Rajasthan High Court - Jaipur
Hindustan Machine Tools Ltd. vs Labour Court And Anr. on 11 March, 1993
Equivalent citations: (1993)IILLJ1219RAJ, 1993(1)WLC698
JUDGMENT G.S. Singhvi, J.
1. These three petitions arise out of a common order dated January 5, 1987 passed by the Labour Court, Rajasthan, Jaipur in case No. LCC 35/85, Case No. LCC 124/85, Case No. LCC 125/85 filed by 71 employees claiming overtime wages in terms of the Factories Act, 1948. Since the Labour Court has decided all the three applications by the common order and facts of all these writ petitions are by and large common, I am deciding all these writ petitions by a common order.
2. The facts which are necessary for deciding controversy involved in these writ petitions are that the petitioner Hindustan Machine Tools is a company owned and controlled by the Government of India. It has its factories at various places in India as well as abroad. One of its factories is at Ajmer which is engaged in manufacture of machine tools. This factory is governed by the provisions of the Factories Act, 1948 (for short 1948 Act). The respondent - workmen filed three separate applications under Section 33C(2) of the Industrial Disputes Act, 1947 (for short 1947 Act) claiming computation of their overtime wages in terms of Section 59 of 1948 Act. The workman claimed that they had worked overtime and the company was under an obligation to pay overtime wages in accordance with Section 59 of 1948 Act but the company had deliberately denied those wages to the workmen on the basis of tripartite settlement dated March 31, 1977. The petitioner contested these applications and claimed that payment of overtime to the workmen is regulated by the provisions contained in the Tripartite settlement dated 31st March, 1977. Settlement was arrived at between the management of the Company and representatives of the HMT Shramik Sangh, Ajmer and HMT Employees Union, Ajmer. The Regional Assistant Commissioner-cum-Conciliation Officer had witnessed the settlement. The company claimed that in the terms of Para-21 of the settlement, the workmen were entitled to Sunday allowance on H.M.T. pattern. The HMT pattern has been provided in Clause 2.242 of the Personnel Manual of HMT Bangalore.
3. After hearing the parties, learned Judge, Labour Court has accepted the applications filed by the workmen and directed payment of overtime wages to each of the workmen in accordance with Section 59 of 1948 Act. The Labour Court also computed the amount payable to each of the workmen towards overtime wages.
4. Shri R.C. Joshi, learned counsel for the petitioner company, has argued that the findings recorded by the Labour Court about the entitlement of the workmen to overtime wages under Section 59 of 1948 Act are perverse in as much as the Labour Court has completely over-looked various important aspects of the case. Shri Joshi submitted that the settlement dated 31st March, 77 will occupy the field regarding overtime wages and once the employer and employees have voluntarily entered into a settlement, provisions of Section 59 of 1948 Act cannot be relied upon for claiming overtime wages. Shri Joshi submitted that the Labour Court has completely ignored the fact that all the workmen have derived benefits from the settlement dated, 31st March, 1977 for sufficiently long period and therefore, it was not justified for the Labour Court to have unsettled the service conditions of the employees. Shri Joshi further argued that the Management of the Company has acted upon the settlement for the last more than a decade and a half and about 1100 employees belonging to the Unions have been given benefit of overtime wages/Sunday allowance in accordance with the terms of settlement. Now, on the basis of the order passed by the Labour Court on the applications filed by few employees a situation has come into existence where the management will have to operate the settlement for some employees and will have to pay overtime wages to the respondents under Section 59 of 1948 Act. Shri Joshi then argued that once the workmen have availed the benefits under the settlement they cannot be allowed to again make a claim for payment of wages for the same period merely because the Labour Court has found that Section 59 of 1948 Act is attracted. Shri Joshi placed reliance on the order dated, 2nd August, 1987 passed by the Division Bench of this Court in S.B. Civil Writ Petition No. 1473/86, Sriram Rayons, Kota v. Gajendra Singh and 12 Ors. writ petitions. Shri Virendra Bandhu, learned counsel for the respondents workmen, argued that the demand No. 21 related to Sunday Allowance and the settlement only stipulates that Sunday Allowance will be paid on HMT pattern. However, there is no specified HMT pattern and therefore para 21 of the settlement is virtually redundant. Shri Bandhu then argued that the terms contained in the settlement dated, 31st March, 1977 regarding overtime wages are contrary to the specific provisions contained in the Factories Act, 1948 and such a settlement cannot bind the workmen. Shri Bandhu invited the court's attention to Annexure R-2/1A, Annexure R-2-1B and Annexure R-2/2 to show that the workmen have been denied the benefit of compensatory off in lieu of overtime. Workmen Dhruv Kumar and K.S. Chauhan were denied leave in lieu of overtime and workman Bisan Lal was charge-sheeted for having allegedly declined to do the overtime job when his son was ill. Shri Bandhu argued that the petitioner company has not been following any uniform pattern of Sunday Allowance and the terms of settlement entered into between the two Unions and management of Company is highly prejudicial to the workmen. The workmen were not allowed compensatory off according to their choice. Therefore, the settlement cannot be treated as fair. Shri Bandhu argued that the employer had not denied the factum of overtime done by the employees and once it is proved that the workmen are entitled to overtime done by the employees and once it is proved that the workmen are entitled to overtime as per Section 59 of 1948 Act, the computation made by the Labour Court does not call for any interference by this Court. He placed reliance on an order dated 3rd September, 1992 passed in S.B. Civil Writ Petition No. 1498/83, Rajasthan P.W.D. Workers Federation v. State of Rajasthan.
