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The Central India Sp... v. The State Industrial...
Structured Summary of the Opinion (Mudholkar, J.)
Factual and Procedural Background
The petition under Articles 226 and 227 challenged an order of the State Industrial Court, Nagpur, in proceedings under the C.P. and Berar Industrial Disputes Settlement Act, 1947. The petitioner is Empress Mills, Nagpur, a group of five mills styled Empress Mill Nos. 1–5. Respondent No. 2 is a recognised textile union at Nagpur. On 7 January 1956 the petitioner served a notice of change; on 17 January 1956 the petitioner and respondent No. 2 agreed that Empress Mill No. 1 would be demolished and workers transferred to third shifts in other mills. Non-recognised unions opposed the agreement, leading to unauthorised strikes; the petitioner closed the mills from 11 February 1956 and reopened on 23 April 1956. After reopening, absenteeism and strike-like conduct, particularly affecting the third shifts, persisted; third shifts did not work at all until 6 June 1956 and attendance remained low until August 1956. The petitioner wrote to respondent No. 2 in June and July 1956 complaining that certain doffers refused to work as siders and tenters, dislocating third-shift operations.
Respondent No. 2 filed an application in the State Industrial Court on 4 July 1956 under s. 41 of the C.P. & Berar Industrial Disputes Settlement Act, alleging workers were presented for work but not given work (an unlawful lay-off) and contending that Standing Order No. 20 had been amended by Chapter V-A of the Industrial Disputes Act, 1947 so that compensation was payable; respondent No. 2 sought a declaration that the lay-off was illegal.
The petitioner replied, raising jurisdictional objections (saying the District Industrial Court was the proper forum) and asserting that the lay-offs were justified by continuity/interdependence of processes and permissible under Standing Orders (primarily Standing Order 19), that Standing Order 20 did not apply, and that Standing Order 20 was not amended by s. 25C of the Industrial Disputes (Amendment) Act, 1953. After evidence and hearing the State Industrial Court held that certain named employees had been illegally changed because compensation under s. 25C had not been paid and treated their lay-off periods as unemployment under Standing Orders 19 and 21; the petitioner challenged that order by this petition.
Legal Issues Presented
- Whether the State Industrial Court had jurisdiction to entertain the union's application under s. 41 of the C.P. & Berar Industrial Disputes Settlement Act, or whether such an application lay only before the District Industrial Court.
- Whether the affected employees were 'laid-off' within the meaning of s. 2(kkk) of the Industrial Disputes Act so as to attract the compensation provisions of Chapter V-A (including s. 25C).
- Whether the petitioner's action in treating periods as unemployment without prior payment of compensation amounted to an illegal change in terms and required notice under the change provisions (i.e., whether failure to pay compensation before lay-off contravened Standing Orders or statutory provisions).
- Whether Standing Order 19 (or Standing Order 20) justified the lay-offs, and whether the lay-offs were bona fide or occasioned by strike/absenteeism (and thus potentially excluded from compensation under s. 25E(iii)).
Arguments of the Parties
Petitioner's Arguments (Empress Mills)
- The State Industrial Court had no jurisdiction; the District Industrial Court alone could entertain the application.
- Because of continuity and inter-dependence of processes, stoppage or idling of some departments owing to absenteeism meant subsequent/preceding processes could not be offered work and lay-off under Standing Orders was permissible.
- Standing Order 20 (which deals with stoppage for trade reasons) did not apply to the present case.
- Standing Order 20 was not amended by s. 25C of the Industrial Disputes (Amendment) Act, 1953.
- The lay-off did not contravene Standing Orders or statutes; no notice of change was necessary before lay-off.
- Counsel (Shri K.M. Joshi) contended that for s. 25C / Chapter V-A to apply the lay-off must fall within the definition in s. 2(kkk) (i.e., result from failure/refusal/inability of employer for causes listed), which he submitted was not established here.
- The petitioner also asserted the lay-off might fall within s. 25E(iii) (exclusion for lay-off due to strike or slowing down) — a point the court noted lacked a final finding in the State Industrial Court.
