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PETITIONER: THE TATA OIL MILLS CO. LTD.

       Vs.

RESPONDENT: K.V. GOPALAN AND ORS.

DATE OF JUDGMENT: 15/04/1965

BENCH:

ACT:     Kerala  Industrial Establishment (National and  Festival Holidays) Act, 1958, ss. 3 and 11--Scope of.

HEADNOTE:     Under the Standing Orders of the appellant company,  its employees  were  entitled  to  five  holidays  with  pay  on specified   dates  during  each  year.  Furthermore,  by  an agreement  with  the  respondents’ union,  the  company  had agreed to grant an additional  day’s holiday with pay,  thus raising the total number of paid annual holidays to six.  In 1958  the  Kerala Industrial  Establishments  (National  and Festival  Holidays) Act, 1958, was passed and s. 3  of   the Act  required  every employer to declare holidays  on  every 26th  January,  15th August and 1st May, and to  grant  four additional festival holidays each year, on dates to be fixed by  the  Inspector  after consulting the  employer  and  the employees. The number of paid holidays was thus  statutorily fixed at 7. In  1962, the company obtained the Inspector’s  decision  on the  four festival holidays and declared the dates on  which such  holidays  would  be  given. At  that  time,  while  an industrial dispute between the company and its employees was pending. the respondents filed applications under s. 33A  of the  Industrial Disputes Act, 1947, before the Tribunal.  It was  contended  in  these applications  that  the  statutory provision  in s. 3 for 7 paid holidays did not  override  or abrogate  the existing arrangement as to paid  holidays  and that  the  holidays  to  be given under s.  3  would  be  in addition, to  the holidays which the appellant was bound  to give  the respondents under existing arrangements; and  that the appellant’s attempt to limit the nUmber of paid holidays to  7  during 1962 was contrary to the terms  of  employment evidenced   by  the  existing  arrangement   and   therefore violative  of  s.  33. This contention  was  upheld  by  the Tribunal. In appeal to this Court,     HELD:  Under  s. 3 the statutory requirement is  7  paid holidays  each  year. If under an existing  arrangement  the employees  were entitled to more than 7 paid holidays,  such more favourable right was protected by s. 11. The scheme  of s. 11 clearly shows that s. 3 is not intended to prescribe a minimum number of paid holidays in addition to the  existing ones  and, in the present case, would operate only to  raise the  total  number  of holidays from 6  under  the  existing arrangements  to  7 paid holidays in accordance with  s.  3. [764 B-E]

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JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 150  and 160 of 1964.     Appeals by special leave from the award dated  September 20,   1962,  of  the  Industrial  Tribunal,   Ernakulam   in Industrial Dispute Nos. 11 and 10 of 1962 respectively. 761     G.B.  Pai,  J.B. Dadachanji, O.C.  Mathur  and  Ravinder Narain, for the appellant. M.R.K. Pillai, for the respondents. The Judgment of the Court was delivered by  Gajendragadkar, C.J. The short question of law which  these two   appeals  raise  for  our  decision  relates   to   the construction  of  ss.  3 and 11  of  the  Kerala  Industrial Establishments  (National and Festival Holidays)  Act,  1958 (No. 47 of 1958) (hereinafter called the Act.. That question arises  in this way. Two complaints were filed  against  the appellant,  the  Tam  Oil Mills Company Ltd.,  by   the  two groups  of respondents,  its  workmen,  respectively   under s.  33A of the Industrial Disputes Act.  These  applications alleged that the management of the appellant had contravened the  provisions of s. 33 of the said Act inasmuch as it  had denied  its employees leave with wages on Founder’s Day  and Good  Friday   in 1962. According to the  respondents,  they were  entitled  to  have holidays with pay on the  said  two days under the terms and cOnditions of service, and so, they claimed  that  the Tribunal should direct the  appellant  to give   its  employees  holidays  under  the  said   existing arrangement  and should pass other appropriate  order’s  for the  payment of wages for the two holidays in question.  The appellant  disputed  the  correctness  of  the  respondents’ contention.  The Tribunal has rejected the appellant’s  plea and  has declared that the respondents are entitled  to  the privilege ’of paid holidays on Founder’s Day and Good Friday in  1962. It has also ordered that the appellant should  pay the  wages  to the respondents for those two  days  and  the proportionate  salary  of the staff members as soon  as  the award comes into force. It is against these orders passed by the  Tribunal on the two complaints preferred before  it  by the  respective respondents that the appellant has  come  to this Court by special leave; and on its behalf, Mr. Pai  has contended  that  in  making the  award’,  the  Tribunal  has misconstrued the effect of ss. 3 and 11 of the Act.     Standing  Order  30  of  the  Standing  Orders  of   the appellant   company  makes  provision  for  leave   of   all categories. S.O. 30 (vi) provides for holidays. It lays down that the factory will be closed on the following days  which will  be considered as Company Holidays with pay,  and  will not  be counted against the casual or privilege leave of  an employee: 1. New Year Day (1st January). 2. Founder’s ’Day (Saturday nearest to 3rd March) 3. Good 3  Friday 4. Onam     5. Christmas Day (25th December)  There  is a note appended to this:proVision which makes  it clear  that in the event’of the Company being  compelled  to observe a holiday or holidays for reasons of State such  day or  days shall not be counted as against ’the  privilege  or casual leave of the employees but shall 762 be  treated  as a Company holiday or holidays. Thus,  it  is clear   that   under  the  relevant  Standing   Order,   the respondents are entitled to 5 paid holidays every year.      After  the Standing Orders were framed  and  certified,

