http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: MIS.  ROHTAS SUGAR LTD., & OTHERS

       Vs.

RESPONDENT: THEIR WORKMEN

DATE OF JUDGMENT: 12/02/1960

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS GAJENDRAGADKAR, P.B. SUBBARAO, K.

CITATION:  1960 AIR  671            1960 SCR  (2) 989

ACT:         Seasonal  lndustries-Unskilled workmen-Retaining  allowance        for  off  season-If wage structure to be raised in  lieu  of        retaining allowances.

HEADNOTE: The unskilled seasonal workmen of the Bihar Sugar  Industry, bulk  of whom belonged to the landless labourer  class,  who ceased  to have any contractual relation with the  employers once the 990 season  was over and on the commencement of the next  season might or might not rejoin their employment) raised  disputes over  the  question whether retaining allowances  should  be paid to them   during the off season.        The  Labour Appellate Tribunal inter alia  awarded  a retaining allowance to unskilled workmen, at a rate of 5% of the  basic wage for the period of the off season to be  paid every  year  at  the  beginning of  the  season,  when  they reported for duty. The  main contentions on behalf of the employer  were  that. agriculture was the primary occupation of these persons  and the employment in the Sugar Factory Was merely a  subsidiary occupation, that claim for retaining allowance was really in the  nature of unemployment relief which it was the duty  of the   State  and  not  the  industry  to  give,   that   the relationship of employer and employee did not -exist in  the off season and so no payment of anything in the character of wages could possibly be claimed by the labour. Held, that the relief of unemployment by arranging  suitable alternative employment or an alleviation of the distress  of employment  insurance benefits or by other modes  though  is primarily the function of the Government of the country, yet the  industry  where these workmen are  seasonally  employed cannot look unconcerned and play no part in alleviating  the distress   of  the  people  who  have  contributed  to   the prosperity of the industry by their labour though only for a part of the year. In deciding whether the principle of social justice which it is  the aim of industrial adjudication to apply  to  justify the  payment of retaining allowance to unskilled workmen  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

these sugar industries it is necessary to take into account. (a)  opportunities  of  alternative employment  in  the  off season that will be available to such workmen; (b)  the  degree in which such workmen can be said  to  have become attached to the particular factory where they work; (c)  the likely benefit to the industry if such workmen  are induced  to  return  to  the factory  by  the  incentive  of retaining allowance to be paid when the season commences; (d)  the  capacity  of the industry to bear  the  burden  of retaining allowance. Held,   further,  that  for  alleviating  the  distress   of unskilled  workmen in these Sugar Factories, a  much  better course  will be to raise the wage structure with an  eye  to this  fact that for a part of the off season at  least  when they  remain unemployed than to pay retaining allowance  for the entire off season. In the instant case the interests of both the employers  and labour will be best served if the question of raising  their wages in view of the seasonal nature of their employment  be raised  before the wage board which has been entrusted  with the task of fixing the wages of the workmen concerned in the present  dispute, which will be considered  sympathetically, specially    as   the   employers   have   recognised    the reasonableness of the claim, 991

