21

LABOUR LAW - II
(SOCIAL LEGISLATION)
Suresh C. Srivastava*

I INTRODUCTION

THE YEAR 1992, like the previous year, witnessed notable developments in the
area of social legislation. The employees' state insurance scheme was implemented
at 608 centres, covering five million employees and 23 million beneficiaries upto
the end of March, 1992. Further, the total amount of reserve fund invested was
Rs. 1651.56 crores upto 31.3.1992, out of which Rs. 1639.31 crores was invested
in special deposits with the central government and the balance of Rs. 12.25 crores
was invested in fixed deposits with the nationalised banks. The total amount of
employees state insurance (ESI) arrears recoverable from the defaulting
establishments was Rs. 160.32 crores as against Rs. 140.10 crores as on 31.12.1992.
Moreover, the wage ceiling was raised from Rs. 1600/- to Rs. 3000/- per month.1
Likewise the scope and coverage of the Payment of Gratuity Act, 1972 was also
widened. Thus the wage ceiling for employees for the purpose of entitlement under
the Payment of Gratuity Act, was raised from Rs. 2500/- to Rs. 3500/- with effect
from 1.12.1992.2
The introduction of computerised accounts system in almost all the regions
of the employees' provident fund organisations in the year under review brought
momentum in regard to the payment of provident fund.3 Further, 2.21 lakh
establishments and 166.15 lakhs subscribers were brought under the employees'
provident fund scheme by the end of March 1992.4 The number of subscribers
covered under the employees' family pension scheme, 1971 was 136.68 lakhs upto
31.3.1992.5
Sustained efforts have been made by the government to rehabilitate bonded
labour and to provide financial assistance. The total number of bonded labourers
identified and freed upto 31.3.1992 was 2,50,289 out of which 2,23,141 have been
rehabilitated. Further, Rs. 3.5 crores has been released to the state governments
by way of financial assistance for rehabilitation of bonded labourers6 upto
30.9.1992.

* LL.D. (Calcutta); Joint Secretary & Law Officer, Ministry of Law, Justice & Company Affairs,
Law Commission, Government of India. Formerly Professor and Dean, Faculty of Law, Kurukshetra
University, and University of Calabar (Nigeria),
1 See Government of India, Ministry of Labour, Annual Report 1992-93 46.
2 Id. at 52.
3 Ibid.
4 Id. at 48-49.
5 Id. at 49.
6 Id. at 57.

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416 Annual Survey of Indian Law [1992

Revision of minimum wages in agriculture was another area which received

much attention. Thus, the Government of India, vide notification dated 12.8.1992,
revised the minimum wages under the Minimum Wages Act, 1948 for workers
employed in agriculture. The revised wages provide for variable dearness allowance
adjustable at intervals of six months. Annual increments of basic wages at five
per cent has also been provided for. The total number of employment which stand
covered under the Act (as on 30.11.1992) for which minimum wages have been
fixed/revised is 1023.7

H CONTRACT LABOUR REGULATION AND ABOLITION ACT, 1970

The most significant judicial pronouncement of the year was Deena Nath v.
National Fertilizers Ltd.s Here the court was called upon to decide the question
whether persons appointed by the principal employer through the contractor would
be deemed to be direct employees of the principal employer or not in case the
principal employer does not get himself registered under section 7 of the Act and/or
the contractor does not get a licence under section 12 of the Act?
Prior to this decision, conflicting opinions were expressed by the High Courts
of Punjab, Kerala and Delhi on the one hand and Madras, Bombay, Gujarat and
Karnataka High Courts on the other. The view of the Punjab, Delhi and Kerala
High Courts is that the only consequence of non-compliance of section 7 by the
principal employer or of section 12 by the contractor is that they are liable for
prosecution under the Act; whereas the view of the High Courts of Madras,
Bombay, Gujarat and Karnataka is that in such a situation the contract labour
becomes directly the employee of the principal employer.
The Supreme Court in the instant case ruled:9

The only consequences provided in the Act where either the principal
employer or the labour contractor violates the provision of sections 9 and
12 respectively is the penal provision, as envisaged under the Act for which
reference may be made to sections 23 and 25 of the Act.

