A

BANK OF INDIA

v.

T.S. KELAWALA AND ORS.

WITH

B S.U. MOTORS PRIVATE LID.

v.

Tiffi WORKMEN EMrLOYED UNDER IT

·'"{

MAY 4, 1990 -...,

c

(KULDIP SINGH AND P.B. SAWANT, JJ.)

Payment

of Wages Act, 1936: Sections 7(2) and 9-Absence from

work or indulging in

go-slow tactics-Pro-rata deduction/non-payment

of wages by employer-Whether justified.

j

D In the former appeal, the appellant is a nationalised Bank. In

1977, some demands for wage revision made by the employees of all

Banks were pending and in support

of their demands, a call for a

country wide strike was given. The appellant-Bank issued a Circular

ou

September 23, 1977 to its managers and agents directing them to deduct

wages

of the employees for the days they go on strike. The

respondent·

E

Unions gave a call for a four hour strike on December 29,

1977. Two

days before the strike, the appellant-Bank issued an Administrative

"' Circular warning the employees that if they participate in the strike,

they would be committing a breach of their contract of service and they

would not be entitled to salary for the full day and they need not report

~

for work for the rest of the working hours on that day. However, the

F

employees went on strike as scheduled, for four hours which included

banking hours

of the public, and resumed duty thereafter. The

appellant-Bank did not prevent them from doing so. The

appellant·

' .;.

Bank hy its circular directed the managers and agents to deduct the full

day's salary of those employees who participated in the strike. On a

writ petition tiled by the respondents, the High Court quashed the said

G

Circular. The Letters Patent Appeal filed by the appellant was dismis·

sed. Hence, the appeal by the Bank.

In the latter appeal, the appellant is a company whose workers

had indulged in "go-slow" in July 1984, thereby bringing down pro-

1'

duction. The workers did not attend to their work and were loitering in

H

the premises and were indulging in go-slow tactics to pressurise the

214

··-.,.

' '>-.

-_,,,,,/·

BANK OF INDIA v. KELAWALA 215

company to concede their demands. The company suspended its opera­

tion by giving a notice of lock out. It did not pay wages to the workers

for July, 1984 on the ground that they did not work during all the

working hours and had not earned their wags. The workers' union filed

a complaint before the Industrial Court complaining that the appellnat­

company had indulged in unfair labour practice and that the lock-out

declared was illegal. The Industrial Court held that the deduction of

wages for July, 1984 on account of the go-slow W31' not justified. It also

declared that.the company had committed an unfair labour practice

by

not paying full monthly wages to the workers and directed the company

to pay the said wages for the month of July, 1984. Aggrieved, the

appellant company has preferred the appeal.

Allowing the appeals, this Court,

HELD:

J.l . There is no doubt that whenever a worker indulges in

a misconduct such as a deliberate refusal to work, the employer can

take disciplinary action against him and impose on him the penalty

prescribed for

it which may include some deduction from his wages.

However, when misconduct

is not disputed but is, on the other hand, '

admitted

and is resorted to on a mass scale such as when the employees

go on strike, legal or illegal, there is no need to hold an inquiry. To

insist on an inquiry even in such cases

is to pervert the very object of the

inquiry.

In a mass action such as strike it is not possible to bold an

inquiry against every employee nor is it necessary to do so unless, of

course,

an employee contends that although he did not want to go on

strike and wanted to resume bis duty, he was prevented from doing so

by the other employees or that the employer did not give him proper

assistance to resume his duty though he had asked for it. That

was

certainly not the situation in the present case in respect of any of the

employees

and that is not the contention of the employees either. It is

true that in the present case when the employees came back to work

after their four-hours strike, they were not prevented from entering the

Bank premises. But admittedly, their attendance

after· the four-hours

strike was useless because there was no work to do during the rest of the

hours.

It is for this reason that the Bank had made it clear, in advance,

that if they went on strike for the four-hours as threatened, they would

not be entitled to the wages for the whole day and hence they need not

report for work thereafter.

Short of physically preventing the emp­

loyees from resuming the work which it was unnecessary to do, the

Bank

had done all in its power to warn the employees of the

consequ­

ences of their action and if the employees, in spite of it, chose to enter

the Bank's premises where they had no work to do, and in fact did not

A

B

c

D

E

F

G

H

A

B

c

D

E

F

G

216

SUPREME COURT REPORTS I 1990] 3 S.C.R.

do any, they did so of their own choice and not according to the require­

ment of the service or at the direction of the Bank. In fact, the direction ·"('

was to the contrary. Hence, the later resumption of work by the

employees was not in fulfihnent of the contract

of service or any

obliga­

tion under it. The Bank was therefore not liable to pay either full day's

salary

or even the pro rata salary for the hours or work that the

employees remained in the Bank premises without doing any work.

It is

not a mere presence of the workmen at the place of work but the work

that they do according to the terms of the contract which consitutes the

·

. ..,

fulfilment of the contract of employment and for which they were

entitled to be paid. [222E-H; 223A-F]

1.2 Although the service regulations do not provide for a situa­

tion where employees on a mass scale resort to absence from duty for

whole day

or a part of the day whether during crucial hours or

otherwise they do provide for treating an absence from duty of an

.1

individual employee as a misconduct and for taking appropriate action

against him for such absence. [2240-E]

2.1. When the contract, Standing Orders, or the service rules/

regulations are silent, but enactment such as the payment of

Wages Act

providing for wage-cuts for the absence from duty is applicable to the

establishment concerned, the wages can be deducted even under the

provisions

of such enactment. [231F]

2.2. The working class has indisputably earned the right to strike

as

an industrial action

after a long struggle, so much so that the relevant

industrial legislation recognises it as their implied right. However, the

legislation also circumscribes this right

by prescribing conditions under

which alone its exercise may become legal. Whereas, therefore, a legal

strike may not invite disciplinary proceedings, an illegal strike may do

so,

it being a misconduct. However, whether the strike is legal or illegal,

the workers. are liable to

lose wages for the period of strike. The liability

to lose wages does not either make the strike illegal as a weapon or

deprive the workers of it. When workers resort to it, they do so knowing

full well its consequences. During the period of strike the contract of

employment continues but the workers withhold their labour.

Conse­

quently, they cannot expect to be paid. [232C-E]

2.3. The contract, which

is this case is monthly, cannot be

sub­

divided into days and hours. If the contract comes to an end amidst a

month by death, resignation

or retirement of the employee, he would

H

not be entitled to the proportionate payment for the part of the month

.\.

'y

BANK OF INDIA v. KELAWALA 217

he served. If the employment-contract is held indivisible, it will be so

for both the parties. There is no difficulty, inequity or impracticability

in construing the contract as divisible into different periods such

as days

and hours for proportionate reimbursement or deduction of wages,

which

is normally done in practice. [232G-H; 233A]

2.4. The contract of employment, Standing

Orders or the service

rules provide for disciplinary proceedings for the lapse on the part of a

particular individual or individuals when the misconduct is disputed.

As things stand today, they do not provide a remedy for

mass-mis­

conduct which is admitted or cannot be disputed. Hence, to drive the

management to hold disciplinary proceedings even in such cases

is

neither necessary nor proper. The service conditions are not expected to

visualise and provide for all situations. When they are silent

on

unex­

pected eventualities, the management should be deemed to have the

requisite power to deal with them consistent with law and the other

service conditions and to the extent it

is reasonably necessary to do so.

