Madura Coats Ltd. Vs. the Labour Officer and Inspector and anr. - Court Judgment

Excerpt:
(a) karnataka industrial establishments (national and festival holidays) act, 1963 - (24 of 1963) -- sections 3, 11 - in the event of holidays referred to in section 3 does not fall on a whole day and if it falls on a half day whether the workmen are entitled to a compensatory holiday in excess of 10 days holidays as prescribed under section 3 of the act. held - it becomes clear when the statute declares 5 days as full paid holidays the question of the employer or even the inspector meddling with those holidays in any manner would not arise. inspector has no jurisdiction to resolve any dispute regarding 5 full paid holidays declared under the statute itself, when the statute declared these as holidays it has not, made any provision to the effect that in the event if those holidays fall.....ordern. kumar, j.1. the petitioner is engaged in the manufacture of textiles and textile related products and has employed around 4800 workmen. as per the karnataka national and festival holidays act (hereinafter referred to for short the 'act') the petitioner is required to declare 10 paid holidays which includes 26th january-republic day, 15th august-independence day, 2nd october-gandhi jayanthi, 1st may-may day, 1st november-kannada rajyotsava day. apart from the aforesaid holidays the petitioner grants 10 days of casual leave, 14 days sick leave and 23 days of privilege leave to its employees.2. on 9.12.2002 the second respondent union was invited for a meeting to discuss, finalise and communicate national and festival holidays for the year 2003. the second respondent did not attend.....

Judgment:
ORDER

N. Kumar, J.

1. The petitioner is engaged in the manufacture of textiles and textile related products and has employed around 4800 workmen. As per the Karnataka National and Festival Holidays Act (hereinafter referred to for short the 'Act') the petitioner is required to declare 10 paid holidays which includes 26th January-Republic Day, 15th August-Independence day, 2nd October-Gandhi Jayanthi, 1st May-May Day, 1st November-Kannada Rajyotsava Day. Apart from the aforesaid holidays the petitioner grants 10 days of casual leave, 14 days sick leave and 23 days of privilege leave to its employees.

2. On 9.12.2002 the second respondent Union was invited for a meeting to discuss, finalise and communicate National and Festival Holidays for the year 2003. The second respondent did not attend the meeting. Therefore, the petitioner declared the holidays for the year 2003 by its letter on 10,12.2003 a copy of which is produced along with this Writ Petition at Annexure-B and a copy of the same was sent to the second respondent. 26th January 2003 was a Sunday. However the petitioner has declared 10 days as holidays apart from 26th January 2003 under the Act. Hence the total number of holidays for the year 2003 became 11. The same was communicated to the Labour Inspector as required under law. The second respondent being not satisfied with the list of holidays filed a petition before the first respondent on 27.11.2002 seeking his intervention in the matter. After due service of notice the petitioner has filed his objections. The second respondent has suggested that working on 1st November should be compensated by declaring Thiru Onam on 8.9.2003 as paid holiday. The petitioner rejected the said suggestion. The second respondent is insisting that 8.9.2003 be declared as holiday on account of Thiru Onam as 1st November 2003 being Saturday and it is only a half-day. The first respondent without appreciating the legality has declared holidays for the year 2003 declaring 8.9.2003 as paid holiday with a direction to the second respondent to work full day on 8.11.2003. A copy of the said order is at Annexure-G. The petitioner has challenged the said order in this Writ Petition.

3. The second respondent has filed its counter. They contend, the petitioner was granted 10 days paid holidays each year to their employees and this practice was in vogue since inception of the company. For the year 1998, 1999 and 2002 the management had notified 11 days, 14 days and 11 days respectively as holidays. Due to Saturday the limit of holidays were restricted to 10 full days. The holidays notified by the petitioner consists of nine full days and half day for 1st November 2003. As it did not satisfy the requirement of 10 paid holidays the first respondent by impugned order has altered the list of holidays declared by the petitioner. The first respondent has not given any extra benefit to the workmen, but maintained the customary practice of the company without favouring any of the parties. As Saturday was half working day to the workmen, he has directed the workmen to compensate half day work on 8.11.2003 Saturday after availing full day holiday on 8.9.2003 for Thiru Onam festival. Therefore, the order of the first respondent is legal, just and proper and do not call for any interference. Therefore they have sought for dismissal of the Writ Petition.

4. Learned Counsel appearing for the respondents Sri S.N. Murthy submitted, in law the petitioner is expected to grant 10 paid days as holidays, out of which 5 holidays are specified under the statute and the remaining 5 holidays are left to the discretion of the management. In the event of any of the 5 specified days under the Act falling on any holidays, such as Sunday, there is no legal obligation on the part of the petitioner to declare another day as a holiday to compensate the said day. If one such holiday specified in the Act happens to be a Saturday, which is half day in the company of the petitioner, there is no obligation to compensate the remaining half day also by declaring another holiday. Inspite of the same, as 26th January 2003 having fallen on Sunday, ignoring the same, 10 paid holidays has been declared in accordance with law and therefore the first respondent committed serious error in declaring 8th September 2003 as a holiday on account of Thiru Onam and directing the employees to work on 8.11.2003 which is Saturday, full day, and therefore the impugned order is liable to be set aside.