Respondent No. 2's Arguments (Recognised Union)
- Although workers presented themselves for work, they were not given employment — this amounted to unlawful lay-off in breach of Standing Order No. 20 (as amended by Chapter V-A), and the lay-off required payment of compensation under s. 25C.
- The lay-off was not bona fide and was not for any trade or good reason and therefore could not be effected without notice of change.
- Counsel (Shri Dhabe) argued the words “or for any other reason” in s. 2(kkk) are wide, and the Industrial Disputes Act being social legislation requires as extended a meaning as possible for ‘lay-off’ to include many cases of unemployment; cited decisions to support a liberal construction favourable to labour.
- Respondent No. 2 relied on the State Industrial Court's jurisdiction to entertain the union's application under s. 41 (as opposed to the District Industrial Court).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Berar Oil Industries v. Majumdar, 1957 59 Bom. L.R. 1189 | Held that an application under s. 41 of the C.P. & Berar Industrial Disputes Settlement Act can be made to the District Industrial Court only by employer, employee or Labour Officer; the power to entertain an application under s. 41 made by a union is given to the State Industrial Court. | The Court relied on this decision to hold that the State Industrial Court was competent to entertain respondent No. 2's application (i.e., jurisdictional objection by petitioner rejected). |
| Mervin Veiyra v. C.P. Fernandes, 1955 58 Bom. L.R. 385; S.C. [1957] A.I.R. Bom. 100 | Interpreted s. 2(kkk): a lay-off must result from the employer's failure/refusal/inability because of causes such as shortage of coal, power, raw materials, accumulation of stocks, breakdown of machinery or "for any other reason", and s. 25C applies only if the conditions of lay-off in the definition exist. | The Court cited the decision to support the proposition that Chapter V-A (s. 25C) applies only where the lay-off falls within the statutory definition in s. 2(kkk), i.e., caused by employer-side causes independent of worker action. |
| Mahadeo Dhondu v. Labour Appellate Tribunal | Expressed judicial reluctance to construe labour legislation in a way prejudicial to labour; urged interpreting labour law in a manner favouring workers. | The Court cited it as an authority for the proposition that courts should be cautious about constructions prejudicial to labour, though the Court ultimately limited the scope of 'lay-off' by reference to statutory context. |
| Prahash Cotton Mills v. State of Bombay | Emphasised the role of social justice in interpreting labour/industrial legislation and acknowledged courts apply social justice principles in this field. | The Court cited the case as part of the argument advanced for a generous interpretation of 'lay-off' in favour of labour, but the Court declined to adopt an unbounded meaning for 'lay-off'. |
| Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur, [1955] 1 S.C.R. 991 | Warned against importing vague notions of 'social justice' beyond established legal principles; social justice must be founded on solid legal foundations and not fanciful adjudicatorial notions. | The Court relied on this Supreme Court authority to caution that the concept of social justice should not be used to expand statutory definitions beyond accepted principles; this supported a restrained interpretation of 'lay-off'. |
| Textile Mills, M.P. v. Their Workmen (Full Bench decision referenced) | Referenced as part of a formula relating to social justice and adjudication in labour matters (the Full Bench decision set out principles to be followed). | Mentioned via Muir Mills' discussion to show that adjudicators are bound by established formulae; used to support limiting arbitrary use of 'social justice' in interpretation. |
| Famous Cine Laboratory v. Their Workmen (referenced) | Reiterated the Full Bench formula and deprecated importing individual notions of social justice not comprised in the formula. | Cited (through Muir Mills) to support the proposition that courts should not import subjective conceptions of social justice to expand statutory terms. |
| Cox v. Hakes (Lord Herschell quoted) | For construing sweeping general words, one should look at related provisions to see if general words were intended to be applied without limitation. | The Court quoted this to support the view that the wide words in s. 2(kkk) ('or for any other reason') must be read in the context of the Act and limited by related provisions. |
| Blackwood v. The Queen, 1882 8 App. Cas. 82 | Privy Council guidance: limit sweeping general words by examining similar expressions in the same instrument and imposing like limitations if others are so qualified. | The Court used this canon to justify restricting the literal scope of 'lay-off' and not extending it to every circumstance of unemployment (for example, strikes excluded). |
Court's Reasoning and Analysis
The Court proceeded through the issues sequentially and applied statutory text, Standing Orders, and precedent:
- Jurisdiction: Relying on Berar Oil Industries v. Majumdar, the Court held that when a union makes an application under s. 41 of the C.P. & Berar Industrial Disputes Settlement Act the State Industrial Court has power to entertain it. Therefore the State Industrial Court was competent to hear respondent No. 2's application and the petitioner's jurisdictional objection failed.
