), Govt of NCT of
Delhi on 23.05.2017 about an Industrial Dispute of 16 workmen
including Sh. Rakesh (hereinafter referred as workman/claimant
herein) and M/s. Jai Tulsi Garments (hereinafter referred as
management).
2. Vide order dated 23.05.2017, the reference was
segregated and the workmen were directed to file separate
statement of claim in each file. Pursuant thereto, the
workman/claimant herein has filed the present statement of claim
on 19.08.2017 stating that Sh. Rajender Chopra and Sh. Raj
Kamal Chopra employers, have been running a Readymade
Garments Factory in the four floors of the building of the
management and the cutting work is done at the ground floor; the
manufactured garments are given finishing at the first floor,
sewing machines have been placed at the third and fourth floors
where Silai Karigars works.
It is further averred in the statement of claim that the
employers have employed about 200 workers in various
categories at four floors of the building as Silai Karigars,
Helpers, Cutting Masters etc.
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Rakesh Vs. Jai Tulsi Garments
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The workman claimed that he was appointed by the
management on 03.04.2012 as Silai Karigar and his last drawn
salary was Rs.14000/- per month; he performed his duty to the
entire satisfaction of the management and there was no complaint
against him; he was performing the duties of the highly skilled
category of Silai Karigar.
It is further stated in the statement of claim that the
employers were openly violating all the labour laws. They were
neither maintaining the records of the employees as required
under labour laws nor provided them wage slip, appointment
letter etc. The management was neither maintaining attendance
register, muster roll register, wage register, register of overtime
and fine nor made any other record pertaining to the workman as
prescribed under the Factories Act, Payment of Wages Act,
Minimum Wages Act and Delhi Shops and Establishment Act.
It is further stated in the statement of claim that the
management deprived the workman from legal benefits such as
provident fund, ESI, overtime, leave and holidays etc. It is
alleged that the management was paying less than the minimum
wages to the workmen of their establishment including the
workman herein and used to take work from them beyond the
prescribed hours without paying any overtime wages. The
workman and his co-workmen repeatedly requested the
management for granting the aforesaid benefits but of no avail.
It has been further stated in the statement of claim
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Rakesh Vs. Jai Tulsi Garments
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that on 02.08.2016, Sh. Rajender Chopra and Supervisors Aslam
and Salam started abusing and misbehaving with one of the Silai
Karigars Sh. Shivam and orally terminated his services. The
workman and all other Silai Karigars protested the misbehaviour
of the employers. On this, the employers and supervisors got
infuriated over the courage of all the Silai Karigars for protesting
in one voice and started abusing them for forming a Union and
orally terminated the services of all the 140 Silai Karigars
including the workman herein and closed the floors of
Silai/sewing section. Aggrieved therefrom, the workman and his
co-workmen complained the matter to the Union which filed a
complaint in the office of Assistant Labour Commissioner on the
same day i.e. 02.08.2016. Pursuant thereto, the Labour Inspector
called the employers in his office on 05.08.2016. The employer
Sh. Rajender Kumar Chopra appeared before the Labour
Inspector on 05.08.2016 and agreed to take back all the workmen
on job except the workman Shivam and thereafter, all the
workmen joined the duty including the workman herein.
It is further contended that before the Labour
Inspectors the management agreed to provide all the legal
facilities to the workman and his co-workmen and to maintain
the minimum statutory records. The management, however,
instead of providing the legal facilities of PF, ESI, leaves and
making proper records started harassing the workman and other
co-workmen. The management also took the signatures of the
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Rakesh Vs. Jai Tulsi Garments
Page 4 of 34
workman and other workmen on blank vouchers and forms on
the pretext of providing the benefits of PF and ESI and also took
their identity proofs with photographs. The said papers also
included the blank full and final settlement receipts and when the
workman and his co-workmen protested against the said action of
the management, the management got annoyed and terminated
the services of the workman herein on 28.08.2016 as he had
refused to sign blank full and final settlement receipts.
Thereafter, the workman and his co-workmen approached the
Shops and Commercial Workers Union and the Union also filed a
complaint dated 17.10.2016 before the Deputy Labour
Commissioner, East District in regard to the illegal termination of
the service of the workman and his co-workmen. The
management did not appear before the Labour Inspector despite
repeated opportunities.
Aggrieved from the illegal termination, the
workman and his co-workmen also issued demand notice dated
13.12.2016 to the management through Union requesting for
their reinstatement and back wages which was not replied.
Thereafter, the workmen filed their claim before the Conciliation
Officer. In the conciliation proceedings the management
appeared and filed written statement but no settlement could be
arrived between the parties.
The workman claims to be unemployed from the
date of his illegal termination. As claimed, the termination of the
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services of the workman is illegal and unjustified as the
management violated the provisions of Section 25G and 25 H of
Industrial Disputes Act. It is prayed that an award be passed in
favour of workman and against management directing the
management to reinstate him with consequential benefits
including full back wages and continuity in service.
