Management of Kairbetta Estate, Kotagiri
Vs. Rajamanickam & Ors  INSC 55 (24 March 1960)
GUPTA, K.C. DAS
CITATION: 1960 AIR 893 1960 SCR (3) 371
CITATOR INFO :
RF 1964 SC1458 (10) RF 1976 SC2584 (10)
compensation-Closure of division due to disturbances by
workers--Lock-out--Subsequent reopening of division--Claim for lay-off
compensation--Lock-out and lay-off, Distinction--Industrial Disputes Act,
1947--(14 of 1947), ss. 2(1), 2 (kkk), 25C, 25E(iii), 33C.
The appellant's manager was violently
attacked by its workmen as a result of which he sustained serious injuries.
The workers in the lower division also
threatened the appellant's staff working in that division that they would
murder them if they worked there. The appellant was therefore compelled to
notify that the division would be closed until further notice. Subsequently as
a result of conciliation before the labour officer, the division was opened
again. The workers made a claim for lay-off compensation under s. 25C of the Industrial
Disputes Act, 1947, for the period during which the lower division was closed
on the footing that the management for their own reasons did not choose to run
the division during that period. The appellant's answer was, inter alia, that
the closure of the division amounted to a lock-out which under the
circumstances was perfectly justified and as such the workers were not entitled
to claim any lay-off compensation:
Held ; (1) that the concept of a lock-out is
essentially different from that of a lay-off and where the closure of business
amounts to a lock-out under s. 2(1) of the Industrial Disputes Act, 372 it
would be impossible to bring it within the scope of a lay-off under s. 2 (kkk)
of the Act.
(2)that the expression " any other
reason " in S. 2 (kkk) means any reason which is allied or analogous to
reasons already specified in that section.
J. K. Hosiery Factory v. Labour Appellate
Tribunal of India Anr, A.I.R. 1956 All. 498, approved.
(3) that the lock-out which was justified on
the facts of the case, was not a lay-off and therefore the workmen were not
entitled to claim any lay-off compensation.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 91 of 1959.
Appeal by special leave from the decision
dated March 24,1958, of the Labour Court, Coimbatore, in R. P. No. 35 of 1958.
G. B. Pai and Sardar Bahadur, for the
M. K. Ramamurthi and T. S. Venkataraman, for
1960. March 24. The Judgment of the Court was
delivered by GAJENDRAGADKAR, J.-This appeal by special leave is directed
against the order passed by the Labour Court at Coimbatore directing the
appellant, the Management of the Kairbetta Estate, Kotagiri, to pay lay-off
compensation to its workmen, the respondents, for the period between July 28,
1957, to September 2, 1957. This order was passed on a complaint filed by the
respondents before the Labour Court under s. 33C(2) of the Industrial Disputes
Act, XIV of 1947 (hereinafter called the Act).
The material facts leading to the
respondents' complaint must be set out briefly at the outset. On July 26, 1957,
Mr. Ramakrishna Iyer, the appellant's Manager, was assaulted by some of the
workmen of the appellant. He suffered six fractures and had to be in hospital
in Coonoor and Madras for over a month. The appellant's staff working in the
division known as Kelso Division was also threatened by the workmen., As a
result of these threats three members of the staff wrote to the appellant on
July 27, 1957, that they were afraid to go down to the lower division and it
was impossible for them to work there because their lives were in danger. They
added that the workers in the lower division were threatening them 373 that they
would murder them if they worked in the lower division. On receiving this
communication from its staff the appellant notified on the same day that the
Kelso Division would be closed from that day onwards until further notice. This
notice referred to the brutal assault on the Manager and to the threat held out
against the field staff who were reluctant to face the risk of working in the
lower division. It appears that the Kelso Division continued to be closed until
September 2, 1957, on which date it was opened, as a result of conciliation
before the labour officer, when the respondents gave an assurance that there
would not be any further trouble. The claim for layoff is made for the said
period during which the division remained closed between July 28 to September
Soon after the division was closed the
respondents made a complaint to the Labour Court (No. 43 of 1957) under s. 33A
of the Act in which they alleged that they had been stopped from doing their
work without notice or enquiry and claimed an order of reinstatement with back
wages and continuity of service. At the hearing of the said complaint the
appellant raised a preliminary objection that the closure in question was a
lock-out and that it did not amount either to an alteration of conditions of
service to the prejudice of the workmen nor did it constitute discharge or
punishment by dismissal or otherwise under cls. A and B of s. 33 respectively,
and so the petition was incompetent. This preliminary objection was upheld by
the Labour Court and the complaint was accordingly dismissed on November 30,
Thereafter the present complaint was filed by
the respondents on January 31, 1958, under s. 33C of the Act.
