Constitution of India and Labour Rights

 
AKANSHA RUKHAIYAR
1. T.K. Rangarajan v. Government of Tamil Nadu, Appeal (civil)B.A. 5556LL.B
of 2003
2015
- TN government terminated the services of all government servants who resorted to strike
- This was challenged before the HC of Madras by filing writ petitions under Article
226/227 of the Consti
- Thee court held that Government servant has neither fundamental nor statutory nor moral
right to go on a strike..
- Strike as a weapon is mostly misused which results in chaos and total mal administration.
Strike affects the society as a whole and neither the constitution nor the SC of India has
provided at any point of time by which the workmen, either governed by the Industrial
Disputes Act or the government employees governed by their respective rules prescribed
by their respective states concerned, are having a fundamental right to strike.
- The ratio for this case is confined to government servants only.
- If the workers, declare the strike without contravening any of the provisions of section 22
or 23, as the case may be, then such strike would definitely be construed as legal strike.
Therefore, it can be said that the right to strike is not a fundamental right, rather it can be
a legal right.

2.      All India Bank Employees’ Association v. National Industrial Tribunal and Others
(1962 3 SCR 269) – Is strike a FR?

ISSUE - Is strike a fundamental right? Whether the right guaranteed to form a union provided
in Article 19(1)(c ) of the constitution carries within it an associated right that the
achievement of the object for which the union is formed.
- In other words, it was submitted that the Article 19(1) (c ) guarantees the right to form
associations, a guarantee is also implied that the fulfillment of every object of an
association so formed is also protected right, with the result that there is a constitutional
guarantee that every association shall effectively achieve the purpose for which it was
formed.

COURT
- rejecting the contention, held that the right to form unions guaranteed by article 19(1) (c )
thus does not carry with it a fundamental right in the union so formed to achieve every
object for which it was formed.
- Even a very liberal interpretation of Article 19(1) (c ) cannot lead to the conclusion, that
the trade unions have a guaranteed right to an effective collective bargaining or to strike,
either as part of collective bargaining or otherwise.

3. Harish Uppal v. Union of India and Another (2003) 2 SCC 45

- The Court (C.B.) held that lawyers have no right to go on strike or give a call for boycott
and even they cannot go on a token strike. The Court has specifically observed that for
just or unjust cause, strike cannot be justified in the present-day situation. strike in any
field, it can be easily realised that the weapon does more harm than any justice. Sufferer is
the society -- public at large.
- . The protest, if any is required, can only be by giving press statements, TV interviews,
carrying out of Court premises banners and/or placards, wearing black or white or any
colour arm bands, peaceful protest marches outside and away from Court premises, going
on dharnas or relay fasts etc. …only in the rarest of rare cases where the dignity, integrity
and independence of the Bar and/or the Bench are at stake, Courts may ignore (turn a
blind eye) to a protest abstention from work for not more than one day…”
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INDUSTRIAL DISPUTE

1. Workmen of Dimakuchi Tea Estate v. DTE 1958

- Mr. B was appointed as the Asst. Medical Officer on three months probation. However post three
months his services were terminated on grounds of medical incompetence. He not being a
workman, can he bing a claim under IDA?
- “Any person” not co-extensive with any workman-potential or otherwise.
- Test: community of interest and person regarding whom dispute is raised must be one in whose
employment/non/terms/conditions the parties to the dispute have a direct or substantial interest.
- Whether or not this direct and substantial interest has been met with? (Depends on facts and
circumstances)
- “Any person”- S-2(k)- must be read subject to such limitations and qualifications as arise from
the context—limitations being:
o Dispute must be a real dispute b/w the parties to the dispute so as to be capable of
settlement or adjudication by one party to the dispute giving necessary relief to the other.
o Employment/terms/conditions, the parties to the dispute have a direct or substantial
interest w/o which can’t be a real dispute.
- Here, A was not held to be a ‘workman’

2. Workmen v. Dharampal Premchand (Saughhandi) 1966

a. Issue – Whether or not the dispute referred to the Industrial Tribunal is an
industrial dispute?
b. The respondent company terminated the services of 18 of its 45 employees; (b)
The apparent reason for it was that these employees had joined ‘Mercantile
Employees Association’ which was a registered Trade Union in Delhi. (c) The
Union then took up the cause of these 18 employees. (d) The respondent
Company alleges that this is NOT an industrial dispute.
c. The reason for the respondent Company’s argument is the catena of cases laid
down by the SC then, which suggest that in order to be considered an industrial
dispute, the cause of a workman must be espoused either by a union or a number
of his co-workers. (f) The respondent company’s argument is that Mercantile
Employees Association doesn’t have the authority to represent the 18 workers as
no other worker (from the 45 workers) are part of that union
d. What did the Court say?
i. The Court held that it would be unreasonable to hold that out of the 27
workmen, some of them should also be members of this Trade Union for it
to have legitimacy. This is so especially in light of the fact that there were
18 men who’s services were terminated and they themselves are an
appreciable number of people to institute an industrial dispute.
ii. Any Union may espouse the cause of an individual workmen, provided that
the Union is part of the same broad Industry and there is no Union in the
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establishment concerned to which the workers belong. Read paragraph 12 of

the judgment for further clarity.