The

pro rata deduction of wages is not an unreasonable exercise of

power on such occasions. Whether on such occasions, the wages are

deductible at

all and to what extent will, however, depend on the facts

of each case. Although the employees may strike only for some hours

but there is no work for the rest of the day as in the present case, the

employer may be justified in deducting salary for the whole day. On the

other hand, the employees may put in work after the strike hours and

the employer may accept it

or acqquiesce in it. In that case the employer

may not be entitled to deduct wages

at

all or be entitled to deduct only

for the hours

of strike. If statutes such as the Payment of Wages Act or

the

State enactments like the Shops and Establishments Act apply, the

employer ,-.ay be justified in deducting wages under their provisions.

Even

if they do not apply, nothing prevents the employer from taking

guidance from the legislative wisdom contained in it to adopt measures

on

the lines outlined therein, when the contract of employment is silent

on the subject. [233B-F

l

V. T. Khanzode &

Ors. v. Reserve Bank of India & Anr., [1982] 3

SCR 411; Paluru Ramkrishnaiah & Ors. etc. v. Union of India & Anr.

A

B

c

D

E

F

etc., [1989] l JT 595 and Senior Superintendent of Post Office & Ors. v. G

Izhar Hussain, [1989] 3 JT 4ll, relied on.

Buckingham and Carnatic Co. Ltd. v. Workers of the Bucking-

ham and Carnatic

Co. Ltd., [1953]

SCR 219; V. Ganesan v. The State

Bank of India & Ors., [1981] 1 LLJ 64; State Bwk of India, Canara

Bank, Central Bank etc. & Ors. v. Ganesan, Jambunathan, Venkatara- H

A

B

c

D

218

SUPREME COURT REPORTS [ 1990) 3 S.C.R.

man, B. V. Karnath, V.K. Krishnamurthy, etc. & Ors., [1989] I LU 109;

Sukumar Bandyopadhyyay & Ors. v. State of West Bengal & Ors.,

[1976) IX LIC 1689; Algemene .Bank Nederland, N. V. v. Central

Government Labour Court, Calcutta & Ors., [1978) II LU, i 17; V.

Ramachandran v. Indian Bank, [1979) I LLJ 122; Dharam Singh Rajput

& Ors. v. Bank of India, Bombay & Ors., [1979) 12 LIC 1079; R.

Rajamanickam, for himself and on behalf

of other Award Staff v.

Indian Bank, [1981) II LLJ 367; R.N. Shenoy & Anr. etc. v. Central

Bank of India & Ors. etc., [1984]

XVII LIC 1493; Prakash Chandra

Johari

v. Indian Overseas Bank & Anr., [1986) II LLJ 496; Workmen of

M fs.Firestone Tyre & Rubber Co. of India

(P) Ltd. v. Firestone Tyre &

Rubber Co., [1976) 3 SCR 369; Krishnatosh Das Gupta v. Union of

India & Ors., [1980) 1 LLJ 42; Sant Ram Sharma v. State of Rajasthan &

Anr., [1968) 1SCR111; Roshan Lal Tandon v. Union of India, [1968]

1 SCR 185; Secretary of State for Employment v. A>Sociated Society of

Locomotive Engineers and Firemen and Ors. (No. 2), I 1972] 2 All ER

949; Miles v. Wakefield Metropolitan District Council, [1989] I LLJ 335

and Cutter v. Pwell, [1795) 6 TR 320, referred to.

3. J. There cannot he two opinions that go-slow

is a serious

mis­

conduct being a covert and a more damaging breach of the contract of

employment.

It is an insidious method of undermining discipline and at

the same time a crude device to defy the norms of work. It has been

roundly condemned as an industrial action and has not been recognised

E as a legitimate weapon of the workmen to redress their grievances. In

fact the model standing orders

as well as the certified standing orders of

most

of the industrial establishments define it as a misconduct and

F

provide for disciplinary action for it. Hence, once it

is proved, those

-

guilty of it have to face the consequences which may include deduction (

of wages and even dismissal from service. [237G-H: 238Al

3.2. The proof of go-slow, particularly when it is dispnted,

involves investigation into various aspects such as the nature of the

process of production, the stages of prodnction and their relative

importance, the role

of the

workers engaged at each stage of produc­

tion, the pre-production activities and the facilities for production and

G

the activities of the

workmen connected therewith and their effect on

production, the factors hearing on the average production etc. The

go-slow

further may be indulged in by an individual

work.man or only

some workmen either in one

section or different sections or in one shift

or both shifts affecting the output in

varying degrees and to different

H

extent depending upon the nature of product and the productive pro­

cess. Even where it is admitted, go-slow may in some case present

BANK OF INDIA v. KELAWALA 219

difficulties in determining the actual or approximate loss, for it may

A

~-

have repercussions on production after the go-slow ceases which may be

difficult to estimate. The deduction of wages for go-slow· may, there-

fore, present difficulties which may not

he easily resoluble. When,

therefore, wages

are

sought to he deducted for breach of contract on

account of go-slow, the quantum of deduction may become a bone of

contention in most of the cases inevitably leading to an industrial dis-B·

pule to be adjudicated by_ an independent machinery statutory or

'>

otherwise as the parties may resort to. The simplistic method of deduct-

,. ing uniform percentage of wages from the wages of all workmen

calculated

on the basis of the percentage fall in production compared to

the normal or average production may not always be equitable. It is,

therefore, necessary that in all cases where the factom of

go-slow and /or

c

the extent of the loss of production on account of it, is disputed, there

should be a

proper inquiry on

charges which furnish particulars of the

'

go-slow and the loss of production on that account. The rules of natural

~ justice require it, and whether they have been followed or not will

depend on the facts of each case. [2388-G]

D

3.3. In the instant case, there is a finding recorded hy the lndust-

rial Court that there was a gil-slow resorted to by tbe workmen result-

~

ing in loss of production during the said period. Since the said finding is

not challenged, it is not possible to interfere with it in this appeal.

Though

the appellant is justified in deducting wages for the said period,

.?' in the facts and circumstances of the case it is directed that it will not E

deduct more than 5

per cent of the wages of the workmen for the month

of

July, 1984 when they indulged in go-slow tactics. [239D-F]

..,.

-) M /s. Bharat Sugar Mills Ltd. v. Shri Jai Singh & Ors., [1962] 3

SCR 684; T.S. Kelwala & Ors. v. Bank of India & Ors., [1981] 43 FLR

341 and Apar (Pvt) Ltd. v. S.R. Samant & Ors., [1980] II LU 344, F

referred to.

)..

CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 2581

of 1986.

Appeal by Certificate from the Judgment and Order dated G

15.10.1985 of the Bombay High Court in Appeal No. 547of1984.

__:,, WITH

Civil Appeal No.

855 of 1987.

H

A

B

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D

220 SUPREME COURT REPORTS [ 1990) 3 S.C.R.

From the Judgment and Order dated 8.12.1986 of the Industrial

Court, Maharashtra, Bombay

in Complaint (ULP) No.

1202 of 1984.

Ashok Desai, Attorney General, G.B. Pai, J. Ramamurthy,

Jitendra Sharma, B.N. Dutt, H.S. Parihar, Vipin Chandra, R.F. Nari­

man,

P.H. Parekh, N.K.

Sahu, Mrs. Urmila Sirur and Raj Birbal for

the appearing parties.

The Judgment of the Court

was delivered by SAW ANT, J. These are two appeals involving a common ques­

tion

of law, viz., whether an employer has a right to deduct wages

unilaterally and without holding an enquiry for the period the emp­

loyees go on strike or resort to go-slow. In CA No. 2581of1986we are concerned with the case of a strike while in the other appeal, it is a·case

of a go-slow. By their very nature, the facts in the two appeals differ,

though the principles of law involved and many of the authorities to be

considered in both cases may be the same. For the sake of con­

venience, however,

we propose to deal with each case separately to the

extent of the distinction.

