Supreme Court of India
INDIAN OXYGEN LTD.versusSTATE OF BIHAR & ORS.
- Citation
- 1990 INSC 39
- Decided
- 16 February 1990
- Disposal
- Appeal(s) allowed
- Bench
- K JAGANNATHA SHETTY
Holding
Section 3 provides a minimum of eight paid holidays, and under Section 13 any more favourable contractual rights are saved, so the employer may incorporate International Labour Day within the existing settlement holidays and is not required to grant it as an extra holiday.
Summary
Indian Oxygen Ltd. had two establishments in Bihar where a 1971 settlement granted 14 paid holidays to factory staff and 18 to office staff. The company sought to treat International Labour Day (1 May), a compulsory holiday under the Bihar Industrial Establishments (National and Festival Holidays and Casual Leave) Act, 1977, as one of the holidays within the settlement, while employees demanded it as an extra holiday. The statutory provision (Section 3) fixes eight minimum holidays (three national, International Labour Day, and four festival holidays) and Section 13 preserves any more favourable rights under a contract or other law. The Supreme Court held that the eight statutory holidays are not in addition to the settlement; if the settlement already provides more than eight holidays, the employer may adjust 1 May within the existing quota. Consequently, the employees were not entitled to an additional holiday, and the appeal was allowed, setting aside the High Court’s decision.
Issues considered
- Whether International Labour Day (1 May) must be granted as an additional paid holiday beyond the holidays already provided under the 1971 settlement.
- Whether Section 3 of the Bihar Industrial Establishments Act, 1977, prescribes a minimum number of holidays that must be added to existing contractual holidays, or merely sets a floor that can be satisfied within the settlement.
Legislation cited
Subjects
paid holidayInternational Labour Daystatutory minimumSection 13settlement agreementindustrial establishmentslabour lawstatutory interpretation
Judgment
INDIAN OXYGEN LTD.
A v.
STATE OF BJHAR & ORS.
FEBRUARY. 16, 1990
B (K. JAGANNATHA SHETTY AND KULDJP SINGH, JJ.]
Bihar Industrial Establishments (National and Festival Holidays \,,
and Casual Leave) Act, 1977/ Bihar Industrial Establishments and Fes-
tival Holidays and Casual Leave Rules, 1979: Section 3 and 13/Rule
3-National and Festival holidays-Whether International Labour Day
(1st May) should be a paid holiday in addition to holidays allowed
C under settlement between employees and management.
The appellant-a Public Limited Company had two establish·
ments in the State of Bihar. The holidays available to the employees of
the appellant-company were provided by the settlement dated 14th
D March, 1971. The settlement provided for a total number of 18 holidays
for office staff and 14 holidays for the factory staff.
There was a dispute between the management and the employees
as to whether the International Labour Day (lst May) which was
declared as a mandatory holiday under the Bihar Industrial Establish·
E ments (National and Festival Holidays and Casual Leave) Act, 1977
should be a paid holiday in addition to the existing holidays. While the
management wanted to declare lst May as holiday by adjusting the
holidays allowed in the settlement, employees wanted it to be given as
an additional holiday. Negotiations having failed and the conciliation
officer being unable to bring about settlement, the statutory authorities
F directed the company to declare lst May as holiday in addition to the
holidays provided for in the sdtlement. The appellant-company filed a
Writ Petition before the High Court, challenging the direction of the
authorities. Dismissing the Writ Petition, the High Court held that the
holiday on Isl May prescribed under the Act being compulsory in
nature, must be in addition to the privileges already granted to the
workmen under the agreement. Hence the appeal by the Company.
G
Allowing the appeal, by special leave, this Court.
