C.S. Gopal vs Industrial Tribunal Madras and Another

Rajamannar, C.J.—The management of the Madras Engineering Works which is the applicant before us in this application made a reference

to the Industrial Tribunal for Engineering Firms and Type Foundaries, Madras on 7-7-1949, requesting permission to suspend work for two

months as the firm was suffering loss and needed time to make arrangements for continuing the business. Subsequently, on 27-7-1919, the

management requested permission for permanent closure. There was, however, an experiment to find out if the concern could be successfully

continued and the work was continued till 8-9-1949; but even during this short experimental period loss was incurred. In the circumstances both

parties agreed that the business should be closed. The Tribunal permitted the closure of the work with effect from 9-9-1949. There is now no

dispute in this matter.

What the applicant complains is the direction made by the Tribunal that the management should pay all the workers half a month''s wage for

every year of service pro rata. This payment was directed to be made because the Industrial Tribunal thought that the workers should get some

compensation for the sudden closure of the concern. In the award there is a statement that the manager of the applicant firm did not deny his

liability, but said he was unable to make the payment while the workers said that he was in a position to pay. Mr. Suryaprakasam for the applicant

contended that there was no dispute before the Tribunal as regards the payment of any compensation and that the Tribunal had no jurisdiction to

award such compensation. He also attempted to argue that a reference to the Tribunal itself was unnecessary, but we do not think that he can be

permitted to raise this objection having himself invoked the jurisdiction of the Tribunal.

The language employed by the Tribunal is not particularly apposite, but in substance what it has done does not appear to call for any

interference from us. As a result of the closure of the concern, the workers were thrown out of employment. They were in a sense being compelled

to retire. At the time of retirement, when there is no provision for a Provident Fund, it has become customary that the work-men should get some

payment by way of gratuity or pension. The workmen in fact did ask for a month''s gratuity for every year of service in their memorandum filed on

27-7-1919.

For the management it was pleaded, that it was unable to pay any gratuity because of great loss. It cannot be said that a direction to pay gratuity

is beyond the jurisdiction of the Industrial Tribunal which is called upon to decide the propriety of a closure of the concern on account of the loss

sustained. It is true that neither under the common law, nor under any express provision in the contract between the parties is there any liability on

the part of the management to pay gratuity to the workers on retirement of compulsory discharge. But it is too late in the day to contend that the

Industrial Tribunal cannot go into the question of payments such a bonus or gratuity which though strictly cannot be part of the contract between

the parties, nevertheless have been regarded impliedly as part of the terms of employment in an industrial concern As the learned Judges say in

Baktavatsalu Naidu v. Chrome Leather Co. Ltd., 1949-1 M. L. J. 119

Payments of gratuities, pensions and provident fund may be regarded as deferred wages, payable upon retirement, and affording a means, which

the individual worker may be unable to do for himself of putting by a little to provide for the days when he will no longer be able to work.

What the Tribunal has done in this case is to direct a payment of the kind referred to in that decision. It may not be exactly compensation for any

wrongful act on the part of the management. It really partakes of the nature of a gratuity payable on retirement. In these circumstances the

application must be dismissed; but we make no order as to costs.