In this complaint it was stated that the
respondents were refused work from July 28 to September 2, 1957, " by
declaring a lock-out of a division of the estate " and the claim made was
that, as the management for their own reasons did not choose to run the
division during the said days and laid-off the respondents, the respondents
were entitled to claim lay-off compensation under s. 25C of the Act. Against
this complaint the appellant raised several contentions 48 374 It was urged on
its behalf that the complaint was incompetent under s. 33C and that the Labour
Court had no jurisdiction to deal with it. It was also contended that the
closure of the division amounted to a look-out which under the circumstances.
was perfectly justified and as such the respondents were not entitled to claim
any lay-off compensation. The Labour Court rejected the preliminary objection
as to want of jurisdiction and held that the complaint was competent under s.
33C. On the merits it found in favour of the respondents and so it directed the
appellant to pay to the respondents the lay-off compensation for the period in
question. It is this order which is challenged before us in the present appeal;
and the same two questions are raised before us.
For the purpose of deciding this appeal we
will assume that the complaint filed by the respondents under s. 33C was
competent and that the Labour Court could have entertained a claim for lay-off
compensation if the respondents were otherwise entitled to it. On that
assumption the question which we propose to decide is whether the closure of
the appellant's division during the relevant period which amounts to a lock-out
can be said to fall within the definition of lay-off. We have already pointed
out that in the earlier complaint by the respondents under s. 33A it has been
held by the Labour Court that the closures question was a lock-out and as such
the appellant had not contravened the provisions of s. 33 of the Act. Even in
the present application the respondents have admitted that the said closure is
a lock-out but they have added that a lock-out falls within the definition of
lay-off and that is the basis for their claim for layoff compensation. The
question which thus arises for our decision is: Does a lock-out fall under s.
2(kkk) which defines a lay-off ? Section 2(kkk) defines a lay-off as meaning
the failure, refusal or inability of an employer on account of shortage of
coal, power or raw materials or the accumulation of stocks or the breakdown of
machinery or for any other reason to give employment to a workman whose name is
borne on the muster rolls of his industrial establishment and who has not been
375 retrenched. There is an explanation to the definition which it is
unnecessary to set out. It is clear that tile lay-off takes place for one or
more of the reasons specified in the definition. Lay-off may be due to shortage
of coal or shortage of power or shortage of raw materials or accumulation of
stocks or breakdown of machinery or any other reason. " Any other reason
" to which the definition refers must, we think, be a reason which is
allied or analogous to reasons already specified. It has been urged before us
on behalf of the respondents that " any other reason " mentioned in
the definition need not be similar to the preceding reasons but should include
any other reason of whatsoever character for which lay-off may have taken
and in support of this argument reliance is
placed on s. 25E(iii). Section 25E deals with three categories of cases where
compensation is not liable to be paid to a workman even though he may have been
laid-off. One of these is prescribed by s. 25E(iii); if the laying-off is due
to a strike or slowing down of production on the part of workmen in another
part of the establishment no compensation has to be paid. The argument is that
laying-off which is specified in this clause has been excepted because, but for
the exception, it would have attracted the definition of s. 2(kkk) and would
have imposed an obligation on the employer to pay lay-off compensation. That no
doubt is true; but we donot see how the case specified in this clause is
inconsistent with the view that " any other reason " must be similar
to the preceding reasons specified in the definition. If there is a strike or
slowing down of production in one part ,of the establishment, and if lay-off is
the consequence, the reason for which lay-off has taken place would undoubtedly
be similar to the reasons specified in the definition. We are, therefore,
satisfied' that the expression " any other reason " should be
construed to mean reason similar or analogous to the preceding reasons
specified in the definition. That is the view taken by the Allahabad High Court
in J. K. Hosiery Factory v. Labour Appellate Tribunal of India & Anr.(1).
