M/S. U.P. DRUGS AND PHARMACEUTICALS CO. LTD. v.

RAMANUJ Y ADA V AND ORS.

SEPTEMBER 23, 2003

[Y.K. SABHARWAL AND BN. AGRAWAL, JJ.]

Uttar Pradesh Industrial Disputes Act, 1947.

Sections 2(g), 4(k), & 6N-Termination/retrenchment-Workmen C completing 2 40 days of work in each of the earlier years but not completing

240 days preceding 12 months from the date of termination-Whether such workmen entitled to benefit and protection of Section 6N read with Section 2(g)-Held, requirement of having worked for 240 days during preceding period of 12 calendar months not necessary for completion of one year of continuous service under Section 2(g)-Such workmen deemed to be in D continuous service and entitled to benefit of Section 6N read with Section

2(g)-Termination without compliance of Section 6N illegal-Industrial Disputes Act, 1947-Section 25-B.

Words & Phrases-'Continuous service '-Meaning of in the context E of the Uttar Pradesh Industrial Disputes Act, 1947.

Appellant terminated the services of respondents and some other workmen w.e.f. 31.3.1987 on the ground that they were causal workers and there was no work for them. Workmen approached State F Government against their termination and the State Government in exercise of power under Section 4(k) of Uttar Pradesh Industrial Disputes Act, 1947 referred the matter to Labour Court to decide the dispute. Labour Court held that workmen have not completed 240 days in a calendar year preceding the date of termination/retrenchment to claim benefit of Section 6N of the U.P. Act though they have worked G for more than 240 days in each year from 1983 to 1986 and are not entitled to benefit of continuous service under the U.P. Act. Some of the workmen challenged the award by filing writ petition which was allowed by the High Court. High Court held that under Section 6N read with Section 2(g) of the U.P. Act it is not necessary for workmen H to complete 240 days in the preceding year and since workmen had

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U.P. DRUGS AND PHARMACEUTICALS CO. LTD. v. R. Y ADAV

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completed 240 days in earlier years preceding 12 months from the date A of termination they were deemed to be in continuous service and their termination was illegal and in violation of Section 6N read with Section 2(g) of the U.P. Act. However, High Court declined payment of wages to workmen. Hence, this appeal by Management and Special Leave Petition by workmen for payment of back wages.

Appellant contended that respondents have not worked for 240 days in preceding 12 months from the date of termination and hence are not entitled to benefit of Section 6N read with Section 2(g) of the U.P. Act even though they have worked for 240 days or more during the period earlier to 12 calendar months.

Respondent contended that the contention propounded by Management, if accepted, it would provide a handle of abuse in the hands of the Management.

Dismissing the appeal and also the Special Leave Petition, the D Court

HELD : I. Section 2(g) of the U.P. Industrial Disputes Act, 1947 does not require a workman, to avail the benefit of the deeming provision of completion of one year of continuous service in the E industry, to have worked for 240 days during 'preceding' period of 12 calendar months. The work 'preceding' has been used in Section 25-B of the Industrial Disputes Act, 1947 as incorporated in the year

1964. Section 25-B was substituted by Industrial Disputes (Amendment) Act, 1964. It brought in the concept of preceding 12 calendar months. F The earlier definition did not mention 'preceding' with reference to period of 12 calendar months. Section 2(g) does not use the word 'preceding'. The concept of 'preceding' was introduced in the Industrial Disputes Act so as to give complete and meaningful benefit of welfare legislation to the working class. Welfare statutes must, of necessity, G receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads &y making etymological excursions. [1031-D-F]

Sur Enamel and Stamping Works Ltd v. The Workmen, (1964] 3 SCR 616 and Surendra Kumar Verma Etc. v. The Central Government Industrial H

A Tribunal-cum-Labour Court, New Delhi & Anr., (1981) 1 SCR 789, relied on.

