LAY-OFF VS LOOK-OUT: Management of Kairbetta V. Rajamanickam And Anr. (AIR 1963 SC 893)

FACTS:

 On July 26, 1957, Mr. Ramakrishna Iyer, the appellant’s Manager,

was violently assaulted by some of his workmen as a result of which he sustained serious injuries and suffered six fractures and hospitalized 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 werein danger if they work in the lower division.

 They also added that, the workers of lower division would murder them if they work inlower division.

 On receiving this communication from staff, the appellant notified on the same day thatthe 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 thefield 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 itwas opened as a result of conciliation before the labour officer, when the respondents willgive 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 courtunder section 33A (i.e. special provision for adjudication as to whether conditions ofservice, etc., changed during pendency of proceedings.) of the Act, in which theycontended 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 becausehe contended that it was an lock-out and that it did not amount to any alteration ofconditions or services to the prejudice of the workmen.

 And also this lock-out did not constitute any discharge or punishment by dismissal underClause 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 a 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. He urged that complaint was incompetent under section 33-C and that the labor court had no jurisdiction to deal with it.

II. Closure of division was justified and the respondents were not entitled to claimlay-off compensation.

 So, labour court rejected the preliminary objection is to want of jurisdiction and held thatthe complaint was competent under section 33C.

 So, labour court gave decision in favour of the respondents and directed the appellant tothe lay-off compensation.

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

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?

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 1947Supreme 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 underS.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 labor the weapon of strike is available to labor 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 wherethe closure of business amounts to a lock-out underSec.2 (1) it would be impossible to bringit 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 theclosure of the business. In the case of a lay-off, owing to the reasons specified in s. 2(kkk) theemployer is unable to give employment to one or more workmen. In the case of a lock-out theemployer closes the business and locks out the whole body of workmen for reasons whichhave 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 Managerhad been violently attacked and the other members of the staff working in the lower divisionwere threatened by the respondents. In such a case if the appellant locked out his workmen nogrievance 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 respondent’s under 

Sec.33C is dismissed. There would be no order asto costs.Appeal allowed.

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.

Author:

Advocate Muskan Chauan

PH/2553/2022