Letters Patent Appeal No.578 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Letters Patent Appeal No.578 of 2009 Date of decision: 31.07.2009 *** Panipat Cooperative Sugar Mills Ltd., Panipat ...Appellant Versus Presiding Officer and another ...Respondents CORAM: HON'BLE MR. JUSTICE J.S.KHEHAR. HON'BLE MR. JUSTICE S.D.ANAND. Present: Mr. Kulvir Narwal, Advocate for the appellant ***** J.S.KHEHAR, J.(ORAL) The solitary issue pressed by the learned counsel for the appellant while canvassing the claim of the management in the instant appeal was that the calculation of 240 days at the hands of the Presiding Officer, Labour Court, Panipat, as also, at the hands of this Court while disposing of the Civil Writ Petition No.10140 of 2006 so as to determine the claim of the respondent-workman under Section 25-F of the Industrial Disputes Act, 1947 was clearly unjustified. It is vehement contention of the learned counsel for the appellant that in making the aforesaid calculation, it was open to this Court, in view of the judicial precedents relied upon, to take into consideration only the actual days on which the workman rendered service, and besides the aforesaid, such off days/holidays for which the Letters Patent Appeal No.578 of 2009 -2- respondent-workman was paid. It is the vehement contention of the learned counsel for the appellant, that if calculation in terms of Section 25-F of the Industrial Disputes Act, 1947 is made on the basis of the aforesaid criterion it would be evident that the respondent-workman did not render service for 240 days in the 12 calendar months preceding his retrenchment. During the course of hearing, learned counsel for the appellant reiterated the submission advanced by him before the learned Single Judge which has been duly noticed in the impugned judgment dated 18.2.2009. Relevant extract whereof is being reproduced hereunder:- “He further relied upon the proviso to Rule 23 (4) of the Punjab Minimum Wages Rules, 1950, which has been relied upon by the Division Bench of this Court to state that where the minimum daily rate of wages of the employee as notified under the Minimum Wages Act, has been worked out by dividing the minimum monthly rate of wages by twenty six or where the actual daily rate of wages of the employee has been worked out by dividing the monthly rate of wages by twenty six and such actual daily rate of wages is not less than the notified minimum daily rate of wages of the employee, now ages for the rest day shall be payable. He on the basis contents that since the minimum daily rate of wages was based on this principle, the workman was not entitled to payment of rest day, and therefore, rest day cannot be termed as paid rest day which could be included while computing 240 days under Section 25-B of the Industrial Disputes Act.” It is not a matter of dispute, and infact on being asked the Letters Patent Appeal No.578 of 2009 -3- learned counsel for the appellant acknowledged that the appellant- management strictly follows the provisions of the Minimum Wages Act, 1948, as also, the the Minimum Wages (Central) Rules, 1950. While advancing his contention learned counsel for the appellant placed reliance on Rule 23 of the Minimum Wages (Central) Rules, 1950 (hereinafter referred to as “the Rules”). Before we deal with the Rule 23 of the Rules relied upon by the learned counsel for the appellant, it is imperative for us to take into consideration Section 13 of the Minimum Wages Act, 1948 (hereinafter referred to as “the Act”). Section 13 of the Act is, accordingly, being extracted hereunder:- “13. Fixing hours for normal working day, etc.- (1) In regard to any scheduled employment minimum rates of wages in respect or which have been fixed under this Act, the appropriate Government may- (a) fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals; (b) provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest; (c ) provide for payment for work on a day of rest at a rate not less than the overtime rate. (2) The provisions of sub-section (1) shall, in relation to the following classes of employees, apply only to such extent and subject to such conditions as may be prescribed:- (a) employees engaged on urgent work, or in any emergency which could not have been foreseen or prevented; (b) employees engaged in work in the nature of preparatory of complementary work which must necessarily be carried on outside the limits laid down for the general working in the employment concerned; (c ) employees whose employment is essentially intermittent; Letters Patent Appeal No.578 of 2009 -4- (d) employees engaged in any work which for technical reasons has to be completed before the duty is over; (e) employees engaged in a work which could not be carried on except at times dependent on irregular action of natural forces. (3) For the purposes of clause (c) of sub-section (2), employment of an employee is essentially intermittent when it is declared to be so by the appropriate Government on the ground that the daily hours of duty of the employee, or if there be no daily hours of duty as such for the employee, the hours of duty, normally include periods of inaction during which the employee may be on duty but is not called upon to display either physical activity or sustained attention”. A perusal of the Section 13(1) (b) of the Act reveals that every employee has to be provided a day of rest in every period of seven working days, and further that, the employee would also be entitled to payment of remuneration in respect of such day(s) of rest. It is in the background of the mandate of Section 13 of the Act (extracted herein above) that we shall examine Rule 23 of the Rules relied upon by the learned counsel for the appellant. Rule 23 of the Rules is being extracted