JUDGMENT:        CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 717 to  742        of 1957.        Appeals by special leave from the decision dated  August 31,        1956, of the Labour Appellate Tribunal of India, Calcutta in        Appeals  Nos.  (Cal.) 45 to 52, 59,61-63, 65-78  and  98  of        1955.        A.   B.  N. Sinha and B. P. Maheshwari, for  the  appellants        (in all the appeals).        L.   K.  Jha and D. P. Singh, for respondents Nos. 1, 4,  5,        7, 8, 10, 14, 15, 21, 24, 26 to 30, 36, 37 and 39.        P.K. Chatterjee, for respondents Nos. 6, 9, 12, 17, 20,  22,        23, 25, 31 and 32.        L.   K.  Jha  and R. C. Prasad, for  the  Intervener.         1960,  February,  12.   The  Judgment  of  the  Court  ,was        delivered by        DAS  GUPTA,  J.-These appeals are against the order  of  the        Labour  Appellate Tribunal of India at Dhanbad by which  the        Labour  Appellate  Tribunal  confirmed  the  order  of   the        Industrial  Tribunal  awarding  a  retaining  allowance   to        unskilled workmen at a rate of 5% of the basic wages for the        period  of  the off season of numerous sugar  industries  in        Bihar.   The appellants-companies, the employers,  in  these        sugar industries also challenge the correctness of the order        made by the Industrial Tribunal and confirmed by the  Labour        Appellate  Tribunal  awarding  the  workmen  attending   the        proceedings   before   the   Industrial   Tribunal,   wages,        travelling  allowance  and  halting  allowance  and  further        directing that the workmen attending these proceedings would        be treated on special leave with pay for the period of        such attendance.        As regards these orders the appellants contend that they run        counter  to  the  pronouncements of  this  Court  in  Punjab        National  Bank Ltd. v. Sri Ram Kanwar, Industrial  Tribunal,        Delhi  (1).   This  contention,  we are  bound  to  say,  is        correct.   Whatever might have been said in support  of  the        view  taken  by the Tribunals in ordering payment  of  these

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

      allowances   and  of  granting  special  leave  to   workmen        attending proceedings of necessity, if the question was  res        integra  we  are bound by the authority of  Punjab  National        Bank’s Case (1) to        (1) [1957] S.C.R. 220.        126        992        hold  that no such allowances are payable and no such  order        garanting leave may be made.  The order of the    Tribunals        below  allowing travelling allowance and  balting  allowance        and  special  leave  to  workmen  attending  proceedings  of        necessity, must therefore be set   aside.     Mr.     Sinha,        learned counsel for the appellants, however, has  undertaken        on  their  behalf  that no restitution will  be  claimed  of        allowances which have already been paid.        This brings us to the main question in controversy in  these        appeals.   That  question  is  whether  retaining  allowance        should  be  paid to unskilled workers  in  these  industries        during  the  off season.  Disputes over this  question  have        been  going on for many years and committee after  committee        has  wrestled  with the problem for arriving  at  a  formula        acceptable to both employers and labourers but in vain.   In        1950  a reference %as ultimately made to Mr. Justice  B.  P.        Sinha  (as  he  then was) as regards  these  disputes  about        retaining  allowance.   The award made by him  provided  for        retaining  allowance to skilled and semiskilled workmen  but        none  to unskilled workmen.  Before the  Appellate  Tribunal        who  heard the appeal against that award the  labourers  and        employers  came to an agreement that no retaining  allowance        would  be payable to the unskilled workmen.  This award  was        in  operation for a period of two years but  was  thereafter        determined by notice given by workmen followed up by similar        notice by employers.  The reference out of which the present        appeals   arise  included  several  other  matters   besides        retaining allowance to seasonal employees, but with those we        are  no  longer  concerned in these  appeals.   Nor  are  we        concerned  with  the  question  of  retaining  allowance  to        skilled  and semiskilled workmen as that part of  the  award        was not disputed by the present appellants.        On the question of retaining allowance the main  contentions        on  behalf  of the employers were that agriculture  was  the        primary  occupation of these persons and the  employment  in        the  sugar factory was merely a subsidiary occupation,  that        the  claim for retaining allowance was really in the  nature        of  unemployment relief which it was the duty of  the  State        and not the        993        industry   to  give,  that  the  relationship  between   the        employers and these employees does not exist in   off season        and so no payment of anything in tile   character  of  wages        could possibly be claimed by the   labour.   The    Tribunal        overruled  all these objections. It was of opinion that  the        working  season in the factory completely covers  the  paddy        harvesting season   in  North  Bihar,  where  most  of   the        factories are  situated so that the workmen the bulk of whom        belong    to  the  landless labourers’ class  in  the  rural        areas do  not  obtain employment in the off season. It  also        pointed out that the seasonal employees are entitled      to        provident fund, gratuity and also bonus and that       their        connection  with the employers is not broken during the  off        season. Accordingly it awarded retaining allowance of 5%  to        all  unskilled  employees-to  be  paid  every  year  at  the        beginning of the season when  they   report  themselves   to        duty.        In  agreeing  with the Tribunal’s conclusion  the  Appellate

