An application under the provisions of the U.P. Industrial Peace (Timely Payment of Wages) Act, 1978 (hereinafter referred to as the Act of 1978) was filed by the respondent 74 employees. Their grievance was that despite working in the petitioner's industrial establishment, the petitioner company has committed default in payment of wages to them which exceeds Rs. 50,000/-. The application was filed before respondent no. 3 who was the competent authority dealing with the matter. An objection was filed before respondent no. 3 by the petitioner company that all the employees have taken voluntary retirement scheme (VRS) and only 21 employees were left out of which, 17 were under lay-off for the disputed period from December 2002 till January 2005. Since they were under lay-off no amount was payable to them, as such, the proceedings initiated in this behalf under the Act of 1978 were not permissible. The matter was required to be decided by taking recourse to the Industrial Disputes Act. The question regarding legality of the lay-off was also required to be determined. Regarding remaining 4 employees, it is contended that their wages were not beyond Rs. 50,000/- as such, their claim was not maintainable under the Act of 1978. In addition to other pleas, it is stated that the company was facing acute financial crises and was registered under the B.I.F.R.
The labour court while dealing under the Act of 1978 accepted the plea of the company in respect of the employees who were brought under the voluntary retirement scheme. It was observed by the labour court that their cases were not covered under the Act of 1978. Regarding remaining 21 employees, the labour court found that they were regularly attending to their duties but had not been paid their wages for the various periods. Consequently, the labour court gave an award on 7.11.2005 by holding that an amount of Rs. 27,08,719/- was payable by the company to the employees. This order is subject matter of challenge in the present writ petition.
The grounds taken by the petitioner in the writ petition are :
(a) The lay-off compensation payable during the period of lay-off does not come within the definition of 'wages' as such, the same can not be recoverable under Section 3 of the Act of 1978. The amount claimed was not payable during this period, as such, they were not entitled for wages at all.
(b) In order to determine the validity of lay-off, a determination was required to be made under the Industrial Disputes Act and not under the Act of 1978.
(c) A specific plea with regard to lay-off was raised by the petitioners but the issue was not decided by the court below.
(d) The jurisdiction under the Act of 1978 is summary in nature, no recovery can be initiated under section 3 of the Act of 1978 regarding the lay-off compensation.
On the other hand, the stand of the respondents is that the respondents have illegally declared lay-off on 8.5.2003, which was found illegal by order of the Deputy Labour Commissioner dated 30.6.2003. The plea of lay-off taken by the petitioner can not be entertained by this Court. 17 workmen alleged to have been laid off continuously discharged their duties till the period of alleged lay-off and continued to do the same thereafter. The wages which have become due have not been paid to them, as such, and the proceedings taken under the Act of 1978 were permissible. The case set out by the respondents in nut-shell is that they had earned the wages which is required to be paid by the company and for effecting recovery of non-payment, recourse to provisions of Section 3 of the Act of 1978 is permissible.
I have heard the learned counsel for the parties.
The dispute regarding the payment of wages to 74 employees was subject matter of adjudication before respondent no. 3. The application of this Act conceives of circumstances where the wages of the workman are not disbursed to him on account of default committed by the company. Under the Industrial Disputes Act, 1947, the wages has been defined as under :
" 'Wages' means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment, and includes--
(i) such allowances (including dearness allowance) as the workman is for the time being entitled to;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food-grains or other articles;
(iii) any travelling concession;
(iv) any commission payable on the promotion of sales or business or both; but does not include--
(a) any bonus;
(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force;
(c) any gratuity payable on the termination of his service;"
The essential feature of this definition contemplates that a workman is entitled to receive remuneration in terms of money, which is payable to him in respect of his employment or of the work done by him in such employment. If in terms of the employment or work done by the employee is not under dispute, the wages can be, if not paid, recovered under Section 3 of the Act of 1978. The essential feature of this provision is that there should be no dispute in respect of money which is payable as wages to the employee. However, where dispute is raised with respect to the entitlement to receive the wages under the Industrial Disputes Act, 1947, the same can not be recovered under Section 3 of the Act of 1978.
There are certain contingencies contemplated under the Act which requires that the dispute not only in respect of employment but in respect of wages can be determined by the competent authority. Chapter IV (v) and V-A of the Industrial Disputes Act deals with such type of disputes.
In the present case, issue which is required to be determined is as to whether employees were laid off during the disputed period for which the claim has been raised. Chapter V-A of the Act deals with lay-off and retrenchment.
