1. Chalakudy Refractories Limited is a State Government company. The company was not functioning from 1993 due to financial difficulties, especially due to want of working capital. After detailed evaluation of the various aspects, Government decided to lay-off the workers of the company with effect from October, 1994. A meeting was convened at the instance of the trade unions and management of the company and a memorandum of settlement dated October 16, 1995 was arrived at. It was decided all the workers of the company would retire voluntarily from the services of the company, and the company would give compensation as per the Voluntary Retirement Scheme.
2. The Managing Director of the company then through the Secretary of the Public Sector Re-structuring and Internal Audit Board, a Government establishment, submitted a Voluntary Retirement Scheme for the workers of the company and a detailed statement of financial commitment for the proposed Voluntary Retirement Scheme and other dues as per the Memorandum of Settlement. Voluntary Retirement Scheme was intended to apply only in the case of permanent employees of the company. Petitioners who were admittedly employed as casual employees on daily wages took up the stand that they are also covered by the Scheme. Consequently, they made repeated representations before the authorities to get the benefit under the Scheme. Since no action was taken, respondents-petitioners approached this Court and filed O.P. No. 10443 of 1997 which was disposed of by this Court directing the State Government to consider the representations filed by the respondents and pass appropriate orders. Accordingly, Government issued Ext. P6 dated September 17, 1997 stating that the benefit of the Voluntary Retirement Scheme would not be extended to respondents, since they were not regular employees of the company. However it was ordered, on humanitarian ground, to release Rs. 5000/- as ex-gratia. Respondents, aggrieved by the denial of the benefit under the Voluntary Retirement Scheme have preferred O.P. No. 17706 of 1997.
3. Respondents contended before the learned single Judge that even though they entered service on daily wages of Rs. 20/- they continued in service uninterruptedly and therefore they should be deemed to be in continuous service under Section 25-B of the Industrial Disputes Act. Further, it was contended that as per Section 25-F of the I.D. Act, a worker who is in continuous service for not less than one year, is entitled to notice pay with retrenchment benefit. Further it was also pointed out that eight employees of the company, who had not completed 4 years of service, were given the benefit of the Scheme, while respondents, who had put in more than six years of service, were not given the said benefit.
4. Learned Judge took the view that under the Scheme all the employees are entitled to get minimum compensation of Rs. 1 lakh and respondents were continuously working during the years 1989 to 1995. Learned Judge pointed out that since termination orders were not issued by appellants, respondents are also entitled to get compensation. Aggrieved by the said judgment, company as well as the State Government have come up in appeal.
5. Learned Government Pleader contended that learned Judge has not properly understood the scope of the Scheme. According to learned Government Pleader, the Scheme is not applicable to respondents since they were casual employees working on daily wages. With regard to the complaint that certain persons who had put in less than six years of service were given the benefit, learned Government Pleader submitted that they are not similarly placed and are covered by the Scheme.
6. In order to appreciate the rival contentions, it is necessary to examine the scope of the Scheme and its applicability. We have already indicated in the earlier part of the judgment that the appellants had decided to wind up the company since it was found to be partly unviable and not profitable. Accordingly a meeting was convened by the Government with the trade unions and the management of the company and a Memorandum of Settlement was arrived at. As per the Settlement dated October 16, 1995, it was decided that all the workers of the company would retire voluntarily from the services of the company and the company would give compensation as per the Voluntary Retirement Scheme. The matter was then placed before the Public Sector Restructuring and Internal Audit Board which was to advise the Government on proposals for revival of sick units and with regard to the proposal in the matter of compensation to be paid to the workers of the Industries or establishments which are being closed down or laid-off. After consulting with the said Board, a Voluntary Retirement Scheme was framed. A detailed statement of financial commitment for the proposed Scheme and other dues as per the Memorandum of Settlement was also worked out. Question of giving compensation to casual workers was also considered by the above mentioned Board. After consultation with the above mentioned Board, it was decided as follows:
The Scheme shall be offered to all employees including Executives (but excluding Managing Director) who have completed 40 years of age or 10 years of service. The Managing Director may be asked to circulate the Scheme of Voluntary Retirement among the employees. He may also be directed to obtain written request from eligible employees who are willing to accept VRS.
The VRS shall be offered to Executives also. Since the Executives have already requested for alternate employment, their case can be interpreted as the Scheme offered to them but not accepted. Since there is no specific exclusion of Executives, the Scheme is well within the limits of the guidelines under Rule 28A.
In case of eight employees, who have not completed 40 years of age or 10 years of service, they shall be excluded from the VRS Scheme. In their case, equivalent compensation may be given separately as retrenchment compensation inclusive of gratuity and notice pay. They will have to individually claim for tax relief which will have to be processed by the company as per IT Act and Rules. The amount can be disbursed only after the tax liability is correctly assessed.
Regarding the two casual labourers who have also less than 10 years service, a lumpsum ex-gratia amount may be paid which may be decided by Government separately.
7. It is evident from the abovementioned Scheme, causal employees are not covered by the Scheme. Scheme was formulated on the basis of Memorandum of Settlement entered into between the company and the trade unions. Admittedly, respondents were casual employees and therefore they are not covered by the Scheme. However, it was decided that the Government would decide to pay ex-gratia amount to the casual workers. It is under the said circumstances, Government decided to pay an amount of Rs. 5,000/- as ex-gratia. We are of the view that respondents are not entitled to a declaration from this Court on the basis of Section 25-N(6) of the I.D. Act.
8. Going by the terms of the Scheme evidently respondents are not covered by the Scheme. With regard to the contention of respondents that appellants had given the benefit of the Scheme to eight persons, Government filed a detailed statement in the appeal. From the statement it is evident that those persons are not similarly placed. In fact those persons are permanent employees of the company who had not completed 40 years of age, or 10 years of service. Since they were permanent employees, they were given the benefit of equivalent compensation under the Scheme. Therefore the finding of the learned single Judge that those persons are similarly placed cannot be sustained. If the appellants have not followed the provisions of the I.D. Act, we are of the view that those are matters not to be decided under Article 226 of the Constitution of India.
9. In the said circumstances, Writ Appeal is allowed, and the judgment of the learned single Judge is set aside.