Jaswant Sugar Mills Ltd., Meerut vs Shri Badri Prasad And Ors.

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Not extracted

Decision Date: 14 December, 1960

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

The case was titled Jaswant Sugar Mills Ltd., Meerut versus Shri Badri Prasad and others, and it was decided on 14 December 1960 by the Supreme Court of India; the judgment was authored by Justice K.C. Das Gupta and the bench was composed of Justices P.B. Gajendragadkar, K.N. Wanchoo and K.C. Das Gupta. The appeals before this Court arose out of an industrial dispute between the appellant company, Jaswant Sugar Mills Ltd., and a group of its workmen. The dispute was framed in the order of reference, which asked whether the employer should be required to designate fifteen workmen listed in an annexure as permanent workmen and, if so, what details should be recorded. Four of the fifteen workmen settled their claims amicably, leaving the Tribunal to consider the remaining eleven workmen. The workmen contended that they qualified as permanent workmen under the company's Standing Orders, while the company asserted that all eleven were seasonal workmen. To resolve the question, the Tribunal first had to interpret the definition of “permanent workman” contained in the Standing Orders and then apply that interpretation to the factual record. The Standing Orders defined a permanent workman as “one who is engaged in a permanent nature of work throughout the year and has completed his probationary period, if any.” The Tribunal concluded that a proper reading of this definition required two conditions: the workman must be engaged in a job of a permanent nature, and he must be engaged throughout the entire year in such a job. After examining the evidence, the Tribunal found that seven of the eleven workmen satisfied both conditions and therefore had acquired the status of permanent workmen. The Tribunal held that the remaining four workmen failed to meet one or both of the required conditions and consequently were not entitled to be designated as permanent workmen.

The Tribunal further rejected the claim of the seven workmen for wages covering periods during which they had not been employed by the company, but it directed that if those seven appeared and applied for work within fifteen days of the order, they would be treated as permanent workmen from the date they completed one year of service and would receive full wages from the date they applied to be put on work. Both the employer and the workmen subsequently appealed to the Labour Appellate Tribunal. The Appellate Tribunal adopted a different construction of the definition of permanent workman, holding that all eleven workmen had acquired the status of permanent workmen. Regarding the wages payable for the period of unemployment, the Labour Appellate Tribunal decided that the workmen should be awarded fifty percent of their wages for the period of forced unemployment until their reinstatement, thereby dismissing the employer’s appeal and allowing the workmen’s appeal.

The Appellate Tribunal decided that fairness would be served by granting the workmen fifty percent of their wages for the period during which they were involuntarily unemployed until they were reinstated. On that basis, the Labour Appellate Tribunal rejected the employer’s appeal and gave relief to the workmen by allowing the workmen’s appeal. The principal issue that the Supreme Court was asked to examine in the employer’s special leave petition was how to properly interpret the definition of a “permanent workman.” In order to give meaning to the words used in that definition, the Court considered the definition in the Standing Order of two other categories of workers, namely “Seasonal Workmen” and “Temporary Workmen.” A Seasonal Workman, according to the Standing Order, is a person who is employed only for the crushing season and may also be employed for the period required for cleaning and overhauling either before or after that season, after which the worker is discharged. A Temporary Workman, on the other hand, is defined as a person who is engaged in work of a temporary or casual nature or who is employed to meet a temporary requirement for extra hands on either permanent or temporary jobs.

When the three definitions are read together, it becomes clear that a Seasonal Workman works only during the crushing season, while a Temporary Workman may be engaged either for work that is temporary or casual in nature or for work that is permanent in nature, but only to fill a short‑term need for additional labour on permanent jobs. By contrast, a Permanent Workman is a person who is employed only on work that is permanent in nature. The distinction between a Permanent Workman who performs permanent work and a Temporary Workman who performs permanent work lies in the fact that the Temporary Workman is employed merely to fill a temporary requirement for extra hands on a permanent job. In this context, the phrase “engaged on a permanent nature of work throughout the year” is to be understood as meaning “engaged on a permanent nature of work that lasts throughout the year,” rather than “engaged throughout the year on a permanent nature of work.” If a workman is hired for work that is permanent in nature and that work continues for the whole year, it is reasonable to expect that the workman will remain in that position permanently unless the employer has hired him specifically to meet a temporary need. It would be unreasonable to assume that the Standing Orders created a loophole that would allow an employer to prevent a worker, who is employed on permanent work that lasts the entire year, from attaining permanent status simply by dismissing him from time to time. Such a device would enable the employer to thwart any workman from becoming permanent even though the nature of the work is permanent and continues throughout the year, which could not have been the intention of those who framed the Standing Orders. It is far more logical to conclude that the Standing Orders were meant to ensure that, once a workman has completed any probationary period, he would continue to be employed in a permanent capacity for work that persists year‑round.

The judgment explained that the drafters of the Standing Orders assumed that when work of a permanent nature persists throughout the year, a workman who has completed any probationary period would ordinarily remain engaged in that work. Accordingly, the Court held that the Appellate Tribunal was correct in its view that the definition of a permanent workman does not require the workman to be employed for the entire year. What is essential, the Court observed, is that the nature of the work itself is permanent and that such work continues for the whole year. The Court then considered the situation of a workman who, although assigned to work of a permanent nature that lasts the entire year, is hired only to fill a temporary requirement for extra hands. The Court found that such a person clearly fits within the definition of a temporary workman that had been previously set out, even though the same individual might also meet the description of a permanent workman. Because this category of temporary workman is narrower and specially defined, it would be unreasonable to include him within the permanent workman definition contemplated by the Standing Orders. The Court therefore articulated the proper construction of “permanent workman” as follows: a workman engaged on work of permanent nature that lasts throughout the year, who has completed any probationary period, and who is not engaged merely to meet a temporary need for additional labour on permanent jobs, such as covering leave vacancies. The Court noted that there was no dispute that, on the facts established, all eleven workmen satisfied this test. Consequently, the Court affirmed the Labour Appellate Tribunal’s conclusion that the eleven individuals were indeed permanent workmen.

Turning to the question of back wages, the Court observed that neither side produced evidence that the workmen had obtained alternative employment during the period they were not employed by the company. The Appellate Tribunal, however, correctly pointed out that it is common for workers in sugar factories to be employed in agricultural activities during off‑season periods. In view of this practice, the Tribunal ordered that the workmen be paid fifty percent of their wages for the duration of their involuntary unemployment caused by the company, up to the time of their reinstatement. The Court found no reason to disturb this order and therefore upheld it. Finally, the Court dismissed the appeals and awarded costs to the respondents.