1. Dispute over the award of retaining allowance to unskilled seasonal workmen in sugar industries and allowances for attending industrial tribunal proceedings. (Para 1 )
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1960 Supreme(SC) 318
SUPREME COURT OF INDIA
12th February, 1960.
P.B. GAJENDRAGADKAR, K. SUBBA RAO AND K.C. DAS GUPTA, JJ.
Rohtas Sugar Ltd., and others, Appellants
Versus
Mazdoor Seva Sangh and others etc., Respondents.
State of Bihar, Intervener.
Civil Appeals Nos. 717 to 742 of 1957. 672
Advocates appeared
M/s. A. B. N. Sinha and B. P. Maheshwari, Advocates, for Appellants (in all the appeals); Mr. L. K. Jha, Senior Advocate, (Mr. D. P. Singh Advocate, with him), for Respondents (Nos. 1, 4, 5, 7, 8, 10, 14, 15, 21, 24, 26 to 30, 36, 37 and 39); Mr. P. K. Chatterjee, Advocate, for Respondents (Nos. 6, 9, 12, 17, 20, 22, 23, 25, 31 and 32) : Mr. L. K. Jha, Senior Advocate, (Mr. R. C. Prasad, Advocate, with him), for Intervener.
Advocates:
A.B.N.Sinha, B.P.MAHESHVARI, D.P.Singh, L.K.JHA, P.K.CHATTERJI, R.C.Prasad
A.B.N.Sinha, B.P.MAHESHVARI, D.P.Singh, L.K.JHA, P.K.CHATTERJI, R.C.Prasad
Retaining allowances for unskilled seasonal workers require evidence of limited alternative employment and industry attachment. In their absence, adjusting the wage structure is the preferred remedy for seasonal unemployment. Furthermore, allowances and special leave for attending tribunal proceedings are not payable.
Headnote:(A) Industrial Adjudication - Allowances for attending proceedings - No travelling allowance, halting allowance, or special leave with pay is payable to workmen attending proceedings of necessity. (Para 2)
(B) Industrial Adjudication - Retaining allowance for unskilled seasonal workers - The determination of whether a retaining allowance should be paid to unskilled seasonal workers depends on several factors: (a) the opportunities for alternative employment available in the off-season; (b) the degree to which such workmen are attached to the particular factory; (c) the likely benefit to the industry if such workmen are induced to return by the incentive of the allowance; and (d) the capacity of the industry to bear the financial burden. (Para 6)
(C) Industrial Adjudication - Seasonal unemployment - For alleviating the distress of unskilled seasonal workmen, raising the wage structure to account for the period of unemployment is a more appropriate course of action than paying a retaining allowance for the entire off-season. (Para 9)
Facts of the case:
Appeals were filed against orders awarding a retaining allowance of 5 percent of basic wages to unskilled workmen in seasonal industries during the off-season. The orders also awarded travelling allowance, halting allowance, and special leave with pay to workmen attending proceedings before the Industrial Tribunal.
Findings of Court:
The court held that allowances and special leave for attending proceedings are not payable. Regarding the retaining allowance for unskilled workers, the court found that the evidence regarding alternative employment opportunities and the attachment of workers to the industry was insufficient to justify the award.
Issues: Whether workmen attending proceedings of necessity are entitled to travelling allowance, halting allowance, and special leave with pay; and whether unskilled seasonal workers are entitled to a retaining allowance during the off-season.
Ratio Decidendi: The court ruled that based on established precedent, no allowances or special leave are payable for attending tribunal proceedings. For retaining allowances, while the principles of social justice are central to industrial adjudication, the decision must be based on concrete evidence of the workers' inability to find alternative work and their attachment to the industry; in the absence of such evidence, adjusting the wage structure to compensate for seasonal unemployment is the preferable remedy.
Result: Appeals allowed.
