The Court held that a declared 'special casual leave' amounted to illegal lay-off under the Industrial Disputes Act, resulting in the workers' entitlement to backwages and benefits.

ORDER :

ANANT RAMANATH HEGDE, J.

This petition is filed by the two registered Unions of the respondent-Company (for short, ‘Company’), which was closed in terms of the closure order dated 04.05.2002.

2. The petitioners assail the award dated 29.07.2013, passed by the Industrial Tribunal, Mysuru (‘Tribunal’) in Ref. No.92/2005. In terms of the impugned award, the petitioners’ reference is rejected.

3. Certain facts are admitted: The Union raised the dispute relating to the “special casual leave” declared by the Company, on the premise that it amounts to Lay-Off, as the “special casual leave” denied employment and wages without terminating the relationship between employer and employee.

4. The Company claimed that it was unable to employ the workers due to a shortage of raw materials, and declared “special casual leave”. Though employment was denied, workers were permitted to seek employment elsewhere during the said period; as such, workers are not entitled to wages, according to the Company’s contention.

5. When the matter was still before the Conciliation Officer, the Company was closed on 04.05.2002.

6. The Conciliation failed, and thereafter, the Conciliation Officer referred the matter to the appropriate Government. The appropriate Government refused to refer the dispute on the premise that the Company had been closed with effect from 04.05.2002.

7. The petitioners questioned the said decision of the appropriate Government in Writ Petitions No.19235- 236/2003. The Writ Petitions were allowed, and the appropriate Government was directed to refer the dispute for adjudication to the Tribunal.

8. Consequently, the appropriate Government referred the dispute for adjudication.

9. The points for reference framed by the Government are as under:

(i) Whether the Management of M/s Indian Plywood Manufacturing Company Limited, South Kannada District, is justified in declaring special casual leave with effect from 03.01.2000 and offering 50% wages amounts to illegal Lay-Off?

(ii) If so, to what relief are the workmen entitled to?

10. Before the Tribunal, the petitioners claimed full wages for the period between 03.01.2000 to 04.05.2002 on the premise that the “special casual leave” is illegal and it amounts to illegal “Lay-off” and the mandatory provisions under Chapter V-B of the Industrial Disputes Act, 1947 (for short, ‘Act, 1947’) governing Lay-off are not followed.

11. The Company contested the petition on the premise that Chapter V-B of the ‘Act, 1947’ is not applicable to the Company.

12. The Company also took the contention that the period between 03.01.2000 to 04.05.2002 is treated as “special casual leave”, which permitted the workmen to stay away from the Company and allowed them to work elsewhere. The Company also contended that, with effect from 04.05.2002, the Company has been closed and the workmen were paid compensation and had given a complete discharge and the workmen accepted the compensation without any protest; as such, there is no liability on the Company.

13. The Tribunal, in terms of the impugned award, has rejected the claim.

14. It is relevant to notice that the Tribunal, in addition to the points for reference framed by the appropriate Government, also framed five points for consideration to adjudicate the reference. Said five points are as under:

(i) Whether Chapter V-B of the Act is applicable to the Establishment of the second party?

(ii) Whether the declaration of ‘Special Leave’ by the second party from 03.01.2000 is an illegal Lay- off?

(iii) Whether the closure compensation given by the second party also covers Lay-off compens