U.P Drugs & Pharmaceuticals Co. Ltd. v. Ramanuj Yadav And Others

Y.K Sabharwal, J.— The appellant directed the respondents and a few other workmen to cease work w.e.f 31-3-1987. According to the appellant, they were casual workers and had worked for a short time and since there was no work, they were asked to cease work and their services were, thus, terminated. The workmen approached the State Government of Uttar Pradesh against their termination and pursuant thereto, the State Government, in exercise of power under Section 4(k) of the Uttar Pradesh Industrial Disputes Act, 1947 (for short “the U.P Act”) referred the matter to the Labour Court of Lucknow to decide the dispute. It was not disputed before the Labour Court that none of the workmen had worked for 240 days in the year preceding the date of termination. In this view, the Labour Court, in the award dated 31-5-1991, concluded that the respondent workmen were not entitled to protection of Section 6-N of the U.P Act. According to the Labour Court, the workmen ought to have completed 240 days in a calendar year preceding the date of termination/retrenchment so as to claim benefit of Section 6-N of the U.P Act. Considering the evidence, the Labour Court also held that all the twenty-nine workmen had worked for more than 240 days in each year during the past years prior to 1986. The effect of the finding recorded by the Labour Court is that the workmen have worked for more than 240 days from the year 1983 to 1986 but they having not worked for 240 days from 1-4-1986 to 31-3-1987, they were not entitled to protection and benefit of the continuous service under the U.P Act. On appreciation of evidence, the finding recorded by the Labour Court is as follows:

“In these circumstances, I arrive at the conclusion that the employer has failed to dispute the evidence of the workmen that all the twenty-nine workmen had worked for more than 240 days in each year during the past years prior to 1986. In other words, I reached the conclusion that although these workmen have not completed 240 days of service in a year preceding the date of their termination but have worked for more than 240 days in each year prior to that after joining the service.”

2. Out of the twenty-nine workmen before the Labour Court, the award was challenged by eighteen workmen in a writ petition filed in the High Court. The said workmen are respondents in this appeal. By the impugned judgment, the High Court, setting aside the award, has held that under Section 6-N read with Section 2(g) of the U.P Act, it is not necessary for the workmen to complete 240 days in the preceding year and since the workmen had completed 240 days in the earlier calendar years preceding twelve months on the date of retrenchment, they were deemed to be in continuous service and hence their termination in violation of Section 6-N of the U.P Act was illegal. The respondents have been held to be in continuous service. The High Court has directed that they shall be given consequential service benefits including reinstatement except the back wages. The appellant has been directed to pay the wages to the respondents from the date of reinstatement.

3. Assailing the impugned judgment, it has been contended that for applicability of Section 6-N read with Section 2(g) of the U.P Act, it is essential for a workman to complete 240 days in the preceding twelve calendar months. The learned counsel for the appellant argues that the respondents having worked for 240 days or more during the period earlier to twelve calendar months is inconsequential. The undisputed fact is that the respondents whose services were terminated w.e.f 31-3-1987, did not actually work for 240 days for the period from 1-4-1986 to 31-3-1987. The finding of the Labour Court, however, is that for earlier years, they did work for more than 240 days. What is the consequence of this finding is the question. The correctness of the impugned judgment is required to be examined on these facts. We may note that the respondents have also challenged the impugned judgment insofar as it declines payment of back wages to them. Mr Jitendra Sharma, learned advocate appearing for the respondents, supporting the impugned judgment on the aspect of interpretation of Sections 6-N and 2(g), contends that if the contention propounded by the management is accepted, it will provide a handle of abuse in the hands of the management.

4. Section 6-N was inserted in the U.P Act by Section 8 of U.P Act 1 of 1957. It reads as under:

“6-N. Conditions precedent to retrenchment of workmen.—No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—

(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice wages for the period of the notice:

Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service;

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of service or any part thereof in excess of six months, and

(c) notice in the prescribed manner is served on the State Government.”

5. The expression “continuous service” is defined in Section 2(g) of the U.P Act which reads as under:

“2. (g) ‘Continuous service’ means uninterrupted service, and includes service which may be interrupted merely on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman, and a workman, who during a period of twelve calendar months has actually worked in an industry for not less than two hundred and forty days shall be deemed to have completed one year of continuous service in the industry.

