Case: Workmen of Messrs Firestone Tyre and Rubber Company Of India Private Limited Vs. Firestone Tyre and Rubber Company

Civil Appeal No. 2307 ofrespondent company in this appeal has its Head office at Bombay. It manufactures tyres at its Bombay factory and sells the tyres and other accessories in the markets throughout the country. The company has a Distribution office at Nicholson Road, Delhi. There was a strike in the Bombay factory from 3rd March, 1967 to 16th May, 1967 and again from 4th October, 1967. As a result of the strike there was a short supply of tyres etc. to the Distribution office. In the Delhi office, there were 30 employees at the relevant time. 17 workmen out of 30 were laid-off by the management as per their notice dated the 3rd February, 1968, which was to the followingis unable to give employment to the following workmen due to much reduced product ion in the companys factory resulting from strike in one of the factory departments.These workmen are, therefore, laid-off in accordance with law with effect from 5th February,lay-off of the 17 workmen who se names were mentioned in the notice was recalled by the management on the 22nd April, 1968. The workmen were not given their wages or compensation for the period of lay-off. An industrial dispute was raised and referred by the Delhi Administration on the 17th April, 1968 even when the layoff was in operation. The reference was in the followingthe action of the management to lay-off 17 workmen with effect from 5th Feb. 1968 is illegal and/or unjustified, and if so, to what relief are these workmen entitled?The Presiding officer of the Additional Industrial Tribunal, Delhi has held that the workmen are not entitled to any lay-off compensation. Hence this is an appeal by their Union.We were informed at- the Bar that some of the workmen out of the batch of 17 have settled their disputes with the management and their cases were not represented by the Union in this appeal. Hence this judgment will not affect the compromise or the settlement arrived at between the management and some of the workmen.

Court's reasoning:
The effect of the provisions aforesaid is that for the period of lay-off in an Industrial Establishment to which the said provisions apply, compensation will have to be paid in accordance with section 25C. But if a workman is entitled to benefits which are more favourable to him than those provided in the Act, he shall continue to be entitled to the more favourable benefits. The rights and liabilities of employers and workmen in so far as it relate to lay-off and retrenchment, except as provided in section 25J, have got to be determined in accordance with the provisions of Chapter VA.The ticklish question which does not admit of an easy answer is as to the source of the power of management to lay-off a workman. The employer has a right to terminate the services of a workman. Therefore, his power to retrench presents no difficulty as retrenchment means the termination by the employer of the service of a workman for any reason whatsoever as mentioned in clause (oo) of section 2 of the Act. But lay-off means the failure, refusal or inability of employer on account of contingencies mentioned in clause (kkk) to give employment to a workman whose name is borne on the Muster Rolls of his Industrial Establishment. It has been called a temporary discharge of the workman or a temporary suspension of his contract of service. Strictly speaking, it is not so. It is merely a fact of temporary unemployment of the workman in the work of the Industrial Establishment. Mr. S. N. Andley submitted with reference to the explanation and the provisions appended to clause (kkk) that the power to lay-off a workman is inherent in the definition. We do not find any words in the definition clause to indicate the conferment of any power on the employer to lay-off a workman. His failure or inability to give employment by itself militates against the theory of conferment of power. The power to lay-off for the failure or inability to give employment has to be searched somewhere else. No section in the Act confers thisindicates that there is neither a temporary discharge of the work man nor a temporary suspension of his contract of service. Under the general law of Master and Servants an employer may discharge an employee either temporarily or permanently but that cannot be without adequate notice. Mere refusal or inability to give employment to the workman when he reports for duty on one or more grounds mentioned in clause (kkk) of section 2 is not a temporary discharge of the work man. Such a power, therefore, must be found out from the terms of contract of service or the Standing orders governing the establishment. In the instant case the number of workmen being only 30, there were no Standing orders certified under the Industrial employment (Standing orders) Act, 1946. Nor was there any term of contract of service conferring any such right of lay-off. In such a situation the conclusion seems to be inescapable that the workmen were laid-off without any authority of law or the power in the management under the contract of service. In Industrial Establishments where there is a power in the management to lay-off a workman and to which the provisions of Chapter VA apply, the question of payment of compensation will be governed and determined by the said provisions. Otherwise Chapter VA is not a complete Code as was argued on behalf of the respondent company in the matter of payment of lay-off compensation. This case, therefore, goes out of Chapter VA. Ordinarily and generally the workmen would be entitled to their full wages but in a reference made under section 10(l) of the Act, it is open to the Tribunal or the Court to award a lesser sum finding the justifiability of theour opinion, in the context, the sentence aforesaid means that if the power of lay-off is there in the Standing orders but the grounds of lay-o ff are not covered by them, rather, are governed by the provisions of the Act, then lay-off would be permissible only on one or the other of the factors mentioned in clause (kkk). Subsequent discussions at pages 558 and 559 lend ample support to t he appellants argument that there is no provision in the Act specifically providing that an employer would be entitled to lay-off his workmen for the reasons prescribed by section 2statute under consideration in this case was the Payment of Bonus Act, 1965 and it was held that the Act was intended to be a comprehensive and exhaustive law dealing with the entire subject of bonus of the persons to whom it should apply. The Bonus Act was not to apply to certain Establishments. Argument before the Court was that bonus was payable de hors the Act in such establishment also. This argument was repe11ed and in that connection it was observed at pagewill be noticed that though the Industrial Disputes Act confers substantive rights on workmen with regard to lay off, retrenchment compensation, etc., it does not create or confer any such statutory right as to payment to bonus. Bonus was so far the creature of industrial adjudication and was made payable by the employers under the machinery provided under that Act and other corresponding Acts enacted for , . investigation and settlement of disputes raised there under. There was, therefore, no question of Parliament having to delete o r modify item S in the Third Schedule to Industrial Disputes Act or any such provision in any corresponding Act or its having to exclude any right to bonus there under by any categorical exclusion in the presenta case of compensation for lay-off the position is quite distinct and different. If the term of contract of service or the statutory terms engrafted in the Standing orders do not give the power of lay off to the employer, the employer will be bound to pay compensation for the period of lay-off which ordinarily and generally would be equal to the full wages of the concerned workmen. If, however, the terms of r employment confer a right of lay-off on t he management, then, in the case of an industrial establishment which is governed by Chapter VA, compensation will be payable in accordance with the provisions contained therein. But compensation or no compensation will be payable in the case of an industrial establishment to which the provisions of Chapter VA do not apply, and it will be so as per the terms of thethese appeals the facts are identical to those in the other appeal. There were only 33 employees in the Madras office of the respondent company. Certain workmen were laid-off for identical reasons from the 5th February, 1968. The lay-off was lifted on the 29th April, 1968. The concerned workmen filed petitions under section 33C (2) of the Act f or computation of their wages for the period of lay-off. Holding that the lay-off was justified and valid the Presiding officer of the Additional Labour Court, Madras has dismissed their applications for salary and allowances for the period of lay -off. Hence these appeals.In a reference under section 10 (1) of the Act it is open to the Tribunal or the Court to award compensation which may not be equal to the full amount of basic wages and dearness allowance. But no such power exists in the Labour Court under section 33C (2) of the Act. Only the money due has got to be quantified. If the lay-off could be held to be in accordance with the terms of the contract of service, no compensation at all could be allowed under section 33C ( 2) of the Act, while, in the reference some compensation could be allowed. Similarly on the view expressed above that the respondent company had no power to lay-off any workmen, there is no escape from the position that the entire sum payable to the laid-off workmen except the workmen who have settled or compromised, has got to be computed and quantified under section 33C(2) of the Act for the period of lay-off.