ORDER
H.N. Nagamohan Das, J.
Page 0225
1. In this petition, the petitioners have prayed for a writ in the nature of certiorari to quash the order dated 31.1.2002 passed by the 1st respondent-Labour Commissioner rejecting the claim of the petitioners under Section 33-C(1) of the Industrial Disputes Act, 1947 (for short the ‘Act’).
2. The 2nd respondent is a registered Company engaged in the manufacture of leather goods. The petitioner is an employees Association representing the workmen in the 2nd respondent-Company. The service conditions of 2nd respondent and its workers are governed by a settlement dated 11.3.1998. The 2nd respondent deducted the wages of certain employees on pro-rata basis on the ground that they indulged in go-slow for the period from February 2001 to July 2001. Aggrieved by this pro-rata deduction, the petitioners approached the 1st respondent under Section 33-C(1) of the Act. The 1st respondent passed the impugned order on 31.1.2002 rejecting the claim of the petitioners as not maintainable. The reasoning of the 1st respondent is that there is dispute between the parties with regard to go-slow and pro-rata deduction and therefore the same cannot be determined and adjudicated under Section 33-C(1) of the Act. Hence, this petition.
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3. Sri K.S. Subramanya, learned Counsel for the petitioners contends that the service conditions of 2nd respondent and its employees are governed by a settlement dated 11.3.1998. Contrary to the terms of settlement, the 2nd respondent unilaterally deducted pro-rate wages from the salary of the employees and the same is opposed to principles of natural justice. He further contends that the 2nd respondent unilaterally cannot determine the pro-rata wages to be deducted without holding a due enquiry. Reliance is placed on the following decisions.
1. 1990 II LLJ 39 Bank of India v. T.S. Kelawala and Ors.
2. 1965 II LLJ 429 Kays Construction Company (Private) Limited v. State of Uttar Pradesh and Ors.
3. 1966 I LLJ 41 (Sawatram Ramprasad Mills Company Limited, Akola v. Baliram Ukandaji and Anr.)
4. Per-contra, Sri C.K. Subrahmanya, learned Counsel for the 2nd respondent justifies the impugned order. He contends that the dispute between the petitioner-Union and the 2nd respondent requires enquiry and therefore the same cannot be adjudicated by the 1st respondent under Section 33-C(1) of the Act. Now the 2nd respondent had already deducted the pro-rata wages, the question of paying the same to workers and then holding an enquiry and recovering thereafter is not practicable.
5. Heard arguments on both the side and perused the entire writ papers.
6. It is not in dispute that the service condition of 2nd respondent-Company and its employees are governed by a settlement dated 11.3.1998. As per the terms of settlement, the employees of the 2nd respondent are entitled for monthly wages, The terms of settlement do not provide for deduction of wages for go-slow in the work, In the absence of any specific term in the settlement, it is not open for the 2nd respondent to deduct the wages on the ground of go-slow work from the monthly wages payable to its employees. Therefore, the deduction of pro-rata wages for certain period in the wages payable to the employees on the ground of go-slow work is contrary to the terms of settlement.
7. Though the 2nd respondent issued certain notices in the month of February 2001, it only indicates the actual production and previous average production. These notices do not specify the go-slow is on account of employees alone and that the same has resulted in loss. These notices issued in the month of February 2001 by the 2nd respondent do not further specify that they are providing an opportunity to show cause to the employees. Therefore, without holding an enquiry and without providing an opportunity to the employees, the unilateral deduction of pro-rata wages from the monthly wages payable to the employees is opposed to principles of natural justice.
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8. In the absence of terms of settlement, deduction can be made from the wages payable to an employee as specified in Section 7 of the Payment of Wages Act, Firstly, the provisions of Payment of Wages Act do not apply to the workmen in question since all of them are drawing more than Rs. 1,600/- as wages per month. Further, Section 7 of The Payment of Wages Act do not specify deduction of pro-rata wages on the ground of go-slow work. Therefore, in the absence of any provision in the settlement and also any statutory provision, it is not open for the 2nd respondent to deduct wages on pro-rata basis on the ground of go-slow work.
9. The Supreme Court in 1990 II LLJ 39 (Bank of India v. T.S. Kelawala and Ors.) held as under:
37. But by its very nature, the proof of go-slow, particularly when it is disputed, involves investigation into various aspects such as the nature of the process of production, the stages of production and their relative importance, the role of the workers engaged at each stage of production, the pre-production activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the facts bearing on the average production etc. The go-slow further may be indulged in by an individual workman or only some workmen, either in one section or difference sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the productive process. Even where it is admitted, go slow may in some case present difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go-slow ceases which may be difficult to estimate. The deduction of wages for go-slow may therefore, present difficulties which may not be easily resoluble. When, therefore, wages are sought to be deducted for breach of contract on account of go-slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to be adjudicated by an independent machinery, statutory or otherwise as the parties may resort to. It is necessary to emphasize this because unlike in the case of a strike where a simple measure of a pro-rata deduction from wages may provide a just and fair remedy, the extent of deduction of wages on account of a go-slow action may in some case raise a complex question. The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fall in production compared to the normal or average production may not always be equitable. It is, therefore, necessary that in all cases where the factum of go-slow and/or the extent of the loss of production on account of it, is disputed, there should be a proper inquiry on charges which furnish particulars of the go-slow and the loss of production on that account. The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case.
