BAREILLY HOLDINGS LTD. v. THEIR WORKMEN
Citation: [1979] 3 S.C.R. 236; 1979 INSC 40
Court: Supreme Court of India
Bench: Y.V. CHANDRACHUD , R.S. SARKARIA, N.L. UNTWALIA, O. CHINNAPPA REDDY, A.P. SEN
Judgment date:
Case summary
1979 INSC 40. Supreme Court of India judgment dated 1979-02-16. BAREILLY HOLDINGS LTD. v. THEIR WORKMEN. Read the judgment and case details on LawSphereX.
Judgment text
2 38 SUPREME COURT REPORTS [1979] 3 s. c. R. BAREILLY HOLDINGS LTD. v. THEIR WORKMEN • February 16, 1979 • [Y. V. CHANDRACllUD, C. J. , R. S. SARK. ARIA, N. L. UNTWALIA, 0. CHINNAPPA REDDY AND A. P. SEN, JJ. J E111ployees State Insurance Act, 1948, Section 72 and Regulation 97 framed under Section 97(1) of the E. S. l. , Act, . 1948, purpose and effect oj- ' Whether 1he deduction of half day's wages corresponding to the sickness benefit to which the lvorkmen were entitled under the E. S. l. Act, in the event of their not availing themselves of the benefits under the E. S. l. scheme in order. By virtue of the award in Adjudication case No. 33 of 1952 given by the State Tribunal Allahabad, respondents were entitled to fifteen days' sick leave on full wages as a condition of their service. The appellant adopted the Employees State Insurance Act in 1957. The appellant, therefore, paid to the workmen full wages for two day's sick leave out of 1.
5 days' sick leave for the reason that the workmen did not get cash benefit for the first two days of the waiting period of sickness on account of the provisions of section 49 of the E. S. I. Act. For the balance of the thirteen days only half the wages' were paid. In the industrial dispute referred for adjudication to the Indtll! trial Tribunal under section 4(k) of the U. P. Industrial Disputes Act, the award went in favour of the workmen. Dismissing the appeal by special leave, the Court, HELD : !. The general purpose and effect of section 72 is to deny to the employers the right or power to reduce or discontinue the benefit payable to the workmen under their conditions of service on the ground that the benefits available under the conditions of service and under the E. S. I. Act being similar the workmen would not be entitled to a double benefit. [240 A-Bl Section 72 provides in terms that the mere circumstance th. et an employer is liable to make a contribution under the E. S. I.
Act will not entitle him, directly or indirectly, to reduce the wages of an employee or, in so far as the Regulation permits, discontinue or reduce the benefits payable to him under the conditions of his service even if those benefits are similar to tho benefits conferred by the E. S. I. Act. The purpos. e of Section 72 is evidently to dis~ courage employers from using the benefits provided under the E. S. I. Act as an excuse or justification for reducing or dis-continuing the benefits avDilable to the workmen under their conditions of service on the ground of similarity between the two types of benefits. The case of the appellant before the lndutrsial Tribunal was that it was making a contribution to the E. S. I.
Corporation for the benefit of its employees and if any individual employee • chose not to avail of the benefits due to him from the Corporation on account of the sickness benefit; it is he who ought to suffer and there would be no justification for obliging the employer to spend for his sickness benefit twice over. It is precisely this type of argument and attitude that the legislature anticipated and guarded against by incorporating the particular provision in section 72. (240 B-E] MREILLY HOLDINGS LTD. v. WORKMEN (Chandrachud, C. J. ) 237 2. The contention that it is enough for justifying the deduction from wages at its action in deducting half wages corresponding to the sickness benefit to which the workmen we. re entitled under the Act in regard to the sick leave was in accordance with the provisions of Regulation 97 of the Employees State Insurance (General) Regulations 1950, that if any individual employee choose not to avail of th~ benefit due to him from the E. S. I.
Corporation on account of his sickness, a deduction of half the wages corresponding to the sickness benefit could be made by the employer and that the sickness benefit provided· under the E. S. I. Act and the Scheme was in substitution of the benefits. provided by the employer and not in addition thereto. The appellant raised an objection to the maintainability of the reference on the ground that the dispute referred by the State Government to the Triounal was not an industrial dispute and contended further that the subject matter of the dispute fell within the exclusive jurisdiction of the Employees State Insurance Court set up under section 74 of the E. S. I. Act, as a result of which the Industrial Tribunal had no jurisdiction to-deal with the dispute. The objection to the maintainability of the reference and to the· ..
jurisdiction of the Industrial Tribunal to deal with it not having beeii pressed by the appellant's counsel, the only question which we liave to consider is whether the appellant can deduct half-day's wages corresponding to the sickness benefit to which the workmen are entitled under the E. S. I. Act, in the event of their not availing th~mselves of the benefits under the E. S. I. Scheme. BAREILLY HOLDINGS LTD. v. WORKMEN (Chandrachud, C. J. ) 239 • Before dealing with this question. it may be mentioned that the ' appellant has no objection to paying full wages for two days of sick leave to the workmen and in fact, it has been paying full wages for • two days out of 15 days' sick leave due to the workmen. The reason ~ for this course seems to be that the workmen do, not get cash benefit ~ for the first two days of the waiting period of sickness by reason of the provisions of section 49 of the E. S. l. Act.
