Workmen Of The Bombay Port Trust vs Trustees Of Port Of Bombay

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 529/1959

Decision Date: 10 October 1961

Coram: K.C. Das Gupta, K.N. Wanchoo, J.C. Shah

The case titled Workmen of the Bombay Port Trust versus Trustees of the Port of Bombay was decided by the Supreme Court of India on 10 October 1961. The judgment was written by Justice K.C. Das Gupta, and the bench also included Justices K.N. Wanchoo and J.C. Shah. The petitioner in the proceedings was the workmen of the Bombay Port Trust and the respondent was the Trustees of the Port of Bombay. The decision is reported in 1962 AIR 481 and also in the first supplement to the Supreme Court Reports on page 36. The matter concerned the application of the Industrial Dispute‑Wages provisions, specifically whether wages were payable for Sundays that were designated as the weekly off day on which no work was performed, and for Sundays on which work was performed without the grant of a compensatory off day. The provisions examined were the Minimum Wages Act, 1948 (XI of 1948), section 13, and the Minimum Wages Rules, rule 23.

The headnote of the judgment explained that the Minimum Wages Act, 1948 and the Rules made under it established the principle that the Government must ensure that workers receive one day of rest for every period of seven days and must also provide for a payment in connection with that day of rest. The dispute in the present case was two‑fold: first, the workmen claimed arrears of wages for Sundays that were the weekly off day on which no work was done; second, they claimed arrears for Sundays on which work was performed but for which no compensatory day off was provided, as contemplated under the Minimum Wages Rules.

The workmen argued that for each Sunday on which no work was performed they were entitled to receive an amount equal to their average daily wage for the preceding week, and that for each Sunday on which work was performed without a compensatory off day they were entitled to three times the ordinary rate of wages. The respondents contended that a proper construction of rule 23 of the Minimum Wages (Central) Rules, 1960 precluded any payment for Sundays on which no work was done, and further submitted that the workmen had been constructively paid for those Sundays because the daily wage was fixed at one‑twenty‑sixth of the monthly wages.

The Industrial Tribunal hearing the matter rejected all of the workmen’s claims. The workmen appealed the Tribunal’s decision by special leave. The Supreme Court held that while a breach of rule 23 of the Minimum Wages Rules was punishable under the Minimum Wages Act, the Industrial Tribunal did not possess the authority to impose a penalty that required the employer to pay more than what would otherwise be payable for work done on Sundays. Neither the Act nor the Rules contain any provision authorising an additional payment above that which is payable for overtime work. Consequently, the workmen could not obtain three times the ordinary rate of wages. The Court further explained that the expression “for which” in rule 23 referred to the weekly holiday, whether that holiday fell on a Sunday or on any other day of the week, and that no distinction was drawn between a holiday on the first day of the week and a holiday on any of the five days immediately before or after that day.

The Court observed that rule 23 of the Minimum (Wages Central) Rules, 1960, referred to a weekly holiday without distinguishing whether the holiday fell on a Sunday or on any other day of the week that the Rules permitted. The provision made no differentiation between a holiday that occurred on the first day of the week and a holiday that fell on any of the five days immediately before or after that day. The statutory scheme contemplated only one holiday in each week, and the payment prescribed by the Rules was intended to cover that single holiday irrespective of the day on which it actually occurred. The Court relied on earlier decisions, namely Trustees of the Port of Bombay v. Authority under the Payment of Wages Act (1957) I L.L.J. 627, A.C.C. v. Labour Inspector (1960) 1 L.L.J. 192, and Jaswani Sugar Mills v. Sub‑divisional Magistrate (1960) 2 L.L.J. 373, which had approved the same interpretation. The Central Government, by framing the Minimum Wages Rules, clearly intended that work performed on a holiday should be compensated at a rate higher than the ordinary wages payable for six days of work. This intention could not be defeated by the argument that, although the form of payment was for six days’ wages, the substance of the payment effectively amounted to seven days’ wages. Accordingly, the plea that the workmen received a “constructive” payment for the holiday must fail. The Court also rejected the contention that rule 23 ceased to apply to the workmen after the introduction of the piece‑rate scheme, holding that the rule remained applicable to the employees concerned in the present case.

