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  • Army Act, 1950 (46 of 1950) or the Air Force Act, 1950 (45 of 1950) or the Navy (Discipline) Act, 1934 (34 of 1934); or(ii)
  • SECTION 25 F INDUSTRIAL DISPUTES ACT 1947
  • Section 25-C,
  • Section 25-B
  • Section 25-F,
  • Section 25-G
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  • Army Act, 1950 (46 of 1950) or the Air Force Act, 1950 (45 of 1950) or the Navy (Discipline) Act, 1934 (34 of 1934); or(ii)
  • SECTION 25 F INDUSTRIAL DISPUTES ACT 1947
  • Section 25-C,
  • Section 25-B
  • Section 25-F,
  • Section 25-G
  • Section 2(s)
Smart Summary

Case Summary — Pilot Pen Company (India) Private Ltd. (Writ under Article 226)

Delivered by Palaniswamy, J.

Factual and Procedural Background

The petitioner, Pilot Pen Company (India) Private Ltd., operates a main factory at Red Hills (manufacturing inks) and a subsidiary factory at Mount Road (manufacturing ball point pens and screw pencils). In November 1965 a strike occurred at the Red Hills factory, resulting in a stoppage of work. Because inks manufactured at Red Hills could not be bottled there during the strike, the management arranged to bottle and pack ink at the Mount Road subsidiary and engaged 16 persons for that purpose.

The Government of Madras declared the strike illegal in December 1965 and work at Red Hills resumed, but bottling and packing at Mount Road continued until December 1966. On December 28, 1966, the company terminated the services of the 16 persons, giving rise to an industrial dispute which the Government referred to the Labour Court (first respondent). The Madras Pen and Ink Factory Workers' Union sponsored the claim on behalf of the workmen before the Labour Court.

The Labour Court, in I.D. No. 157 of 1967 dated August 12, 1968, held that the 16 persons were "workmen" within the meaning of the Industrial Disputes Act, 1947; found that six of them had put in continuous service for one year (Section 25-B) and that their terminations were not in accordance with law (Section 25-F), and directed reinstatement with benefits for those six. The management filed the present petition under Article 226 seeking to quash that award insofar as it related to the six workmen.

Legal Issues Presented

  1. Whether the 16 persons engaged at the Mount Road factory were "workmen" within the meaning of Section 2(s) of the Industrial Disputes Act, 1947, despite being employed on a casual/temporary basis.
  2. Whether six of those persons had rendered "continuous service" for one year as defined in Section 25-B of the Act, thereby entitling them to protection under Section 25-F against retrenchment without compliance with statutory conditions.
  3. Whether the termination of the services constituted retrenchment requiring compliance with Section 25-F, or whether the management could now contend that there had been a closure of the Mount Road item of business (an argument not taken before the Labour Court).
  4. Whether casual labourers, by the very nature of their employment, are precluded from being "workmen" under the Act and from claiming the benefits of Sections 25-B/25-F.

Arguments of the Parties

Madras Pen and Ink Factory Workers' Union (on behalf of the workmen)

  • Claimed the 16 workmen were retrenched and that the retrenchment was mala fide, linked to submission of a charter of demands.
  • Asserted that the principle of "last come first go" was not followed in effecting the terminations.
  • Contended that the procedure under Section 25-F of the Industrial Disputes Act was not followed before termination.

Petitioner-Management (Pilot Pen Company)

  • Contended the 16 persons were casual labourers (temporary employees) and therefore not "workmen" entitled to benefits under the Act.
  • Maintained that the 16 were engaged only to clear arrears caused by the strike and once arrears were cleared they were surplus, so their services were terminated.
  • Raised (in these proceedings) the contention that what occurred was a closure of the Mount Road bottling operation rather than retrenchment, and therefore Section 25-F would not apply (this position was not advanced before the Labour Court).
  • Argued (before the High Court) that by the nature of daily-rate employment their contract ended each day and thus continuity for one year could not be made out; also sought to rely on an authority (Workmen of Orient Paper Mills Ltd. v. O.P. Mills Ltd.) for a proposition about distinguishing casual and permanent workers.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Workmen of Orient Paper Mills Ltd. v. O.P. Mills Ltd. Quoted observations distinguishing casual workers from permanent workers in the context of wage fixation; management sought to draw from it the proposition that casual workers are on a lower footing than permanent employees. The court held that the quoted observations do not support a general rule that casual workers are not "workmen" under the Act; the passage was contextual to wage fixation and agreements in that case and cannot be read as excluding casual workmen from the statutory definition of "workman."
Elumalai v. Management of Simplex Concrete Piles Considered the definition in Section 2(s) and held that casual workers are included within the definition of "workman"; observations that Section 2(s) is in the widest possible terms and that references elsewhere in the Act (e.g., Section 25-C) confirm inclusion of casual workers. The court relied on this reasoning to support the conclusion that casual workers may be "workmen" for the purposes of the Act; it rejected the management's contention that casual status automatically excludes a person from the definition.

