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Petitioner: LYALLPUR COTTON MILLS, LYALLPUR VS Respondent: MAQSOOD ALI AND 16 OTHERS
Court Name: Lahore High Court Judge(s): Aftab Hussain Title: LYALLPUR COTTON MILLS, LYALLPUR vs MAQSOOD ALI AND 16 OTHERS Case No.: Civil Revision No. 554 of --1968 Date of Judgment:1972-06-05 Reported As: 1972 PLC 448 Result: Petition dismissed
JUDGMENT
JUDGMENT By this revision petition the petitioner has challenged the order of Mr. M. Gulbaz Khan, District Judge, Lyallpur, dated 17th June 1968 accepting the appeal of the respon--dents under section 17. Of the Payment of Wages Act, 1936, against the order of the Authority under the Payment of Wages Act dated 22nd August 1968 dismissing the respondents' applica--tion claiming their wages for the period of suspension. The facts are that the 17 respondents who are employees of the petitioner factory were suspended from service on charges of misconduct, rioting anti indiscipline. As an industrial dispute was already pending, an application is alleged to have been submitted by the petitioner on 26th January 1964 to the Industrial Court under section 30 of the Industrial Disputes Ordinance, 1959, for permission to dismiss these workers. During the pendency of that application, the Districts Review Committee, said to have been set up by the Labour Department consisting of the City Magistrate. Deputy Superintendent of Police and Assistant Director Labour, intervened and recommended on the employees' showing regret and giving assurance not to repeat the conduct attributed to them, the. Re-if-statement of the respondents and clarified that their period of. Suspension before the re- instatement be treated as leave with or without pay or both. This direction was explained to me by the learned counsel for the petitioner as meaning that if the leave of any of the respondents was due, he would be entitled to pay, otherwise the period of suspension will be treated as leave without pay., The respondents were re-instated on various Oates between April to July 1964 and the petition for permission to dismiss them having become infructuous, the same was withdrawn by the petitioner on 12th August 1964.
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The respondents submitted an application under section 31 of the Industrial Disputes Ordinance claiming payment of wages for the period of suspension but the same was dismissed on 4th December 1964, for non-prosecution and ultimately the present application under section 15 of the Payment of Wages Act was submitted. This application was dismissed by the Authority under the Payment of Wages Act on the ground that the respondents were put back on duty as a result of compromise and it was not denied that they committed serious misconduct and also gave undertaking at different levels that they would behave properly in future. It was also found that the Authority was not the proper forum to be approached. The respondents filed an appeal under section 17 of the Payment of Wages Act against that decision. The appellate Court hold that the respondents were entitled to wages for the period intervening the dates of their suspension and re-instatement and the recommendation of the District Review Committee for treating this period as leave with pay or without pay could not override the mandatory provisions of the Payment of Wages Act. It was also, held that. The Authority was competent to adjudicate upon the matter. The appeal was, therefore, accepted and the petitioner was directed to pay to the respondents the wages for the period of. Suspension. The learned counsel for the petitioner attacked this order before me only the points of competence of the appeal and the jurisdiction of the District Judge to award wages for the period of suspension. First I will take up the question of maintainability of tae appeal. The Payment of Wages Act No. IV of 1935 wa3 enacted to regulate the payment of wages to certain classes of persons employed in industries. It is a piece of ,legislation enforced for the benefit of the employees of inter alia, factories. Section 3 makes the employer responsible for payment to persons employed by him, of all wages required to be paid under this Act. The employer has no fix periods in respect of which wages are payable but no wage period can exceed one month (section 4). The wages are payable in the case of a factory in which less than 1,000 persons are employed, before the expiry of the 7th day of the month and in the case of any other factory the expiry of the 10th day and in case of termination of employment of a worker the wages earned by him have to be paid before the expiry of the second working day from the day on which his employment is terminated. Section 7 deals with permissible deductions from the wages, and sections 8 to 13 deal with the conditions under which such deductions can or cannot be made by the employer. In case, any illegal deduction has been made from the wages, or the-payment of wages has been delayed the employee, or persons specified in the section on his behalf can make an application to the Authority under the Act for a direction for payment of such deducted or delayed wages (section 15) and against some directions made by the Authority an appeal is competent (section 17). Sections 15 and 17 of the Payment of Wages Act provide :-- "15.-(1) The Provincial Government may, by notification in the official Gazette.. Appoint any. Commissioner for Work--men's Compensation or other officer with experience as a Judge of a civil Court or as a stipendiary Magistrate to be the authority to hear arid decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages, of persons employed or paid in that area. (2) Where contrary to the provisions of this Act any deduc--tion has been made from the . Wages of an employed 'person, say payment of wages has been delayed, such person him--self, or any legal ,practitioner or any official of a registered Trade Union authorised in writing to at on his behalf, or any Inspector under this Actor any other person acting with the permission of the authority appointed under subsection ' (1), may apply to such authority for a direction under sub---section (3) : Provided that every such application shall be presented within six months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, .As the case may be :
