Madras High Court
Management Of Sri Akilandeswari Mills ... vs Asst. Commr. Of Labour (Controlling ... on 19 November, 1998
Equivalent citations: (2000)ILLJ1411MAD
JUDGMENT Balasubramanian, J.
1. The question that arises in this writ petition is whether for determining the continuous service under the provisions of the Payment of Gratuity Act, 1972 (hereinafter to be referred to as the Gratuity Act), weekly holidays and national holidays are to be taken into account to determine whether an employee had actually worked or not under an employer for 240 days in a year.
2. The petitioner is a company. The petitioner filed this writ petition challenging the order of the Deputy Commissioner of Labour under the Gratuity Act. The third respondent was an employee in the petitioner- company and he retired on superannuation on June 1, 1987. He claimed gratuity under the provisions of the Gratuity Act before the first respondent, the controlling authority on the ground that he had put in 38 years and 10 months as the total period of service. The controlling authority found that the third respondent had put in only 30 years of service and on that basis, he was paid gratuity and there was no justification for the third respondent to claim any higher amount towards gratuity. There was an appeal and there was a remand and again after the remand the controlling authority found that the third respondent had not put in 39 years of service and there was no proof for the third respondent to show that he had put in 39 years of service. The order of the controlling authority was challenged before the Appellate Authority under the Gratuity Act. The appellate authority found that the service record filed before the controlling authority contained particulars regarding the number of days and third respondent actually worked, weekly holidays, festival holidays, etc. which are not necessary to be set out in this judgment and the appellate authority also found from the records that the petitioner-company had not calculated weekly holidays and national and festival holidays while calculating the number of days the third respondent had actually worked within the meaning of Section 2-A of the Gratuity Act. He held that the weekly holidays and national and festival holidays should be included while computing the number of days the third; respondent actually worked. The appellate authority found that for the nine years in dispute, the third respondent had worked for not less than 240 days in each of the said nine years and hence, the third respondent was entitled to the balance amount of gratuity for nine years also based on the last drawn monthly wages. In this view of the matter, he determined the balance amount payable and directed the petitioner-company to pay the amount to the third respondent. It is against that order, the present writ petition has been filed.
3. Sri S. Jayaraman, learned counsel for the petitioner, submitted that the decision of the Supreme Court in the case of Workmen of American Express International Banking Corporation v. American Express International Banking Corporation, (1985-II-LLJ-539)(SC), has no application to the facts of the case as under the provisions of the Industrial Disputes Act, weekly holidays and national holidays should be included and in the absence of any evidence that the third respondent was paid wages for weekly holidays, it cannot be said that weekly holidays should be included in the computation of number of days for the purpose of determination of the amount of the gratuity payable by an employer. Learned counsel for the petitioner also relied upon the decision of the Supreme Court in the case of Digvijay Woollen Mills Ltd. v, Mahendra Prataprai Buch, 1980 (2) LLN 417, where the Apex Court has held that the wages for 26 days are to be treated as monthly wages and not of thirty days and submitted that since for calculating monthly wages, the wages taken is for 26 working days, under the same principle, the weekly holidays and national and festival holidays should be excluded in the computation of continuous service for the purpose of gratuity under the provisions of the Gratuity Act.
4. Sri Ayyathurai learned counsel for the third respondent, on the other hand, submitted that in computing 240 days the public holidays including Sundays cannot be excluded under the provisions of the Gratuity Act in ascertaining whether or not an employee has put in uninterrupted service for one year.
5. I have carefully considered the submissions of the learned counsel for the parties. Section 2-A of the Gratuity Act as it existed at the time of retirement of the third respondent reads as under:
"an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order imposing a punishment or penalty or treating the absence as break in service has been passed in accordance with the Standing Orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lockout or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of Clause (1), for any period of one year or six months, he shall be deemed to be continuous service under the employer;
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than--
(i) one hundred and ninety days, in the case of an employee-employed below the ground in a mine or in an establishment which works for less than six day in a week, and
(ii) two hundred and forty days, in any other case,
(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than--
(i) ninety-five days, in the case of an employee, employed below the ground in a mine or in an establishment which works for less than six days in a week, and
(ii) one hundred and twenty days, in any other case".