2. If the viewpoint propounded by the management is accepted, then in every year the workman would be required to complete more B than 240 days. If in any one year the eRtployer gives him actual work for less than 240 days, the service of the workman can be terminated without compliance of Section 6N of the Uttar Pradesh Industrial Disputes Act, despite his having worked for number of years and for more than 240 days in each year except the last. Such an intention cannot be attributed to the U.P. Act. The interpretation propounded C for the appellant is wholly untenable. The termination of the respondents was in violation of Section 6N read with Section2(g) of the U.P. Act.

[1032-F-G, 1033-B-DI

Ramakrishna Ramnath v. The Presiding Officer, Labour Court, D Nagpur & Anr, (19701 3 sec 67, referred to.

Mohan Lal v. Management of Mis. Bharat Electronics Ltd., [19811 3 SCC 225 and V.P. State Co-operative Land Development Bank Ltd. v.

TazMulk Ansari & Ors., (1994) Supp. 2 SCC 745, held inapplicable.

3. No interference is called for regarding denial of back wages to the respondents having regard to the facts and circumstances of the case including the circumstance of the financial position of the appellant and the proceedings before the Board for Industrial and Financial Reconstruction. (1033-D, E)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2537 of 2001.

From the Judgment and Order dated 21.9.99 of the Allahabad High Court in C.M.W.P. No. 5125 (SIS) of 1991.

WITH

S.L.P. (C) No. 18267 of 2003.

R.C. Srivastava, Ms. Rachna Srivastava and Rohit Singh for the H Appellant.

...

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U.P. DRUGS AND PHARMACEUTICALS CO. LTD v. R YADAV [SABHARWAL, J] 1025

Jitendra Shanna and Ms. Chandan Ramamurthi for the Respondents. A

The Judgment of the Court was delivered by

Y.K. SABHARWAL, J.: The appellant directed the respondents and few other workmen to cease work w.e.f. 3 lst March, 1987. According to the appellant, they were casual workers and had worked for a short time B and since there was no work, they were asked to cease work and their services were, thus, tenninated.

The workmen approached the State Government of Uttar Pradesh against their tennination and pursuant thereto, the State Government, in exercise of power under Section 4(k) of Uttar Pradesh Industrial Disputes Act, 1947 (for short, 'the UP Act') C referred the matter to the labour court of Lucknow to decide the dispute.

It was not disputed before the labour court that none of the workmen had worked for 240 days in the year preceding the date of tennination. In this view, the Jabour court, in the award dated 31st May, 1991, concluded that the workmen/respondents were not entitled to protection of Section 6N of D the UP Act.

According to labour court, the workmen ought to have completed 240 days in a calendar year preceding the date of tennination/ retrenchment so as to claim benefit of Section 6N of the UP Act.

Considering the evidence, the labour court also held that all the 29 workmen had worked for more than 240 days in each year during the past years prior to 1986. The effect of the finding recorded by the labour court E is that the workmen have worked for more than 240 days from the year 1983 to 1986 but they having not worked for 240 days from I st April, 1986 to 31st March, 1987, they were not entitled to protection and benefit of the continuous service under the UP Act. On appreciation of evidence, the finding recorded by the labour court is as follows : F

"In these circumstances, I arrive to the conclusion that the empfoyer have failed to dispute the evidence of the workmen that all the 29 workmen had worked for more than 240 days in each year during the past years prior to 1986. In other words, I reached G to the conclusion that although these workmen have not completed 240 days of service in a year preceding the date of their tennination but have worked for more than 240 days in each year prior to. that after joining the service."

Out of29 workmen before the labour court, the award was challenged H

A by 18 workmen in a writ petition filed in the High Court.

The said workmen are respondents in this appeal. By the impugned judgment, the High Court, setting aside the award, has held that under Section 6N read with Section 2(g) of the UP Act, it is not necessary for the workmen to complete 240 days in the preceding year and since workmen had completed B 240 days in earlier calendar years preceding to 12 months on the date of retrenchment, they were deemed to be in a continuous service and hence their termination in violation of Section 6N of the UP Act was illegal. The respondents have been held to be in continuous service. The High Court has directed that they shall be given consequential service benefits including reinstatement except the back wages. The appellant has been C directed to pay the wages to the respondents from the date of reinstatement.

