Case: The Bagalkot Cement Co. Ltd Vs. R. K. Pathan &amp; Ors

1. This appeal by special leave raises a short question about the scope and effect of Cl. 5 in the Schedule to the Industrial Employment (Standing Orders) Act. 1946 (20 of 1946) (hereinafter called the Act). That question arises in this way. The appellant Bagalkot Cement Co. Ltd. is a Limited C Company registered under the Indian Companies Act, 1913 it carries on the business Or manufacturing cement and for that purpose, it owns a factory as well as a limestone Quarry at Bagalkot in the State of Mysore. As required by S. 3 of the Act, the appellant submitted draft Standing Orders on the 3rd Marsh 1958 to the Certifying Officer and the Regional Labour Commissioner (Central), Madras, in order that they should be certified. The Certifying Officer considered to draft submitted by the appellant, heard the appellant and its employees, the respondents and passed an order of certification on the 16th June, 1959. While considering the draft for the purpose of certification, the Certifying Officer, however, made certain amendments in, and additions to, the said draft. Amongst the additions made, clause (7) in paragraph 11 was one and it is with this addition made by the Certifying Officer that we are concerned in the present appeal.2. Paragraph 11 of the draft Standing Orders submitted by the appellant dealt with the question of leave. Paragraph 11(1) of the draft provided that holidays with pay will be allowed as provided for inthe Factories Act, 1948, and other holidays in accordance with law and contract. Clauses (2) to (6) dealt with allied matters. In the Standing Orders as they were finally certified, cl. (1) of paragraph it was slightly changed and it provided that holidays will pay will be allowed as provided for in the Mines Act. No grievance is made of this alteration Clause (7) has been added to paragraph 1l. It reads thusThe workmen shall be allowed during the course of a year :(a) Ten festival holidays with pay for the celebration of important festivals (which will be fixed before the commencement of every calendar year in consultation with the workmen) including the Republic Day (26th January) and the Independence Day (15th August) and/or any other paid holidays as may be declared and notified by the Government from time. Those workmen that are required to work on festivals and National Holidays shall be given an equal number of compensation holidays on day convenient to the company,(b) Fifteen days casual leave with wages. This will include all kinds of leave due to sickness or any other use.(c) Casual leave will not be allowed for more than 3 days at a time except in the case of sickness and emergencies at the discretion of the company.(d) Wages shall be allowed for those days remaining unavailed by the workers at the end of the year.(e) Fourteen days annual leave to all classes of workers who have put in 265 attendances in a year as defined in the Mines Act. This includes statutory leave.All leave should be applied for only in the prescribed form. The workmen after filling the particulars of the leave required by them shall hand over the same to the head of the section in which they areappellant apparently contended before the Certifying Officer that it was outside his jurisdiction to deal with the topics covered by clause (7) which he wanted to add but its objection was overruled.3. Against the order passed by the Certifying Officer Certifying the Standing Orders with the additions and amendments made by him, the appellant preferred an appeal under S. 6 of the Act to the appellate authority viz. the Chief Labour Commissioner (Central, New Delhi, on the 5th July, 1959. The appellate authority, in substance, agreed with the view taken by the Certifying Officer and retained the addition made by him by the insertion of clause (7) to paragraph 11. He, however, made slight modifications by directing that in clause (a) there will be seven festival holidays instead of ten festival holidays and in clause (b) there will be ten days, casual leave instead of fifteen days. Clause (d) was amended by the appellate authority by substituting a new clause in its place. The substituted clause reads thusleave will not be allowed to be accumulated.. Unavailed casual leave shall lapse at the close of the calenderin regard to cl. (e), the appellate authority held that the said clause amounted to a repetition of statutory provision. Therefore, the said clause was amended to read thusleave with wages will be allowed as per provisions of the Minesappellate authority made certain other amendments in the Standing Orders as they were certified by the Certifying Officer and ultimately, the Standing Orders were certified with the modifications and alterations suggested by the order of the appellate authority. The order of the appellate authority was passed on October 15,1959.4. Against this order the appellant applied for special leave to this Court and special leave was granted to it on the 1st February, 1960.