6. Under Section 2(c), "Continuous service" means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lockout or cessation of work not due to any fault of the employee concerned whether such uninterrupted or interrupted service was rendered before or after commencement of the Act. In my view, though there is a cessation of work on Sundays, national holidays or weekly holidays, the cessation of work is not due to any fault of the employee and once it is held that the cessation of work during those days is not due to any fault of the employees, Sundays, weekly holidays and national or festival holidays are to be included in the computation of the period of continuous service under Section 2-A of the Gratuity Act.
7. The Supreme Court in the case of Workmen of American Express International Banking Corporation v. American Express International Banking Corporation, (supra) held that while calculating 240 days for the purpose of continuous service under Section 25-B of the Industrial Disputes Act, 1947, Sundays and other paid holidays should be taken into account in counting the number of days on which the workman is said to have actually worked and the following observation of the Apex Court is relevant for the purpose of this case, in Para 5 :
"...This expression, according to us, cannot mean those days only when the workman worked with hammer, sickle or pen, but must necessarily comprehend all those days during which he was in the employment of the employer and for which he had been paid wages either under express or implied contract of service or by compulsion of statute, Standing Orders, etc...."
8. In my view, the principles laid down by the Apex Court would equally apply to the determination of continuous service under the Gratuity Act.
9. The Andhra Pradesh High Court while considering a similar question which arose under the provisions of Gratuity Act has also taken a view that the expression "actually employed" does not mean actually doing work or discharging duty. The following observation of the Andhra Pradesh High Court is relevant for the purpose of this case :
"Cessation of work by the employee on a holiday, whether it is Sunday or a public holiday, no doubt, is not on account of sickness, accident, leave, lay-off, strike or a lockout. But at the same time, it is not cessation of work due to any fault of the employee concerned. As part of the management of an establishment, the employer himself either in compliance with the Standing Orders or a statutory duty imposed upon him in relation to the establishment in which the employee concerned is rendering service has to observe certain number of days as public holidays and Sundays. The establishment itself cannot work or even if it works, the same employees cannot be employed on those days. In such cases the holidays are staggered and other employees are employed to do the work. For whatever reason it may be, the cessation of work by the individual cannot be termed as one due to any fault of the employee. Hence cessation of the work of the respondent employees on Sundays and other public holidays during a year satisfied the inclusive definition of 'continuous service'. Though the service is interrupted, it is not on interruption caused due to any fault of the employee. If that be the position that as per explanation I, he would be deemed to be in continuous service if he has been actually employed by an employer during the twelve months, immediately preceding the year for not less than 240 days in an establishment such as the appellant-company."
I am in respectful agreement with the above view expressed by the Andhra Pradesh High Court.
10. The submission of Sri Jayaraman, learned counsel was that for calculating the wages, the wages for 26 days are to be treated as monthly wages and not of 30 days and hence, it must be taken only the actual working days should be taken into account for the purpose of gratuity. I am unable to accept the submission of Sri Jayaraman, learned counsel. In the decision of the Supreme Court Digvijay Woollen Mills Ltd v. Mahendra Prataprai Buch, (supra), the Supreme Court has considered the expression "average of the basic wage" and in that context, the Apex Court has held that wages for 26 days are to be treated as monthly wages and not of 30 days. The question that arises in this writ petition is whether in computing 240 days, holidays whether Sundays or public holidays, and the days on which the establishment remained closed and the employees did not actually work and the days where there was cessation of work not due to the fault of the employees concerned, should be included or not. The establishment may remain closed on Sundays, national or festival holidays but is not due to the fault of the employees, but it is closed as the employer is required either under the Standing Orders or under some statutory orders to close the establishment for those days. The requirement of law that in computing continuous service, the number of days on which there was cessation of work not due to any fault of the employee should be taken as if on those days also there was no uninterrupted service is also reasonable and within the parameter of Article 19(1)(g) of the Constitution of India as there was cessation of work by the employee not due to his fault, but on account of other extraneous circumstances which are beyond his control. Hence, the cessation of work on those days is not due to any fault of the employee concerned and cannot be attributed to the employees, and hence, in calculating 240 days, those days should not be excluded, but it was rightly held to be included in the order impugned. A learned Judge of this Court in W.P. No. 10915 of 1989 by judgment, dated August 11, 1998, has taken a similar view in the case of the same establishment and I agree with the conclusion of the learned Judge in the above writ petition consequently, the writ petition is liable to be dismissed and accordingly, it is dismissed. However, in the circumstances of the case, there will be no order as to costs.