- Meaning of 'lay-off' and applicability of Chapter V-A: The Court examined s. 2(kkk)'s definition of 'lay-off' and the contents of s. 25C. It accepted the Mervin Veiyra authority that s. 25C/Chapter V-A applies only where the lay-off falls within the statutory definition: the unemployment must result from the employer's failure, refusal or inability on account of causes enumerated (or "for any other reason") in cl. (kkk).
- Scope of "or for any other reason": The Court considered the union's submission (supported by cases urging liberal construction in favour of labour) to give a wide meaning to the phrase. However, guided by Muir Mills and authorities (and principles of statutory interpretation exemplified by Cox v. Hakes and Blackwood v. The Queen), the Court concluded that the phrase must be read in context and limited so as not to cover every circumstance of unemployment, particularly where the cause is action/inaction of the workmen themselves (e.g., strikes, absenteeism, go-slow), which are treated differently in the statute (e.g., s. 25E(iii)).
- Effect of worker conduct and Standing Orders: The Court reasoned that Chapter V-A compensations are payable only where the lay-off is occasioned by causes beyond the control of the workmen. If the lay-off resulted from strikes, go-slow or absenteeism in other sections on which the affected section depended, the lay-off would not fall within s. 2(kkk).
- Relationship between Standing Orders and Chapter V-A: The Court acknowledged that Standing Orders dealing with lay-off/retrenchment are subject to Chapter V-A. But it drew a distinction between retrenchment (where compliance with Chapter V-A conditions is a pre-condition under s. 25P) and lay-off. The Court held, based on its prior decision, that although Standing Orders must be read with Chapter V-A and Chapter V-A creates a right to compensation for laid-off workmen, neither the Standing Orders nor Chapter V-A make payment of compensation a condition precedent to effecting a lay-off. Thus failure to pay compensation before lay-off does not itself amount to an illegal change.
- Standing Order 19/21 application: The Court examined Standing Order 19(1), which permits the manager to stop machines or departments without notice and without compensation for causes including shortage of process or short attendance of operatives, and Standing Order 21, which treats an operative laid-off under Orders 19 or 20 as temporarily unemployed and not entitled to wages except to the extent mentioned in Order 19. The Court accepted the petitioner's justification under Standing Order 19(1) because there was short attendance in third shifts producing yarn (a shortage of process) which dislocated working. The Court rejected the argument that Standing Order 19 required showing that requisite yarn was unavailable in the market or that the petitioner purchased such process elsewhere; respondent No. 2 did not allege the petitioner purchased yarn from other mills.
- Strike exclusion and s. 25E(iii): The Court noted the petitioner's contention that the lay-off could be excluded from compensation under s. 25E(iii) if due to a strike or slowing down by workmen. The Court observed contradictory statements in the State Industrial Court order on whether actual strikes in other departments had occurred and noted that, because there was no finding, the point would ordinarily be remitted for determination; however, given the Court's other reasoning (i.e., no requirement to pay compensation before lay-off), remittal was unnecessary.
- Conclusion on illegal change: Because the Standing Orders permitted the type of lay-off here and because neither the Standing Orders nor Chapter V-A required pre-payment of compensation as a condition to lay-off, the Court concluded there was no illegal change effected by the petitioner by failing to pay compensation before laying off workers.
Holding and Implications
Holding: Petition allowed; the order of the State Industrial Court is quashed.
Implications (direct effect on the parties):
- The State Industrial Court's finding that the petitioner effected an illegal change by not paying compensation prior to lay-off was set aside.