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

      Tribunal pointed out further that the grant  of     seasonal        allowance to unskilled labour in the industry would  promote        stability, good relations and efficiency.             The question whether the retaining allowance should  be        paid  to  seasonal workers during the off season is  one  of        great complexity. A measure of the complexity is provided by        the  conflict in the view expressed by many  committees  who        examined  the matter. While it will serve no useful  purpose        to  set out these different views and the reasons  given  in        support  thereof,  it  is proper to mention  that  with  the        exception of the Labour Enquiry Committee no committee  ever        recommended  payment  of retaining  allowance  to  unskilled        workmen, though several of these recommended payment of such        allowance  to  skilled and semi-skilled  workmen.  When  the        matter comes before the  Tribunals  for  adjudication   they        have to decide the  matter on the materials before them  and        it  is  not possible to derive much  assistance  from  these        reports of the committees. The real difficulty in coming  to        a  conclusion lies in the fact that while there is no  doubt        on   the  one  hand of the plight of  the  seasonal  workmen        during the off season, if they during such period remain        994        prartically   unemployed,  there  is  some  force  also   in        the argument that it is neither just nor fair to treat these        unfortunate  people  as the special  responsibility  of  the        particular industry or the factory where they are seasonally        employed.  It is difficult not to agree      with        the        opinion  that  the  relief  of  unemployment  by   arranging        suitable  alternative  employment or an alleviation  of  the        distress of such seasonally unemployed persons by  providing        unemployment  insurance  benefits  or  by  other  modes   is        primarily the function of the government of the country.  To        say  that, is, however, not to say that the  industry  where        they are seasonally employed should look on unconcerned  and        play  no part in alleviating the distress of the people  who        have contributed to the prosperity of the industry by  their        labour,  even  though for only a part of  the  year.   While        these considerations on either side are common to claims for        retaining   allowance  for  all  seasonal  workmen  in   all        industries,  the  special  facts and  circumstances  of  the        categories  of workmen and different local circumstances  in        different industries play an important part in deciding  the        question.  Thus skilled and semi-skilled workers have  often        been able to put forward a strong case by pointing out  that        the  specialized skill acquired by them makes  it  difficult        for  them to obtain suitable alternative employment  in  the        off  season.   Employers  also often find it  to  their  own        interest  to pay such categories of workmen, some  retaining        allowance  as  an  inducement to them  to  return  to  their        factories when the season commences.  In the present appeals        we  are concerned with the case of unskilled  workmen  only.        It  is  obvious as has been noticed by  both  the  Tribunals        below, that the employers feel that there is such a glut  in        the  supply  of  unskilled labour in  Bihar  that  retaining        allowance or no retaining allowance a sufficient supply will        be  available for the industries. That is why the  employers        contend  that  they ought not to be asked in  an  industrial        adjudication to pay retaining allowance to unskilled labour.        We  do no think it will be fair to say that  merely  because        the  employers  have agreed to pay  retaining  allowance  to        skilled labour their opposition to such payment of                                   995        some  such allowance to unskilled labour is unjustified.  In        deciding whether the principles of social justice   which it        is the aim of industrial adjudication to apply   justify the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