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there  was  an  agreement  between  the  appellant  and  the respondents’ Union as a result of which the appellant agreed to  grant a further holiday, and’ this agreement raised  the number of total paid holidays in a year to 6. The additional holiday  which  the  appellant thus agreed to  give  to  the respondents was to be given on the day when the respondents’ Union  would  celebrate  its  Union  Day.  Apparently,  this holiday  was  analogous  to  the  Founder’s  Day,  the  idea underlying  the agreement being that just as  the  appellant gave  a paid holiday on the Founder’s Day,  the  respondents should be given a paid holiday on the Union Day.     It  appears that even after this agreement was  reached, the respondents began to claim additional holidays; but  the appellant was not prepared to make any addition to the  list of  holidays.  It was prepared to leave the  choice  of  the agreed holidays to the employees provided they submitted  to the Company an agreed list of such holidays.                   In  1958, the Act was passed and  it  came               into force on the 29th December, 1958.-Section               3 of the Act provides               "Grant of National and Festival Holidays--                  Every  employee  shall be allowed  in  each               calendar  year a holiday of one whole  day  on               the 26th January,  the 15th August and the 1st               May and four other holidays each of one  whole               day  for such festivals as the Inspector  may,               in  consultation  with the  employer  and  the               employees specify in respect of any industrial               establishment". The result of this provision was that every employer to whom the  Act  applied  had  to declare  holidays   on  the  26th January,   the 15th August and the 1st May and had  to  give four  other  holidays  according  to  the  decision  of  the Inspector,  the  requirement of the section being  that  the Inspector  had  to consult the employer  and  the  employees before  fixing  such other holidays. In other  words,  s.  3 statutorily  fixed the number of paid holidays at  7;  fixed three  out  of them and left the decision of  the  remaining four  to the Inspector who had to consult the  employer  and the employees.     In  pursuance of this provision, the Inspector  declared certain  holidays for the year 1959. Not satisfied with  the decision of the Inspector, one of the appellant’s  employees Mr.  Baskara Menon filed a writ petition in the Kerala  High Court  under  Art. 226 of the Constitution  challenging  the validity of the Inspector’s decision. In that writ petition, the question about the construction of s. 3 of the 763 Act  was agitated. In the result, the High Court  held  that the complaint made by the petitioner against the validity of the decision of the Inspector was not well-founded, and  so, the writ petition was dismissed.     In  1962, the appellant followed the same procedure  and got  a  decision  as  to  the  festival  holidays  from  the Inspector  and  declared  that the said  holidays  would  be observed as paid holidays in the year. At this time, certain industrial  disputes were pending between the appellant  and its  employees  belonging both to monthly   and  daily-rated categories before the Industrial Tribunal at Ernakulam.  The respondents  felt that the declaration of the holidays  made by   the  appellant  for  the  year  1962  amounted   to   a contravention  of s. 33 of the Industrial Disputes Act,  and so,  they  filed  the  two  present  complaints  before  the Industrial  Tribunal  under 33A of the said  Act.  That,  in brief, is the genesis of the present complaints.

