REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.1977 OF 2010

THE MANAGEMENT OF  SRI RAMNARAYAN MILLS LTD.   .. Appellant(s)

Versus

SECRETARY COIMBATORE  DISTRICT TEXTILE WORKERS UNION(HMS) AND ORS.  .. Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. This appeal is filed against the final judgment

and order dated 13.08.2007  passed by the  High

Court of Judicature at Madras in W.A. No. 2675 of

2002 whereby the Division Bench of the High Court

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dismissed the Writ Appeal and affirmed the order of

the Labour Court and Single Judge.

2. Facts of the case lie in a narrow compass.

They, however, need mention in brief  infra  to

appreciate the short controversy.

3. The appellant is a limited company having its

mill in Coimbatore.   The appellant being an

employer applied to the Joint Commissioner of

Labour (Respondent No.3) praying in their

application that  they be allowed to add one more

new ground namely “break in service” in Clause 16

of the Chapter of Punishment in Certified Standing

Orders in addition to the existing grounds specified

therein.  

4. In other words, the appellant's prayer was that

if any employee commits “break in service” in any

year, then it should be regarded as one of the

ground for punishment enabling the employer

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(appellant) to take action against such employee

under their certified standing order.   They,

therefore, prayed that they may be allowed to add

this  new  ground in  Clause  16  of the  Chapter of

Punishment in Certified Standing Orders.

5. On 02.04.1992 the third respondent (Joint

Commissioner of Labour) allowed the said

application of appellant and permitted them to

amend their certified standing orders by adding

“brake in service” as one new ground in Clause 16

of the Chapter of Punishment in Certified Standing

Orders.

6.        The  Workers’  Union (Respondent  No.1) felt

aggrieved by the order dated 02.04.1992 filed

appeal in the Labour Court. By order dated

06.02.1995, the Labour Court allowing the appeal

and setting aside the order dated 02.04.1992 held

that if the proposed amendment is allowed, it would

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cause immense prejudice to the rights of the

workmen and further the employer would likely to

misuse this new ground of punishment mostly for

their benefit.  It was also held that apart from these

two reasons, it would also defeat the object of the

Payment of Gratuity Act while calculating the

employee’s continuous service as defined under the

Payment of Gratuity Act which provides for different

modes of calculation.

7. The appellant felt aggrieved of the order of the

Labour Court and filed the writ petition in the High

Court at  Madras questioning therein the legality

and correctness of the order of the Labour Court.

By order dated 19.07.2002, the learned Single

Judge dismissed the appellant's writ petition which

gave rise to filing of the intra court appeal by the

appellant (employer)  before the  Division  Bench  of

the High Court.

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8. By impugned order, the Division Bench

dismissed the appeal and affirmed the order of the

Labour Court and Single Judge.  It is against this

order; the appellant (employer) has felt aggrieved

and filed the present special leave to appeal in this

Court.

9.     So the short question which arises for

consideration in this appeal is whether the Courts

below (Labour Court, Single Judge and the Division

Bench)  were justified in rejecting the application

filed by the appellant (employer) to the Joint

Commissioner of Labour (certifying officer) seeking

therein a permission to add one more new

ground i.e. “break  in service” in Clause  16 of the

Chapter of Punishment in Certified Standing

Orders.

10. Having heard the learned counsel for the

parties and on perusal of the record of the case and

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the written submissions,  we  find no merit in this

appeal.

11. The  Division  Bench  dealt  with this issue in

Para 6 of the impugned order which reads as under:

“We have considered the above submission of the learned counsel for the appellant.   In fact, what is sought for is to include ‘break in service’ as one of the punishment under Clause 16 of the Standing Orders.  To say in other words, if the workman does not come for duty, for any reason, break in service will be effected for such  period  of absent.  By permitting the appellant to modify the Standing Order so as to include the break in service as one of the punishment, in fact, will enable the appellant to exercise the power to impose the punishment in an arbitrary manner i.e., if  an employee is punished for the absence in accordance with the existing Standing Order, continuity of service of the employee is not disrupted whereas, if the appellant is permitted to modify the Standing Order so as to include the break in service as also one of the punishment, even a half day absent from duty in a year of 12 months, will give an opportunity to the appellant to take disciplinary action against an employee concerned at the end of the year and to impose a punishment of break in service, which will  have a consequence of depriving the employee’s right to get gratuity for that particular year.   When so many other

