Case ID: 1981

Judgment:
vil Appeal Nos. 150 and 160 of 1964. Appeals by special leave from the award dated September 20	 1962	 of the Industrial Tribunal	 Ernakulam in Industrial Dispute Nos. 11 and 10 of 1962 respectively. 761 G.B. Pai	 J.B. Dadachanji	 O.C. Mathur and Ravinder Narain	 for the appellant. M.R.K. Pillai	 for the respondents. The Judgment of the Court was delivered by Gajendragadkar	 C.J. The short question of law which these two appeals raise for our decision relates to the construction of sections 3 and 11 of the Kerala Industrial Establishments (National and Festival Holidays) Act	 1958 (No. 47 of 1958) (hereinafter called the Act. That question arises in this way. Two complaints were filed against the appellant	 the Tam Oil Mills Company Ltd.	 by the two groups of respondents	 its workmen	 respectively under section 33A of the . These applications alleged that the management of the appellant had contravened the provisions of section 33 of the said Act inasmuch as it had denied its employees leave with wages on Founder 's Day and Good Friday in 1962. According to the respondents	 they were entitled to have holidays with pay on the said two days under the terms and cOnditions of service	 and so	 they claimed that the Tribunal should direct the appellant to give its employees holidays under the said existing arrangement and should pass other appropriate order 's for the payment of wages for the two holidays in question. The appellant disputed the correctness of the respondents ' contention. The Tribunal has rejected the appellant 's plea and has declared that the respondents are entitled to the privilege 'of paid holidays on Founder 's Day and Good Friday in 1962. It has also ordered that the appellant should pay the wages to the respondents for those two days and the proportionate salary of the staff members as soon as the award comes into force. It is against these orders passed by the Tribunal on the two complaints preferred before it by the respective respondents that the appellant has come to this Court by special leave; and on its behalf	 Mr. Pai has contended that in making the award '	 the Tribunal has misconstrued the effect of sections 3 and 11 of the Act. Standing Order 30 of the Standing Orders of the appellant company makes provision for leave of all categories. S.O. 30 (vi) provides for holidays. It lays down that the factory will be closed on the following days which will be considered as Company Holidays with pay	 and will not be counted against the casual or privilege leave of an employee: 1. New Year Day (1st January). Founder 's 'Day (Saturday nearest to 3rd March) 3. Good 3 Friday 4. Onam 5. Christmas Day (25th December) There is a note appended to this:proVision which makes it clear that in the event 'of the Company being compelled to observe a holiday or holidays for reasons of State such day or days shall not be counted as against 'the privilege or casual leave of the employees but shall 762 be treated as a Company holiday or holidays. Thus	 it is clear that under the relevant Standing Order	 the respondents are entitled to 5 paid holidays every year. After the Standing Orders were framed and certified	 there was an agreement between the appellant and the respondents ' Union as a result of which the appellant agreed to grant a further holiday	 and ' this agreement raised the number of total paid holidays in a year to 6. The additional holiday which the appellant thus agreed to give to the respondents was to be given on the day when the respondents ' Union would celebrate its Union Day. Apparently	 this holiday was analogous to the Founder 's Day	 the idea underlying the agreement being that just as the appellant gave a paid holiday on the Founder 's Day	 the respondents should be given a paid holiday on the Union Day. It appears that even after this agreement was reached	 the respondents began to claim additional holidays; but the appellant was not prepared to make any addition to the list of holidays. It was prepared to leave the choice of the agreed holidays to the employees provided they submitted to the Company an agreed list of such holidays. In 1958	 the Act was passed and it came into force on the 29th December	 1958. Section 3 of the Act provides "Grant of National and Festival Holidays Every employee shall be allowed in each calendar year a holiday of one whole day on the 26th January	 the 15th August and the 1st May and four other holidays each of one whole day for such festivals as the Inspector may	 in consultation with the employer and the employees specify in respect of any industrial establishment". The result of this provision was that every employer to whom the Act applied had to declare holidays on the 26th January	 the 15th August and the 1st May and had to give four other holidays according to the decision of the Inspector	 the requirement of the section being that the Inspector had to consult the employer and the employees before fixing such other holidays. In other words	 section 3 statutorily fixed the number of paid holidays at 7; fixed three out of them and left the decision of the remaining four to the Inspector who had to consult the employer and the employees. In pursuance of this provision	 the Inspector declared certain holidays for the year 1959. Not satisfied with the decision of the Inspector	 one of the appellant 's employees Mr. Baskara Menon filed a writ petition in the Kerala High Court under article 226 of the Constitution challenging the validity of the Inspector 's decision. In that writ petition	 the question about the construction of section 3 of the 763 Act was agitated. In the result	 the High Court held that the complaint made by the petitioner against the validity of the decision of the Inspector was not well founded	 and so	 the writ petition was dismissed. In 1962	 the appellant followed the same procedure and got a decision as to the festival holidays from the Inspector and declared that the said holidays would be observed as paid holidays in the year. At this time	 certain industrial disputes were pending between the appellant and its employees belonging both to monthly and daily rated categories before the Industrial Tribunal at Ernakulam. The respondents felt that the declaration of the holidays made by the appellant for the year 1962 amounted to a contravention of section 33 of the 	 and so	 they filed the two present complaints before the Industrial Tribunal under 33A of the said Act. That	 in brief	 is the genesis of the present complaints. We have already noticed the provisions of section 3 of the Act. The contention raised by the respondents before the Tribunal was that the statutory provision as to 7 paid holidays prescribes the