      payment of retaining allowance to unskilled  workmen      in        these sugar industries, it is necessary to   take       into        account  (a) the opportunities of alternative employment  in        the  off season that will be available to such workmen;  (b)        the degree in which such workmen   can   be  said  to   have        become attached to the particular  factory where they  work;        (c)  the likely benefit to the industry if such workmen  are        induced  to  return  to  the factory  by  the  incentive  of        retaining  allowance to be paid when the  season  commences;        (d) the capacity    of  the industry to bear the  burden  of        retaining allowance. The capacity of the appellant-employers        to  bear  the  additional  burden  resultant  from  the   5%        retaining  allowance ordered by the Tribunals below has  not        been  disputed before us. The position is however  far  from        clear as regards the existence of alternative  opportunities        available  to  unskilled labour in the ’Off season.  It  was        found, and we must proceed on the  basis,   rightly   found,        that the working season of the sugar industry in North Bihar        where most of the factories concerned in the present-appeals        are situated,  completely   covers  the   paddy   harvesting        season. That   however   is   slender   material   for   any        conclusion as  regards  the  existence of  opportunities  of        alternative    employment for these unskilled workmen.             The  appellate  Tribunal  has said that  the  grant  of        seasonal allowance to unskilled labour in the industry  will        promote stability, good relations and efficiency.      Except        in  so  far  as  this conclusion is  based  on  the  general        probability that newly recruited labour at the  commencement        of  the  season  is likely to be  less  efficient  and  less        disciplined than men who have worked    in previous seasons,        this does not appear to have been  based  on  any   concrete        evidence on the point.        Nor  is  it  clear from the materials  on  the  record  that        unskilled workmen employed in a particular factory  consider        themselves  attached  to, that factory.  It  appears  to  be        clear  that once the ’season is over the  unskilled  workmen        cease  to have any contractual relations with the  employers        and may rejoin on the com-        996        mencement  of  the season or may not rejoin at  their  sweet        will.   As regards the observations of the Tribunal  that  "        seasonal employees are entitled to the benefit of  provident        fund, gratuity and also bonus which shows that in fact their        connection with the employers is not broken " the  materials        on  the record Are too scanty for arriving at  any  definite        conclusion.   In consideration of the nature and  extent  of        the  materials  on  the record we are of  opinion  that  for        alleviating the distress of unskilled workmen in these sugar        factories, with whom we are concerned in the present appeals        a  much  better course will be to raise the  wage  structure        with  an eye to this fact that for a part of the off  season        at least when they remain unemployed than to pay a retaining        allowance for the entire off season.        The  appellant’s counsel readily agrees that the  fact  that        these  unskilled  workmen  find  employment  in  the   sugar        factories  only  for  a few months and  are  in  comparative        difficulty  in the matter of finding employment  during  the        remaining  months,  should be taken  into  consideration  in        fixing  their  wages.   We are informed that  a  Wage  Board        entrusted  with the task of fixing the wages of the  workmen        concerned in these disputes is sitting at the present  time.        The  interests  of both the employers and  labour  will,  we        think,  be  best served if instead of confirming  the  order        made  by  the Appellate Tribunal as  regards  the  retaining        allowance  the workmen will raise this question  of  raising

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

      their  wages  in  view  of  the  seasonal  nature  of  their        employment  before this Wage Board.  We have no  doubt  that        such a claim will be sympathetically considered by the  Wage        Board,  especially  as  the  employers  have  through  their        counsel,  recognized before us the reasonableness  of  their        claim.   The  appellants  have through  their  counsel  also        undertaken  that  they  will not claim  restitution  of  the        amounts already paid as retaining allowance and further that        they  will continue to pay the retaining allowance  for  the        next  season-half at the commencement of the season and  the        other  half  mid-way during the season-till the  wages  have        been  fixed  by the Wage Board.  Accordingly  we  allow  the        appeals and set aside the order passed by the Labour        997        Appellate  Tribunal of India, Dhanbad, as regards  retaining        allowance  to  unskilled  ’workmen and  also  its  order  as        regards   payment  of  halting  allowance   and   travelling        allowance  and  wages to workmen  attending  proceedings  of        necessity  of  the  Industrial Tribunal.  But  as  has  been        mentioned earlier the appellants have undertaken not to seek        restitution  as regards the halting or  retaining  allowance        already  paid  and further that they will  continue  to  pay        retaining   allowance  for  the  next  season-half  at   the        commencement of the season and the other half mid-way during        the season--till the wages are fixed by the Wage Board.        There will be no order as to costs.        Appeal allowed.