Case: The Brahmachari Research Institute, Calcutta-4 Vs. Their Workmen

properly so called.5. This brings us to the provisions of the Act with respect to retrenchment. "Retrenchment" is defined under S. 2 (oo) and means"the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill-health".If this definition is compared with the provisions of the Award, it will be found that the Award provides payment not only for retrenchment as such but also for other termination of service which is specifically excepted from the definition of "retrenchment". Clauses (a) and (B) of S. 2 (oo) are provided in the Award by the words "cases of resignation with the consent of the management". Similarly, clause (c) of S. 2 (oo) is provided for by the words "termination of service by the company for any reason other than misconduct". It is, therefore, obvious that the Award provides not only for payment on retrenchment but also for payment on termination of service for any reason other than misconduct and on retirement. It is thus a composite scheme; and merely because the payment is called gratuity even where it is payable on account of retrenchment, it cannot be anything other than compensation so far as the part of the Award relating to retrenchment is concerned.6. Chapter VA, containing Ss. 25F and 25J, with which we are concerned, was added in the Act by Act 43 of 1953 with effect from 24-10-1953. The reason for this addition was that though there were schemes in force in many concerns for payment to workmen on retrenchment, there were many other concerns where no such schemes were in force and the workmen got nothing on retrenchment unless there was an award by a Tribunal. Besides, where schemes were in force or awards were made rates of payment on retrenchment varied. The legislature, therefore, thought it fit by enacting Chapter VA to provide by S. 25F a uniform minimum payment to workmen on retrenchment. This payment was called compensation. Section 25F provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched without payment of compensation which shall be equivalent to fifteen days average pay for every completed year of service or any part thereof in excess of six months. Then comes S. 25J, sub-s. (1) whereof provides that the provisions of Chapter VA shall have effect notwithstanding anything inconsistent therewith contained in any other law including standing orders. There is, however, a proviso to sub-s. (1), which says that nothing contained in the Act shall have effect to derogate from any right which a workman has under any award for the time being in operation or any contract with the employer.This clearly means that if by any award or contract a workman is entitled to something more as retrenchment compensation than is provided by S. 25F, the workman will be entitled to get that and the provisions of S. 25F will not derogate from that right of the workman, i.e., will not reduce the compensation provided under the award or contract to the level provided under S. 25F.It is obvious that it was not the intention of the legislature that a workman on retrenchment should get compensation twice, i.e., once under the Act and once under the scheme in force providing for retrenchment compensation, by whatever name the payment might have been called. We cannot agree with the Appellate Tribunal that the payment of gratuity in the event of retrenchment has nothing to do with the compensation payable to a workman under S. 25F of the Act. The Appellate Tribunal seems to have been carried away by the word "gratuity" used in the Award and it seems to think that gratuity on retrenchment is something different from compensation on retrenchment. We are of opinion that this is not correct.Whether it is called "gratuity" or "compensation", it is in substance a payment to the workman on account of retrenchment; and if a scheme like the present specifically provides payment for retrenchment as defined in S. 2(oo), we see no justification for compelling that payment twice over, once under S. 25F and again under the scheme in force in the concern. The matter would be different if the scheme in force in any concern or any award provides gratuity which is different in nature from the retrenchment compensation under S. 25F.We also cannot agree with the Appellate Tribunal that this gratuity under the Award in this case is not a retrenchment benefit. We have already analysed the Award above and shown that it deals with three contingencies, and one of them is payment due on retrenchment. On the terms, therefore, of the Award in this case it must be held that gratuity provided therein on retrenchment is nothing more nor less than retrenchment compensation provided under S. 25F of the Act, and the workmen are only entitled to one or the other, whichever is more advantageous to them in view of S. 25J. In the circumstances we are of opinion that the Industrial Tribunal was right in holding that the scheme of the Award in this case providing for gratuity on retrenchment was exactly the same as compensation provided under S. 25F, and as the provisions of S. 25F are better than the provisions of the Award in respect of retrenchment the workmen would be entitled to compensation provided under S. 25F only, and not both under that section and under the Award. The appellant has already paid the compensation provided under S. 25F; the workmen therefore are not entitled to anything more under the Award.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]4. It will be seen that the Award is a composite scheme providing for what is termed gratuity therein under three conditions, namely, (I) where there is retrenchment, (ii) where there is termination of service for any reason other than misconduct, and (iii) where there is resignation with the consent of the management.Now, under this Award, it is obvious that this payment on retrenchment though called gratuity is really nothing more nor less than compensation on account of retrenchment. Further it is obvious from the terms of the Award that a retrenched workman could claim gratuity under the Award only on account of retrenchment and could not claim it under the other two conditions therein. In other words, on a fair and reasonable construction of the Award, what the retrenched workman got is only compensation for retrenchment and not any amount by way of gratuity properly sois, therefore, obvious that the Award provides not only for payment on retrenchment but also for payment on termination of service for any reason other than misconduct and on retirement. It is thus a composite scheme; and merely because the payment is called gratuity even where it is payable on account of retrenchment, it cannot be anything other than compensation so far as the part of the Award relating to retrenchment isclearly means that if by any award or contract a workman is entitled to something more as retrenchment compensation than is provided by S. 25F, the workman will be entitled to get that and the provisions of S. 25F will not derogate from that right of the workman, i.e., will not reduce the compensation provided under the award or contract to the level provided under S. 25F.It is obvious that it was not the intention of the legislature that a workman on retrenchment should get compensation twice, i.e., once under the Act and once under the scheme in force providing for retrenchment compensation, by whatever name the payment might have been called. We cannot agree with the Appellate Tribunal that the payment of gratuity in the event of retrenchment has nothing to do with the compensation payable to a workman under S. 25F of the Act. The Appellate Tribunal seems to have been carried away by the word "gratuity" used in the Award and it seems to think that gratuity on retrenchment is something different from compensation on retrenchment. We are of opinion that this is not correct.Whether it is called "gratuity" or "compensation", it is in substance a payment to the workman on account of retrenchment; and if a scheme like the present specifically provides payment for retrenchment as defined in S. 2(oo), we see no justification for compelling that payment twice over, once under S. 25F and again under the scheme in force in the concern. The matter would be different if the scheme in force in any concern or any award provides gratuity which is different in nature from the retrenchment compensation under S. 25F.We also cannot agree with the Appellate Tribunal that this gratuity under the Award in this case is not a retrenchment benefit. We have already analysed the Award above and shown that it deals with three contingencies, and one of them is payment due on retrenchment. On the terms, therefore, of the Award in this case it must be held that gratuity provided therein on retrenchment is nothing more nor less than retrenchment compensation provided under S. 25F of the Act, and the workmen are only entitled to one or the other, whichever is more advantageous to them in view of S. 25J. In the circumstances we are of opinion that the Industrial Tribunal was right in holding that the scheme of the Award in this case providing for gratuity on retrenchment was exactly the same as compensation provided under S. 25F, and as the provisions of S. 25F are better than the provisions of the Award in respect of retrenchment the workmen would be entitled to compensation provided under S. 25F only, and not both under that section and under the Award. The appellant has already paid the compensation provided under S. 25F; the workmen therefore are not entitled to anything more under the Award.