- On the court's view, workers laid off under the factual circumstances described (short attendance/shortage of process due to absenteeism in dependent sections) are not necessarily 'laid-off' within s. 2(kkk) so as to attract Chapter V-A compensation; in any event, payment of compensation is not a statutory condition precedent to effecting a lay-off under the Standing Orders.
- The petition was allowed with no order as to costs.
Broader implications / precedent: The opinion did not declare a new general principle beyond the statutory interpretation applied here; it reaffirmed that Standing Orders must be read with Chapter V-A but that Chapter V-A does not make pre-payment of compensation a condition precedent to a lay-off. The Court also emphasised limits on using vague notions of social justice to expand statutory definitions beyond established principles. No directive in the opinion purports to create a new binding rule outside the context of the facts and statutes considered.
Mudholkar, J.:— This is a petition under arts. 226 and 227 of the Constitution for the issue of a writ of certiorari quashing and setting aside the order passed by the State Industrial Court, Nagpur, in the matter arising under the C.P and Berar Industral Disputes Settlement Act, 1947.
2. The relevant facts are as follows: The petitioner is known as the Empress Mills, Nagpur. These mills are five in number and are known and styled as Empress Mill No. 1, Empress Mill No. 2, Empress Mill No. 3, Empress Mill No. 4 and Empress Mill No. 5. Respondent No. 2 is a recognised union for the local area of Nagpur in respect of the textile industry at Nagpur.
3. On January 7, 1956, the petitioner, i.e the Empress Mills, served a notice of change on respondent No. 2. After discussion over the matter, an agreement was reached between the petitioner and respondent No. 2 on January 17, 1956, and it was agreed between the parties that Empress Mill No. 1 should be demolished and persons who used to work there should be transferred to third shifts of Empress Mills Nos. 3, 4 and 5, which shifts were agreed to be started for the purpose of absorbing workers from Empress Mill No. 1. According to the petitioner, the non-recognised Unions resented this agreement and started agitation against the Empress Mills as a result of which several unauthorised strikes took place. Due to these strikes, normal working of the mills was completely dislocated with the result that the petitioner was compelled to close down the Mills on and from February 11, 1956. They declared the closure of the Mills till such time when sufficient number of workers expressed their willingness to resume work normally and peacefully and carry on the work in accordance with the provisions of the agreement arrived at between the petitioner and respondent No. 2. Eventually, the Mills reopened on April 23, 1956. According to the petitioner, despite the reopening of the Mills strikes and absenteeism continued in all the Mills and more particularly in the third shifts. In fact, according to the petitioner, the third shifts did not work at all till June 6, 1956. Though the third shifts started working after that date, the attendance was very small till August 1956. The petitioner therefore entered into correspondence with respondent No. 2 on this matter and brought to the notice of respondent No. 2 the state of affairs obtaining in the Mills. The letters addressed by the petitioner to respondent No. 2 are of June 27, 1956, and July 7, 1956. The petitioner pointed out to respondent No. 2, among other things, that doffers had refused to work as siders and tenters even though they were sufficiently acquainted with these jobs and that this refusal on their part had completely dislocated the working in the third shifts. The petitioner's contention is that respondent No. 2, instead of rendering full assistance and adequate co-operation to the petitioner in restoring the normal working of its units, filed an application before respondent No. 1, the State Industrial Court, on July 4, 1956, under s. 41 of the C.P and Berar Industrial Disputes Settlement Act, 1947, alleging that even though the workers presented themselves for work, they were not given work, that this amounted to an unlawful lay-off and was in contravention of the provisions of the Standing Order No. 20. According to respondent No. 2 the Standing Order stood amended by virtue of the provisions of Chapter V-A of the Industrial Disputes Act, 1947, which provided for payment of compensation to the workers who were laid off. Respondent No. 2 also contended that the lay-off was not bona fide and was not for any trade or good reason and that, therefore, it could not be effected without notice of change. Upon these grounds respondent No. 2 sought a declaration to the effect that the play-off was an illegal change.
4. The petitioner in their reply to the application of respondent No. 2 raised the following contentions:
(i) That the State Industrial Court had no jurisdiction to entertain the application and that the only Tribunal which could entertain it was the District Industrial Court.