3. Notice of the statement of claim was issued to the
management and management had filed its written statement to
the statement of claim of workman contended that the
management is not an Industry but a small Proprietorship Firm
which was registered on 01.06.2012 as a dealer under the Central
Sales Tax Act, 1956 bearing Registration No.TIN
No.07500423311 and got the Registration Order
No.056998081213 under DVAT & CST on 08.06.2012 from the
Department of Trade and Taxes, Govt. of NCT of Delhi and also
got GST Registration Certificate No.GSTIN:
07AKSPC0873F1Z5 dated 26.06.2017; the management is doing
a small trading work of sale and purchase of fabric and
garments/readymade garments; the workman and his co-
workmen contacted the management for taking stitching work of
fabric on the basis of payment of piecework/per piece basis; the
claimant and others have done stitching work on fabrics with the
management for about one or two weeks on the basis of per-piece
payment with their own wish and freedom; he was given the
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 6 of 34
payment of Rs.2082/- on per piece basis payment on 27.08.16
against the pieces he stitched from 17.08.16 to 27.08.16; the
claimant and other workmen were never been employed or
appointed in the management neither on permanently or
temporarily nor any contract basis and never been hired on the
basis of any type of salary either monthly or weekly or on daily
wages. The management denied all the other averments made in
the statement of claim in parawise reply on merits and lastly
prayed to dismiss the claim.
4. Rejoinder to the written statement of the
management was filed by the workman reiterating the averments
mentioned in the statement of claim while denying the
contentions of management in the written statement.
5. Vide order dated 30.01.2018 passed by the Ld.
Predecessor, the following issues were framed in view of
pleadings of the parties :-
ISSUES:
(i) Whether the workman had voluntarily resigned from
his job and had received all his dues in full and final?OPM
(ii) Whether the services of workman have been
terminated illegally or unjustifiably by the management? OPW
(iii) If the answer of aforementioned issue is in
affirmative, to what consequential remedies the workman is
entitled to? OPW
(iv) Relief.
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 7 of 34
6. Vide order dated 21.04.2018, the following
additional issue was framed:
"(1A) Whether there exists employer - employee
relationship between the parties as alleged? OPW.
The case was, thereafter, fixed for evidence of
workman.
7. In order to discharge the onus and prove the issues,
the workman had appeared as witness and filed in evidence, his
examination in chief by way of affidavit Ex.WW1/A wherein he
had reiterated the contents of his statement of claim on solemn
affirmation. Besides this, the workman also filed the following
documents:
(I) Ex.WW1/1: Complaint made to Assistant Labour
Commissioner dated 19.09.2014 against the management;
(ii) Ex.WW1/2: Proceeding sheets of Labour Officer;
(iii) Ex.WW1/3: Complaint dated 16.08.2016 made to
ALC against the management;
(iv) Ex.WW1/4: Complaint dated 16.08.2016 made to
Police against the management;
(v) Ex.WW1/5: Complaint dated 22.08.2016 made to
ALC against the management;
(vi) Ex.WW1/6: Complaint dated 26.09.2016 made to
ALC against the management;
(vii) Ex.WW1/7: Complaint dated 17.10.2016 made to
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 8 of 34
the Deputy Labour Commissioner against the management;
(viii) Ex.WW1/8 & Ex.WW1/9: Demand notice dated
13.12.16 issued to the management and its postal receipt;
(ix) Ex.WW1/10: Statement of claim filed before
Conciliation Officer; and
(x) Ex.WW1/11: Identity card issued to the workman by
the All India General Kamgar Union.
8. In rebuttal, management had examined Sh. Raj
Kamal Chopra as MW1 who filed his affidavit by way of
evidence as Ex.DW1/A, reiterating the factual contents of the
written statement of management on solemn affirmation. MW1
also placed on record the documents Ex.DW1/1 : Copy of Sales
Tax Registration No.TIN No.07500423311 dated 01.06.2012;
Ex.DW1/2: Registration order No.056998081213 under DVAT
CST dated 08.06.12; Ex.DW1/3: GST Certificate No.GSTIN:
07AKSPCO873F1Z5 dated 26.06.17 and Ex.DW1/4: Copy of
job card having last details of payment given to the claimant
against stitching work.
The management's evidence was, thereafter, closed.
9. I have heard the final arguments addressed by the
AR for both the sides. I have also gone through the written
arguments filed by the workman as well as records. The AR for
the workman relied upon the following judgments in support of
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 9 of 34
his contentions:
(I) Dharangadhara Chemical Works Ltd. v. State of
Saurashtra, 1957 SCR 152;
(II) Silver Jubliee Tailoring House and Ors. v. Chief
Inspector of Shops and Establishment and another; 1974 SCR (1)
747;
(III) Hussainbhai Calicut v. Altah Factory Thozhilali,
1978 SCR (3) 1073;
(IV) Shining Tailors v. Industrial Tribunal II, U.P., AIR
1984 SC 23;
(V) Mahesh Kumar Goyal v. University of Ajmer, 1991
(1) WLN 211; and
(VI) The Management of Indian Bank v. The Presiding
Officer (1990) I LLJ 50 Mad.