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Provided further that any application :nay be admitted after the said period of six months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period. (3) When any application under subsection (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them as opportunity of being heard, and, after such further inquiry (if any) as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authori-- ty may think fit, not exceeding ten times the amount deducted in the former case and not exceeding ten rupees in the latter: Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to- (a) a bona fide error or bona fide dispute as to the amount payable to the employed persona, or (b) the occurrence of an emergency, or the existence of exceptional circumstances, such that the person responsible for the payment of the wages was unable, though exercising reason--able diligence, to make prompt payment, or (c) the failure of the employed person to apply for or accept payment. (4) If the authority hearing any application under this section is satisfied that it was either malicious or vexatious, the authority may direct that a penalty not exceeding fifty rupees be paid to the employer or other person .Responsible for the payment of wages by the person presenting the application. (5) Any amount directed to be paid under this section may be recovered- (a) if the authority is a Magistrate, by the authority as if it were a fine imposed by him as Magistrate, and (b) if the authority is not a Magistrate, by any Magistrate to whom the authority makes application in this behalf, as if it were a fine imposed by such Magistrate. 17.-(1) An appeal against a direction made under sub--section (3) or subsection (4) o,- section 15 may be preferred, within thirty days of the date on which the direction was made before the District Court- (a) by the employer or other person responsible for the payment of wages under section 3, if the total sum directed to be paid by way of wages and compensation exceeds three hundred rupees, or (b) by an employed persons, if the total amount of wages claimed to have been withheld from him or from the unpaid group to which he belonged exceeds fifty rupees, or (c) by any person directed to pay a penalty under sub--section (4) of section 15. (2) Save as provided in subsection (1), any direction made under subsection (3) or subsection (4) of section 15 shall be final. The argument of the learned counsel for the petitioner is that under subsection (3) of section 15, the authority could direct the employer to refund to the employed person, the amount deducted or to pay him his delayed wages together with compensation. Subsection (4) similarly enables the authority to direct the appli--cant to pay to the employer certain penalty if it is satisfied that the application under section 15 was either malicious or vexatious. According to the learned counsel, the appeal is competent only against a direction to pay, made under subsections (3) and (4) of section 15 and not against refusal to make a direction. The learn--ed counsel for the petitioner has relied upon Chimanlal Isharlal Mehta v. Junior Inspector of Factories (AIR 1942 Bom. 273), Khema Nand v. Fast Indian Rly. Administration Divisional Superintendent, Moradabad (AIR 1943 All. 243) and Ram Bharosey and others v. Joivala Prasad (A I
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R 1946 Oudh 148). The ratio of these authorities is that where an application of the employee under section 15 has been rejected it must be taker, that there was no direction and hence no appeal lay against the rejection of the application. But judicial opinion is sharply divided about this question and a contrary view was taken in Amir Muhammad Haji Omar v. Divisional Superintendent, N. W. Railway (AIR 1941 Sind 191) in which it was held that the word "direction" in section 17 should be taken to included a refusal to make a direction. This view was also adopted by the High Court of West Pakistan in Abdul Rashid v. Abdul Rahim (PLD 1959 Lah. 806). It was held that the Sind view was correct and an appeal lies against an order whereby the claim of the employee has been rejected in toto. It was observed that "The right of appeal has been provided to an employee under section ~17(1)(b) if the total amount of wages claimed to have been withheld from him or from the unpaid group to which he belongs, exceeds Rs. 50. In my opinion, it could not have been the intention of the Legislature that the employee will have the right of appeal when his claim has bi-en reduced and not when his claim has been rejected in toto. The word "direction" used in subsection (1) of section 17 is comprehensive enough to include the rejection of 'the claim of an employee in toto. The Payment of Wages Act appears to have been enacted for the benefit of the employees and a speedy and an expensive remedy has been provided for enforcing the claim. I do not think the Legislature could have intended to deprive the labourer of his right of appeal in case his claim was rejected in toto by the authority concerned." I am also of the view that the authorities relied upon by the learned counsel for the petitioner construe sections 15 and 17 to narrowly. ` Subsection (3) of section 15 empowers the Authority to issue direction to pay wages, deducted or delayed, with o without compensation. The power to refuse to issue direction is implicit in the power to issue such direction. It is, therefore, open to an Authority to refuse to exercise the power given to and this refusal to issue a direction amounts to a direction not to pay. Section 17 does not make only the direction to pay as appealable; but by clause (b) of its subsection (1) authorises an employ, I person to file appeal even against the refusal to issue direction and the insertion of this clause (b) shows that the inten--tion of the Legislature was not to confine the right of appeal to a direction or