Civil Appeal No. 258 lof 1986

2. The appellant in

this case is a nationalised bank, and respon-

E dents 1 and 2 are its employees whereas respondents 3 and 4 are the

Unions representing the employees of the Bank.

It appears that some

demands for wage-revision made

by the employees of all the banks

were pending at the relevant time, and

in support of the said demands

the All India Bank Employees' Association had given a call for a

countrywide strike. The appellant-Bank issued a circular on Septem-

F

ber 23, 1977 to all its managers and agents to deduct wages of the

employees who would participate in the strike for the days they

go on

strike. Respondents 3 and

4, i.e., the employees' Unions gave a call

for a four-hours strike on December 29,

1977. Hence, the Bank on

December 27, 1977 issued an Administrative Circular warning the

employees that they would be committing a breach of their contract of

G service if they participated

in the strike and that they would not be

entitled to draw the salary for the full day if they did so, and conse­

quently, they need not report for work for the rest of the working

hours on that day. Notwithstanding it, the employees went

oh a four­

hours strike from the beginning of the working hours on 29th

December 1977. There is no dispute that the banking-hours for the

H public covered the said four hours. The employees, however, resumed

BANK OF INDIA v. KELAWALA [SAWANT, J.) 221

work on that day after the strike hours, and the Bank did not prevent

A

r

them from doing so. On January 16, 1978, the Bank issued a Circular

directing its managers and agents to deduct the full day's salary of

those of the employees who had participated

in the strike. The respon-

dents filed a writ petition

in the High Court for quashing the circular.

The petition was allowed. The Bank preferred a Letters

Patent Appeal

in the High Court which also came to be dismissed. Hence, the present B

:irrieal.

). .

"

The High Court has taken the view, firstly, that neither regula-

lions

nor awards nor settlements empowered the Bank to make the

deductions, and secondly,

in justice, equity and good conscience the

....

Bank could not by the dictate of the impugned circular attempt to stifle

the legitimate weapon given by the law to the workers to ventilate c

their grievances by resorting to strike. The High Court further took

,._ the view that since strikes and demonstrations were not banned in the

country and despite the inconvenience that they may cause, they were

recognised as a legitimate form of protest for the workers, the circular

acted as a deterrent to the employees from resorting to a legally recog-

D

nised mode of protest. According to the High Court, the circular even

acted as an expedient to stifle the legitimate mode of protest allowed

and recognised

by law. The deduction of the wages for the day accord-

ing to the Court amounted to unilaterally changing the service condi-

lions depriving the workers of their fixed monthly wages under the

__/ contract of service. The Court also reasoned that under the conditions E

of service, wages were paid not from day to day or hour to hour but as

a fixed sum on a monthly basis. The contract between the Bank and

the workers being not a divisible one,

in

the· absence of a specific term

_,

in the regulations, awards and settlements, the Bank could not uni-

laterally reduce the monthly wage and thus

give the employees lesser

monthly wages than the one contracted. The non-observance

by the F

,f.-

employees of the terms of the contract may give the employer a cause

of action and a right to take appropriate remedy for the breach, but the

employer was not entitled to deduct any part of the wages either on a

pro rata basis or otherwise. The High Court further opined that the

Bank was not without a remedy and the employees cannot hold the

bank to ransom. The Bank could get the four-hours strike declared

G

illegal by recourse to the machinery provided by law or put the erring

workers under suspension for minor misconduct under Regulation

-\..

19. 7, hold an enquiry and if found guilty, impose punishment of warn-

ing, censure, adverse remarks or stoppage of increment for not more

than six months as prescribed by Regulation 19.8. The High Court also

rejected the contention of the Bank that the Bank

was entitled to make H

A

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222 SUPREME COURT REPORTS [1990] 3 S.C.R.

deductions under Section 7(2) of the Payment of Wages Act, 1936 by

holding that the provision enabled the employer to deduct wages only

if the Bank had power under the contract of employment.

4. The principal question involved in the case, according to us,

is, notwithstanding the absence of a term

in the contract of employ­

ment

or of a provision in the service rules or regulations, whether an

employer

is entitled to deduct wages for the period that the employees

refuse to work although the work

is offered to them. The deliberate

refusal to work may be the result of various actions on their part such

as a sit-in or stay-in strike at the work-place or a strike whether legal or

illegal,

or a go-slow tactics. The deliberate refusal to work further may

be legal or illegal as when the employees go on a legal or illegal strike.

The legality of strike does not always exempt the employees from the

deduction of their salaries for the period of strike.

It only saves them

from a disciplinary action since a legal strike

is recognised as a legiti­

mate weapon in the hands of the workers to redress their grievances.

It

appears to us that this confusion between the strike as a legitimate

D weapon

in the hands of the workmen and the liability of deduction of

wages incurred on account

ofit, whether the strike is legal or illegal,

has been responsible for the approach the High Court has taken

in the

matter.

5. It is necessary to clear yet another misconception. There is no

E doubt that whenever a worker indulges in a misconduct such

as a

deliberate refusal to work, the employer can take a disciplinary action

against him and impose on him the penalty prescribed for it which may

include some deduction from his wages. However, when misconduct

is

not disputed but is, on the other hand, admitted and is resorted to on a

mass scale such

as when the employees go on strike, legal or illegal,

F there

is no need to hold an inquiry. To insist on an inquiry even in such

cases

is to pervert the very object of the inquiry. 1n a mass action such

as a strike it is not possible to hold an inquiry against every employee

nor is it necessary to do so unless, of course, an employee contends

that although he did not want to

go on strike and wanted to resume his

duty, he was prevented from doing so by the other employees or that

G

the employer did not give him proper assistance to resume his duty

though he had asked for it. That

was certainly not the situation in the

present case in respect of any of the employees and that

is not the

contention of the employees either. Hence,

in cases such as the pre­

sent one, the only question that has to be considered

is whether, when

admittedly the employees refuse to work

by going on strike, the emp-

H toyer

is entitled to deduct wages for the relevant period or not. We

BANK OF INDIA v. KELAWALA [SAWANT, J.I 223

thOught that the answer to this question was apparent enough am did

A

not require much discussion. However, the question has assumed a

different dimension in the present case because on the facts, it

is

contended that although the employees went on strike only for four

hours and thereafter resumed their duties, the Bank has deducted

wages for

the whole day. It is contended that in any case this was

impermissible and the Bank could at the most deduct only

pro rata B

wages. Normally, this contention

on the part of the workers would be

~· valid. But in a case such as the present one, where the employees go on

·-,,,...

strike during the crucial working hours which generate work for the

rest of the day, to accept this argument is in effect to' nega.te the

purpose and efficacy of the remedy, and to permit its circumvention

.-

effectively. It is true that in the present case when the employees came

back to work after their four-hours strike, they were not prevented

c

from entering the Bank premises. But admittedly, their attendance

after the four-hours strike was useless because there was no work to do

during

the rest of the hours. It is for this reason that the Bank had

made it clear, in advance, that if they went on strike for the four-hours

as

threatended, they would not be entitled to the wages for the whole D

day and hence they need not report for work thereafter. Short of

physically preventing the employees from resuming the work which it

was unnecessary

to do, the Bank had done all in its power to warn the

employees

of the consequences of their action and if the employees, in

spite

of it, chose to enter the Bank'spremises where they had no work

?' to do, and in fact did not do any, they did so of their own choice and E

not according to the requirement of the service or at the direction of

the Bank. In fact, the direction was to the contrary. Hence, the later

resumption

of work by the employees was not in fulfilment of the .. contract of service or any obligation under it. The Bank was therefore

not liable to pay either full day's salary or even the pro rata salary for

the hours of work that the employees remained in the Bank premises F

;_

without doing any work. It is not a mere presence of the workmen at

the place of work but the work that they do according to the terms of

the contract which constitutes the fulfilment of the contract of employ-

ment and for which they are entitled to be paid.