The AR for the workman further relied upon the
Awards passed by the other Labour Courts in similar matters in
support of the contentions and prayed to pass the award in favour
of the workman and against the management.
10. I have considered the rival contentions raised by the
parties. My issue-wise findings are as under:-
ISSUE No.1A:
"(1A) Whether there exists employer - employee relationship
between the parties as alleged? OPW.
11. The onus to prove the Issue No.1A was on the
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 10 of 34
workman. It is no longer res-integra that the burden of proving
the employer-employee relationship primarily rests upon the
person who asserts its existence. In a situation where a person
asserts to be an employee of the management which the
management denies, the duty primarily rests upon the person so
asserting to give positive evidence in his favour and discharge his
initial burden. Once such a person has given positive evidence in
his favour, only then, the burden would shift on the management
to give evidence to counter such claims. This is because it is
always easier to prove positive facts than a negative.
12. In the judgment titled Automobile Association
Upper India v. P.O. Labour Court-II & Anr., reported as 130
(2006) DLT 160, Hon'ble Delhi High Court has held that
"engagement and appointment of the workman in service
can be established either by direct evidence like
existence and production of appointment letter or written
agreement, or by circumstantial evidence of incidental or
ancillary records, in nature of attendance register, salary
register, leave records, deposit of PF contribution, ESI
etc. or even by examination of co-worker who may
depose before the court that the workman was working
with the management".
13. The Hon'ble Supreme Court in "Workman of Nilgiri
Coop. Mkt. Society Ltd. Vs State of Tamil Nadu", reported as
AIR 2004 SC 1639 held as under:-
"47. It is a well - settled principle of law that the person
who is set up a plea of existence of relationship of
employer and employee, the burden would be upon him.
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 11 of 34
48. In N.C. John Vs Secretary Thodupuha Taluk Shop
and Commercial Establishment Workers' Union and
others [1973 Lab. I.C. 398], the Kerala High Court held :
"The burden of proof being on the workman Jai Prakash
Vs M/s J.K. Sales Corporation 19.12.2019 Page No. 14
of 21 to establish the employer - employee relationship
an adverse inference cannot be drawn against the
employer that if he were to produce books of accounts
they would have proved employer-employee
relationship."
50. The question whether the relationship between the
parties is one of the employer and employee is a pure
question of the fact and ordinarily the High Court while
exercising its power of judicial review shall not interfere
therewith unless the findings is manifestly or obviously
erroneous or perverse."
14. In 'Kanpur Electricity Supply Co. Ltd. Vs Shamim
Mirza' (2009/ 1 SCC 20, the Hon'ble Supreme Court held as
under :-
"20. It is trite that the burden to prove that a claimant
was in the employment of a particular management,
primarily lies on the person who claims to be so but the
degree of proof, so required, varies from case to case. It
is neither feasible nor advisable to lay down an abstract
rule to determine the employer - employee relationship.
It is Jai Prakash Vs M/s J.K. Sales Corporation
19.12.2019 Page No. 15 of 21 essentially a question of
fact to be determined by having regard to the cumulative
effect of the entire material placed before the
adjudicatory forum by the claimant and the
management."
15. Similarly, the Hon'ble Delhi High Court in case
Babu Ram Vs Govt. of NCT of Delhi & Anr., 247 (2018) Delhi
Law Times 596 was pleased to observe :
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments
Page 12 of 34
"it is well settled principle of law that the person, who
sets up a plea of existence of relationship of employer
and employee, the burden would be upon him. In this
regard, the Hon'ble Supreme Court in the case of
Workmen of Nilgiri Coop. Mkt. Society Ltd. V. State of
T.N. and Others, (2004) 3 SCC 514 has approved the
judgment of Kerala and Calcutta High Court, where the
plea of the workman that he was employee of the
company was denied by the company and it was held
that it was not for the company to prove that he was not
an employee. Para 48 to 50 of the said judgment reads
as under :
"In N.C. John v. Secy., Thodupuzha Taluk Shop and
Commercial Establishment Workers' Union & Ors,
(1973 Lab IC 398) the Kerala High Court held : The
burden of proof being on the workmen to establish the
employer employee relationship an adverse inference
cannot bedrawn against the employer that if he were to
produce books of accounts they would have proved
employer employee relationship.
In Swapan Das Gupta & Ors. v. The First Labour Court
of W.B. (1976 Lab IC 202 (Cal)) it has been held :
Where a person asserts that he was a workman of the
company and it is denied by the company, it is for him
to prove the fact. It is not for the company to prove that
he was not an employee of the company but of some
other person.
The question whether the relationship between the
parties is one of employer and employee is a pure
question of fact and ordinarily the High Court while
exercising its power of judicial review shall not interfere
therewith unless the finding is manifestly or obviously
erroneous or perverse."
