Delhi District Court
Sh. Jokender vs M/S. Royal Automobiles on 8 April, 2021
IN THE COURT OF SH. JOGINDER PRAKASH NAHAR
PRESIDING OFFICER, LABOUR COURT-IX
ROUSE AVENUE COURTS COMPLEX, NEW DELHI
LIR No. 8014/16 CNR No. DLCT13-006199-2016
Sh. Jokender
S/o Sh. Tek Chand
R/o 46, Rani Khera Gaon
Nangloi, Delhi-110081 ......Workman
Versus
M/s. Royal Automobiles
Now known as: Gati E-Rickshaw
Through its Prop. Sh. Dalip Narang
At: I-14-15, Udyog Nagar, Peeragarhi
New Delhi-110041 ......Management
Date of Institution : 13.05.2016
Date of Award reserved on : 08.04.2021
Date of Award : 08.04.2021
REFERENCE U/SEC. 10(1) (C) AND 12(5) OF INDUSTRIAL
DISPUTE ACT, 1947 R/W GOVT. OF INDIA, MINISTRY OF
LABOUR NOTIFICATION NO. S-11011/2/75/DK (IA) DATED
14th APRIL 1975 AND NOTIFICATION NO.
F.1/31/616/Estt./2008/7458 DATED 3rd MARCH 2009
LIR No. 8014/16
Jokender v. M/s. Royal Automobiles Page 1 of 46
AWAR D
BRIEF FACTS AND REASONS FOR DECISION :-
1. Vide this Award the present reference petition referred by the Deputy Labour Commissioner, District West, Labour Department, Govt. of the National Capital Territory of Delhi shall be disposed which was referred by appropriate Government/Office of Labour Commissioner arising between the parties. The issue as sent in terms of reference is reproduced hereasunder:
"Whether services of Sh. Suraj Prakash S/o Sh. Krishan Lal & 9 others (As per annexureA) have been terminated illegally and/or unjustifiably by the management; and if so, to what relief are they entitled and what directions are necessary in this respect?"
2. The present statement of claim was filed by the workman submitting that he is under employment of respondent/management since 29.08.2008 as 'Checker Karigar' on monthly pay of Rs.11,000/- per month. On demand of facilities like appointment letter, salary slip, attendance pass, annual LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 2 of 46 holidays, national holidays, bonus, EPF and others. The employer threatened the workman to implicate him in false case. A demand letter dated 26.02.2016 was sent to the management. The management had illegally terminated the service of workman on 01.01.2016 and also not paid salary from 01.11.2015 to 31.12.2015 which are detailed in para no. 9 of the claim. Accordingly workman has prayed for full back wages with bonus, gratuity, legal expenses, compensation for mental agony and physical harassment and other benefits.
3. In the written statement it is submitted by the management that there was decrease in sale and service of motorcycles therefore M/s. Bajaj Auto Limited cancelled the dealership of management. The decrease in sale was due to dirty politics amongst the workman. The mediation was also conducted in this matter. It is submitted that the workman has himself has left the organisation and his services were not terminated. Further, the statement of claim is beyond the reference made in the present matter with salary, bonus, leave encashment, compensation for mental agony, physical tension and legal expenses. Workman has joined the other organisation. All dues are paid to the workman. It is submitted that all dues till date are paid to the workman.
LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 3 of 463.1 The workman had joined the management in the year 2013 as Helper on his last drawn salary of Rs.6,000/- per month. No legal dues of worker was denied. Now since the dealership is cancelled no work is left with the management. Salary only for the month of December 2015 remains to be paid to the workman which management is ready to pay. Other submission made in the claim of workman are denied.
4. The workman himself has appeared as sole witness in the case as WW1 who has led ex-parte evidence on 21.01.2017 and re-appeared for evidence on 19.10.2019. The management did not appear for cross-examination on 19.10.2019 when the right to cross-examine WW1 was closed vide order dated 19.10.2019. Last and final opportunity was granted to the management to lead evidence on 21.01.2020 and thereafter for not leading evidence despite grant of opportunity the ME was closed vide order dated 04.02.2021.
5. Replication is filed by the workman in which workman has reaffirmed the averments made in the claim and denied the averments of the management.
LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 4 of 466. On the pleadings of the parties and averments made following issues are framed in the case on 29.09.2018:
1. As per terms of reference.
"Whether services of Sh. Suraj Prakash S/o Sh. Krishan Lal & 9 others (As per annexureA) have been terminated illegally and/or unjustifiably by the management; and if so, to what relief are they entitled and what directions are necessary in this respect?"
2. Relief.
7. Final arguments are heard and record perused.
8. The issue-wise findings are as follows:-
9. ISSUE NO. 11. As per terms of reference.
9.1 It is submitted by the workman that he was appointed on 29.08.2008 and his services were terminated on 01.01.2016. However management has failed to cross-examine the workman on his claim that workman was appointed on later date. The LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 5 of 46 version of the management is that the workman has joined in the year 2013 as Helper. It is submitted by the management that workman has left the job on his own who is gainfully employed somewhere else however no specific pleading is taken that with whom the workman is employed and since which date. Hence the above submission of the management could not be believed. However no supportive evidence in this respect is produced by the management. On the face of deposition of workman as WW1 there is no cross-examination of workman in this respect. Hence the deposition of workman remains unrebutted. It is submitted by the management that the dealership of management was cancelled by M/s. Bajaj Auto Ltd. Hence the workman has admitted to worked continuously for more than 240 days in a year with the management and therefore he is entitled for protection u/Sec. 25F of Industrial Disputes Act, 1947.
9.2 The workman has relied on citation titled Management of the Ambala Cantonment Electric Supply Corporation Ltd. v. Workman of the Ambala Cantonment Electric Supply Coporation Ltd. & Ors. in Civil Writ No. 319 of 1967 decided on 25.09.1970=1970 SCC Online P&H 275= AIR 1971 P&H 274 decided on 26 September, 1970 at para no. 16, 20, 23 and 24. The LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 6 of 46 relevant para are reproduced hereasunder:
16. In order to decide which of the two sections applies, it has to be determined whether the transaction of the purchase between the petitioner-Company and respondent 2 amounted to transfer of ownership or the management of the undertaking by operation of law from one employer to another, or that the undertaking was closed as a consequence of the expiry of the period of licence before April 1, 1967. The matter is not res integra. It was held but their Lordships of the Supreme Court in Anakapalle Co-operative Agricultural and Industrial Society v. Its Workmen, 1962-2 Lab LJ 621 = (AIR 1963 SC 1489), that the purchaser of a going concern is a successor-in-interest of the previous employer but the employees have no right to claim re-employment under the successor and that the employees are entitled to retrenchment compensation in accordance with Section 25FF of the Industrial Disputes Act. On the parity of reasoning, it has to be held in the present case that the compulsory purchase of the undertaking of the petitioner-
company by respondent 2 without taking over the employees of that undertaking is a part of that transaction did amount to transfer of the ownership or management of the undertaking from one employer to another. The transfer contemplated under Section 25FF is of the undertaking and not of its employees necessarily. Nevertheless, the Board took the previous employees of the petitioner-Company into its employment by giving them fresh offers of appointment but without continuity of service and without th protection of the wages they were already drawing. The workmen had no choice in the matter and they agreed to serve the Board as its employees on condition that they were to be considered the employees of the Board having been employed on April 24, 1965, and they had to forego to creditor or benefit of their previous service with the petitioner-Company. It is also in evidence that they were given less emoluments by the Board than they were drawing under the petitioner-Company. It is, thus LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 7 of 46 apparent that the case is not covered by the proviso to Section 25FF of the Industrial Disputes Act as the conditions of service on which the workmen were employed by the Board were less advantageous to them the terms under which they were serving the petitioner-company.
