1972 PLP 448 (PLC)

(2) Save as provided in subsection (1), any direction made under subsection (3) or subsection (4) of section 15 shall be final. The argument of the learned counsel for the petitioner is that under subsection (3) of section 15, the authority could direct the employer to refund to the employed person, the amount deducted or to pay him his delayed wages together with compensation. Subsection (4) similarly enables the authority to direct the appli cant to pay to the employer certain penalty if it is satisfied that the application under section 15 was either malicious or vexatious. According to the learned counsel, the appeal is competent only against a direction to pay, made under subsections (3) and (4) of section 15 and not against refusal to make a direction. The learn ed counsel for the petitioner has relied upon Chimanlal Isharlal Mehta v. Junior Inspector of Factories (A I R 1942 Bom. 273), Khema Nand v. Fast Indian Rly. Administration Divisional Superintendent, Moradabad (A I R 1943 All. 243) and Ram Bharosey and others v. Joivala Prasad (A I R 1946 Oudh 148). The ratio of these authorities is that where an application of the employee under section 15 has been rejected it must be taker, that there was no direction and hence no appeal lay against the rejection of the application. But judicial opinion is sharply divided about this question and a contrary view was taken in Amir Muhammad Haji Omar v. Divisional Superintendent, N. W. Railway (A I R 1941 Sind 191) in which it was held that the word "direction" in section 17 should be taken to included a refusal to make a direction. This view was also adopted by the High Court of West Pakistan in Abdul Rashid v. Abdul Rahim (P L D 1959 Lah. 806). It was held that the Sind view was correct and an appeal lies against an order whereby the claim of the employee has been rejected in toto. It was observed that "The right of appeal has been provided to an employee under section ~17(1)(b) if the total amount of wages claimed to have been withheld from him or from the unpaid group to which he belongs, exceeds Rs.

50. In my opinion, it could not have been the intention of the Legislature that the employee will have the right of appeal when his claim has bi‑en reduced and not when his claim has been rejected in toto. The word "direction" used in subsection (1) of section 17 is comprehensive enough to include the rejection of 'the claim of an employee in toto. The Payment of Wages Act appears to have been enacted for the benefit of the employees and a speedy and an expensive remedy has been provided for enforcing the claim. I do not think the Legislature could have intended to deprive the labourer of his right of appeal in case his claim was rejected in toto by the authority concerned." I am also of the view that the authorities relied upon by the learned counsel for the petitioner construe sections 15 and 17 too narrowly. ` Subsection (3) of section 15 empowers the Authority to issue direction to pay wages, deducted or delayed, with o without compensation. The power to refuse to issue direction is implicit in the power to issue such direction. It is, therefore, open to an Authority to refuse to exercise the power given to and this refusal to issue a direction amounts to a direction not to pay. Section 17 does not make only the direction to pay as appealable; but by clause (b) of its subsection (1) authorises an employ, I person to file appeal even against the refusal to issue direction and the insertion of this clause (b) shows that the inten tion of the Legislature was not to confine the right of appeal to a direction or order by the Authority to do something but was also to extend it to a direction or order not to do something. The learned counsel for‑the petitioner, however, contended that clause (b) is attracted only if the authority makes a direction to pay a part of the claim. This will be putting too restricted a meaning to clause (b). The point is that the word "direction" in section 17(1) Is not confined only to a direction to pay but also applies to a direction not to pay and an appeal by an employed person can be filed only when there is a direction not to pay may a part or may be the whole amount claimed. There is nothing in clause (b) to justify the Interpretation that the direction not to pay must be only of a part of the claim. The words of clause (b) are quite general and will cover a case even of a direction not to pay any part of the amount claimed provided that the total amount of wages claimed to have been withheld from the employed person or from the unpaid group to which he belonged, exceeds fifty rupees. By the insertion of clause (b) the scope of section 17 has been clearly defined as inclusive of a direction not to pay and that must be given effect to. Even If there had been any ambiguity in the language of section 17 the interpretation in favour of that class for the safe guard of whose interest this law was enforced, would have been preferable: The appeal was, therefore, competent and the first objection fails. The second contention of the learned counsel for the peti tioner is that the respondents were suspended not as a measure of punishment but pending permission to dismiss them and the order of suspension was passed under the lawful powers conferred by section 30(2) of the Industrial Disputes Ordinance, 1959 upon the petitioner. There are two provisions dealing with suspension. Under Standing Order No. 13 of the Industrial and Commer cial Employment (Standing Orders) Ordinance 1960, the workman could be suspended for a period not exceeding four days at a time if he was found to be guilty of misconduct. Clause 5 of this standing order provides that an order of suspension shall be in writing and may take effect immediately on delivery to the work man. It is further provided that such an order shall set out in detail the alleged misconduct and the workman shall be given an opportunity of explaining the circumstances alleged against him if on inquiry the order is confirmed, the workman shall be deemed to have been absent from duty for tae period of suspension and shall not be entitled to any remuneration but if the order i9 res cinded the workman shall be deemed to have been on duty during the period of suspension. Section 30 of the Industrial Disputes Ordinance, 1959 prohibits alteration of conditions of service to the prejudice of the workman concerned, as also imposition of any punishment on him including his discharge or dismissal, during the pendency of conciliation proceedings in respect of an indus trial dispute. Subsection (2) of section 30 further bans the dis charge or dismissal, for misconduct not connected with the industrial dispute, of an officer of a Trade Union except with the. previous permission of the Industrial Court but authorises the suspension of such an officer pending the disposal on an application to that Court for such permission. It is not denied that the respondents fell within the category of 'Officers of the Trade Union'. According to the learned counsel for the petitioner, the order of suspension in the present case was not covered by Standing Order No. 13 of the Ordinance of 1960, but was made under the powers given to the employer under section 3C(2) of the Industrial Disputes Ordinance because under the Ordinance of 1960 suspension was a punishment while under section 30(2) of Industrial Disputes Ordinance it was only an interim measure. In this connection, he has referred to Lakshmi Devi Sugar Mills Ltd. v. Pt. Ram Sarup and others (A I R 1957 S C 82), Ruin Ram v. Divisional Superintendent, N. W. Rly., Lahore (A I R 1945 Ph. 298) and M. Noman v. Dacca Improvement Trust and others (P L D 1964 Dacca 671). Mr. Mushtaq Raj, the learned counsel for the respondents, however, denied that the respondents were not suspended under Standing Order No.