And observed:
"The petitioner has placed on record his self supporting
affidavit, demand notice and postal receipts in evidence
which does not prove his relationship with the
respondent as employee and employer. In these
LIR No.1674/2017
Rakesh Vs. Jai Tulsi Garments Page 13 of 34 circumstances, I do not find that the impugned Award suffers from any illegality or perversity. There is no merit in the petition. The same is accordingly dismissed with no order as to costs."
16. The question regarding onus and degree of proof for a claim of employment of a workman with the management was examined in the case of Bank of Baroda v. Ghemarabhai Harijibhai Rabari reported as 2005 (10) SCC 792. It was held that onus of proof was on the claimant, namely the workman who claimed to have been employed by the management. It was also held that the degree of proof is vary from case to case and if the workman had established a prima facie case, it would be the responsibility of the management to rebut the same.
In view of afore-said law, it was for the claimant to prove that he was employee of the management.
17. The statement of claim filed by the workman along- with defence of management has been mentioned at the outset. The workman claimed that he worked with the management since 03.04.2012 as Silai Karigar and his last drawn salary was Rs.14,000/-. The claimant further stated that his services were terminated on 28.08.2016 without paying legal dues; he issued demand notice to the management dated 13.12.2016 which was not replied.
On the other hand, the management claimed that there is no relationship of employee employer between the parties as the workman was working with the management on LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 14 of 34 piece rate basis; he was never employed or appointed in the management neither on permanently or temporarily nor any contract basis and never been hired on the basis of any type of salary either monthly or weekly or on daily wages.
18. The witness/claimant has deposed regarding the case and relied upon the documents as aforesaid during his examination by way of affidavit. The witness was cross- examined by the management and deposed as under:-
"I joined the management on 03.04.2012. I had joined the management on the salary of Rs.12,000/- per month and my salary was Rs.14,000/- at the time of my termination.
XXXX XXXX XXXX No appointment letter was issued to me by the management. I know workman Ganga Ram who had joined the management prior to the date of my joining."
From the testimony of the workman, it is apparent that he has denied the defence of the management that he was appointed on piece rate basis and there was no employee employer relationship between the parties. The written statement of the management also reflects the working relationship between the parties. There are certain features and nature of work that ought to be taken into account while determining an employer-employee relationship:
(1) Instructions: A worker who is required to comply with the company's instructions about when, where and how to work is an LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 15 of 34 employee.
(2) Integration: Integration of a worker's work into the company's business operations indicates that the worker is subject to the company's direction and control and that he/she is an employee.
(3) Services Rendered Personally: When a worker performs services personally, and the company dictates both the methods that are used and the results that are produced, the worker is an employee.
(4) Continuing Relationship: A continuing relationship between a worker and the company for whom the services are performed indicates that there is an employer-employee relationship. (5) Set Hours of Work: The establishment of set hours of work by the company indicates control, and the worker who is subject to those hours is an employee.
(6) Hiring; Supervising; Paying: When a worker is hired, paid and supervised by the company for whom the services are performed, the worker is an employee.
(7) Full Time Required: If a worker must devote substantially full time to the business of the company, and the company controls this amount of time, the worker is an employee whereas an independent contractor is free to work when, where and how he/she chooses.
(8) Doing Work on Employer's Premises: If the work must be performed on the premises of the company, and cannot be done LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 16 of 34 elsewhere, the person who does the work is an employee whereas an independent contractor is free to do the work wherever he/she chooses since they are responsible only for the results produced. (9) Order or Sequence Set: If a worker must perform work in a sequence set by the company, must follow established routines and schedules and may not follow their own pattern, this indicates control and that the worker is an employee. (10) Payment of Business and Traveling Expenses: When a company pays a worker's business expenses and retains the right to control or regulate those expenses, the worker is an employee. (11) Furnishing Tools and Materials: When a company supplies tools and equipment to a worker, this indicates that there is an employer-employee relationship between them. (12) Right to Terminate: If a worker has the right to end his/her relationship with the company whenever he/she chooses, and without incurring any liability, this fact indicates the presence of an employer-employee relationship.
