PETITIONER:
ALEMBIC GLASS INDUSTRIES LTD. BARODA & OTHERS
Vs.
RESPONDENT:
THE WORKMEN & OTHERS
DATE OF JUDGMENT30/07/1976
BENCH:
SHINGAL, P.N.
CHANDRACHUD, Y.V.
GOSWAMI, P.K.
CITATION:
1976 AIR 2091 1977 SCR (1) 80
1976 SCC (3) 522
ACT
Employees’ State Insurance Act, 1948--S. 61--If debars
grant of sick. leave--If the Act deals with all aspects of
sickness.
HEADNOTE
The workmen’s demand for grant of sick leave and its
accumulation upto a period was rejected by the employers on
the ground that the Employees’ State Insurance Act, 1948
provided more than adequate sickness benefits, and that any
additional benefits would place a financial burden on the
industry and would adversely affect other industries in the
region. The Tribunal, to which the dispute was referred,
partly granted the workmen’s demand.
On appeal to this Court it was contended that s. 61 of
the Employees’ State Insurance Act debarred a person enti-
tled to any of the benefits under that Act from receiving
similar benefit under the provisions of any other Act and as
such the workmen were not entitled to the benefit of sick
leave.
Dismissing the appeals,
HELD: (1) The Employees’ State Insurance Act, does not
deal with the question of sick leave. The scheme of the
benefits admissible under the Act does not cover the work-
men’s demand for sick leave to the extent allowed by the
Tribunal. Section 61 is not applicable because the benefits
granted by the Tribunal are not similar to those admissible
under the Act. [84 C]
The Hindustan Times Ltd., New Delhi v. Their Workmen
[1964] 1 SCR 234 and Technological Institute of Textiles v.
Its Workmen and others [1965] 2 L.L.J. 149 applied.
(2) Sickness benefit under the Act cannot be said to be
adequate, for, it works out to about half the average wage
of a workman which benefit is not admissible for the first
two days of sickness except under the conditions provided in
the Act. A workman is prevented from earning the normal
daily wages during the period of his illness and there is no
justification for the argument that the rate of benefit at
about half his wage, under the Act, should be considered
sufficient so as to deny him the benefit of sick leave
on full emoluments for a period of 7 days when he is certi-
fied by a competent medical officer to be ill for that or a
longer period. Sickness is a serious misfortune to a work-
man for it not only prevents him from earning his normal
wages, but is a drain on his meagre financial resources by
way of additional expenditure on food, nursing and visits to
the medical centre etc. [84 E-F]
(3) The Tribunal could not be said to have erred in
restoring the benefit which the workmen were receiving under
an earlier award. The benefit of sick leave to the employ-
ees in the region was lost when the Act was made applicable
to the region from December 14, 1969. This was obviously
under a mistaken impression. The Act does not deal with
all aspects of sickness benefit and does not provide for the
grant of leave on full emoluments during the period of a
workman’s physical incapacity to earn his normal wages
because of his sickness. [85 B-C]
(4) There is no force in the argument that the Tribunal
had granted additional privilege leave for 7 days under the
garb of sick leave because by its very nature sick leave
would be admissible only in the case of actual sickness
certified by a registered medical practitioner. [86 B]
(5) There is no evidence to show that the benefit had
not been allowed by other companies in the region. The
Tribunal had examined the financial
81
capacity of the companies and had given adequate reasons for
holding that they were in good financial position and could
bear the additional burden. [85 H]
(6) It has not been shown that the awards are illegal or
unjust, or would adversely affect the economy or the indus-
trial peace, or lead to imbalance in the conditions of
service in other industrial establishments. [86 C]
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1951 of 1975.
Appeal by Special Leave from the Award of the Industrial
Tribunal, Gujarat in Reference (II) No. 30 of 1974, pub-
lished in the Gujarat Govt. Gazette dated 23-10-1975 and
Civil Appeal No. 631 of 1976
Appeal by Special leave from the Award of the Industrial
Tribunal, Gujarat in Ref. (II) No. 158 of 1974 published in
the Gujarat Govt. Gazette Part I-L dated 15-4-76.
V.B. Patel, 1. N. Shroff and H.S. Parihar for the appel-
lants (In CA 1951/75).
S.T. Desai, A. P. Hathi, Mrs. S. Bhandare, M. S.
Narasimhan K.C. Sharma, A. K. Sharma and A. K. Mathur for
the appellants in C.A. 631/76.