The dispute in this ~ appeal is, therefore, confined to a period of 13 days of sick kave only, for which the workmen are being paid half wages by the appellant. • _. ---"---- To justify the deduction of half wages from 13 days of sick leave, , the appellant relies on the provisions of section 72 of the E. S. I. Act and Regulation 97 framed unde;r section 97 ( 1) of the E. S. I. Act. Section 72 reads thns : "Employer not to reduce the wages. No employer by reason only of his liability for any contributions payable under this Act shall directly or indirectly reduce the wages of any employee, or except as provided by the regulations, discontinue or reduce benefits payable to him under the conditions of his se;rvice which are similar to the benefits conferred by the Act. " The relevant part of Regulation 97 is as follows : "Discontinuance or reduction of benefi,t.
An employer may discontinue or reduce the benefits payable to his employees under conditions of tlieir service, which are similar to the benefits conferred by the Act to the extent specified below, namely: (a) from the date of commencement of the first benefit period following the appointed day fo;r his factory or estab-lishment - • (i) sick leave on half pay to the full extent; (ii) such proportion of any combined general purposes and sick leave on half pay as may be assigned as sick leave but in any case not exceeding SO per cent of such combined leave; (b) Provided that where an employee avails himself of any leave from the employer for sickness, maternity or temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he may be entitled under the Act for the correi;ponding ' period.
" • The general purpose and effect of section 72 is to deny to the employers the right or power to reduce or discontinue the benefits payable to the workmen under their conditions of service on the ground that the benefits available under the conditions of service and under the E. S. I. Act being similar, the workmen would not be entitled to a double benefit. Section 72 provides in terms that the mere circumstance that > an employer is liable to make a contribution under the E. S. I. Act _-l,_ will not entitle him, directly or indirectly, to reduce the wages of an "- 7 employee or, in so far as the Regulation permits, discontinue or reduce the benefits payable to him under the conditions cf his service even if those benefits are similar to the benefits conferred by the E. S. I. Act. The case of the appellant before the Industrial Tribunal was that it was making a contribution to the E. S. I.
Corporation for the benefit of its employees and if any individual employee chose not to avail of the benefits due to him from the Corporation on account of the sickness benefit, it is he who ought to suffer and there would be no justification for obliging the employer to spend for his sickness benefit twice over. It is precisely this type of argument and attitude that the legislature an. ticipated and guarded against by incorporating the particular provision in section 72. The purpose of that provision is evidently to discourage employers from using the benefits provided under the E. S. I. Act as an excuse or justification for reducing or discontinuing the benefits available to. the workmen under their corrditions of service on the ground of similarity between the two types of benefits. That leads to the question as to whether Regulation 97 can justify the deduction made by the appellant.
Regulation 97 provides that aii employer may discontinue or reduce the benefits payable to his employees under the conditions of their service which are similar to the benefits conferred by the E. S. I. Act but only to the extent specified in clauses (a) and (b) of the Regulation. We are not concerned with clause (b) and sub-clauses (i) and (ii) of clause (a) have no application in· the instant case. The appellant relie. s strongly oo the J proviso to Regulation 97 under which, where an employee avails himself of any leave from the employer for sickness, the employer shall be entitled to deduct from his leave salary the amount of benefit to which he may be entitled under the Act for the corresponding period. The case of the appellant is that it is enough for justifying the deduetion from wages due to the workmen tor sick leave that the employee is covered by the E. S. I. Act or the E. S. I. Scheme. It is not possible BAREILLY HOLDINGS LTD. v. WORKMEN (Chandrachud, C. l.
) 241 • to accept this submission. In the first plac. ~\ section 46 of the E. S. I. Act would show that employees who are covered by the E. S. I. AcL ' are entitled to certain benefits subject. to the provisions of the E. S. I. • Act. It is, therefore, not as if the workmen are entitled to the beriefit• . absolutely and. without compliance with the conditions laid down by the Act or the Regulation. Secondly, the proviso to Regulation 97 says that the employer shall be entitled to deduct from the leave salary of the employee, "the amount of benefit" to which he may be crilitled under the E. S. I. Act for the corresponding pe. riod of his sickness. • , workman does not become entitled to the "amount" payable to· him _. ~-by way of sickness benefit unless, in the first instance, he chooses to avail himself of the sickness benefit. That benefit cannot be forced on him.
This would show that the employer's right to make a deduction from the employee's sick leave wages can only be exercised in respect of those days of sickness leave for which the workman· has actually availed of the sickness benefit. Benefits which are available under the E. S. I. Act are not intended as substitutes for benefits to which the workmen are entitled under the conditions of their service. As stated ~rlier, a workman becomes entitled to sickness benefit only if he is qTl! lified for it and he gets a cash benefit only if he avails himself of the sickness benefit. Thus, it is only when a workman, in fuct, obtains or receives a cash benefit that the employer can exercise his right to make a deduction from wages due to him by way of leave . salary. The decision of this Court in Hindustan Times Ltd. v.
Their Workmen(') is not directly in point bnt it can be cited in support of our reasoniug to the extent which it holds that in providing for periodical payments to an insured worker in case of sickness, the legis- ~ _ lature did not intend to substitute any of those benefits for the work-t' ·· men's right to get leave on full pay on the ground of sickness. For these reasons, we confirm the award of the Industrial Tribunal and dismiss the appeal with costs. V. D. K. Appeal dismissed . • (I) [1964] I S. C. R. 234.
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