In the present case the management has not denied that the workman used to work from the place of the management. There is no averment from the side of the management that the workman had independently worked on his own creativity and without the specific instructions of the management. Even if the version of the management regarding "piece rate" employee is taken to be correct, it is also necessary to see whether a "piece rate" worker can be an employee. That is LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 17 of 34 to say that even if a workman is on "piece rate" can an employer- employee relationship is feasible. The above-said contention of the management is unfounded. In Shining Tailors vs Industrial Tribunal, U. P {AIR 1984 SC 23, 1983 (2) SCALE 397, (1983) 4 SCC 464} it has been clearly observed and held:
"5. We have gone through the record and especially the evidence recorded by the Tribunal. The Tribunal has committed a glaring error apparent on record that whenever payment is made by piece rate, there is no relationship of master and the servant and that such relationship can only be as between principal and principal and therefore, the respondents were independent contractors. Frankly, we must say that the Tribunal has not clearly grasped the meaning of what is the piece rate, If every piece rated workmen is an independent contractor, lakhs and lakhs of workmen in various industries where payment is correlated to production would be carved out of the expression 'workmen' as defined in the Industrial Disputes Act. In the past the test to determine the relationship of employer and the workmen was the test of control and not the method of payment. Piece rate payment meaning thereby payment correlated to production is a well-recognised mode of payment to industrial workmen. In fact, wherever possible that method of payment has to be encouraged so that there is utmost sincerity, efficiency and single minded devotion to increase production which would be beneficial both to the employer, the workmen and the nation at large. But the test employed in the past was one of determining the degree of control that the employer wielded over the workmen. However, in the identical situation in Silver Jubilee Tailoring House and Ors. v. Chief Inspector of Shops and Establishments and Anr. , J. speaking for the Court observed that the control idea was more suited to the agricultural society prior to Industrial Revolution and during the last two decades the emphasis in the field is shifted from and no longer rests exclusively or strongly upon the question of control. It was further observed that a search for a formula in the nature of a single test will not serve the useful purpose, and all factors that have been referred to in the cases on topics, should be considered to tell a contract of service. Approaching the matter from this angle, the Court observed that the employer's right to reject the end product if it does not conform to the instructions of the employer speaks for the element of LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 18 of 34 control and supervision. So also the right of removal of the workman or not to give the work has the element of control and supervision. If these aspects are considered decisive, they are amply satisfied in the facts of this case. The Tribunal ignored the well laid test in law and completely misdirected itself by showing that piece rate itself indicates a relationship of independent contractor and error apparent on the record disclosing a total lack of knowledge of the method of payment in various occupations in different industries. The right of rejection coupled with the right to refuse work would certainly establish master servant relationship and both these tests are amply satisfied in the facts of this case. Viewed from this angle, the respondents were the workmen of the employer and the preliminary objection therefore, raised on behalf of the appellant-employer was untenable and ought to have been overruled and we hereby overrule it."
The purport of the judgment in Shining Tailors vs Industrial Tribunal , U. P is clear:
Even if the mode of payment is by way of 'piece-rate basis' it will not disrobe the employee from his employer-employee relationship;
Piece rate payment correlated to production is a well recognised mode of payment to industrial workmen.
In fact, wherever possible that method of payment has to be encouraged so that there is utmost sincerity, efficiency and single minded devotion to increase production which would be beneficial both to the employer, the workmen and the nation at large.
The employer's right to reject the end product if it does not conform to the instructions of the employer speaks for the element of control and supervision.
The right of rejection coupled with the right to refuse work would certainly establish master servant relationship and both these tests are amply satisfied in the facts of this case.
The facts of the present case is squarely covered by the principles laid down in the above-said judgment of the Hon'ble Supreme Court. As observed the workman worked with LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 19 of 34 the management and the management was supervising the work of the claimant and had control over the services of the workman. Thus there is no doubt that the workman-herein is the employee- workman of the management-herein and there certainly is an employer-employee relation. This issue No:1A is thus decided in favour of the workman and against the management.Issues No.1 to 3
(i) Whether the workman had voluntarily resigned from his job and had received all his dues in full and final?OPM
(ii) Whether the services of workman have been terminated illegally or unjustifiably by the management? OPW
(iii) If the answer of aforementioned issue is in affirmative, to what consequential remedies the workman is entitled to? OPW All these issues shall be decided together being inter-related.
19. The statement of claim and defence of the management has been mentioned at the outset. The workman claimed that he worked with the management since 03.04.2012 as Silai Karigar and his last drawn salary was Rs.14,000/-. The claimant further stated that his services were terminated on 28.08.2016 without paying legal dues. The management on the other hand claimed that the services of the workman were never terminated rather he himself voluntarily resigned from the job and had received all his dues in full and final.
LIR No.1674/2017Rakesh Vs. Jai Tulsi Garments Page 20 of 34 The workman has filed his affidavit by way evidence Ex.WW1/A and deposed regarding the case. The witness has also deposed regarding the relevant documents in support of his claim and during cross-examination deposed that:-
"I became the member of the Union after termination of my services with the management. My services were terminated on 28.08.2016. I am having the ID card issued by the Union, copy of the same is already available on record as Ex.WW1/11.
XXXX XXXX XXXX I had made first complaint against the management in the month of August, 2016 before the Labour Office, Jhilmil. Thereafter the management had taken me back on join but I do not remember the said date and my services were terminated by the management on 17.08.2016. I had not visited the management again for work. I had completed my work finally, however, I was not paid the salary. The last salary paid to me was in July 2016".
The workman during his cross-examination reiterated regarding his case. There is no cross-examination by the management that the workman himself resigned from the job after receiving the full and final settlement. There is nothing in the testimony of the MW1 to support the contention of the management.
I have gone through all the documents relied by the parties in support of their contentions. There is no document on record placed by the management to show that workman resigned from the job nor any settlement deed has been filed by the management on record to prove the contentions. The contention LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 21 of 34 and claim of the workman appears to be coherent.
