Case Note & Summary
The judgment concerns two cross writ petitions arising from an order of the Labour Court, Mumbai, dated 27 October 2005, in an application under Section 33C(2) of the Industrial Disputes Act, 1947. The application was filed by 13 former employees of Abbott Laboratories (I) Ltd. (now Pfizer Ltd.) seeking payment of 12 months wages for a lock-out period and 20 months wages as ex-gratia payment by way of settlement of a general Charter of Demands. The employees had left the company between 1989 and 1993, either under a Voluntary Retirement Scheme (VRS) as claimed by them, or by resignation as contended by the company. It was admitted that each employee received ex-gratia compensation of Rs. 2 lacs at the time of leaving. The company entered into a Memorandum of Settlement dated 23 January 1996 with the recognized union and another settlement dated 14 February 1996. The Labour Court partly allowed the application, directing the company to pay 12 months lock-out wages to all applicants at the rate of last drawn wages, but denied the claim for 20 months ex-gratia payment. The company filed Writ Petition No. 64 of 2006 challenging the direction to pay lock-out wages, while the employees filed Writ Petition No. 2080 of 2006 challenging the denial of ex-gratia payment. The High Court dismissed the company's petition and allowed the employees' petition in part, upholding the Labour Court's order regarding lock-out wages and confirming the denial of ex-gratia payment. The court held that the claim for lock-out wages was based on an existing right under the settlement and was computable under Section 33C(2), whereas the claim for ex-gratia payment was not based on any pre-existing right and could not be adjudicated under that provision.
Headnote
A) Industrial Disputes Act, 1947 - Section 33C(2) - Computation of Benefits - Lock-out Wages - The Labour Court directed the Company to pay 12 months lock-out wages to former employees who had left service under a Voluntary Retirement Scheme or resignation. The High Court upheld the direction, finding that the employees were entitled to wages for the lock-out period as a benefit under the settlement. (Paras 1-3) B) Industrial Disputes Act, 1947 - Section 33C(2) - Ex-gratia Payment - Settlement of Charter of Demands - The employees claimed 20 months wages as ex-gratia payment by way of settlement of general Charter of Demands. The Labour Court denied this claim, and the High Court affirmed, holding that the claim was not based on any existing right or settlement and was not computable under Section 33C(2). (Paras 3-5)
Issue of Consideration
Whether the Labour Court was justified in directing payment of 12 months lock-out wages to former employees under Section 33C(2) of the Industrial Disputes Act, 1947, and whether the employees were entitled to 20 months wages as ex-gratia payment by way of settlement of general Charter of Demands.
Final Decision
The High Court dismissed Writ Petition No. 64 of 2006 filed by the company and partly allowed Writ Petition No. 2080 of 2006 filed by the employees, upholding the Labour Court's order directing payment of 12 months lock-out wages and confirming the denial of 20 months ex-gratia payment.
Law Points
- Section 33C(2) of Industrial Disputes Act
- 1947
- computation of benefits
- lock-out wages
- ex-gratia payment
- settlement of charter of demands
- voluntary retirement scheme
- resignation