(ii) That owing to continuity and inter-dependence of processes, whenever certain departments or sections were stopped or remained idle due to absenteeism amongst workers, workers of the subsequent or preceding processes could not be offered employment and had to be laid-off, and that it was permissible to lay them off under Standing Orders.
(iii) That Standing Order 20 which related to stoppage for trade reasons such as shortage of orders etc. had no application or bearing in the present case.
(iv) That Standing Order 20 did not stand amended by virtue of the provisions of S. 25C of the Industrial Disputes (Amendment) Act, 1953.
(v) That the lay-off was not in contravention of the Standing Orders or the provisions of the state or central act and that no notice of change was necessary before such play-off was effected.
5. Upon these allegations, respondent No. 1 framed the following issues:
“1. Does section 25C of the Act 43 of 1953 override Standing Order 20 and are the employees who are laid-off under Standing Order No. 20 entitled to compensation? Are provisions of Act 43 of 1953 regarding lay-off not applicable to the cases of lay-off of employees in the non-applicant Mills.
2. Were employees Baoji, Punjaram, Motiram and Tulsiram laid off as alleged?
3. (a) Did the lay-off of these employees by the non-applicant Mills violate Standing Orders or any provisions of the Madhya Pradesh Industrial Disputes Settlement Act or the Industrial Disputes Act (No. XIV of 1947)?
(b) Is the employer bound to give notice under s. 31 before laying off an employee?
(c) Was the lay-off not bona fide?
(d) Did the laying-off of the employees amount to an illegal change?
4. Was absenteeism among the workers the cause of lay-off of the employees? If so, was the lay-off justified? Are the non-applicant Mills not liable to pay compensation for lay-off?”
6. After recording evidence and hearing the parties the State Industrial Court held that in respect of the employees Doma Punjaram, Tulsiram Arjun and Chandrabhan Raoji, the petitioner had effected an illegal change in treating their lay-off period as period of unemployment under Standing Order 19 read with Standing Order 21, because before laying them off the petitioner did not pay them compensation as they were required to do under s. 25C of the Industrial Disputes Act. The State Industrial Court further held that the case was not governed by Standing Order 20, but was governed by Standing Orders 19 and 21 and that though respondent No. 2 had based its case on the breach of Standing Order 20 only the defect in the pleading could not be allowed to stand in the way of the workers to get a relief. Being aggrieved by the order of the State Industrial Court the petitioner “The Empress Mills” has come up before us.
7. On the first question raised on behalf of the petitioner, which is to the effect that the application lay not before the State Industrial Court but before the District Industrial Court, it is sufficient for us to refer to a decision of this Court in Berar Oil Industries v. Majumdar . 1957 59 Bom. L.R 1189., where it has been held that an application for declaring a change as illegal under s. 41 of the C.P and Berar Industrial Disputes Settlement Act can be made to the District Industrial Court only by the employer, employee or the Labour Officer and not by the Union of employees. It has further been held that the power to entertain an application under s. 41 made by the Union is given only to the State Industrial Court. In view of this decision, we hold that the State Industrial Court was competent to entertain the application.
8. The next point urged on the petitioner's behalf by Shri K.M Joshi, who appears for it, was that before any worker could be entitled to claim compensation under Chapter V-A of the Industrial Disputes Act, 1947, it will have to be established that he had been laid-off in the sense in which that expression is defined in s. 2(kkk) of the Act. In support of this contention the learned counsel has relied upon the decision of this Court in Mervin Veiyra v. C.P Fernandes . 1955 58 Bom. L.R 385, S.C [1957] A.I.R Bom. 100.. In that case the learned Chief Justice, who delivered the judgment of the Court, observed (p. 388):
“…The definition of ‘lay off’ which is given in s. 2(kkk) makes it clear that it must result from the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or for any other reason to give employment to a workman whose name is borne on the muster rolls of the industrial establishment and who has not been retrenched.”
9. Then after referring to s. 25C the learned Chief Justice observed (p. 388):
“…Therefore, this section would only apply provided the conditions of lay-off mentioned in the definition exist and the lay-off is in accordance with the conditions and the definition contained in the Act.”
