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2012 Supreme(Mad) 3636
High Court of Judicature at Madras
D. HARIPARANTHAMAN, J.
K. Dharmalingam
Versus
Labour Court, Rep. By its Presiding Officer, Coimbatore & Another
W.P. NO. 789 OF 2012
Decided On : 24-08-2012
Advocate Appeared:
For the Petitioner:C.K. Chandrasekkar, Advocate.
For the Respondent:R2 - P. Anbarasan, Advocate.
The main legal point established in the judgment is that the recovery from an employee's salary must comply with the provisions of the relevant Act and By-Laws, and if an illegal deduction is made, the employee can seek remedy through the Labour Court.
Headnote:
Deduction - Recovery of Salary - Tamil Nadu Shops and Establishments Act, 1947, Section 34(2)(c), Section 37 - The court discussed the applicability of the Tamil Nadu Shops and Establishments Act, 1947 to the second respondent-Establishment and the incorporation of Sections 34 and 37 into the By-Laws of the Co-operative Society. The court held that the recovery made from the petitioner's salary was illegal as it did not comply with the provisions of the Act and By-Laws, and directed the second respondent to repay the deducted amount to the petitioner.
Fact of the Case:
The petitioner, an employee of a Co-operative Society, filed a claim petition under section 33(C)(2) of the Industrial Disputes Act, 1947, seeking the repayment of a sum deducted from his salary. The Labour Court rejected the claim, stating that the issue should be resolved through an Industrial Dispute. The petitioner filed a writ petition to quash the order and seek repayment.
Finding of the Court:
The court found that the recovery from the petitioner's salary was made illegally, contrary to the provisions of the By-Laws framed under the Tamil Nadu Co-operative Societies Act. It held that the Labour Court had the jurisdiction to decide whether the recovery was made in violation of the By-Laws and directed the second respondent to repay the deducted amount to the petitioner.
Issues: The main issue was the legality of the recovery from the petitioner's salary and the jurisdiction of the Labour Court under section 33(C)(2) of the Industrial Disputes Act to decide on the same.
Ratio Decidendi: The court held that if an employer makes an illegal deduction from the earned wages, the employee is not required to seek remedy by raising an industrial dispute and can approach the Labour Court. It also emphasized the importance of compliance with the provisions of the Act and By-Laws regarding deductions from wages.
Final Decision: The court set aside the Labour Court's order and directed the second respondent to repay the deducted amount to the petitioner within eight weeks.
1. The petitioner was an employee of the second respondent Co-operative Society. He retired from service on 31.10.2004. A sum of Rs.86,000/-was deducted from the salary of the petitioner from August 2003 to October 2004 i.e., till he retired from service.
2. The petitioner filed a claim petition in C.P.No.397 of 2006 before the first respondent-Labour Court under section 33(C)(2) of the Industrial Disputes Act, 1947 claiming the aforesaid amount.
3. The second respondent-Management took a plea that the second respondent incurred loss in running a liquor shop. The loss was taken as Rs.4,30,000/-and the same was apportioned among the five employees including the petitioner. As per the apportionment, Rs.86,000/- was recovered from the salary of the petitioner. Further, the issue as to the validity of the recovery could not be gone into under section 33(C)(2) of I.D. Act and the remedy is by way of raising an industrial dispute.
4. The Labour Court passed an order dated 14.03.2011 rejecting the claim of the petitioner stating that the above Computation Petition under section 33(C)(2) of the Industrial Disputes Act, 1947 is not maintainable, since the issue as to whether the recovery shall be made from the salary of the petitioner or not is a disputed one and the same shall be resolved only by way of an Industrial Dispute under section 10 of the Industrial Disputes Act.
5. The petitioner has filed this writ petition to quash the order dated 14.03.2011 of the first respondent and for a direction to the second respondent to repay the amount that was recovered from his salary.
6. A counter affidavit is filed by the second respondent refuting the allegations.
7. Heard both sides.
8. The learned counsel for the petitioner submits that the above recovery was made illegally contrary to sections 34(2)(c) and 37 of the Tamil Nadu Shops and Establishments Act, read with By-Law No.7 in annexure to the Regulations framed under Special By-Laws No.20 relating to the service conditions of the employee.
9. On the other hand, the learned counsel for the second respondent has submitted that Tamil Nadu Shops and Establishments Act, 1947 is not applicable to the second respondent-Establishment except section 41, since the same was exempted under section 6 of the Tamil Nadu Shops and Establishments Act.
10. In reply, the learned counsel for the petitioner submitted that sections 34(2)(c) and 37 of the Tamil Nadu Shops and Establishments Act, as such, would not apply to the second respondent-Establishment, but, the same sections are getting incorporated into the By-Laws referred to above and in support of his contentions, he has relied on the Division Bench judgements of this court in W.A.No.1372 to 1375 of 2006, dated 08.01.2007 and W.A.No.1264 of 2009, dated 07.10.2009 .
11. I have considered the submissions made on either side.
12. A sum of Rs.86,000/- was recovered from the salary of the petitioner from August 2003 to 31.10.2004. The petitioner has questioned the recovery on the ground that the recovery was made illegally contrary to the provisions of the By-Laws framed under the Tamil Nadu Co-operative Societies Act. There is no bar for the Labour Court under section 33(C)(2) of the Industrial Disputes Act to decide as to whether the recovery-from the earned wages was made in violation of the By-laws of the second respondent co-operative society. If it is the case of the second respondent that punishment of recovery from wages was imposed pursuant to disciplinary action, then it is different. If an employer makes illegal deduction from the earned wages, the employee shall not be directed to seek remedy by raising industrial dispute under section 2(k) of the I.D. Act and to get the same adjudicated by the Labour Court after reference under section 10 of I.D. Act is made by the Government.
13. The relevant By-Law relied on by the petitioner is extracted hereunder:-
"7. Deductions which may be made from wages shall be in accordance