20. The learned counsel for the petitioner has then argued that the Board, being a successor-in-interest of the petitioner- Company, was under a legal obligation to take all the workmen into its employment, particularly because the undertaking was continued by the Board as before. On this point, the learned counsel for the workmen has also sought to support the petitioner-Company because, according to the workmen, if the Board is held to be legally under an obligation to take them into its employment, they would be entitled to continuity of service and protection of the wages that they were already drawing and the other conditions of service. This relief was refused to the workmen by the Industrial Tribunal and they have not filed any writ petition challenging that part of the award. Moreover, no provision of any law has been brought to my notice obliging the transferee to take over the employees with the undertaking. If that were the position, there was no necessity of enacting Section 25FF. Under the operative part of this section, the transfer of ownership or management of an undertaking from one employer to another has the effect of retrenchment of the workmen entitled them to retrenchment compensation in accordance with Section 25F for which the liability has been laid on the previous employer. The liability of the previous employer only vanishes if the case of the employees is covered by the proviso to that section. It cannot, therefore, be held as proposition of law that the transfer of an undertaking as a going concern necessarily obliges the transferee to take the employees into its employment. Moreover, their Lordships of the Supreme Court also held in (1962) 2 Lab LJ 621 = (AIR 1963 SC 1489) (supra) that the employees have no right to claim reemployment under the successor and they are entitled to retrenchment compensation in accordance with Section 25FF of the LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 8 of 46 Industrial Disputes Act. This submission of the learned counsel is therefore, repelled.
23. The last argument urged by the learned counsel for the petitioner is that the workmen were not entitled to compensation in lieu of unavailed earned leave and the learned Industrial Tribunal committed an error of law in awarding that compensation to the workmen. The only observation of the Tribunal on this point is-
"it is also not disputed that the workmen are also entitled to wages in lieu of the earned leave. Accordingly they are entitled to these wages as provided under Section 79 of the Indian Factories Act, 1948."
The petitioner did not state in the petition that this part of the award was factually wrong. In any case the learned counsel submits that it is a question of law which can be determined in the present petition. Reliance has been placed on the judgment of their Lordships of the Supreme Court in U. P. Electric Supply Co. Ltd., AIR 1970 SC 237 (supra) para 23 of which reads as under:-
"Finally it was contended-and that contention relates only to the cases of 56 workmen in the Lucknow undertaking-that the workmen who had not availed themselves of earned leave were entitled to compensation equal to thirty days' wages. But we do not think that any such compensation is statutorily payable. So long as the Company was carrying on its business, it was obliged to give facility for enjoying earned leave to its workmen. But after the Company closed its business, it could not obviously give any earned leave to those workmen, nor could the workmen claim any compensation in not availing themselves of the leave. In the absence of any provision in the statute governing the right to compensation for earned leave not availed of by the workmen before closure or transfer of an undertaking, we do not think that any such compensation is payable."
24. Section 79(2) of the Factories Act, 1948, does not provide LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 9 of 46 for any right to compensation for earned leave not availed of by the workmen before closure of transfer of an undertaking and, therefore, following the decision of their Lordships referred to above, I hold that the workmen were not entitled to any compensation in lieu of earned leave not availed of by them before undertaking was purchased by respondent 2. Moreover, the workmen had enough time from June 19, 1964, to April 23, 1965, to avail themselves of the earned leave due to them. They had been informed well in time that the undertaking would be taken over by the Board with effect from April 24, 1965. If they did not avail themselves of the earned leave due to them they are themselves to blame.
9.3 The claim of workman for reinstatement has to be considered in the light of citation titled Dal Singer and Ors. v. Material Movement Pvt. Ltd. Dated 17.07.2018 in W.P.(C) 4179/2011 from Hon'ble High Court Of Delhi and the relevant para no. 32, 33, 35, 37, 41, 42, 43, 49, 51 and 58 are reproduced hereasunder:
32. Closure of an undertaking, per se, therefore, is not susceptible to challenge, the ID Act. Per corollary, it would ordinarily be impermissible for a workmen, who has lost his employment consequent on closure of the undertaking in which was employed, to seek reinstatement, as there can be no reinstatement against a closed industrial undertaking (unless the closure is not "genuine or real"- an aspect which I shall address presently). The rights of workmen, who had been "cast out in the cold", as it were, consequent to closure of the undertaking in which they were employed and working has, therefore, necessarily to be circumscribed by Section 25 FFF of LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 10 of 46 the ID Act, and the various sub-sections and clauses thereof.
Sub-section (1) of Section 25 FFF, read with the proviso thereto, merely ordains that, where an undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the workmen working in the undertaking would be entitled only to compensation not in excess of their average pay for 3 months, whereas, in all other cases of closure of the undertaking, the workmen working therein, who have been in continuous service for not less than one year in the undertaking immediately prior to the closure, would be entitled to notice and compensation in accordance with the provisions of Section 25 F of the ID Act, as if they had been retrenched. The ID Act, therefore, does not contemplate reinstatement against a closed undertaking, or issuance of mandamus, to an undertaking which stands closed, to reopen its doors and take back its workmen, irrespective of the reason for closure.
33. Notice may also be taken, at this juncture, of section 30A of the ID Act, inserted with effect from 14th June, 1972, which deals with "penalty for closure without notice", and stipulates that "any employer who closes down any undertaking without complying with the provisions of section 25 FFA shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both." As such, the consequence of closure in violation of Section 25 FFA being specifically provided in the form of Section 30A of the ID Act, it is doubtful whether closure, in violation of Section 25 FFA would be rendered non est, solely for that reason. It is not necessary for me to dwell further on this aspect of the matter, on which there is cleavage of judicial opinion, as, in my view - adverted to, in greater detail, hereinafter - there is been no infraction, in the present case, by the respondent, of Section 25 FFA of the ID Act, 60 days' advance notice having been issued, by it, as required by the said provision.
35. The Supreme Court, thereafter, went on to notice that, while LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 11 of 46 Article 19(1)(g) of the Constitution of India guaranteed freedom, to every citizen, to carry on trade or business, such freedom was not absolute, but would, by virtue of clause (6) of Article 19, be subject to any law, which could impose, in the interest of the general public, reasonable restrictions on the exercise of the said right. Therefore, held the Supreme Court, "in the interest of the general public, the law may impose restrictions on the freedom of the citizens to start, carry on or close their undertakings." The Supreme Court, thereafter, traced the history of, and the purpose behind, enactment of Section 25 FFF, which need not burden the present decision. Consequent on the said discussion, it was held, in paras 12 and 13 of the judgement, thus:
"2. Closure of an industrial undertaking involves termination of employment of many employees, and throws them into the ranks of the unemployed, and it is in the interest of the general public that misery resulting from unemployment should be redressed. In Indian Hume Pipe Co. Ltd. v. Workmen [ Civil Appeal No. 169 of 1958 decided on October 16, 1959] this Court considered the reasons for awarding compensation under Section 25-F (though not its constitutionality). It was observed that retrenchment compensation was intended to give the workmen some relief and to soften the rigour of hardship which retrenchment brings in its wake when the retrenched workman is suddenly and without his fault thrown on the streets, to face the grim problem of unemployment. It was also observed that the workman naturally expects and looks forward to security of service spread over a long period, but retrenchment destroys his expectations. The object of retrenchment compensation is therefore to give partial protection to the retrenched employee to enable him to tide over the period of unemployment. Loss of service due to closure stands on the same footing as loss of service due to retrenchment, for in both cases, the employee is thrown out of employment suddenly and for no fault of his and the hardships which he has to face are, whether unemployment is the result of retrenchment or closure of business, the same. If the true basis of the impugned provision is the achievement of social justice, it is immaterial to consider the motives of the LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 12 of 46 employer or to decide whether the closure is bona fide or otherwise.