10. The expression ‘lay-off’ is defined thus in s. 2(kkk) of the Act:
“‘lay-off’ (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or for any other reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.”
11. Now, according to Shri Joshi a workman could be deemed to have been laid-off within the meaning of this expression only if there is a ‘failure, refusal or inability’ on the part of the employer to allow him to work because of any of the causes set out in cl. (kkk) of s. 2. In the instant case, Shri Joshi points out that the ‘failure, refusal or inability’ of the petitioner to employ the workman was not due to any of the causes specified in cl. (kkk) and that, therefore, the provisions of s. 25C or of Chapter V-A were not attracted.
12. Shri Dhabe, who appears for respondent No. 2, contended that the words “or for any other feasons” which occur in the definition are very wide and it will be clear from the use of these words that the Legislature intended to give a very wide meaning to the expression ‘lay-off’. He further contended that we must bear in mind the fact that the Industrial Disputes Act is a piece of social legislation and, therefore, it would be the duty of the Court to give as extended a meaning as possible to the word ‘lay-off’ so as to comprise in it every case which results in an unemployment of workers. He has relied on the decisions in Mahadeo Dhondu v. Lab. App. Tribunal and Prahash Cotton Mills v. State of Bombay, in support of this proposition.
13. In the first case the learned Chief Justice, who delivered the judgment of the Court, observed (p. 410):
“…We have had occasion to say it before and we will say it again that we are always most reluctant to put any interpretation upon labour legislation which is likely to prejudice the rights or welfare of labour. We are fully conscious of the fact that our Legislature has put labour legislation on the statute book primarily for the purpose of redressing the balance between employers and employees and that we should not, unless we are compelled to do so by the clear language used by the Legislature, put any construction upon any provision of labour legislation which will in any way prejudicially affect their rights.”
14. In the next case relied on by Shri Dhabe we have again the judgment delivered by the learned Chief Justice who has observed (p. 844):
“…We must not forget that we are no longer living in the age of laissez-faire and the relations between employer and employees are no longer solely governed by the principles of contract. Contractual rights and liabilities are now subject to the principles of industrial law and also the principles of special justice. It is true that social justice is an imponderable and Mr. Bhatt asked us not to introduce the principles of social justice in construing legislation which comes for interpretation before us. In our opinion, no labour legislation, no social legislation, no economic legislation can be considered by a Court without applying the principles of social justice in interpreting the provisions of these laws. Social justice is an objective which is embodied and enshrined in our Constitution. It is true that it may be difficult to define social justice. In the opinion of Holmes it is an inarticulate major premise which is personal and individual to every Court and every Judge. How a Court or a Judge approaches a particular problem is influenced and coloured by his outlook on life and society. But however a Judge or a Court may approach a particular problem, it cannot ignore the fact that all our legislation is aimed at bringing about social justice, and, therefore, it would indeed be startling for anyone to suggest that the Court should shut its eyes to social justice and consider and interpret a law as if our country had not pledged itself to bringing about social justice. Therefore, it is a truism to say that the present tendency of our labour and industrial legislation is to impose more and more burdens upon the emplovers. These burdens are imposed in the interests of the employees, because they have been under-dogs for decades and centuries….”
15. We may however refer to the decision of the Supreme Court in Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur . [1955] 1 S.C.R 991. in which their Lordships have made the following observation (p. 1001):
“The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable. Social justice is a very vague and indeterminate expression and no clear-cut definition can be laid down which will cover all the situations. Mr. Isaacs, the learned counsel for the respondent, attempted to Five a definition in the following terms— and he stated that there were three parties concerned here, viz., the employers, the labour and the State itself, and the conception of social justice had to be worked out in this context. Without embarking upon a discussion as to the exact connotation of the expression ‘social justice’ we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation.”
