Case: Tatanagar Foundry Company Vs. Their Workmen

stated that the appellant had not costed any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay off its workmen, has also been rejected by the Tribunal. 10. We Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified. The Tribunals view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided. It is this part of its finding that is seriously disputed before us by the appellant. 11. Under section 2(kkk), "lay-off" means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. As we have already seen, there is no doubt that raw materials were not available to the appellant at the relevant time and so the layoff which is the subject-matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid off for compensation, and it is common ground that compensation equal to 50% of the total of the basic wages and dearness allowance as therein prescribed, has been paid by the appellant to the respondents. The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified. If not, to what relief were the respondents entitled? In other words, the reference shows that it was only 4 the Tribunal came to the conclusion that the lay-off was not justified that the question of considering what additional compensation should be paid to the respondents could arise. If the lay-off is justified and it satisfies the requirements of the definition under S. 2 (kkk), the only relief to which the workmen laid of are entitled is the statutory rebel prescribed by S. 25C. There is no doubt or dispute about this position. 12. It is also not in dispute that if the lay-off is mala fide in the sense that the employer has deliberately and maliciously brought about a situation where lay-off became necessary, then it would not be a lay-off which is justified under S. (kkk) and the relief provided to the laid of workmen under section 25C would not be the only relief to which they are entitled, Mala fides of the employer in declaring a lay-off really mean that no lay off, as contemplated by the definition, has in law taken place and so, a finding as to mala fides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of S. 2 (kkk) and as such, .S. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed. If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would not be a lay-off as contemplated by S. 2(kkk). 13. But when dealing with a lay-off like the one with which we are concerned in the present appeal, it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay-off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless mala fides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of managements of the employer and investigate whether a more prudent management could have avoided the situation which led to a lay-off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself. The Tribunal has found that the appellant was in financial difficulties at the relevant time; it has found that the appellant was not actuated by any mala fide intentions: it has come to the conclusion that the lay-off was not the result of any ulterior motive, and yet it has finally come to the conclusion that it the affairs of the appellant had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay-off could have been avoided. Apart from the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better management could have avoided the crisis. The appellant is no doubt, expected to manage affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the fore-thought displayed by it in anticipating and avoiding the difficulties. That is why we think in embarking upon in enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides as we have just, indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid the retrenchment compensation due to them.

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

Explanation:
1[ds]In other words, the reference shows that it was only 4 the Tribunal came to the conclusion that the lay-off was not justified that the question of considering what additional compensation should be paid to the respondents could arise. If the lay-off is justified and it satisfies the requirements of the definition under S. 2 (kkk), the only relief to which the workmen laid of are entitled is the statutory rebel prescribed by S. 25C. There is no doubt or dispute about this position12. It is also not in dispute that if the lay-off is mala fide in the sense that the employer has deliberately and maliciously brought about a situation where lay-off became necessary, then it would not be a lay-off which is justified under S. (kkk) and the relief provided to the laid of workmen under section 25C would not be the only relief to which they are entitled, Mala fides of the employer in declaring a lay-off really mean that no lay off, as contemplated by the definition, has in law taken place and so, a finding as to mala fides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of S. 2 (kkk) and as such, .S. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed. If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would not be a lay-off as contemplated by S. 2(kkk)13. But when dealing with a lay-off like the one with which we are concerned in the present appeal, it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay-off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless mala fides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of managements of the employer and investigate whether a more prudent management could have avoided the situation which led to a lay-off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself. The Tribunal has found that the appellant was in financial difficulties at the relevant time; it has found that the appellant was not actuated by any mala fide intentions: it has come to the conclusion that the lay-off was not the result of any ulterior motive, and yet it has finally come to the conclusion that it the affairs of the appellant had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay-off could have been avoided. Apart from the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better management could have avoided the crisis. The appellant is no doubt, expected to manage affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the fore-thought displayed by it in anticipating and avoiding the difficulties. That is why we think in embarking upon in enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides as we have just, indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid the retrenchment compensation due to them.