The court, accordingly, approved the decisions of the Punjab, Kerala and Delhi
High Courts.

Termination of service of contract labour

The judicial policy to protect the interest of contract labour is evident from
the decision in Association of Chemical Workers v. Shri Alaspurkar.10 In this
case, various labour contractors were engaged by the management. But in view
of certain disturbed industrial relations, the management terminated the contract
with the labour contractors on 20.11.1979. Soon thereafter the contractors
terminated the services of all the workmen on various dates. Thereafter the

7 Id. at 27.
8 1992 Lab IC 75 (SC).
9 Id. at 82.
10 1992 Lab IC 2582.

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Vol. XXVIII] Labour Law—II 417

management engaged the same labour contractors to continue the same work but
with a new set of workmen. The aggrieved workmen of the contractors questioned
the legality and fairness of the termination of their services and contended that
the termination was an unfair labour practice and void. The industrial court
dismissed the petition. On appeal, the Supreme Court directed the following:11

For the vacancies that exist or might arise in future and as and when these
vacancies are sought to be filled up in the following departments, namely,
(0 general, cleaning, removal of garbage, grass cutting and road cleaning;
(ii) cleaning of equipments, pipeline work, erection of equipments; and
(iii) equipment cleaning during shut down period (as clarified by the High
Court in its order), preference shall be given to the workmen whose services
were terminated in the year 1979 by the respective labour contractors.

Scope of the term "workman"

Section 2(2)(i) of the Contract Labour (Regulation and Abolition) Act, 1976
defines 'workman' to mean:

[A]ny person employed in or in connection with the work of any

establishment to do any skilled, semi-skilled, manual, supervisory, technical
or clerical work for hire or reward, whether the terms of employment be
express or implied, but does not include any such person—
(a) who is employed mainly in a managerial or administrative capacity; or
(b) who, being employed in a supervisory capacity, draws wages exceeding
five hundred rupees per mensem or exercises, either by the nature of the
duties attached to the office or by reason of the powers vested in him,
functions mainly of a managerial nature; or
(c) who is an out-worker, that is to say, a person to whom any articles
or materials are given out by or on behalf of the principal employer to
be made up, cleaned, washed, altered, ornamented, finished, repaired,
adapted or otherwise processed for sale for the purposes of the trade or
business of the principal employer and the process is to be carried out either
in the home of the outworker or in some other premises, not being premises
under the control and management of the principal employer.

The scope of this section was examined in National Airport Authority v.

Bangalore Airport Services Co-operative, Bangalore.12 The Karnataka High
Court held that in order to determine whether the applicants were workmen, it
is necessary to consider the relationship of employer and employee between the
appellants and the applicants. The court pointed out:12a

Mere exercise of control is not sufficient to hold that the authority so

exercising the control is a principal employer without noticing from where

11 Id. at 2584.
12 1992 U b I C 1191.
12a Id. at 1200.

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418 Annual Survey of Indian Law [1992

that power of control emerges. So also, the power to suspend or to

recommend to removefromservice is also not an important factor. Because
the test of control in order to establish relationship of master and servant
may be a relevant factor, but it is wrong to say that it is the decisive factor
in all cases.