5. Learned Counsel for the respondents contended, the respondents are entitled to 10 days paid holidays each year. 10 paid holidays should be whole of the day. 1st of November 2003 which js declared as holiday on account of Kannada Rajyotsava is a Saturday. In the petitioner company each Saturday is a half day. Therefore, declaration of 1st November 2003 as a holiday on account of Kannada Rajyotsava cannot be taken as a holiday for whole day. If that is so, though the respondents are entitled to 10 paid holidays actually what is granted would be 9-1/2 days holiday. Therefore, the Labour Inspector who has been vested with the power to see that the purpose of the Act is carried into effect was justified in declaring 8th September 2003. Thiru Onam as holiday and directing the workmen to work full day on 8.11.2003 which is again a Saturday and therefore he submits, the impugned order is valid and legal and is not liable to be set aside. He also contended, the petitioner has declared 11 holidays in the year 1998, 14 days holidays in 1989, 11 days again in 2002 and therefore when the respondents are entitled to the aforesaid right or privilege which are more favourable in the earlier years, cannot be taken away for the year 2003 which is prohibited under Section 11 of the Act and therefore seen from any angle the impugned order is valid, legal and do not call for any interference.

6. In view of the aforesaid rival contentions, the points that arise for my consideration in this Writ Petition are as under:

1) In the event of holidays referred to in Section 3 does not fall on a whole day and if it falls on a half day whether the workmen are entitled to a compensatory holiday in excess of 10 days holidays as prescribed under Section 3 of the Act?

2)lf the management has granted them holidays for more than 10 days during the earlier years the management has no right to grant them holidays only as required under Section 3 of the Act for subsequent years?

7. RE: POINT NO. 1: Learned Counsel for the petitioner is support of his contention relied on a judgment of this Court in the case of NGEF LTD., v. LABOUR OFFICER AND INSPECTOR, 1976(2) KAR. LJ. 1101 In aforesaid case, one of the three national holidays namely 15th August 1956 fell on Sunday which is otherwise a weekly holiday for the workmen and therefore the workmen contended, as they are losing a paid holiday they have to be compensated by declaring 'Mahashivarathri' as a paid holiday which plea has been upheld by the Labour Officer. Negativing the said contention the Court said under the Act it is obligatory for the employer to declare every year three national holidays and five festival holidays. These eight holidays are the minimum prescribed. The Act however does not come in the way of the employer to give more holidays to its employees. The Act by Section 11 preserves certain right and privileges of the employees. The favourable rights or privileges which any employee is entitled to under any other law, contract, custom or usage on the date the Act came into force, are not affected by the provisions of the Act. Ex-facie, the Section has a limited operation confined to a particular date, i.e., the date on which the Act came into force. On that day, if a right or privilege had accrued to any employee under any other law, contract, custom or usage and if that right or privilege is more favourable or advantageous to him, than those declared under the Act, the employee is entitled to retain that right or privilege. In other words, the section only continues to make available to the employees those rights and privileges that were existing on the date when the Act came into force, if those rights and privileges are more favourable to them. Such employees may retain those rights or privileges and discard the minimum number of paid holidays prescribed under Section 3. But if, the existing arrangement of holidays on the date of the Act came into force, was less favourable to the employees, then Section 3 would step in and would require the employer to give the minimum prescribed thereunder. This appears to be the scheme of Section 3 and 11 of the Act. If the list of holidays submitted by the company is in conformity with the provisions of the Act, he cannot alter it by way of addition or deletion. He may, however, re-arrange the festival holidays as suggested or mutually agreed upon. It must be borne in mind that he is not an adjudicating authority to determine any dispute of the employer and employees. He is only a statutory authority to enforce the provisions of the Act. If there is any dispute, falling outside the scope of the Act, he may direct the parties to get it adjudicated by having recourse to the remedies provided under the Industrial Disputes Act, and therefore, if one of the national holidays falls on Sunday, the Inspector had no power to substitute some other day as paid holiday. Therefore, in order to answer the aforesaid questions it is necessary to look into the Section 3 and 11 of the Act.