Assailing the impugned judgment, it has been contended that for applicability of Section 6N read with Section 2(g) of the UP Act, it is essential for a workman to complete 240 days in preceding 12 calendar D months. Learned counsel for the appellant argues that the respondents having worked for 240 days or more during the period earlier to 12 calendar months is inconsequential.

The undisputed fact is that the respondents whose services were terminated w.e.f. 31st March, 1987, did not actually work for 240 days for the period from 1st April, 1986 to 31st E March, 1987. The finding of the labour court, however, is that for earlier years, they did work for more than 240 days. What is the consequence of this finding is the question. The correctness of the impugned judgment is required to be examined on these facts.

We may note that the respondents have also challenged the impugned judgment in so far as it declines payment of back wages to them. Mr. Jitender Sharma, learned F advocate appearing for the respondents, supporting the impugned judgment on the aspect of interpretation of Sections 6N and 2(g), contends that if the contention propounded by the management is accepted, it will provide a handle of abuse in the hands of the management.

G Section 6N was inserted in the UP Act by Section 8 of the UP Act No.I of 1957. It reads as under:

6N. Conditions precedent to retrenchment of workmen.- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be H retrenched by that employer until-

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U.P. DRUGS AND PHARMACEUTICALS CO.LTD. v. R. YADA V [SABHARWAL J]

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(a) the workmen has been given one month's notice in writing A indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice wages for the period of the notice :

Provided that no such notice shall be necessary if the B retrenchment is under an agreement which specified a date of the termination of service;

(b) the workmen has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of service or any part c thereof in excess of six months, and

(c) notice in the prescribed manner is served on the State Government"

The expression 'continuous service' is defined in Section 2(g) of the D UP Act which reads as under :

2.(g)'Continuous service' means uninterrupted service, and includes service which may be interrupted merely on account of sickness or authorized leave or an accident or a strike which is E not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman, and a workman, who during a period of twelve calendar months has actually worked in an industry for not less than two hundred and forty days shall be deemed to have completed one year of continuous service in F the industry.

Explanation.- In computing the number of days on which a workman has actually worked in an industry, the days on which-

(i) he has been laid off under the agreement or as permitted by G standing order made under the Industrial Employment (Standing Orders) Act, 1946, or under this Act or under any other law applicable to the industrial establishment, the largest number of days during which he , has been so laid off being taken into account for the ptlrposes of this H

clause,

(ii) he has been on leave with full wages, earned in the previous year, and

(iii) in the case of a female, she has been on maternity leave; so however that the total period of such maternity leave shall not exceed twelve weeks, shall be included."

Let us also examine the central legislation. In the Industrial Disputes Act, 1947 (for short, the 'ID Act'), Chapter V-A containing Sections 25 C A to 25J was inserted by the Industrial Disputes (Amendment) Act, 1953

(43of1953) w.e.f. 24th October, 1953. Section 25-B as it stood then was as under :

"25-B. Definition of one year of continuous service.

For the purposes ofSs.25C and 25F, a workman who, during a period of 12 calendar months, has actually worked in an industry for not less than two hundred and forty days shall be deemed to have completed one year of continuous service in the industry.

&planation.-ln computing the number of days on which a workman has actually worked in any industry, the days on which-

(a) he has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946, or under this Act or under any other law applicable to the industrial establishment, the largest number of days during which he has been so laid-off being taken into account for the purposes of this clause.

(b) he has been on leave with full wages, earned in the previous year, and

( c) in the case of a female, she has been on maternity leave; so however, that the total period of such maternity leave shall not H exceed twelve weeks.