5. The Factories Act, 1948 has been enacted with the object to consolidate and amend law relating to labour in factories. Chapter-III of 1948 Act contains provisions regarding health of the workers. Chapter-IV-A contains provisions regarding hazardous processes. Chapter-V deals with welfare. Chapter-VI regulated the working hours of adults. Chapter-VII contains provisions regarding employment of young persons. Chapter-VIII deals with annual leave with : wages; Chapter-IX contains special provisions. Chapter-X deals with penalties and procedure. Chapter-VI is relevant for the purpose of questions raised in these cases and therefore some elaborate reference deserves to be made to the provisions contained in this Chapter. Section 51 regulates weekly hours of adult worker and it provides that, no adult worker shall be required or allowed to work in a factory for more than 48 hours in any week. Section 52 deals with weekly holidays. Section 53 provides for compensatory holidays. It says that, where a worker is deprived of any weekly holidays as a result of passing of an order or the making of a rule under the provisions of 1948 Act exempting the factory or workers from the provisions of Section 52, such worker shall be allowed compensatory holidays due to him within one month equal to the number of holidays lost. Section 54 deals with the daily hours and it says that no adult worker shall be required or allowed to work in a factory for more than nine hours in any day. Section 55 speaks of intervals for rest. Section 56 refers to spread over of the work. Section 57 refers to night shifts and Section 58 contains prohibition of overlapping shifts. Section 59 contains provisions for payment of overtime work. Section 60 contains restriction on double employment. Section 64 authorises making of exemption rules. Sub-section (4) imposes an embargo on the Government while making rules for granting exemption. Sections 59 and 64(1)(4) are quoted below for the purpose of ready reference:
"59. Extra wages for overtime - (1) Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.
(2) for the purposes of Sub-section (1), ordinary rate of wages means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of food-grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.
(3) Where any workers in a factory are paid on a piece rate basis, the time rate shall be deemed to be equivalent to the daily average of their full time earnings for the days on which they actually worked on the same or identical job during the month immediately preceding the calendar month during which the overtime work was done, and such time rates shall be deemed to be the ordinary rates of those workers:
Provided that in the case of a worker who has not worked in the immediately preceding calendar month on the same or identical job, the time rate shall be deemed to be equivalent to the daily average of the earning of the worker for the days on which he actually worked in the week in which the overtime work was done.
Section 64(1). Power to exempting rules (1) -The State Government may make rules defining the persons who hold positions of supervision or management or are employed in a confidential position in a factory (or empowering the Chief Inspector to declare any person, other than a person defined by such rules, as a person holding position of supervision or management or employed in a confidential position in a factory if, in the opinion of the Chief Inspector, such person holds such position or is so employed) and the provisions of this Chapter, other than the provisions of Clause (b) of Sub-section (1) of Section 66 and of provision to that sub-section, shall not apply to any person so defined".
