The Tata Oil Mills Co. Ltd. Vs. K.V.
Gopalan & Ors  INSC 110 (15 April 1965)
Kerala Industrial Establishment (National and
Festival Holidays) Act, 1958, ss. 3 and 11--Scope of.
Under the Standing Orders of the appellant company,
its employees were entitled to five holidays with pay on specified dates during
each year. Furthermore, by an agreement with the respondents' union, the
company had agreed to grant an additional day's holiday with pay, thus raising
the total number of paid annual holidays to six. In 1958 the Kerala Industrial
Establishments (National and Festival Holidays) Act, 1958, was passed and s. 3
of the Act required every employer to declare holidays on every 26th January,
15th August and 1st May, and to grant four additional festival holidays each
year, on dates to be fixed by the Inspector after consulting the employer and
the employees. The number of paid holidays was thus statutorily fixed at 7.
In 1962, the company obtained the Inspector's
decision on the four festival holidays and declared the dates on which such
holidays would be given. At that time, while an industrial dispute between the
company and its employees was pending. the respondents filed applications under
s. 33A of the Industrial Disputes Act, 1947, before the Tribunal. It was
contended in these applications that the statutory provision in s. 3 for 7 paid
holidays did not override or abrogate the existing arrangement as to paid
holidays and that the holidays to be given under s. 3 would be in addition, to
the holidays which the appellant was bound to give the respondents under
existing arrangements; and that the appellant's attempt to limit the number of
paid holidays to 7 during 1962 was contrary to the terms of employment
evidenced by the existing arrangement and therefore violative of s. 33. This
contention was upheld by the Tribunal. In appeal to this Court,
HELD: Under s. 3 the statutory requirement is
7 paid holidays each year. If under an existing arrangement the employees were
entitled to more than 7 paid holidays, such more favourable right was protected
by s. 11. The scheme of s. 11 clearly shows that s. 3 is not intended to
prescribe a minimum number of paid holidays in addition to the existing ones
and, in the present case, would operate only to raise the total number of
holidays from 6 under the existing arrangements to 7 paid holidays in
accordance with s. 3.
CIVIL APPELLATE JURISDICTION: Civil Appeal
Nos. 150 and 160 of 1964.
Appeals by special leave from the award dated
September 20, 1962, of the Industrial Tribunal, Ernakulam in Industrial Dispute
Nos. 11 and 10 of 1962 respectively.
761 G.B. Pai, J.B. Dadachanji, O.C. Mathur
and Ravinder Narain, for the appellant.
M.R.K. Pillai, for the respondents.
The Judgment of the Court was delivered by
Gajendragadkar, C.J. The short question of law which these two appeals raise
for our decision relates to the construction of ss. 3 and 11 of the Kerala Industrial
Establishments (National and Festival Holidays) Act, 1958 (No. 47 of 1958)
(hereinafter called the Act.. That question arises in this way. Two complaints
were filed against the appellant, the Tam Oil Mills Company Ltd., by the two
groups of respondents, its workmen, respectively under s. 33A of the Industrial
Disputes Act. These applications alleged that the management of the appellant
had contravened the provisions of s. 33 of the said Act inasmuch as it had
denied its employees leave with wages on Founder's Day and Good Friday in 1962.
According to the respondents, they were entitled to have holidays with pay on
the said two days under the terms and conditions of service, and so, they
claimed that the Tribunal should direct the appellant to give its employees
holidays under the said existing arrangement and should pass other appropriate
order's for the payment of wages for the two holidays in question. The
appellant disputed the correctness of the respondents' contention. The Tribunal
has rejected the appellant's plea and has declared that the respondents are
entitled to the privilege 'of paid holidays on Founder's Day and Good Friday in
1962. It has also ordered that the appellant should pay the wages to the
respondents for those two days and the proportionate salary of the staff
members as soon as the award comes into force. It is against these orders
passed by the Tribunal on the two complaints preferred before it by the respective
respondents that the appellant has come to this Court by special leave; and on
its behalf, Mr. Pai has contended that in making the award', the Tribunal has
misconstrued the effect of ss. 3 and 11 of the Act.
Standing Order 30 of the Standing Orders of
the appellant company makes provision for leave of all categories. S.O. 30 (vi)
provides for holidays. It lays down that the factory will be closed on the
following days which will be considered as Company Holidays with pay, and will
not be counted against the casual or privilege leave of an employee:
1. New Year Day (1st January).
2. Founder's 'Day (Saturday nearest to 3rd
March) 3. Good 3 Friday
5. Christmas Day (25th December) There is a
note appended to this provision which makes it clear that in the event' of the
Company being compelled to observe a holiday or holidays for reasons of State
such day or days shall not be counted as against 'the privilege or casual leave
of the employees but shall 762 be treated as a Company holiday or holidays.
Thus, it is clear that under the relevant Standing Order, the respondents are
entitled to 5 paid holidays every year.
After the Standing Orders were framed and
certified, there was an agreement between the appellant and the respondents'
Union as a result of which the appellant agreed to grant a further holiday,
and' this agreement raised the number of total paid holidays in a year to 6.
The additional holiday which the appellant thus agreed to give to the
respondents was to be given on the day when the respondents' Union would
celebrate its Union Day. Apparently, this holiday was analogous to the
Founder's Day, the idea underlying the agreement being that just as the
appellant gave a paid holiday on the Founder's Day, the respondents should be
given a paid holiday on the Union Day.
It appears that even after this agreement was
reached, the respondents began to claim additional holidays; but the appellant
was not prepared to make any addition to the list of holidays. It was prepared
to leave the choice of the agreed holidays to the employees provided they
submitted to the Company an agreed list of such holidays.