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U.P. DRUGS AND PHARMACEUTICALS CO LTD. v. R. YADAV [SABHARWALJ] 1029

Shall be included."

The same Amending Act introduced the definition of 'continuous service' in Section 2(eee) as under :

"2.(eee) 'continuous service' means uninterrupted service, and includes service which may be interrupted merely on account of B sickness or authorized leave or an accident or a strike which is not illegal, or a Jock-out or a cessation of work which is not due to any fault on the part of the workman;"

Section 25-B was, however, substituted by Industrial Disputes C (Amendment) Act, 1964 (36of1964) w.e.f. 19th December, 1964 and the same reads as under :

"25-B. DEFINITION OF CONTINUOUS SERVICE- For the purposes of this Chapter, -

(I) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which

is not illegal, or a lock-out or a cessation of work which is E not due to any fault on the part of the workman;

(2) where a workman is not in continuous service within the meaning of clause (I) for a period of one year or six months, he shall be deemed to be in continuous service under an employer -

(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made,

has actually worked under the employer for not less G than -

(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and

(ii) two hundred and forty days, in any other case; H

A (b) for a period of six months, if the workman, during a period

of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -

(i) ninety-five days, in the case of a workman employed below ground in a mine; and

(ii) one hundred and twenty days, in any other case.

Explanation : For the purpose of clause (2), the number of days C on which a workman has actually worked under an employer shall include the days on which -

(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the industrial establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks."

The Amending Act of 1964 deleted Section 2( eee ), having incorporated in Section 25-B itself the definition of 'continuous service'. It also brought G in the concept of preceding 12 calendar months. The earlier definition did not mention 'preceding' with reference to period of 12 calendar months.

It appears that the decision of this Court in Sur Enamel and Stamping Works Ltd v. The workmen, [1964] 3 SCR 616 interpreting Sections 2(eee) and 25-B led to the amendments made by Amending Act of 1964. In Sur H Enamel, interpreting Sections 2( eee) and 25-B, it was held that twin

U.P. DRUGS AND PHARMACEUTICALS CO. LTD. r. R. YADAV [SABHARWALJ] 1031

conditions were required to be fulfilled before a workman can be considered A to have completed one year of continuous service in an industry. It must be. shown first that the workmar. wa~ employed for a period ofnot less than 12 calendar months and next that during those 12 calendar months, he had worked for not less than 240 days. In that case, the workman had not been employed for a period of 12 calendar months. Therefore, the Court held B that it was unnecessary to examine whether actual days of work were 240 or more for in any case the requirements of Section 25-8 would not be satisfied by mere fact of number of working days being not less than 240 days. The effect was that if a workman completes actual 240 or more days of work in less than 12 calendar months, he would not be entitled to the benefit of beneficial legislation. This anomaly led to the amendment of C the ID Act in the manner abovestated.

Under the aforesaid legislative background, the question involved is required to be considered. Section 2(g) of the UP Act does not require a workman, to avail the benefit of the deeming provision of completion D of one year of continuous service in the industry, to have worked for 240 days during 'preceding' period of 12 calendar months.

The word 'preceding' has been used in Section 25-8 of the ID Act as incorporated in the year 1964. Section 2(g) does not use the word 'preceding'. The concept of 'preceding' was introduced in the ID Act so as to give complete E and meaningful benefit of welfare legislation to the working class. The approach to be borne in mind while interpreting the welfare legislation is illustrated in Surendra Kumar Verma Etc. v. The Central Government Industrial Tribunal-cum-Labour Court, New Delhi & Anr., [1981] l SCR 789 where this Court has observed that semantic luxuries are misplaced F in the interpretation of 'bread and butter' statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads by making etymological excursions.

