Case: Indian Hume Pipe Co. Limited  Vs. The Workmen

2. This appeal by special leave arises from an industrial dispute between the Indian Hume Pipe Co. Ltd., Bombay (hereinafter called the appellant) and its workmen monthly-rated including canteen boys employed under it (hereinafter called the respondents). The dispute was in regard to the claim for gratuity made by the respondents and it was referred to the tribunal in these words : "Gratuity-employees should be paid gratuity on the scale and the conditions prescribed in the industrial tribunals award in Ref. (IT) No. 82 of 1950 dated 13-8-1951. It should also be paid to those whose services have been terminated by the management after the termination of the aforesaid award". It appears that the respondents had raised an industrial dispute in 1950 which covered their claims for scale of pay, dearness allowance, provident fund and gratuity and it was referred to the adjudication of Mr. Thakore. On this reference Mr. Thakore made his award on 13-8-1951, which inter alia provided for a scheme of gratuity. Both the parties had gone in appeal against the said award but the appellate tribunal dismissed both the appeals and confirmed the award. On 2-6-1953, notice was given by the respondents terminating the said award and making a fresh demand for gratuity at a higher rate. Conciliation proceedings were started but they failed; and so on 1-7-1954, the present reference was made.3. Before the tribunal the employees urged that the State Government had no jurisdiction to confine their demand to the scheme of gratuity as framed by Mr. Thakore, and they urged the tribunal to consider their claim for a revision of the said scheme. The tribunal held that its jurisdiction was limited by the terms of reference and it could not entertain any such plea; it also observed that even if it was open to the respondents to agitate for the revision of the said award there was not much chance of their succeeding in that demand. The appellant opposed the scheme of gratuity framed by the earlier award and contended that no gratuity should be paid to the workmen who would be entitled to receive retrenchment compensation under S. 25F of the Industrial Disputes Act (hereinafter called the Act). This contention was negatived by the tribunal. It held that the respondents were entitled to claim both gratuity and retrenchment compensation. The tribunal then examined the financial position of the appellant and held that the gratuity scheme framed by the earlier award should be enforced subject to certain modifications specified by it.4. This award was challenged by the appellant before the Labour Appellate Tribunal; and it was argued that the respondents were not entitled to the double benefit of the gratuity scheme and the statutory retrenchment compensation. The appellate tribunal agreed with the view taken by the tribunal and rejected the appellants contention. It also examined the financial position of the appellant and held that it saw no reason to interfere with the discretion exercised by the tribunal in granting "the same gratuity to the workmen in the case of retrenchment as in other cases". Then the appellate tribunal considered the merits of the scheme sanctioned by the tribunal and made some changes and added one paragraph which had been included in the earlier award but had been omitted by the tribunal. This paragraph dealt with the cases of persons retrenched after the date of reference but before the award came into operation and it directed that in the case of such persons no additional gratuity shall be paid if they have already received unemployment or retrenchment compensation in excess of the gratuity awarded above; in other cases the difference alone shall be paid. It is against this award that the present appeal has been preferred.

Court's reasoning:
It is obvious that for construing S. 25F the words used in the statement about the aims and objects of the Act are not relevant; and in regard to the use of the word gratuity in S. 25E (b) of the Ordinance it is significant that the said word has been deliberately omitted and the words "retrenchment compensation" have been used in its place by S. 25F. Therefore it would not be possible to determine the character of the payment statutorily prescribed by S. 25F by reference to the word gratuity used either by the Ordinance or in the statement about the aims and objects of the Act. If we have to decide the character of the payment merely by the words used in describing it, then the words used in S. 25F are "retrenchment compensation" and not gratuity.13.But apart from the mere use of words there can be no doubt that S. 25F is intended to provide compensation to retrenched workmen solely on account of the difficulties which they have to face on their retrenchment.we have already pointed out, even before S. 25F was enacted tribunals were adopting similar methods in determining the amount of retrenchment compensation,and so the mere fact that the length of the past service of the retrenched workman is made the basis for computing retrenchment compensation cannot clothe retrenchment compensation with the character of gratuity. The claims for retrenchment compensation and gratuity proceed on different considerations and it would be impossible to hold that the grant of one excludes the claim or grant of the other.15. It is true that a retrenched workman would get both the retrenchment compensation and gratuity, and in a sense, on his retrenchment he would get more than what other workmen with corresponding length of service would get on their retirement; but it must be remembered that the retrenched workman gets compensation because involuntarily he has been forced to face unemployment, and it is to enable him to tide over the period of unemployment that retrenchment compensation is paid to him.So, on the general contention raised before us that the employees are not entitled to claim the double benefit of gratuity and retrenchment compensation there can be only one answer, and that is that there is no conflict between the two claims, and industrial tribunals are right in recognising that both claims can be entertained and granted, and reasonable gratuity schemes can and should be framed even after the enactment of S. 25F in thethe absence of any such provision in the Industrial Disputes Act it would be unreasonable to hold that the mere enactment of S. 25F either ousts the jurisdiction of industrial tribunals to entertain claims for gratuity schemes or makes it improper or unjust to frame such schemes for all employees including those who are retrenched.We do not think we can accede to this request. Whether or not a two-fold scheme of gratuity should be framed, one applicable to retrenched workmen and other to the rest, is a matter which may, if necessary, be raised before the tribunal in a proper case. Besides it may be pertinent to observe that the question as presented in this form is not one of general importance, for in the present state of our economy which has received and is receiving the stimulus of national plans, our industries may not have to face the problem of retrenchment on an appreciable or extensive scale; but apart from this consideration we cannot entertain or decide the point raised by the learned Solicitor-General in an appeal under Art. 136.18. Before we part with this appeal, we ought to refer to another aspect of the matter which our present decision does not consider or decide. It is likely that gratuity schemes framed by consent or by awards may provide for payment of compensation to retrenched workmen either in lieu of or in addition of gratuity;in such cases the question as to whether the retrenched workmen can claim the benefit of such a scheme in addition to the retrenchment compensation under S. 25F would depend on the construction of the material terms of the relevant scheme considered in the light of the provisions of S. 25F of the Act.In the present appeal we are not called upon to consider such a question. Therefore, our decision has and can have no reference to cases which would fall to be decided under S. 25F of the Act.