{"id":225870,"date":"2020-02-18T14:12:02","date_gmt":"2020-02-18T08:42:02","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=225870"},"modified":"2020-02-21T12:43:25","modified_gmt":"2020-02-21T07:13:25","slug":"cal-hc-labour-dispute-duty-of-hc-to-only-interfere-in-such-matters-where-there-an-egregious-error-in-law","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2020\/02\/18\/cal-hc-labour-dispute-duty-of-hc-to-only-interfere-in-such-matters-where-there-an-egregious-error-in-law\/","title":{"rendered":"Cal HC | Labour Dispute| Duty of HC to only interfere in such matters where there is an egregious error in law"},"content":{"rendered":"

Calcutta High Court: <\/strong>Shekhar B. Saraf, J., while dismissing the present petition and upholding the interpretation placed by the Labour Court with regard to the \u201cService\u201d Charge\u201d<\/strong>, quoted prose by V.R. Krishna Iyer, J., —<\/p>\n

\u201cThe Constitution of India is not a non-aligned parchment but a partisan of social justice with a direction and destination which it sets in the Preamble and Art. 38, and so, when we read the evidence, the rulings, the statute and the rival pleas we must be guided by the value set of the constitution. We not only appraise Industrial Law from this perspective in the disputes before us but also realize that ours is a mixed economy with capitalist mores, only slowly wobbling towards a socialist order, notwithstanding Sri Garg\u2019s thoughts. And, after all, ideals apart, \u201claw can never be higher than the economic order and the cultural development of society brought to pass by that economic order.\u201d<\/em><\/p>\n

Coming to the present application, filed which is with respect to a dispute between the Management and Labour, wherein Management assailed an award passed by Labour Court.<\/p>\n

Issue before the Labour Court was:<\/p>\n

\u201cInterpretation of Clause 5 of the \u2018Settlement Agreement\u2019 that had been reached between the petitioner company and the employees of the petitioner company in reference under Section 36 A of the Industrial Disputes Act, 1947.\u201d<\/em><\/p>\n

Contentions<\/strong><\/p>\n

Counsel for the petitioner company, Ranjay De submitted that the service charge that is collected on Food and Beverage sales was decided to be disbursed amongst all the employees and the managerial personnel connected with the hotel functioning.<\/p>\n

Adding to his submissions, he stated that, Service charge is only payable to personnel who are functioning in the hotel, and not to personnel that have been suspended.<\/strong><\/p>\n

There was no question of service charge being treated as part of wages.<\/p>\n

Placing reliance on Section 2(rr) of West Bengal Payment of Subsistence Allowance Act, 1969 counsel for the petitioner canvassed the argument that unless the employee was functioning, he could not be entitled to any service charge.<\/p>\n

Bank of India v. T.S. Kelawala, <\/em>(1990) 4 SCC 744<\/a>:<\/p>\n

Petitioner\u2019s counsel placed reliance on the above case to buttress the argument that wages are payable to the employees only upon fulfilment of the contract and not otherwise.<\/p>\n

State of Punjab v. Jaswant Singh Kanwar, <\/em>(2014) 13 SCC 622<\/a>:<\/p>\n

Supreme Court held that a person, who is suspended would be debarred from any privilege.<\/p>\n

\u201c…increment is an incidence of employment and an employee gets an increment upon working the full year and drawing full salary, and therefore, if he is under suspension, no such increment can be given to him.\u201d<\/p>\n

With reference to the present application and decision of Labour Court, the counsel submitted that:<\/p>\n

Labour Court erred in law in holding that the service charge was payable to employees that were under suspension. Interpretation of the clause \u2018service charge\u2019 collected on Food and Beverage sales will be disbursed amongst all employees including managerial personnel connected with the hotel functioning by the tribunal is absolutely incorrect, as the Tribunal has held that the term \u2018connected with the hotel functioning<\/strong>\u2019 is redundant.<\/p>\n