6.

It is also necessary to state that thongh, before the High G

Court, reliance was placed by the Bank on the provisions of Section

7(2)(b)

read with Section 9 of the Payment of Wages Act, 1936 for a

A

right to deduct the wages for absence from duty, there is nothing on

' record to show that the provisions of the said Act have been made

applicable

to the Bank. However, assuming that Act was applicable to

the Bank, we are of the opinion that the relevant discussion of the H

B

c

224 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

High

Court has missed the contentions urged by the Bank on the basis

of the said provisions. What was urged by the Bank was that the said

provisions enabled it to deduct wages for absence from duty. Hence,

even if the Service rules/regulations were silent on the point, the Bank

could legally deduct the wages under the said provisions. The High

Court has reasoned that the power given by the said provisions come

into play only when the employer has power to do so, probably mean­

ing thereby, the power under the Service rules/regulations.

We are

unable to appreciate this reasoning, which to

say the least, begs the

question.

It is, therefore, necessary to point out that if the Act was

applicable, the Bank would certainly have had the power to deduct the

wages under the said provisions

in the absence of any service rule

regulation to govern

th~ situation.

7. Since the admitted position is that the service rules do not

provide for such a sitution, the question

as stated earlier which

requires to be answered in the present case,

is whether there exists an

~

implied right in the employer-Bank to take action as it has done. There

D is no dispute that although the service regulations do not provide for a

situation where employees on a mass scale resort to absence from duty

for whole day or a part of the day whether during crucial hours or

otherwise, they do provide for treating an absence from duty of an

individual employee as a misconduct and for taking appropriate action

against him for such absence. Since the High Court has indicated a

E disciplinary action under the said provision even

in the present

circumstances, we

will also have to deal with that aspect. But before

we do so, we may examine the relevant authorities cited at the Bar.

8. In Buckingham and Carnatic Co. Ltd. v. Workers of the

Buckingham and Carnatic

Co. Ltd., [1953]

SCR 219 the facts were that

F

on 1st November, 1948 the night-shift operatives of the carding and

spinning department of the appellant-Mills stopped work, some at 4

p.m., some at

4.30 p.m. and some at 5 p.m. and the stoppage ended at

8 p.m. in·both the departments, and at 10 p.m. the strike ended comp­

letely. The apparent cause for the strike

was that the management of

the Mills had expressed its inability to comply with the request of the

G workers to declare the forenoon of the

Jst November, 1948 as a holi­

day for solar-eclipse.

On 3rd November, 1948, the management put up

a notice that the stoppage of work on the 1st November amounted to

an illegal strike and a break in service within the meaning of the

Factories

Act and that the management had decided that the workers

who had participated

in the said strike would not be entitled to holi-

H days with pay as provided

by the Act. The disputes having thus arisen,

''r·

~ -

BANK OF INDIA v: KELAWALA [SAWANT, J.] 225

the State Government referred the matter to Industrial Tribunal. The

Tribunal held that the workers had resorted to an illegal strike and

upheld the view

of the management that the

c<'ntinuity of service of

the workers was broken by the interruption caused

by the illegal

strike

and as a result the workers were not entitled to annual holidays with

pay

under Section 49-B(l) of the Factories Act.

The Tribunal, how­

ever, held

that the total deprivation of leave with pay was a severe p>>nish!!'P!lt and reduced the punishment by 50 per cent and held that

the workers would

be deprived of only half their holidays with pay. In

the appeal before the then Labour Appellate Tribunal, the Tribunal

held, among

other things, that what happened on the night of the 1st

November did not amount to a strike and did not cause any interrup­

tion in the workers' service. The Tribunal observed that

"It would be

absurd to hold that non-permitted absence from work even for half an

hour or less in the course of a working day would be regarded as

interruption of service of a workman for the purpose of the said sec­

tion

(i.e., Section 49-B(l) of the Factories Act). We are inclined to

hold that the stoppage of work for the period for about 2 to 4 hours in

the circumstances of the case is not to be regarded as a strike so as to

amount to a break in the continuity of service of the workman con­cerned". In the result, the Tribunal allowed the Union's appeal and

ordered that holidays at full rates as provided for in Section 49-A of

the Factories Act will have to be calculated on the footing that there

was no

break in the continuity of service. This Court set aside the

finding

of the Appellate Tribunal by holding that it could not be

disputed

that there was a ce'ssation of work by a body of persons

employed in the Mills and that they were acting in combination and

their refusal to go back to work was concerted, and the necessary

ingredients

of the definition of

"strike" in Section 2 (q) of the Indust­

rial Disputes Act existed and it was not a case of an individual worker's

failure to

tum up for work. Hence, it was an illegal strike because no

notice had

been given to the management, the Mills being a public

utility industry.

In Secretary of

State for Employment v .Associated Society of

Locomotive Engineers and Firemen and Ors. (No. 2), I 1977] 2 All ER

A

B

c

D

E

F

949, Lord Denning MR observed: · G

" ... It is equa]]y the case when he is employed as one of

many's to work in an undertaking which needs the service

of all. If he, with the others, takes steps wilfully to disrupt

the undertaking to produce chaos so that it

will not run as it

should. then each one who is a party to those steps is

~uilty H

A

B

c

D

226 SUPREME COURT REPORTS [1990] 3 S.C.R.

of a breach of his contract. It is no answer for any one of

them to say 'I am only obeying the rule book', or 'I am not

bound tCN!o more than a 40 hour week'. That would be all

very well if done in good faith without any wilful disrup­

tion

of services; but what makes it wrong is the object with

which it is done. There are many branches of our law when

an act which would otherwise be lawful

is rendered unlaw­

ful by the motive

or object with which it is done.

So here it

is the wilful disruption which is the breach. It means that

the work

of each man goes for naught. It is made of no

effect. I ask: is a man to

be entitled to wages for his work

when he, with others,

is doing his best to make it useless?

Surely not. Wages are to be paid for services rendered, not

for producing deliberate chaos. The breach goes to the

whole

of the consideration. as was put by Lord Campbell

CJ in Cuckson v. Stones, [1858] 1 E & E 248 at 255, (1983-

60) All ER Rep 390 at 392 and with other cases quoted in

Smith's Leading Cases (13th Edn., Vol. 2, p. 48), the notes

to

Cutterv.

Powell, [1795] 6 Term Rep 320, (1775-1802) All

ER Rep 159)".

In Miles v. Wakefield Metropolitan District Council, [1989] I LLJ

335 the facts were that the plaintiff, Miles was the Superintendent­

Registrar in the Wakefield Metropolitan District Council. His duties

E

included performing marriages. As part of trade union action, he

declined to perform marriages on Saturdays

which day was very popu­

lar with marrying couples. However, on that day he performed his

other duties. The Council, not wanting to terminate his services,

imposed a cut in his remuneration. He sued the Council for payment

but failed. He appealed to the Court of Appeal and was successful.

F

The appellate court held that he was a statutory official and there was

no contractual relation and the only action against him was dismissal.