(4) in making rules under this section, the State Government shall not exceed, except in respect of exemption under Clause (a) of Sub-section (2), the following limits of work inclusive of overtime:
(i) the total number of hours of work in any day shall not exceed ten;
(ii) the spreadover, inclusive of intervals for rest, shall not exceed twelve hours in any one day;
Provided that the State Government may in respect of any or all of the categories of workers referred to in Clause (d) of Sub-section (2), make rules prescribing the circumstances in which, and the conditions subject to which the restrictions imposed by Clause (i) and Clause (ii) shall not apply in order to enable a shift worker to work the whole or part of a subsequent shift in the absence of a worker who has failed to report for duty;
(iii) the total number of hours of work in a week including overtime shall not exceeds sixty;
(iv) the total number of hours of overtime shall not exceed fifty for any one quarter":
6. A combined reading of various provisions referred to hereinabove clearly shows that the employer cannot ask a workman to work for more than 48 hours in any week and the workman is entitled to weekly holidays and in case the benefit of weekly holidays is denied to him, he is entitled to compensatory holidays. Section 59 entitles the workman to claim wages for overtime if a worker is made to work for more than 9 hours in any day or for more than 48 hours in any week. The rate of such overtime is two times of his ordinary rate of wages. Section 64(iv) further provides that the total number of hours of overtime shall not exceed 50 for any one quarter. It can, therefore, be said that Chapter VIII is a complete code in itself providing for the number of working hours and working days and it entitles a workman to claim compensatory holidays and overtime wages. The Factories Act is a piece of welfare legislation and therefore, while interpreting the provisions of this Act, the well recognised canon of interpretation, namely, the interpretation which favours working class and which fulfils the object of the legislation has to be adopted by the court. An interpretation which restricts or curtails benefits admissible to workers under the Factories Act has to be avoided. Since the provisions contained in the Factories Act, particularly those contained in Chapter-VI, are intended to protect the workmen against exploitation on account of his uneven position qua the employer, employer cannot be permitted directly or indirectly to infringe upon the rights of the workers. Likewise, the employee cannot be permitted to volunteer to work beyond the prescribed hours. If the employer was given permission to contract out of the provisions of 1948 Act, the whole object with which these provisions have been enacted will be frustrated.
7. The order of the Labour Court which has been challenged by the petitioner shows that after narrating the facts contained in the application and the reply filed by the employer, the learned Judge observed that during the course of arguments no dispute was raised as to the overtime working hours claimed by the applicants and, therefore, there was no dispute as regards the quantum of overtime. The Labour Court also noted that despite the directions given by it to the employer to produce certain documents in case No. 124/85, such documents were not produced. The workman filed his affidavit and in rebuttal, the employer's witness only stated that the record was not available. The Labour Court then took into consideration the plea of employer that the provisions contained in the settlement are quite beneficial to the employees and the employees have been getting benefits of the settlement since 1977 without any objection and for that reason they were not entitled to challenge the same. The learned Judge, Labour Court then noticed the argument advanced on behalf of the workmen and observed as under:-
"It is settled law that the industrial law aims at the welfare of the labour and also regulates the relations between the two in a very harmonious manner conducive in over-all growth in the country. In this connection it may also be staled that the settlements between the parties do occur, but it must be borne in mind that the employer is always in a better position to dictate terms. While scanning the terms of settlement this tendency on the part of the employer must be kept in view.
Moreover, the mandatory provisions contained in the relevant law cannot be over-ridden by inserting the provisions in settlement contrary to it".
8. Learned Judge, Labour Court then held that the settlement clearly contravened the mandatory provisions of Section 59 of the Factories Act in as much as the benefits enshrined in the settlement are far less than those contained in Section 59 of the Factories Act. Learned Judge rejected the argument of the employer that a settlement is binding under Section 19 of the Industrial Disputes Act and observed that only such settlement is binding between the parties or : the workers which does not offend other provisions of law and in view of the mandatory provisions contained in Section 59 of 1948 Act the settlement cannot operated to the prejudice of the workers. The learned Judge then examined the argument advanced with reference to Section 64(4)(iv) and observed that since the employer has contravened the provisions of Section 64(4)(iv) and compelled the workmen to work overtime on the strength of settlement, workers cannot be denied the benefits of overtime work done by them. The learned Judge also took notice of the fact that when the workmen refused to do overtime work they were threatened with the domestic enquiry and they were not even allowed compensatory holidays. The learned Judge also rejected the plea of the employer that the benefit already availed by the workmen should be deducted from the amounts claimed by them in lieu of overtime work. In arriving at this conclusion, the Labour Court observed that the employer cannot arbitrarily take work from a workman for any unreasonable period at a time and if something has been given to the workmen the same cannot be taken into consideration for denying wages admissible to the workmen.