The appeal arose under the civil appellate jurisdiction of the Supreme Court and was filed as Civil Appeal No. 529/1959. It was taken by special leave from an award dated 28 February 1958, rendered by the Central Government Industrial Tribunal at Calcutta in reference No. Of 1957. The appellants were workmen employed by the Bombay Port Trust, while the respondents were the Trustees of the Port of Bombay. The Tribunal had been referred the dispute by the Central Government under section 10 of the Industrial Disputes Act. The workmen involved were shore workers classified under “A” category, “B” category and a casual category. These classifications had been created under a scheme introduced by the Bombay Port Trust in April 1948 to employ shore workers directly, replacing the earlier system in which such labourers were supplied by contractors known as Toliwallas. The letter of reference that sent the matter to the Tribunal specified three points of dispute: (i) arrears of wages for the weekly off with pay for the period 15 March 1951 to 2 March 1956; (ii) arrears for work performed on weekly off days during the same period without a compensatory day off; and (iii) the calculation of average daily wages for the weekly off days after the piece‑rate scheme became effective on 3 March 1956, when the average wages varied from week to week. Counsel for the appellants included H. R. Gokhale, Yeshwant Chitale, Ratna Rao and K. R. Choudhri, while counsel for the first respondent comprised S. T. Desai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain. The judgment was delivered on 10 October 1961 by Justice Das Gupta.

During the hearing before the Tribunal it became evident that, for the interval specified in Item (i) and Item (ii)—that is, from 15 March 1951 to 2 March 1956—no “weekly off” was granted at all between 15 March 1951 and October 1953. During that earlier period the workmen were required to work all seven days of every week. From October 1953 until 2 March 1956, however, Sunday was designated as the weekly holiday and no work was performed on that day. Consequently, the actual dispute concerning Items (i) and (ii) centered on two matters: first, the claim for arrears of wages for the Sundays that were treated as weekly holidays from October 1953 to 2 March 1956 on which no work was done; and second, the claim for arrears of wages for the Sundays between 15 March 1951 and October 1953 on which work was performed even though those days should have been weekly holidays, and for which no compensatory day off was provided. The workmen contended that, for the Sundays on which no work was performed, they were entitled to receive an amount equal to their average daily wage of the preceding week, yet no such payment had been made. The respondent argued that, when Rules 23 of the Minimum Wages (Central) Rules, 1960 are correctly interpreted, the workmen were not entitled to any payment for Sundays on which they performed no work, and further maintained that the workmen had in effect been paid for those Sundays because the daily wage was fixed at one‑twenty‑sixth of the monthly wage. The Tribunal accepted the respondent’s submissions and concluded that there were no arrears of wages for Sundays on which no work was done.

Regarding the period from 15 March 1951 to October 1953, the Tribunal observed that, except for the “morphias” category, the workmen had been paid twice the ordinary rate—including all allowances—for any work performed on Sundays; the morphias, however, had received one and a half times the normal rate. The workmen asserted that they should have been paid three times the ordinary rate for Sunday work during that interval. The Tribunal rejected this claim, but it held that the morphias were entitled to double their wages, inclusive of all allowances, for work done on weekly rest days in the said period. Accordingly, the Tribunal directed that the employer pay the morphias the difference between the double rate (including allowances) and the amount they had actually received for work performed on Sundays between 15 March 1951 and October 1953. The Tribunal also noted that the dispute concerning arrears for workers in the “casual” category had not been raised before the Tribunal and therefore did not require consideration in the present appeal. The claim for arrears of wages for the period from 15 March 1951 to October 1953, except for the portion already awarded to the morphias, was therefore left without further adjudication.

