Godrej Soaps Ltd., A Public ... vs Baban Baburao Nemane, Vasant ...
2003 Latest Caselaw 489 Bom

JUDGMENT

Nishita Mhatre, J.

1. This Petition challenges the order dated 6th February 1999 passed by the Labour Court, Mumbai granting certain claims of the Respondent workmen under Section 33C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act"). The first Respondent workmen had filed an application under Section 33C(2) of the Act before the Labour Court claiming ad hoc lump sum of Rs. 3,500/-, ex gratia payment of Rs. 6,000/- for the period 1994-95 in lieu of bonus, Rs. 4000/- as T.C. and a service award given to workmen on completion of 25 years and 15 years. In the Written Statement filed by the Petitioner, it was submitted that the workmen had ceased to be in employment pursuant to a voluntary retirement scheme which the Petitioner had floated pursuant to an agreement with the recognised Union. According to the Petitioner Company, the Respondent workmen had all accepted the voluntary retirement scheme and, therefore, nothing was due and payable to them as claimed in the application. Moreover, it was submitted that since the salary of all the workmen exceeded Rs. 3,500/- per month, they were not covered by the Payment of Bonus Act and hence not eligible for payment of bonus. The Labour Court awarded the workmen Rs. 6,000/- each as ex gratia payment on the basis of the notice dated 29th September, 1995 issued by the Petitioner for payment of ex gratia for the year ending 31st March, 1995. While rejecting the other claims the Labour Court allowed the claim of the workmen in respect of the service award and directed that each of the workmen be paid Rs. 1,000/- in lieu of the wrist watch.

2. It was contended on behalf of the Petitioner that the notice for payment of ex gratia was applicable to only those employees who were on the rolls of the Company on the date of disbursement of the bonus/ex gratia i.e. for daily rated workmen and monthly rated Peons and Watchman on 16th October, 1995 and for the other staff and employees as also Officers and Managers on 17th October, 1995. Therefore, according to the learned Counsel for the Petitioner, Respondent workmen who had accepted the voluntary retirement scheme in May 1995 were not eligible for payment of ex gratia. It was further contended that only two categories of ex-employees were to be paid this amount as a special case and without any precedent, namely, those who were superannuated and legal heirs of deceased workmen. The learned Counsel submits that the Respondent workmen did not fit in any of these categories and, therefore, were not entitled to the ex gratia payment. As regards the service award, reliance is placed on an agreement of 21st November, 1991. Under Clause 17 of that agreement, the Company agreed to voluntarily pay service awards to those employees who complete 15 years of service on or after 1st January 1991. According to the learned Counsel, these workmen having completed 15 years prior to 1st January, 1991 were not entitled to any service award under the said notice.

3. Per contra, the learned Counsel for the Respondent workmen vehemently urged that ex gratia payment was payable to workmen who were superannuated to all ex-employees and especially those who were superannuated. He submits that superannuation stands on a same footing as voluntary retirement and, therefore, the workmen are entitled to these ex gratia payment. As regards service award also he submits that once a person complete 15 years of service on or after 1st January 1991, then he is entitled to service award of Rs. 1,000/-. He submits that the Labour court has correctly interpreted the clauses of the settlement as well as the notice and, therefore, there is no need to interfere with the findings of the Labour Court under Article 226 of the Constitution of India.

4. Considering the question of ex gratia first, the notice of 29th September, 1995 in no uncertain terms states as follows:

"Bonus/Ex-gratia as above, will be paid to the employees, who are on the rolls of the Company on the date of disbursement of Bonus/Ex-gratia. However, as a special case and without any precedent, the following categories of ex-employee will also be paid Bonus/Ex-gratia as above:

(a) Superannuated; and

(b) Legal heirs of the deceased, if any."

Admittedly, these workmen were not on the rolls on the date of disbursement of the ex gratia payment i.e. either on 16th October, 1995 or 17th October 1995 as specified in the notice. The contention of the learned Counsel for the Respondent workmen that superannuation is synonymous with voluntary retirement also cannot be accepted. In the Concise Oxford Dictionary, Fifth Edition, superannuation means, "declare too old for work or use or continuance, dismiss or discard as too old, require the removal from school of (a pupil who has failed to reach a certain education standard), sent into retirement with pension, past work or use.". In the Oxford English Dictionary, Volume X, superannuation means, "The condition of being superannuated; impairment of the powers or facilities by old age; the state of having out lived one's vigour; senile infirmity of decay" and "The action of superannuating an official; also, the allowance or pension granted to one who is discharged on account of age". In the Oxford Reference Dictionary, edited by Joyce M. Hawkings, "superannuate" means "to discharge (an employee) into retirement with a pension (2) to discard as too old for use". Therefore, "superannuation" is a term used for cessation of employment on account of an employee reaching the age of superannuation or age of retirement which, in the present Company, is 60 years. Admittedly, these workmen ceased to be in employment not on account of having attained the age of 60 years, but because of a voluntary retirement scheme which gave them the option to retire at an earlier age. Superannuation presupposes that it is due to efflux of time and the workmen attaining the age of retirement that his services ceased with the employer. Voluntary retirement and superannuation or retirement of the workman on reaching the age of superannuation are two different and distinguishable eventualities. The definition of the term "retrenchment" in Section 2(oo) of the Industrial Disputes Act, 1947, would throw some light on the distinction. Section 2(oo) reads as under:

"(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:-

(a) voluntary retirement of the workmen; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf or

(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or

(c) termination of the service of a workman on the ground of continued ill-health."