20. Though the management has not filed any document to prove the settlement as regards the settlement of dues, it remains to be seen whether the stated settlement is at all valid. To understand the word 'full and final settlement', it is to be understood first that what amount may come or may be included in full and final settlement. As far as I.D. Act is concerned, there is no definition of 'full and final settlement'. In view of various pronouncements, the word 'full and final settlement' would simply mean that it would include such an amount which if paid by the management and accepted and received by the workmen then thereafter there would be no claim either of the management upon the workmen or vice versa with respect to any monetary benefits qua the terms and nature of employment. Therefore, if a wider view is taken then it would include that all amount which the management paid to the workman at the time of leaving/retiring/terminating the job i.e. their earned wages, leave encashment, bonus, amount of PF, amount towards gratuity if payable, retirement benefits and which may also include any other amount which the workman owe to the management including the amount which the management has given to the workman during its tenure by way of advancing loan or by way of any legal facility attached to the job entrusted to the workman LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 22 of 34 like accommodation or conveyance if any, or any other such benefit which the workman have to return to the management at the time of such settlement & after adjusting all such benefits, the terms of full and final would be arrived at.
21. There is prescribed procedure under Section 58 of The Industrial Disputes (Central) Rules, 1957 regarding the Memorandum of settlement. Furthermore, it is to be noted that in Section 2 (p) of The Industrial Disputes Act 1947 and Rule 58 of The Industrial Disputes (Central) Rules 1957 it has been specifically provided that in case of a settlement arrived otherwise than in the course of conciliation proceedings, a copy of the same has to be sent to the authorities as mentioned in Rule 58 (4) of The Industrial Disputes (Central) Rules 1957. Rule 58 (3) of the Industrial Disputes (Central) Rules 1957 provides that where a settlement is arrived at in the course of conciliation proceedings, the Conciliation Officer shall send a report to Central Government together with a copy of memorandum of settlement signed by the parties to the dispute. Hence, the legislature has provided appropriate provisions for protecting poor workman from being forced to enter into settlement by requiring that a copy of settlement is to be sent to the Central Government even in case the settlement is arrived before the Conciliation Officer (who is an officer superior to Labour LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 23 of 34 Inspector). The legislature has nowhere provided that in case the settlement is arrived in the presence of Labour Inspector then there is no requirement of compliance of provisions Rule 58(4) of The Industrial Disputes (Central) Rules 1957. It is also to be noted that the legislature has provided appropriate provision for safety of workman even in case a settlement is arrived during the course of conciliation proceedings by requiring a copy of the same being sent to Central Government under Rule 58(3) of the Industrial Disputes (Central) Rules, 1957.
While enacting Section 2 (p) of the ID Act 1947 and Rule 58 of the Industrial Disputes (Central) Rules 1957 the legislature was well aware that a poor workman may be forced or coerced to enter into settlement under the pressure or threat and on that account necessary provisions were made whereby it was directed that the appropriate authorities as provided in the said provisions, shall be informed about the settlements in order to prevent abuse of authority by the management or union or any officials of the government.
In Workmen of Delhi Cloth and General Mills Co. Ltd. v. Management of Delhi Cloth and General Mills Co. Ltd., 1970 Lab. IC 1470, it was held that the settlement has to be in compliance with the statutory provisions, as they are of a mandatory character. Hence, in view of Section 2 (p) of I.D. Act 1947 read with Rule 58 of Industrial Dispute ( Central) Rules LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 24 of 34 1957 a copy of settlement was required to be sent to the authorities as mentioned in Rule 58 (4) however, it has not been proved that any copy of the alleged settlement was ever sent to the authorities as mentioned in Rule 58 (4) of Industrial Dispute (Central) Act. In view of decisions of our own Hon'ble High Court in Om Prakash Sikka Vs. Presiding Officer, Labour Court another (Supra) the alleged settlement is inoperative.
22. In Om Prakash Sikka v. The Presiding Officer, Labour Court and Anr., 1983 (46) FLR 172, it was observed that it has been held in decided cases that where there is non compliance with Rule 58(4) the settlement is invalid because the settlement has to be in strict compliance with the statutory provisions of Rule 58(4) and in such cases it cannot be contended that the copy sent to the Labour Commissioner was in full compliance with subrule (4) of Rule 58, in as much as a copy of the settlement has to be sent to the authorities named specified therein. It was held that where a copy is not sent to the authorities named in subrule (4), it must be held that the settlement is inoperative.
23. In the Case of Workmen of M/s. Delhi Cloth and General Mills v. Management of M/s. Delhi Cloth and General Mills Ltd., reported as 1970 SCR (2) 886, the Hon'ble Supreme LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 25 of 34 Court has held:
"(2) Rule, 28F(4) of the Industrial Disputes (Central)Rules 1957 made under S. 38 of the Industrial Disputes Act has full force of law of which judicial notice can be taken. This rule must be fully complied with if the settlement is to have a binding effect on all workmen."