Court's reasoning:
10. Besides, the first three clauses dealing with the conditions, the procedure and the authority would apply both to leave and holidays and it is not easy to appreciate what conditions could be prescribed by the standing orders for the purpose of holidays. No doubt Mr. Narayanaswami suggested that the conditions in the context of holidays may mean conditions as to holidays with pay, or without pay or with half pay and that is what is contemplated by the first clause in relation to holidays. Theoretically, it may be conceivable that the word "conditions" may have that meaning in respect of holidays; but it seems to us that it would serve no useful purpose merely to provide for such conditions and to prescribe the procedure to be adopted in applying for leave and holidays unless the quantum of leave and the quantum of holidays are also intended to be prescribed by the standing orders. On the broad construction of Cl. 5, it becomes a self-sufficient and reasonable provision. The standing orders will provide for the leave to which the employees are entitled and will prescribe the number of holidays which they will be able to enjoy. Having provided for the quantum of leave and holidays, the standing orders will also provide for the conditions in respect of them, for the procedure in applying for them and for the authority which may grant them. It is true that it is not easy to understand why an application has to be made for holidays, but It may be that if-there are sectional holidays, employees belonging to a particular section entitled to them may have to apply for them. Therefore, in our opinion, it cannot be said that the authorities below have adopted an unreasonable construction of Cl. 5 in the Schedule when they held that they were entitled to make the additional provisions in respect of leave and holidays which they have purported to make by adding Cl. 7 in paragraph 11 of the standing orders.11. In this connection, reference may be made to the Model Standing Orders framed by the Central Government in 1946. Clause 9of the Model Orders provides that holiday with pay will be allowed as provides for in Chapter VI ofthe Factories Act, 1948, and other holidays in accordance with law, contract, custom and usage. In fact, it is significant that paragraph 11(1) of the draft submitted by the appellant has also provided that holidays with pay will be allowed as provided for in the Factories Act and other holidays in accordance with law and contract. If this provision is legitimately included in the Standing Orders and that too under Clause 5 of the Schedule, it is difficult to understand why a more specific provision cannot be made under the said clause by clearly stating the number of holidays to which the employees would be entitled and that is precisely what paragraph 11(7) purports to do.12. Then Cl. 10 of the Model Standing Orders provides for casual leave. It lays down that a workman may be granted casual leave of absence with or without pay not exceeding 10 days in the aggregate in a calendar year. Then it lays down further conditions in respect of the grant of the said casual leave. It would be noticed that the quantum of casual leave to which the employee is entitled is thus specifically provided by Cl. 10 of the Model Standing Orders. It is perfectly true that if Cl. 5 of the Schedule is read in the narrow sense for which Mr. Narayanswamy contends, Cl. 10 of the Model Standing Orders would be invalid and from that point of view, the existence of Cl. 10 in the Model Standing Orders cannot be of any assistance in interpreting Cl. 5 of the Schedule. But if Cl. 5 is construed in the broad sense for which Mr. Ramamurthi contends, it would follow that Cl. 10 of the Model Standing Orders is consistent with the aim and object of the Schedule and that, incidentally, may support the argument for the broad construction. That is about all.13. In regard to the argument based on the scope of the 10 Clauses in the Schedule, it is certainly not correct to say that the scope of the Schedule is intended to be very narrow. Take for instance, Cl. 8 which deals with the termination of employment or Cl. 9 which deals with the suspension or dismissal for misconduct, and acts or omissions which constitute misconduct. These are matters of general importance and it is conceded that all relevant and material provisions in respect of these matters have to be included in the Standing Orders. Therefore, it would not be inconsistent with the scheme of the Schedule if we were to hold that the substantive provision for the granting of leave and holidays along with the conditions in respect of them have to be made by the Standing Orders under C1. 5 of the Schedule.14. It would be recalled that S. 10 of the Act provides for the duration of the standing orders and if any standing orders are found by experience to be unreasonable or inconvenient either by the employer or the employees, an application can be made or the modification of the said standing order after the expiration of six months from the date on which they came into operation. Therefore, there would be no hardship in requiring the standing orders to include a provision as to leave and holidays. The provisions made in that behalf can be modified after following the procedure prescribed by S. 10 it is not disputed that the claim for leave and holidays can become the subject-matter of on industrial dispute and if such a dispute is referred for adjudication to an Industrial Tribunal, the Tribunal can fix the quantum of holidays and leave. What the Tribunal can do on such reference is now intended to he achieved by the Standing Orders themselves in respect of Industrial establishments to which the Act applies. We have noticed that the Certifying Officer as well as the appellate authority are, in substance industrial authorities and it they are given power to make provision for leave and holidays as they undoubtedly are given power to provide for termination of employment and suspension or dismissal for misconduct, there is nothing inconsistent with the spirit of the Schedule or with the object of the Act. Therefore, we are not satisfied that the authorities below were in error in holding that it was competent to them to make the additional provision in the Standing Orders as prescribed by paragraph 11(7).