minimum number of holidays which the employer has to give to his employees. This provision	 according to the respondents	 does not over ride or abrogate the existing arrangement as to paid holidays. In regard to paid holidays which are common to section 3 and the present arrangement they would	 of course	 have to be treated as paid holidays	 but the four other festival holidays which the Inspector decides from year to year would be in addition to the holidays which the appellant is bound to give to the respondents under the existing arrangement	 and since the appellant has limited the number of paid holidays to 7 for the year 1962	 it has acted contrary to the terms of employment evidenced by the existing arrangement as to paid holidays and that constitutes the violation of section 33 of the . This contention has been upheld by the Tribunal; and Mr. Pai argues that the view taken by the Tribunal is plainly inconsistent with the true scope and effect of section 3 read with section 11 of the Act. That takes us to section 11 of the Act	 because this section has to be read along with section 3 in determining the validity of the conclusion recorded by the Tribunal on the main point of dispute between the parties. section 11 reads thus: "Rights and privileges under other laws	 etc.	 not affected Nothing contained in this Act shall adversely affect any rights or privileges which any employee is entitled to with respect to national and. festival holidays on the. date on which this Act comes into force under any other law	 contract	 custom or usage	 if such rights or privileges are more favourable to him than those to which he would be entitled under this Act". D)5 SCI 10 764 This section gives an option to the employees	 they can choose to have the paid ' holidays either as prescribed by section 3 or as are available to them under any other law	 contract	 custom or usage exercising this choice	 it must	 however	 be borne in mind by the employees that the 26th January	 the 15th August and the 1st May have to be taken as three holidays. That is the direction of section 3. In regard to the remaining 4. the Inspector decides which days should be paid holidays. In other words	 the. statutory requirement is 7 paid holidays. If under the existing arrangement the employees are entitled to 'have more 		than7 paid holidays	 that right will not be defeated by section 3	 because section 11 expressly provides that if the rights or privileges in respect of paid holidays enjoyed by the employees are more favourable than are prescribed by section 3	 their existing rights and privileges as to the total number of holidays will not be prejudiced by section 3. The scheme of section 11 thus clearly shows that section 3 is not intended to prescribe a minimum number of paid holidays in addition to the existing ones	 so that the respondents should be entitled to claim the seven holidays prescribed by section 3 plus the six holidays to which they are entitled under the existing arrangement. If in addition to the three holidays which are compulsory under section 3	 the employees are getting	 say 3 ' other paid holidays	 then section 3 would step in and would require the employer to give his employees one more paid holiday	 so as to make the number of paid holidays 7. In our opinion	 if sections 3 and 11 are read together	 there can be no doubt that the respondents ' claim that they should have 7 holidays as prescribed by section 3 plus 6 holidays as are available to them under the present arrangement is cleary untenable. In the present case	 the respondents were having six paid holidayS. The statute has fixed the minimum number at 7 paid holidays	 and so	 since the existing arrangement was less favourable to the employees	 the statutory provision will come to their help and they will be entitled to claim 7 paid holidays in a year	 and that means that section 3 will be operative. If that be so	 the procedure followed by the employer in consulting the Inspector and in fixing the list of 4 paid holidays for 1962 in addition to the three holidays fixed by the statute is perfectly consistent with the provisions of section 3 of the Act. The Tribunal was	 therefore	 in error in holding that the appellant had contravened section 33 of the . In the result	 the appeals must be allowed	 the orders passed by the Tribunal in the two respective complaints set aside	 and the two complaints dismissed. There would be no order as to costs. Appeals allowed.

Summary:
Under the Standing Orders of the appellant company	 its employees were entitled to five holidays with pay on specified dates during each year. Furthermore	 by an agreement with the respondents ' union	 the company had agreed to grant an additional day 's holiday with pay	 thus raising the total number of paid annual holidays to six. In 1958 the Kerala Industrial Establishments (National and Festival Holidays) Act	 1958	 was passed and section 3 of the Act required every employer to declare holidays on every 26th January	 15th August and 1st May	 and to grant four additional festival holidays each year	 on dates to be fixed by the Inspector after consulting the employer and the employees. The number of paid holidays was thus statutorily fixed at 7. In 1962	 the company obtained the Inspector 's decision on the four festival holidays and declared the dates on which such holidays would be given. At that time	 while an industrial dispute between the company and its employees was pending. the respondents filed applications under section 33A of the 	 before the Tribunal. It was contended in these applications that the statutory provision in section 3 for 7 paid holidays did not override or abrogate the existing arrangement as to paid holidays and that the holidays to be given under section 3 would be in addition	 to the holidays which the appellant was bound to give the respondents under existing arrangements; and that the appellant 's attempt to limit the nUmber of paid holidays to 7 during 1962 was contrary to the terms of employment evidenced by the existing arrangement and therefore violative of section 33. This contention was upheld by the Tribunal. In appeal to this Court	 HELD: Under section 3 the statutory requirement is 7 paid holidays each year. If under an existing arrangement the employees were entitled to more than 7 paid holidays	 such more favourable right was protected by section 11. The scheme of section 11 clearly shows that section 3 is not intended to prescribe a minimum number of paid holidays in addition to the existing ones and	 in the present case	 would operate only to raise the total number of holidays from 6 under the existing arrangements to 7 paid holidays in accordance with section 3. [764 B E]