Learned counsel for the appellant, however, relies upon Mohan Lal G

v. Management of Mis. Bharat Electronics Ltd.., [1981] 3 SCC 225. In that case, the Court was considering the scope of Section 25-8 of the ID Act. It was observed that in order to invoke the fiction enacted in clause (2)(a) of Section 25-8, it is necessary to determine first the relevant date, i.e., the date of termination of service which is complained of as retrenchment. H

A After that date is ascertained, move backward to a period of 12 months just preceding the date of retrenchment and then ascertain whether within a period of 12 months, the workman has rendered service for a period of 240 days. It was held that if these three factors are affirmatively answered in favour of the workman pursuant to the deeming fiction enacted in clause B (2)(a), it will have to be assumed that the workman is in continuous service for a period of one year and he will satisfy the eligibility qualification enacted in Section 25-F. In Mohan Lal's case, the appellant was employed with the respondent from 8th December, 1973. His services were abruptly terminated by letter dated 12th October, 1974 w.e.f. October 19, 1974.

C This Court said that it is not necessary for the purpose of clause (2)(a) of

Section 25-B that workman should be in service for a period of one year.

It was held that if he is in service for a period of one year and that service is continuous service within the meaning of clause (I), his services would be governed by clause (I) and his case need not be covered by clause (2).

Clause (2) envisages the situation not governed by clause ( 1 ). Clause (2)(a) D provides for a fiction to treat a workman in continuous service for a period of one year despite the fact that he has not rendered uninterrupted service for a period of one year but he has rendered service for a period of 240 days during the period of 12 calendar months counting backward and just preceding the relevant date the date of retrenchment. These were the facts E under which it was held as to how the period of 240 days was to be calculated. The decision in the case of Mohan Lal does not lay down that if a workman had worked for more than 240 days in any number of years and if during the year of his termination, he had not worked for the said number of days, he would not be entitled to the benefit of Section 25-B.

F The question with which we are concerned was not under consideration in Mohan Lal 's case. If the viewpoint propounded by the management is accepted, then in every year the workman would be requiJ:ed to complete more than 240 days. If in any one year the employer gives him actual work for less than 240 days, the service of the workman can be terminated without compliance of Section 6N of the UP Act, despite his having G worked for number of years and for more than 240 days in each year except the last. Such an intention cannot be attributed to the UP Act. In the present case, as already noticed, the finding of the labour court is that the respondents worked for more than 240 days in each year from 1983 to 1986 · but not having worked for 240 days in the year of termination, the H termination was held by the labour court not to be violative of Section 6N.

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U.P. DRUGS AND PHARMACEUTICALS CO. LTD. v. R. YADAV [SABHARWAL J.] 1033

Reference may also be made to the decision in Ramakrishna Ramnath v. A The Presiding Officer, Labour Court, Nagpur & Anr., [1970] 3 SCC 67 where this Court observed that the provision requiring an enquiry to be made to find out whether the workman has actually worked for not less than 240 days during a period of 12 calendar months immediately preceding the retrenchment does not show that a workman, after satisfying B the test, has further to show that he has worked during all the period he has been in service of the employer for 240 days in the year.

The interpretation propounded for the appellant is wholly untenable.

The decision in U.P. State Cooperative Land Development Bank Ltd. v. Taz Mulk Ansari & Ors., [1994] Supp. 2 SCC 745 relied upon by learned counsel for the appellant has no applicability since that was a case of clause C

(a) of Section 6N and, therefore, Section 2(g) had no relevance.

The High Court has rightly concluded that the termination of the respondents was in violation of Section 6N read with Section 2(g) of the ~~ D

Regarding denial of back wages to the respondents, in our view, no interference is called for having regard to the facts and circumstances of the case including the circumstance of the financial position of the appellant and the proceedings before the Board for Industrial and Financial E Reconstruction.

For the foregoing reasons, we find no merit in the appeal. The same is accordingly dismissed. The Special Leave Petition No. 18267 of 2003 (CC-384712000) is also dismissed. The respondents are directed to be reinstated from November, 2003. They shall be paid wages from the month F of November, 2003. There shall be no order as to costs.

A.K.T.

Appeal/Special Leave Petition dismissed.