order by the Authority to do something but was also to extend it to a direction or order not to do something. The learned counsel for-the petitioner, however, contended that clause (b) is attracted only if the authority makes a direction to pay a part of the claim. This will be putting to restricted a meaning to clause (b). The point is that the word "direction" in section 17(1) Is not confined only to a direction to pay but also applies to a direction not to pay and an appeal by an employed person can be filed only when there is a direction not to pay may a part or may be the whole amount claimed. There is nothing in clause (b) to justify the Interpretation that the direction not to pay must be only of a part of the claim. The words of clause (b) are quite general and will cover a case even of a direction not to pay any part of the amount claimed provided that the total amount of wages claimed to have been withheld from the employed person or from the unpaid group to which he belonged, exceeds fifty rupees. By the insertion of clause (b) the scope of section 17 has been clearly defined as inclusive of a direction not to pay and that must be given effect to. Even If there had been any ambiguity in the language of section 17 the interpretation in favour of that class for the safe--guard of whose interest this law was enforced, would have been preferable: The appeal was, therefore, competent and the first objection fails. The second contention of the learned counsel for the peti--tioner is that the respondents were suspended not as a measure of punishment but pending permission to dismiss them and the order of suspension was passed under the lawful powers conferred by section 30(2) of the Industrial Disputes Ordinance, 1959 upon the petitioner. There are to provisions dealing with suspension. Under Standing Order No. 13 of the Industrial and Commer--cial Employment
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(Standing Orders) Ordinance 1960, the workman could be suspended for a period not exceeding four days at a the if he was found to be guilty of misconduct. Clause 5 of this standing order provides that an order of suspension shall be in writing and may take effect immediately on delivery to the work--man. It is further provided that such an order shall set out in detail the alleged misconduct and the workman shall be given an opportunity of explaining the circumstances alleged against him if on inquiry the order is confirmed, the workman shall be deemed to have been absent from duty for tae period of suspension and shall not be entitled to any remuneration but if the order i9 res--cinded the workman shall be deemed to have been on duty during the period of suspension. Section 30 of the Industrial Disputes Ordinance, 1959 prohibits alteration of conditions of service to the prejudice of the workman concerned, as also imposition of any punishment on him including his discharge or dismissal, during the pendency of conciliation proceedings in respect of an indus--trial dispute. Subsection (2) of section 30 further bans the dis- -charge or dismissal, for misconduct not connected with the industrial dispute, of an officer of a Trade Union except with the. Previous permission of the Industrial Court but authorises the suspension of such an officer pending the disposal on an application to that Court for such permission. It is not denied that the respondents fell within the category of 'Officers of the Trade Union'. According to the learned counsel for the petitioner, the order of suspension in the present case was not covered by Standing Order No. 13 of the Ordinance of 1960, but was made under the powers given to the employer under section 3C(2) of the Industrial Disputes Ordinance because under the Ordinance of 1960 suspension was a punishment while under section 30(2) of Industrial Disputes Ordinance it was only an interim measure. In this connection, he has referred to Lakshmi Devi Sugar Mills Ltd. v. Pt. Ram Sarup and others (AIR 1957 SC 82), Ruin Ram v. Divisional Superintendent, N. W. Rly., Lahore (AIR 1945 Ph. 298) and M. Noman v. Dacca Improvement Trust and others (PLD 1964 Dacca 671). Mr. Mushtaq Raj, the learned counsel for the respondents, however, denied that the respondents were not suspended under Standing Order No. 13. He contested that the charge-sheet was served upon the respondents under Standing Order No. 13 of the Ordinance of 1960. This was conceded by the learned counsel for the petitioner who explained that the charge-sheet was with a view to impose the penalty of dismissal on the respondents and not for punishing them with suspension. I have gone through the record of this case and find that in the application under section 15 of the Payment of Wages Act, it was admitted by the respondents that they were given a charge-sheet by the Mills Management in December 1962 and then the gate of the mills was closed, it was further averred that with a view to dismiss them, an application was submitted by the mills management to the Indus--trial Court and the respondents were suspended awaiting the decision of that Court. The contention of the petitioner that the suspension of the respondents was ordered by the petitioner under section 30, subsection (2) of the Industrial Disputes Ordinance, 1959, is thus clearly admitted in the application under section 15 of the Payment of Wages Act. Standing Order No. 13 of the Industrial and Commercial Employment (Standing Orders) Ordinance, 1960, undoubtedly deals with disciplinary action for misconduct or for other acts and omissions. Clause (2) of this Standing Order reads as follows :- "A workman may be suspended for a period not exceeding four days at a the or dismissed without notice or any compen--sation in lieu of notice, if he is found to be guilty of misconduct." Clause (3) describes the acts and omissions which shall be treated as misconduct. Clause (4) provides that no order of dismissal can be passed unless the workman concerned is informed in writing of the alleged misconduct and is given an opportunity to explain the circumstances alleged against him. Clause (5) deals with the procedure to be adopted in case an under of sus--pension is passed, and is reproduced here :--