Aggrieved by this appellate decision, the Council went before the

House

of· Lords in appeal. The House of Lords held that the salary

payable to the plaintiff was not an honorarium for the mere tenure of

office but had the character of remuneration for work done. If an

G

employee refused to perform the full duties which could be required of

him under his contract of service, the employer is entitled to refuse to

accept any partial performance. In an action by an employee to

recover his pay, it must be proved or admitted that the employee

worked or was willing to work in accordance with the contract of

employment or that such service as was given by the employee, if

H falling short of. his contractual obligations was accepted by the

BANK OF INDIA v. KELAWALA (SAWANT, J.] 227

employer as sufficient performance 'Jf the contract. In a contract of

A

~ employment wages and work go together. The employer pays for the

work and the worker works for his wages. If the employer declines to

pay, the worker need not work. If the worker declines to work, the

employer need not pay. In an action by a worker to recover his pay, he

must allege and prove that he worked or was willing to work. In the

instant case, the plaintiff disentitled himself to salary for Saturday

B

!'.

morning becuase he declined to work on Saturday morning in accor-

dance with his duty. Since the employee had offered only partial

....

performance of his contract, the employer was entitled, without

terminating the contract

of employment, to decline partial perfor-

mance, and in that case the employee would not be entitled to sue for ,-- his unwanted service.

c

In this connection, Lord Templeman stated as follows:

·~··

"The consequences of counsel's submissions demonstrate

that his analysis

of a contract of employment is deficient. It

cannot be right that an employer should be compelled to D

pay something for nothing whether he dismisses or retains

a worker.

In a contract of employment wages and work go

together. The employer pays for work and the worker

works for his wages.

If the employer declines to pay, the

worker need

not work. If the worker declines to work, the

,.,

employer need not pay. In an action by a worker to recover E

his pay he must allege and be ready to prove that he

worked

or was willing to work .....

"

''i

It may be mentioned here that on the question whether the emp-

Ioyee engaged in some kind

of industrial action can claim wages on the

basis

of quantum meruit, only two of the Law Lords expressed F

)- themselves in favour, while the other three did not want to express any

definite opinion

on the question.

9. Among the decisions of the various

High Courts relied upon

by the parties in support of the respective cass, we find that except for

the decision in

V. Ganesan v. The State Bank of India & Ors., [1981] 1 G

LLJ 64 given by the learned Single Judge of the Madras High Court

and the decision of the Division Bench of the same Court in that

A. matter and other matters decided together in State Bank of India,

Canara Bank, Central Bank

etc. &

Ors. v. Ganesan, Jambunathan,

Venkataraman, B. V. Karnath, V.K. Krishnamurthy, etc. & Ors.,

[1989] 1 LLJ 109, all other decisions, namely, (i) Sukumar Bandyo- H

J3

c

228 SUPREME COURT REPORTS [1990] 3 S.C.R.

padhyyay & Ors. v. State of West Bengal & Ors., [1976] IX UC 1689; (ii)

Algemene Bank Nederland, N. V. v. Central Government Labour

Court, Calcutta & Ors., [1978] II LU, 117; (iii) V. Ramachandran v.

Indian Bank, [1979] 1 LU 122; (iv) Dharam Singh Rajput & Ors. v.

Bank of India, Bombay & Ors., [1979] 12 UC 1079; (v) R.

Rajamanickam, for himself and on behalf

of other Award

Staff v.

Indian Bank, [1981] II LU 367; (vi) R.N. Shenoy & Anr. etc. v.

Central Bank of India & Ors. etc., [1984] XVII UC 1493 and (vii)

Prakash Chandra Johari v. Indian Overseas Bank & Anr., l 1986] II LU

496, have variously taken the view that it is not only pennissible for the

employer to deduct wages for the hours or the days for which the

employees are absent from duty but in cases such as the present, it is

permissible to deduct wages for the whole day even if the absence is for

a few hours.

It is also held that the contract is not indivisible.

Some of

the decisions have also held that the deduction of wages can also be

made under the provisions of the Payment of Wages Act and similar

statutes where they are applicable. It is further held that deduction of

wages in such cases is not a penalty but is in enforcement of the

D

contract of employment and hence no disciplinary proceedings need

precede it.

E

F

G

H

Even in

V. Ganesan v. The State Bank of India & Ors., (supra), it

was

not disputed on behalf of the employees that the employer,

namely, the Bank had no right to deduct pro rata the salary of the

officers for the period

of absence from duty. What was contended

there was that the Bank was not entitled to deduct the salary for the

whole three days on which the employees had staged a demonstration

for a duration of

30 minutes during working hours on two days and for

an hour, on the third day. The learned Judge held that by pennitting

the employees to perfonn their work during the rest of the day and by

accepting such perfonnance the bank must be deemed to have

acquiesced in the breach

of contract by the employees. It is on this fact

that the learned Judge held that the right to deduct salary (obviously

for the whole day) on the principle of

"no work no pay" could be

exercised only when there was a tenn in the contract or when there was

a

statutory provision to that effect. The Division Bench of the said

Court in appeal against the said decision and similar other matters

(supra) confinned the reasoning of the learned Judge' and held that in

the absence of either a tenn in the contract of service stipulating that if

an employee abstains from doing a particular work on a particular day,

he would not be entitled to emoluments for the whole day or in the

absence of a statutory

·provision laying down such a rule, it was

impermissible for

the employer to deduct or withhold the emoluments

t

)..

BANK OF INDIA v. KELAWALA [SAWANT, J.] 229

of the employees even for the hours during which they worked. Having

· accepted the performance of work from the employees for the rest of

the day, the Banks are bound to compensate the employees for the

work performed by them. In that very case, the Court also held, on the

facts arising from

the other matters before it, that the refusal to

perform the clearing-house work can ony be the subject matter of a

disciplinary action

and it cannot straightaway result in the withholding

of the wages for the whole day. Non-signing of the attendance register

and doing work is also work for which the employees should be com­

pensated by payment of remuneration. 10. On the specific question whether the management can take

action in situations, where either the contract, Standing Order or rules

and regulations are silent, both parties relied on further authorities.

In Workmen of Mis. Firestone Tyre & Rubber Co. of India (P)

Limited v. Firestone Tyre & Rubber Co., [1976] 3 SCR 369 on which

reliance was placed on behalf of the workmen it was held that under

the general law of master and servant, an employer may discharge an

employee either temporarily or permanently but that cannot be with­

out adequate notice. Mere refusal or inability to give employment to

the workmen when he reports for duty, on one or more grounds

mentioned in clause (kkk) of Section 2 of the Industrial Disputes Act is

not a temporary discharge of the workmen. Such a power, therefore,

must be found out from the terms of the contract of service or the

Standing Orders governing the establishment. Hence, even for lay-off

of the workmen there must be a power in the management either in the

contract of service or the standing orders governing the establishment.

Ordinarily, the workmen, therefore, would be entitled to their full

wages

when the workmen are laid off without there being any such

power. There was no common law right to lay off the workmen, and,

therefore, no right to deny the workmen their full wages.

In Krishnatosh Das Gupta v.

Union of India & Ors., [1980] 1 LU

42, it was a case of the employees of the National Test House, Calcutta

who had staged demonstration after signing the attendance register to

register their protest against suspension of some of their colleagues.

