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1998 Supreme(Mad) 1297
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE E. PADMANABHAN
Union and Others - Appellant
Versus
Indian Oxygen EmployeesBoc India Limited (Formerly Indian Oxygen Limited ) and Others - Respondents
W.A. No. 254/1998, W.P. Nos. 3117, 4270 & 8503/1997 and 479 & 3233/1998 etc.,
Decided On : 24 September 1998
An employer may discontinue or reduce benefits payable to his employees under conditions of their service which are similar to the benefits conferred by the ESI Act to the extent specified in Regulation 97 of the ESI Regulations.
Headnote:
ESI ACT - SECTION 72 - MEDICAL BENEFITS SCHEME - WITHDRAWAL - SETTLEMENT - SERVICE CONDITIONS - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 18(1) - SECTION 12(3) - MAINTAINABILITY OF WRIT PETITION - ARTICLE 226 OF THE CONSTITUTION OF INDIA - ARTICLE 12 OF THE CONSTITUTION OF INDIA - PUBLIC DUTY - FUNDAMENTAL RIGHTS - REGULAR REMEDY - INDUSTRIAL DISPUTES ACT, 1947.
Fact of the Case:
The petitioner union challenged the withdrawal of medical benefits by the respondent employer following the extension of the ESI Act coverage to employees drawing salary up to Rs. 6,500/- per month. The petitioner contended that the withdrawal of benefits was illegal and arbitrary, and that it violated Section 72 of the ESI Act, which prohibits employers from reducing wages or discontinuing benefits payable under the conditions of service. The respondent employer contended that the withdrawal of benefits was permissible under the terms of a settlement agreement entered into between the employer and the employees under Section 18(1) of the Industrial Disputes Act, 1947, which provided for the withdrawal of medical benefits upon the extension of the ESI Act coverage.
Finding of the Court:
The court held that the withdrawal of medical benefits was permissible under the terms of the settlement agreement, which was binding on both the employer and the employees. The court further held that Section 72 of the ESI Act did not prohibit the withdrawal of benefits in this case, as the benefits provided under the settlement agreement were not part of the wages and were not similar to the benefits conferred by the ESI Act. The court also held that the writ petition was not maintainable, as the employees had an alternative remedy under the Industrial Disputes Act, 1947.
Issues: 1. Whether the withdrawal of medical benefits by the respondent employer was illegal and arbitrary. 2. Whether the withdrawal of benefits violated Section 72 of the ESI Act. 3. Whether the settlement agreement between the employer and the employees under Section 18(1) of the Industrial Disputes Act, 1947, was valid and binding. 4. Whether the writ petition was maintainable.
Ratio Decidendi: 1. The withdrawal of medical benefits was permissible under the terms of the settlement agreement, which was binding on both the employer and the employees. 2. Section 72 of the ESI Act did not prohibit the withdrawal of benefits in this case, as the benefits provided under the settlement agreement were not part of the wages and were not similar to the benefits conferred by the ESI Act. 3. The settlement agreement between the employer and the employees under Section 18(1) of the Industrial Disputes Act, 1947, was valid and binding. 4. The writ petition was not maintainable, as the employees had an alternative remedy under the Industrial Disputes Act, 1947.
Final Decision: The writ petition was dismissed.
E. PADMANABHAN, J.
The above Writ Appeal and the writ petitions were taken up together for final disposal. 2. Mr. N. G. R. Prasad, learned counsel appeared for the appellant in W.A. No. 254/1998, W.P. Nos. 479/1998, 8503/1997. Mr. A. L. Somayaji, Senior Counsel appeared for the respondent in Writ Appeal No. 254/1998 for M/s. Gupta & Ravi. Mr. S. Ramasubramanian, Senior Counsel appeared for Mr. S. Jayaraman, Senior Counsel in W.P. No. 8503/1997, Ms. R. Vaigai appeared for the petitioners in W.P. Nos. 4270/1997, 3117/1997 & 3233/1998, Mr. G. Subramanian, Senior Counsel for M/s. T. S. Gopalan & Co. appeared for the respondents in W.P. No. 4270/1997, 3117/1997 and 3233/1998. 3. With the consent of counsel appearing for either side, the main Writ Appeal and the Writ Petitions were taken up for disposal. 4. The Writ Appeal No. 254/1998 has been preferred by Indian Oxygen employees Union represented by its General Secretary being aggrieved by the order of dismissal dated January 28, 1998 made in W.P. No. 18098/1997. 5. In the said Writ Petition No. 18098/1997, the petitioners Union prayed for the issue of writ or direction in the nature of mandamus directing the respondent management not to discontinue the medical allowance and other benefits extended to the workmen/staff. 6. For convenience, the parties to the Writ Appeal will be referred to as arrayed in the writ petition. 7. In the affidavit filed in support of the writ petition, it has been stated that the petitioner is a trade union recognised by the respondent management and the petitioner union represents about 114 employees, who are drawing more than Rs. 3000/- per month and working under the respondent Company.
8. According to the Writ petitioner, the employees working in the respondent establishment are covered under Medical Benefit Scheme in terms of Settlement which the respondent establishment and Petitioner Union have concluded. All the members of the petitioners union were drawing more than Rs. 3, 000/- per month. Till recently they were not covered under the E.S.I. Act. In terms of notification issued by the Government of India dated December 23, 1996, the Government of India has enhanced the coverage of the Act to, such of those employees, who draw salary upto' Rs. 6, 500/- per month. Following the notification, the petitioner Union addressed the Secretary to Government, Labour & Employment Department, Govermnent of Tamil Nadu on January 16, 1997 seeking for exemption of the factory from the coverage of the provisions of the employees State Insurance Act, 1948, while giving details of the various medical facilities, medical reimbursement schemes and medical welfare schemes, which were presently available to the employees.
9. According to the Writ Petitioner, the State Government by a letter dated March 7, 1997 required the Writ Petitioner Union to apply for exemption of the factory from the applicability of the provisions of the ESI Act through the management. However, the management had not taken steps in this respect, despite reminders. According to the petitioner, the employees of the respondent establishment enjoy better benefits under the Medical Benefits Schemes of the Company than that may be provided under the ESI scheme.
10. In terms of the existing facilities, the petitioners claim that the respondent Company had provided such facilities as detailed hereunder :
"The Company gives the reimbursement of medical expenses incurred for domiciliary treatment for self and family has been raised to Rs. 200/- per month.Part time services of the doctor will be arranged by the company for the purpose of chamber consultations.
Hospitalisation Expenses :
Rs. 3000/- per year to be accumulated upto Rs. 9000/- for a period of 3 years in the event of hospitalisation of die employee or the family members. Under hospitalisation scheme, any employee can choose any reputed Hospital/Nursing Home for getting treatment and there is no restriction in this respect.
Company's Gold