HELD: Section 3 'of lite Bihar Industrial Establishments
(l'loational and Festival Holidays and Casual Leave) Act, 1977 provides
H for three· iliational holidays, one International Labour Day and four
402
INDIAN OXYGEN LTD. ,. BIHAR 403
festival holidays. It thus statutorily fixes eight paid holidays; for out of' A
4. them are left to the choice of the management and employees for festival
occasions. These eight holidays, however, are not in addition to the
holidays that are mutually agreed upon in the settlement. They are the
minimum holidays which the employees are entitled to. If the employees
are entitled to more than eight holidays under any contract or usage
applicable to the said establishment, or under any other law for the time B
) being in force, those rights and privileges are saved by Section 13. This
is the requirement of the statute. I407B-D l
In the present case, the festival holidays have not been identified
or specified in the settlement. They have to be selected and declared as
holidays with notice to employees every year. It is only three Natioal c
holidays that have been specified therein in addition to Vishwakarma ·
Puja day for the factory staff and factory general staff. Now, the statute
prescribes the same three National holidays, besides International
Labour Day and four festival holidays. But these 8 holidays are not to
the .exclusion of or in addition to the total number of holidays agreed
upon um!er the settlement. The total number of 14 holidays under the D
settlement as again~! 8 holidays under the statute remains undisturbed
by section 13 of tile Act since it Ii 11111re favourable to the employees than
the rights and privileges conferred by the Act. That being the position,
the management would be entitled to adjust the International Labour
Day as a paid holiday within the fourteen days allowed under the settle-
ment. The demand of the employees that it should he in addition to E
fourteen days has no support either under the settlement or by the
terminology of the statute. I468E-H; 469A]
Tata Oil Mj//s Co. v. K. V. Gopa/an & Ors., (1966] 3 SCR 760,
referred to.
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1130
of 1990.
From the Judgment and Order dated 19.6.1989 of the Patna High
Court in L.P.A. No. 5 l of 1987.
G.B. Pai, S.K. Patri and J.R. Das for the Appellant.
Dr. S.K. Ghose, Mrs. M. Qammaruddin and M. Qammaruddin
(NP) ior the Respondents.
The Judgment of the Court was delivered by H
404 SUPREME COURT REPORTS [1990] 1 S.C.R.
A
K. JAGANNATHA SHETTY, J. Special Leave granted.
Whether International Labour Day (1st May) should be paid
holiday in addition to the existing holidays for the employees of the
appellant Company is the sole question for determination in this
B appeal. The appellant is a public limited company having manufactur-
ing units and selling outlets in the different parts of the country. In the
State of Bihar the company has an establishment at Mona Road,
Burma Mines, Jamshedpur manufacturing Industrial and Medical
Cases and there is another establishment located at Ranchi
manufacturing liquid Oxygen Explosives.
c The holidays available to the employees of the company's
establishment are provided by the settlement dated 14 March 1971.
The settlement provides for a total number of 13 holidays for office
staff and 14 holidays for the factory staff. The relevant portion of the
settlement reads: )
D
"Provision of Settlement dated 14.3.1971
ARTICLE: Leave and Holidays
(c) The number of National/Festival Holidays to which the
E factory staff and factory general staff are entitled will be ,
enhanced·from the present number of 10 to 14 days includ-
ing 3 National Holidays viz. Republic Day, Independence
Day, Mahatma Gandhi's birthday and Viswakarma Puja.
(d) The number of National/Festival holidays for office
F and office general staff will be enhanced from 17 to 18 days
per calendar year including 3 National Holidays viz.
Republic Day, Independence Day and Mahatama Gandhi's
birthday."
In 1977, the State of Bihar enacted the Bihar Industrial
G Establishments (National and Festival Holidays and Casual Leave)
Act, 1971 (Act No. 17 of 1977) (called shortly as the 'Act') making
provisions for National/Festival holidays and casual leave for workers.
We are concerned with Sections 3 and 13 of the Act which must be set
out in full:
H "Section 3
INDIAN OXYGEN LTD. v. BIHAR [JAGANNATI!A SHETTY, J.] 405
National and Festival Holidays: A
(!) Every employee shall be granted following .in each
calendar year in such manner and on such terms and condi-
tions as may be prescribed:
(a) Three National Holidays on the 26th January, 15th B
August and 2nd October.