8. The aforesaid judgment was rendered in the year 1976 while interpreting Section 3 of the Act. Section 3 of the Act was substituted with a new Section by Act 28/97 which came into force from 29.9.1997. Substituted Section 3 reads as under:

Section 3(1) - Every employee shall be allowed in each calendar year, a holiday of one whole day on the 26th January, 15th August, 2nd October and five other holidays each of one whole day for such festivals as the employer may specify, from out of the list of festivals specified in the Schedule appended to this Act in consultation with the trade unions or in the absence of any trade union in consultation with the employees or their authorized representatives in such manner as may be prescribed:

Provided that except in the case of industrial establishments owned or controlled by the Government of India, the number of such other holidays shall be seven including First day of May and First day of November.(2) Whenever there is any disagreement between the employer and employees or the Trade Unions concerned as to the festivals to be allowed as holidays, during each calendar year the employer or the employees of the concerned Trade Union shall refer the dispute to the Inspector, having jurisdiction over the area in which the industrial establishments is situated, for his decision and his decision shall be final.

Section 11 of the Act reads as under:Rights and privileges under other laws, etc., not affected -Nothing contained in this Act shall affect any rights or privileges which any employee is entitled to, 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 Act.

A reading of the aforesaid sections makes it very clear that every employee shall be allowed in each calendar year, a holiday of one whole day on 26th January, 15th August and 2nd October and five other holidays each of one whole day for such festivals, as the employer may specify, from out of the list of festivals specified in the Schedule appended to this Act in consultation with the trade unions or in the absence of any trade union in consultation with the employees or their authorized representatives in such manner as may be prescribed. Here it is relevant to point out, in the Section before substitution in so far as five other holidays each of one whole day for such festivals is concerned, the same had to be specified by the Inspector in consultation with the employer and the employees. After substitution that discretion which was with the Inspector has been given a go by. Now under the present Section it is for the employer to specify which are those five other holidays. But he should specify those five days from out of the list of festivals specified in the Schedule appended to the Act. Before specifying the said five holidays the employer is expected to consult the trade union or in the absence of the trade union the employees or their authorized representative. Therefore, it becomes clear, in so far as five other holidays is concerned it has to be five among the 52 festival holidays which are set out in the schedule which was also inserted by Act 28 of 1997.

9. The aforesaid Section now has a proviso. The proviso makes it clear, except in the case of industrial establishment owned or controlled by the Government of India, the number of such other holidays shall be seven including 1st day of May and 1st day of November. In other words, as the law stood prior to this amendment under the Act the employees were entitled to 8 days holidays out of which 3 days are National holidays, five other are festival holidays. Now subsequent to the amendment instead of five other holidays the number of holidays is increased to 7 to all establishments except the establishments owned or controlled by the Government of India. In other words, the employees are entitled to now 10 days of holidays out of which five festival holidays, five holidays specified under Section 3 of the Act.

10. Sub-section (2) of Section 3 provides that whenever there is any disagreement between the employer and employees or the Trade Unions concerned as to the festivals to be allowed as holidays, during each calendar year the employer or the employees of the concerned Trade Union shall refer the dispute to the Inspector, having jurisdiction over the area in which the industrial establishment is situated, for his decision and his decision shall be final. In other words, in so far as declaration of holiday on 26th January, 15th August, 2nd October, 1st of May and 1st of November is concerned, nobody can have any grievance. They are statutorily provided and declared as full paid holidays under Section 3 of the Act- When the employer chooses to declare five holidays out of the list of festivals specified in the Schedule appended to the Act and if there is any disagreement between the employer and employee or Trade Union with reference to this festival holidays then the same shall be referred to the Inspector and he has jurisdiction to decide the same and his decision shall be final.

11. Section 7 of the Act deals with the powers of the Inspectors. One such power conferred under the said section as per Clause (C) is that he shall exercise such other powers as may be necessary for carrying out the purposes of this Act. Preamble to the Act provides that, for the grant of national and festival holidays to the persons employed in industrial establishments in the State of Karnataka, the Act came to be passed and the definition of 'day' as contained in Section 2(1) means a period of twenty-four hours beginning at midnight and it is the responsibility of the Inspector who is appointed in Sub-section (1) of Section 6 of the Act to see that the purposes of this Act is carried into effect. Therefore, it becomes clear when the statute declares five days as full paid holidays the question of the employer or even the Inspector meddling with those holidays in any manner would not arise. Only in respect of other paid holidays under Section-3 if the employer chooses to declare five festival holidays out of the 52 holidays specified in the schedule and there is a disagreement between the employer and employees and on a reference the Inspector gets jurisdiction to resolve the said dispute. In other words, he has no jurisdiction to resolve any dispute regarding five full paid holidays declared under the statute itself. When the statute declared these as holidays it has not, made any provision to the effect that, in the event if those holidays fall on Sunday or on any half day, whether the employees have to be compensated by granting any other full paid day as compensatory holiday. The very fact that the statute itself declares five full paid holidays on National holidays, the object is that these employees should celebrate those days as of National and State holidays. The object of granting holidays on those days, is not to give rest to the employees. The object is for celebration of those days. Whether those holidays falls on a working day, or on a Sunday, those days have to be celebrated. If those holidays were to fall on a Sunday or on a non-working day the celebration of those days cannot be postponed to a working day. It so happens if the said holidays were to fall on non-working day or on a holiday, the employees may lose one day of holiday but that is not the criteria behind declaring these days as holidays. If once this intention is kept in mind, then there would not be any justification in the demand of the employees to grant an additional holiday on account of these declared National or State holidays having fallen on a holiday. In that view of the matter the Inspector has no jurisdiction to grant a compensatory holiday to the employees in the event to these National and State holidays were to fall on a Sunday or on a non-working day or on a half day. Similarly if any dispute arise between the Management and the employees in respect of a compensatory holiday on account of these declared holidays under Section 3 having fallen on a Sunday, the non-working day or a half day such a dispute would be fully outside the jurisdiction of the Inspector as contemplated under Sub-section (2) of Section 3 of the Act.