hereunder:- “23. Weekly day of rest:-(1) Subject to the provisions of this rule, an employee in a scheduled employment in respect of which minimum rates of wages have been fixed under the Act, shall be allowed a day of rest every week (hereinafter referred to as “the rest day”) which shall ordinarily be Sunday, but the employer may fix any other day of the week as the rest day for any employee or class of employees in that scheduled employment: Provided that the employee has worked in the scheduled employment under the same employer for a continuous period of not less than six days: Provided further that the employee shall be informed of the day fixed as the rest day and of any subsequent change in the rest day before the change is effected, by display of a notice to that effect in the place of employment at the place specified by the Inspector in this behalf. Explanation : For the purpose of computation of the continuous Letters Patent Appeal No.578 of 2009 -5- period of not less than six days specified in the first proviso to this sub-rule – (a) any day on which an employee is required to attend for work but is given only an allowance for attendance and is not provided with work, (b) any day on which an employee is laid off on payment of compensation under the Industrial Disputes Act, 1947, and ( c) any leave or holiday, with or without pay, granted by the employer to an employee in the period of six days immediately preceding the rest day, shall be deemed to be days on which the employee has worked. (2) Any such employee shall not be required or allowed to work in a scheduled employment on the rest day unless he has or will have a substituted rest day for a whole day on one of the five days immediately before or after the rest day: Provided that no substitution shall be made which will result in the employee working for more than ten days consecutively without a rest day for a whole day. (3) Where in accordance with the foregoing provisions of this rule, any employee works on a rest day and has been given a substituted rest day on any one of the five days before or after the rest day, the rest day shall, for the purpose of calculating the weekly hours of work, be included in the week in which the substituted rest day occurs. (4) An employee shall be granted for rest day wages calculated at the rate applicable to the next preceding day and in case he works on the rest day and has been given a substituted rest day, he shall be paid wages for the rest day on which he worked, at the overtime rate and wages for the substituted rest day at the rate applicable to the next preceding day: Provided that where the minimum daily rate of wages of the employee as notified under the Act has been worked out by dividing the minimum monthly rate of wages by twenty-six, or where the actual daily rate of wages of the employee has been worked out by dividing the monthly rate of wages by twenty- Letters Patent Appeal No.578 of 2009 -6- six and such actual daily rate of wages is not less than the notified minimum daily rate of wages of the employee, no wages for the rest day shall be payable, and in case the employee works on the rest day and has been given a substituted rest day, he shall be paid, only for the rest day on which he worked, an amount equal to the wages payable to him at the overtime rate; and if any dispute arises whether the daily rate of wages has been worked out a aforesaid, the Chief Labour Commissioner may, on application made to him in this behalf, decide the same, after giving an opportunity to the parties concerned to make written representations: Provided further that in case of an employee governed by a piece-rate scheme, the wages for the rest day, or, as the case may be, the rest day, and the substituted rest day, shall be such as the Central Government may, by notification in the Gazette of India, prescribe, having regard to the minimum rate of wages fixed under the Act, in respect of the Scheduled employment. Explanation : In this sub-rule ‘next preceding day’ means the last day on which the employee has worked, which precedes the rest day or the substituted rest day, as the case may be; and where the substituted rest day falls on a day immediately after the rest day, the next preceding day means the last day on which the employee has worked, which precedes the rest day. (5) The provisions of this rule shall apply to the employees in scheduled employments other than agricultural employment. (6) The provisions of this rule shall not operate to the prejudice of more favourable terms, if any, to which an employee may be entitled under any other law or under the terms of any award, agreement or contract of service, and in such a case, the employee shall be entitled only to more favourable terms aforesaid. Explanation: For the purposes of this rule, ‘week’ shall mean a period of seven days beginning at midnight on Saturday night.” (emphasis is our's) Based on Sub Rule (4) of Rule 13 of the Rules and specially the first proviso thereunder, it is the vehement contention of the learned counsel for the appellant that while calculating the daily wage payable to the respondent-workman, the monthly wage was divided by 26. He further Letters Patent Appeal No.578 of 2009 -7- states that having paid the wages on daily rate basis calculated as depicted herein above, the respondent-workman was not paid wages for the rest days under the provisions of Sub Rule (4) of Rule 23 of the Rules. Since no wage was paid to the respondent workman for any rest day in terms of the first proviso under Rule 23(4) of the Rules, it is submitted that the respondent workman can not be permitted to count the rest days while calculating whether or not he had worked for 240 days in the 12 calendar months preceding the date of