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37. It is clear, from the above decision, that the motive, or provocation, behind the decision of the employer to close down the undertaking, is irrelevant, insofar as the right of the employees/workmen, employed therein, to compensation, or the quantum of such compensation, are concerned. Section 25 FFF (1) makes the quantum of compensation dependent solely on the issue of whether the closure was attributable to "unavoidable circumstances beyond the control of the employer". The Supreme Court has, in the aforementioned decision, also clarified that undertakings suffering financial difficulties or accumulation of undisposed stocks, would stand insulated from the main part of Section 25 FFF(1) only where the closure was merely because of the said factors. In other words, where the closure of the undertaking was attributable merely to financial difficulties or accumulation of undisposed stocks, the benefit of the proviso to Section 25 FFF(1) stood excepted by the Explanation to the said sub-section, but not otherwise. Where the closure was attributable, not merely to financial difficulties or accumulation of undisposed stocks, but to the said factors coupled with others, the benefit of the proviso would continue to be applicable. By way of illustration, the Supreme Court clarified that a case where the undertaking was suffering persistent losses, due to no fault of the employer or due to accumulation of stocks having regard to persistently unfavourable market conditions, may normally be regarded as due to unavoidable circumstances beyond the control of the employer. This, however, was a matter to be examined and decided by the Labour Court or Industrial Tribunal. In any event, the Supreme Court clarified that the existence of financial difficulty or accumulation of stocks did not conclude the issue of whether the case came within the main part of, or the proviso to, Section 25 FFF(1) of the ID Act; it had to be examined, further, whether the closure was merely because LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 13 of 46 of the said factors, or attributable, in addition, to other exacerbating circumstances.
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41. The Supreme Court went on, in para 7 of its judgement in Workmen of the Indian Leaf Tobacco Development Co Ltd (supra), to hold that, even where a Company closed down a branch or a depot of its business, the question could always arise, as to the relief to which the workmen of that branch or depot were entitled and that, if such a question arose and became subject matter of an industrial dispute, the Industrial Tribunal would be fully competent to adjudicate thereon. Having said so, in para 8 of its judgement, the Supreme Court noticed that the legal position had undergone a change with the enactment of Sections 25-FF and Section 25FFF. The following words, in para 8 and 10 of the report, are significant:
"8. ... Since then, as we have indicated above, Section 25- FF and Section 25-FFF have been added in the Industrial Disputes Act, and the latter section specifically lays down what rights a workman has when an undertaking is closed down. In a case where a dispute may arise as to whether workmen discharged are entitled to compensation under Section 25-F or Section 25-FFF it may become necessary to decide whether the closure, as a result of which the services have been dispensed with, amounts to a closure in law or not. In the case before us, it was admitted by learned counsel for both parties that the workmen, who have been discharged as a result of the closure of the 8 depots of the Company, have all been paid retrenchment compensation at the higher rate laid down in Section 25-F, so that, in this case, it is not necessary to decide the point raised on behalf of the workmen.
10. The Tribunal examined in detail the allegations made on behalf of the workmen in this respect. In fact, the interim award mentions that, for the purpose of deciding the preliminary issue and the first issue, evidence was recorded by the Tribunal for more than a week and arguments of Advocates of the parties LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 14 of 46 were heard for even a longer period. After examining the evidence, the Tribunal came to the conclusion that the stoppage of the work at the depots was genuine and that the work which was being carried on at the depots had not been transferred to the buying points established by the Company. The closure of the business at the depots was necessitated by reasons of expediency inasmuch as the Company had to reduce its purchases in its quest for quality and its desire to run the business economically. The principal work, which used to be done at the depots, was not that of purchasing tobacco, but of handling it and that work was not transferred at all to any buying point. The Tribunal, thus, came to the finding that the closure of these depots was real and genuine and that the suggestion of the appellants that only a device was adopted of carrying on the same business in a different manner had no force at all if the same business had been continued, though under a different guise, the claim of the workmen not to be retrenched could possibly be considered by the Tribunal; but, on the finding that there was a genuine closure of the business that used to be carried on at the depots, no question could arise of the retrenchment being set aside by the Tribunal. The Tribunal could not ask the Company to re- employ or reinstate the workmen, because there was no business for which the workmen could be required. In these circumstances all that the workmen could claim was compensation for loss of their service and in that respect, as we have indicated above, the workmen have received adequate compensation."
(Emphasis supplied)
42. The above judgement would, therefore, appear to settle the legal position that the closure of an undertaking, which is "genuine and real", is immune from interference, at the hands of the Labour Court or the Industrial Tribunal and that, in such cases, the only relief that would be available to the workmen of such an undertaking, would be by way of compensation, the quantum whereof would depend on whether the case would fall within the main part of Section LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 15 of 46 25 FFF(1), of the Industrial Dispute Act, or the proviso, thereto. No direction, for reinstating of workmen employed in an undertaking, which was closed, could be issued, where the closure was found to be "genuine and real".
43. Whenever, therefore, workmen, consequent on closure of an undertaking of an industry, raise an industrial dispute, the Labour Court, or Industrial Tribunal, would be required to address the following issues:
(i) Is the closure "genuine and real"? If the answer is the negative, i.e. the closure is found to be a "sham", merely with the oblique intent of laying off the workmen, it would be a fraud on the statute and ex facie unconscionable in law, in which case the Labour Court, or Industrial Tribunal, would be well within its authority in setting aside the closure and directing the undertaking to resume work and reinstate the workmen.
(ii) In case the closure is found to be, on the other hand, "genuine and real", the motive, or justifiability, of the closure, is not open to judicial scrutiny. It is not open to the Labour Court, or Industrial Tribunal, to examine whether the facts and circumstances necessitated the closure, or not, or whether the closure was avoidable, irrespective of the hardship that might have resulted, to the workmen employed in the undertaking, as a result thereof. This is because Article 19(1)(g) of the Constitution of India guarantees, to every citizen, not only the right to carry on a business of his choice, but also the right to discontinue the business, if he so chooses.
(iii) The Legislature has not been insensitive to the prejudice, resulting to the workmen as a consequence of the closure of the undertaking; it is for this reason that Section 25 FFF requires the management only the undertaking, which it closes down, to pay compensation, to the workmen working in the undertaking. As a result, in case the answer the query at (i) supra is in the affirmative, i.e., if the closure of the undertaking is found to be "genuine and real", the Labour Court/Industrial Tribunal would next have to examine whether the workers LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 16 of 46 would be entitled to compensation under sub-section (1) of Section 25 FFF, or under the proviso thereto. This, in turn, would require examining whether the closure was "on account of unavoidable circumstances beyond the control of the employer". As such, this would be the next query, which the Labour Court, or Industrial Tribunal, would have to address, and answer.
(iv) In case the closure is merely on account of any of the circumstances enumerated in the Explanation to Section 25 FFF(1), it cannot be regarded as "on account of unavoidable circumstances beyond the control of the employer". If, however, these circumstances, in conjunction with other factors, have resulted in the undertaking having to close down, then the Labour Court, or Industrial Tribunal, would have to examine, and decide, on facts, whether the reason for closure could still be regarded as "on account of unavoidable circumstances beyond the control of the employer", or not.
(v) In case the closure is "on account of unavoidable circumstances beyond the control of the employer", only reduced compensation, as per the proviso to Section 25 FFF(1), would be payable.
(vi) If the closure, however, cannot be attributed to "unavoidable circumstances beyond the control of the employer", Section 25 F would apply, mutatis mutandis, i.e., the workmen would be entitled to notice, as well as compensation, as if they had been retrenched.