For the period from 15 March 1951 to October 1953, the claim for additional wages by the Morphias was dismissed because the appellant’s counsel could not demonstrate any legal foundation for such a claim. He argued that Rule 23 of the Minimum Wages (Central) Rules obliges the employer to grant a weekly holiday on Sunday, unless that holiday is provided on another day, and therefore it would be unfair for the employer to avoid the extra payment that the Rules require for overtime work when the statutory holiday is not observed. However, the Minimum Wages Act, 1948 contains specific provisions for penalties when the Act, its Rules, or any orders made under it are violated. Section 22 prescribes punishment, among other things, for contravening rules or orders issued under section 13. Section 22A provides for a fine, which may be up to five hundred rupees, for any breach of the Act or of any rule or order made thereunder when no other penalty is prescribed. The Minimum Wages Rules were promulgated by the Central Government under the authority of section 30 of the Minimum Wages Act, 1948; consequently, any breach of rule 23 is punishable under section 22A of the Act. Regardless of whether any penal action is taken against the employer for such a breach, the Industrial Tribunal does not have the power to impose an additional monetary penalty by ordering the employer to pay more for work performed on Sundays than what would ordinarily be payable for overtime. Neither the Act nor the Rules contain any provision that mandates such an extra payment beyond the standard overtime rate. Accordingly, the workmen’s demand for further compensation for work performed on Sundays during the said period was properly rejected.

With respect to the claim for payment for Sundays covering the period from October 1953 to 2 March 1956, during which no work was actually performed, the Court first needed to interpret the phrase “for which” in Rule 23 as it existed before being amended by Notification GSR 918 dated 29 July 1960. The pre‑amendment wording of Rule 23 read: “Weekly Holidays‑(1) Unless otherwise permitted by the Central Government, no worker shall be required or allowed to work in a scheduled employment on the first day of the week (hereinafter referred to as the said day) except when he has or will have a holiday for the whole day on one of the five days immediately before or after the said day for which he shall receive payment equal to his average daily wages during the preceding week. Provided that the weekly holidays may be substituted ….” The Court noted that the interpretation of this language was essential to determine whether any entitlement to payment arose for Sundays on which no work was done, and that the analysis would proceed in light of this original wording before considering the later amendment.

The provision allows a weekly holiday to be substituted by another day, but adds that no substitution may cause any worker to work for more than ten days in succession without a whole‑day holiday. The Court did not consider clause 2 of Rule 23. The Rule is explained as follows: “For the purpose of this rule ‘week’ shall mean a period of seven days beginning at midnight on Saturday night.” The underlying policy of the Rule is clearly to ensure that workmen obtain full rest at regular intervals—generally once every seven days and never at intervals exceeding ten days. This policy conforms to the principle set out in clause 8.13 of the Minimum Wages Act, which authorises the Government to provide a day of rest for every period of seven days, although the Minimum Wages (Central) Rules 1960, which address many matters beyond those mentioned in clause 8.13, do not refer to that section at all. In order to give effect to the policy of a weekly rest—normally once in seven days but never after more than ten days—the rule‑making authority also incorporated a provision for payment in connection with the rest day. The wording of the Rule is unfortunately complex because the primary requirement concerning the rest day and the ancillary provision for payment are combined in a single sentence. The dispute before the Court therefore centres on the interpretation of the words “for which”. A basic rule of grammar holds that the antecedent of a relative pronoun should be placed as close as possible to the pronoun. Applying that rule might lead one to associate “which” with the word “day” in the phrase “the said day”, immediately preceding the preposition “for”. If that analysis were adopted, the clause would read as if it said: “and for the said day he shall receive payment equal to his average daily wages during the preceding week.” However, that is only a grammatical construction. While courts must be mindful of grammatical rules because they normally reflect the intention of the drafter, the Court must also examine the true purpose of the provision. It was considered unreasonable to attribute to the legislator an intention that, if the weekly rest fell on the “said day” (for example, Sunday), the workman would receive payment, but that he would receive no payment when the employer exploited the clause permitting a workman not to be required or allowed to work on Sunday if he has or will have a holiday for the whole day on one of the five days immediately before or after that day. Allowing such an interpretation would enable an employer to consistently schedule the weekly holiday on one of the five days surrounding Sunday and thereby avoid payment for the designated rest day.

