Case: Bareilly Holdings Ltd Vs. Their Workmen

to him under the conditions of his service which are similar to the benefits conferred by the Act".The relevant part of Regulation 97 is as follows :"Discontinuance or reduction of benefit. An employer may discontinue or reduce the benefits payable to his employees under conditions of their service, which are similar to the benefits conferred by the Act to the extent specified below, namely :(a) from the date of commencement of the first benefit period following the appointed day for his factory or establishment -(i) sick leave on half-pay to the full extent;(ii) such proportion of any combined general purposes and sick leave on half-pay as may be assigned as sick leave but in any case not exceeding 50 per cent of such combined leave;(b) .........................................................Provided that where an employee avails himself of any leave from the employer for sickness, maternity or temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he may be entitled under the Act for the corresponding period."7. The general purpose and effect of S. 72 is to deny to the employers the right or power to reduce or discontinue the benefit payable to the workmen under their conditions of service on the ground that the benefits available under the conditions of service and under the E.S.I. Act being similar, the workmen would not be entitled to a double benefit. Section 72 provides in terms that the mere circumstances that an employer is liable to make a contribution under the E.S.I. Act will not entitle him, directly or indirectly, to reduce the wages of an employee or, in so far as the Regulations permits, discontinue or reduce the benefit payable to him under the conditions of his service even if those benefits are similar to the benefits conferred by the E.S.I. Act. The case of the appellant before the Industrial Tribunal was that it was making a contribution to the E.S.I. Corporation for the benefit of its employees and if any individual employee chose not to avail of the benefits due to him from the Corporation on account of the sickness benefit, it is he who ought to suffer and there would be no justification for obliging the employer to spend for his sickness benefit twice over. It is precisely this type of argument and attitude that the Legislature anticipated and guarded against by incorporating the particular provisions in S. 72. The purpose of that provision is evidently to discourage employers from using the benefit provided under the E.S.I. Act as an excuse or justification for reducing or discontinuing the benefits available to the workmen under their conditions of service on the ground of similarly between the two types of benefits.8. That leads to the question as to whether Regulation 97 can justify the deduction made by the appellant. Regulation 97 provides that an employer may discontinue or reduce the benefits payable to his employees under the conditions of their service which are similar to the benefits conferred by the E.S.I. Act but only to the extent specified in cls. (a) and (b) of the Regulation. We are not concerned with cl. (b) and sub-cls. (i) and (ii) of cl. (a) have no application in the instant case.9. The appellant relies strongly on the proviso to Regulation 97 under which, where an employee avails himself of any leave from the employer for sickness, the employer shall be entitled to deduct from his leave salary the amount of benefit to which he may be entitled under the Act for the corresponding period. The case of the appellant is that it is enough for justifying the deduction from wages due to the workmen for sick leave that the employee is covered by the E.S.I. Act or the E.S.I. Scheme. It is not possible to accept this submission. In the first place S.46 of the E.S.I. Act would show that employees who are covered by the E.S.I. Act are entitled to certain benefits subject to the provisions of the E.S.I. Act. It is, therefore, not as if the workmen are entitled to the benefits absolutely and without compliance with the conditions laid down by the Act or the Regulations. Secondly, the proviso to Regulation 97 days says that the employer shall be entitled to deduct from the leave salary of the employee, "the amount of benefit" to which he may be entitled under the E.S.I. Act for the corresponding period of his sickness. A workman does not become entitled to the "amount" payable to him by way of sickness benefit unless, in the first instance, he chooses to avail himself of the sickness benefit. That benefit cannot be forced on him. This would show that the employers right to make a deduction from the employees sick leave wages can only be exercised in respect of those days of sickness leave for which the workman has actually availed of the sickness benefit. Benefits which are available under the E.S.I. Act are not intended as substitutes for benefits to which the workmen are entitled under the conditions of their service. As states earlier, a workmen becomes entitled to sickness benefit only if he is qualified for it and he gets a cash benefit only if he avails himself of the sickness benefit. Thus, it is only when a workman, in fact obtains or receives a cash benefit that the employer can exercise his right to make a deduction from wages due to him by way of leave salary.10. The decision of this Court in Hindustan Times Ltd. v. Their Workmen, [1963-I L.L.J. 108]; (1964) 1 S.C.R. 234, is not directly in point but it can be cited in support of our reasoning to the extent which it holds that in providing for periodical payments to an insured worker in case of sickness the Legislature did not intend to substitute any of those benefits for the workmens right to get leave on full pay on the grounds of sickness.11.

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

Explanation:
0[ds]5. Before dealing with this question, it may be mentioned that the appellant has no objection to paying full wages for two days of sick leave to the workmen and in fact, it has been paying full wages for two days out of 15 days sick leave due to the workmen. The reason for this course seems to be that the workmen do not get cash benefit for the first two days of the waiting period of sickness by reason of the provisions of S.49 of the E.S.I. Act. The dispute in this appeal is, therefore, confined to a period of 13 days of sick leave only, for which the workmen are being paid half wages by the appellant.t leads to the question as to whether Regulation 97 can justify the deduction made by the appellant. Regulation 97 provides that an employer may discontinue or reduce the benefits payable to his employees under the conditions of their service which are similar to the benefits conferred by the E.S.I. Act but only to the extent specified in cls. (a) and (b) of the Regulation.We are not concerned with cl. (b) and(i) and (ii) of cl. (a) have no application in the instant case.The appellant relies strongly on the proviso to Regulation 97 under which, where an employee avails himself of any leave from the employer for sickness, the employer shall be entitled to deduct from his leave salary the amount of benefit to which he may be entitled under the Act for the corresponding period. The case of the appellant is that it is enough for justifying the deduction from wages due to the workmen for sick leave that the employee is covered by the E.S.I. Act or the E.S.I. Scheme. It is not possible to accept this submission. In the first place S.46 of the E.S.I. Act would show that employees who are covered by the E.S.I. Act are entitled to certain benefits subject to the provisions of the E.S.I. Act. It is, therefore, not as if the workmen are entitled to the benefits absolutely and without compliance with the conditions laid down by the Act or the Regulations. Secondly, the proviso to Regulation 97 days says that the employer shall be entitled to deduct from the leave salary of the employee, "the amount of benefit" to which he may be entitled under the E.S.I. Act for the corresponding period of his sickness. A workman does not become entitled to the "amount" payable to him by way of sickness benefit unless, in the first instance, he chooses to avail himself of the sickness benefit. That benefit cannot be forced on him. This would show that the employers right to make a deduction from the employees sick leave wages can only be exercised in respect of those days of sickness leave for which the workman has actually availed of the sickness benefit. Benefits which are available under the E.S.I. Act are not intended as substitutes for benefits to which the workmen are entitled under the conditions of their service. As states earlier, a workmen becomes entitled to sickness benefit only if he is qualified for it and he gets a cash benefit only if he avails himself of the sickness benefit. Thus, it is only when a workman, in fact obtains or receives a cash benefit that the employer can exercise his right to make a deduction from wages due to him by way of leave salary.The decision of this Court in Hindustan Times Ltd. v. Their Workmen,L.L.J. 108]; (1964) 1 S.C.R. 234, is not directly in point but it can be cited in support of our reasoning to the extent which it holds that in providing for periodical payments to an insured worker in case of sickness the Legislature did not intend to substitute any of those benefits for the workmens right to get leave on full pay on the grounds of sickness.