LAY OFF

1. Workmen of Dewan Tea Estate v. Their Management

a. Facts
i. This is a dispute between the management of 11 tea estates, and their
workmen.
ii. The management declared a ‘lay-off’ in February 1959 and it lasted for 45
days.
iii. The contention of the workers is that this lay off was not justified, whereas
the management resist this claim. If held in favour of the workmen, then
the workmen will be entitled to full wages for the period of purported
‘layoff’.
b. The case of the management was that the tea estates in question had to face a long
period of depression in trade by reason of poor prices generally and that the
management thought it appropriate to lay off workmen to avoid closure oftheir
business.
c. The workers argue that there are other tea estates in the district which are not
facing such an issue and that it is due to the negligence of the management that
the tea estates are in a condition in which they are. The workers also argue that
depression in trade / financial difficulties cannot justify their lay off.
d. Rule 8 of the Standing Orders in this case provided that “the manager may at any
time in the event of fire, catastrophe break down of of machinery, stoppage of
power or supply, epidemic, civil commotion, strike, extreme climate conditions or
other causes beyond his control, close down either the factory or field work or
both without notice.”
e. The argument of the management is that the phrase “other causes beyond his
control” would also include financial difficulties faced by the tea estates.
f. We also have Section 2(kkk) which defines lay off in the following terms, “on
account of shortage of coal, power or raw materials or the accumulation of stocks
or the breakdown of machinery or natural calamity or for any other connected
reason”
g. Section 25J of TIDA says the following (in part):

(1) The provisions of this Chapter shall have effect notwithstanding anything
inconsistent therewith contained in any other law [including standing orders made
under the Industrial Employment (Standing Orders) Act, 1946.
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Provided that where under… standing orders, a workman is entitled to benefits in

respect of any matter which are more favourable to him than those to which he
would be entitled under this Act, the workman shall continue to be entitled to the
more favourable benefits in respect of that matter…

h. Keeping in mind the foregoing, it was held in this case that Rule 8of the Standing
Orders will be applicable to the workmen.
i. The matter was heard by the Tribunal and it held that under the relevant provision
of the Standing Order, the lay-off was justified.
j. The Tribunal also held that the tea estates had a common law right to lay-off. The
Tribunal also went on to find that the tea estates did in fact suffer considerable
losses and held that the duration of 24 days would have sufficed for lay-off in 5
tea estates.
k. Issue:
i. Whether or not the Tribunal was justified in holding that Section 25-C
recognises the common law right of the respondent to declare a lay off for
reasons other than those specified in the relevant clause of the standing
order?
l. Argument of tea estates:
i. Even though trading reasons may not justify the declaration of lay off
under the said clause, as prudent employers who must be given the liberty
to run their industry in the best manner they choose, they have a common
law right to declare a lay off if they feel that the alternative to the lay off
would be closure
m. Court
i. This question must be answered in the negative. When the laying off of
the workmen is referred to in Section 25-C, it is the laying off as defined
by Section 2(kkk), and so, workmen who can claim the benefit of Section
25-C must be workmen who are laid off and laid off for reasons
contemplated by Section2(kkk);
ii. If any case is not covered by the Standing Orders, it 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 Section 2(kkk) is
present, and for such lay off compensation would be awarded.
iii. The Tribunal was not right in holding that Section 25C recognizes the
inherent right of the employer to declare lay off for reasons which he may
regard as sufficient or satisfactory in that behalf.
iv. The financial distress argument was rejected as sufficient proof was not
adduced to show that the tea estates completely failed to raise the
necessary finances, among other reasons laid down in para 7 of judgment
+ ejusdem generis (must be integrally connected with production)

2. Workman of Firestone Tyre and Rubber Co. v. The Firestone Tyre and Rubber
Co.
a. Facts -
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i. The company has its head office at Bombay. It manufactures tyres at its
Bombay factory. The company also has its distribution office in Delhi.
ii. There was a strike in the Bombay factory from March 03, 1967 to May 16,
1967. As a result of the strike, there was a short supply of tyres to the
Delhi office.
iii. In the Delhi office, there were 30 employees at the relevant time. 17 out of
these 30 workers were laid off by the management.
iv. Once the workers were re-instated, they were neither given their regular
wages for those days, nor the lay-off compensation.
v. Issue: Whether the management had a right to lay off their workmen?
vi. Court
1. The respondent company employed only 30 workmen at its Delhi office at the relevant
time. Therefore, as per Section 25A of TIDA, Sections 25C to 25E are not applicable to
this company.
2. There were no standing orders in place between the company and the workmen as the
Industrial Employment (Standing Orders) Act, 1946 only applies to establishments with
more than 100 workmen.
3. There was no contract in place between the employer and the workmen giving the right of
lay-off to the employer.
4. There’s no inherent “power” of lay-off with the employers as per Section 2(kkk) of TIDA.
5. The Court cited Management of Hotel Imperial, New Delhi v. Hotel Workers’ Union where
it was stated, “… The absence of such power either as an express term in the contract or in
the rules framed under some statute would mean that the master would have no power to
suspend a workman and even if he does so in the sense that he forbids the employee to
work, he will have to pay wages during the so-called period of suspension…” and agreed
with the conclusion therefore.
6. The Court goes on to cite Workmen of Dewan Tea Estate and its rationale and said that, “if
the power of lay-off is there in the standing orders but the grounds of lay-off are not
covered by them, rather, are governed by the provisions of the Act, then layoff would be
permissible only on one or the other of the factors mentioned in Section 2(kkk).”
7. held that, “If the term of contract of service or the statutory terms engrafted in the standing
orders do not give the power of lay-off to the employer, the employer will be bound to pay
compensation for the period of lay-off which ordinarily and generally would be equal to the
full wages of the concerned workmen.”
8. The crux therefore being that the power to lay-off needs to be provided either in the
Standing Orders of each establishment or in the contract itself. If no such power is provided
for, employers have no right of lay-off. If such power is given, but no grounds are laid
down. Then grounds under Section 2(kkk) to be looked at. If power and grounds given
under Standing Order or contract, then the one which is more beneficial to be looked at as
per Section 25J.
9. In the instant case, neither was there any Standing Orders in place, nor was there any terms
of service which conferred on the employer the right of ‘lay-off’. In such a situation, the
conclusion seems to be inescapable that the workmen were laid off without any authority of
law. Therefore, ordinarily and generally the workmen would be entitled to their full wages,
subject to any power of the Courts as provided for in TIDA.
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3. Associated Cement Companies v. Their Workman