Counsel appearing on behalf of the Union of Employees, argued that there was no scope for interference by the High Court to Labour Court\u2019s Order. \u00a0He further submitted that, Supreme Court in several of its decisions has held that,<\/p>\n

\n

\u201c…beneficial interpretation is required to be given in favour of the employees, wherein settlement has been reached between the management and the workers.\u201d<\/strong><\/span><\/p>\n<\/blockquote>\n

Justice V.R. Krishna Iyer<\/strong><\/span> in KCP Employees\u2019 Assn. v. Management of KCP Ltd, <\/em>(1978) 2 SCC 42<\/a> stated that,<\/p>\n

\u201c…In Industrial Law, interpreted and applied in the perspective of Part IV of the Constitution, the benefit of reasonable doubt on law and facts, if there is such doubt, must go to the weaker section, that is labour.\u201d<\/p>\n

Justice Ashok Ganguli<\/strong><\/span> in Harjinder Singh v. Punjab State Warehousing Corpn., <\/em>(2010) 3 SCC 192<\/a>, held that,<\/p>\n

\u201c…it is the Court\u2019s duty to interpret statute with social welfare benefits in such a way as to further the statutory goal and not to frustrate the same.\u201d<\/p>\n

Conclusion<\/strong><\/p>\n

To get a clear understanding of the issue at present, Bench has quoted Clause 5:<\/p>\n

\u201c5. SERVICE CHARGE <\/strong><\/em><\/p>\n

It is agreed between the parties that effective 1st October 1994, 70% of Service Charge collected on Food & Beverage sales will be disbursed amongst all employees including managerial personnel connected with the hotel functioning. The Industrial Trainees and the hotel operation trainees coming for on the job training from different Institutes\/source will not get share of service charge. The tipping zone employees will get 50% less service charge than the amount payable to the non-tipping zone employees. From 1st October 1996 disbursement of service charge will be 75%.\u201d<\/em><\/p>\n

Court while concluding its decision, stated that, it is clear that the service charge is not a part of the exclusive clause. It further appears that the same may not be part of the inclusive clause either as the service charge is neither an allowance or is it a payment for house accommodation\/travelling concession\/commission payable.<\/p>\n

\u201cService charge comes within the first portion of Section 2(rr) of the West Bengal Payment of Subsistence Allowance Act, 1969 wherein it is stated that \u2018wages\u2019 means all remuneration capable of being expressed in terms of money.\u201d<\/strong><\/p>\n

High Court while reasoning and upholding the Labour Court\u2019s decision stated that the term \u2018hotel functioning\u2019 would only apply to the managerial personnel due to the fact that the settlement agreement is between the management and the employees.<\/p>\n

With regard to service charge, agreement clarifies that the managerial personnel connected to the hotel functioning shall also obtain a share as they are actively involved in the \u2018service\u2019 being provided to the customers.<\/p>\n

\u201cTreating the term \u2018employees\u2019 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.\u201d<\/strong><\/span><\/p>\n

Hence, to eschew 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. [Peerless Inn v. First Labour Court, 2020 SCC OnLine Cal 335<\/b><\/a>, decided on 10-02-2020]<\/p>\n","protected":false},"excerpt":{"rendered":"