V.M. Tarkunde, K.L. Hathi and P.C. Kapur for the Re-
spondent in C.A. 1951/75 and Res. 1(1) C.A. 631/76.
S.S. Khanduja, S.K. Jain and Mrs. Laxmi Arvid for Re-
spondent Nos. 1(2) In C.A. 631/76.
The Judgment of the Court was delivered by
SHINGHAL, J.--These two are companion appeals by
special leave. They have been heard together at the in-
stance. of the learned counsel for the parties, and will be
disposed by a common judgment.
Appeal No. 1951 of 1975 is directed against the award
of the Industrial Tribunal Gujarat, dated September 24,
1975, in the dispute between the Alembic Glass Industries
Ltd., Baroda, and its workmen, while appeal No. 631 of 1976
arises out of the Tribunal’s award in the dispute between
Jyoti Limited, Baroda, and its workmen. Speaking broadly,
the dispute in both cases related to the workmen’s demand
for 10 days sick leave, with retrospective effect, and ,its
accumulation over a period of three years i.e. upto 30 days.
The workmen particularly felt aggrieved because by virtue of
the first proviso to section 49 of the Employees’ State
Insurance Act, 1948, hereinafter referred to as the Act,
they were not entitled to the sickness benefit for the first
two days of sickness except in the case of a, spell of
sickness following, at an interval of not more than 15 days,
the spell of sickness for which sickness benefit was last
paid. It was also a grievance that the benefit under the
scheme of the Act was much less than the normal earnings of
an employee and was not beneficial to the workmen.
The demand was resisted by the Companies in both cases.
In the case of the Alembic Glass Industries Ltd., it was
contended that the Act provided more than adequate sickness
benefits, and any additional
82
benefit would place unproductive financial burden on the
industry and would have an all round adverse effect on other
industries. It was also urged that section 99 of the Act
gave wide powers to the Employees’ State Insurance Corpora-
tion to enhance the benefit and it was therefore the proper
authority to examine the demand. The Company also contended
that there was no practice of giving any such sick leave in
the industries in Baroda or in the State of Gujarat. In the
case of Jyoti Ltd. an objection was taken that the reference
was incompetent and the Tribunal had no jurisdiction to
entertain it. It was also pointed out that the benefit of
sick.leave of 7 days per year was initially given to the
workmen under an award dated August 29, 1958 which contained
a specific direction that it would be automatically discon-
tinued when the benefits of the Employees’ State Insurance
scheme would become available to the workmen, and also that
the reasonableness of the demand could not be examined by
the Tribunal. An objection was also taken that the workmen
had benefited a lot under the entire scheme of the Act and
it would not be reasonable and proper to confer any addi-
tional benefit as the demands would place a heavy financial
burden on the Company which it Could not bear. The demand,
according to the Company, would create an absurd position
inasmuch as a worker would receive more wages by remaining
absent than on duty. The Company also pleaded that the
demand for sickness leave could not be granted retrospec-
tively or allowed to accumulate.
While the reference in the case of Jyoti Ltd., Baroda,
was still pending, the Tribunal gave its award dated Septem-
ber 24, 1975 in the case of the Alembic Glass Industries
Ltd. The Tribunal, inter alia, awarded 7 days sick leave
with full pay and dearness allowance to the workmen of that
Company in a year, with the facility of accumulation upto 21
days. It was stated before the Tribunal, on behalf of the
workmen of Jyoti Ltd., that the arguments advanced and the
contentions made in the case of the Alembic Glass industries
may be considered as those made in their case also. The
reference in the case of Jyoti Ltd. proceeded accordingly
and resulted in the award dated March 9, 1976 to which
reference has been made above. The award was on the lines
of the earlier award in the case of the Alembic Glass Indus-
tries case, except .that the direction regarding 7 days sick
leave was given retrospective effect from January 1, 1975.
The Company applied for and obtained special leave to appeal
as aforesaid, with the further direction that the appeal may
be heard along with the identical matter (in the Alembic
Glass Industries case). This is why these two have become
companion appeals and are being disposed of together.
The controversy in these cases is whether the benefits
admissible under the Act in the matter of the grant of sick
leave are such as to justify the rejection of the workmen’s
demand and the setting aside of the Tribunal’s awards in
that respect.
It has been argued by the learned counsel for the appel-
lants that as the benefits of sections 47 and 49 of the Act
are already admissible to workmen in Baroda with effect from
December 14, 1969, and they are quite adequate, the Tribunal
committed an error
83
of law in granting the additional benefits mentioned above.
