Judgment:
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 30/09/2013 CORAM THE HONOURABLE MR.JUSTICE S.NAGAMUTHU W.P.(MD)No.16007 of 2013 W.P.(MD)No.16008 to 16011 of 2013 and M.P.(MD)Nos.1 and 2 of 2013 The Senior Regional Manager, Tamil Nadu Civil Supplies Corporation, Sachidanandha Moopanar Road, Thanjavur Road, Thanjavur..Petitioner in W.P.(Md.Nos.16007 to 16010 of 2013 The Senior Regional Manager, Tamil Nadu Civil Supplies Corporation, Thiruvarur..Petitioner in W.P.(Md.No.16011 of 2013 Vs 1.The Joint Commissioner of Labour, Trichy.
2.The Assistant Commissioner of Labour, Trichy.
3.K.Swaminathan ..Respondents in W.P.(Md.No.16007 of 2013 1.The Joint Commissioner of Labour, Trichy.
2.The Assistant Commissioner of Labour, Trichy.
3.K.Venkatanarasingam ..Respondents in W.P.(Md.No.16008 of 2013 1.The Joint Commissioner of Labour, Trichy.
2.The Assistant Commissioner of Labour, Trichy.
3.K.Ramalingam ..Respondents in W.P.(Md.No.16009 of 2013 1.The Joint Commissioner of Labour, Trichy.
2.The Assistant Commissioner of Labour, Trichy.
3.R.Vijayarani ..Respondents in W.P.(Md.No.16010 of 2013 1.The Joint Commissioner of Labour, Trichy.
2.The Assistant Commissioner of Labour, Trichy.
3.R.Balasubramanian ..Respondents in W.P.(Md.No.16011 of 2013 W.P.(MD)No.16007 of 2013 filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari by calling for the records pertaining the impugned order passed by the fiRs.respondent in P.G.A.No.29 of 2012 dated 28.03.2013 confirming the order passed by the second respondent in P.G.No.58 of 2010 dated 18.04.2012 and quash the same.
W.P.(MD)No.16008 of 2013 filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari by calling for the records pertaining the impugned order passed by the fiRs.respondent in P.G.A.No.28 of 2012 dated 28.03.2013 confirming the order passed by the second respondent in P.G.No.53 of 2010 dated 18.04.2012 and quash the same.
W.P.(MD)No.16009 of 2013 filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari by calling for the records pertaining the impugned order passed by the fiRs.respondent in P.G.A.No.26 of 2012 dated 28.03.2013 confirming the order passed by the second respondent in P.G.No.118 of 2011 dated 18.04.2012 and quash the same.
W.P.(MD)No.16010 of 2013 filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari by calling for the records pertaining the impugned order passed by the fiRs.respondent in P.G.A.No.27 of 2012 dated 28.03.2013 confirming the order passed by the second respondent in P.G.No.34 of 2010 dated 18.04.2012 and quash the same.
W.P.(MD)No.16011 of 2013 filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari by calling for the records pertaining the impugned order passed by the fiRs.respondent in P.G.A.No.25 of 2012 dated 28.03.2013 confirming the order passed by the second respondent in P.G.No.57 of 2010 dated 15.02.2012 and quash the same.
!For Petitioners in all ..Mr.R.Vijayakumar Writ Petitions ^For Respondents in all ..Mr.T.S.Mohammed Mohidheen, Writ Petitions Additional Government Pleader for R1 and R2 :COMMON ORDER
Since common issues are involved in these writ petitions, they were heard together and they are disposed of by means of a Common Order.
2.The petitioner-Tamil Nadu Civil Supplies Corporation is the former employer of the third respondent in each writ petition.
The third respondent in each writ petition (hereinafter referred to as ".employees".) has retired from service.
While passing the gratuity amount, the Tamil Nadu Civil Supplies Corporation, paid gratuity at the rate of 7 days wages for each season.
This is, according to the petitioner / Tamil Nadu Civil Supplies Corporation, in accordance with the second proviso to Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972.
According to the employees, they are entitled for gratuity at the rate of 15 days wages based on the rate of wages last drawn by the employee concerned.
It is the further contention of the employees that the second proviso to Sub Section (2) of Section 4 of the Payment of Gratuity Act, 1972, is not applicable to them, and that Section 4(2) of the Payment of Gratuity Act, 1972, alone is applicable to them.