49. The use of the words "and if so", in the referral order, cannot be said to be justified because, in law, the workmen would be entitled to relief even if the issue of legality/justifiability of their termination were to be decided against them. Even, that is, if it were to be held that Badarpur factory, indeed, stood closed w.e.f. 13th October, 1998, and that the closure was effected in accordance with Section 25-FFA of the ID Act, the workmen employed in the said factory would, nevertheless, be entitled to compensation in accordance with Section 25-FFA LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 17 of 46 thereof. The right to compensation, under Section 25-FFF, is not dependent on the validity, or otherwise the closure of the factory, compensation being available to the workmen, working in the factory, under Section 25-FFF, in every case of closure. Where the closure is on account of unavoidable circumstances beyond the control of the employer, compensation would be payable as per the proviso to Section 25-FFF (1); in other cases, compensation would be payable in accordance with Section 25-F, by virtue of sub-section (1) of Section 25-FFF. Compensation, would, however, be payable in every case. The ID Act does not, therefore, contemplate workmen, who have lost their job because of closure of the undertaking in which they were working, returning home empty-handed. If the closure of the undertaking is not "genuine and real", the workmen would be entitled to reinstatement; if, on the other hand, the closure is "genuine and real", the workmen would be entitled to compensation, either in accordance with the proviso to Section 25 FFF(1) of the ID Act , or in accordance with Section 25 F, depending on whether the closure was "on account of unavoidable circumstances beyond the control of the employer", or not.
51. While it is always open to the Labour Court, or Industrial Tribunal, to re-frame the issue, as originally framed in the referral order, so as to facilitate the adjudication thereof, it appears that, in the present case, after reframing the issues as above, the Labour Court has effectively decided only the issue of the nature of closure of the Badarpur factory, without adverting, at all, to Section 25 FFF, or the compensation which would be available to the petitioner-workmen thereunder. As already noted herein above, the Labour Court cannot be faulted for having adopted this approach, as the term of reference, contained in the referral order of the State Government, by using the words "and if so", required the Labour Court to enter into the issue of relief available to the petitioner-workmen only if their termination was found to be illegal and/or unjustified. In law, however, having decided that the termination, of the service of the petitioner-workmen was not illegal/unjustified, the Labour LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 18 of 46 Court was required, nevertheless, to examine the issue of the compensation, to which the workmen would be entitled (which, needless to say, would come within the ambit of the expression "relief"), i.e., whether compensation would be payable under Section 25 FFF (1) of the ID Act, or under the proviso thereto. This exercise, unfortunately, has not been undertaken, by the Labour Court in the instant case.
58. Adverting, now, to this aspect of the matter, i.e. whether the closure of the Badarpur factory was "on account of unavoidable circumstances beyond the control of the employer", it is clear that failure to decide the said issue would result in an inchoate determination of the rights of the workmen, to compensation, consequent to closure of the Badarpur factory. While it is obvious that the said closure cannot be treated as not being genuine or real, or as being a sham, the petitioners-workmen would, nevertheless, be entitled to compensation, under Section 25 FFF(1) of the ID Act. In case the closure is attributable to unavoidable circumstances beyond the control of the respondent, only limited compensation, as contemplated by the proviso to Section 25 FFF(1) of the ID Act would be available to the petitioners. On the other hand, if the closure is not attributable merely to unavoidable circumstances beyond the control of the respondent, the petitioners- workmen would be entitled to additional compensation, in accordance with sub-section (1) of Section 25 FFF of the ID Act.
9.4 In view of the above settled law if there is a closure of an undertaking then requirement of Sec. 25FFF has to be satisfied. Therefore it has to be first found out that whether closure is genuine and real so that compensation could be provided under Sub Section (1) of Sec. 25FFF or that when the closure is in non LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 19 of 46 satisfaction of Sub Clause (1) of 25FFF then in such eventuality it has to be held that the closure was deemed not closed on account of unavoidable circumstances beyond the control of employer. In such situation the proviso to Sub Section (1) of Sec. 25FFF will be applicable. In the present case the management has not lead any evidence despite grant of opportunity and the evidence available on record is of the workman. However the written statement of management is available on record whereby the claim of the management is that M/s. Bajaj Auto Ltd. had cancelled the dealership of the management and no work has left in the office. This is mentioned in para no. 8-11 of parawise reply on merits in the written statement. The management has failed to bring on record the reason for cancellation of this dealership. Further there is provision u/Sec. 25-O of Industrial Disputes Act, 1947 which prescribe procedure of closing the down the undertaking. The management has failed to show having complied with this procedure or that any application is made under Sub-Sec. (1) of the above provision in absence of which it is held that management has failed to show compliance of this provision. It is laid down under Sub Sec. (iii) of Sub Sec. (1) of Sec. 25FFF that on the expiry of period of lease or licence granted to it/the undertaking shall not be deemed to be closed down on account of unavoidable LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 20 of 46 circumstance beyond the control of employer within the meaning of proviso to the Sub-Section. The only ground submitted for closure of the undertaking with the management is cancellation of dealership by M/s. Bajaj Auto Ltd. The above statement of management is an admission u/Sec. 58 of Indian Evidence Act and the relevant case titled as Vimal Chand Ghevarchand Jain v. Ramakant Eknath Jadoo at para 25 and 31 is reproduced hereasunder:
25. ....It is also a cardinal principle of appreciation of evidence that the court in considering as to whether the deposition of a witness and/or a party is truthful or not may consider his conduct. Equally well settled is the principle of law that an admission made by a party in his pleadings is admissible against him propriovigore. [(See Ranganayakamma & Anr. v. K.S. Prakash (D) By Lrs. & Ors.
[2008 (9) SCALE 144]...
31. The effect of an admission in the context of Section 58 of the Indian Evidence Act has been considered by this Court in Sangramsinh P. Gaekwad and Others v. Shantadevi P. Gaekwad (Dead) through Lrs. and Others [(2005) 11 SCC 314], wherein it was categorically held that judicial admissions by themselves can be made the foundations of the rights of the parties and admissions in the pleadings are admissible proprio vigore against the maker thereof. [See also Union of India v. Pramod Gupta (Dead) by Lrs. and Others [(2005) 12 SCC 1]".
9.5 In view of the above it is held that the closure of LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 21 of 46 undertaking of the management was not due to unavoidable circumstance and therefore the case of the management does not fall u/Sec. 25FFF of the Industrial Disputes Act, 1947 but falls u/Sec. 25F of Industrial Disputes Act, 1947 r/w Proviso 2 Sub Sec. (1) Sec. 25FFF of Industrial Disputes Act, 1947. Hence in the present case on such closure of undertaking of management/respondent the case of workman falls under heading of retrenchment provided u/Sec. 25F of Industrial Disputes Act, 1947. The management has failed to show having issued any notice to the appropriate Government under Sub-Clause (c) of Sec. 25F of Industrial Disputes Act, 1947. Further, notice under Sub-Clause (a) of Sec. 25 Industrial Disputes Act, 1947 has also not been given to the workman. Therefore in the present case in absence of this notice the workman is held entitled to notice pay of this period of one month under Sub Clause (a) of Sec. 25F of Industrial Disputes Act, 1947. Further, the workman is held entitled to retrenchment compensation equivalent to 15 days average pay for every complete year of continuous service.
9.5.1 The WW1 has deposed that he was appointed on 29.08.2008 and he was retrenched on 01.01.2016 and thereby he has worked for more than seven years with the management. The LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 22 of 46 management though claimed in written statement that workman has joined in the year 2013 and joined some other job but management has failed to put anything in support of above pleading to WW1 in the evidence. The evidence WW1 has gone unrebutted and unimpeached. It is case of WW1 that management does not issue any appointment letter and any ID card to the workman.