Calcutta High Court: Shekhar B. 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under Section 33(2)(b) of the Industrial Disputes Act, 1947 cannot adjudicate on the merits of the finding in the domestic enquiry or on the penalty, as it has no jurisdiction to adjudicate on the merits of the findings in a domestic enquiry. Those questions have to be adjudicated\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Section 33 ID Act res judicata","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/Section-33-ID-Act-res-judicata.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/Section-33-ID-Act-res-judicata.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/Section-33-ID-Act-res-judicata.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/Section-33-ID-Act-res-judicata.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":315022,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/02\/22\/del-hc-upholds-labor-court-award-hospital-is-an-industry-under-industrial-disputes-act-directs-continous-service-of-workman-legal-news\/","url_meta":{"origin":225870,"position":1},"title":"\u2018Hospital deemed an \u2018Industry\u2019 under Industrial Disputes Act\u2019; Delhi High Court affirms Rights of a \u2018Workman\u2019 in Hospital Dispute","author":"Arunima","date":"February 22, 2024","format":false,"excerpt":"Delhi High Court upholds Labour Court's finding, affirming Hospital as an Industry under the Industrial Disputes Act, 1947 validating State Government's referral authority, and confirming the continuous service of the workman.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Delhi High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":340278,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/02\/01\/claim-under-s-33-c-2-id-act-limited-to-pre-exiting-right-benefit-gujarat-hc\/","url_meta":{"origin":225870,"position":2},"title":"\u2018Claim under S. 33-C(2) ID Act limited to pre-exiting right\/benefit\u2019; Gujarat HC upholds Labour Court\u2019s rejection of workman\u2019s claim","author":"Editor","date":"February 1, 2025","format":false,"excerpt":"The Court stated that there was no award passed by the Labour Court directing the respondent to pay the benefits claimed by the petitioner.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Gujarat High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Gujarat-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Gujarat-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Gujarat-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Gujarat-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":242574,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/01\/22\/guj-hc-dismissing-the-argument-of-arrangement-being-a-contractual-set-up-with-no-industrial-dispute-as-such-court-upholds-reinstatement-of-the-workman-granting-compensation-against-back-wages\/","url_meta":{"origin":225870,"position":3},"title":"Guj HC | Dismissing the argument of arrangement being a Contractual set up with no Industrial dispute as such, Court upholds reinstatement of the workman granting compensation against back wages","author":"Editor","date":"January 22, 2021","format":false,"excerpt":"Gujarat High Court: A.P. Thaker J., upholding the decision of the Labour Court with respect to reinstatement of the workman, directed the employer to pay compensation of Rs 55000 as a lump sum against prayer for 100% back wages. Being aggrieved with the award dated 23-04-2009 passed by the Labour\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/12\/1200px-Gujarat-High-Court-1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/12\/1200px-Gujarat-High-Court-1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/12\/1200px-Gujarat-High-Court-1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/12\/1200px-Gujarat-High-Court-1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/12\/1200px-Gujarat-High-Court-1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":349487,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/06\/03\/latest-high-court-cases-service-labour-laws\/","url_meta":{"origin":225870,"position":4},"title":"Cases Reported in HCC | Latest High Court Cases on Service and Labour Laws","author":"Niyati","date":"June 3, 2025","format":false,"excerpt":"Explore the latest Cases reported in SCC\u2019s High Court Cases (HCC)Volume on Industrial Dispute, Transfer of Employees, Departmental Enquiry, Compulsory Retirement and much more.","rel":"","context":"In "Cases Reported"","block_context":{"text":"Cases Reported","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casesreported\/"},"img":{"alt_text":"Latest High Court Cases on Service and Labour Laws","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/06\/shared-image-2025-06-03T135833.906.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/06\/shared-image-2025-06-03T135833.906.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/06\/shared-image-2025-06-03T135833.906.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/06\/shared-image-2025-06-03T135833.906.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":236399,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/09\/28\/bom-hc-will-strict-rules-of-pleadings-as-applicable-for-suits-filed-under-cpc-be-applicable-under-industrial-disputes-act-as-well-hc-elaborates\/","url_meta":{"origin":225870,"position":5},"title":"Bom HC | Will strict rules of pleadings as applicable for suits filed under CPC be applicable under Industrial Disputes Act as well? HC elaborates","author":"Bhumika Indulia","date":"September 28, 2020","format":false,"excerpt":"Bombay High Court:\u00a0Anil S. Kilor, J., reiterated that the strict rule of pleadings as applicable to civil suits is not applicable under the Industrial Disputes Act, 1947. The petitioner's application under Section 33-C(2) of the Industrial Disputes Act, 1947 was rejected by the Labour Court, Nagpur and the Judgments and\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/225870","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=225870"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/225870\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/52131"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=225870"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=225870"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=225870"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}