Prabha Sridevan, J.
The 117 employees who had retired availing the Voluntary Retirement Scheme offered by the appellant-Corporation in the year 1986, preferred a claim petition under
Section 33C(2) of the Industrial Disputes Act, 1947 on the ground that while calculating the retrenchment compensation, ex gratia and Earned Leave wages, the Management has taken 30 days and 31 days for the month for the purpose of calculating the amount instead of taking 26 days in the month, as calculated in the case of gratuity. The Labour Court, Salem accepted their contention and passed orders. Against that, the appellants herein filed the writ petition. That was dismissed by the learned single Judge holding that there is no irregularity in the order.
2. Learned counsel for the appellants raised only two points. One is that when the option under Voluntary Retirement Scheme has been accepted and the benefits have been taken, no claim can be made and it is not open to the respondents to re-agitate the matter, especially after nine years, and claim that dues are payable on the ground of pay revision. In this regard, he relied on (2003) 5 S.C.C. 163 [A.K. Bindal vs. Union of India]. He also referred to 2007 (1) L.L.N. 740 [Guru Jambheshwar University vs. D. Pal], where the Supreme Court has held that the principle of 26 working days per month as applicable under the Payment of Gratuity Act cannot be imported for determining retrenchment compensation payable under
Section 25F(b) of the I.D. Act. Secondly, it was also submitted that the appellant-Corporation had incurred heavy loss in its administration due to surplus and eight units had been closed down and in those circumstances, the Voluntary Retirement Scheme was extended to its employees. Learned counsel submitted that having accepted the amounts paid in the year 1986, the respondents cannot return after nine years and make a claim under
Section 33C(2) of the Act.
3. Learned counsel for the respondents-workmen submitted that they are all poor workers who are entitled to the relief.
4. It is not necessary to go into the details regarding the facts of the case. In (2003) 5 S.C.C. 163 (supra), the facts are almost identical. There, the company was Fertilizer Corporation of India, a Government of India Enterprise and the employees had retired taking advantage of the Voluntary Retirement Scheme extended by it. When there was a pay revision, they again made a claim alleging that they are entitled to more. The Supreme Court held as follows :
"34. This shows that a considerable amount is to be paid to an employee ex gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in the same. It is a package deal of give and take. That is why in the business world it is known as golden handshake. The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated."
In that case also, the Supreme Court held that "the contention that the economic viability of the industrial unit or the financial capacity of the employer cannot be taken into consideration in the matter of revision of pay scales of the employees does not appeal to us". And then, it was held thus :
"Therefore, it appears to be the consistent view of this Court that the economic viability or the financial capacity of the employer is an important factor which cannot be ignored while fixing the wage structure, otherwise the unit itself may not be able to function and may have to close down which will inevitably have disastrous consequences for the employees themselves. The material on record clearly shows that both FCI and HFC had been suffering heavy losses for the last many years and the Government had been giving a considerable amount for meeting the expenses of the organisations. In such a situation, the employees cannot legitimately claim that their pay scales should necessarily be revised and enhanced even though the organisations in which they are working are making continuous losses and are deeply in the red."
In the present case also, there is no dispute that TANSI has been closed on account of the loss sustained by it.
5. In 2007 (1) L.L.N. 740 (supra), an identical issue came up before the Supreme Court and the Supreme Court explained the position in paragraphs 15, 17, and 18 as hereunder :
"15. It may be noted that
Section 4(2) of the Payment of Gratuity Act uses the expression ''the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rates of wages last drawn by the employee." On account of the language used in
Section 4(2) it becomes necessary to find out the rate of wages which necessarily involves the concept of actual working days. It was on the basis of the aforesaid language of the provisions under the Payment of Gratuity Act that this Court in the case of Jeevanlal (supra) observed that "although a month is understood to consist of 30 days, gratuity payable under the Payment of Gratuity Act treating the monthly wages as wages for 26 days is not new or unknown.
...
17. There is another important feature which deserves notice. Subsequent to the decision of this Court in Jeevanlal (supra) an explanation has been added after second proviso to
Section 4(2) of the Payment of Gratuity Act, by Act No. 22 of 1987, which reads as under:-
"Explanation: In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen."
18. By adding the explanation, the legislature has brought the statute in line with the principle laid down in the case of Jeevanlal (supra) and has given statutory recognition to the principle evolved, viz. that in case of monthly rated employee the fifteen days' wages shall be calculated by dividing the monthly rate of wages by twenty six and multiplying the quotient by fifteen. But, no such amendment has been made in the Industrial Disputes Act. If the legislature wanted that for the purposes of Section 25F(b) also the average pay had to be determined by dividing the monthly wages by twenty-six, a similar amendment could have been made. But the legislature has chosen not to do so. This is an additional reason for holding that the principle of "twenty-six working days" is not to be applied for determining the retrenchment compensation under Section 25F(b) of the Act."
Therefore, we are bound by the decision of the Supreme Court and the retrenchment compensation can be paid only by working it out at the rate of `5/30 and not at the rate of 15/26, as in the case of payment of gratuity.
6. In addition to the aforesaid decision, there are two other reasons why the respondents are not entitled to the claim made by them. In the voluntary retirement scheme of the appellants, it was specifically mentioned that gratuity will be paid by applying the principle of 15/26 and there was no agreement to pay earned leave etc. by applying the principle of 15/26. It is on the basis of this claim that the respondents gave their applications for availing the voluntary retirement scheme and eleven years later, without any explanation for the delay, they have filed their claim petition. The learned single Judge had followed 2000 (1) L.L.N. 418 [Management of Shadlow India Ltd. vs. Presiding Officer, Labour Court], but in 2007 (1) L.L.N. 740 (supra), the Supreme Court has declared that there is no justification to import the concept of "26 working days" into the Industrial Disputes Act when no amendment has been made to the Act to bring it in line with the language in the Payment of Gratuity Act.
7. For the aforesaid reasons, the order of the learned single Judge is set aside and the writ appeal is allowed, but there shall be no order as to costs. Consequently, W.A.M.P. No.1834 of 2004 is closed.
ab To The Presiding Officer, Labour Court, Salem