Reference in this connection has been made to section 61 of
the Act which provides that when a person is entitled to any
of the benefits provided by the Act, he shall not be enti-
tled to receive any similar benefit admissible under the
provisions of any other enactment. The argument was
raised in the Tribunal, but was rejected.
A similar question arose for consideration in The
Hindustan Times Ltd., New Delhi v. Their Workmen(1) and was
answered as follows by this Court,--
"Mr. Pathak has tried to convince us that in
view of the provisions of the Employees’ State
Insurance Act, 1948, no provision need be made
about sickness leave at all. That this Act has
been applied, to the Company and that the workmen
of the Company get the benefit of this Act is not
disputed. It is difficult to see however how the
benefit that the workmen will get under this Act
can affect the question of sickness leave being
provided for the workmen. This Act it has to be
noticed does not provide for any leave to the
workmen on the ground of sickness. It provides in
s. 46(1)(a) for periodical treatment of any insured
person in case of his sickness if certified by a
duly appointed medical practitioner. It is unnec-
essary to mention here the several provisions in
the Act; viz., Sections 47, 48 and 49 which deal
’with the eligibility of workmen for
sickness .benefit and the extent of the benefit
that may be granted. Section 56 of the Act pro-
vides for medical benefits to the insured workmen
or in certain cases to the members of his family.
It appears to us clear however that in providing
for periodical payments to an insured worker in
case of sickness (sickness benefit) or for medical
treatment or attendance to him or the members of
his family, the legislature did not intend to
substitute any of these benefits for the workmen’s
right to get leave on full pay on the ground of
sickness."
The matter came up again for consideration by this
Court in Technological Institute of Textiles v. Its
Workmen and others(2) and it was held as follows
with specific reference to the first proviso to
section 49 of the Act according to which a person
qualified to claim sickness benefit is not enti-
tled to it for the initial waiting period of two
days except in the case of continuous illness of
the nature mentioned therein,--
"With regard to sick leave, the argument on
behalf of the appellant was that benefits were
granted by the Employees’ State Insurance Act,
but .that is not a bar to the demand of the workmen
for sick leave. The reason is that the first
proviso to s. 49 of the Employees’ State
(1) [1964] 1 S.C.R. 234. (2) [1965] 2 L
L.3,149.
84
Insurance Act states that a person qualified to
claim sickness benefit shall not be entitled to the
benefit for an initial waiting period of two days
except in the case of a spell of sickness following
at an interval of not more than fifteen days, the
spell of sickness for which benefit was last paid.
It is apparent that the Employees’ State Insurance
Scheme does not cover all contingencies of sickness
and in any event the first two waiting days are not
covered. In our opinion, the tribunal was, there-
fore, justified in its view that the workmen are
entitled to 7 days’ sick leave with wages on pro-
duction of a medical certificate."
It would thus appear that the Scheme of the benefits
admissible under the Act cannot be said to cover the work-
men’s demand for sick leave to the extent allowed by the
Tribunal. Section 61 of the Act cannot thus be said to be
applicable for the simple reason that the benefits granted
by the Tribunal are not similar to those admissible under
the Act. The Act does not in fact deal with the question of
sickness leave.
The other question regarding the adequacy of the sick-
ness benefit under the provisions of the Act has been exam-
ined by the Tribunal with reference to the reports of the
National Commission of Labour, 1969, the Labour Laws Review
Committee and the Norms Committee of Gujarat State, which go
to show that the benefit cannot b.e said to be adequate for,
it works out to about half the average wage of a workman,
and even that amount is not admissible for the first two
days of sickness except in the case of a spell of sickness
following, at an interval of not more than 15 days, the
spell of sickness for which the sickness benefit was last
paid. It has to be appreciated that a workman is prevented
from earning the normal daily wages during the period of his
illness and there is no justification for the argument that
the rate of benefit at about half his wage, under the Act,
should be considered sufficient so as to deny him the bene-
fit of sick leave on full emoluments for a period of 7 days
when he is certified by a competent medical officer to be
ill for that or a longer period. Sickness is a serious
misfortune to a workman for it not only prevents him from
earning his normal wages, but is a drain on his meagre
financial resources by way of additional expenditure on
food, nursing and visits to the medical centre etc.