Court's Reasoning and Analysis

The court proceeded by examining (a) the factual record accepted by the Labour Court, and (b) the statutory definitions and provisions of the Industrial Disputes Act.

On the procedural/contention point of "closure" versus "retrenchment," the court noted that the management had not advanced the closure contention before the Labour Court and had earlier pleaded that the workmen were found surplus and their services were terminated when pending orders were executed. The court held that the management could not, in the writ proceedings, advance the new factual contention of closure because it required evidence and was inconsistent with the position taken in the Labour Court pleadings.

Turning to the statutory question of who is a "workman," the court quoted Section 2(s) (definition of "workman") and observed that the definition is broad and does not restrict "workman" to permanent employees. The court also referenced Section 25-G (where casual workers are expressly excluded from lay-off compensation) and Section 25-F (conditions precedent to retrenchment) to show that the Legislature was aware of categories such as casual workmen and provided specific rules where necessary. From this statutory structure the court concluded there is no basis for a blanket rule excluding casual labourers from the definition of "workman."

The court considered the authorities relied upon by the management. It explained that the Orient Paper Mills decision, insofar as it contained observations about casual workers and wages, did not establish that casual workers fall outside the statutory definition of "workman." The court found stronger support in Elumalai v. Management of Simplex Concrete Piles, where the view was expressed that Section 2(s) includes casual workers and that other provisions of the Act confirm that inclusion.

The Labour Court's factual findings (based on evidence, including Ex. M-5, an attendance record) were enumerated and accepted:

  • The 16 persons were employed on daily rate wages;
  • They were employed temporarily because of the Red Hills strike;
  • They received bonus in addition to wages.
On this analysis, the Labour Court concluded that the 16 were "workmen" and that six of them had put in continuous service for one year as defined in Section 25-B.

The management's argument that daily-rate employment precluded continuity was rejected: Section 25-B does not require a person to be in service for all 24 hours of every day, and the court found no authority to support the contention that daily-rate employment automatically prevents a claim of continuous service. The Labour Court's factual finding that six workmen had continuous service for one year was sustained as being evidence-based.

Having accepted that six workmen satisfied Section 25-B, the court held that their termination without compliance with Section 25-F was unlawful. Consequently, the Labour Court's order directing reinstatement and other benefits for those six was upheld.

Holding and Implications

Holding: The writ petition is dismissed. The Labour Court's award directing reinstatement and benefits for the six workmen who had put in continuous service for one year is upheld. Costs were awarded against the petitioner; specifically, costs of the second respondent and an advocate's fee of Rs. 100/- were directed.

Implications:

  • The decision affirms that casual or temporary status, by itself, does not exclude a person from the definition of "workman" under Section 2(s) of the Industrial Disputes Act; such persons may qualify as "workmen" if they satisfy statutory conditions (for example, continuous service under Section 25-B).
  • The court refused to allow the management to advance a new factual contention (closure) in writ proceedings that was not pleaded or supported before the Labour Court; factual disputes of that nature require evidence and proper adjudication at the appropriate forum.
  • This judgment upholds the Labour Court's application of Sections 25-B and 25-F: where continuous service for one year is established, retrenchment without compliance with Section 25-F is procedurally and legally impermissible and calls for reinstatement with benefits.

The opinion does not purport to lay down any broad new legal principle beyond its application of the statute and the cited authorities to the facts of this case; its direct effect is the upholding of the Labour Court award in favour of the six workmen and dismissal of the petition.

    Pilot Pen Co. (India) P. Ltd. v. Presiding Officer, Addl. Labour Court, And Another

    Palaniswamy, J.:— This petition under Article 226 of the Constitution is filed by the Pilot Pen Company (India) Private Ltd. for quashing the award passed by the first respondent Labour Court, Madras in I.D No. 157 of 1967 dated August 12, 1968. The petitioner-management is engaged in the manufacture of fountain pens, ball point pens, screw pencils and fountain pen inks. Its main factory is at Red Hills where fountain pen inks are manufactured. Its subsidiary factory is at Mount Road, where ball point pens and screw pencils are manufactured. In November 1965, there were disputes at the Red Hills factory resulting in a strike. There was consequential stoppage of work. But the management had a considerable amount of orders to be executed. The ink that was manufactured at Red Hills could not be bottled and sealed there. Therefore, the management made arrangement to bottle the ink and pack the bottles at its subsidiary factory at Mount Road. For this purpose, the management engaged 16 persons. The Government of Madras declared the strike as illegal in December 1965, and thereafter the work at Red Hills factory was resumed. But the bottling and packing of ink bottles at the Mount Road Factory continued till December 1966. On December 28, 1966, the petitioner-company terminated the service of 16 workmen, and this gave rise to an industrial dispute. The Government referred the dispute for adjudication to the first respondent.