a. A company owns a factory that produces cement and a limestone quarry which
are a mile apart.
b. The cement factory is totally dependent on the limestone quarry for the supply of
limestone which is the principal raw material for making cement.
c. A strike was called for in the limestone quarry as per the rules of TIDA.
Accordingly, the management laid off a few workers in the cement factory citing
strike in the limestone quarry.
d. Upon resumption of services, the workers in the cement factory demanded lay-off
compensation, which was denied by the management citing Section 25E(iii) of
TIDA which says, “No compensation shall be paid to a workman who has been
laid off… if such laying off is due to a strike or slowing down of production on
the part of workmen in another part of the establishment”.
e. The workers contend that the limestone quarry and the cement factory are two
different establishments, as opposed to being a part of a single establishment.
f. Issue: Whether or not the cement factory and the limestone quarry are part of one
establishment within the terms of Section 25E (iii) of TIDA?
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g. The Court took into consideration the foregoing statement of the manager and
also took notice of the fact that the limestone quarry and the cement factory were
in fact owned by the same company.
h. What did the Court say?
i. The Court listed out possible tests that one can apply under the
circumstances. These are: (1) Ownership, (2) control and supervision, (3)
finance, (4) management and employment, (5) Geographical proximity,
and (6) general unity of purpose and functional integrality. The Court also
pointed out the true relationship between units must be judged based on
proved facts and no one test will always be useful. Therefore, a holistic
perspective must be applied, keeping in mind the scheme and the object of
‘lay-off’ under TIDA.
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ii. Applying the foregoing test and keeping in mind the factual scenario of
this case, the Court held that the cement factory and the limestone quarry
are in fact part of the same establishment for the purposes of Section 25E
(iii).

LOCK OUT
1. Kairbetta Estate v. Rajamanichickam
i. Facts
i. The manager of the appellant was assaulted by some workmen of the
appellant, as a result of which the manager suffered six fractures.
ii. The staff in the Keslo division were also threatened with dire
consequences if they went to work. The staff members wrote to the
management about it, where after the management closed the keslo
division until further notice.
iii. Upon re-instatement the workers of the Keslo division claim lay-off
compensation. The Labour Court granted lay-off compensation to these
workers and at the same time admitting that the actions of the employer
constituted ‘lock out’.
j. Issue –
i. Whether the closure of the appellant’s division during the relevant period
which amounts to a lockout [defined by section 2(l) of TIDA] can be said
to fall within the definition of lay-off under Section 2(kkk)?
k. Section 2(l) of TIDA defines ‘lock-out’ to mean “the temporary closing of a place
of employment, or the suspension of work, or the refusal by an employer to
continue to employ any number of persons employed by him.”
l. The question here is whether ‘lock-out’ could fall within the ambit of the phrase
“any other reason” to which Section 2(kkk) refers.
m. Note: The words “any other reason” appearing in Section 2(kkk) have now been
amended to read, “any other connected reason”. Therefore, it sheds more clarity
on what all could be included within the meaning of ‘lay-off’.
n. Cou rt
i. The expression “any other reason” should be construed to mean similar or
analogus to the preceding reasons specified in Section 2(kkk).
ii. Lock out is essentially the anti-thesis of a strike. Just as a strike is
available to the employees for enforcing their industrial demands, a lock
out is a weapon available to the employer to persuade by a coercive
process the employees to see his point of view and accept his demands.
Therefore, conceptually speaking, the concept of ‘lock-out’ is very
different from ‘lay-off’.
iii. Also, the liability of the employer for lockout would depend on whether
the lockout was justified and legal or not.

RETRENCHMENT
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1. Hariprasad Shiv Shukla v. Divelkar

a. Facts of Barsi Light Railway:
i. The principal respondent in this case is the President of the Barsi Light
Railwaymen’s Union.
ii. Under an agreement dated August 01, 1895 between Secretary of State for
India and the Railway Company, the latter constructed and maintained a
railway line known as the Great Indian Peninsular Railway.
iii. Under the said agreement, the Secretary of State could take over the
undertaking.
iv. The Railway Company gave notice of termination of service to all its
employees. It also conveyed the terms and conditions offered by the
President of India on which such employees could continue.
v. The workers are now claiming retrenchment compensation under Section
25F. (See para 3 of judgment for the new t/c offered to these employees)
vi. The question before the Court was to figure if the workers could have been
said to have been ‘retrenched’ under Section 25F.
vii. Note: Section 25FF wad added after this judgment was delivered (in 1957
itself) and therefore, this case is not being discussed further. Now 25 FF
directly applies to such situations of take over.
b. Facts of Hariprasad Shivshankar Shukla
i. As a result of closure of business, the services of some 450 workmen were
terminated. They now claim retrenchment compensation under Section 25F.
ii. Issue
A. Whether or not closure of the entire business entitle the workmen to
retrenchment compensation under Section 25F of TIDA?
B. Should the words “for any reason whatsoever” that occur in Section 2(oo) of
TIDA be given the broadest meaning possible or a narrow meaning by keeping
in mind the dictionary meaning of the word ‘retrenchment’?
b. Court
A. The object of all labour legislation was firstly to ensure fair terms to the
workmen, and secondly to prevent disputes between employers and employees
so that production might not suffer. Both these objects can have their fulfilment
only in an existing and not a dead industry.
B. Where the business has been closed and it is either admitted or found that the
closure is real and bona fide, any dispute arising with reference thereto would,
as held in KN Padmanabha Ayyar v. State of Madras (1954) 1 LLJ 469 fall
outside the purview of TIDA.
C. Retrenchment as defined under Section 2(oo) and as used in Section 25F has no
wider meaning than the ordinary, accepted connotation of the word: it means the
discharge of surplus labour or staff by the employer for any reason whatsoever,
otherwise than as a punishment inflicted by way of a disciplinary action, and it
has no application where the services of all workmen has been terminated by the
employer on a real and bona fide closure of business.