In 1958, the Act was passed and it came into
force on the 29th December, 1958.-Section 3 of the Act provides "Grant of
National and Festival Holidays-- Every employee shall be allowed in each
calendar year a holiday of one whole day on the 26th January, the 15th August
and the 1st May and four other holidays each of one whole day for such
festivals as the Inspector may, in consultation with the employer and the
employees specify in respect of any industrial establishment".
The result of this provision was that every
employer to whom the Act applied had to declare holidays on the 26th January,
the 15th August and the 1st May and had to give four other holidays according
to the decision of the Inspector, the requirement of the section being that the
Inspector had to consult the employer and the employees before fixing such
other holidays. In other words, s. 3 statutorily fixed the number of paid holidays
at 7; fixed three out of them and left the decision of the remaining four to
the Inspector who had to consult the employer and the employees.
In pursuance of this provision, the Inspector
declared certain holidays for the year 1959. Not satisfied with the decision of
the Inspector, one of the appellant's employees Mr. Baskara Menon filed a writ
petition in the Kerala High Court under Art. 226 of the Constitution
challenging the validity of the Inspector's decision. In that writ petition,
the question about the construction of s. 3 of the 763 Act was agitated. In the
result, the High Court held that the complaint made by the petitioner against
the validity of the decision of the Inspector was not well-founded, and so, the
writ petition was dismissed.
In 1962, the appellant followed the same
procedure and got a decision as to the festival holidays from the Inspector and
declared that the said holidays would be observed as paid holidays in the year.
At this time, certain industrial disputes were pending between the appellant
and its employees belonging both to monthly and daily-rated categories before
the Industrial Tribunal at Ernakulam. The respondents felt that the declaration
of the holidays made by the appellant for the year 1962 amounted to a contravention
of s. 33 of the Industrial Disputes Act, and so, they filed the two present
complaints before the Industrial Tribunal under 33A of the said Act. That, in
brief, is the genesis of the present complaints.
We have already noticed the provisions of s.
3 of the Act. The contention raised by the respondents before the Tribunal was
that the statutory provision as to 7 paid holidays prescribes the minimum
number of holidays which the employer has to give to his employees. This
provision, according to the respondents, does not over-ride or abrogate the
existing arrangement as to paid holidays. In regard to paid holidays which are
common to s. 3 and the present arrangement they would, of course, have to be
treated as paid holidays, but the four other festival holidays which the
Inspector decides from year to year would be in addition to the holidays which
the appellant is bound to give to the respondents under the existing
arrangement, and since the appellant has limited the number of paid holidays to
7 for the year 1962, it has acted contrary to the terms of employment evidenced
by the existing arrangement as to paid holidays and that constitutes the
violation of s. 33 of the Industrial Disputes Act. This contention has been
upheld by the Tribunal; and Mr. Pai argues that the view taken by the Tribunal
is plainly inconsistent with the true scope and effect of s. 3 read with s. 11
of the Act.
That takes us to s. 11 of the Act, because
this section has to be read along with s. 3 in determining the validity of the
conclusion recorded by the Tribunal on the main point of dispute between the
parties. s. 11 reads thus:-- "Rights and privileges under other laws,
etc., not affected-Nothing contained in this Act shall adversely affect any
rights or privileges which any employee is entitled to with respect to national
and. festival holidays on the. date on which this Act comes into force under
any other law, contract, custom or usage, if such rights or privileges are more
favourable to him than those to which he would be entitled under this
D)5 SCI-10 764 This section gives an option
to the employees, they can choose to have the paid' holidays either as
prescribed by s. 3 or as are available to them under any other law, contract,
custom or usage exercising this choice, it must, however, be borne in mind by
the employees that the 26th January, the 15th August and the 1st May have to be
taken as three holidays. That is the direction of s. 3. In regard to the
remaining 4. the Inspector decides which days should be paid holidays. In other
words, the. statutory requirement is 7 paid holidays. If under the existing
arrangement the employees are entitled to 'have more ,,than7 paid holidays,
that right will not be defeated-by s. 3, because s. 11 expressly provides that
if the rights or privileges in respect of paid holidays enjoyed by the
employees are more favourable than are prescribed by s. 3, their existing
rights and privileges as to the total number of holidays will not be prejudiced
by s. 3. The scheme of s. 11 thus clearly shows that s. 3 is not intended to
prescribe a minimum number of paid holidays in addition to the existing ones,
so that the respondents should be entitled to claim the seven holidays
prescribed by s. 3 plus the six holidays to which they are entitled under the
If in addition to the three holidays which
are compulsory under s. 3, the employees are getting, say 3' other paid
holidays, then s. 3 would step in and would require the employer to give his
employees one more paid holiday, so as to make the number of paid holidays 7.
In our opinion, if ss. 3 and 11 are read together, there can be no doubt that
the respondents' claim that they should have 7 holidays as prescribed by s. 3
plus 6 holidays as are available to them under the present arrangement is
cleary untenable. In the present case, the respondents were having six paid
The statute has fixed the minimum number at 7
paid holidays, and so, since the existing arrangement was less favourable to
the employees, the statutory provision will come to their help and they will be
entitled to claim 7 paid holidays in a year, and that means that s. 3 will be
operative. If that be so, the procedure followed by the employer in consulting
the Inspector and in fixing the list of 4 paid holidays for 1962 in addition to
the three holidays fixed by the statute is perfectly consistent with the provisions
of s. 3 of the Act.
The Tribunal was, therefore, in error in
holding that the appellant had contravened s. 33 of the Industrial Disputes Act.
In the result, the appeals must be allowed,
the orders passed by the Tribunal in the two respective complaints set aside,
and the two complaints dismissed. There would be no order as to costs.