16. Their Lordships then referred to a certain formula evolved by the Full Bench of the Labour Appellate Tribunal and then proceeded to observe (p. 1002):
“This formula was reiterated in Textile Mills, M.P v. Their Workmen and Famous Cine Laboratory v. Their Workmen, and in the latter case it deprecated the idea of adjudicators importing considerations of social justice which are not comprised in that formula:—
‘And what is social justice? Social justice is not the fancy of any individual adjudicator; if it were so then ideas of social justice might vary from adjudicator to adjudicator over all parts of India. In our Full Bench decision (See 1950, 2 L.L.J, p. 1247), we carefully considered the question of social justice in relation to bonus, and there we equated the rights and liabilities of employers and workmen with a view to achieving a just formula for the computation of bonus. That Full Bench decision stands, and this tribunal and all other tribunals are bound by it.’”
17. As we understand this decision of their Lordships, the conception of social justice ought not to be imported while interpreting the provisions of the Industrial Disputes Act or other similar Acts. Therefore, the only thing which we have to bear in mind in understanding the true import of the definition is the set of principles which have been accepted by the Judges in the past for interpreting statutes.
18. Here, Shri Dhabe asked us to give the widest possible meaning to the words ‘or for any other reason’. Surely, it could not have been the intention of the Legislature to bring within the definition every circumstance possible which has resulted in an unemployment of workers as for instance a strike. Even Shri Dhabe admits that an unemployment resulting from a strike would not be comprised in the definition. The reason given by him for this is that strikes are dealt with expressly by the provisions of s. 25E(iii) of the Industrial Disputes Act, 1947. In our opinion, the key to understand the import of the definition is to be found in the words ‘the failure, refusal or inability of an employer’ which occur in cl. (kkk) of s. 2. These words make one thing clear and that is that the unemployment has to be on account of a cause which is independent of any action or inaction on the part of the workmen themselves. However wide the definition contained in a statute may be taken to be it will have to be limited or restricted for the purpose of carrying into effect the provisions of the statute in which such definition occurs. In this connection we may quote the following observations of Lord Herschell in Cox v. Hakes (p. 529):
“It cannot, I think, be denied that, for the purpose of construing any enactment, it is right to look not only at the provision immediately under construction, but at any others found in connection with it, which may throw light upon it, and afford an indication that general words employed in it were not intended to be applied without some limitation.”
19. We may also refer to a canon laid down by the Privy Council in Blackwood v. The Queen . 1882 8 App. Cas. 82, 94. (p. 94):
“…one of the safest guides to the construction of sweeping general words, which it is difficult to apply in their full literal sense, is to examine other words of like import in the same instrument, and to see what limitations must be imposed on them. If it is found that a number of such expressions have to be subjected to limitations or qualifications, and that such limitations or qualifications are of the same nature, that forms a strong argument for subjecting the expression in dispute to a like limitation or qualification.”
20. The consequences of a lay-off are dealt in Chapter V-A of the Act, and it is clear from the provisions of that Chapter that compensation for a lay-off is payable only in those circumstances where the laying-off is occasioned by a cause which is beyond the control of the workmen. It would, therefore, follow from this that if, in point of fact, the lay-off here was occasioned because of strikes or go-slow tactics or absenteeism of workers in other sections of the Mills, on which the particular section in which some workers were laid off was dependent, then their laying off cannot be deemed to fall within the definition contained in s. 2(kkk) of the Act.
21. Apart from that we are of the view that even if the expression ‘lay-off’ were to be interpreted in the widest and most general way as contended for on behalf of respondent No. 2, the action taken against the workers here being permissible under Standing Order 19 there is no room for the contention that the petitioner has brought about an illegal change because no previous notice of the action was given by the petitioner to the appropriate parties. Standing Order 19(1) reads thus:
“The Manager may, at any time or times, in the event of a fire, catastrophe, breakdown of machinery, stoppage of the power supply, epidemic, civil commotion, shortage of raw materials or process, short attendance of operatives or other causes, whether of a like nature or not, beyond the control of the Manager, stop any machine or machines or department or departments wholly or partially or the whole or part of the establishment, for any period or periods, without notice and without compensation in lieu of notice.”