The Court observed that if an employer were allowed to give the weekly rest on any of the five days immediately before or after Sunday, the employer could systematically avoid paying for the rest day. Accordingly, the Court concluded that the rule‑making authority, by using the words “for which” after the phrase “the said day,” did not intend for “which” to refer back to “the said day.” Rather, the authority meant that “for which” applied to any day on which a holiday was granted, whether that holiday fell on the said day or on another day. The Court stated that this interpretation was not barred by grammatical rules.

Mr Desai, appearing for the respondent, contended that the word “which” should be read as relating to the term “holiday.” He argued that payment was due only when a workman had, or would have, a holiday on one of the five days immediately before or after the said day. According to him, the phrases “for the whole day” and “one of the five days immediately before or after the said day” functioned as adverbial modifiers of the verbs “has” and “will have,” and therefore could not be linked to the words “for which.” He further asserted that, if this reading were adopted, the rule would split into two separate parts: first, that no worker could be required or allowed to work on the first day of the week; and second, that a worker would receive payment equal to his average daily wages for the preceding week only when he had or would have a holiday “for which” he was to be paid. The Court found that such a reconstruction lacked any textual justification.

The Court noted that the respondent’s interpretation would lead to an absurd result: if the rest day were scheduled on the first day of the week, no payment would be required, whereas if the rest day were scheduled on any other day, payment would become obligatory. The Court deemed it unreasonable to ascribe such an intention to the legislature. The Tribunal, having been troubled by the unreasonableness of that consequence, had concluded that no payment was payable to workmen irrespective of whether the weekly rest day fell on the first day of the week or on any of the five days immediately before or after the said day.

Reading the operative portion of the rule together with the proviso that the weekly holiday might be substituted by another day, the Court found that the rule‑making authority made no distinction between a holiday on the first day of the week and a holiday on one of the five days surrounding the said day. The authority intended that the weekly holiday—whether it occurred on the first day of the week or on any of the five days immediately before or after the said day—could, under the proviso, be replaced by a different day, and that payment would be due for that single weekly holiday irrespective of the day on which it was observed.

In this case the Court observed that the rule was intended to provide a payment for a single weekly holiday, whichever day of the week that holiday occurred. The Court noted that the Bombay High Court in Trustees of the Port of Bombay v. Authority under the Payment of Wages Act (1) had held that the phrase “for which” must be read in connection with the word “holiday” that appears immediately before the words “for the whole day”. The same interpretation had been adopted by the Madras High Court in A.C.C. v. Labour Inspector (2). The Court further referred to the judgment of the Allahabad High Court in Jaswant Sugar Mills v. Sub‑Divisional Magistrate (3), where it was held that the expression “for which” pertains to the weekly holiday, whether that holiday falls on a Sunday or on any other day permitted by the Rules. The Court agreed with the Allahabad High Court’s view. Applying a proper construction of the rule, the Court concluded that the workmen falling in categories A and B were entitled to receive a payment equal to the average wages of the preceding week for the period from October 1953 to March 2, 1956. The employer then contended that a constructive payment for Sundays during that period had already been made. The employer’s argument was that the daily wage for these workmen had been determined by dividing the total of the components of the monthly scale of pay and allowances by twenty‑six, so that the daily wage represented one twenty‑sixth of a thirty‑day month. Accordingly, the employer claimed that the total receipt for twenty‑six days, without a separate payment for rest days, would amount to thirty days’ wages. The Court identified a flaw in that reasoning. It held that once the daily wage is fixed at a certain amount, it ceases to retain the character of being merely one twenty‑sixth of the monthly wage; the daily wage becomes a fixed daily amount and cannot be treated as a fraction of the monthly wage. The Court explained that when the Central Government formulated the Minimum Wages Rules, it clearly intended that an additional amount should be paid for a holiday beyond the wages already earned for the six working days of the week. The Court rejected the employer’s suggestion that, although six days’ wages were paid in form, in substance five days’ wages were being paid. The Court emphasized that payment for six days cannot be equated with payment for seven days. Consequently, the Court held that the workmen of categories A and B were entitled to arrears of wages for the Sundays falling within the period from October 1953 to March 2, 1956, with effect from March 3, 1956.