Ill BONDED LABOUR SYSTEM (ABOLITION) ACT, 1976

The judicial policy of protecting the interest of bonded labour is evident from
the decision of the Supreme Court in T. Chakkalackal v. State of Bihar.13 In the
present case several labourers were working under bondage. After the deputy
collector's survey, the employees were forced to refund the bonded debt. In October
1985 a vigilance committee was appointed and thereafter orders were made by
the court from time to time. The district judge was directed to look into matters
of bonded labour and ensure their rehabilitation and undertake other appropriate
relief measures. He submitted the interim and final reports. The State of Bihar
was also directed to clarify the following three points: (i) Whether any of the bonded
labourers about whom enquiry is made, have been settled in any government
programme and, if so, the details may be furnished, (ii) Whether state government
accepts or recognises any of them as bonded labourers, (iii) The details of the
immovable property of the alleged bonded labourers based upon the records
maintained by the office of anchaldhikari.
However, no report was submitted by the state. But according to the State
of Bihar certain persons who were in bondage were released after the Act came
into force. In view of the above, the Supreme Court held:14

That after the incorporation of section 6 if bonded labourers continued to

work under the same or any other employer, the question whether they were
paid wages as required by the Minimum Wages Act, would have to be
considered and if the same had not been done that would have to be done.
The court added:15
Section 9 provides that no creditor shall accept any payment against any
bonded debt which has been extinguished or deemed to have been
extinguished or fully satisfied by virtue of the provisions of the Act.
Whoever contravenes this provision is made liable to punishment for a
term which may extend to three years and also with fine.
The court accordingly directed the additional chief secretary of the state to
carry out the further work to ensure complete implementation of court's order.

IV WORKMEN'S COMPENSATION ACT, 1923

Is a civil servant "workman" under the Workmen's Compensation Act? This

13 Judgements Today (JT) 1992 (1) SC 106.

14 Ibid.
15 Ibid.

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Vol. XXVIII] Labour Law—II 419

issue was answered in the affirmative by the Gujarat High Court in State of Gujarat
v. Rajendra Khodabhai Deshdia Junagadh16 wherein it was observed:

A person in employment cannot be excluded from the definition of the

term * workman' on the ground that the workman is a civil servant unless
it is specially so provided. To exclude a person from the scope of definition
of 'workman' two conditions are required to be fulfilled. They are (1) the
employment of the workman is of a casual nature; and (2) he is not
employed for the purpose of the employer's trade or business. In this view
of the matter, once it is shown that the workman has been employed for
the purposes of the trade or business of the employer, even though the
employment be of a casual nature, the workman would fall within the
definition of workman, provided, however, other requisite conditions are
also satisfied. There is nothing in the Act to show that workman holding
the posts in civil services of the State would be excluded from the purview
of the definition of the term 'workman'.

The aforesaid judgement reflects the progressive attitude of the courts to give
a broad meaning to the term "workman".
The Gujarat High Court in Oriental Fire and General Insurance Company
Limited v. Sunderbai Ramji}1 was called upon to determine the scope of the
expression ' 'accident arising out of and in the course of employment'' occurring
under section 3 of the Act
In this case, the deceased Babu Makiya, a labourer was doing work of a
"khalasi" involving hard labour and strenuous physical exertion. The working
hours of the deceased were from 8 a.m. to 12 noon and 1 p.m. to 5 p.m. with
a break of one hour in between two spells. The deceased went to attend to his
duties on 31.8.1980 in the morning at about 8 a.m. He worked till 11 a.m. on
that day. He had suffered chest pain and therefore stopped the work and took rest
for 15 to 20 minutes. He again started working and chest pain recurred. The
deceased complained about this to his co-worker and subsequently he fainted and
became almost unconscious. Thereupon he was shifted to Tata Hospital where
he was declared dead on 31.8.1990. The commissioner for workmen's
compensation held that the deceased died by an accident arising out of and in
the course of employment. Thereupon, the management filed an appeal under
section 30 before the Gujarat High Court. The High Court affirmed the decision
of the commissioner and held that the personal injury resulting in death has direct
and proximate nexus with employment. The court ruled:Xla

In order to succeed in a compensation application under section 3 three

following factors must be established:

16 1992 Lab IC 1259 at 1261.

17 1992 Lab IC 1020.
Ma Id. at 1025.

