CASE ANALYSIS

CASE LAW: Management of Kairbetta V. Rajamanickam And Anr. (AIR 1963 SC 893)

Author: P Gajendragadkar

Bench: Gajendragadkar, P.B.

FACTS:

On July 26, 1957, Mr. Ramakrishna Iyer, the appellants Manager, was violently
assaulted by some of his workmen as a result of which he sustained serious injuries and
suffered six fractures and hospitalised over a month in Madras.
The appellants Staff who was working in the Kelso Division, were also threatened by the
workmen.
So, three members of the staff wrote to the appellant on July 27, 1957 that their lives were
in danger if they work in the lower division.
They also added that, the workers of lower division would murder them if they work in
lower division.
On receiving this communication from staff, the appellant notified on the same day that
the Kelso Division would be closed from that day onwards until further notice.
The notice referred to the brutal assault on the manager and to the threat held against the
field staff who were reluctant to face the risk of working in the lower division.
So, the Kelso Division continued to be closed until September 2, 1957. On which date it
was opened as a result of conciliation before the labour officer, when the respondents will
give assurance that there would not be any further trouble.
The claim for lay-off is made for the said closed period i.e. 28 July, 1957 to 2 September,
1957.
So, the division was closed and the respondents made a complaint to the labour court
under section 33A (i.e. special provision for adjudication as to whether conditions of
service, etc., changed during pendency of proceedings.) of the Act, in which they
contended that their work had been stopped without any notice or enquiry.
So, they claimed an order of reinstatement with back wages and continuity of service.
Now, appellant raised an preliminary objection that the petition was incompetent because
he contended that it was an lock-out and that it did not amount to any alteration of
conditions or services to the prejudice of the workmen.
 And also this lock-out did not constitute any discharge or punishment by dismissal under
Clause A & B of Section 33 respectively.
Preliminary objection was upheld by the labour court and complaint was dismissed on
November 30, 1957.
Later, the respondents filed an complaint on January 31, 1958, under section 33C of the
Act, stating by declaring a lock-out of a division of the estate and claimed that the
management for their own reasons only did not run the estate, so respondents were
entitled to claim lay-off compensation under section 25-C of the Act.
Against this complaint appellant raised several conditions.
They are:
I. He urged that complaint was incompetent under section 33-C and that the labour
court had no jurisdiction to deal with it.
II. Closure of division was justified and the respondents were not entitled to claim
lay-off compensation.
So, labour court rejected the preliminary objection is to want of jurisdiction and held that
the complaint was competent under section 33C.
So, labour court gave decision in favour of the respondents and directed the appellant to
the lay-off compensation.

Now, the appellant challenged the order of labour court and filed an appeal in Supreme
Court.

ISSUES:

1. Whether the closure of the estate amounts to lock-out or lay-off?

2. Does a lock-out fall under S.2 (kkk) which defines lay-off?
3. Whether the respondents are entitled to claim compensation or not?

LEGAL PROVISION:

Section 2 (i) Lock-Out

Lock-out means the closing of a place of employment, or the suspension of work, or
the refusal by an employer to continue to employ any number of persons employed by
him.
Strike is a weapon in the hands of the labour to force the management to accept their
demands.

Similarly, lock-out is a weapon in the hands of the management to coerce the labour to come
down in their demands relating to the conditions of employment. Lock-out is keeping of
labour away from work by an employer with a view to resist their claim.

There are 4 ingredients of lock-out. They are:

1. (i) Temporary closing of a place of employment by the employer, or

(ii) Suspension of work by the employer, or
(iii) Refusal by an employer to continue to employ any number of persons employed
by him;
2. The above - mentioned acts of the employer should be motivated by coercion;
3. An industry as defined in the Act; and
4. A dispute in such industry.
Section 2(kkk) : Lay-off
The following are sailent features of lay-off. They are:
1. An employer, who is willing to employ, fails or refuses or is unable to provide
employment for reasons beyond his control.
2. Any such failure or refusal to employ a workmen may be on account of:
a) Shortage of coal, power, or raw materials, or
b) The accumulation of stock, or
c) The breakdown of machinery, or
d) Natural calamity, or
e) Any other connected reasons.
3. Workmen must not have been retrenched.