Though the employees signed the attendance register and attended the

office, they did

no work on the relevant day. As such, a circular was

issued by the Joint Director informing the employees that they would

be considered as

"not on duty". By a subsequent circular the same

Joint Director notified to all departments concerned the decision of

the Cabinet that there shall not be pay for no work. Relying on the said

A

B

c

D

E

F

G

H

230 SUPREME COURT REPORTS (1990] 3 S.C.R.

A

circular the Management of the National Test House effected on a

mass-scale pay-cut from the pay and allowances of the concerned

~

employees. The circular was challenged by the employees by a writ

petition before the

High Court. The High Court held that in order to

deduct any amount from salary, there must be specific rules relating to

the contract

of service of the person concerned.

B

On behalf of the employers, reliance was placed on a decision of

~

this Court in Sant Ram Sharma v. State of Rajasthan & Anr., (1968] 1

SCR 111 for the proposition laid down there.that in the absence of any

statutory rules

or a specific provision in the rules, the Government can

act by administrative instructions. The Court has held there that

though it

is true that the Government cannot amend or supersede

c

statutory rules by administrative instructions, if the rules are silent on

any particular point, Government can fill up the gaps and supplement

the rules and issue instructions not inconsistent with the rules already

framed.

. ..;

D In Roshan Lal Tandon v. Union of India, (1968] 1SCR185, this

Court has stated that although the origin of Government service

is

contractual in the sense that there is an offer and acceptance in

eveiy

case, once appointed to his post or office, the Government servant

acquires a status, and his rights and obligations are no longer deter-

mined by consent

of both parties but by statute or statutory rules

E

which may be framed or altered unilaterally by the Government. In

"

other words, the legal position of the Government servant is more of

status than of contract. The hallmark of status

is the attachment

\o

legal relationship of rights and duties imposed by the public law and

not by mere agreement of the parties. The relationship between the ..

Government and the servant is not like an ordinary contract of service

F

between a master and servant. The legal relationship is something

entirely different, something in the nature of status. .

In V. T. Khanzode & Ors. v. Reserve Bank of India & Anr.,

[ 1982] 3 SCR 411, this Court has reiterated that so long as Staff

Regulations are not framed, it is open to issue administrative circulars

G

regulating the service conditions in the exercise of power conferred

by

Section 7(2) of the Reserve Bank of India Act, 1934 so long as they do

not impinge on any regulations made under Section 58 of the Act. f.

The same view with regard to power to issue administrative

instructions when rules are silent on a subject has been reiterated

by

H the Court in Paluru Ramkrishnaiah &

Ors. etc. v. Union of India &

BANK OF INDIA v. KELAWALA [SAWANT, J.[ 231

Anr. etc., l 1989 J 1 JT 595 and in Senior Superintendent of Pos1 Office &

·'t-Ors. v.IzharHussain, [1989]3JT411.

11. The principles whch emerge from the aforesaid authorities

may now by stated. Where the contract, Standing Orders or the service

rules/regulations are silent on the subject, the management has the

power to deduct wages for absence from duty when the absence

is a

concerted action on the part of the employees and the absence

is not

} disputed. Whether the deduction from wages will be pro rata for the

"< period of absence only or will be for a longer period will depend upon

the facts

of each case such as whether where was any work to be done

in the said period, whether the work was in fact done and whether it

was accepted and acquiesced in, etc.

It is not enough that the employees attend the place of work.

· '>-They must put in the work allotted to them. It is for the work and hot

for their mere attendance that the wages/salaries are paid. For the

same reason, if the employees put in the allotted work but do not, for

some

reason-may be even as a protest-comply with the formalities

such as signing the attendance register, no deduction can be effected

from their wages. When there

is a dispute as to whether the employees

attended the place

of work or put in the allotted work or not, and if

they have not, the reasons therefore etc., the dispute has to be

investigated by holding an inquiry into the matter.

In such cases, no

-" deduction from the wages can be made without establishing the omis­

sion and/or commission on the part of the employees concerned.

When the contract, Standing Orders, or the service rules/regula­

tions are silent, but enactment such as the Payment of Wages Act

providing for wage-cuts for the absence from duty

is applicable to the

establishment concerned, the wages can be deducted even under the

provisions of such enactment.

12. Apart from the aforesaid ratio of the

deeisions and the provi­

sions of the Payment of Wages Act and similar statutes on the subject,

according to us, the relevant provisions of the major legislation

governing the industrial disputes, viz., the Industrial Disputes Act,

1947 also lend their support to the view that the wages are payable pro

rata

for the work done and hence deductible for the work not done.

Section 2 (rr) of the said Act defines "wages" to mean "all remumera-

tion

.......... which would, if terms of employment, expressed or

implied, were fulfilled, be payable to workman in respect of his

employment or work done in such employment

...

" while Section

A

B

c

D

E

F

G

H

A

B

c

D

E

232 SUPREME COURT REPORTS [1990] 3 S.C.R.

2(q) defines "strike" to mean "cessation of work" or "refusal to con­

tinue to work or accept employment by workman". Reading the two -.(

definitions together, it is clear that wages are payable only if the con­

tract

of employment is fulfilled and not otherwise. Hence, when the

workers do not put in the allotted work or refuse to do it, they would

not

be entitled to the wages proportionately.

13. The decisions including the one impugned in

this appca!

which have taken the view which is either contrary to or inconsistent "

with the above conclusions, have done so because they have proceeded v"

on certain wrong presumptions. The first error, as we have pointed out

at the outset, is to confuse the question of the legitimacy of the strike

as a weapon in the workers' hands with that of the liability to lose

wages for the period of strike. The working class has indisputably

earned the right to strike as an industrial action after a long struggle,

so much so that the relevant industrial legislation recognises it

as their

..,(

implied right. However, the legislation also circumscribes this right by

prescribing conditions under which alone its exercise may become

legal. Whereas, therefore, a legal strike may not invite disciplinary 4

proceedings, an illegal strike may do so, it being a misconduct. How-

ever, whether the strike is legal or illegal, the workers are liable to lose

wages for the period of strike. The liability to lose wages does not

either make the strike illegal as a weapon or deprive the workers of it.

When workers resort to it, they do so knowing full well its conse­

quences. During the period of strike the contract of employment

....

continues but the workers withhold their labour. Consequently, they

cannot expect to be paid.

The second fallacy from which the said decisions suffer

is to view

..­

the contract of employment as an indivisible one in terms of the wage-

F period. When it

is argued that the wages cannot be deducted pro rata

for the hours or for the day or days for which the workers are on strike

because the contract, which in this case is monthly, cannot be sub­

divided into days and hours, what

is forgotten is that, in that case if the

contract comes to an end amidst a month

by death, resignation or

retirement of the employee,

he would not be entitled to the propor-

G tionate payment for the part of the month he served. This

was the

inequitous and harsh consequence of the rule of indivisibility of con-

tract laid down

in an English case, Cutter v.

Powell, [1795] 6 TR 320

which was rightly vehemently criticised and later, fortunately not fol-)--..

lowed. If the employment-contract is held indivisible, it will be so for

both the parties. We are also unable to see any difficulty, inequity or

H impracticability in construing the contract as divisible into different

;.

'y

-~

)..

BANK OF INDIA v. KELAWALA [SAWANT, J.J 233

periods such as days and hours for proportionate reimbursement or

deduction of wages, which

is normally done in

practice.

The third fallacy was to equate disputed invididual-conduct with

admitted mass conduct. A disciplinary proceeding is neither necessary

nor feasible in the latter case. The contract of employment,

Standing

Orders or the service rules provide for disciplinary proceedings for the

lapse on the part of a particular individual or individuals when the

misconduct

is disputed. As things stand today; they do not provide a

remedy for mass-misconduct which

is admitted or cannot be disputed.