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420 Annual Survey of Indian Law [1992

(0 that there must be injury;

(ii) that it should be caused in an accident; and
(iii) it should be caused in the course of employment.

In Nav Bharat Rice and General Mills, Hanumangarh v. Rukma Devi}* the
(deceased) employee was sent by the manager by the motorcycle of the mill to
bring labourers from the nearby village. While he was going to the village, he
received injuries and died on the same day. The commissioner awarded
compensation, interest and penalty, to the tune of Rs. 37,831/-, Rs. 4,727/-,
Rs. 9,457/- respectively, in all Rs. 52,015/-. Thereupon, an appeal was filed before
the Rajasthan High Court under section 30 against the order of the commissioner.
The court held that the deceased employee died as a result of accident "arising
out of and in the course of the employment'' and, therefore, the management was
liable under section 3 to pay compensation.
The Bombay High Court in Sadashiv Krishna Adke v. M/s Time Traders}9
had an opportunity to interpret sections 4 and 4A. In this case, the applicant was
engaged in loading and unloading glass sheet bundles on a truck. A bundle fell
down and crushed the right foot of the applicant resulting in compound fractures.
The applicant remained in the hospital for more than two months. He, though
recovered, was walking with crutches. The applicant claimed compensation on
the basis of 100 percent loss of working capacity. The claim was disputed by the
employers. The commissioner held that a sum of Rs. 4,500/- should be treated
as having been paid to the applicant by the employers and that amount was required
to be deducted from the amount of compensation payable. However, the
commissioner did not consider this case to be fit one for imposing penalty or for
directing payment of interest under section 4A. Aggrieved by the order, the
applicant filed an appeal before the Bombay High Court. The court ruled that
the "incapacity to earn is to be determined with reference to the work or job the
workman was doing at the time of the accident," and observed:20

The defect in his leg as a result of which he was to walk with crutches
will certainly make him unfit to do the work of a coolie. Therefore, the
incapacity in his case will have to be taken as 100 per cent. Therefore,
the applicant would be entitled to compensation in the sum of Rs. 32340/-.

In Dalip Kaur v. Northern Railway21 the Punjab and Haryana High Court
held that the court can levy penalty under section 4A(3), even without specific
claim for penalty if circumstances so warrant.

Appeal—necessary and proper party

In General Manager v. Chickabora22 a question arose whether the

18 1992 Lab IC 1109.

19 (1992) 1 L U 877.
20 Id. at 879.
21 (1992) 1 L U 762.
22 (1992) 1 L U 717.

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Vol. XXVIII] Labour Law—II 421

commissioner for workmen's compensation is a necessary or proper party to

appeal. The Karnataka High Court answered the question in the negative and
observed:23

The Commissioner for Workmen's Compensation decides the claim as

a Tribunal. He performs the role of a Court. He exercises the powers of
a Civil Court for the purpose of recording evidence. He is also deemed
to be a Civil Court for all the purposes of section 195 and Chapter XXXV
of the Code of Criminal Procedure. As a Judge or a Court cannot be a
party to the cause, inasmuch as there cannot be a lis between a court and
a party to the proceeding, the Commissioner does not become either a
necessary or a proper party to the appeal unless allegations are made against
the Commissioner in the appeal which require his presence before the Court
to explain the same. For effective and a complete and final adjudication
of the appeal the presence of the Commissioner is not necessary because
he has no personal right or interest in the subject matter of the appeal.
He is also in no way interested or connected with the relief sought in the
appeal against the respondents to the appeal. He has only decided the claim
as any otiier Court or Tribunal does. Therefore, in the absence of any
allegations made against him in the appeal, the Commissioner cannot even
be held to become proper party to the appeal.