    2. Before the Labour Court, the Madras Pen and Ink Factory Workers' Union, which sponsored the claim of the workmen, filed a claim statement contending that the 16 workmen were retrenched, that the said retrenchment was mala fide, because the workmen submitted a charter of demands, that the principle of ‘last come first go’ was not followed and that the procedure laid down under Section 25-F of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) was not followed before effecting retrenchment. The management repudiated these contentions and contended that the 16 workmen were merely casual labourers, that after the termination of the strike at the main factory, the services of these workmen were continued to clear off arrears of orders and that after the arrears were cleared, the services of these workmen were found to be superfluous and were hence terminated. It was further contended that the 16 persons were casual labourers and not ‘workmen’ within the meaning of the Act, and were not entitled to claim the benefits of the Act.

    3. The Labour Court found that there were no mala fides on the part of the management in terminating the services of the 16 persons. It was also found that the 16 persons were ‘workmen’ within the meaning of the Act, that out of the 16 persons, 6 had put in continuous service for one year as defined in Section 25-B of the Act, that the termination of the services of these workmen was not in accordance with law and that, therefore, these six workmen were entitled to be reinstated with other benefits. As regards the remaining 10 workmen, the Labour Court found that they were not entitled to any relief as they had not put in continuous service for one year and were, as such, not entitled to be reinstated. It is against the award passed in respect of the six workmen that this petition has been filed by the management. The first contention urged on behalf of the management is that the termination of the services of the 16 persons was effected not by way of retrenchment, but as a result of closure of the business that was undertaken at the Mount Road subsidiary factory as a result of the strike at the main factory. The contention is that inasmuch as what had been effected was only closure, it was not incumbent upon the management to comply with Section 25-F of the Act before terminating the services. The circumstances under which the management had to employ 16 persons are not in controversy. It was as a result of the strike at the main factory that the management had to employ the services of those persons for the purpose of bottling and package at the Mount Road factory. Though the strike that was started in November 1965 ended in December 1965, the services of these 16 persons were continued till December 1966 when the management found that all the arrears of orders had been cleared oft. It is, therefore, contended that what had been done was closure of the business that was started at the Mount Road factory and this cannot be construed to be retrenchment. It is unnecessary to consider the differences between retrenchment and closure having regard to the fact that this contention was not put forward before the Labour Court. The specific stand taken by the management before the Labour Court was that what had been done was retrenchment. That position is made clear by the following allegation contained in paragraph 2 of the counter-affidavit filed on behalf of the management before the Labour Court:

    “After the termination of the strike in the main factory, both the ink sections at the main factory and the factory at Mount Road worked to the full capacity till completion of all the pending orders. When the accumulated orders had been executed the management found the workmen employed at the Mount Road Factory for manufacture of ink as surplus to its requirements and therefore their services were terminated”.

    4. Again in paragraph 3 it is alleged:

    “…the management submits that the 16 persons in the order of reference were engaged for a particular contingency and when that contingency ceased to exist these 16 persons could not be provided with work.”

    5. In the face of these allegations, it is not now open to the management to take up the position that the item of business at the subsidiary factory at Mount Road was closed down and that as a result of such closure, the services of the 16 workmen were terminated. The question whether a particular item of business or department was closed down or not has to be determined upon evidence. It is not known wherefrom the salary of these 16 workmen was paid during the term of employment. It is also not known how the income derived from this bottling and packing of the ink bottles was dealt with, namely, whether it was dealt with as a part of the income of the Mount Road subsidiary factory or as a part of the income of the main factory at Red Hills. It is not open to the management to advance a new fact in this writ proceedings, as it requires evidence. This position, which is now sought to be taken up, is inconsistent with the plea urged before the Labour Court, namely, that the services of the workmen were terminated as they were found to be surplus, In this view, the contention that is now put forward on behalf of the management cannot be countenanced.

    6. The next contention urged on behalf of the petitioner-management is that the 16 persons were casual labourers and cannot be said to be ‘workmen’ within the meaning of the Act and that casual labourers are not entitled to any benefit under the Act. The term ‘workman’ is defined in Section 2(s) of the Act. It provides:

    “‘workman’ means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, and for the purposes of any proceedings under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrechment has led to that dispute, but does not include any such person—

    (i) who is subject to the Army Act, 1950 (46 of 1950) or the Air Force Act, 1950 (45 of 1950) or the Navy (Discipline) Act, 1934 (34 of 1934); or

    (ii) who is employed in the police service or as an officer or other employee of a prison; or

    (iii) who is employed mainly in a managerial or administrative capacity; or

    (iv) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.”