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   We  have already noticed the provisions of s. 3  of  the Act.  The  contention raised by the respondents  before  the Tribunal  was  that  the statutory provision as  to  7  paid holidays prescribes the minimum number of holidays which the employer  has  to  give to his  employees.  This  provision, according to the respondents, does not over-ride or abrogate the  existing arrangement as to paid holidays. In regard  to paid  holidays  which  are common to s. 3  and  the  present arrangement  they would, of course, have to be  treated   as paid  holidays, but the four other festival  holidays  which the Inspector decides from year to year would be in addition to the holidays which the appellant is bound to give to  the respondents  under the existing arrangement, and  since  the appellant  has limited the number of paid holidays to 7  for the  year  1962,  it  has acted contrary  to  the  terms  of employment evidenced by the existing arrangement as to  paid holidays and that constitutes the violation of s. 33 of  the Industrial Disputes Act. This contention has been upheld  by the Tribunal; and Mr. Pai argues that the view taken by  the Tribunal  is  plainly inconsistent with the true  scope  and effect of s. 3 read with s. 11 of the Act.     That takes us to s. 11 of the Act, because this  section has  to be read along with s. 3 in determining the  validity of the conclusion recorded by the Tribunal on the main point of dispute between the parties. s. 11 reads thus:--    "Rights  and  privileges  under  other  laws,  etc.,  not affected-Nothing  contained  in  this  Act  shall  adversely affect  any  rights  or privileges  which  any  employee  is entitled  to with respect to national and. festival holidays 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". D)5 SCI-10 764 This  section  gives an option to the  employees,  they  can choose to have the paid’ holidays either as prescribed by s. 3 or as are available to them under any other law, contract, custom or usage exercising this choice, it must, however, be borne  in mind by the employees that the 26th  January,  the 15th  August  and  the 1st May have to  be  taken  as  three holidays.  That is the direction of s. 3. In regard  to  the remaining 4. the Inspector decides which days should be paid holidays.  In other words, the. statutory requirement  is  7 paid  holidays.  If  under  the  existing  arrangement   the employees are entitled to ’have more ,,than7 paid  holidays, that  right  will  not be defeated-by s. 3,  because  s.  11 expressly  provides  that  if the rights  or  privileges  in respect  of paid holidays enjoyed by the employees are  more favourable  than  are  prescribed by s.  3,  their  existing rights  and  privileges as to the total number  of  holidays will  not  be prejudiced by s. 3. The scheme of s.  11  thus clearly  shows  that  s. 3 is not intended  to  prescribe  a minimum number of paid holidays in addition to the  existing ones,  so that the respondents should be entitled  to  claim the seven holidays prescribed by s. 3 plus the six  holidays to which they are entitled under the  existing  arrangement. If  in addition to the three holidays which  are  compulsory under  s.  3, the employees are getting, say 3’  other  paid holidays,  then  s. 3 would step in and  would  require  the employer to give his employees one more paid holiday, so  as to  make the number of paid holidays 7. In our  opinion,  if ss. 3 and 11 are read  together, there can be no doubt  that the  respondents’ claim that they should have 7 holidays  as prescribed by s. 3 plus 6 holidays as are available to  them

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under  the present arrangement is cleary untenable.  In  the present case, the respondents were having six paid holidayS. The statute has fixed the minimum number at 7 paid holidays, and  so, since the existing arrangement was less  favourable to the employees, the statutory provision will come to their help and they will be entitled to claim 7 paid holidays in a year, and that means that s. 3 will be operative. If that be so, the procedure followed by the employer in consulting the Inspector and in fixing the list of 4 paid holidays for 1962 in  addition to the three holidays fixed by the  statute  is perfectly consistent with the provisions of s. 3 of the Act. The  Tribunal was, therefore, in error in holding  that  the appellant  had contravened s. 33 of the Industrial  Disputes Act.     In  the result, the appeals must be allowed, the  orders passed by the Tribunal in the two respective complaints  set aside,  and the two complaints dismissed. There would be  no order as to costs. Appeals allowed. 765