V EMPLOYEES' STATE INSURANCE CORPORATION ACT, 1948

The anxiety to give full scope to the provisions of the Employees' State
Insurance Corporation Act is evident from the decision in M/s Cochin Shipping
Co. v. Employees' State Insurance Corporation.24 In this case the appellant
company was carrying on stevedoring, clearing and forwarding operations in the
customs house. The appellant received a notice along with a notification whereby
the provisions of the Act was extended to the appellant. On these facts, a question
arose whether the appellant company was covered by the Act. The court answered
the question in the affirmative and observed:25

Under Section 1(4), in the first instance, it is made applicable to all factories.
The Act envisages the extension of benefit to the employees in other
establishments or class of establishments, industrial, commercial,
agricultural or otherwise. The extension of benefit is to be done by means
of a notification by the appropriate Government. Thus, the benefits covered
by the Act cover a large area of employees than what the Factories Act
and the akin legislations intended. The conclusion is inescapable that it
is a welfare legislation. The endeavour of the Court should be to place
a liberal construction so as to promote its objects to which a reference
has been made.

23 Id. at 718.
24 1992 Lab IC 2577.
25 Id. at 2580.

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422 Annual Survey of Indian Law [1992

The court gave a liberal interpretation to "shop" when it said:26

We do not agree with the narrow construction placed by the petitioner on

the expression 'shop' which appears in the notification issued under section
1(5) of the Act which is a beneficent legislation. The word 'shop' has not
been defined in the Act. A shop is no doubt an establishment (other than
a factory) to which the Act can be extended under section 1(5) of the Act
provided other requirements are satisfied.

Wages
Section 2(22) defines "wages" to mean: "all remuneration paid or payable
in cash to an employee, if the terms of the contract of employment, express or
implied, were fulfilled and includes any payment to an employee in respect of
any period of authorised leave, lock-out, strike which is not illegal or lay-off and
other additional remuneration, if any paid at intervals not exceeding two months..."
The aforesaid provision raises a question whether production bonus, collection
bhatta and subsistence allowance fall within the term "wages".
The High Court of Delhi in M/s Shouris Duplicators Ltd. v. ESIC,21 held that
the production bonus falls within the expression "wages" inasmuch as it is other
additional remuneration which management have paid to the employees at intervals
not exceeding two months though the payment was de-hors the terms of the contract
of employment. The Kerala High Court in Regional Director, Employees' State
Insurance Corporation v. K.P. Vinod2* held that the collection bhatta by reason
of its being production incentive allowance constituted "wages". But the same
High Court in Regional Director, ESIC, Trichur v. Smt. Neela Karunakaran,29
held that subsistence allowance is not "wages" within the meaning of section 2(22).

Determination of contribution in certain cases

The Madras high Court in P.S. Ambikanathan v. Employees' State Insurance
Corporation,30 ruled that it is a settled principle of civil law that the executing
court cannot go behind the original order and it has to simply execute the order
as it stands. Applying the analogy of this principle, the court held that the execution
levied by the special tahsildar for collection of the amounts determined under
sections 45A(1) and 85B, which became final, cannot be challenged even before
the ESI court.

Appeal to High Court

The Kerala High Court in Employees* State Insurance Corporation v.
Cheeran's Auto Agencies31 held that under section 82, an appeal would lie to

26 Ibid.
27 1992 Lab IC 104.
28 1992 Lab IC 1077.
29 1992 Lab IC 1069.
30 1992 Lab IC 675,
31 (1992) 1 LLJ704.

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Vol. XXVHI] Labour Law—II 423

the High Court from an order of ESI court only if it involves a substantial question
of law.