    7. From the language of this definition, there is no room to incorporate into it the idea that only a permanent employee can be construed to be workman. It is not as though the Legislature did not comprehend any necessity to make a provision for a casual workman. After defining ‘workman’ in a general way so as to include not only permanent workmen but also temporary or casual workmen, the Legislature enacted in Section 25-G the right of the workmen to lay-off compensation. In making that provision, casual workmen are expressly excluded from the benefit. Section 25-F lays down the conditions precedent to retrenchment of workmen, There the legislature has taken care to prescribe the qualification for getting the benefit of retrenchment. Any workman who has been in continuous service of not less than one year under an employer can alone claim the benefit of that provision. What is one year of continuous service is defined in Section 25-B. Therefore, there is no room to think that a casual workman cannot be construed to come within the scope of the definition of ‘workman’ as contended on behalf of the petitioner. If a casual workman satisfies the requirement of Section 25-B, then he would be a person in continuous service for one year and would be entitled to the benefits of the Act

    8. Mr. Gopal, appearing for the petitioner-management, was unable to cite any authority to support his contention that a casual workman is not a ‘workman’ within the meaning of the Act. He wanted to derive support from the decision in Workmen of Orient Paper Mills Ltd. v. O.P Mills Ltd. (1), and relied on the following observations at pages 404 and 405:

    “The only other point argued before us in respect of wages by learned counsel was that casual workers should also be paid minimum wages on the same basis as the permanent workers for whom the minimum wages was fixed by the tribunal which is being varied by us by increasing it to a total wage-packet of Rs. 95. It appears that the Tribunal did not accept this demand primarily on the ground that the distinction between casual workers and the permanent workers was recognised by both the parties in the agreement of 1959. It may be noticed that, by the very nature of employment being casual, it can be presumed that a casual worker is on a lower footing and cannot expect the same wages as a permanent employee. Therefore, the decision by the tribunal not to equate the casual workers with the permanent employees cannot be held to be incorrect and must be upheld.”

    9. From the foregoing observations, it cannot be inferred that their Lordships of the Supreme Court intended to lay down that a casual workman is not a ‘workman’ within the meaning of the Act. The above observation should be understood in the context of the facts of that case in which the rights of the parties were regulated by the terms of the agreement. The question whether a casual worker would be a ‘workman’ within the meaning of the Act directly arose for consideration before Ismail, J. in Elumalai v. Management of Simplex Concrete Piles (2). After referring to the terms of Section 2(s) the learned Judge held:

    “Section 2(s) defines ‘workman’ in widest possible terms, including apprentice and Section 25-C, when it used the expression ‘workman’ (other than a Badli workman or a casual worker) clearly shows that casual ‘workman’ is included in the definition of ‘workman’ in Section 2(s) of the Act.”

    10. Mr. Gopal, appearing for the petitioner-company, pointed out that in the aforesaid case, the respondent was not represented, and that therefore, the above observation of the learned Judge cannot be said to be laying down a sound precedent. I am unable to accept this argument. As already pointed out, it is not as though the Legislature had not in its mind a category of workmen such as casual workers. It had in its mind such a category and it has made provision wherever provision was found to be necessary. In defining the word ‘workman’ the Legislature has made no such distinction, thereby clearly indicating that even casual workmen would come within the defintion of ‘workman.’ On an analysis of the evidence, the Labour Court came to the following conclusions:

    (i) The 16 persons were employed on daily rate wages;

    (ii) The 16 workmen were employed as a temporary measure because there was strike by the workmen at the Red Hills Factory;

    (iii) The 16 persons were given bonus apart from wages.

    11. For these reasons, the Labour Court found that the 16 persons were workmen within the meaning of the Act. On an examination of Ex. M-5, the statement of attendance record of 16 workmen, the Labour Court found that six persons had put in continuous servc???e for one year as defined in Sec???on 25-B of the Act it is contended on behalf of the management that by the very nature of the employment it should be held that the management had no control over the 16 employees and that the contract of employment should be deemed to nave come to an end on the close of every day and that therefore, it cannot be said that there was continuity in service. I am unable to accept this argument. Section 25-B does not lay down the requirement that in order to entitle a person to claim the benefit thereunder, he should be in service for all the 24 hours of the day. No authority in support of this contention was also cited. It has not been shown that the Labour Court made any error in coming to the conclusion that those six workmen who were directed to be reinstated, had not put in continuous service for one year. In view of the finding that those six workmen had put in continuous service for one year, which is based on evidence, the Labour Court was right ??? holding that their termination was unjustified as the requirements of Section 25-F, dealing with retrenchment, had not been complied with. The Labour Court was, therefore, right in passing the award of reinstatement so far as these six workmen are concerned. In the result, the writ petition fails and is dismissed with costs of the second respondent. Advocate's fee Rs. 100/-.

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    Pilot Pen Co. (India) P. Ltd. v. Presiding Officer, Addl. Labour Court, And Another
    (Nov 19, 1970)