TaxTMI 
TaxTMI 
TaxTMI 
2007 (1) TMI 660
X X X X Extracts X X X X
X X X X Extracts X X X X
....aryana referred the dispute under Section 10(1) of the Act for adjudication by the Industrial Tribunal-cum-Labour Court, Hisar (hereinafter referred to as 'the Labour Court") regarding the validity of the termination of services of the respondent Dharam Pal and the relief which he was entitled to get in case the termination order was found to be illegal. 4. The respondent in his claim statement pleaded, inter alia, that he was appointed as unskilled workman on the post of Mali (gardener) in the University by a verbal order dated 2.10.1995; that he was removed from service on 2.7.1997 but subsequently he was taken back on duty on 15.10.1997; that he was illegally removed from the service of the University on 15.1.1998; that the University was paying wages of Rs. 1638/- per month before his removal from service; that the University had regular work and persons junior to him had been retained in service and had been regularized; that the University was forcing the workman to work on contract basis despite the fact that there is work of regular nature; that the University was adopting unfair labour practice and that his retrenchment was illegal as neither any notice was given nor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....port of their case before the Labour Court. The Labour Court held that the instructions issued by the Government showed that the monthly wages of unskilled Mali were Rs. 1642/-. The respondent had been appointed on 2.12.1995 and his services were terminated on 15.1.1998 and thus he had completed two years and one month of service on the date when he was retrenched from service. He was thus required to be paid 15 days' average pay for completion of the first year of service and 15 days' average pay for completion of second year of service as retrenchment compensation. It was further held that in order to calculate the retrenchment compensation, the legal requirement was to divide average monthly wage by 26 and not by 30, as a worker ordinarily gets four weekly holidays and has to work only on 26 days in a month. For holding so, the Labour Court relied upon some decisions of the High Courts and also a decision of this Court in Jeevanlal (1929) Ltd. V. Appellate Authority under the Payment of Gratuity Act and Ors. (1984) Lab IC 1458. After holding so, it was held that one day's average pay of the respondent would be Rs. 63.15 (Rs.1642/26) and thus the compliance of Section 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice: (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette. Sub-section (b) of Section 25F requires payment of retrenchment compensation to a workman which shall be equivalent to 15 days' average pay for every completed year of continuous service or any part thereof in excess of six months. Average pay has been defined in Section 2(aaa) of the Act and, therefore, average pay has to be determined strictly in accordance with the aforesaid provision and not on the basis of some hypothetical calculation. Section 2(aaa) contemplates four different kinds of wage period for payment of wages. Clause (i) speaks of monthl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e that the respondent was being paid wages on monthly basis though there is slight difference in the actual amount which was being paid to him. The Labour Court has recorded a finding that a cheque for Rs. 1642/- was given by the University to the respondent as retrenchment compensation. Since the respondent was being paid wages on monthly basis, his average pay has to be calculated in accordance with the formula given in clause (i) of Section 2(aaa) of the Act which would mean the sum total of wages paid to him in three complete calendar months immediately preceding his retrenchment and dividing the said amount by three. The respondent was being paid wages amounting to Rs. 1642/- per month in immediately three preceding months before his retrenchment. Therefore, the "average pay" in accordance with Section 2(aaa)(i) would come to Rs. 1642/-. The respondent had worked for two years and one month and, therefore, he was entitled to thirty (15 x 2) days of average pay by way of retrenchment compensation in order to comply with requirement of Section 25F(b) of the Act. The "average pay" of the respondent being Rs. 1642/- per month and he being entitled to 30 days' a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rate of wages last drawn by the employee concerned : Provided that in the case of a piece rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account : Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay, the gratuity at the rate of seven days' wages for each season. (3) The amount of gratuity payable to an employee shall not exceed twenty months' wages." While interpreting the aforesaid provisions, the Court held as under in para 10 of the reports : 10. In dealing with interpretation of sub-sections (2) and (3) of Section 4 of the Act, we must keep in view the scheme of the Act. Sub-section (1) of Section 4 of the Act incorporates the concept of gratuity being a reward for long, continuous and meritorious service. Sub-section (2) of Section 4 of the Act provides for payment of gratuity at the rate of "fifteen days' wages" based on the rate of wages last drawn by the employee concerned for every completed y....
X X X X Extracts X X X X
X X X X Extracts X X X X
....into consideration this economic reality\005\005.. A worker gets full month's wages not by remaining on duty for all the 30 days within a month but remaining on work and doing duty for only 26 days. The other extra holidays may make some marginal variation into 26 working days, but all wage boards and wage fixing authorities or Tribunals in the country have always followed this pattern of fixation of wages by this method of 26 working days." And then observed : "The view expressed in the extract quoted above appears to be legitimate and reasonable." The learned Judge then went on to say : "Ordinarily of course a month is understood to mean 30 days, but the manner of calculating gratuity payable under the Act to the employees who work for 26 days a month followed by Gujarat High Court cannot be called perverse." He further observed that it was not necessary to consider whether another view was possible and declined to interfere under Article 136 in a matter where the High Court had taken a view favourable to the employees and the view taken could not be said to be in any way unreasonable and perverse, and then added : "Incidentally, to indicate that treating monthly wages a....