VI EMPLOYEES' PROVIDENT FUNDS & MISCELLANEOUS

PROVISIONS ACT, 1952

Basic wages
Section 2(b) defines "basic wages" to mean "all emoluments which are earned
by an employee while on duty or on leave with wages in accordance with the
terms of the contract of employment and which are paid or payable in cash to
him, but does not include—(i) cash value of any food concession; (ii) any dearness
allowance (that is to say, all cash payments by whatever name called paid to an
employee on account of a rise in the cost of living), house rent allowance, bonus,
commission or any other similar allowance payable to the employee in respect
of his employment or of work done in such employment; (iii) any presents made
by the employer."
And section 6 provides: "The contribution which shall be paid by the employer
to the fund shall be six-and-a-quarter per cent of the basic wages [dearness
allowance and retaining allowance (if any)] for the time being payable to each
f the employees (whether employed by him directly or by or through a contractor)
and the employees' contributions shall be equal to the contribution payable by
the employer in respect of him and may, if any employee so desires and if the
scheme makes provision therefor, be an amount not exceeding eight-and-one-
third per cent of his basic wages (dearness allowance and retaining allowance (if
any)..."
In Prantiya Vidhyut Mandal Mazdoor Federation v. Rajasthan State Electricity
Board32 the Supreme Court was invited to consider the question whether arrears
of wages, as a result of wage increase, would come within "basic wages" under
section 2(b). The Supreme Court held that section 2(b) read with section 6 suggests
that the expression "basic wages" means, (/) all emoluments which are earned
by an employee while on duty or on leave; (ii) with wages in accordance with
the terms of the contract of employment; (iii) which are paid or payable in cash;
and (iv) are payable for the time being to each of the employees.
The court also held that if the original emoluments earned by an
employee were "basic wages" under the Act, then there was no justification to
hold that the substituted emoluments as a result of the award would not be ' 'basic
wages".

Meaning of the term "employees"

Section 2(f) defines "employees" to mean, "any person who is employed
for wages in any kind of work, manual or otherwise, in or in connection with
the work of an establishment, and who gets his wages directly or indirectly from
the employer, and includes any person (i) employed by or through a contractor
in or in connection with the work of the establishment; (ii) engaged as an apprentice,

32 1992 (2) SCC 723.

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424 Annual Survey of Indian Law [1992

not being an apprentice engaged under the Apprentices Act, 1961, or under the
standing orders of (he establishment"
In Regional Provident Fund Commissioner v. Management of Hotel Highway
Limited, Mysore,*3 a question arose whether the trainees undergoing training with
the management in Hotel Highways Limited were employees within the meaning
of section 2(f). The Karnataka High Court answered the question in the negative
and observed:34
Hie heart of the matter is apprenticeship's dominant object and intent is
to impart training on the part of the employer and to accept on the part
of the other person learning under certain agreed terms. That certain
payment is made during the apprenticeship, by whatever name called, and
that die apprentice has to be under certain rules of the discipline do not
convert the apprentice to a regular employee under the employer. Such
a person remains a learner and is not an employee. It is inherent in die
word "apprentice" that there is no element of employment as such in a
trade or industry.

VII MINIMUM WAGES ACT, 1948

The Delhi High Court in KB. Verma v. Union of India35 was asked to decide
whether the recommendations of the advisory board under die Minimum Wages
Act could be sustainable where die board failed to consider the objections raised
by the petitioners and whether it applied its mind.
In this case the central government revised the minimum wages under section
5(l)(e) of the Act, after publishing their proposal, inviting objections and seeking
the advice of the advisory board. However, the advisory board did not consider
the objections while approving the proposal under the impugned notification.
Aggrieved by this order, the petitioner filed a writ petition in the High Court
challenging the validity of the notification issued by the Government of India.
The Delhi High Court observed:36
In our view there has not been proper consideration of the relevant
circumstances including the objections fded by the petitioners to the
proposed increase in wages by the impugned notification by the Advisory
Board. The action of the Advisory Board appears to be rather arbitrary.
It is not for us to see whether the proposed revision in minimum wages
is fair or reasonable, but the minutes of the Advisory Board should have
reflected as to how it had applied its mind to all die relevant considerations
to say the least We feel, perhaps the Advisory Board was under too much
pressure both on account of various Supreme Court orders and the award
of the Central Government Industrial Tribunal and was rather overwhelmed
on that account Whatever may be, the Advisory Board had to perform
its statutory functions in a manner which would appear to be fair, reasonable

33 1992 Lab IC 1201.