12. In the background of these if we look into the facts of this case, the petitioner has declared 10 full paid days as per Annexure-B as holidays. Out of the said 10 days declared, the petitioner has not included 26th of January 2003 though the said day is to be declared as a holiday under Section 3 of the Act for the reason that 26th January 2003 happens to be a Sunday. If that day is also included virtually the employees would get 11 paid holidays for the year 2003. Out of the ten holidays declared, 1st of November 2003 is Kannada Rajyotsava and it falls on Saturday, In the petitioner's establishment Saturday is a half day. Therefore, the respondent contend that they are entitled to a full paid holiday, as 1st November 2003 is a half day but that cannot be counted as a holiday of a full paid day. Accepting the said contention, now the Inspector has declared 8th September 2003. Thiru Onam as a festival holiday and as that full days declared as a holiday he has called upon the employees to work for another half day on 8th November 2003 which is a Saturday. The said order proceeds on the assumption that 1st November 2003 is a Saturday which is not a full paid holiday and therefore the employer is bound to compensate the employees by declaring another half day at least as a holiday in order to bring it within ten days holidays. The said order of the Inspector is outside the scope of Sub-section (2) of Secton-3 and is wholly without jurisdiction and therefore it cannot be sustained. Whether 1st November 2003 is a half day or full holiday, the Inspector has no jurisdiction to declare another day as compensatory holiday on account of 1st November 2003 being a half working day for the petitioner establishment.

13. RE. POINT No. 2 : In so far as the contention that in the previous years the petitioner had enjoyed the benefit of 11 days, 12 days and 14 days of holidays and therefore in the current year 2003 the holidays cannot be reduced to 10 days as required under Section 3 and in view of Section 11 when the holidays enjoyed by them in earlier years is more favourable that has to be granted to the employees, even though under Section 3 they are entitled to only 10 days is concerned it has no substance. Section 11 of the Act deals with rights and privileges and other laws etc., as being not affected by the provisions of the Act. It provides, nothing contained in this Act shall affect any rights or privileges which any employee is entitled to, 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 Act. Therefore it is clear, if respondents were enjoying more holidays prior to the Act came into force i.e., prior to 14th August 1963 then they are entitled to those privileges and rights, not otherwise. Admittedly, in this case no material is placed on record to show prior to 1963 when the Act came into force the respondents were having the benefit of 11 days, 12 days and 14 days of holidays. On the contrary, the material produced on record shows they were enjoying those number of holidays for the year 1998, 1999, 2000 and 2002. Therefore, the said Section has no application to the facts of this case.

14. When once list submitted by the employees is strictly in accordance with Section 3 of the Act and in law when the petitioners are entitled to 10 full paid holidays out of which 5 specified holidays under Sections 3 and 5 festival holidays out of 52 holidays mentioned in the schedule annexed to the act the same cannot be found fault with. If only the respondents are not happy with the five festival holidays declared by the employer it is open to them to approach the Labour Inspector for modification or rearrangement of the said five festival holidays. Admittedly, in this case, the respondents have no grievance regarding five festival holidays declared by the employer. It is relevant to note the employer has been magnanimous enough not to declare 26th January as one of the ten holidays as it has fallen on a Sunday. If that day is also taken into consideration for 2003 the respondents have been granted 11 days holidays i.e., one day more than what the law stipulates under Section 3. In that view of the matter I do not find any substance in any of the contentions urged by the respondents. As the order passed by the Labour Inspector is out side the purview and is contrary to Section 3 of the Act, the same is liable to be quashed and accordingly it is hereby quashed. Hence, ! pass the following order.

Writ Petition is allowed. The impugned order passed by the Labour Inspector as per Annexure-G is hereby quashed.

List of holidays declared by the employer is held to be valid. Parties to bear their own costs.