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The Supreme Court in 1965 II LLJ 429 (Kays Construction Company (Private) Limited v. State of Uttar Pradesh and Ors.) held as under:
The contrast in the two Sub-sections between “money due” under Sub-section (1) and the necessity of reckoning the benefit in terms of money before the benefit becomes “money due” under Sub-section (2) shows that mere arithmetical calculations of the amount due are not required to be dealt with under the elaborate procedure of Sub-section (2). The appellant no doubt conjured up a number of obstructions in the way of this simple calculation. These objections dealt with the “amount due” and they are being investigated because the State Government must first satisfy itself that the amount claimed is in fact due. But the anti-thesis between “money due” and a “benefit which must be computed in terms of money” still remains, for the inquiry being made is not of the kind contemplated by Sub-section (2) but is one for the satisfaction of the State Government under Sub-section (1). It is verification of the claim to money within Sub-section (1) and not determination in terms of money of the value of a benefit. The judgment of the Division Bench was thus right. The appeal fails and will be dismissed with costs. The companion appeal will also be dismissed but we make no order about costs in that appeal.
The Supreme Court in 1966 I LLJ 41 (Sawatram Ramprasad Mills Company Limited, Akola v. Baliram Ukandaji and Anr.) held as under:
The next contention is that the claim for lay-off is not a claim for money due, because calculations have to be made before the money due can be found. This argument has been considered on more than one occasion and it was rejected recently by this Court in Kays Construction Company (Private), Ltd. v. State of Uttar Pradesh and Ors. (1965-II L.L.J. 429). It is not essential that the claim which can be brought before the Government or its delegate under Section 33-C(1) must always be for a predetermined sum. The Government or the labour court may satisfy itself about the exact amount and then take action under that section. In the present case the dates of lay-off are known and each workman will show to the second labour court that he is qualified to receive compensation for lay-off. That will be shown from the master-roll which the employer is required to maintain and it will then be a simple arithmetical calculation which, in our judgment, Section 33C permits to be made. If there is any question whether there was lay-off or not, the labour court will decide it. This argument, therefore, has not force.
A Division Bench of Bombay High Court in 1980 II LLJ 344 (Apar (Pvt.) Limited v. S.R. Samant and Ors.) held as under:
Wages can be deducted only in terms of statutory provisions or in terms of a settlement.
Page 0229
Reduction of wages on the allegation that the workers in general had resorted to go slow is wholly impermissible in law, specially when the workmen were not piece-rated employees. There can arise a case of settlement under which such deduction is specially provided for. Different considerations may arise in such a case. Settlement in the instant case contains no provision authorising the petitioner to deduct any part of the salary either on pro-rata basis or to the bare statutory minimum for failure or refusal on the part of the employees to carry on their work in such manner as would bring particular production level.
It is not as if the worker concerned or the workmen in general can commit misconduct and still go scot-free. The standing orders and settlements provide for remedies which include disciplinary action, claim for damages on partial failure of consideration and complaining of unfair labour practice in terms of the Act.
In the absence of a specific term in the settlement or statutory provision an employer has no right to reduce the wages or emoluments on the allegation that the workers had resorted to go-slow tactics or had not performed their part of the obligation in the settlement. In the instant case the management had proceeded on the assumption that the workers had indulged in serious types of misconduct. Reduction of wages in such circumstances is clearly a punishment. Such penal action is not permissible without holding an enquiry as it is violative of principles of natural justice. There is absolutely no justification for such action, especially when it has been taken unilaterally. After all, the pay packet is the property of the workman and there can be no deprivation of it except in due process of law.
10. In view of the law declared by the Supreme Court and Bombay High Court in the decisions referred supra, the deduction of pro-rata wages from the monthly salary payable to the employees is illegal. Without determining as to whether there is go-slow or not, if so, who is responsible for it and to what extent, the employees are responsible and what is the resultant loss and consequential deduction to be made, the present unilateral deduction of wages of workmen is illegal.
11. The petitioners are entitled for refund of pro-rata wages deducted by the 2nd respondent. The quantum of deduction made from monthly wages payable to its employees is already specified in the deduction so made. Therefore, the question of determining the refund of wages will not arise. A right is vested in the employees to claim wages in terms of the settlement and less paid wages. There are no disputed questions to be adjudicated or determined between the parties in respect of their claim before the 1st respondent-Labour Commissioner under Section 33-C(1) of the Act.
12. For the reasons stated above, the following
Order
I. The writ petition is allowed.
II. The impugned order dated 31.1.2002 passed by the 1st respondent-Labour Commissioner is hereby quashed.
Page 0230
III. The 2nd respondent is directed to refund the pro-rata wages deducted from the monthly wages payable to its employees within one month from the date of receipt of a copy of this order.
IV. Liberty is reserved to the 2nd respondent to take appropriate steps in accordance with law, if they are so advised.