34 Id. at 1202.
35 1992 Lab IC 1039.
36 Id. at 1043.

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Vol. XXVIII] Labour Law—II 425

and just. The impugned notification issued on the basis of any such
recommendation or opinion of the Advisory Board cannot, therefore, stand.

vin PENSION

The decision of the Supreme Court in All India Reserve Bank Retired Officers
Association v. Union of India31 is of considerable importance in the area of social
security in general and pension in particular. In this case, the Reserve Bank of
India (RBI) introduced a pension scheme in lieu of contributory provident fund
scheme (CPF scheme) by the Reserve Bank of India Pension Regulation, 1990
operative with effect from 1.11.1990. The scheme was made applicable to all
employees entering bank services on or after 1.1.1990; for them the CPF scheme
did not exist. The validity of the scheme which was applicable to those who retired
from bank service between 1.1.1986 and 1.1.1990 and the cut-off date chosen under
the regulation was challenged on the ground that those employees who retired
from service on or after 1.1. 1986 should be struck down and instead the scheme
should be liberalised and extended to all retired bank employees regardless of
the date of their retirement provided they opt for the scheme. The pension scheme
was also challenged on the ground that it is violative of articles 14, 19 and 21
of the Constitution. Upholding the validity of the scheme, the Supreme Court
observed:370

The concept of pension is now well-known and has been clarified by this
Court time and again. It is not a charity or bounty nor is it gratuitous
payment solely dependent on the whim or sweet will of the employer. It
is earned for rendering long service and is often described as deferred
portion of compensation for past service. It is in fact in the nature of a
social security... Such social security plans are consistent with the socio-
economic requirements of the Constitution when the employer is a State
within the meaning of Article 12 of the Constitution.

The Supreme Court also upheld the cut-off date on the ground that it was framed
on the model or a similar scheme applicable to central government employees.
Further, the rationale of fixing the cut-off date as 1.1.1986 was the same as in
the case of central government employees based on the recommendation of the
Fourth Central Pay Commission.
The anxiety of the court to protect the interest of a widow of a naval driver
is evident from the decision of the Bombay High Court in Janbee v. Union of
India3* In this case, a widow approached the Bombay High Court to compel the
navy to disburse the family pension due to her. She stated that her deceased husband
served the navy as naval driver during 1942-43. The petitioner was in receipt of
family pension of Rs. 100/- granted by the Collector of Nasik. This was according
to her, much less than Rs. 300/- which was due to her. She, therefore, addressed

37 1992 U b I C 633
37a Id at 637-38
38 1992 Lab IC 981

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426 Annual Survey of Indian Law [1992

a petition to the Chief Justice of the Bombay High Court, who treated this petition
suo motu as a writ petition and observed:39

The payment of this paltry sum to a poor widow who produced convincing
materials about her entitlement need not make the Commodore lament that
everything is at sea except the ships. We do not have the least hesitation
in coming to the conclusion that the materials produced fully justify the
claim of the petitioner.

The court added:40

The law on question is no longer in grey area. The court will certainly
exercise its powers when official default in disbursement of pension is
established.

The court accordingly ruled that the disbursement of the entire beneficiary
claim calculated at the rate of Rs. 300/- per month from September 1989 and
interest thereon at 12 per cent per annum should be disbursed within two weeks
from the date of the order.

IX PAYMENT OF WAGES ACT, 1936

The tendency of the court to protect the interest of the workmen from arbitrary
deductions in wages of workmen where they absented themselves for short duration
was considered by the Madras High Court in C.T Suganaraj v. Syndicate Bank.41
In this case the petitioners absented themselves for about 15 minutes every day
between 2.7.1981 to 14.7.1981 except on holidays. On these facts, a question arose
whether the management could deduct the wages and if so, whether it should be
on pro rata basis for the duration of absence or whether it should be for full day.
The court held that the management could deduct only pro rata wages for the
duration of the absence of each of the petitioner.

