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Judgment
Rajagopalan Ayyangar, J.—This is an application under Article 228 of the Constitution for the issue of a writ of certiorari to quash the order
of the Labour Appellate Tribunal in App. No. III-381 of 1954 dated 20-8-1955, to the extent of the direction for the additional payment by the
petitioner to the workers concerned on the basis of inclusion of dearness allowance as part of the wages in the calculation of retrenchment
compensation.
2 There is not much dispute about the facts at least at this stage. The petitioner is a cinema studio company. On 10-9-1953 it retrenched 54 of its
workers on the ground that they were surplus for its requirements. This was contested by the workmen which resulted in an industrial dispose. This
dispute was referred to the Industrial Tribunal of Madras for adjudication. The Tribunal after enquiry passed its award on 6-7-1954. It held that,
the management were justified in retrenching 50 of the workers and as regards the other four the management themselves agreed to reinstate them
in service.
The nest question which the Tribunal was called upon to consider was in regard to the compensation payable to the retrenched workers. The
management agreed to pay retrenchment compensation on the basis of 15 days'' wages for each year''s-completed service. In doing so, they
calculated the wages payable as the'' basic wage exclusive of the, dearness allowance. They filed a list or tabulated statement giving these figures
marked as Ex. M. 3-in the case. Before the Tribunal the Union which appeared on behalf of the workers did not contest, this basis of
compensation. The only objection which it raised to this Ex. M. 3 was that the compensation was calculated on the basis of a reduced salary and
that a larger-scale of salary paid at earlier periods ought to have been taken into account. The Tribunal in its order states;
The details in other aspects are admitted by the Unions to be correct"",
which I take to mean that there was no dispute as regards the correctness of the compensation except in regard to the one matter which I have
mentioned. An award was passed by the Tribunal granting compensation on the basis of M. 3.
The workers filed an appeal from this award to the Labour Appellate Tribunal u/s 7 , Industrial Disputes (Appellate Tribunal) Act. In the
grounds of appeal the Union raised two points, one was that the wages on the basis of which retrenchment compensation was to be computed
should have included the dearness allowance. They also called in aid the definition of ""wages"" in Section 2 (rr) introduced by the Amending Act 43
of 1953-The amending Act made provision for regulating the conditions on which workmen could be retrenched and the compensation payable to
them In making these provisions the basis of computation of wages was defined to include dearness allowance. This enactment was on the terms of
Section 1(2) of the Act to be in force from 24-10-1953 notwithstanding that it received the assent of the President on 24-12-1953. The Union in
its grounds of appeal claimed that under the provision introduced by this Amending Act 43 of 1953 the workers were entitled to retrenchment
compensation on the definition of ""wages"" as found in Section 2 (rr). The Appellate Tribunal upheld these contentions and giving retrospective
effect to the statutory provision introduced in 1953, allowed the appeal and granted retrenchment compensation by including dearness allowance
as part of the wages. It is this order of the Labour Appellate Tribunal that is challenged as erroneous and without jurisdiction by the learned
counsel for the petitioner,
Two points were urged in support of this petition. The first was that as the Union had agreed to the computation of retrenchment compensation
based on wages not including dearness allowance, it was not open to it to; contend before the Labour Appellate Tribunal that it should be on any
other basis. Secondly that the Tribunal was in error in considering that the Amending Act of 1953 governed the relationship between the parties or
could be availed of to determine the amount of retrenchment compensation payable to the workers. In my opinion, the counsel for the petitioner is
well-founded in both these arguments. I have extracted the relevant portion, of the Tribunal''s order which would show that the workers had
agreed to the calculation of the compensation on the basis of wages which did not include dearness allowance. In the face of this agreement it was
not open to them to urge the contention they put forward before the Labour Appellate Tribunal and the Tribunal erred and acted without
jurisdiction in acceding to this argument of the Union. On the second point, even the learned counsel for the respondent does not seek to support
the order of the Tribunal that the amending Act was retrospective so as to govern the relationship between the parties. The retrenchment was
effected on 10-9-1933 and the basis of compensation can only be that which was the law on that date. Surely Act 43 of 1953 was not applicable
then and so could not govern the computation of retrenchment compensation become payable in September 1953.
The rule is, therefore, made absolute. The writ petition is allowed and the order of the Tribunal is quashed to the extent prayed for. There will be
no order as to costs.