(1) A.I.R. 1956 All. 498.
376 Let us now consider what a lock-out means
under the Act.
Section 2(1) defines a lock-out as meaning
the closing of a place of employment, or the suspension of work, or the refusal
by an employer to continue to employ any number of persons employed by him. It
may be relevant to point out that the definition of lock-out contained in s.
2(e) of the Trade Disputes Act, 1929 (VII of 1929), had, in addition to the
present definition under s. 2(1), included an additional clause describing a
lock-out which provided that "such closing, suspension or refusal occurs
in consequence of a dispute and is intended for the purpose of compelling those
persons or of aiding another employer in compelling persons employed by him to
accept terms or conditions of or affecting employment ". This clause has
now been deleted.
Even so, the essential character of a
lock-out continues to be substantially the same. Lock-out can be described as
the antithesis of a strike. Just as a strike is a weapon available to the
employees for enforcing their industrial demands, a lock-out is a weapon available
to the employer to persuade by a coercive process the employees to see his
point of view and to accept his demands. In the struggle between capital and
labour the weapon of strike is available to labour and is often used by it, so
is the weapon of lockout available to the employer and can be used by him. The
use of both the weapons by the respective parties must, however, be subject to
the relevant provisions of the Act.
Chapter V which deals with strikes and
lock-outs clearly brings out the antithesis between the two weapons and the
limitations subject to which both of them must be exercised.
Thus the concept of lockout is essentially
different from the concept of lay-off, and so where the closure of business
amounts to a lock-out under s. 2(1) it would be impossible to bring it within
the scope of lay-off under s. 2(kkk). As observed by the Labour Appellate
Tribunal in M/S. Presidency Jute Mills Co. Ltd. v. Presidency Jute Mills Co.
Employees' Union (2), in considering the
essential character of a lock-out its dictionary meaning may be borne in mind.
According to the dictionary meaning (2)
377 lock-out means " a refusal by the
employer to furnish work to the operatives except on conditions to be accepted
by the latter collectively ".
Stated broadly lay-off generally occurs in a
continuing business, whereas a lock-out is the closure of the business.
In the case of a lay-off, owing to the
reasons specified in s. 2(kkk) the employer is unable to give employment to one
or more workmen. In the case of a lock-out the employer closes the business and
locks out the whole body of workmen for reasons which have no relevance to
causes specified in s. 2(kkk). Thus the nature of the two concepts is entirely
different and so are their consequences. In the case of a lay-off the employer
may be liable to pay compensation as provided by s. 25(C), (D) and (E) of the
Act; but this liability can-not be invoked in the case of a lock-out. The
liability of the employer in cases of lock-out would depend upon whether the
lock-out was justified and legal or not;
but whatever the liability, the provisions
applicable to the payment of lay-off compensation cannot be applied to the
cases of lockout. Therefore, we hold that the lock-out in the present case was
not a lay-off, and as such the respondents are not entitled to claim any
lay-off compensation from the appellant. Incidentally we would like to add that
the circumstances of this case clearly show that the lock-out was fully
justified. The appellant's Manager had been violently attacked and the other
members of the staff working in the lower division were threatened by the
respondents. In such a case if the appellant locked out his workmen no
grievance can be made against its conduct by the respondents.
In the result the appeal is allowed, the
order passed by the Labour Court is set aside and the complaint filed by the
respondents under s. 33C is dismissed. There would be no order as to costs.