Labour disputes and the Court's role: What Calcutta HC held [Read Judgment]

The Calcutta High Court recently upheld a Labour Court ruling which found that service charges were payable to the litigant employees under suspension as a part of their subsistence allowance. (The Peerless Inn v. First Labour Court & Ors.).Recalling Justice Krishna Iyer's cautionary note that "Law may be guilty of double injustice when it is too late and too costly" particularly when it comes to labour disputes, the Calcutta High Court also remarked,.To eschew such delay that is deleterious to the Labour, it is the duty of the High Court to only interfere in such matters where there exists gross perversity in findings and/or the High Court finds an egregious error in law. Routine interference by the High Court on mere change of opinion or on a different plausible interpretation should be abstained from, at all costs."Calcutta High Court.The dispute concerned the interpretation of Clause 5 of a settlement agreement between a hotel (the petitioner) and its employees. This Clause spelt out that service charges collected on Food and Beverage sales would be distributed among all the employees and the managerial personnel connected with the hotel functioning. .The question was whether this meant that suspended hotel employees were also eligible to be given a share of these service charges under the agreement. The Labour Court ruled that suspended employees were also entitled to these service charges. The ruling was challenged before the Calcutta High Court by the hotel. .The High Court, in turn, found no reason to interfere with the Labour Court ruling, following an examination of the settlement agreement and provisions of the West Bengal Payment of Subsistence Allowance Act, 1969. Justice Shekhar B Saraf observed, .In fact, keeping in view the general principles of industrial law, I am of the view that treating the term ‘employees’ in the said clause as only employees that are presently working and excluding those who are suspended would amount to a very narrow interpretation of the said clause.Calcutta High Court.He went on to opine, “Excluding suspended employees would be reading into the settlement something that was neither intended by the parties that arrived at the settlement nor what appears on a plain perusal of the clause..The respondents in the matter had relied on various case laws, to recount the law laid down by Justice Krishna Iyer that if there is any doubt on the interpretation of Industrial law, the benefit of reasonable doubt (on law and facts) must go to the weaker section i.e. the labour force. Such interpretation rests on the principles in Part IV of the Constitution.Justice Saraf also noted that an allied view was taken by the Supreme Court in Harjinder Singh vs. Punjab State Warehousing Corporation, wherein it was observed,.“...the Industrial Disputes Act and other similar legislative instruments are social welfare legislations and the same are required to be interpreted keeping in view the goals set out in the Preamble to the Constitution and the provisions contained in Part IV ... which mandate that the State should secure a social order for the promotion of welfare of the people, ensure equality ... and equitable distribution of material resources ... and also ensure that the workers get their dues...”.Justice Saraf proceeded to observe that if there is ambiguity in the language of a beneficial labour legislation, the Courts have to resolve the same in favour of the labour force. However, the same must be done without re-writing and/or doing violence to the provisions of the enactment. As recorded in the judgment, ....in a case of ambiguity in the language of a beneficial labour legislation, the Courts have to resolve the quandary in favour of conferment of, rather than denial of, a benefit on the labour by the Legislature but without re-writing and/or doing violence to the provisions of the enactment.Calcutta High Court.The High Court also pointed out that the settlement agreement in question does not deal with suspended employees anywhere. While this is the case, Justice Saraf opined, ."Treating Clause 5 to be an exception would be akin to marching on a path contrary to the rule of liberal and broad construction that would result in losing sight of the fact that welfare statutes in a welfare State are enacted with a specific goal of promoting general welfare; a goal that cannot be thrown off the cliff in a sea of technicalities. Ergo, I agree with the finding of the said Labour Court that if a benefit has to be curtailed by way of settlement, the same has to be done in an expressed manner.".In view of these observations, the Court dismissed the writ petition..[Read the Judgement here]