22. Standing Order 21 provides:
“Any operative played-off under O. 19 or O. 20 shall not be considered as dismissed from service, but as temporarily unemployed, and shall not be entitled to wages during such unemployment except to the extent mentioned in Order 19…”
23. Now, it is contended by Shri Dhabe that if the word ‘lay-off’ is given the wide meaning contended for by him then a lay-off of this kind is not permissible without the payment of compensation. He says that the Standing Orders must now be deemed to be amended by Chapter V-A of the Act because of the provisions of s. 25J of the Act and, therefore, without complying with the provisions of Chapter V-A no lay-off could be effected. In fact, we have recently held that Standing Orders in so far as they relate to a lay-off or retrenchment, are subject to the provisions of Chapter V-A. But it does not follow from our decision that compliance with the provisions of Chapter V-A is a condition precedent to the laying-off of a workman. The case before us was one of retrenchment and we held that no retrenchment could be effected without complying with the provisions of Chapter V-A. That was because s. 25P specifically provides that before retrenching workmen certain conditions are to be satisfied. That is not the position so far as a lay-off is concerned. All that follows from our decision in that case and from the provisions of Chapter V-A is that workmen who have been laid off would be entitled to recover compensation according to the provisions of the Act. No doubt, the Standing Orders have to be read along with the provisions of Chapter V-A, but it does not follow in the case of a lay-off that compensation must be actually paid before a workman is laid off. The Standing Orders read with Chapter V-A now create a right in favour of the workman who has been laid-off to claim compensation. They do not create a right in his favour of being paid compensation before he is laid off. He can work out his right independently and so also the employer can exercise his right of laying off independently of paying compensation. The mere failure on the part of an employer to pay compensation would not amount to the contravention of the Standing Order for the simple reason that neither the Standing Orders nor the Act make the payment of compensation a condition precedent to the lay-off. Upon this view, it would follow that no illegal change was effected by the petitioner.
24. Incidentally we may mention that it was contended for the petitioner that this case fell under cl. (iii) of s. 25E and that, therefore, the workmen are not entitled to compensation. Under this clause, if a lay-off is due to ‘a strike’ or slowing down of production on the part of workmen in another part of the establishment, the workmen affected thereby are not entitled to the lay-off compensation. Here, it was alleged by the petitioner that there were actual strikes in other departments. Now, tins fact is mentioned by the State industrial Court in one part of its order, but in another part of, its order the State Industrial Court has said that there is no allegation by the petitioner that there was a strike. The result is that there is no finding on the point. In the absence of a finding we would have ordinarily remitted the case to the State Industrial Court for examining the question, but upon the view we take on the other part of the case, we remit it unnecessary to remit the matter on this point.
25. We may also advert to the point raised by respondent No. 2 that the lay-off here is not in contravention of Standing Orders inasmuch as it is not occasioned by a cause referred to in Standing Order No. 20. It is true that the lay-off in this case is not for a trade reason or for any other reason which is referred to in Standing Order 20. But the petitioner justifies the lay-off not under Standing Order 20 but under Standing Order 19(1) which, among other things, permits a lay-off of workmen due to shortage of ‘process’. It is not disputed that here there was a shortage of process because of short attendance in the third shifts of the sections producing yarn, which dislocated the working of these shifts. Shri Dhabe, however, contended that the petitioner was bound to show also that the requisite quantity of yarn was not available at all in the Nagpur market. In our opinion, the Standing Order does not contemplate purchase of “process” from other Mills. Moreover, respondent No. 2 has never alleged that the petitioner purchases yarn or process for production of cloth in its Mills. In the circumstances, therefore, we cannot accept Shri Dhabe's argument on the point.
26. Shri Dhabe wants us to mention that he had addressed an argument before us on the basis of s. 51 of the C.P and Berar Industrial Disputes Settlement Act, 1947. That argument was that the petitioner, the Express Mills, by failing to pay compensation as provided by the Standing Order read along with Chapter V-A, have effected an illegal change without giving notice thereof.
27. We have dealt with this matter in an earlier paragraph and stated that though Chapter V-A entitles a person laid off to compensation, neither Chapter V-A nor the Standing Orders make the payment of compensation a condition precedent to a lay-off. The omission of the petitioner to pay compensation to any of the workmen who have been properly laid off does not result in an illegal change.
28. Upon this view, we allow the petition and quash the order of the State Industrial Court. There will be no order as to costs.
29. Petition allowed.
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