24. In P. Selvaraj v. The Management of Shardlow India (W.A.No.1478 of 2006), the Madras High Court was of the opinion that where a full and final settlement was a predicament whereby it was mandatory for an employee to sign it to get any amount, even if it was less than the sum he was entitled to, in those cases the full and final settlement will not stand, and the employee can claim the sum he was entitled to. It also asserted that an employee cannot be estopped from claiming the gratuity amount by virtue of section 14 of Payment of Gratuity Act, 1972, since it has an overriding effect over any other enactment or any instrument or contract.
25. The compliance with the Rule 58 (4) was mandatory and same view was also held in another case of the Management of Cooperative Stores Ltd. vs. Ved Prakash Bhambri reported as 36 (1988) DLT 185, wherein it was reiterated that Rule 58 and Form H of Industrial Dispute(Central) Rules 1957 have to be strictly followed before the statement could be considered as valid.
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26. Full and final settlement is usually used by the employers to absolve themselves from all the previous dues and claims of their employees. It is usually actuated in the form of a settlement contract and effectively concludes the employer employee relationship. Ideally such a settlement ought to serve its purpose and lead to the dissolution of all the preexisting disputes and claims between the employer and employee. Sadly, that is not always the case. Employers usually get dragged into the labour courts for certain previous dues or claims which are claimed by the employees to be beyond the purview of the terms of settlement.
27. In the present case, the workman herein is not in a position to understand the intricacies of the "full and final"
settlement as imposed upon him by the management herein. The management herein has not been able to discharge its onus to prove that the workman herein had settled by way of amounts as "Full and final" settlement or he left the job by resignation. The settlement, if any, projected by the management is not in conformity with Rule 58 (4) of the Industrial Disputes (Central) Rules, 1957. Therefore, in view of above referred judgments, the settlement claimed by the management can not be upheld. In view of the aforesaid discussion, the management has failed to prove that workman had settled the matter by way of "Full & LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 27 of 34 Final" Settlement or resignation of the workman.
28. Whether the workman-herein is unjustifiably terminated by the management? There is another aspect to it. It is the case of the management that the workman had worked for about one or two weeks and abruptly left the job on 27.08.2016. Even if that is taken to be correct (though the management has not proved it) the workman-herein ought to have been informed by the management as per the proviso to the Rule 13 of the INDUSTRIAL EMPLOYMENT (STANDING ORDERS) CENTRAL RULES, 1946 Notification No. L.R. 11 (37), dated 18th December, 1946:
"13. Termination of services.--(a)For terminating the services of permanent workman having less than one year of continuous service, notice of one month in writing with reasons or wages in lieu thereof shall be given by the employer:
Provided further that when the services of a temporary workman, who has not completed three months' continuous service, are terminated before the completion of the term of employment given to him, he shall be informed of the reasons in writing. When the services of a badli workman are terminated before the return to work of the permanent incumbent or the expiry of his badli's term of employment, he shall be informed of the reasons for such termination in writing."
There is nothing on record to show that the management therein had fulfilled any of its duties as per the I.D. Act.
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29. In view of the aforesaid discussions, the management herein has not been able to discharge its onus in support of contentions made in the written statement. It is duly proved from the materials on record and the testimony of the witnesses that the services of the claimant were terminated illegally/unjustifiably by the management. In view of the above discussions, the Issue no.1 is decided against the management whereas the Issues no.2 & 3 are decided in favour of the workman and against the management.
Issue no.4:
Relief
30. Ld AR for workman has argued that since the workman had been terminated illegally, he is entitled for reinstatement with full back wages. The prayer of the workman is denied by the management claiming that he is not entitled for any relief.
31. I have considered the arguments and gone through the record. It is settled law that reinstatement and back wages are not automatic and it depends upon the facts and circumstances of each case. In Ashok Kumar Sharma Vs Oberoi Flight Services reported as AIR 2010 Supreme Court 502, Hon'ble Supreme Court while relying upon various judgments of the Hon'ble Supreme Court held that compensation in lieu of reinstatement LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 29 of 34 and back wages would be appropriate. The relevant para of judgment is reproduced as under :
"8. In the case of Sita Ram v. Moti Lal Nehru Farmers Training Institute 2(2008 AIR SCW 2256) this Court considered the matter thus :
"2. JT 2008 (3) SC622.
"21. The question, which, however, falls for our consideration is as to whether the Labour Court was justified in awarding reinstatement of the appellants in service.
22. Keeping in view the period during which the services were rendered by the respondent (sic appellants); the fact that the respondent had stopped its operation of bee farming, and the sen/ices of the appellants were terminated in December 1996, we are of the opinion that it is not a fit case where the appellants could have been directed to be reinstated in service.
23. Indisputably, the Industrial Court, exercises a discretionary jurisdiction, but such discretion is required to be exercised judiciously. Relevant factors therefore were required to be taken into consideration; the nature of appointment, the period of appointment, the availability of the job, etc. should weigh with the court for determination of such an issue.