2. Uptron v. Shammi Bhan 1998

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a. Facts
i. Provision for automatic termination of services on account of absence is not covered
by exception (bb) to s. 2 (oo)
ii. In this case, the R was a permanent employee of P.
iii. There was no fixed term contract of service between them
iv. Since there was no contract, none of the two situations in exception (bb) are
covered. 1. No question of service being terminated on expiry of contract.
2. No question of termination due to stipulation to that effect in contract
v. Therefore, the rule of exception was not applicable. R’s termination was
retrenchment.
vi. “Liable to automatic retrenchment”- discretion of employer- cannot be unchecked-
principles of natural justice and right to be heard have to be applied especially since
she was a permanent employee. She must also be told why she was retrenched.
vii. Therefore, retrenchment was improper
b.
3. Anand Bihari v. RSRTC and Others
a. The workers in question were appointed as drivers to drive the roadways buses of
the Corporation.
b. Some time in 1987, their routine medical examination showed that they had
developed a defective eyesight and that they were unable to drive buses any
further.
c. The Corporation issued show cause notices to them asking why their services
should not be terminated. The Corporation then terminated their services.
d. The termination was challenged on the ground that the termination amounted to
retrenchment and that mandatory provisions under Section 25F have not been
followed.
e. The workmen not only prayed for the quashing of the orders terminating their
services, but in the alternative also prayed for the direction to the Corporation to
offer them the alternate job of a helper.
f. The Corporation of course insists that such termination was not retrenchment as it
was based on the continued ill health of the workmen.
g. Issue - Whether or not termination of service of bus drivers who’re unable to
drive buses any further due to their weak eye sight, is retrenchment under TIDA?
h. Court
i. There is no dispute that the only sub-clause of the definition of retrenchment
which can cover the present termination of service is sub-clause (c).
ii. It can be scarcely disputed that the expression “ill-health” used in sub-clause
(c) has to be construed relatively and in its context. i.e. the ill health must
have a bearing on the normal discharge of duties of the workman. It is not
any illness but that which interferes with the usual orderly functioning of the
duties of the post which would be attracted by the sub-clause.
iii. Conversely, even if the illness does not affect general health or general
capacity and is restricted only to a particular limb or organ but affects the
efficient working of the work entrusted, it will be covered by the phrase
iv. The phrase has also to be construed from the point of view of the consumers
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of the concerned products and services. In this case, if the drivers are allowed
to drive the buses, it puts the lives of consumers in danger. Therefore, a
realistic meaning is to be attributed to the said phrase. Hence, in this case, the
termination of services of drivers was not retrenchment.
v. it was held that the expression ‘ill-health’ used in Ss 2(oo)(c) has to be
construed relatively and in its context.
vi. Hence, the termination per se is not illegal on ground that the provisions of s
25F have not been followed while effecting it.

CLOSURE

1. Orissa Textiles and Steel v. State of Orissa 2002

a. Examined validity of amended S. 25-O in light of Excel wears case (struck down
unamended 25-O) and Meenakshi Mills case (upheld s. 25-N)
b. Contention: Substantive ultra vires remain, only procedural removed + Legis
delegated job to exec- not valid (Art. 19 (6)- restriction can only be imposed by
leg)
c. Held: Constitutional
d. Now, govt has to conduct inquiry, give reasons and do so within a fixed period of
time. It can’t remain quiet because two months silence can be understood as
acceptance.
e. The amended s. 25- O is saved by Art. 19 (6) because now the govt has to conduct
an inquiry and give reasons for its decisions ‘in public interest’. It can refuse all
the reasons given by the employer. All this has to be done within a fixed time
frame. So it is a reasonable restriction.
f. About “public interest” being as vague as it used to be in the unamended section,
court said that it is important to keep it vague in order to give it a wider scope in
light of its importance.
g. “May” w.r.t to referring/reviewing disputes will be read as “shall”
h. Court compares 25-O with 25-N. Says, 25-N is valid and its elements
(compensation, time period, inquiry, objections, permission from Govt.) have
been amended to 25-O.
i. About the contention of the employers “if employees can come with objections if
permission is given, why can’t employers come with objections if permission is
not given?”- Court said that option is contained in review after one year which is
now read as “shall”

ILLEGAL STRIKE
1. Rohtas Industries v. Union 1976
a. Labour and Industrial
b. Compensation - Section 10-A of Industrial Disputes Act, 1947
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c. There was strike in the industry . Parties agreed to refer dispute to arbitration
d. Employees claimed wages for period of strike while employer claimed
compensation for losses suffered during strike
e. Arbitrator held employees guilty and asked them to make payment to
management - High Court reversed Order – If disputes related to enforcement of
right remedy is adjudication under Act - compensation for loss of business not
related to employment, non-employment or terms of employment or with
condition of labour
f. Therefore, dispute in question not an industrial dispute within meaning of Act
g. Reference under Section.10-A is restricted to present or apprehending industrial
disputes - reference to arbitration under Section 10-A was not valid and so the
Award was not valid either.
h. If the purpose of the combination leading to strike was to inflict damage, it would
be conspiracy. If the aim of the combination was to improve wage prospects, it is
not a tort of conspiracy even if it affects the interests of the employer. The right
to strike is an essential element of collective bargaining.
i. In the present case, the strike was due to non-implementation of existing award
and there were no ulterior motives. Hence, the strike is not illegal.
j. Even if they are illegal under s. 24, they do not lose immunity under s. 18.
Immunity under s. 18 is unaffected by legality or illegality. The workers
demonstrations are protected so long as they are peaceful and not violent

2. Gujarat Steel Tubes v. Mazdoor Sabha 1980

a. Citing Crompton Greaves, the court held that even if a strike be illegal, it cannot be
castigated as unjustified, unless the reasons for it are entirely perverse or unreasonable.
b. We cannot agree that mere failure to report for duty, when a strike is on, necessarily
means misconduct.
c. The management could not pass a real order of dismissal in the garb of discharge.
d. It was open to the court to "lift the veil and to hold an order of discharge to amount to a
dismissal" because the motive behind it was a misconduct attributed to the employee.
e. The court rejected "the theory of community guilt and collective punishment" and instead
ruled that no worker shall be dismissed save on the proof of his individual delinquency.
f. The action taken under the general law or the standing orders, was illegal in the
absence of individualised charge sheets, proper hearing and personalise
punishment if found guilty. None of these steps having been taken, the discharge orders
were still born.
g. Jurisdiction under Art. 226 if an order suffers from an error apparent on the face of the
record.

