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Natarajan R. And Another v. Lakshmi Mills Company, Limited, Coimbatore, And Others
Factual and Procedural Background
These two appeals arise from judgments of Veeraswami, J., concerning the scope and extent of Section 33C(2) of the Industrial Disputes Act. In the first case (Writ Appeal No. 84 of 1962), the appellant was employed in 1954 at Lakshmi Mills, Ltd., Coimbatore, initially as an unskilled worker, later temporarily designated as a power reel fitter during a conversion process, and then transferred back to his original department with a wage increase. He claimed before the labour court that he was entitled to wages appropriate for a fitter rather than an unskilled worker and sought recovery of the wage difference. The management contested the labour court's jurisdiction, but the labour court upheld the appellant's claim and awarded him the differential wages.
In the second case (Writ Appeal No. 126 of 1962), the appellant, employed since 1947 as a clerk at Dhanalakshmi Mills, Ltd., Tirupur, claimed before the labour court that his work was that of a cashier and sought salary adjustment and arrears based on an agreement between management and workers. The management disputed the labour court's jurisdiction and the claim itself. The labour court overruled the jurisdictional objection and proceeded with the case.
The managements filed writ petitions under Article 226 of the Constitution to quash the labour court orders, alleging usurpation of jurisdiction. Veeraswami, J., allowed the writ petitions, holding that Section 33C(2) of the Industrial Disputes Act only covered ascertainment of benefits under industrial settlements, awards, or matters under Chapter V-A of the Act, and that the claims in these cases did not fall under these categories. This view was challenged based on a recent Supreme Court decision in Central Bank of India v. Rajagopalan.
Legal Issues Presented
- Whether Section 33C(2) of the Industrial Disputes Act confers jurisdiction on the labour court to adjudicate claims by employees disputing their classification or designation for the purpose of salary and benefits.
- Whether claims disputing the category or grade of employment, as opposed to claims relating to benefits under awards or settlements, fall within the scope of Section 33C(2).
- The extent to which the labour court can determine the nature of the post held by an employee when the employee claims classification in a higher category than designated by the employer.
Arguments of the Parties
Appellants' Arguments
- The appellants contended that although designated as unskilled worker and clerk respectively, the nature of their work entitled them to classification in higher categories (fitter and cashier) with corresponding wages and benefits.
- They argued that the labour court had jurisdiction under Section 33C(2) to decide whether they fell within the designated classes entitled to benefits under industrial awards or settlements.
- The appellants relied on passages from the Supreme Court decisions in Amibika Mills, Ltd. v. S. B. Bhatt and Central Bank of India v. Rajagopalan to support the competence of the labour court to decide classification disputes.
Managements' Arguments
- The managements disputed the jurisdiction of the labour courts to decide whether the appellants were rightly classified, contending that Section 33C(2) was limited to claims relating to benefits under industrial settlements, awards, or Chapter V-A of the Industrial Disputes Act.
- They argued that classification or designation disputes involving an individual employee’s grade or post do not fall within Section 33C(2) and instead constitute industrial disputes requiring collective sponsorship.
- In the second case, the management contended that the cashier duties were performed by a managing agent’s firm member and that the appellant was only a clerk assisting the managing agent.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Central Bank of India v. Rajagopalan | Section 33C(2) of the Industrial Disputes Act includes claims beyond those based on settlements, awards, or Chapter V-A provisions; labour courts can decide claims for benefits even if disputed by employer. | The court held that while Section 33C(2) comprehends claims for benefits, it does not extend to disputes about classification or designation of posts; claims of wrongful designation fall outside its scope. |
| Amibika Mills, Ltd. v. S. B. Bhatt | Labour court’s jurisdiction to decide incidental questions related to claims for benefits under industrial awards. | The court acknowledged that labour courts may decide questions incidental to claims for benefits but distinguished this from classification disputes. |
Court's Reasoning and Analysis
The court analyzed the scope of Section 33C(2) of the Industrial Disputes Act in light of the facts of the two appeals and relevant Supreme Court precedent. It noted that the appellants were undisputedly designated as unskilled worker and clerk respectively and were paid salaries appropriate to those posts. The appellants’ claims related not to non-payment of benefits but to reclassification to higher categories with corresponding wages.