MEANING OF LAY-OFF

Lay-off means putting aside workmen temporarily. The duration of lay-off should not be for
a period longer than the period of emergency. The employer employee relationship does not
come to an end but is merely suspended during the period of emergency.
JUDGEMENT:

The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-This appeal by

special leave is directed against the order passed by the Labour Court at Coimbatore directing
the appellant, the Management of the Kairbetta Estate, Kotagiri, to pay lay-off compensation
to its workmen, the respondents, for the period July 28, 1957 to September 2, 1957. This
order was passed on a complaint filed by the respondents before the Labour Court under Sec.
33C (2) of the Industrial Disputes Act, XIV of 1947

Supreme Court for deciding this appeal assumed the complaint filed by the respondents
under s. 33C was competent and that the Labour Court could have entertained a claim for lay-
off compensation if the respondents were otherwise entitled to it. On that assumption the
Supreme Court raised a question to decide is whether the closure of the appellant's division
during the relevant period which amounts to a lock-out can be said to fall within the
definition of lay-off. SC pointed out that in the earlier complaint by the respondents under
S.33A it has been held by the Labour Court that the closures question was a lock-out and as
such the appellant had not contravened the provisions of s. 33 of the Act. Even in the present
application the respondents have admitted that the said closure is a lock-out but they have
added that a lock-out falls within the definition of lay-off and that is the basis for their claim
for layoff compensation. The question which thus arises before SC for decision is: Does a
lock-out fall under s. 2(kkk) which defines a lay-off?

And also Supreme Court again gave the definition of lock-out and lay-off clearly.

Lock-out can be described as the antithesis of a strike. Just as a strike is a weapon available to
the employees for enforcing their industrial demands, a lock-out is a weapon available to the
employer to persuade by a coercive process the employees to see his point of view and to
accept his demands. In the struggle between capital and labour the weapon of strike is
available to labour and is often used by it, so is the weapon of lock- out available to the
employer and can be used by him. The use of both the weapons by the respective parties
must, however, be subject to the relevant provisions of the Act. Chapter V which deals with
strikes and lock-outs clearly brings out the antithesis between the two weapons and the
limitations subject to which both of them must be exercised.
Thus the concept of lockout is essentially different from the concept of lay-off, and so where
the closure of business amounts to a lock-out underSec.2 (1) it would be impossible to bring
it within the scope of lay-off under Sec. 2(kkk).

Stated broadly lay-off generally occurs in a continuing business, whereas a lock-out is the
closure of the business. In the case of a lay-off, owing to the reasons specified in s. 2(kkk) the
employer is unable to give employment to one or more workmen. In the case of a lock-out the
employer closes the business and locks out the whole body of workmen for reasons which
have no relevance to causes specified in s. 2(kkk).

Thus the nature of the two concepts is entirely different and so are their consequences.

Lastly, Supreme Court held that this lock-out was fully justified and the appellant's Manager
had been violently attacked and the other members of the staff working in the lower division
were threatened by the respondents. In such a case if the appellant locked out his workmen no
grievance can be made against its conduct by the respondents.

In the result the appeal is allowed, the order passed by the Labour Court is set aside and the
complaint filed by the respondents underSec.33C is dismissed. There would be no order as
to costs.

Appeal allowed.

RELEVANT CASE LAWS:

1. Workmen of Itakhoolie Tea Estate v. The Management, 1952 LAC 343

In the instant case it was held that, in case of lock-out the workmen are asked by the
employer to keep away from work, and, therefore, they are not under any obligation to
present themselves for work.
2. M/S. Presi- dency Jute Mills Co. Ltd. v. Presidency Jute Mills Co. Employees
In the instant case the Labour Appellate Tribunal observed that the concept of lockout
is essentially different from the concept of lay-off, and so where the closure of
business amounts to a lock-out under Sec. 2 (1) it would be impossible to bring it
within the scope of lay-off under Sec. 2 (kkk).
CONCLUSION:

According to my observation by reading this case, it was observed by me that the lock-out
means "a refusal by the employer to furnish work to the operatives except on conditions to be
accepted by the latter collectively ".

The liability of the employer in cases of lock-out would depend upon whether the lock-out
was justified and legal or not; but whatever the liability, the provisions applicable to the
payment of lay-off compensation cannot be applied to the cases of lockout. Therefore, we
hold that the lock-out in the present case was not a lay-off, and as such the respondents are
not entitled to claim any lay-off compensation from the appellant.

And both the concepts of lock-out and lay-off were completely different.