9.6 It is argued on behalf of AR of management that terms of reference does not mention about payment of bonus and payment of pending due wages therefore the above cannot be decided in the present reference. However the AR for the workman has submitted that he is raising dispute for claiming bonus, previous wages and other claims since very beginning and it form part of the reference. Both the parties are heard and record perused. It is noted that the workman had given notice to the management dated 26.02.2016 which is demand letter which mentions about non payment of wages from 01.11.2015 till 31.12.2015. This letter also mentions about annual bonus which was not paid. In evidence by way of affidavit Ex.WW1/A at para no. 11 it mentions that the copy of demand letter from the management is Ex.WW1/3. Hence the dispute as to payment of bonus and past wages were pending LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 23 of 46 between both the parties before the present reference was made before the present Court. Therefore one of the condition about pendency of such dispute between the parties on the date of reference is satisfied. The other condition is that whether by raising such dispute the parties are claiming an independent right which was not pre-existing at the time of raising of the dispute or that the existence of such right at the time of raising of dispute is not denied but its due satisfaction is disputed in the present case. There is no dispute to the fact workman are entitled to due wages for the work done by them. There is no dispute that the workman are entitled to payment of bonus which is also part of wages. Therefore the workman are claiming only pre-existing undisputed rights and due satisfaction of which are to be decided in the present reference only and not by way of separate reference u/Sec. 10 of Industrial Disputes Act, 1947 only when the above issues are incidental to the reference already made. The question is one of fact. The relevant citation is reproduced hereasunder:
State Bank Of India vs Ram Chandra Dubey & Ors on 14 November, 2000 (2001) 1 SCC 73, wherein it is held as under:
However, Shri Pramod Swarup, learned counsel for the respondents, strongly supported the views taken by the Labour Court and the High Court and contended that award of reinstatement from a particular date would include in it impliedly award of back wages as well and placed reliance upon LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 24 of 46 the decision of this Court in Hindustan Tin Works Pvt. Ltd. vs. Employees of Hindustan Tin Works Pvt. Ltd., 1979 (1) SCR 563 and The Central Bank of India Ltd. vs. P.S. Rajagopalan etc., 1964 (3) SCR 140. He contended that the Labour Court is competent to interpret the award on which the workman bases his claim under Section 33C(2) of the Act and in doing so, it would certainly be open to the Labour Court to expound the exact meaning and content of the award as to whether it impliedly awards back wages or not and not merely determine the quantum of the same. The learned counsel also referred to the decision in P. Kasilingam vs. P.S.G.College of Technology, 1981 (1) SCC 405, to contend that ordinarily reinstatement would be followed by award of back wages and, therefore, when there was no reason to deny the same, the award must be deemed to have included the award of back wages. He also placed reliance in this regard on the decision of this Court in Managing Director, Uttar Pradesh Warehousing Corporation & Anr. vs. Vijay Narayan Vajpayee, 1980(3) SCC 459. When a reference is made to an Industrial Tribunal to adjudicate the question not only as to whether the termination of a workman is justified or not but to grant appropriate relief, it would consist of examination of the question whether the reinstatement should be with full or partial back wages or none. Such a question is one of fact depending upon the evidence to be produced before the Tribunal. If after the termination of the employment, the workman is gainfully employed elsewhere it is one of the factors to be considered in determining whether or not reinstatement should be with full back wages or with continuity of employment. Such questions can be appropriately examined only in a reference. When a reference is made under Section 10 of the Act, all incidental questions arising thereto can be determined by the Tribunal and in this particular case, a specific question has been referred to the Tribunal as to the nature of relief to be granted to the workmen.
The principles enunciated in the decisions referred by either side LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 25 of 46 can be summed up as follows: Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied of such benefit can approach Labour Court under Section 33C(2) of the Act. The benefit sought to be enforced under Section 33C(2) of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. The difference between a pre- existing right or benefit on one hand and the right or benefit, which is considered, just and fair on the other hand is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33C(2) of the Act while the latter does not. It cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman as the specific question of the relief granted is confined only to the reinstatement without stating anything more as to the back wages. Hence that relief must be deemed to have been denied, for what is claimed but not granted necessarily gets denied in judicial or quasi-judicial proceeding. Further when a question arises as to the adjudication of a claim for back wages all relevant circumstances which will have to be gone into, are to be considered in a judicious manner. Therefore, the appropriate forum wherein such question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made. To state that merely upon reinstatement, a workman would be entitled, under the terms of award, to all his arrears of pay and allowances would be incorrect because several factors will have to be considered, as stated earlier, to find out whether the workman is entitled to back wages at all and to what extent. Therefore, we are of the view that the High Court ought not to have presumed that the award of the Labour Court for grant of back wages is implied in the relief of reinstatement or that the award of reinstatement itself conferred right for claim of back wages.
9.7 The evidence of workman is hence believed in view of LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 26 of 46 citation titled as Director, Fisheries Terminal Division v.
Bhikubhai Meghajibhai Chavda AIR 2010 SC 1236. The relevant para is reproduced hereasunder:
14) Section 25B of the Act defines "continuous service". In terms of Sub section (2) of Section 25B that if a workman during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer 240 days within a period of one year, he will be deemed to be in continuous service. The respondent claims he was employed in the year 1985 as a watchman and his services were retrenched in the year 1991 and during the period between 1985 to 1991, he had worked for a period of more than 240 days. The burden of proof is on the respondent to show that he had worked for 240 days in preceding twelve months prior to his alleged retrenchment. The law on this issue appears to be now well settled. This court in the case of R.M. Yellatty vs. Assistant Executive Engineer [(2006) 1 SCC 106], has observed :
"However, applying general principles and on reading the aforesaid judgments, we find that this Court, has repeatedly taken the view that the burden of proof is on the claimant to show that he had worked for 240 days in a given year. This burden is discharged only upon the workman stepping up in the witness box. This burden is discharged upon the workman adducing cogent evidence, both oral and documentary. In cases of termination of services of daily-waged earners, there will be no letter of appointment of termination. There will also be no receipt of proof of payment. Thus in most cases, the workman (the claimant) can only call upon the employer to produce before the Court the nominal muster roll for the given period, the letter of appointment of termination, if any, the wage register, the attendance register, etc. Drawing of adverse inference ultimately would depend thereafter on the facts of each case."LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 27 of 46
15) Applying the principles laid down in the above case by this court, the evidence produced by the appellants has not been consistent. The appellants claim that the respondent did not work for 240 days. The respondent was a workman hired on a daily wage basis. So it is obvious, as this court pointed out in the above case that he would have difficulty in having access to all the official documents, muster rolls etc. in connection with his service. He has come forward and deposed, so in our opinion the burden of proof shifts to the employer/appellants to prove that he did not complete 240 days of service in the requisite period to constitute continuous service. It is the contention of the appellant that the services of the respondent were terminated in 1988. The witness produced by the appellant stated that the respondent stopped coming to work from February, 1988. The documentary evidence produced by the appellant is contradictory to this fact as it shows that the respondent was working during February, 1989 also. It has also been observed by the High Court that the muster roll for 1986- 87 was not completely produced. The appellants have inexplicably failed to produce the complete records and muster rolls from 1985 to 1991, inspite of the direction issued by the labour court to produce the same. In fact there has been practically no challenge to the deposition of the respondent during cross-examination. In this regard, it would be pertinent to mention the observation of three judge bench of this court in the case of Municipal Corporation, Faridabad Vs. Siri Niwas [(2004) 8 SCC 195], where it is observed:
"A Court of Law even in a case where provisions of the Indian Evidence Act apply, may presume or may not presume that if a party despite possession of the best evidence had not produced the same, it would have gone against this contentions. The matter, however, would be different where despite direction by a court the evidence is withheld."LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 28 of 46
16) It is not in dispute that the respondent's service was terminated without complying with the provisions of Section 25F of Industrial Disputes Act. Section 25G of the Act provides for the procedure for retrenchment. The section reads-
"25G. Procedure for retrenchment.- Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman."
The labour court based on the pleadings and evidence on record has come to the conclusion that the services of some of the employees junior to the respondent was continued after the respondent was discharged from its duties. The dates of joining of some of the fellow employees of the respondent like Mohanbhai, Kalubhai and Nanjibhai were not produced by the appellants. The appellants have clearly failed to prove that the services of no junior employee was continued when the services of the respondent was terminated. Thus, the procedure laid down in Section 25G has also not been followed. The findings on facts by the labour cannot be termed as perverse and need no interference.
Hence the burden of proving the contrary has shifted on the management as workman would have difficulty in access all official documents from muster roll etc. in collection with his service. Management has failed to bring anything contrary in evidence on record. Hence the deposition of WW1 is believed to be true as proved on record. Accordingly the workman is held entitled LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 29 of 46 to 15 days average pay 7 times as he has completed seven years of service with the management/respondent which therefore comes about salary for a period of three and a half months. Hence the workman is held entitled to above compensation u/Sec. 25F of Industrial Disputes Act, 1947.