The court emphasized that Section 33C(2) concerns the ascertainment of benefits under industrial awards, settlements, or Chapter V-A matters, not disputes about the correctness of an employee’s classification or designation. Such classification disputes are industrial disputes that require collective representation and cannot be individually adjudicated under Section 33C(2).
Referring to the Supreme Court’s observation in Central Bank of India v. Rajagopalan, the court reiterated that claims like wrongful demotion or dismissal do not fall under Section 33C(2), and by analogy, classification disputes similarly lie outside its scope. The court distinguished cases where the labour court could decide incidental questions about benefits within a designated category from cases where the employee claims a different category altogether.
The court rejected the appellants’ reliance on precedents that allowed the labour court to decide classification for benefits within an awarded category, clarifying that those cases did not involve claims for reclassification to a higher category. Accordingly, the labour court lacked jurisdiction to entertain the appellants’ claims.
Holding and Implications
The appeals are dismissed.
The court held that Section 33C(2) of the Industrial Disputes Act does not empower labour courts to adjudicate claims disputing the classification or designation of an individual employee’s post or grade when the employee is already paid the salary corresponding to the designated post. Such disputes constitute industrial disputes requiring collective representation and cannot be individually adjudicated under Section 33C(2).
This decision directly affects the parties by upholding the managements’ classification and denying the appellants’ claims for wage differentials based on reclassification. The court did not set any new precedent beyond clarifying the limits of Section 33C(2) jurisdiction in this context.
Ramachandra Ayyar, C.J.
These two appeals which arise from the judgment of Veeraswami, J., have been heard together as they involve the determination of a common question of law relating to the scope and extent of S.33C(2) of the Industrial Disputes Act. In Writ Appeal No. 84 of 1962, the appellant was originally entertained in the year 1954 in the machine shop department of the Lakshmi Mills, Ltd., Coimbatore. He was made permanent in that post on 1 January 1956. Being an unskilled worker he was put in the lowest category with a basic wage of Rs. 26 per month. Early in June 1956 the management was converting hand reels into power reels and the appellant was directed to work in the reeling section where conversion work was going on, being temporarily designated as a power reel fitter. After the process of conversion was over he was transferred back from 1 April 1957 to the mechanical shop department; his basic wages were increased to Rs. 32-8-0. The appellant continued to do work as an unskilled labourer in the lowest category till 3 October 1959. He then made a claim to the labour court at Coimbatore that he was a fitter and that appropriate wages to that category of workers under the industrial award should be paid to him. He therefore sought to recover from the management a sum of money representing the difference in wages between what he had received and what was due to him had he been designated as fitter. The management disputed the jurisdiction of the labour court to decide the question whether the appellant was a fitter or was merely an unskilled fitter helper. The labour court upheld the claim of the appellant and awarded a sum of Rs. 316-8-0 as the difference in wages due to him.
In Writ Appeal No. 126 of 1962 the appellant was entertained in the year 1947, as a clerk in the Dhanalakshmi Mills, Ltd., Tirupur. On 16 February 1960 he filed an application before the labour court at Madarai claiming that although he was designated as clerk, the nature and character of the work done by him was that of cashier, and that he should have been placed in a grade which carried the salary fixed for the cashier under an agreement entered into between the management and the workers in May 1948. Accordingly he made a claim to recover a sum of Rs. 697.75 by way of difference in salary and also the dearness allowance due to him. The management contended that the duties of the cashier were being performed by a member of the firm of the managing agents, and that the appellant was nothing more than a clerk who was assisting the managing agent in that behalf. They further contested the jurisdiction of the labour court to adjudicate the question whether the appellant had been rightly placed as a clerk by the management. The labour court overruled the preliminary objection taken by the management as to its jurisdiction to decide the dispute and posted the case for further evidence.The managements in the two respective cases filed applications to this Court under Art. 226 of the Constitution to quash the orders of the labour court as amounting to usurpation of jurisdiction. Veeraswami, J., allowed the writ petitions and quashed the order of the labour court. The learned Judge was of opinion that S.33C(2) of the Industrial Disputes Act could only refer to ascertainment of benefits derived under an industrial settlement or award or to matters coming under Chap. V-A of the Industrial Disputes Act and that as the claims in the instant case did not come under those categories specified in S. 33C (1), the labour court would have no jurisdiction to entertain the petitions. This view cannot now be supported as correct, having regard to a recent