9. From the above analysis of the order of the Labour Court it can be said that the learned Judge of Labour Court has considered all the arguments advanced before it on behalf of the petitioner and has recorded a categorical finding that the settlement dated 31st March, 1977 is less beneficial to the workers. Shri Joshi, learned counsel for the petitioner, has not been able to show as to how the provisions of the settlement are advantageous to the workers as against the benefits admissible to them under Chapter-VI of 1948 Act. In fact, learned counsel for the petitioner could not point out anything from the settlement which may justify interference with the conclusion of the Labour Court that the Settlement is less beneficial to the workers. Once it has been found that settlement dated 31st March, 1977 is disadvantageous to the workers in as much as it denied the benefit of overtime wages to the workers as contemplated by Section 59 of 1948 Act it has to be held that the settlement dated 31st March, 1977 contravened the provisions of Section 59 of 1948 Act. A settlement like the one in question, which has been made in total derogation of the provisions of Section 59, cannot be treated as binding on the workmen in the garb of Section 19 of 1947 Act. Therefore, I find no justification for interference with the conclusion reached by the Labour Court that part of the settlement dated 31st March, 1977 is liable to be ignored as it is contrary to the provisions of Section 59 of 1948 Act. I also do not find any merit in the submission of Shri Joshi that even if workers have worked for more than 50 hours of overtime, they are not entitled to benefit of wages for that period in view of the prohibition contained in Section 54(4)(iv). This argument of Shri Joshi has been referred to only to be rejected for the simple reason that the petitioner (employer) cannot take advantage of its own act of contravening the embargo of maximum overtime contained in Section 64(4)(iv). The employer has clearly taken advantage of its superior bargaining position vis-a-vis the workmen by making them to work for more than 50 hours of overtime work. It cannot now claim that despite the fact that workmen have rendered service for more than 50 hours of overtime wages should be denied to them because the workmen became a party to the violation of that embargo. Having taken advantage by violating the provisions of law, the employer cannot now plead that the workmen should be denied benefit of their extra work.
10. Argument of the learned counsel for the petitioner that the management will be put to a predicament by virtue of the impugned order, is an argument of despair. Once it is found that the provisions of settlement are less advantageous to the workers and that there has been a violation of the mandatory provisions contained in Section 59, it will be obligatory for the employer to give benefit of the mandatory provisions to all the workmen and therefore, there will be no occasion for any discrimination between the workmen engaged in the factory of the petitioner company.
11. However, the last argument of Shri Joshi relating to the deduction of the benefits already earned by the workmen under the settlement dated 31st March, 1977 deserves to be accepted. The reason given by the learned Judge, Labour Court for ignoring the benefits already taken by the workmen is not legally sustained. The fact is that some of the workmen have availed some benefits under the settlement. If that is so, they cannot be allowed to take double benefits i.e. one under the settlement and the other under the provisions of Section 59 of 1948 Act. When the Court had found that the settlement dated 31st March, 1977 contravened Section 59 of 1948 Act, the only course open to the Labour Court was to have ordered extension of benefit only of the provisions of Chapter-VI to the workmen. The benefits already availed by the workmen under the settlement will have to be set off from the money payable to the workmen under 1948 Act.
12. The decision of this Court dated, 7th August, 1987 in Sriram Kota v. Gajendra Singh and connected writ petitions has no relevance whatsoever to the questions raised in this writ petition. That was a case in which the employees had agreed for deduction of 50 paise per month as a contribution which was to be utilised for welfare of the workers in accordance with the constitution of Sriram Rayons Karmachari Kalyan Samiti. This Court declared that the deduction was for the benefit of the workers and it could not be declared to be violative of Section 23 of the Payment of Wages Act. No case of deduction is involved in the present case. On the other hand, in the case in hand, it has been found that the settlement is contrary to Section 59 of 1948 Act and is less advantageous to the workers, In Rajasthan P.W.D. Workers Federation v. State, this Court declared the settlement to be contrary to the rules and held that settlement was not binding on the workers. The decision of that case does apply to the facts of this case.
As a result of the above discussion, these writ petitions are decided in the following manner:
(1) The finding of the Labour Court that settlement dated 31st March, 1977 is partially contrary to Section 59 of the Factories Act, 1948 is upheld.
(2) The finding of the Labour Court that the workmen are entitled to payment of overtime wages for the entire overtime work is also upheld.
(3) The finding of the Labour Court that the workmen cannot be asked to account for the benefits already availed by them is, however, set aside.
13. All these cases are remanded back to the Labour Court for recomputation of the benefits admissible to the workmen towards overtime wages by accounting for the benefits already taken by them under the settlement dated 31st March, 1977. The Labour Court is directed to decide this limited question within a period of three months from the date of receipt of the copy of this order.
14. Registrary is directed to send a copy of this order to the Judge, Labour Court, Jaipur, immediately.