9.8 The workman has prayed for grant of gratuity and in this regard u/Sec. 4 and Sec. 8 of The Payment of Gratuity Act are referred to. The workman has failed to show that his case is covered under the above provision of law so that present Court has jurisdiction to decide the issue of gratuity. Further the terms of reference also does not mention issue of gratuity between the parties. Under the Payment of Gratuity Act, 1972 the controlling authority on application shall issue a certificate of that amount to the Collector to recover it with compound interest the amount of gratuity. The controlling authority is defined u/Sub-Clause (d) of Sec. 2 of The Payment of Gratuity Act, 1972 which means the authority appointed by appropriate Government u/Sec. 3. The appropriate Government may by notification appoint any officer to be a controlling authority. It was held in case titled State of Punjab v. Labour Court, Jullundur & Ors dated 16.10.1979 1980 1 SCR 953 that a retrenched employee is entitled to gratuity.
LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 30 of 46The relevant para no. 6, 7, 8 and 9 is reproduced hereasunder:
6. The third contention raised by the appellant is that the employee respondents were not entitled to apply under section 33-C(2) of the Industrial Disputes Act, 1947 for payment of the gratuity, and should have, if at all, applied under the provisions of the Payment of Gratuity Act. It is urged that the Payment of Gratuity Act is a self-contained code incorporating all the essential provisions relating to payment of gratuity which can be claimed under that Act, and its provisions impliedly exclude recourse to any other statute for that purpose. The contention has force and must be accepted. A careful perusal of the relevant provisions of the Payment of Gratuity Act shows that Parliament has enacted a closely knit scheme providing for payment of gratuity. A controlling authority is appointed by the appropriate Government under section 3. and Parliament has made him responsible for the administration of the entire Act. In what event gratuity will become payable and how it will be quantified are detailed in section 4. Section 7(1) entitled a person eligible for payment of gratuity to apply in that behalf to the employer. Under section 7(2), the employer is obliged, as soon as gratuity becomes payable and whether an application has or has not been made for payment of gratuity, to determine the amount of gratuity and inform the person to whom the gratuity is payable specifying the amount of gratuity so determined. He is obliged, by virtue of the same provision, to inform the controlling authority also, thus ensuring that the controlling authority is seized at all times of information in regard to gratuity as it becomes payable. If a dispute is raised in regard to the amount of gratuity payable or as to the admissibility of any claim to gratuity, or as to the person entitled to receive the gratuity, section 7(4) (a) requires the employer to deposit with the controlling authority such amount as he admits to be payable by him as gratuity. The controlling authority is empowered. under section 7(4)(b), to enter upon an adjudication of the dispute, and after due inquiry, and after giving the parties LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 31 of 46 to the dispute a reasonable opportunity of being heard, he is required to determine the amount of gratuity payable. In this regard, the controlling authority has all the powers as are vested in a court while trying a suit under the Code of Civil Procedure, 1908 in respect of obtaining evidentiary material and the recording of evidence. The amount deposited by the employer with the controlling authority as the admitted amount of gratuity will be paid over by the controlling authority to the employee or his nominee or heir. Section 7(7) provides an appeal against the order of the controlling authority under section 7(4) to the appropriate Government or such other authority as may be specified by the appropriate Government in that behalf. The appropriate Government or the appellate authority is empowered under section 7(8), after giving the parties to the appeal a reasonable opportunity of being heard, to confirm, modify or reverse the decision of the controlling authority. Where the amount of gratuity payable is not paid by the employer with in the prescribed time, the controlling authority is required by section 8, on application made to it by the aggrieved person, to issue a certificate for that amount to the Collector. The Collector, thereupon, is empowered to recover the amount of gratuity, together with compound interest thereon at the rate of nine per cent per annum from the date of expiry of the prescribed time, as arrears of land revenue, and pay the same to the person entitled thereto.
7. It is apparent that the Payment of Gratuity Act enacts a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity. It creates the right to payment of gratuity, indicates when the right will accrue, and lays down the principles for quantification of the gratuity. It provides further for recovery of the amount, and contains an especial provision that compound interest at nine per cent per annum will be payable on delayed payment. For the enforcement of its provisions, the Act provides for the appointment of a controlling authority, who is entrusted with the task of administering the Act. The fulfilment of the rights and obligations of the parties are made his responsibility, LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 32 of 46 and he has been invested with an amplitude of power for the full discharge of that responsibility. Any error committed by him can be corrected in appeal by the appropriate Government or an appellate authority particularly constituted under the Act.
8. Upon all these considerations, the conclusion is inescapable that Parliament intended that proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act and not under any other. That being so, it must be held that the applications filed by the employee respondents under section 33-C(2) of the Industrial Disputes Act did not lie, and the Labour Court had no jurisdiction to entertain and dispose of them. On that ground, this appeal must succeed.
9, In the circumstances, it is not necessary to notice the further submission on behalf of the appellant that where a serious dispute exists in regard to the basis of a claim for payment of gratuity, no proceedings will lie under section 33-C(2) of the Industrial Disputes Act.
In view of settled law discussed above it is held that present Court does not have jurisdiction for grant of gratuity for which the claimant has to be approached the controlling authority u/Sec. 3 of The Payment of Gratuity Act, 1972 discussed above.
9.9 The claimant in the present case has claimed bonus of Rs.88,000/-. However the claimant has failed to disclosed that how he has arrived at this figure. The bonus is part of wages and it is not a bounty. The industry must be shown to have made profits LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 33 of 46 which are partly the result of contribution made by the workman in increasing production. It is not the claim of the workman that the management was incurring profit. However the workman can claim bonus before the present Court and he could not have audited documents of the management to show that the management was incurring profit or not. There is no cross-examination of workman/ WW1 in respect of profit or loss of the management and when the WW1 has deposed that he is entitled to bonus then his depositing to this effect is sufficient to shift on the management as all the necessary documents and knowledge in this respect are with the management/respondent and not with the workman. It is for the management to show that they did not incur any profit to give such bonus. The management has not produced any evidence to the contrary. The relevant citation titled Union Of India (UOI) vs Kishor Lakha dated 6th November, 2003 2004 (102) FLR 624 (DB) is reproduced hereasunder with relevant paras:
7. The word "bonus" is not defined in the provisions of the Payment of Bonus Act, 1965. However, as held by the Supreme Court in Sree Meenakshi Mills Ltd. v. Their Workmen, reported in AIR 1958 SC 153, the true nature and character of the workmen's claim for bonus against their employer is well settled. Bonus is not a mere matter of bounty gratuitously made by the employer to his employees; nor is it a matter of deferred wages. As held by the Supreme Court, the term LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 34 of 46 "bonus" is applied to a cash payment made in addition to wages.
It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained. The claim for bonus cannot be effectively made unless two conditions are satisfied:
(i) the wages paid to workmen fall short of what can be properly described as living wages, and
(ii) the industry must be shown to have made profits which are partly the result of the contribution made by the workmen in increasing production. (See paragraph 6 of the judgement).
7.1 In The Central Bank of India v. Their Workmen, reported in AIR 1960 SC 12, the Supreme Court, in paragraph 25 of the judgement, held that bonus in the industrial sense as understood in our country does come out of the available surplus of profits, and when paid, it fills the gap, wholly or in part, between the living wages and the actual wage. It is an addition to the wage in that sense, whether it be called contingent or supplementary.