3.The employees filed Gratuity Cases in P.G.Nos.58 of 2010, 53 of 2010, 118 of 2011, 34 of 2010 and 57 of 2010, respectively, before the Competent Authority, under the Payment of Gratuity Act, 1972.
The Competent Authority held that employees are entitled for gratuity amount at the rate of 15%, as provided under Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972.
The Competent Authority accepted the contention of the employees that the second proviso to Sub-Section (2) of Section 4 is not applicable to them.
The petitioner / Tamil Nadu Civil Supplies Corporation is aggrieved by the same.
Accordingly, the petitioner-Corporation filed appeals before the Appellate Authority in P.G.A.Nos.29 of 2012, 28 of 2012, 26 of 2012, 27 of 2012 and 25 of 2012, respectively.
The Appellate Authority dismissed all the appeals thereby confirming the orders of the Competent Authority.
Aggrieved over the same, the Tamil Nadu Civil Supplies Corporation is before this Court with these writ petitions.
4.These writ petitions have come up today for admission.
I have heard the learned counsel for the petitioner-Corporation.
I do not propose to issue notice to the respondent-employees in view of the fact that the order that I pass herein, will not cause any prejudice to them.
5.The crux of the issue involved in all these writ petitions is as to whether the second proviso to Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972, is applicable to the petitioner-Corporation and so, the employees concerned are entitled for gratuity only at the rate of 7 days wages for each season.
In order to resolve the said legal issue, it is worthwhile to have a look into Section 4 of the Payment of Gratuity Act, 1972, which reads as follows: ".4.Payment of gratuity.-(1)Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,- (a)on his superannuation, or (b)on his retirement or resignation, or (c)on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heiRs.and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation.-For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2)For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account: Provided further that in the case of an employee who is employed in a seasonal establishment, and who is not so employed throughout the year the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation.-In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
(3)The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
(4)For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5)Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
(6)Notwithstanding anything contained in sub-section (1),- (a)the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused; (b)the gratuity payable to an employee may be wholly or partly forfeited.
(i)if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (ii)if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the couRs.of his employment.".
6.It is the contention of the petitioner that the employees were all employed in Direct Purchase Centres run by the petitioner, viz.
Tamil Nadu Civil Supplies Corporation.
Such Centres are only seasonal since the Centres are established for procurement only during harvest season in Cauvery Delta Districts.
During off-season, the Centres are closed and thus, the employees who are working in such Centres would be ousted.
Thus, according to the petitioner- Corporation, the Direct Purchase Centres wherein the employees were working, are all seasonal establishments and further these employees were not employed throughout the year.
Therefore, according to the petitioner-Corporation, the second proviso to Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972, is applicable and thus the employees are entitled for gratuity only as per the said proviso, ie., at the rate of 7 days wages for each season.
7.The learned counsel for the petitioner-Corporation would place reliance on the judgment of a Division Bench of this Court in Tamil Nadu Civil Supplies Corporation Workers Union v.
Tamil Nadu Civil Supplies Corporation, reported in 1997 (III) CTC535 about which I would make a reference at the appropriate stage, in this order.
8.I have considered the above submissions of the learned counsel for the petitioner-Corporation and also perused the records carefully.
9.The second proviso to Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972, upon which much reliance has been placed by the petitioner, speaks of establishment which is seasonal in character.
It deals with an employee who is working in a seasonal establishment.
Thus, it is crystal clear that the establishment itself should be a seasonal one.
In the said Act, however, the term ".establishment".
has not been defined.
Taking the meaning of the term ".establishment".
from other labour legislations, I have to state that the entire Tamil Nadu Civil Supplies Corporation is an establishment.
In other words, the term ".employer".
refers to the Tamil Nadu Civil Supplies Corporation, and therefore, it is an establishment.
It is not as though the employees were employed by the Direct Purchase Centres.
They are all Centres run by the Tamil Nadu Civil Supplies Corporation, and the employees were employed not by Direct Purchase Centres but by the Tamil Nadu Civil Supplies Corporation itself.
Therefore, the Tamil Nadu Civil Supplies Corporation, as a single unit, is an establishment which undoubtedly, is not a seasonal establishment.
The proviso to Sub-Section (2) of Section 4 does not refer to seasonal employment of an employee.
A plain reading of the said proviso goes to show that it refers only to seasonal establishment.