3. Vidhyasagar Institute of Mental Health v. Hospital Employees 2006 – DONETEXTILES

4. TK Rangarajan v. Govt of Tamil Nadu 2003 – DONE
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EQUAL REMUNERATION ACT 1976

1. Randhir Singh v. Union of India

a. The petitioner is a driver constable in the Delhi Police Force under the Delhi
Administration.
b. The scale of pay in the Delhi Police Force is for non-matriculate drivers Rs. 210-
270 and for matriculate drivers 225-308. The scale of pay of a driver in the
Railway Protection Force is Rs. 260-400. The scale of pay of driver in the
non-secretariat offices in Delhi is Rs. 260 -350, while that of Secretariat offices in
Delhi is Rs. 260-400. The scale of pay of drivers in the office of the Language
Commission is Rs. 260-300 while the drivers of heavy vehicles in the Fire
Brigad and the Department of Light House is Rs. 330-480.
c. The petitioner and other driver constables made a representation to the authorities
that their case was omitted to be considered separately by the Third Pay
Commission and that their pay scales should be the same as the drivers of heavy
vehicles in other departments. As their claims for better scales of pay did not meet
with success, the present application has been filed by the petitioner.
d. The petitioner was appointed as a driver in the Delhi Police Force. After his
discharge from the army question of his employment as a driver in Delhi Police
Force was considered, he was asked to appear for a test of proficiency
in driving, directed to produce a Civil Heavy Transport Driving Licence, selected
thereafter as a driver in Delhi Police Force under the category "Employment of Ex-
serviceman in Delhi Police as N.T. Driver (Constable)." He was designated as
Constable, because for the purposes of the discipline of the Force and appointment
as driver in the Delhi Police Force he had to be made a member of the Delhi
Police Force and had to be assigned a rank in the Force.
e. The petitioner and other drivers in the Delhi Police Force perform the same
functions and duties as other drivers in the service of the Delhi Administration
and the Central Government.
f. Court
i. It is true that the principle of 'equal pay for equal work' is not expressly
declared by our Constitution to be a fundamental right. But it certainly is a
Constitutional goal. Art. 39(d) of the Constitution proclaims 'equal pay
for equal work for both men and women" as a Directive Principle of State
Policy.
ii. 'Equal pay for equal work for both men and women' means equal pay for
equal work for everyone and as between the sexes. Directive principles, as
has been pointed out in some of the judgments of this Court have to be read
into the fundamental rights as a matter of interpretation.
iii. There cannot be the slightest doubt that the drivers in the Delhi Police Force
perform the same functions and duties as other drivers in service of the Delhi
Administration and the Central Government. If anything, by reason of their
investiture with the 'powers, functions and privileges of a police officer', their
duties and responsibilities are more arduous.
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iv. In answer to the allegation in the petition that the driver-constables of the
Delhi Police Force perform no less arduous duties than drivers in other
departments, it was admitted by the respondents in their counter that the duties
of the driver-constables of the Delhi Police Force were onerous.
v. What then is the reason for giving them a lower scale of pay than others?
There is none. The only answer of the respondents is that the drivers of the
Delhi Police Force and the other drivers belong to different departments and
that the principle of equal pay for equal work is not a principle which the
Courts may recognize and act upon, which is unsound and the clarification is
irrational.
vi. Therefore, SC allowed the Writ Petition and direct the respondents to fix the
scale of pay of the petitioner and the drivers-constables of the Delhi Police
Force atleast on a par with that of the drivers of the Railway Protection Force.

2. PUDR
a. the Supreme Court considered the scope and ambit of Article 23 in detail. The
Court held that the scope of Article 23 is wide and unlimited and strikes at "traffic
in human beings" and "beggar and other forms of forced labour" wherever they are
found.
b. It is not merely "beggar" which is prohibited by Article 23 but also all other forms
of forced labour, "Beggar is a form of forced labour under which a person is
compelled to work without receiving any remuneration. This Article strikes at
forced labour in whatever form it may manifest itself, because it is violative of
human dignity and contrary to basic human values. The practice of forced labour is
condemned in almost every international instrument dealing with human rights.
Every form of forced labour "beggar" or other forms, is prohibited by Article 23
and it makes no difference whether the person who is forced to give his labour or
service to another is paid remuneration or not.
c. Even if remuneration is paid, labour or services supplied by a person would be hit
by this Article, if it is forced labour, e.g., labour supplied not willingly but as a
result of force or compulsion, this Article strikes at every form of forced labour
even if it has its origin in a contract voluntarily entered into by the person obligated
to provide labour or service.
d. If a person has contracted with another to perform service and there is a
consideration for such service, in the shape of liquidation of debt or even
remuneration he cannot be forced by compulsion of law, or otherwise to continue to
perform such service as it would be forced labour within the meaning of Article 23.
e. No one shall be forced to provide labour or service against his will even though it
be under a contract of service.
f. The word "force" was interpreted by the court very widely. Bhagwati, J. said, 'The
word 'force' must therefore be construed to include not only physical or legal force
but also force arising from the compulsion of economic circumstances which leaves
no choice of alternatives to a person in want and compels him to provide labour or
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service even though the remuneration received for it is less than the minimum
wage.
g. Section 5. No discrimination to be made while recruiting men and women workers.
-- On and from the commencement of this Act, no employer shall, while making
recruitment for the same work or work of a similar nature, or in any condition of
service subsequent to recruitment such as promotions, training or transfer, make any
discrimination against women except where the employment of women in such
work is prohibited or restricted by or under any law for the time being in force:
h. Provided that the provisions of this section shall not affect any priority or
reservation for scheduled castes or scheduled tribes, ex-servicemen, retrenched
employees of any other class or category of persons in the matter of recruitment to
the posts in an establishment or employment.