8. Under Section 8 of the Payment of Bonus Act, 1965, every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of the said Act, provided he has worked in the establishment for not less than thirty working days in that year. This provision relates to the eligibility for bonus for which the only requirement is that the employee concerned should have worked in the establishment at least for not less than thirty working days in an accounting year. It has been provided by Section 10 of the said Act that every employer shall be bound to pay to every employee, in respect of the accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee. Thus, the payment of bonus is a statutory obligation and it is not a bounty or an ex-gratia payment. Section 9 deals with disqualification for bonus 13. In Goa Bottling Pvt. Ltd. (supra), the Bombay High Court, in paragraph 14 of its judgement, held that, in the computation of the backwages, in case of a reinstated workman, the benefit of LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 35 of 46 revised wage or salary arising out of a revised payscale, as also yearly increment and revised dearness allowance should enter the calculation of arrears of backwages, and that leave encashment or bonus, if other workmen in the same category have been paid the same, would also be his dues. The Patna High Court in Colliery of Pure Dhansar Coal Co., Dhanbad v. Prabhu Dayal Sharma, reported in 1973(26) F.L.R. 116 has held in paragraph 7 of the judgement that, when the award ordered reinstatement with backwages, the term "wages" there must be taken in a comprehensive sense, i.e. all that was due to the workman on account of wages, bonus etc. which go with the wages. The Division Bench of this Court in Bipinchandra P. Singwala v. Navin Fluorine, reported in XXII G.L.R. 1070, while directing the backwages to be paid to the employee till the date of his reinstatement, made it clear in paragraph 5 of the judgement that, backwages will include all the payments to which a permanent employee would be entitled to, such as, dearness allowance, increments, bonus, etc.and provides that an employee who is dismissed from service for fraud, riotous or violent behaviour, theft, misappropriation or sabotage shall be disqualified from receiving the bonus. In the present case, the question of disqualification on any of such grounds never arose.
9. It, therefore, follows that when bonus is payable to an employee and is not paid, he is deprived of money which he is entitled to receive. The workman would, therefore, be entitled to prefer an application under Section 33(C)(2) of the Industrial Disputes Act, 1947, if he is deprived of the bonus amount by the employer, for recovering the same. 9.1 A Division Bench of this Court in Union of India v. Dharamsi F.Zala, reported in 1992 I L.L.J. 880, in the context of an application made under Section 33(C)(2) of the Industrial Disputes Act, 1947, on the basis of the orders of the Administrative Tribunal, held:
"The Supreme Court has, in a series of decisions, indicated that by way of execution, the authority under Section 33(C)(2) of the I.D. Act can quantify the benefits of service if such quantification is possible. It cannot be said that only because an LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 36 of 46 application for contempt may be made before the Tribunal for violation of its order, a workman is precluded from making an application before the Labour Court.The decision of the Labour Court under Section 33(C)(2) is not per se illegal or without jurisdiction".
13. In Goa Bottling Pvt. Ltd. (supra), the Bombay High Court, in paragraph 14 of its judgement, held that, in the computation of the backwages, in case of a reinstated workman, the benefit of revised wage or salary arising out of a revised payscale, as also yearly increment and revised dearness allowance should enter the calculation of arrears of backwages, and that leave encashment or bonus, if other workmen in the same category have been paid the same, would also be his dues. The Patna High Court in Colliery of Pure Dhansar Coal Co., Dhanbad v. Prabhu Dayal Sharma, reported in 1973(26) F.L.R. 116 has held in paragraph 7 of the judgement that, when the award ordered reinstatement with backwages, the term "wages" there must be taken in a comprehensive sense, i.e. all that was due to the workman on account of wages, bonus etc. which go with the wages. The Division Bench of this Court in Bipinchandra P. Singwala v. Navin Fluorine, reported in XXII G.L.R. 1070, while directing the backwages to be paid to the employee till the date of his reinstatement, made it clear in paragraph 5 of the judgement that, backwages will include all the payments to which a permanent employee would be entitled to, such as, dearness allowance, increments, bonus, etc. 9.10 The minimum bonus is laid down @ 8.33% at para no. 8 above in the referred citation. This is the minimum percentage of salary of workman. Since the management has not produced any evidence to the contrary therefore it is believed that nominal profit would have incurred with the management and therefore adverse inference is drawn against the management for not bringing best LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 37 of 46 evidence before the present Court. Hence the workman is entitled to per year bonus for a period of 7 years which is service rendered by the workman. Thus bonus is granted to the workman @8.33% of his monthly salary which is Rs.11,000/- per month. Hence bonus @ 8.33% of Rs.11,000/- with a multiplication factor of seven is granted as total bonus to the workman.
9.11 Since it is already held that the undertaking of the respondent has stood closed therefore the claim of the workman has to be seen in the light of the above facts admitted on record both by the workman and the management. Further the workman has himself has relied on case titled Premchand v. Management of M/s. The Joint Director (Hon'ble High Court of Delhi) in Civil Writ Petition No. 950 of 2008 dated 06.02.2008 at para no. 5 and 6 which are reproduced hereasunder:
(5) The learned Labour Court thereafter examined the question as to the nature of the relief to be granted to the workman. The power and jurisdiction of the Labour Court to grant appropriate relief in the event termination being set aside, for not following the provisions of Section 25-F of the Industrial disputes Act, is well recognized through a catena of judgments on this issue.
It has been repeatedly stated that reinstatement is not the rule. It may be useful at this juncture to set down a brief background of the trend of judicial pronouncements on this aspect. Till the LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 38 of 46 years 1980-85, the general trend was of reinstatement in the event termination is found illegal. The power of Industrial tribunal to direct reinstatement was recognised in Western India Automobiles association Vs. Industrial Tribunal AIR 1949 FC 111. Exceptions to this rule are also recognised in various judgments and reinstatement can be validly denied for many reasons including, inter alia, the nature of job, the workman not being a regular worker or not recruited through employment exchange or other regularly prescribed mode of selection. Such exceptions were also noted by the Supreme court in the case of Haryana Tourism Corporation Ltd. Vs. Fakir Chand and Ors. AIR 2003 SC 4465. To decide this matter, the Labour Court has examined a number of authorities, and in particular, the decision of this Court in Nehru Yuva kendra Sangathan Vs. Union of India, 2000 IV ad (Delhi) 709 wherein this Court had dealt with the question of reinstatement and back wages. It is noticed in paragraphs 27 and 28 thereof that although in the 1970s and 1980s, reinstatement with back wages was the norm in all cases where termination was found to be illegal, the trend of later decisions of the Supreme Court seems to suggest that now the award of compensation in lieu of reinstatement and back wages is the norm. This Court therefore held that;
"reinstatement is not the inevitable consequence of quashing an order of termination; compensation can be awarded in lieu of reinstatement and back wages. "
The learned Labour Court also adverted to the decision of the Supreme Court in M. L. Binjolkar Vs. State of Madhya Pradesh 2005 VI (SCC) 224, to the same effect where, in paragraph 7, the Supreme Court has referred to a number of earlier decisions of that Court and concluded that "
"the earlier view was that whenever there is interference with the order of termination or retirement, full back wages were the natural corollary. It has been laid down in the cases noted above that it would depend upon several factors and the court has to weigh the pros and cons of each case and to take a LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 39 of 46 pragmatic view. . . . . . . . . . "
(6) The same position has been reiterated by the Supreme Court in paragraph 56 of its decision in U. P. State Brasware Corporation Ltd. Vs. Uday Narain pandey 2006 1 (SCC)
479). Reference may also be made to a decision of a Division bench of this Court in Pramod Kumar and Anr. Vs. The Presiding Officer and Anr. 123 (2005) DLT 509 where also a plea taken by the petitioner that the learned single Judge ought to have directed reinstatement instead of merely awarding compensation to the workman, was considered only to be rejected. It is in the light of these pronouncements that the learned Labour Court has looked at the circumstances of the petitioner's case. A reading of paragraphs 26 and 27 of the impugned award shows that in deciding to award compensation instead of reinstatement, while the learned Labour Court was conscious of the fact that compensation in lieu of reinstatement and back wages is now the norm, at the same time, it has also considered the fact that the petitioner had worked with the management on a part time basis for two hours on monthly wages of Rs. 500/-per month for about six years. The Labour Court has felt that since the petitioner was only a part time employee, working for only two hours in a day with the management, therefore instead of reinstatement, compensation would be a better alternative. It has therefore decided to award compensation of Rs. 20,000/- to be paid to the petitioner within one month of publication of the award failing which interest @ of 10% would be payable to the workman. According to the Labour Court, this amount would be sufficient to meet the ends of justice. A rough calculation will show that the Labour Court has in fact directed payment of compensation equivalent to 40 months of earnings. To put it differently, it has given him compensation amounting to the salary drawn over a period of three years, which is also more than half of his tenure with his employer. It is noteworthy that Supreme Court in the case of O. P. Bhandari Vs. Indian Tourism Development Corporation Ltd. (1986) 4 SCC 337 held that compensation equivalent to 3. 33 years' salary (including allowances) as LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 40 of 46 admissible on the basis of last pay and allowances would be a reasonable amount to award in lieu of reinstatement. In that case, the Court has taken into consideration the fact that the corpus, if invested at prevailing rate of interest, will yield 50% of the annual salary and allowances and the workman would get 50% of what he would have earned by way of salary and allowances with four additional advantages:
(i)He will be getting this amount without working (ii)He can work somewhere else and can earn annually whatever he is worth over and above, getting 50% of the salary he would have earned. (iii)If he had been reinstated, he would have earned the salary upto the date of superannuation (upto 55, 58 or 60 as the case may be) unless he died earlier. As against this, he would be getting the aforesaid 50% annually till he dies, regardless of his superannuation, after his demise, his heirs would keep getting it in perpetuity. (iv)The corpus of lump sum compensation would remain intact, in any event.