Therefore, it is not the character of employee but it is the character of the establishment itself, which is relevant.
Here, in this case, the character of the establishment is not seasonal, and therefore, the said proviso is not applicable to Tamil Nadu Civil Supplies Corporation.
10.The learned counsel for the petitioner would contend that apart from the above clause, viz.
seasonal establishment, there is also another requirement in the said Proviso which states that ".and who is not so employed throughout the year".Referring to this, the learned counsel for the petitioner would contend that employees were not admittedly employed throughout the year and thus according to the learned counsel, the employees would fall within this phrase and thus the proviso is applicable.
This argument, though attractive, does not persuade me for many reasons.
11.FiRs.of all, if one carefully looks into the Proviso, it is crystal clear that it is not stated as though an employee who is employed in a seasonal establishment OR who is not so employed throughout the year.
The word used between the two clauses is a conjunction, viz.
".and".The word used is not ".or".
which is disjunctive in nature.
If the word ".or".
has been used, then, irrespective of the fact whether the establishment is seasonal or permanent, if the employee has not worked throughout the year, he will be entitled only for gratuity at the rate of 7 days for each season as the Proviso would be applicable.
Obviously, the Legislature did not use the disjunction ".or".Instead, the Legislature has consciously used the word ".and".Thus it is the intention of the Legislature to bring those employees who are the employees of an establishment which is seasonal and further those employees who have not worked throughout the year, within the ambit of this Proviso.
Here in this case, the establishment cannot be stated to be seasonal, even though it may be the case that employees did not work throughout the year.
In such view of the matter, I hold that the second Proviso to Sub-Section (2) of Section 4 of the Act, is not at all applicable to the employees of Tamil Nadu Civil Supplies Corporation, who have worked in the Direct Purchase Centres.
12.But the learned counsel for the petitioner-Corporation would make much reliance on the judgment of the Division Bench of this Court in Tamil Nadu Civil Supplies Corporation Workers Union v.
Tamil Nadu Civil Supplies Corporation, cited supra.
That was a case where the Trade Union filed the writ petition seeking the relief of permanent status for the employees of the Tamil Nadu Civil Supplies Corporation as per the provisions of the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981.
The Division Bench referred to the relevant provision of the said Act, viz.
Sub- Section (3) of Section 1, which reads as follows: ".It applies to every Industrial Establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than 50 workmen were employed on any day of the preceding twelve months.
If any question arises whether an Industrial establishment is of a seasonal character or whether work is performed therein only intermittently the decision of the Government thereon shall be final.
(Emphasis supplied) Provided that the Government may, by notification, apply the provisions of this Act to any Industrial Establishment employing such number of workmen less than fifty as may be specified in the Notification.".
13.Referring to the said provision, the Division Bench took the view that the Bill Clerks, Helpers and Watchmen who are employees only on seasonal basis, are not entitled for the benefit of the said Act.
In this context, we should note that the word used is not conjunctive ".and"., instead the word used is disjunctive ".or".So far as this Act is concerned, if the establishment is seasonal in character, any employee who is employed in the said establishment is not entitled for the benefit of the Act.
Though the establishment may not be a seasonal establishment, still if the work is performed intermittently, in such a case also, the employee is not entitled for any permanent status.
That is the reason why the Legislature consciously used the word ".or".
between two phrases.
As I have already pointed out, in the Payment of Gratuity Act, 1972, the word used is not ".or"., but instead, ".and".
is used.
Therefore, I hold that the said decision cannot be a precedent for deciding the issue involved in these writ petitions, as the two provisions referred to above are drastically different.
14.In view of all the above, I hold that the respondents 1 and 2 were right in holding that employees are entitled for gratuity at the rate of 15% based on the rate of wages last drawn by the employee concerned as per the second Proviso to Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972.
I also hold that the second Proviso to Sub-Section (2) of Section 4 of the Payment of Gratuity Act, 1972 is not at all applicable to the employees of Tamil Nadu Civil Supplies Corporation who have worked in Direct Purchase Centres.
15.In view of the above legal position, I hold that the respondents 1 and 2 were right in issuing the directions, which does not require any interference at the hands of this Court.
16.In the result, the writ petitions fail and accordingly they are dismissed.
Consequently, the connected miscellaneous petitions are closed.
No costs.
KM To 1.The Joint Commissioner of Labour, Trichy.
2.The Assistant Commissioner of Labour, Trichy.