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"(5) An order of suspension shall be in writing and may take effect immediately on delivery to the workman. Such order shall set out in detail the alleged misconduct and the workman shall be given an opportunity of explaining the circum--stances alleged against him. If on enquiry, the order is confirmed, the workman shall be deemed to have been absent from duty for the period of suspension and shall not be entitled to any remuneration for such period. If, however, the order is rescinded the workman shall be deemed to have been on duty during the period of suspension, and shall be entitled to the same wages as he would have received if he had not been suspended: " Clause (6) clarifies that Standing Order No. 13 provides for an order of punishment and lays down that in awarding the punish--ment the gravity of the misconduct and previous record of the workman and any other extenuating or aggravating circumstances shall be taken into account. Under clause (2) of Standing Order No. 13 suspension is one of the penalties for misconduct and manifestly clause (5) deals with the procedure for imposition of this penalty as also with the effect of its confirmation or rescission. Clause (5) as such, therefore, does not apply to an order of sus-- pension passed under any other power or authority by the mana--gement of an industrial concern, although, as would be shown later, the effect of confirmation or rescission of the order provided in that clause is in accordance with general principles. The order of suspension In the present case not having been passed under Standing Order No. 13, clause (4) of that Standing Order as such is not applicable and the suspension of the respondents was not as a measure of a penalty. The Industrial Disputes Ordinance, 1959, does not make provision for payment of wages during the period of suspension. To the absence of any statutory provision, the principle regulating the payment or refusal to. Pay wages for period of suspension in specified circumstances has o be found out from the decided The earliest case appears to be Warburton v. Taff Valley Railway Company ((1902)18 TLR 420). In that case the plaintiff was suspended from April 24 to May 8, when he was dismissed. The plaintiff claimed his wages for the period of suspension on the ground that the course adopted was equivalent to imposing double punish--ment viz., summary dismissal arid the period of suspension without wages. The rule under which the action could be taken was that the company reserved the right to punish any servant, by immediate dismissal, or suspension from duty, for inter alia, misconduct. It was urged that under the rule in question, the company could suspend a man and then dismiss him without paying him wages for the period of suspension. The Lord Chief Justice who gave the judgment (which was concurred by the other to Judges) observed that in his opinion that-was not so and he thought that the plaintiff was in the Company's service during suspension, and when he was dismissed, there was no rule empo--wering their to withhold his wages the case is an authority for the proposition that if suspension Is not a sentence of penalty imposed upon an employee, the service contract subsists during the period of suspension. Another English decision is Hanely v. Pease partners Ltd: ((1915) 1 K B 698). In that case, an employee absented himself from the work for one day without leave of his employer. The employer did not dismiss him, but suspended him from working of the following day and thus prevented him from earning the wages he would have earned on that day had he been allowed to work. The employee made a claim under the Employers and Workmen Act, 187., which was allowed. Lush, J. Observed- "Assuming that there has been a breach on the part of the servant entitling the master to dismiss him, he may if he pleases to terminate the contract, but he is not bound to do it, and if he chooses not to exercise that right but to treat the contract as a continuing contract notwithstanding the misconduct or breach of duty of the servant, then the contract is for all purposes a continuing contract subject to the master's right in that case to claim damages against the servant for his
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breach of contract. But in the present case after declining to dismiss the workman after electing to treat the contract as a continuing one the employers took upon themselves to suspend him for one day in other words to deprive the' workman of his wages for one day, thereby assessing their own damages for the servant's misconduct-at the sum which would be represented by one day's wages. They have no possible right to do that. Having elected to treat the contract as continuing it was continuing. They might have had a right to claim damages against the servant, but they could not justify their at in suspending the workman for the one day and refusing to let him work and earn wages." Rowlatt, J. Agreed with this judgment and observed- "As regards the point of substance it is obvious that I the em--ployer has no implied power to punish the workman by suspend--ing him for a certain period of his employment, the contract subsisting all the the. He has power if the occasion arises but there is no finding in the present case that the occasion had arisen-to dismiss a workman and propose anew employment to begin on the next day which the workman may or may not accept. The facts, however, do not support that view of the case. The appeal should be allowed." The principle decided by this case is that if an employer has a power to dismiss an employee, but has no express or implied power to punish him by suspension the contract of em--ployment subsists and the employee is entitled to claim damages or wages for the period of suspension. The above authority was distinguished in the case of Wallwork v. Fielding and others ((1922) 2 K B 66). In that case, the plaintiff who was a Sergeant of Police was reduced to the rank of…
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