MERVIN ALBERT VEIYRA Vs. C P FERNANDES

JUDGEMENT

(1.) THE petitioner is one of the employees of the second respondent company, who, along with seve- ral others, were served with a notice on the 23rd October 1953 by which the second respondent company intimated to them that they proposed to lay-off these employees owing to certain difficulties which might result in the stoppage of work. On the 24th October 1953 an Ordinance was promulgated which provided for compensation for lay-off and compensation for retrenchment. The provisions of this Ordinance were ultimately incorporated, in the Industrial Disputes Act, 1947, as Chapter VA, Some of these employees were reinstated. With regard to the rest, including the petitioner a notice of termination of service was served upon them on the 28th September 1954. The second respondent company then approached the Labour Appellate Tribunal, before which certain" disputes between the second respondent company and its employees were pending, for permission to discharge these employees. The Labour Appellate Tribunal granted the permission with certain conditions. The second respondent company appealed to the Supreme Court and in January 1955 the Supreme Court decided that in granting permission no conditions could be attached by the Labour Appellate Tribunal and it remanded the matter to the Labour Appellate Tribunal to dispose of the application of the company on merits. The Labour Appellate Tribunal ultimately gave permission and on the 24th April 1955 the employees including the petitioner were discharged. The present application was filed by the petitioner and others, out of which this Special Civil Application arises, before the Payment of Wages Authority claiming full wages for the period 1st November 1953 to the 31st October 1954. It may be stated that the second respondent company has paid to its employees compensation for lay-off according to the provisions of the Act and also retrenchment compensation. But the contention of the petitioner before the Authority was that he was entitled to full wages from the 1st November 1953 to the 31st October 1954. This contention was rejected by the Authority and the petitioner, has now come before us on this application.

(2.) WHAT has been urged by Mr. Buch before us is that an employer has no right to lay-off his workmen under the provisions of the Industrial Disputes Act. According to him, the Act merely provides for compensation for workmen laid-off. The Act does not confer any right upon the employer to lay-off an employee. Such a right must be conferred upon the employer by contract of service between him and the employee. If such a contract does not confer a right, that right cannot arise out of the provisions of the Act. It is pointed out that In this case the contract between the employer and the employee does not confer any such right upon the employer. The contract permits the employer to determine the service of the employee summarily without notice and the employee can determine his employment at the cud of any day by notice in writ- , ing given by him to the company. It is clear that under the common law an employer could terminate the services of an employee at any time even though his business or his industry may only bo temporarily stopped and there was every prospect of resumption of that business or industry. There was no obligation upon the employer temporarily to suspend the services of his employee and reinstate him when his business or industry was resumed He was perfectly free to dismiss him and to employ new men when the business or industry was resumed. Nor did the common law impose any obligation upon the employer to give any compensation to an employee it his services were retrenched. The expression used by Mr. Buch on which he has based the whole of his argument that the employer does not possess the right to lay-off an employee under the provisions of the Industrial Disputes Act is not a very appropriate expression. Far from laying-off an employee, being a right, in our opinion it is really an obligation. The common law right of the employer to which we have just referred is curtailed and limited it he is bound to lay-off his employee under certain circumstances. Instead of being free to dispense, with his services, if there is a temporary break down and the conditions laid down in the Act prevail, he cannot put an end to the contract between himself and his employee, "but all that he can do is to suspend the contract for the time being and the employee is entitled to resume his services and to receive full wages as soon as that temporary stoppage has come to an end. From the point of view of the employee the importance of not being dismissed but merely being laid-off can be understood and appreciated. He may or may not find new work if his services are dispensed with. Even when ho finds new work the number of years that he has already put in service with his old employer would be thrown away and whatever benefits might have accrued to him by continuity of service would also be lost to him.

(3.) THEREFORE, in our opinion, and we shall presently point out the scheme of the Act, what the Legislature did by Chapter VA was to impose a certain obligation upon the employer and confer a certain right upon the employee. The obligation was that if the conditions referred to in the definition of ''lay-off" exist, the employer was bound to continue the services of the employee, but was not bound to pay him full wages but compensation provided in the Act. The employer was also entitled to retrench the services of his employee, but that also he could only do provided he paid retrenchment compensation. Therefore, two options were open to the employer. Under given circumstances he could either lay-off his employee, pay him lay-off compensation, and when the crisis passed and the emergency ceased to exist he had to reinstate him or rather he had to give him his full wages as an employee, the suspension of the con-tract having come to an end, or he could dismiss him, but unless the dismissal was for misconduct or for certain other reasons mentioned in the Act, he had to give him retrenchment compensation. Therefore, Chapter VA constituted a serious encroachment upon the employer's rights under the common law, and it is entirely erroneous to look upon the provisions of Chapter VA as conferring rights upon the employer which he did not possess under the common law. Therefore, when it is sought to bo argued that unless the employer has. the right to lay-off an employee under the contract between him and his employee, he cannot claim that right by reason of the provisions of the Act, there is a complete misapprehension both as to the true effect of Chapter VA and the object that the Legislature had in enacting this Chapter. The whole of industrial "law in India today constitutes, an inroad upon the common law rights of the employer. We no longer live in the age when the rights of workers were regulated by the contract between the employee and the employer. Whatever the provisions of the contract might be, the industrial law interferes with those provisions in the interest of labour, and it is futile to suggest today that the Legislature enacted Chapter VA in order to confer rights upon the employers and not upon the employees. It is with this background that we must approach the provisions of the Industrial Disputes Act to see whether the contentions put forward by Mr. Buch are justified.