X PAYMENT OF GRATUITY ACT, 1972

In Management of SIET Women's College, Madras v. Mohd. Ibrahim42 a

question arose as to whether the Payment of Gratuity Act, 1972 applies to
educational institutions. The Madras High Court held that an establishment as
defined by section 2(c) of the Tamil Nadu Payment of Subsistence Allowance
Act, 1981 was an establishment falling within the purview of section l(3)(b) of
the Act. The court also held that the Act is applicable to minority communities
also and the Act did not in any manner impinge upon the rights guaranteed under
article 30(1) of the Constitution.

39 Id. at 983,
40 Ibid.
41 1992 Lab IC 1244.
42 (1992) 1 L U 91 (Mad).

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Vol. XXVIII] Labour Law—II All

XI EQUAL REMUNERATION ACT, 1976

Section 2(h) of the Equal Remuneration Act defines, ''same work or work
of a similar nature" to mean: Work in respect of which the skill, effort and
responsibility required are the same, when performed under similar working
conditions, by a man or a woman and the difference if any, between the skill,
effort and responsibility required of a man and those required of a woman are
not of practical importance in relation to the terms and conditions of employment.''
The scope of this provision was examined by the Supreme Court in State of
Madhya Pradesh v. Pramod Bhartiya43 The court ruled that the expression
"same work or work of similar nature" connotes: (i) Similarity of skill; effort
and responsibility when performed under similar conditions; (ii) the quality of
work which varies from post to post and from institution to institution which is
not a matter of assumption but one of proof; and (iii) discharge similar duties,
responsibilities and functions.
The court also held that since the plea of equal pay for equal work has to
be examined with reference to article 14 of the Constitution, the burden of proof
is upon the petitioners to establish their right to equal pay or the plea of
discrimination, as the case may be.

XII FACTORIES ACT, 1948

In Model Mills, Nagpur v. Presiding Officer,44 the Bombay High Court held
that section 51 of the Factories Act prescribes the maximum limit on the working
hours for which the worker shall be allowed to work in the factory, viz, 48 hours
in a week. Likewise, section 54 requires that the daily work shall not exceed nine
hours in a day. Both these provisions permit the employer to take work from the
employees for the day or for the week which would fall within die maximum limits
provided. The court also held that section 59 applies only to overtime wages over
and above the statutory limits set out by that section.

XIII ANDHRA PRADESH FACTORIES ESTABLISHMENTS (NATIONAL

FESTIVALS AND OTHER HOLIDAYS) ACT, 1974

Section 3 of die Act reads,' 'Every employee shall be allowed in each calendar
year a holiday of one whole day on die 26th January, the 1st May, the 15th August
and die 2nd October and four other holidays each of one whole day for such
festivals as may be notified by the Government or by such other authority as may
be prescribed:
Provided that it shall be open for any employer to declare, with the consent
of the employees in any factory or establishment and under intimation to the
Government or prescribed authority, as substituted holiday in lieu of die festival
holidays aforesaid."

43 1992 Lab IC 2418.

44 1992 Lab IC 1171.

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428 Annual Survey of Indian Law [1992

The scope of this provision was examined in Allwyn Employees' Union v.

Hyderabad Allwyn Ltd.45 The Andhra Pradesh High Court held that the
specification of four holidays by the statute has got die significance of unalterability
whereas the state government or other authority may substitute the four other
festival holidays. The court added that the amended proviso applies only to those
non-specified holidays which may be prescribed in respect of festivals and
observed:46

The effect of the proviso as amended seems to me to confine the option

of the employer to declare a substituted holiday only in lieu of any of the
festival holiday and not any of the national holidays... The result is that
1st May shall be a holiday for the establishment of the respondent.

45 1992 Lab IC 1094.

46 Id. at 1097.

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