Explanation.—In computing the number of days on which a workman has actually worked in an industry, the days on which—

(i) he has been laid off under the agreement or as permitted by standing order made under the Industrial Employment (Standing Orders) Act, 1946, or under this Act or under any other law applicable to the industrial establishment, the largest number of days during which he has been so laid off being taken into account for the purposes of this clause,

(ii) he has been on leave with full wages, earned in the previous year, and

(iii) in the case of a female, she has been on maternity leave; so however that the total period of such maternity leave shall not exceed twelve weeks, shall be included;”

6. Let us also examine the Central legislation. In the Industrial Disputes Act, 1947 (for short “the ID Act”), Chapter V-A containing Sections 25-A to 25-J was inserted by the Industrial Disputes (Amendment) Act, 1953 (43 of 1953) w.e.f 24-10-1953. Section 25-B as it stood then was as under:

“25-B. Definition of one year of continuous service.—For the purposes of Sections 25-C and 25-F, a workman who, during a period of 12 calendar months, has actually worked in an industry for not less than two hundred and forty days shall be deemed to have completed one year of continuous service in the industry.

Explanation.—In computing the number of days on which a workman has actually worked in any industry, the days on which—

(a) he has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946, or under this Act or under any other law applicable to the industrial establishment, the largest number of days during which he has been so laid off being taken into account for the purposes of this clause,

(b) he has been on leave with full wages, earned in the previous year, and

(c) in the case of a female, she has been on maternity leave; so however that the total period of such maternity leave shall not exceed twelve weeks,

shall be included.”

7. The same amending Act introduced the definition of “continuous service” in Section 2(eee) as under:

“2. (eee) ‘continuous service’ means uninterrupted service, and includes service which may be interrupted merely on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman;”

8. Section 25-B was, however, substituted by the Industrial Disputes (Amendment) Act, 1964 (36 of 1964) w.e.f 19-12-1964 and the same reads as under:

“25-B. Definition of continuous service.—For the purposes of this Chapter,—

(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman;

(2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer—

(a) for a period of one year, if the 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 for not less than—

(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and

(ii) two hundred and forty days, in any other case;

(b) for a period of six months, if the workman, during a period of six 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) ninety-five days, in the case of a workman employed below ground in a mine; and

(ii) one hundred and twenty days, in any other case.

Explanation.—For the purposes of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which—

(i) he has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the industrial establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(iv) in the case of a female, she has been on maternity leave; so however, that the total period of such maternity leave does not exceed twelve weeks.”

9. The amending Act of 1964 deleted Section 2(eee), having incorporated in Section 25-B itself the definition of “continuous service”. It also brought in the concept of preceding twelve calendar months. The earlier definition did not mention “preceding” with reference to the period of twelve calendar months. It appears that the decision of this Court in Sur Enamel and Stamping Works Ltd. v. Workmen AIR 1963 SC 1914, (1964) 3 SCR 616 interpreting Sections 2(eee) and 25-B led to the amendments made by the amending Act of 1964. In Sur Enamel AIR 1963 SC 1914, (1964) 3 SCR 616 interpreting Sections 2(eee) and 25-B, it was held that twin conditions were required to be fulfilled before a workman can be considered to have completed one year of continuous service in an industry. It must be shown first that the workman was employed for a period of not less than twelve calendar months and next that during those twelve calendar months, he had worked for not less than 240 days. In that case, the workman had not been employed for a period of twelve calendar months. Therefore, the Court held that it was unnecessary to examine whether actual days of work were 240 or more for in any case the requirements of Section 25-B would not be satisfied by the mere fact of number of working days being not less than 240 days. The effect was that if a workman completes actual 240 or more days of work in less than twelve calendar months, he would not be entitled to the benefit of beneficial legislation. This anomaly led to the amendment of the ID Act in the manner abovestated.

10. Under the aforesaid legislative background, the question involved is required to be reconsidered. Section 2(g) of the U.P Act does not require a workman, to avail the benefit of the deeming provision of completion of one year of continuous service in the industry, to have worked for 240 days during the “preceding” period of twelve calendar months. The word “preceding” has been used in Section 25-B of the ID Act as incorporated in the year 1964. Section 2(g) does not use the word “preceding”. The concept of “preceding” was introduced in the ID Act so as to give complete and meaningful benefit of the welfare legislation to the working class. The approach to be borne in mind while interpreting the welfare legislation is illustrated in Surendra Kumar Verma v. Central Govt. Industrial Tribunal-cum-Labour Court (1980) 4 SCC 443, (1981) 1 SCR 789 where this Court has observed that semantic luxuries are misplaced in the interpretation of “bread-and-butter” statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the court is not to make inroads by making etymological excursions.