This was also reiterated in the case of Workmen Vs. Bharat Fritz Werner (P) Ltd. and Anr. (1990) 3 SCC 565. Thus, I do not find that the decision taken by the labour Court in this regard is in any way perverse or arbitrary nor do I feel that it has occasioned any failure of justice. A Writ Court is not exercising appellate jurisdiction and the scope for interference is very limited. Reference in this regard may also be had to the cases of Syed Yakoob Vs. K. S. Radhakrishnan AIR 1964 SC 477 where it was observed that;"there is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the court exercising it is not entitled to act as an appellate court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as a result of appreciation of evidence cannot be reopened or questioned in writ proceedings. "
In the case of State Bank of Bikaner and Jaipur Vs. Om Prakash Sharma (2006) 5 scc 123, the Supreme Court held that the High LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 41 of 46 Court cannot sit in appeal over the award of the Labour Court, but jurisdictional errors can be corrected while exercising power of judicial review. Similarly, in Apparel Export Promotion council Vs. A. K. Chopra (1999) 1 SCC 759 it was observed that"since the High Court does not sit as an appellate authority over the factual findings recorded during departmental proceedings, while exercising the power of judicial review, the High Court cannot, normally speaking, substitute its own conclusion, with regard to the guilt of the delinquent for that of the departmental authorities. "
Furthermore, in the case of Govt. of A. P. And Others Vs. Mohd. Nasrullah Khan (2006) 2 SCC373 paragraph 11 states as follows:"11. By now it is well established principle of law that the High Court exercising power of judicial review under Article 226 of the Constitution does not act as an appellate authority. Its jurisdiction is circumscribed and confined to errors of law or procedural error, if any, resulting in manifest miscarriage of justice or violation of principles of Natural Justice. Judicial review is not akin to adjudication on merit by re-appreciating the evidence as an appellate authority. "
9.12 Hence the case of the workman has to be considered in the light of above settled law that now compensation has to be awarded in lieu of reinstatement and back wages. In the present case the closure is not attributable merely to unavoidable circumstances beyond the control of the respondent. The workman would be entitled to additional compensation u/Sub Sec. (1) of 25FFF of ID Act for which the compensation is awarded u/Sec. 25F of the ID Act.LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 42 of 46
9.13 The workman has claimed for payment of salary from 01.11.2015 to 31.12.2015 which comes to Rs.22,000/-. Management has claimed that they have paid salary till November 2015 and admits that salary for the month of December 2015 remains to be paid. However in any absence of any cross- examination of WW1 and in evidence of management of having so paid the salary to the workman it is held that management has failed to discharge onus that it has paid salary to the workman for the month November 2015. It is admitted by the management in para no. 8 to 11 of reply on merits in the written statement that salary for the month of December 2015 remains to be paid. Hence it is held that the workman has successfully proved on record that salary from 01.11.2015 to 31.12.2015 for a sum of Rs.22,000/- is due to him from the management to which management is held liable to pay to the workman. Hence this amount of salary is awarded to the workman u/Sec. 11-A of ID Act read with citation Premchand v. Management (supra) at para no. 9. of the above citation.
Hence in the present case in the event of closure of undertaking the relief of reinstatement with full back wages of the workman is declined for which he is granted relief u/Sec. 25F of Industrial Disputes Act, 1947. The workman has claimed for LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 43 of 46 physical tension and unemployment allowance however he has failed to show how this allowance is payable to him under Industrial Dispute Act other than payment of retrenchment compensation u/Sec. 25F of Industrial Dispute Act, 1947. Hence claim in respect of physical tension and unemployment allowance is declined.
9.14 The workman has prayed for encashment of leave. However the citation relied upon by the workman Management of the Ambala Cantonment Electric Supply Corporation Ltd. v. Workman of the Ambala Cantonment Electric Supply Coporation Ltd. & Ors. (supra) wherein it is laid down at para no. 23 and 24 that workman is not entitled to any compensation in lieu of earned leave not availed off by them before the purchase of such undertaking. In the present case there is case of closure of undertaking.
In view of above present issue is decided in favour of workman and against the management.
ISSUE NO. 2 : R E L I E F
10. In view of findings under issues above the Award is LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 44 of 46 passed accordingly wherein workman is held entitled to 15 days average pay seven times as he has completed seven years of service with the management/respondent which therefore comes about salary for a period of three and a half months. Hence the workman is held entitled to above compensation under Clause (b) u/Sec. 25F of Industrial Disputes Act, 1947. Further, the retrenchment compensation which is salary for a period of one month under Sub Clause (a) of Sec. 25F of Industrial Disputes Act, 1947 is allowed to the workman. It is notice pay of one month under Sub Clause (a) of Sec. 25F of Industrial Disputes Act, 1947. The workman is also entitled to per year bonus for a period of 7 year which is service rendered by the workman. Thus bonus is granted to the workman @8.33% of his monthly salary which is Rs.11,000/- per month. Hence bonus @ 8.33% of Rs.11,000/- with a multiplication factor of 7 is granted as total bonus to the workman. It is held that the workman has successfully proved on record that salary from 01.11.2015 to 31.12.2015 for a total sum of Rs.22,000/- is due to him from the management to which management is held liable to pay to the workman. All the due amount be paid within one month of the date of publication of present Award with interest at the rate of 9% per annum from the date of publication till its realization. Cost of the litigation LIR No. 8014/16 Jokender v. M/s. Royal Automobiles Page 45 of 46 expenses u/Sec. 11(7) of Industrial Disputes Act, 1947 are also awarded to the workman for a lump sum amount of Rs.10,000/-. Reference stands answered in the aforesaid terms.
10.1 A copy of Award be sent to the competent authority/appropriate Government i.e., Deputy Labour Commissioner, Government of NCT of Delhi of Distt./Area concerned for publication which thereafter become enforceable u/Sec. 17A of Industrial Dispute Act, 1947. Award is passed accordingly and claim stands disposed in above terms.
File be consigned to record room after due compliance.
Announced in the open Court
on 08.04.2021. JOGINDER Digitally signed by
JOGINDER PRAKASH
PRAKASH NAHAR
Date: 2021.04.12
NAHAR 15:45:43 +0530
(JOGINDER PRAKASH NAHAR)
PRESIDING OFFICER LABOUR COURT-IX
ROUSE AVENUE COURT COMPLEX /NEW DELHI
LIR No. 8014/16
Jokender v. M/s. Royal Automobiles Page 46 of 46