It has not been disputed before us that the
"region-cure-industry" basis is suitable in cases like the
present for examining any controversy regarding the work-
man’s demand for additional benefits, but it has been argued
by the learned counsel for the appellants that the award of
the benefit of sick leave to the workers of the two Compa-
nies could not be justified on that basis. We find that the
Tribunal has examined this aspect of the controversy also,
and we have no reason to disagree with the view which it has
taken. As has been stated, the Act came into force in the
region concerned on December 14, 1969, and it has not been
disputed before us that till then it was the practice in the
glass industries to grant sick leave with wages for periods
varying from 6 to 10 days. In fact in the
85
case of the Alembic Glass Industries Ltd., Baroda, the
Tribunal made an award for 7 days sick leave on full pay and
dearness allowance in 1958, subject to the condition that
the benefit would cease to apply when the benefits of the
Act became available to the workmen. The benefit of sick
leave was therefore lost when the Act was made applicable to
the region from December 14, 1969. That was obviously under
a mistaken impression of the sickness benefit which the Act
allowed for, as has been shown, it does not deal with all
aspects of the demand for sickness benefit and does not, at
any rate, provide for the grant of leave on full emoluments
during the period of the workman’s physical incapacity to
earn his normal wages because of his sickness. It there-
fore appears that the Tribunal could not be said to have
erred in restoring the benefit which the workmen were re-
ceiving under the award of 1958, for it was taken away under
the mistaken impression that it had been adequately replaced
by the new provisions on the coming into force of the Act.
The appellants have filed a statement (Ex. 7) containing
information regarding the companies which have provided the
benefit of sick leave to its workmen in the region. It
shows that even though the Act was applicable to the workers
of the Precision Bearings India Ltd., Baroda, Hindustan
Brown Bovari Ltd., Baroda, the Associated Cement Companies
Ltd., and M.S. University Press, Baroda, the benefit of
sick leave has been allowed to the workmen of. those
companies. It is therefore .futile to contend that
the benefit should not be admissible on the ground that it
had not been allowed by other companies in the region. We
also find that such a benefit has been allowed in the case
of glass industries by Shree Vallabha Glass Works Ltd.,
Vallabh Vidyanagar, Ogale Glass Works Ltd., Oglewadi and
Vijay Glass Works, Bombay. Even the Alembic Glass Industries
Ltd. has allowed 6 days sick leave in a year to its employ-
ees in Bangalore and it is permissible to accumulate it upto
12 days in addition to the current year’s leave, under a
settlement dated July 17, 1969, which is being continued
even after the coming into force of the Act. Learned coun-
sel for the appellants have invited our attention to the
case between the Textile Labour Association and the Ahmeda-
bad Millowner’s Association where the demand for sick leave
was refused but, as the Tribunal has pointed out, the demand
there was for a month’s leave every year in addition to 15
days casual leave and pay in lieu of privilege leave. The
Full Bench of the Industrial Court in that case considered
the paying capacity of the mills also, and held that the
additional leave demanded by the workmen would be very much
beyond the paying capacity of the industry. As against
this, the Tribunal has examined the financial capacity of
the two companies in question, and has given adequate rea-
sons for holding that they are in good financial position
and can bear the additional burden of sick leave. Learned
counsel for the appellants have in fact not advanced any
argument to the contrary.
Mr. S.T. Desai has raised the argument, in the case of
Jyoti Ltd., Baroda, that the Tribunal laboured under a
misconception that
86
the sickness benefit would be lost for the first two days of
sickness under the first proviso to s. 49 of the Act, that
the Tribunal should not, in any view of the matter, have
given the benefit of 7 days sick leave, and that the workmen
did not deserve anything more than sickness benefit for
the first two days also. According to him, what has been
awarded by the Tribunal is additional privilege leave for 7
days in the garb of sick leave. The argument is however
futile because, as has been stated, the Tribunal has cor-
rectly examined the controversy and given adequate reasons
for allowing the benefit of 7 days sick leave in the manner
set out in the award. Such a leave could not be categorised
as privilege leave as, by its very nature, it would be
admissible only in the case of actual sickness certified by
a registered medical practitioner.
It would thus appear that the appellants have not been
able to show that the awards in question are illegal or
unjust; or would adversely affect the economy or the indus-
trial peace, or lead to imbalance in the conditions of
service in other industrial establishments. It appears,
however, that it was not necessary, in the circumstances of
the case, to award the benefit of the sick leave with retro-
spective effect from January 1, 1975, in the case of Jyoti
Ltd. Baroda.
The appeals therefore fail and are dismissed except
that the award in the case of Jyoti Ltd., Baroda, is made
effective from the date of its commencement. The appellant
companies shall pay to the workmen’ the costs of these
appeals; one set of counsel’s fees.
P.B.R. Appeals
dismissed.
87