Case: Workmen Of Dewan Tea Estate And Ors Vs. The Management

1. This appeal by special leave arises from an industrial dispute between the respondent, the Management of 11 Tea Estates and the appellants, their workmen. It appears that the appellants raised a dispute against the respondent in regard to the lay-off declared by them in the 11 estates in question in February, 1959. The said lay-off lasted for 45 days and the appellants contention was that the lay-off was not justified, and so, they were entitled to their full wages for the period of the lay-off. The respondents Managing Agents for the nine Companies that run the 11 tea estates in question, resisted this claim on the ground that the lay-off was justified and they alleged that the appellants were not entitled to anything more than the compensation prescribed by S. 25C of the Industrial Disputes Act, 1947 (hereinafter called the Act). This dispute was referred to the adjudication of the Industrial Tribunal by the Governor of Assam under S. 10 (1)(d) of the Act. The 11 tea estates which are concerned with this dispute were described in Appendix A to the order of reference. It is common ground that these 11 tea estates are run by nine Companies and M/s. Macneill and Barry Ltd. and the Managing Agents of all these companies.2. The case for the respondent was that the tea estates in question which are all situated in Cachar District had to face a long period of depression in trade by reason of the poor prices generally commanded by the tea produced by them. In 1959, the management faced a very difficult financial position and it took the view that in the interests of the employees and its own business, it would be appropriate to lay off the workmen for a certain period in order to avoid closure of business. The circumstances which caused financial depression were beyond the control of the management and lay-off was therefore, inevitable and fully justified.3. On the other hand, the appellants urged that there were other tea estates in the district of Cachar which had to face similar problems; the labour costs incurred by the respondent were not higher than the corresponding costs incurred by the other tea estates, the burden of taxes was the same for all the tea estates in the district and the quality of the tea produced was relatively similar. They contended that the difficulty which the respondent had to face was partly the result of its mismanagement and neglect. They pleaded that the workmen employed by the respondent had been promised continuous work throughout the year and the declaration of layoff for such a long period as 45 days exposed them to the risk of semi-starvation. The appellants also urged that depression in trade or financial difficulties which may be characterised as trade reasons did not justify the lay-off under the relevant Standing Order, and so, they justified their claim for full wages during the period of the lay off.4. The Tribunal has held that the relevant Standing Order No. 8 justified the lay off. The trade reasons resulting from the depression in trade and financial liabilities arising therefrom fell within the scope of the Standing Order; it has also held that the last clause in the Standing Order which was general in terms could be relied upon by the respondent in support of its plea that the lay off was justified. In the alternative, the Tribunal thought that even if the lay off was not justified by the relevant clause in the Standing Order, the respondent had a common-law right to declare a lay off and this right was recognised by S. 25C of the Act. According to the Tribunal, S. 25C recognises this common-law right and since it is a statutory provision, it overrides the relevant clause in the Standing Order. Having thus found that the lay off was justified, the Tribunal proceeded to examine the question as to whether the trade reasons on which the respondent relied had been proved. It then considered the relevant documentary evidence bearing on the point and noticed some general features applicable to all the tea companies before it. "They have suffered losses which are by no means inconsiderable", said the Tribunal, "and some of the companies have not been able to declare dividends in time during the last ten years, though others have declared them from year to year." The Tribunal rejected the respondents contention that the losses were due to high labour charges, but it found that the tea companies were not making adequate profits. It was satisfied that the companies had reserves and large capital assets and would not have found it difficult to raise necessary finances. On the whole, the Tribunal thought it necessary finances. On the whole, the Tribunal thought it necessary to distinguish between the different tea estates with which it was dealing and having considered their respective individual cases, it came to the conclusion that out of the nine companies, five companies need not have declared lay off for 45 days. In its opinion, there was justification for lay off in their cases, but its duration should have been 21 days. Acting on this finding, the Tribunal has ordered that for the 24 days in excess of three weeks for which the lay off was justified the said companies should pay their workmen full wages and not merely the compensation prescribed by S. 25C of the Act. In regard to the remaining four companies, the Tribunal held that the lay off was fully justified, and so, the workmen were not entitled to full wages for the period of the lay off. In other words, the award made by the Tribunal partially granted relief to the appellants inasmuch as it gave them full wages against five companies for 24 days only. These five companies are: Bhubandhar, Doyapore, Western Cachar, Borak and Koyah. The other four companies in respect of which the Tribunal has given no relief to the workmen are: Doodputlee, Majagram, Scottpore and Tarrapore. It is this award which has given rise to the present appeal by the appellants.

Court's reasoning:
We are not inclined to answer this question in favour of the respondent. Besides, as we have already indicated, having regard to the factors specified by the Rule 8(a)(i) before the clause in regard in other causes beyond his control was introduced, it would not be easy to entertain the argument that a trading reason of the kind suggested by Mr. Banerjee can be included in that clause. Therefore, we are satisfied that the Tribunal was in error in holding that the impugned lay off could be justified by Ruleare not inclined to answer this question in favour of the respondent. Besides, as we have already indicated, having regard to the factors specified by the Rule 8(a)(i) before the clause in regard in other causes beyond his control was introduced, it would not be easy to entertain the argument that a trading reason of the kind suggested by Mr. Banerjee can be included in that clause. Therefore, we are satisfied that the Tribunal was in error in holding that the impugned lay off could be justified by Rulewe do not think Mr. Banerjee would be entitled to contend that S. 2(kkk) of the Act is wider than the relevant Rule in the Standing Orders and should apply to the facts of this case. We ought to make it clear that in dealing with this argument, we have not thought it necessary to consider whether the broad and general construction of S. 2(kkk) for which Mr. Banerjee contends is justified. In fact, Mr. Agarwala for the appellants has very strongly urged that the words "for any reason" found in S. 2(kkk) will not take in the trading considerations. He contends and prima facie with some force that the said words must be construed ejusdem generis with the words that precede them, (vide Management of Kairbetta Estate, Kotagiri v. Rajamanickam, 1960-3 SCR 371  : (AIR 1960 SC 893  ). According to him, the circumstances specified in S. 2(kkk) which justify a lay off must be integrally connected with production, and, so, trading reasons cannot be included in that definition. According to this argument, the distinguishing features of the genus of which the several circumstances mentioned in the definition are different species, are: they are beyond the control of the employer, are expected to be of a short duration, and are of compulsive effect. As we have already indicated, we do not think it necessary to decide this interesting point in the present appeal because we are satisfied that the present dispute must be governed by R. 8(a)(i) of the respondents Standing Orders.