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Workmen of Dewan Tea Estate v. The Management (SC 1963)

• The workers raised a dispute against the employer for a lay-off declared by them in the estates. The lay-off lasted for 45 days and the workers’ contention was that the lay-off was not justified and they were entitled to full wages for the period of the lay-off. The employer resisted the claim on the ground that the lay-off was justified.
• The facts are that there were tea estates situated in Cachar District and had to face a long period of depression in trade by reason of poor prices for the tea produced by them. In 1959, the management faced a very difficult financial position and took the view that in the interests of the employees and its own business, it would be appropriate to lay off the workmen for a certain period in order to avoid closure of business. The circumstances which caused financial depression were beyond the control of the management and lay-off was, therefore, inevitable and fully justified.
• The workers argued that there were other tea estates in the district of Cachar which had to face similar problems. The labour costs incurred by the respondent were not higher than the other tea estates, the burden of taxes was the same and the quality of the tea produced was the same. The difficulty faced by the employer was a result of its mismanagement and neglect. They pleaded that the workmen had been promised continuous work throughout the year and the declaration of lay off for such a long period as 45 days exposed them to the risk of semi-starvation.
• The workers also argued that depression in trade or financial difficulties which may be characterized as trade reasons did not justify the lay off under the Standing Orders, and so they justified their claim for full wages during the period of the lay off.
• The Tribunal held that the Standing Orders justified the lay off. The trade reasons resulting from the depression in trade and financial liabilities fell within the scope of the Standing Order.
• In the alternative, the Tribunal thought that even if the lay off was not justified by the Standing Orders, the respondent had a common law right to declare a lay off and this right was recognized by S. 25C of the Act. According to the Tribunal, s. 25 C recognizes this common law right and since it is a statutory provision, it over-rides the relevant clause in the Standing Order.
• The Supreme Court however disagreed with the Tribunal and held that it was not right in holding that S. 25C of the Industrial Disputes Act recognizes the inherent right of the employer to declare lay-off for reasons which he may regard as sufficient or satisfactory.
• No such common law right can be spelt out from the provisions of S. 25C. When the laying off of the workmen is referred to in S. 25C, it is laying off as defined by S. 2 (kkk), and so, workmen who can claim the benefit of S. 25C must be workmen who are laid off for the reasons contemplated by S. 2(kkk).
• Lay-off will necessarily be governed by the provisions of the Act, and lay-off would be permissible only where one or the other of the factors mentioned by S. 2(kkk) is present, and for such lay-off compensation would be awarded under S. 25C.

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