Legal Category Hierarchy
Table of Contents
2. Employers contend that retaining allowance for unskilled labour is unemployment relief and that no employer-employee relationship exists during the off-season. (Para 4 )
3. The court observed that while unemployment relief is primarily a government function, retaining allowance for unskilled labour lacks sufficient evidentiary support regarding factory attachment. (Para 6 , 7 , 8 )
4. Retaining allowance for seasonal workers depends on alternative employment opportunities, attachment to the factory, industry benefit, and the employer's capacity to pay. (Para 6 )
5. Appeals allowed; orders for retaining allowance to unskilled workmen and attendance allowances set aside, with wages to be determined by the Wage Board. (Para 10 )
6. Are workmen entitled to wages, travelling, and halting allowances for attending industrial tribunal proceedings?
No, following the precedent in Punjab National Bank Ltd. v. Sri Ram Kanwar, such allowances and special leave with pay are not payable to workmen attending proceedings of necessity. (Para 2 )
7. What factors determine whether a retaining allowance should be paid to seasonal workers during the off-season?
The court identified four key factors: the availability of alternative employment in the off-season, the degree of attachment to the particular factory, the likely benefit to the industry, and the industry's capacity to bear the financial burden. (Para 6 )
8. Why is the claim for retaining allowance for unskilled labour treated differently from skilled labour?
Skilled workers possess specialized skills making alternative employment difficult and are more valuable to employers as an inducement to return, whereas unskilled labour is often available in abundance, reducing the industry's need for such incentives. (Para 6 )
9. Is the industry responsible for providing unemployment relief to seasonal workers?
While the primary function of alleviating unemployment distress through insurance or alternative employment lies with the government, the industry should not remain unconcerned and may play a part in alleviating the distress of its workers. (Para 6 )
Judgment
DAS GUPTA, J. : These appeals are against the order of the Labour Appellate Tribunal of India at Dhanbad by which the Labour Appellate Tribunal confirmed the order of the Industrial Tribunal awarding a retaining allowance to unskilled workmen at a rate of 5 percent of the basic wages for the period of the off season of numerous sugar industries in Bihar. The appellants - companies, the employees, in these sugar industries also challenge the correctness of the order made by the Industrial Tribunal and confirmed by the Labour Appellate Tribunal awarding the workmen attending the proceedings before the Industrial Tribunal, wages, travelling allowance and halting allowance and further directing that the workmen attending these proceedings would be treated on special leave with pay for the period of such attendance.
2. As regards these orders the appellants contend that they run counter to the pronouncements of this Court in Punjab National Bank Ltd. v. Sri Ram Kanwar , Industrial Tribunal, Delhi, 1957 SCR 220. This contention, we are bound to say, is correct. Whatever might have been said in support of the view taken by the Tribunals in ordering payment of these allowances and of granting special leave to workmen attending proceedings of necessity, if the question was res integra we are bound by the authority of Punjab National Bank s Case, 1957 SCR 220, to hold that no such allowances are payable and no such order granting leave may be made. The order of the Tribunals below allowing travelling allowance and halting allowance and special leave to workmen attending proceedings of necessity, must therefore be set aside. Mr. Sinha, learned counsel for the appellants, however, has undertaken on their behalf that no restitution will be claimed of allowances which have already been paid.
3. This brings us to the main question in controversy in these appeals. That question is whether retaining allowance should be paid to unskilled workers in these industries during the off season. Disputes over this question have been going on for many years and committee after committee has wrestled with the problem for arriving at a formula acceptable to both employers and labourers but in vain. In 1950 a reference was ultimately made to Mr. Justice B. P. Sinha (as he then was) as regards these disputes about retaining allowance. The award made by him provided for retaining allowance to skilled and semi-skilled workmen but none to unskilled workmen. Before the Appellate Tribunal who heard the appeal against that award the labourers and employers came to an agreement that no retaining allowance would be payable to the unskilled workmen. This award was in operation for a period of two years but was thereafter determined by notice given by workmen followed up by similar notice by employers. The reference out of which the present appeals arise included several other matters besides retaining allowance to seasonal employees, but with those we are no longer concerned in these appeals. Nor are we concerned with the question of retaining allowance to skilled and semi-skilled workmen as that part of the award was not disputed by the present appellants.
4. On the question of retaining allowance the main contentions on behalf of the employers were that agriculture was the primary occupation of these persons and the employment in the sugar factory was merely a subsidiary occupation, that the claim for retaining allowance was really in the nature of unemployment relief which it was the duty of the State and not the industry to give, that the relationship between the employers and these employees does not exist in the off season and so no payment of anything in the character of wages could possibly be claimed by the labour. The Tribunal overruled all these objections. It was of opinion that the working season in the factory completely covers the paddy harvesting season in North Bihar, where most of the factories are situated so that the workmen the bulk of who