decision of the Supreme Court in Central Bank of India v. Rajagopalan where it has been held that S.33C (2) of the Act would comprehend claims even other than those based on settlement or award or made under the provisions of Chap. V-A of the Industrial Disputes Act. The learned Judge also expressed the opinion that the question whether the workman concerned occupied a particular position which would entitle him to the benefits relative thereto could not be decided under the aforesaid provision. It has been argued that, that conclusion also could no longer be supported, having regard to the judgment of the Supreme Court which held that it would be competent for the labour court to decide the case of workmen claiming benefits, the precise ground on which their claim was based even albeit such claims were to be disputed by their employer. We consider that the judgment of the learned Judge can be supported on another ground. It will be noticed that there is no dispute in the present case that the appellants were placed by their respective employers as unskilled workman and clerk respectively and that they were being paid salaries during all these years appropriate for such posts. The contention of the appellants is that the nature of the work done by them is such that they should have been placed on a higher category, in which case they would be entitled to draw salaries appropriate to that higher category. The dispute, therefore, is not about the actual posts which the workers occupied, but what they deserved by way of their salary and other emoluments for the duties claimed to have been performed by them. A claim of that kind cannot obviously come under that section which speaks of benefits to which the workman is entitled. The benefits or salary which the workmen in the present case were entitled to according to their designation had undoubtedly been given to them. The claim is that the actual classification of their posts or the grade in which they have been placed is incorrect. That is a matter in respect of which an industrial dispute can be raised if there were a substantial number of workers to sponsor the same. In Central Bank of India v. Rajagopalan (vide supra), the Supreme Court observed at p. 97 :
"If an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful, it would not be open to him to make a claim for the recovery of his salary or wages under S. 33C(2). His demotion or dismissal may give rise to an industrial dispute which may be appropriately tried, but once it is shown that the employer had dismissed or demoted him, a claim that the dismissal or demotion is unlawful and therefore, the employee continues to be the workman of the employer and is entitled to the benefits due to him under a pre-existing contract cannot be made under S. 33C(2)."*
The claim in the instant case is almost similar. The appellants say that they have been wrongfully placed in a particular category or that they have been wrongfully designated as belonging to a particular category which is not appropriate to the work that they have been doing. That is a matter which cannot come within the scope of S. 33C(2). It is true that whenever a workman claims a benefit and his claim is disputed by his employer the labour court will have the jurisdiction to decide all questions incidental thereto, for example, the post he occupies and the emoluments attached thereto, etc. - see the decisions in Amibika Mills, Ltd. v. S. B. Bhatt and Central Bank of India v. Rajagopalan (vide supra). But that is different from a case where a workman claims that although he was designated by the employer as holding a particular post, e.g., as a clerk and had been treated by the management as such, he should properly be considered as holding a different post and be paid the salary appropriate to that position.
Sri Lakshminarayana Reddi appearing for the appellants invited our attention to certain passages in the two cases cited above which according to him support the position that it would be competent for the labour court to decide whether a particular employee is an operative falling under a designated class or not. In the former case a question arose whether the employee was an operative coming within an award or one outside that category. The Supreme Court held that, that question could be decided by the labour court but that was essentially for the purpose of giving relief under the terms of an award to the employee. In the second of the decisions the case of the employee was that besides doing the routine duties as clerk, he had been operating the adding machine provided for use in the bank in which he was employed, and as such he was entitled to payment of extra allowance under the industrial award. In dealing with the claim, the Supreme Court held that it might be open to the employee to prove that he was doing the work which could properly be described as the work of comptist. There was no question in that case of the employee claiming that he was working in a higher category than the one designated and his claim being disputed by the management. What he claimed was that in the category in which he was placed, he was doing certain additional work for which an allowance was due under the industrial award. We are unable to see how that decision can support the case of the present appellants. We are, therefore, of opinion that it was not competent for the labour court to entertain either of the two cases which form the subject-matter of these appeals. The appeals fail and are dismissed. There will be no order as to costs.
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