11. The learned counsel for the appellant, however, relies upon Mohan Lal v. Bharat Electronics Ltd. (1981) 3 SCC 225 In that case, the Court was considering the scope of Section 25-B of the ID Act. It was observed that in order to invoke the fiction enacted in clause (2)(a) of Section 25-B, it is necessary to determine first the relevant date i.e the date of termination of service which is complained of as retrenchment. After that date is ascertained, move backward to a period of twelve months just preceding the date of retrenchment and then ascertain whether within a period of twelve months, the workman has rendered service for a period of 240 days. It was held that if these three factors are affirmatively answered in favour of the workman pursuant to the deeming fiction enacted in clause (2)(a), it will have to be assumed that the workman is in continuous service for a period of one year and he will satisfy the eligibility qualification enacted in Section 25-F. In Mohan Lal case (1981) 3 SCC 225 the appellant was employed with the respondent from 8-12-1973. His services were abruptly terminated by a letter dated 12-10-1974 w.e.f 19-10-1974. This Court said that it is not necessary for the purpose of clause (2)(a) of Section 25-B that a workman should be in service for a period of one year. It was held that if he is in service for a period of one year and that his service is continuous service within the meaning of sub-section (1), his services would be governed by sub-section (1) and his case need not be covered by sub-section (2). Sub-section (2) envisages the situation not governed by sub-section (1). Clause (2)(a) provides for a fiction to treat a workman in continuous service for a period of one year despite the fact that he has not rendered uninterrupted service for a period of one year but he has rendered service for a period of 240 days during the period of twelve calendar months counting backward and just preceding the relevant date i.e the date of retrenchment. These were the facts under which it was held as to how the period of 240 days was to be calculated. The decision in the case of Mohan Lal (1981) 3 SCC 225 does not lay down that if a workman had worked for more than 240 days in any number of years and if during the year of his termination, he had not worked for the said number of days, he would not be entitled to the benefit of Section 25-B. The question with which we are concerned was not under consideration in Mohan Lal case (1981) 3 SCC 225. If the viewpoint propounded by the management is accepted, then every year the workman would be required to complete more than 240 days. If in any one year the employer gives him actual work for less than 240 days, the service of the workman can be terminated without compliance with Section 6-N of the U.P Act, despite his having worked for a number of years and for more than 240 days in each year except the last. Such an intention cannot be attributed to the U.P Act. In the present case, as already noticed, the finding of the Labour Court is that the respondents worked for more than 240 days in each year from 1983 to 1986 but not having worked for 240 days in the year of termination, the termination was held by the Labour Court not to be violative of Section 6-N. Reference may also be made to the decision in Ramakrishna Ramnath v. Presiding Officer, Labour Court, Nagpur (1970) 3 SCC 67 where this Court observed that the provision requiring an enquiry to be made to find out whether the workman has actually worked for not less than 240 days during a period of twelve calendar months immediately preceding the retrenchment does not show that a workman, after satisfying the test, has further to show that he has worked during all the period he has been in service of the employer for 240 days in the year. The interpretation propounded for the appellant is wholly untenable. The decision in U.P State Coop. Land Development Bank Ltd. v. Taz Mulk Ansari 1994 Supp (2) SCC 745 relied upon by the learned counsel for the appellant has no applicability since that was a case of clause (a) of Section 6-N and, therefore, Section 2(g) had no relevance.

12. The High Court has rightly concluded that the termination of the respondents was in violation of Section 6-N read with Section 2(g) of the U.P Act.

13. Regarding denial of back wages to the respondents, in our view, no interference is called for having regard to the facts and circumstances of the case including the circumstance of the financial position of the appellant and the proceedings before the Board for Industrial and Financial Reconstruction.

14. For the foregoing reasons, we find no merit in the appeal. The same is accordingly dismissed. Special Leave Petition No. 18267 of 2003 (CC No. 3847 of 2000) is also dismissed. The respondents are directed to be reinstated from November 2003. They shall be paid wages from the month of November 2003. There shall be no order as to costs.