24. This Court in a large number of decisions opined that payment of adequate amount of compensation in place of a direction to be reinstated in service in cases of this nature would subserve the ends of justice. (See Jaipur Development Authority v. Ramsahai [(2006) 11 SCC 684] : (2006 AIR SCW 5963), M.P. Admn. v. Tribhuban [(2007) 9 SCC 748] : (2007 AIR SCW 2357) and Uttaranchal Forest Development Corpn. v. M.C. Joshi [(2007) 9 SCC 353] : (2007 AIR SCW 7305).
25. Having regard to the facts and circumstances of this case, we are of the opinion that payment of a sum of Rs. 1,00,000 to each of the appellants, would meet the ends of justice. This appeal is allowed to the LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 30 of 34 aforementioned extent. In the facts and circumstances of this case, there shall be no order as to costs."
9. The afore-referred two decisions of this Court and few more decisions were considered by us in the case of Jagbir Singh v. Haryana State Agriculture Marketing Board3(2009 AIR SCW 4824) albeit in the context of retrenchment of a daily wager in violation of section 25F of Industrial Disputes Act who had worked for more than 240 days in a year and we observed thus :
3. JT 2009 (9) SCC 396."7.
It is true that earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention to the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice."
It is not necessary to multiply the decisions of this Court wherein award of compensation in lieu of reinstatement and back wages has been held to be adequate and in the interest of justice.
In light of the aforesaid legal position, the view of the High Court that monetary compensation in lieu of reinstatement of the workman would be proper cannot be said to be unjustified."
32. In case titled as Mohd. Shakir And Sunder Lal Jain Hospital, 2010 ILLJ 245 (Del) High Court of Delhi, it was held that :
"legality of dismissal/termination from service of a workman did not in itself ipso facto result in his LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 31 of 34 reinstatement. The long history of litigation and acrimony between the parties leading to trust deficit in this case was considered by the Labour Court and it had rightly concluded that reinstatement might not be appropriate remedy will justified award of compensation in lieu of the reinstatement of the workman."
33. Hon'ble Supreme Court in the matter of 'Rajasthan State Transport Corporation, Jaipur Vs Sri Phool Chand', in Civil Appeal No. 1756/2010 has reiterated that to be entitled for back wages during the pendency of proceedings, the employee should not be employed in any establishment during the pendency of such proceedings. Further if a worker had been employed during the pendency of such proceedings and had been receiving adequate remuneration, no back wages would be payable for the period of such pendency. It was further held that a worker cannot automatically be entitled to back wages and has no right to claim back wages purely on the basis that the dismissal order has been set aside. As held :
"In order to claim back wages, a worker is required to prove (by adducing evidence) that he was not gainfully employed anywhere after dismissal, and had no earnings to maintain himself and / or his family. An employer is required to prove that a worker was gainfully employed elsewhere - however the initial burden lies on the worker to substantiate his unemployment."
34. Further in 'Deepali Gundu Surwase Vs Kranti Junior Adhyapak Mahavidyalya (D.Ed) & Ors. reported as (2013) in SCC 324, Hon'ble Supreme Court held that in the case LIR No.1674/2017 Rakesh Vs. Jai Tulsi Garments Page 32 of 34 of wrongful termination of a worker, reinstatement with continuity of service and back wages was a normal rule. However, the payment of back wages has to be determined as per the facts and circumstances of his case and cannot be automatically granted on a order of reinstatement of the worker. The worker has to specifically raise the claim for back wages as well as present supporting evidence demonstrating his unemployment. This court also set out various factors for calculating the back wages, which include, among others.
(a) the length of service of a worker ;
(b) the nature of misconduct, if any, proved against worker ; and
(c) the financial condition of employer.
35. In the present case, the workman served the management for more than 4 years before his illegal termination on 28.08.2016. The relationship with the management will not be cordial due to the rift and prolonged litigation. Further, the workman may not be considered sitting idle after his termination. Hence, in these circumstances, it would not be in the interest of justice and industrial piece to direct reinstatement and the ends of justice can be met by granting lump sum compensation. Considering the above facts, the statement of claim as filed by the workman is allowed and it is appropriate that management is directed to pay lumpsum compensation of Rs.40,000/- (Rs. Forty Thousand only) to the workman.
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36. Management is directed to pay the aforesaid amount to the workman within 30 days of publication of this award, failing which, the amount shall also be carrying an interest @ 8% per annum till the date of its realization.
37. Award is passed and reference is answered accordingly.
38. Digitally signed copy of the award be sent to the Office of the Deputy Labour Commissioner, Government of NCT of Delhi of Distt./Area concerned for publication as per rules and judicial file be consigned to Record Room after compliance of necessary legal formalities. The award be also uploaded on server. GORAKH Digitally signed by GORAKH NATH NATH PANDEY Date: 2022.12.17 PANDEY 13:27:33 +0530 Announced in the open (Gorakh Nath Pandey) Court on 09.12.2022 Addl. District & Sessions Judge, Presiding Officer Labour Court- IV, Rouse Avenue District Courts, New Delhi.
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