)
(b) Four other holidays on any festival out of the festivals
mentioned in the schedule .
.(c) International Labour Day on !st May.
c
(2) The Government may add to or exclude a festival from
the Schedule by a notification in the official Gazette and on
publication of such notification, the Schedule shall be
deemed to be amended accordingly."
D
Section 13 of the Act
"Right and privileges under any other law not to be
affected:-Where any employee of an industrial establish-
ment is entitled to such rights and privileges under any other
law for the time being in force or under any contract or E
custom or usage applying to the said establishment, which
are more favourable to him, than any right and privileges
conferred by this Act, nothing contained in this Act shall
affect such rights or privileges."
It will be convenient if at this stage, we also read sub-rule 3 of the F
~ Rule 3(2) of the Bihar Rules framed under Section 14 of the Act:
"Rule 3. National ,Festival Holidays:_
(!) xxx xxx xxx
G
(2) Each employer of an industrial establishment shall at
the beginning of each calendar year or within 60 days from
the date of commencement of work in the case of new
i \ industrial establishments, display a notice asking his
employees to indicate their choice in respect of 4 festival
holidays out of the .Jist of festival holidys mentioned in the H
406 SUPREME COURT REPORTS [1990] 1 S.C.R.
schedule under sub-section ( l)(b) of Section 3 of the Act.··
A
Section 3 makes it mandatory to declare holidays on -bth
January, 15th August, 1st May and 2nd October, besides 4 other holi-
days on festivals out of the festivals mentioned in the schedule. Sub-
rule (2) of rule 3 provides procedure for fixing the four festival holi-
B days at the beginning of each calendar year. The employer shall dis-
play a notice asking his employees to indicate their choice in respect of
~ festival holidays out of the list of festival holidays mentioned in the
schedule to section 3( l)(b ).
Section 13 provides that the rights and privileges of the workmen
under any other law or under any contract or custom or usage applic-
c able to the establishment which are more favourable to the workmen
than that conferred by the Act shall not be affected. Since the
employees of the company's establishment at Jamshedpur were
allowed more favourable holidays every year i.e. 18 (for office staff)
and 14 (for factory staff) against the total of 3 holidays provided for in
D the Act, the company wanted to declare the first May as holiday by
adjusting the holidays allowed in the settlement. The workmen, how-
ever took the stand that the first May should not be adjusted within the
total number of holidays provided in the settlement but should be
given as an additional holiday.
E Negotiations followed but neither side was willing to give up its
claim. The conciliation officer could not bring about settlement. Upon
failure of conciliation, the statutory authorities directed the company
to declare 1st May as holiday in addition to the holidays provided for
in the settlement. The company moved the High Court under Article
226 of the Constitution challenging the direction of the authorities.
F The High Court dismissed the writ petition observing thus:
"Under the existing arrangement, the employees are hav-
ing 14/18 paid holidays in an year and that cannot be
defeated by Section 3 of the Act. But section 13 expressly
provides that if the rights and privileges in respect of paid
G holidays enjoyed by the employees are more favourable
than are prescribed by section 3, their existing rights and
privileges as to the total number of holidays will not be
prejudiced by section 3. it is clear that section 3 is not
intended to prescribe a minimum number of paid holidays
in addition to the existing ones. The holiday on the 1st May
H prescribed under the Act being compulsory in nature,
INDIAN OXYGEN LTD. v. BIHAR [JAGANNATHA SHETTY, J,] 407
therefore, must be in addition to the privileges already A
granted to the workmen under the agreement."