3. Mackinnon Mackenzie v. Audrey D Costa 1987

a. After the services of the respondent No. 1 (i.e. Audrey D’Costa), who was working
as a Confidential Lady Stenographer with the petitioner-company, were terminated
on June 13, 1977, she instituted a petition before the Authority appointed under sub-
s. (1) of s. 7 of the Equal Remuneration Act, 1976 complaining that during the
period of her employment, after the Act came into force, she was being paid
remuneration at the rates less favourable than those paid to the Stenographers of
the male sex in the petitioner's establishment for performing the same or similar
work and claimed that she was entitled to recover the difference between
remuneration paid to her and the male Stenographers.
b. The petitioner opposed the aforesaid contention, inter alia, that the business carried
on by it was not one of those businesses notified under sub-s. (3) of s. 1 of the Act;
that there was no difference in the scales or grades or pay between lady
Stenographers and male Stenographers; that the respondent no. 1 and other lady
Stenographers who had been doing the duty as Confidential Stenographers attached
to the Senior Executives were not doing the same or similar work which the male
Stenographers were discharging; and that since there was no discrimination in
salary on account of sex, s. 4 of the Act had not been violated.
c. The Authority found that the male Stenographers and the lady Stenographers were
doing the same kind of work, but rejected the complaint holding that in view of a
settlement arrived at between the employee's Union and the management the
respondent No. 1 was not entitled to any relief and that the petitioner had not
committed the breach of s. 4 as no discrimination on the ground of sex has been
made.
d. The Appellate Authority allowed the appeal of Respondent No. I holding that there
was clear discrimination between the male Stenographers and the female
Stenographers and the petitioner had committed the breach of the provisions of the
Act and directed the petitioner to make the payment of the difference between the
basic salary and dearness allowances paid to respondent No. 1 and her male
counter parts from 26.9.1975 to 30.6.1977 and to contribute to the Employees
Provident Fund.
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e. The Division Bench and SC dismissed the appeal.

f. Court –
i. In order to grant relief under s. 4 of the Act the employees should establish
that the remuneration paid by the employer, whether payable in cash or kind,
is being paid at rates less favourable than those at which remuneration is
paid by him to the employees of the opposite sex in his establishment for
performing the same work or work of a similar nature.
ii. Discrimination arises only where men and women doing the same or similar
kind of work are paid differently. Wherever sex discrimination is alleged,
there should be a proper job evaluation before any further enquiry is made.
If the two jobs in an establishment are accorded an equal value by the
application of those criteria which are themselves non-discriminatory (i.e.
those criteria which look directly to the nature and extent of the demands
made by the job) as distinct from criteria which set out different values for
men and women on the same demand and it is found that a man and a
woman employed on these two jobs are paid differently, then sex
discrimination clearly arises.
iii. In the instant case, the Authority, the Appellate Authority and the Single
Judge have found that the Confidential Lady Stenographers were doing the
same work or work of a similar nature as defined in s. 2(h) of the Act which
the male Stenographers in the establishment of the petitioner were
performing. The respondent No. 1 was working as a lady Stenographer. The
lady Stenographers working in the establishment of the petitioner were called
"Confidential Lady Stenographers" since they were attached to the senior
Executive working in the petitioner-company. In addition to the work of the
Stenographers they were also attending to the persons who came to interview
the senior Executives and to the work of filing, correspondence. etc. There
was practically no difference between the work which the Confidential Lady
Stenographers were doing and the work of their male counter-parts.
iv. If the Lady Stenographers were found by the management to be proper
persons to be Confidential Stenographers, it does not mean that they should
suffer for their loyalty, integrity, sincerity and punctuality and receive less
pay for possessing those qualities when they are doing the same kind of work
as men. Applying the true tests to the facts of the instant case there is
no ground to take a different view from the view taken by the Authorities
and the Single Judge.
v. The very fact that the lady Stenographers are treated differently and as a class
different from the clerical and subordinate staff by paying less remuneration
even though they have put in the same length of service and they are placed
in the same scale of pay smacks of discrimination.
vi. The discrimination thus brought about by the terms of settlement only on
account of the sex of the employees cannot be allowed to persist in view of s.
4 of the Act. The work of the Confidential Lady Stenographer cannot be said
to be sex based one like the work of air hostesses.
vii. There is no custom or rule that only ladies can be Confidential Stenographers.
If only women are working as Confidential Stenographers it is because the
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management wants them there. Women are neither specially qualified to be

Confidential Stenographers nor disqualified on account of sex to do the work
assigned to the male Stenographers. Even if there is a practice in the
establishment to appoint women as Confidential Stenographers such practice
cannot be relied on to deny them equal remuneration due to them under the
Act.
viii. The management is liable to pay the same remuneration to all the
Stenographers on the same basis irrespective of their sex. The salary and
remuneration payable to the lady Stenographers should be computed in
accordance with the terms applicable to all the male Stenographers. When
so computed, undisputedly the Respondent No. 1 would be entitled to higher
remuneration as observed by the Appellate Authority and the Single Judge.
ix. The management cannot derive any benefit from sub-s. (3) of s. 4 of the Act
and the proviso thereto because sub-s. (3) would be attracted only where in an
establishment or an employment rates of remuneration payable before the
commencement of the Act for the men workers and for the women workers
for the same work or work of similar nature are different.

4. State of AP v. Sreenivasa Rao 1989 – Exception to Equal Pay for Equal Work
a. Issue - whether payment of less salary to a senior than his junior in the same cadre
having the same scale of pay is violative of the principle of "equal pay for
equal work" enshrined in Article 39(d) read with Article 14 and 16 of the
Constitution.
b. The appeal (CAs 317-30/87 etc.) relate to the case of Assistant Section Officers of
Andhra Pradesh High Court. It may be pointed out that copyists and Assistants are
the two feeder-channels to the post of assistant Section Officers. Prior to 1974 the
Copyists were in the pay scale of Rs. 70-130 and were entitled to additional
payment at Rs. 7.5 P every 100 words they copy in excess of 42,000 words.
Consequent upon pay revision, they were given the pay scale of Rs.250-430 w.e.f.
1.1.1974 with- out entitlement of remuneration in addition to pay. The Copyists
represented that while revising their grade, the additional emoluments, which they
were getting prior to revision of pay, has not been taken into consideration.
c. On recommendation of the High Court, the State Government agreed to fix
the pay of the Copyists in the revised grade by adding to their basic pay
Rs.83.34P, that being the average remuneration that each Copyist was earning
prior to 1.1.74 and the Dearness Allowance admissible thereon.
d. The pre-revised scale of pay of Assistants was Rs.90-192 which was revised to
Rs.250-430 from 1.1.1974. Even though the Scale of Pay of Copyists and
Assistants was the same, Copyists started drawing more salary on account of
addition of Rs. 83.34P aforesaid. Consequently on promotion to the Post of
Assistant Section Officer, the salaries of those promoted from the cadre of Copyists
were fixed higher than those who were promoted from the cadre of Assistants.