In this case, the Court described the piece‑rate scheme that had been introduced for the shore workers classified in categories A and B. The scheme was based on a datum line that was fixed for each type of work, and the piece‑rate paid to a worker varied according to the proportion that the gang’s actual output bore to that datum line. For a shift that was fully occupied with piece‑rate work, the Court explained that the piece‑rate wage of a basic gang worker, which included basic pay and the allowance previously mentioned, would rise uniformly as follows: when the output reached 76 percent of the datum line, the wage would be Rs 3‑1‑0; at 100 percent it would be Rs 4‑5‑0; and at 150 percent of the datum line it would be Rs 8. If the output exceeded 150 percent, the wage would be calculated at double the daily wage, meaning that the piece‑rate wage would increase uniformly from Rs 8 at 150 percent to Rs 12 at 200 percent of the datum line. The scheme also stipulated a guaranteed minimum wage for each day of work. For a basic gang worker, the minimum guaranteed wage was set at Rs 3‑1‑0, composed of Rs 1‑8‑3 as basic pay—including allowances—and Rs 1‑9‑0 as a dearness allowance. The Court noted that if, on any day, the earnings from piece work together with any idle‑time payment or other earnings under the appendix fell short of this minimum amount, the Port Trust was required to make up the shortfall for that day. A higher minimum guaranteed wage of Rs 3‑7‑0 was prescribed for another class of workers, consisting of Rs 1‑14‑0 as basic wage—including allowances—and Rs 1‑9‑0 as dearness allowance.

The respondent, on its part, raised the contention that Rule 23 of the Minimum Wages Rules should not be applied to these workers after the introduction of the piece‑rate scheme. It argued that, for such workers, there was no fixed daily wage because the amount received varied each day according to total output, and it was possible that a worker might receive nothing on a day when the output was nil. In opposition, counsel for the petitioner, Mr Gokhale, submitted that “average daily wages during the preceding week” should be interpreted as the average of the total earnings for each day of the preceding week, thereby allowing the average daily wage for every worker to be ascertained for any given week. The Court, however, declined to accept this interpretation of average daily wages as merely an average of earnings per day. It observed that the term “daily wage” has a specific meaning in industrial relations, distinct from weekly or monthly wages, which ordinarily do not include overtime earnings. Accordingly, the Court held that the ordinary meaning of “daily wages” does not encompass overtime earnings, and therefore it could not be reasonably said to include the substantially higher earnings that might accrue when a worker’s output exceeds the minimum fixed level. The Court expressed that it did not

The Court stated that it could not accept the contention that the expression “daily wages” should be understood to include only ordinary earnings and exclude any additional remuneration. At the same time, the Court found no reason to deny that the guaranteed minimum amount fixed for each workman on a daily basis could be treated as his daily wage. The piece‑rate system that had been introduced for these workmen established such a minimum amount. The Court observed that fixing a minimum wage within a piece‑rate arrangement effectively created a hybrid of a time‑rate and a piece‑rate system, where the guaranteed minimum functioned as the time‑rate component representing the daily wage, while any earnings above that minimum were attributable to the piece‑rate component. Consequently, the argument that Rule 23 did not apply to these workmen after the introduction of the piece‑rate scheme was dismissed. Regarding the period beginning on 3 March 1956, the Court considered the submission that the workers had been constructively paid because the guaranteed minimum had been derived by dividing a monthly wage by 26 days. Since the same line of reasoning had been rejected for the earlier period from October 1953 to 2 March 1956, the Court likewise rejected the claim of constructive payment for the later period. Accordingly, the Court held that workers classified in categories A and B were entitled to wage arrears for Sundays falling on or after 3 March 1956, on the basis that the guaranteed minimum constituted their daily wage. The Court noted that Rule 23 was amended in July 1960, which occurred long after the Tribunal had rendered the award that was under appeal, and therefore the Court refrained from commenting on the legal position after that amendment. The appeal was therefore allowed in part, and each party was ordered to bear its own costs in this Court.