Section 24(c) of the Act provides for compensation for workman who has been laid off. It provides a mechanism by which the compensation is to be assessed and paid to such employee for the said period. Where there is genuine dispute with regard to entitlement of workman for wages, the said dispute can not be resolved without deciding the question of facts and law. In the present case it be seen that a specific plea was raised by the petitioner before respondent no. 3 that the employees were under lay-off during the disputed period, as such, they could not invoke the provisions of section 3 of the Industrial Disputes Act, 1947. This fact was not denied by the respondents in their counter affidavit. They have stated that a notice for lay-off was issued by the petitioner on 8.5.2003. The said order has been declared illegal by the Deputy Labour Commissioner, Ghaziabad on 30.6.2003. However, in the counter affidavit, it is stated that on 8.8.2003, respondent no. 3 passed an order in lay-off proceedings directing and advising the workmen to make their claim in accordance with law. In paragraph 9(c) of the short counter affidavit filed on behalf of respondent no. 4 it is stated that the correct facts are that all the workmen including 17 who are alleged to have been laid off have been continuously discharging their duties even during the alleged period of their lay off and are still discharging the duties in the factory.
A dispute was raised by the petitioner before respondent no. 3 that the wages claimed by the workmen were under dispute as such proceedings under section 3 of the Act could not be initiated and respondent no. 3 had no power to deal with this issue. He has bypassed this issue while it was specifically raised before him by the petitioner. As a matter of fact, no effort was made by him to address this issue. The power of the Labour Commissioner to intervene depends upon fulfilment of the following conditions:
(a) Workmen are entitled to wages but have not been paid.
(b) Arrears of wages exceeds to Rs. 50,000/-.
He can not act as adjudicator in case the entitlement of the workmen to the wages is disputed otherwise than on frivolous or prima facie untenable grounds. When the liability to pay the wages, as in the present case, is under dispute involves investigation of the questions of fact and /or law, it is not the function of the Labour Commissioner to adjudicate the same. The only area where he can entertain a dispute is to find out that the employer has plausible defence or not. The Labour Commissioner may have to deal with three different situations. (a) where there is no defence whatsoever raised by the employer to the claim of the workmen; (b) Where the employer raises frivolous and untenable pleas to resist the claim and (c) where there is a genuine dispute with regard to the entitlement of the workmen to the wages, said dispute can not be resolved without investigating the disputed questions of facts or law.
In the present case, while examining such a plea, the respondent no. 3 has not at all addressed the issues raised before him. The genuine or otherwise defence raised by the petitioner can not be brushed aside by the respondent no. 3 in this behalf. It is important to note that the Labour Commissioner while dealing with the plea of lay-off has not passed any final order. He has advised the workmen to file a proper complaint before the competent authority. Since the period involved is one, in which order for paying the wages of the workmen has been ordered it could not be ignored by the respondent no. 3. He lacks power of adjudicator in deciding the issue with respect to the period of lay-off. As a matter of fact any decision by him in this behalf would be without jurisdiction. A situation where this issue is raised requires adjudication by the authorities under the Industrial Disputes Act, 1947. I am fortified with the view of the Apex Court in Modi Industries Ltd. Vesus State of U.P. And others (1994) 1 SCC 159. The Apex Court has held that :
"The Labour Commissioner can intervene only if he is satisfied that two conditions after fulfilled, namely, the workmen are entitled to the wages but they have not been paid, secondly, arrears of wages exceed Rs. 50,000. However, the Labour Commissioner cannot act as an adjudicator in case the entitlement of the workmen to the wages is disputed otherwise than on frivolous or prima facie untenable grounds. When the liability to payment of the wages, as in the present case, is under dispute which involves investigation of the questions of fact and /or law, it is not the function of the Labour Commissioner to adjudicate the same. In such cases, he has to refer the parties to the appropriate forum.
While the recovery officer acts on a claim which is already crystallised in some order, the Labour Commissioner has to ascertain himself whether and to what extent, the workmen are entitled to the wages and then issue or refuse to issue the certificate. The Labour Commissioner acts in a quashi-judicial manner. The Labour Commissioner may have to deal with broadly three different situations, viz., (i) where there is no defence whatsoever raised by the employer to the claim of the workmen; (ii) where there is a genuine is a genuine dispute with regard to the entitlement of the workmen to the wages and the said dispute can not be resolved without investigating the disputed questions of facts or law. In the first case, the Labour Commissioner is not called upon to give any reason while issuing the certificate. In the second case, the Labour Commissioner has to give reasons as to why according to him, pleas raised are untenable. No finding has been recorded by the labour court as to whether wages sought to be recovered are under dispute. He should have recorded finding after hearing the parties.
In view of the aforesaid discussion, the writ petition is allowed and the order impugned dated 7.11.2005 passed by respondent no. 3 and citation dated 5.12.2005 issued by respondent no. 5 are set aside and direct the respondent no. 3 to examine the plea raised by the petitioner that the wages sought to be recovered are disputed as the workmen were under lay-off, in case, he come to the conclusion that there is dispute with respect to the wages, in that eventuality, he shall close the proceedings under the Act of 1978 and in that eventuality the parties are within their right to refer the matter to the authority under the Industrial Disputes Act for determination of the dispute.
Order Date :- 2.3.2012 SU.