Hence, to drive the management to hold disciplinary proceedings even

in such cases

is neither necessary nor proper. The service conditions

are not expected to visualise and provide for all situations. Hence,

when they are silent on unexpected eventualities, the management

should be deemed to have the requisite power to deal with them con­

sistent with law and the other service conditions and to the extent it

is

reasonably necessary to do so. The pro rata deduction of wages is not

A

B

c

an unreasonable exercise of power on such occasions. Whether on

such occasions the wages are deductible at all and to what extent will, D

however, depend on the facts of each case. Although the employees

may strike only for some hours but there

i.s no work for the rest of the

day as in the present case, the employer mav be justified

in deducting

salary for the whole day.

On the other hand, the employees may put in

work after the strike hours and the employer may accept it or

acquiesce in it. In that case the employer may not be entitled to deduct E

wages at all

or be entitled to deduct them only for the hours

of strike.

If further statutes such as the Payment of Wages Act or the State

enactments like the Shops and Establishments Act apply, the

employer may be justified

in deducting wages under their provisions.

Even if they do not apply, nothing prevents the employer from taking

guidance from the legislative wisdom contained in it to adopt measures F

on the lines outlined therein, when the contract of employment

is

0ilent on the subject.

14. It is, however, necessary to reiterate that even in cases such

as the present one where action

is resorted to on a mass scale, soine

employees niay not be a party to the action and may have genuinely G

desired to discharge their duties but could not do

so for failure of the

management to give the necessary assistance or protection

or on

account

of other circumstances. The management

will not be justified

in deducting wages of such employees without holding an inquiry.

That, however, was not the

grievance of any of the employees in the

present case, as pointed out earlier. H

A

B

c

D

E

F

G

H

234 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

15. Hence, we are unable to sustain the impugned decision

which

is untenable in law. The decision is accordingly set aside with no

order as to costs.

Civil Appeal No. 855 of 1987

16. The facts in this case are different from those in the earlier

appeal.

In this case, the allegation of the employer Company is that

the workers had indulged in

"go-slow" and as a result there was negli­

gible production in the month of July

1984. The workers did not attend

to their duty and only loitered in the premises and indulged in go-slow

tactics only with a view to pressurise the Company to concede

demands. The Company was, therefore, compelled to suspend its

operation by giving a notice of lock out. According to the Company,

therefore, since the workers had not worked during all the working

hours, they had not earned their wages. Hence, the Company did not

pay the workers their wages for the entire month of July

1984. The

workers'

Union, therefore, filed a complaint before the Industrial

Court under the Maharashtra Recognition of Trade Unions and Pre­

vention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act,

for short) complaining that the Company had indulged in unfair labour

practice mentioned in Item 9 of Schedule 4, from 7th August,

1984

which was the date for payment of salary for the month of July 1984,

and under Item 6 of Schedule 2 of the Act with effect from 14th

August, 1984 since the Company had declared a lock-out from that

day.

It was also alleged that since no specific date of the commence­

ment of the alleged lock-out had been specified, it was an illegal one.

17. It appears that the Company had declared the lock-out by

notice dated July

30, 1984 and the lock out was effected from August

14, 1984. Subsequently, there were negotiations between the Union

and the Company, and a settlement was reached on October 15, 1984

as a result of which the lock out was lifted with effect from October 16,

1984. The terms of the settlement were formally reduced to writing on

November 30, 1984.

18. In this appeal, we are not concerned with the lock-out and

the subsequent settlement. The question that falls for consideration

before us

is whether the Company was justified in denying to the

workers the full monthly wages for the month of July

1984.

On this

question, the Industrial Court accepted the oral testimony of the Com­

pany's witnesses that the workmen had not at

all worked for full eight

hours

on any day in July 1984 and that they were working intermit-

BANK OF INDIA v. KELAWALA ISAWANT, J.] 235

tently only for some time and sitting idle during the rest of the day.

A

'r

On an average the workers had not worked for more than one hour and

15 to 20 minutes per day, during that month. The Industrial Court did

not accept the evidence of the Union's witness that the witness and the

other workmen had worked on all the days during the entire month of

July

1984 because he admitted that after the Company told the

workers that it could not concede to the demands, the workers had B

started staging demonstration. Although the witness denied that from

'

July 3, 1984, the workers started indulging in go-slow, he admitted that

the Company was displaying notices from time to time with effect from

July 4,

1984 alleging that the workers were not giving production and

that they were loitering here and there. According to the Industrial

Court in the

circumstanceo, it did not see any good reason to disbelieve

c

the Company's witnesses. The Court further held that normally in view

of this evidence on record, it would have held that the pro rata deduc-

">-

tion of wages made by the Company for the month of July 1984 would

not amount to an act of unfair labour practice falling under Item 9 of

Schedule IV of the MRTU and PULP Act. However, in view of the

~

two judgments of the Bombay High Court in T.S. Kelwala & Ors. v. D

Bank of India & Ors., (1981] 43 FLR 341 i.e. the one impugned in the

earlier appeal and

Apar

(Pvt) Limitedv. S.R. Samant & Ors., [1980] II

LLJ 344, the Court had to hold that the non-payment of full wages to

the workmen for the month of July 1984 was an act of unfair labour

practice falling under the said provision of the Act. The Court further

, held that admittedly the workers were not piece-rated and there was E

no agreement or settlement allowing the Company to deduct wages on

the ground that they were indulging in "go-slow" or that they had not

given normal production. According to the Court, the remedy

of the ...

Company against the workmen may lie elsewhere. Thus, the Court

taking sustenance from the Bombay High Court Judgments referred to

above held that the deduction of wages during the month of July,

1984 F

on account of the go-slow was not justified, and declared that the

Company had commited an unfair labour practice by not paying full

monthly wages to the workmen, and directed the Company to pay the

said wages for the month of July

1984. It is this order of the Industrial

Court which

is challenged directly in this Court by the present appeal.

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19. Since one of the two decisions of the Bombay High Court on

which the Industrial Court relied

was rendered in another context and

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it has already been discussed in the other appeal, we may refer here

only to the other decision, viz.,

Apar

(Pvt) Ltd. v. S.R. Samant &

Ors., (supra) which is pressed in service before us on behalf of the

workmen. The facts

in that case were that by a settlement dated Au-H

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236

SUPREME COURT REPORTS [1990] 3 S.C.R.

gust 3, 1974 the workmen were allowed increase in the basis wages,

dearness allowance, house rent, etc.

in addition to the production

bonus in terms of a scheme. That settlement

was binding on the parties

upto the end of April 1977. The matters ran a smooth course till

August 1975. However, from September 1975, the Company refused

to pay the production bonus and with effect from

15th October, 1975 it

refused to pay the wages, dearness allowances etc. as per the settle­

ment. On August21, 1975, a notice was put up by the Company stating

that because of the attitude of indiscipline on the part of the workers

and deliberate go-slow tactics resulting

in

low production, the manage­

ment was relieved of its commitments and obligation imposed upon it

by the settlement. A notice

in terms of

Section 9A of the Industrial

Disputes Act,

1947 was also put up indicating a certain scale of wages

to which only the workers would be entitled. These wages were not

more than the wages under the Minimum Wages Act and were even

less than what

was agreed to in the earlier agreement of Januarry 23,

1971. A complaint was, therefore, filed under the MRTU &

PULP Act

before the Industrial Court, and the Industrial Court recorded a

find­

ing that the figures of production produced by the Company before it

related only to few departments.