We are afraid ·we cannot agree with this line of reasoning
adopted by the High Court. In fact, the conclusion and the reasoning
seem to be inconsistent with each other. Section 3 provides for three B
National holidays, one International Labour Day, and four festival
holidays. It thus statutorily fixes eight paid holidays, four out of them
) are left to the choice of the management and employees for festival
occasions. These eight holidays however, are not in addition to the
holidays that are mutually agreed upon in the settlement. They are the
minimum holidays which the employees are entitled to. If there is
existing settlement by which the employees are entitled to more than c
eight holidays the management could not take away that rights and
privileges. To protect the employees in such cases the Statute
intervenes by Section 13. If the employees are entitled. to more than
eight holidays under any contract or usage applicable to the said
establishment, or under any other law for the time being in force that
D
rights and privileges are saved by section 13. This seems to be the
requirement of the statute.
The case with not a dissimilar problem was in Tata Oil Mills Co.
v. K. V. Gopalan & Ors., [ 1966] 3 SCR 760. There this Court con-
sidered the scheme and scope of sections 3 and 11 of the Kerala Indust-
E
rial Establishment (National and Festival Holidays, 1958) Act, 1958
which are similar in terms with sections 3 and 13 of the Act with which
we are concerned.
Section 3 of the Kerala Act provides:
"Grant of National and Festival holidays: F
."Every employee shall be allowed in each calendar year a
holiday of one full day on the 26th January, 15th August
and the 1st May and four other holidays each of one whole
day for such festivals as the Inspector may, in consultation
with the employer and the employ~es specify in respect of G
any industrial establishment."
Section 11 of the Kerala Act reads:
"Rights and privileges under other laws, etc. are not H
408 SUPREME COURT REPORTS [1990] 1 S.C.R.
A affected-Nothing contained in this Act shall adversely
affect any rights or privileges which any employee is
entitled to with respect to na.tional and festival holidays on
the date on which this Act comes into force under any other
law, contract, custom or usage, if such right or privileges
B are more favourable to him that those to which he would be
entitled under this Act.,.
Considering the rights of workmen under those provisions
Gajendragadkar, CJ., speaking for this Court observed (at 764):
"If under the existing arrangement the employees are
c entitled to have more than 7 paid holidays, that right will
not be defeated by s. 3, because s. 11 expressly provides
that if the rights or privileges in respect of paid holidays
en joyed by the employees are more favourable than are
prescribed by s. 3, their existing rights and privileges as to
the total number of holidays will not be prejudiced bys. 3.
D
The scheme of s. 11 thus clearly shows that s. 3 is not
intended to prescribe a minimum number of paid holidays
in addition to the existing ones, so that the respondents
should be entitled to claim the seven holidays prescribed by
s. 3 plus the six holidays to which they are entitled under
the existing arrangement."
E
In the present case it may be relevant to note that the festival
holidays have not been identified or specified in the settlement. They
have to be selected and declared as holidays with notice to employees
every year. It is only three National holidays that have been specified
F therein in addition to Vishwakarrna Puia day for the factory staff and
factory general staff. Now, the statute prescribes the same three
National holidays, besides International Labour Day and four festival
holidays. But these 3.holidays are not to the exclusion of or in addition
to the tptal number of holidays agreed upon under the settlement.
Indeed, it could not be so, since three National holidays are common
both in the settlement and statute. The total number of 14 holidays
G under the settlement as ·against 3 holidays under the statute remains
undisturbed by section 13 of the Act since it is more favourable to the
employees than the rights and privileges conferred by the Act. When
thus being the position, the management would be entitled to adjust
the International Labour Day as a paid holiday within the fourteen
H days allowed under,t~e settlement. The.demand of the employees that
INDIAN OXYGEN LTD. v. BIHAR (JAGANNATHA SHETIY, J.] 409
it ·should be in addition to fourteen days has no support either under A
the settlement or by the terminology of the statute .
•
In the result the appeal is allowed. The judgment of the High
Court is set aside. There will be, however, no order as to costs.
N.P.V. Appeal allowed. B
)
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