his retrenchment. The submission advanced by the learned counsel for the appellant is perse unacceptable in law. The Rules relied upon by the appellant have to be in conformity with the Minimum Wages Act, 1948 (under which the aforesaid Rules have been drawn ). Section 13 of the Act mandates for every rest day an employee will be entitled to the payment of wages. So as to read the Rule 23 (4) of the Rules in conformity with the Section 13 of the Act, it is imperative to conclude that the respondent- workman was actually paid wages for the rest days. In view of the above we find no merit in the contention of the learned counsel for the appellant. The instant contention can be examined from another angle as well. It is not a matter of dispute that while calculating the daily wages payable to the respondent-workman, the appellant-management divided the monthly wages by 26 days. It is therefore apparent, that while paying wages for 26 days, the appellant-management actually paid the workman wages for 30 days, and thereby, paid him for the rest days envisaged under the provisions of the aforestated Act/Rules. Although actual payment was not made for the rest days to the workman in terms of the proviso under Rule 23(4) of the Rules, factually the aforesaid wages were paid as his daily wage was calculated by Letters Patent Appeal No.578 of 2009 -8- dividing the monthly wage by 26. Thus viewed, the payment for rest days due to the respondent workman was included in the wages paid to him for working days. The proviso (relied upon by the learned counsel for the appellant) under Rule 23(4) of the Rules, would be inapplicable if daily wage is calculated by dividing the monthly wage by 30, in that eventuality even under the said proviso the appellant-management would have had to pay wages to the respondent-workman for rest days. Therefore, for every 26 working days wages shown to have been paid to the workman, it is imperative to hold that he was actually paid for 30 days. Accordingly, for calculating the number of days the respondent workman had rendered service, so as to calculate whether he had worked for 240 (or more) working days in the 12 calendar months preceding his retrenchment, under Section 25-F of the Industrial Disputes Act, 1947, he should be actually deemed to have discharged duties for 30 days although he had actually been paid for 26 working days i.e. for 4 rest days arising every month. If the calculation is made in the aforesaid manner, it is apparent that the respondent-workman would be found to have worked for more than 240 days in the 12 calendar months preceding his retrenchment. Thus, we find no infirmity, in the determination rendered by the learned Single Judge. Therefore, there is no infirmity also in the eventual conclusion, that the respondent-workman despite having worked for more than 240 days in the 12 calendar months preceding his retrenchment, had not been paid retrenchment compensation under Section 25-F of the Industrial Disputes Act, 1947. It would be unfair to the learned counsel for the appellant, if we do not deal with the judgment rendered by the Apex Court in H.U.D.A. Vs. Jagmal Singh Civil Appeal No.5361 of 2005 decided on 13.7.2006 (copy Letters Patent Appeal No.578 of 2009 -9- whereof was placed on record in the instant appeal as Annexure P-8), on which reliance had been placed during the course of hearing. The issue adjudicated upon by the learned Single Judge as also by us herein, is whether or not the respondent-workman must be deemed to have been paid for rest days under the provisions of the Minimum Wages Act, 1948 (as well the as Rules framed thereunder). Since neither the aforestated Act or Rules were subject matter of consideration in the judgment relied upon by the learned counsel for the appellant, we are satisfied that the same cannot be relied upon to record a finding one way or the other in the present controversy. Besides the first issue noticed herein above, learned counsel for the appellant has also canvassed, that it was incorrect for the learned Single Judge to award 40% back wages to the respondent-workman as the respondent-workman had not expressly mentioned in the pleadings before the Labour Court, that he was not gainfully employed. As such, it is submitted that the respondent-workman was not entitled to payment of any back wages. Although the issue noticed in the foregoing paragraph is inconsequential after our conclusion that the retrenchment of the respondent workman was not in consonance of the provisions of Section 25-F of the Industrial Disputes Act, 1947 still we have also considered the same. Although it is true that the respondent-workman had not made any such averment in the pleadings before the Labour Court, yet the respondent workman had filed an affidavit before this Court asserting that he had not been gainfully employed after his retrenchment, so as to enable him to seek the benefits available to him under Section 17-B of the Industrial Disputes Letters Patent Appeal No.578 of 2009 -10- Act, 1947. He had also stated in the said affidavit that he had sustained himself, after his retrenchment from the employment of the appellant- management, by doing labour work. Undisputedly the respondent- workman was a labourer when he was engaged by the appellant- management. Even after his retrenchment he has acknowledged to have sustained himself by doing labour work. In view of the facts depicted in the aforesaid affidavit, which were not controverted at the hands of the appellant-management by filing any counter-affidavit, we are satisfied that the determination rendered by the learned Single Judge, in awarding 40% back wages to the respondent-workman, were fully justified. Dismissed. (J.S.KHEHAR) JUDGE July 31, 2009 (S.D.ANAND) Pka JUDGE