The Legislature has made a distinction between voluntary retirement of the workman and retirement of the workman on reaching the age of superannuation. Therefore, the submission that superannuation and voluntary retirement are synonymous is unsustainable.

5. The contention of the learned Counsel for the Respondent workmen that the clause in the voluntary retirement scheme indicates that for all purposes an employee is considered to be superannuated on acceptance of the voluntary retirement scheme also does not seem to be proper. The reliance placed on Sub-clause (vi) of Clause 7 of the Voluntary Retirement Scheme is also misplaced. The said clause reads as under:-

"vi) Under the Scheme, the normal retirement date refers to the date on which an employee attains the age of superannuation and will be computed on the basis of the records of the company and as per standard practice. Dates on the records of the company shall be treated as correct and applicable dates and no application for any change will be considered."

This sub-clause is included in Clause 7 under the heading "CONDITION OF PAYMENT". It is merely for the purposes of computation of the compensation payable to the workmen on acceptance of the voluntary retirement scheme that the workmen are treated in service till the age of superannuation. It is not as if the scheme treats them as retired from service on the date when their applications for voluntary retirement were accepted. Voluntary retirement under the scheme would be more akin to resignation of an employee rather than superannuation.

6. Therefore, in my view, the order of the Labour Court directing payment of ex gratia to those who had willingly accepted the voluntary retirement scheme and who were no longer on the rolls of the Company either on 16th October 1995 or 17th October 1995 i.e. the date of disbursement of ex gratia must be set aside. The contention of the learned Counsel for the Respondent workmen that this ex gratia was being paid to those workmen who had worked for the year 1994-95 also cannot be accepted as although Respondent workmen had worked during this period, it was only by way of a goodwill gesture that this ex gratia payment has been made to those who were not within the purview of the Payment of Bonus Act. Certain categories of workmen were included for payment despite they being ex-employees. Respondent workmen could not claim to be such employees who had been included in the notice of 29th September, 1995.

7. As regards Clause 17 of the Settlement dated 21st November 1991 under which the Respondent workmen claim the service award, the Labour Court while reproducing the said clause of the settlement has reproduced the said clause incorrectly and, therefore, the reasoning which follows therefrom is incorrect. Clause 12 reads as under:-

"12.0 LONG SERVICE AWARD:

12.1 The company agreed to voluntarily introduce a "15 years service Award" to those workmen who complete 15 years of continuous service on after 1st January, 1991. This award, in the form of an article costing Rs. 1,000/- approximately, shall be in addition to the existing "25 years service award."

It is only those workmen who complete 15 years of continuous service on 1st January 1991 or after that date who are entitled to this service award. There is no reference to those employees who have completed 15 years of service of any earlier date in this clause being eligible to claim the service award. The learned Counsel for the Respondent workmen has not been able to show me any other clause of the settlement permitting these employees to claim the service award nor is the claim based on any practice, usage or custom. The contention of the learned Counsel for the Respondent workmen that all the workmen had completed 15 years of service and, therefore, were entitled to this service award cannot be accepted for more than one reason. If the interpretation placed by the Respondent workman on Clause 12 of the settlement is to be accepted, then the workmen would certainly have claimed this amount immediately on the settlement being signed in 1991 itself when they were in service. It is only after acceptance of the voluntary retirement scheme and amounts paid thereunder that the Respondent workmen have thought it fit to claim this amount. This would indicate that the workmen also did not base their claim on the settlement and were not entitled to the amount under the settlement. If the interpretation placed by the learned Counsel for the Respondent workmen was correct, there was no need for the said clause to mention that only those who complete 15 years of service on or after 1st January 1991 would be entitled to this service award. In fact, the clause would have read that workmen who had completed 15 years of service on or before 1st January 1991 were entitled to this award.

8. The learned Counsel for the Respondent workmen placed reliance on the judgment of the Apex Court in Subrata Sen and Ors. v. Union of India and Ors., 2001 SCC (L&S) 1237. He submits that revision of pension in this case was made payable even to those persons who had retired prior to the cut-off date and, therefore, in the present case also the workmen would be entitled to the ex gratia irrespective of the date on which they ceased to be in service. In my view, this judgment of the Supreme Court has no application to the facts and circumstances of the case before me. Ex gratia payment is not a matter of right and it is only at the will of the employer that this amount is being paid to the workmen. However, pension is a matter a right and the Apex Court has directed that the liberalisation scheme of pension would be applicable in accordance with the notifications issued by the Government.

9. For the foregoing reasons, I have not been able to accept the arguments put forth by the learned Counsel for the Respondent workmen and hence the order of the Labour Court is set aside. Rule is made absolute with no order as to costs.