Workmen are entitled to both statutory retrenchment compensation and gratuity because they serve distinct purposes: the former compensates for the hardship of sudden unemployment, while the latter is a retiral benefit based on length of service. Section 25F of the Industrial Disputes Act does not preclude gratuity.

Judgment

GAJENDRAGADKAR, J. : Are workmen entitled to the double benefit of a gratuity scheme as well as retrenchment compensation? That is the main question which falls to be considered in the present appeal. The same question along with some other subsidiary points arises in some other appeals and so all of them have been grouped together and placed before us for disposal. We propose to deal with the main point in the present appeal and discuss the other points arising in the other appeals separately.

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 tribunal s 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 appellant s 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