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punishments have been enumerated under Clause 16 of the said Standing Order, there is no need to include the punishment of break in service as one  of the  punishments.   In fact, permitting the appellant to include ‘break in service’ as one of the punishment, defects the object of the Payment of Gratuity, that is to say, as per Gratuity Act, on completion of every continuous service of 5  years,  an employee  is  eligible to  get the gratuity.  As referred above, if for a particular period of absents, to say for a day also, this proposed  modification enables an employer to impose a punishment of break in service. Consequently, for that particular year, an employee will not get gratuity inspite of the fact that he had worked for 12 calendar months.   Now, only 240 days shall be taken into  account  and  not  240  days attendance shall be taken into account.   As such, if the modification is  allowed, the future right  of the employee to get a gratuity for a particular year will get affected.   Apart from this, if an employee, for certain reasons beyond his control, was forced to be absent even for a day, he can be imposed with the punishment of break in service  which  will have consequence on his gratuity.   That apart, if an employee has to be punished for the absent as referred above.   The punishment  of  either  censure, reduction in rank  or  payment cut etc.  may  be imposed and continuity of service of that employee is not disrupted.   If the appellant is permitted to include break in service also as one of the punishment, even for one day or half a day absent from duty in a year of 12 months, will give  power to the appellant to impose the

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punishment of break in continuity of service in order to deprive the employee’s right to get the gratuity for that particular year.   In fact, this proposed amendment is against the welfare of the employee and as rightly held by the learned Single Judge, besides, this can be exercised in an arbitrary manner, consequently, the employees will be penalized.  That apart, as rightly held by the learned Single Judge, on the appreciation of the  entire  materials, the  Labour  Court  has arrived at a factual conclusion that the amendment sought for, namely, inclusion of break in service in Clause 16 is unreasonable and it would be possible for the Management to act arbitrarily.  That apart,  by  including the break in service as one of the punishment, in fact, what the appellant intends to do is only to get an opportunity to impose punishment which will have an impact in the gratuity of the employee of the concerned year.”

12.      The Division Bench, in our considered

opinion, rightly concluded that a “break in service”

cannot be allowed as a ground by way of

punishment in Clause 16 of the Chapter of

Punishment in Certified Standing  Orders for the

following reasons:

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13. Firstly, the existing grounds enumerated in

Clause 16 by way of punishment are sufficient to

take care of any  misconduct committed by any

employee and there appears no reason to introduce

one more new ground in the existing grounds

specified in Clause 16 for imposing a new

punishment.

14.   Secondly, the proposed ground, if allowed,

would likely to be misused by the employer against

its employees for their own benefit and detrimental

to the employees’ interest.

15. Thirdly, it would enable the employer to take

action against its employees even in a situation

where an employee is found absent even for a day

and such absence will be treated as “break in

service”  under the  Certified  Standing  Orders and

also under the Payment of Gratuity Act. It will,

therefore,  be in  conflict  with  the  definition of the

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expression “continuous service” defined under the

Payment of Gratuity Act which gives different modes

of calculation for determining the continuous

service for payment of gratuity amount.

16. Fourthly, such  ground  will, therefore, defeat

the very object of the Payment of Gratuity Act which

is a beneficial legislation enacted for the benefit of

the employees and lastly, it is neither bona fide nor

reasonable and nor required and hence it cannot be

allowed.

17. In our opinion, we find no good ground to

differ  with the reasoning assigned by the Division

Bench mentioned above for rejecting the application

made by the appellant (employer) for adding, “break

in service” as a new ground for punishment in the

Certified Standing Orders.  The reasons given by the

Division Bench, in our view, deserve to be upheld.

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18. In the light of the foregoing discussion, we find

no merit in this appeal.  The appeal thus fails and is

accordingly dismissed.

………………………………..J  (ABHAY MANOHAR SAPRE)

           …..………………………………J.      (INDU MALHOTRA)

New Delhi, November 02, 2018

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