e. One Janakirama Rao, a Copyist was promoted to the cadre of Assistant Section
Officer in 1984. On the basis of his last pay drawn as Copyist, his pay as
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Assistant Section Officer was fixed higher than those who were promoted to the
said post from the cadre of Assistants during the period 1982-84, under F.R. 22(a)
(i) of Andhra Pradesh Fundamental Rules. The Seniors filed writ petitions in
the High Court contending that the grant of higher pay to juniors in the same cadre
is violative of the principle "Equal pay for equal work". The High Court allowed
the Writ Petitions and directed that the Assistant Section Officers seniors to
Janakirama Rao be paid the same salary as he was drawing.
f. Division Bench held that grant of higher pay packet to junior person than his
seniors under any circumstances is discriminatory. Hence these appeals by the
State of Andhra Pradesh.
g. Court
i. Doctrine of "Equal pay for equal work" cannot be put in a straight jacket.
Although the doctrine finds its place in the Directive Principles, this Court,
in various judgments, has authoritatively pronounced that right to "equal
pay for equal work" is an accompaniment of the equality Clause enshrined in
Article 14 and 16 of the Constitution of lndia.
ii. Reasonable classification, based on intelligible criteria having nexus with the
object sought to be achieved, is permissible.
iii. "Equal pay for equal work" does not mean that all the members of the cadre
must receive the same pay packet irrespective of their seniority, source of
recruitment, educational qualifications and various other incidents of service.
When a single running pay-scale is provided for a post in a cadre, the
Constitutional mandate of equal pay for equal work is satisfied.
iv. Ordinarily grant of higher pay to a junior would ex- facie be arbitrary
but if there are justifiable grounds in doing so, the seniors cannot invoke
the equality doctrine.
v. “The differentia on grounds such as, when persons recruited from different
services are given pay protection, when promoters from lower cadre or a
transferee from another cadre is given any pay protection, when a senior is
stepped at efficiency bar, when advance increments are given for experience/
passing a test/acquiring higher qualifications or as incentive for efficiency,
would be based on intelligible criteria which has rational nexus with the
object sought to be achieved, and which does not violate the mandate of
equal pay for equal work.”
vi. The orders appealed against were therefore reversed.
h. Section 4. Duty of employer to pay equal remuneration to men and women workers
for same work or work of a similar nature. –

(1) No employer shall pay to any worker, employed by him in an establishment or

employment, remuneration, whether payable in cash or in kind, at rates less
favourable than those at which remuneration is paid by him to the workers of the
opposite sex in such establishment or employment for performing the same work or
work of a similar nature.

(2) No employer shall, for the purpose of complying with the provisions of sub-
section (1), reduce the rate of remuneration of any worker.
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WAGES

1. Standard Vacuum Refining Co. of India v. Their Workmen 1961

a. The workmen claimed bonus for the year 1956, equivalent to nine
months' total earnings on the ground that the employers had admitted
their capacity to pay and that there was a big gap between the wage
actually received and the living wage.
b. The employers contended that they were paying the workmen a living
wage and they were not entitled to any bonus. The employers relying
mainly on the Report of the Textile Labour Committee, 1940, contended
that if the living wage in 1940, i.e., Rs. 55/- was multiplied by 3.5 (due
to rise in prices) it gave Rs. 192.50 as the living wage in 1956 and they
were paying their workmen at a higher rate. The workmen relied on the
recommendations of the Indian Labour Conference, 1957, to show that
Rs. 209.70 approximated to the standard of the need-based minimum
wage and that the average wage paid by the employers was nothing
more than this.
c. The Tribunal held that the wages paid were fair but that there was still a
gap between the actual wage and the living wage and awarded bonus
equivalent to five months' basic wages.
d. Question raised: Whether the workmen would be entitled to bonus even
if a living wage is paid to them by the employers.
e. It was held, that the employers had failed to establish that they were
paying a living wage to the workmen. In construing wage structure the
considerations of right and wrong, propriety and impropriety, fairness
and unfairness are also taken into account to some extent. As the social
conscience of the general community becomes more alive and active, as
the welfare policy of the State takes a more dynamic form, as the
national economy progresses from stage to stage, and as under the
growing strength of the trade union movement collective bargaining
enters the field, wage structure ceases to be a purely arithmetical
problem.
f. Wages are usually divided into three broad categories: the basic
minimum wage, the fair wage and the living wage. The concept of these
three wages cannot be described in definite words, is their contents are
elastic and vary from time to time and from place to place. The concept
of a living wage is not a static concept; it is expanding and the number
of its constituents and their respective contents are bound to expand and
widen with the development and growth of national economy.
g. In an under developed country no wage structure could be described as
reaching the ideal of a living wage. It is unreasonable and unsafe to treat
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the Report of the Textile Labour Committee, 1940, as to the monetary