Out of total of 700 employees who

were working earlier, 116 were retrenched at the relevant time. The

Company's allotment of material, viz., aluminium

was also reduced

from

7390 metric tonnes to 2038 and there was no supply of even that

allotted quantity. The Court further referred to certain inconsistent

statements made by the factory-manager and held that the manage­

ment had failed to discharge the burden of proof of justifying the

drastic reduction

of the wages and other emoluments. The Court

therefore recorded a finding that the Company had engaged

in an

unfair labour practice. Against the said decision, the Company prefer­

red a writ petition before the High Court. The High Court on these

facts held that the wages could be deducted only

in terms of a statutory

provision

or of a settlement. A reduction of wages on the allegation

that the workers in general had resorted to go-slow was wholly

impermissible

in law specially when the workmen were not piece-rated

employees. The High Court referred to the cases where reduction of

wages for absence from duty for striking work

was held as valid such as

Major Kanti Bose &

Ors. v. Bank of India & Ors., (supra);

V. Ramachandran v. Indian Bank, (supra) and Algemene Bank, Neder­

land

v. Central Government Labour Court, Calcuua, (supra) and held

that those cases were distinguishable because they related to absence

from duty and not go-slow.

H In

Mis. Bharat

Sugar Mills Ltd. v. Shri Jai Singh & Ors., [1962) 3

BANK OF INDIA v. KELAWALA [SAWANT, J.] 237

SCR 684 the facts were that certain workmen of the ~ppellant-Mills

resorted to "go-slow". The appellant-Mills held a domestic inquiry

and as a result thereof decided to dismiss 21 workmen, and apply to

the Industrial Tribunal under Section

33 of the Industrial Disputes Act

for permission to dismiss the workmen. Evidence

was laid before the

Tribunal to prove the charge against the workmen. The Tribunal held

that the domestic enquiry was not proper, that the appellant was guilty

of mala fide conduct and victimisation, that except in the case of one

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. workman, the others were guilty of deliberate go-slow and accordingly

granted permission in respect of the one workman only.

It is against

the said decision that the appellant-Mills had approached this Court.

This Court held that the evidence produced before the Tribunal clearly

established that

13 out of the

20 workmen were guilty of deliberate

go-slow and in that connection observed

as follows:

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"Go-slow which a picturesque description of deliberate

delaying of production by workmen pretending to be

engaged in the factory

is one of the most pernicious

practices that discontended or disgruntled workmen some-D

time resort to.

It would not be far wrong to call this dis­

honest. For, while thus delaying production and thereby

reducing the output the workmen claim to have remained

employed and thus to be entitled to full wages. Apart from

this also,

"go-slow" is likely to be much more harmful than

total cessation of work by strike. For, while during a strike E

much of the machinery can be fully turned off, during the

"go-slow" the machinery is kept going on a reduced speed

which

is often extremely damaging to machinery parts. For

all these reasons

"go-slow" has always been considered a

serious type of misconduct."

This Court, therefore, set aside the order of the Tribunal refusing

permission to dismiss

13 of the workmen.

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20. There cannot be two opinions that go-slow is a serious mis­

conduct being a covert and a more damaging breach of the contract of

employment.

It is an insidious method of undermining discipline and G

at the same time a crude device to defy the norms of work.

It has been

roundly condemned

as an industrial action and has not been recog­

nised as a legitimate weapon of the workmen to redress their grie­

vances.

In fact the model standing orders as well as the certified stand-

ing orders of most of the industrial establishments define it

as a mis­

conduct and provide for a disciplinary action for it. Hence, once it is H

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238 SUPREME COURT REPORTS [1990] 3 S.C.R.

proved, those guilty of it have to face the consequences which may

include deduction of wages and even dismissal from service.

But by its very nature, the proof of go-slow, particularly when it

is disputed, involves investigation into various aspects such as the

nature

of the process of production, the stages of production and their

B relative importance, the role of the workers engaged at each stage of

production, the pre-production activities and the facilities for produc­

tion and the activities of the workmen connected therewith and their

effect on production, the factors bearing

on the average production

etc. The go-slow further may be indulged in

by an individual workman

or only some workmen either in one section or different sections or in

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one

shift or both shifts affecting the output in varying degrees and to

different extent depending upon the nature of product and the produc­

tive process. Even where it

is admitted, go-slow may in some case

present difficulties in determining the actual or approximate loss, for it

may have repercussions on production after the go-slow ceases which

may be difficult to estimate. The deduction of wages for go-slow may,

therefore, present difficulties which may not be easily resoluble.

When, therefore, wages are sought to be deducted for breach of con

tract on account of go-slow, the quantum of deduction

may become a

bone of contention in most of the cases inevitably leading to

an indust­

rial dispute to be adjudicated

by an independent machinery statutory

or otherwise as the parties may resort to. It is necessary to emphasize

this because unlike in this case of a strike where a simple measure of a

pro rata deduction from wages may provide a just and fair remedy, the

extent of deduction of wages on account of a go-slow action may

in

some case raise a complex question. The simplistic method of deduct­

ing uniform percentage of wages from the wages of all workmen

calculated on the basis of the percentage

fall in production compared

to the normal or average production

may not always be equitable. It is,

therefore, necessary that

in all cases where the factum of go-slow

and/or the extent of the loss of production on account of

it, is disputed,

there should be a proper inquiry on charges which furnish particulars of

the go-slow and the loss of production on that account. The rules of

natural justice require it, and whether they have been followed or not

G will depend on the facts of each case.

21.

In the present case, the Industrial Court, as pointed out

earlier, has accepted the evidence of the witness of the Company that

the workmen had not worked for

full eight hours on any day in the

month concerned, namely, July

1984, and that they were working

H intermittently only for sometime and were sitting idle during the rest

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l

BANK OF INDIA v. KELAWALA (SAWANT, J.J . 239

of the time. According to him, the workers had worked hardly for an

-"'r-hour and 15 to 20 minutes on an average during the said month. The

· witness had also proauced notices put up by the Company from time to

time showing the daily fall in the production and calling upon the

workmen to resume normalcy. There is further no .dispute that the

copies of these notices were sent to the Union of the workmen as well

l as to the Government Labour Officer. The Industrial Court did not

I", accept the evidence of the workmen that there was no go-slow as

alleged by . the Company. Accordingly, the Industrial Court has

> recorded a finding that the pro rata deduction of wages made by the

Company for the month of July 1984 did not amount to an act of unfair

labour practice within the meaning of the said Act.

It does not further

appear from

the record of the proceedings before the

Industrial Court

that any attempt was made on behalf of the workmen to challenge the

.:,.. figures of production produced by the Company. These figures show

'. that during the entire month of July 1984, the production varied from

~7.06 per cent of 13.9 per cent of the normal production. The Company

has deducted wages on the basis of each day's production. In

view of

the fact that there

is a finding recorded by the

Industrial Court that

there was a go-slow resorted to by the workmen and the production

was

as alleged by the Company during the said period, which finding is

not challenged before us, it is not possible for us to interfere with it in

this appeal. As stated above, all that was challenged was the right of

the employer to deduct wages even when admittedly there

is a

go-slow

__;.-·-which question we have answ~red in favour of the employer earlier.

The question with regard to the quantum of deduction from the wages,

therefore, does not arise before

us for consideration. It is, however, likely that the workmen did not question the figures of production

before the Industrial Court because they were armed with the two

decisions of the High Curt (supra) which according to them, had

negatived the right of the employer to deduct wages even

in such J:.. circumstances. While, therefore, allowing the appeal, we direct that

the appellant will not deduct more than 5 per cent of the wages of the

workmen for the month of July 1984.

22. The appeal is allowed accordingly with no order as to costs.

G.N. Appeals allowed.

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