value of the living wage in 1940 as sound.
h. The figure reached by the committee in 1940 did not represent anything
like a living wage; it really represented the minimum need based
wage. Besides, the method of multiplying the figure by 3.5 was
materially defective; the proper approach was to evaluate each
constituent of the concept of the living wage in the light of the present
day prices.
i. Even the highest average wage paid by the employers was much below
the standard of the living wage though it was above the need-based
minimum.
j. It is now well established that in awarding bonus industrial adjudication
has to take into account the legitimate claims of the industry, its
shareholders who are entitled to claim a return on the investment made
by them and the workmen. This Court has consistently refused to lay
down any rigid rule or formula which would govern the distribution of
the available surplus between the three claimants.
k. The decision of this question must inevitably depend on a proper
assessment of all the relevant facts. If wages are small and the profits are
high then the workmen would be entitled to have a high rate of bonus.
Indeed, if an employer makes consistently high profits and the wages
continue to be low it may justify the increase in the wage structure
itself ; in other words, the award of bonus would have some relation to
the wages paid to the employees.
l. It is also true that unreasonably high or extravagant claims for bonus
cannot be entertained just because the available surplus would justify
such a claim. 
m. It is only where the award passed by the tribunal appears to this Court to
be wholly unreasonable and to be the result of the failure of the tribunal
to take into account the necessary relevant facts that the jurisdiction of
this Court under Art. 136 can be successfully invoked. In the present
case the tribunal has considered all the relevant factors and has come to
the conclusion that five months' bonus would meet the ends of justice.
We do not see any reason to interfere with this award.
n. In the result both the appeals fail and are dismissed. There will be no
order as to costs in both the appeals.
o. Appeals dismissed.

2. Bijay Cotton Mills v. Their Workman 1955

a. It appears that sometime in 1950, there was an industrial dispute
between the company and its labourers regarding enhancement of wages
and the dispute was referred by the Government of Ajmer to an
Industrial Tribunal, by a notification dated the 1st December, 1950. The
tribunal made its award on the 27th November, 1951, and held that "the
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present earning capacity of the mill precludes the award of higher rates
of wages and higher dearness allowance."
b. The employees took an appeal against this award to the Appellate
Tribunal. While this appeal was pending, the Chief Commissioner,
Ajmer, took steps for the fixation of minimum wages of labourers in the
textile industry within the State, under the provisions of the Minimum
Wages Act. A committee was formed, as has already been stated, on the
17th of January, 1952, which submitted its report on the 4th of October,
following and on the 7th of October, 1952, the notification was issued
fixing the minimum rates of wages, against which writ petitions were
filed by several textile companies including the petitioner company. 
c. In the meantime however the appeal filed by the labourers of the
company proceeded, in the usual way, before the Appellate Tribunal.
The Appellate Tribunal sent the case back to the Industrial Tribunal for
further investigation and the latter made its final award on the 8th of
September, 1953, by which it rejected the basis upon which minimum
wages of Rs. 56 were fixed by the Chief Commissioner and fixed the
minimum wages including the dearness allowance at Rs. 35 only.
d. The company states in its petition that the minimum wages fixed by the
State Government of Ajmer is altogether prohibitory and it is not at all
possible for the company to carry on its business on payment of such
wages. Accordingly the company closed its mills on and from the 1st
April, 1953
e. There were about 1500 labourers working in the mills of the company
and since January, 1954, several hundreds of them, it is said, approached
the managing authorities and requested them to open the mills
expressing their willingness to work at Rs. 35 as wages as fixed by the
Industrial Tribunal.
f. Though the majority of workers were agreeable to work on the wages
fixed by the Industrial Tribunal, the company is unable to open the mills
by reason of the fact that the Minimum Wages Act makes it a criminal
offence not to pay the wages fixed under the Act. This being the position
and as the Minimum Wages Act stands in the way of the company's
carrying on its business, on terms agreed to between itself and its
workers, Petition No. 188 of 1954 has been filed by the company
challenging the constitutional validity of the material provisions of
the Minimum Wages Act itself.
g. The workmen who are willing to work at less than the minimum wages
fixed by the State Government have filed the other petition supporting
all the allegations of the company. 
h. Held, that the restrictions imposed upon the freedom of contract by the
fixation of minimum rates of wages though they interfere to some
extent with the freedom of trade or business guaranteed under Art. 19(1)
(g) of the Constitution are not unreasonable and being imposed in the
interest of general public and with a view to carry out one of the
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Directive Principles of State Policy as embodied in Art. 43 of the

Constitution are protected by the terms of el. (6) of Art. 19.
i. The result is that the petitions are dismissed.

PAYMENT OF BONUS ACT

1. Muir Mills v. Suti Mills Mazdoor Union 1955

a. Facts:The case is primarily about workers' claim for bonus and an appeal for
the same was preferred by management through special leave against the
order of Labour Appellate Tribunal in favor of workmen.
b. Analysis: The term bonus is applied to a cash payment made in addition to
wages. it generally represents the cash incentive given conditionally on
certain standards of attendance and efficiency being attained.
There are two conditions, which have to be satisfied before a demand for
bonus can be justified and they are, (1) when wages fall short of the living
standard and (2) the industry makes huge profits part of which are due to the
contribution which the workmen make in increasing production. The demand
for bonus becomes an industrial claim when either or both these conditions
are satisfied.
c. Conclusion: Bonus payment can be made with respect to a year when there is
surplus in that particular year. Therefore, in the present case, Management
was not legally obligated to make bonus payment as the company suffered
trading loss.

2. Mill Owners Association Bombay v. Rashtriya Mill Mazdoor Sangh – FULL

BENCH/SURPLUS FORMULA
a. a Full Bench of the Labour Appellate Tribunal observed that bonus
could no longer be considered as an ex-gratia payment and laid down a
formula known as ‘Full Bench Formula’.
b. Broadly speaking the formula provided that the following prior charges
should be deducted from the gross profits of an enterprise:
a. Return on paid up capital generally @ of 6%;
b. Return on working capital varying from 2 to 4 %;
c. Depreciation worked out on a notional basis;
d. Reserves for rehabilitation; and
e. Income tax.
c. If after deduction of these prior charges, surplus was left over, the
workmen would be entitled to a share in the said surplus, on an equitable
basis. In the absence of any surplus, however, there would be no
question of payment of bonus on general notions of social justice.

3. Jalan Trading Co. v. DM Anay

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a. Payment of min. bonus irrespective of whether there is profit or not

under S.10, the section is not violative of Article 19 and. 301 of the
consti –
b. immaterial as to whether there are any allocable surplus or not