13. He contested that the charge‑sheet was served upon the respondents under Standing Order No. 13 of the Ordinance of 1960. This was conceded by the learned counsel for the petitioner who explained that the charge‑sheet was with a view to impose the penalty of dismissal on the respondents and not for punishing them with suspension. I have gone through the record of this case and find that in the application under section 15 of the Payment of Wages Act, it was admitted by the respondents that they were given a charge‑sheet by the Mills Management in December 1962 and then the gate of the mills was closed, it was further averred that with a view to dismiss them, an application was submitted by the mills management to the Indus trial Court and the respondents were suspended awaiting the decision of that Court. The contention of the petitioner that the suspension of the respondents was ordered by the petitioner under section 30, subsection (2) of the Industrial Disputes Ordinance, 1959, is thus clearly admitted in the application under section 15 of the Payment of Wages Act. Standing Order No. 13 of the Industrial and Commercial Employment (Standing Orders) Ordinance, 1960, undoubtedly deals with disciplinary action for misconduct or for other acts and omissions. Clause (2) of this Standing Order reads as follows :‑ "A workman may be suspended for a period not exceeding four days at a time or dismissed without notice or any compen sation in lieu of notice, if he is found to be guilty of misconduct." Clause (3) describes the acts and omissions which shall be treated as misconduct. Clause (4) provides that no order of dismissal can be passed unless the workman concerned is informed in writing of the alleged misconduct and is given an opportunity to explain the circumstances alleged against him. Clause (5) deals with the procedure to be adopted in case an under of sus pension is passed, and is reproduced here :‑‑ "(5) An order of suspension shall be in writing and may take effect immediately on delivery to the workman. Such order shall set out in detail the alleged misconduct and the workman shall be given an opportunity of explaining the circum stances alleged against him. If on enquiry, the order is confirmed, the workman shall be deemed to have been absent from duty for the period of suspension and shall not be entitled to any remuneration for such period. If, however, the order is rescinded the workman shall be deemed to have been on duty during the period of suspension, and shall be entitled to the same wages as he would have received if he had not been suspended: " Clause (6) clarifies that Standing Order No. 13 provides for an order of punishment and lays down that in awarding the punish ment the gravity of the misconduct and previous record of the workman and any other extenuating or aggravating circumstances shall be taken into account. Under clause (2) of Standing Order No. 13 suspension is one of the penalties for misconduct and manifestly clause (5) deals with the procedure for imposition of this penalty as also with the effect of its confirmation or rescission. Clause (5) as such, therefore, does not apply to an order of sus pension passed under any other power or authority by the mana gement of an industrial concern, although, as would be shown later, the effect of confirmation or rescission of the order provided in that clause is in accordance with general principles. The order of suspension In the present case not having been passed under Standing Order No. 13, clause (4) of that Standing Order as such is not applicable and the suspension of the respondents was not as a measure of a penalty. The Industrial Disputes Ordinance, 1959, does not make provision for payment of wages during the period of suspension. to the absence of any statutory provision, the principle regulating the payment or refusal to. pay wages for period of suspension in specified circumstances has o be found out from the decided The earliest case appears to be Warburton v. Taff Valley Railway Company ((1902)18 TLR 420). In that case the plaintiff was suspended from April 24 to May 8, when he was dismissed. The plaintiff claimed his wages for the period of suspension on the ground that the course adopted was equivalent to imposing double punish ment viz., summary dismissal arid the period of suspension without wages. The rule under which the action could be taken was that the company reserved the right to punish any servant, by immediate dismissal, or suspension from duty, for inter alia, misconduct. It was urged that under the rule in question, the company could suspend a man and then dismiss him without paying him wages for the period of suspension. The Lord Chief Justice who gave the judgment (which was concurred by the other two Judges) observed that in his opinion that‑was not so and he thought that the plaintiff was in the Company's service during suspension, and when he was dismissed, there was no rule empo wering their to withhold his wages the case is an authority for the proposition that if suspension Is not a sentence of penalty imposed upon an employee, the service contract subsists during the period of suspension. Another English decision is Hanely v. Pease partners Ltd: ((1915) 1 K B 698). In that case, an employee absented himself from the work for one day without leave of his employer. The employer did not dismiss him, but suspended him from working of the following day and thus prevented him from earning the wages he would have earned on that day had he been allowed to work. The employee made a claim under the Employers and Workmen Act, 187., which was allowed. Lush, J. observed‑ "Assuming that there has been a breach on the part of the servant entitling the master to dismiss him, he may if he pleases to terminate the contract, but he is not bound to do it, and if he chooses not to exercise that right but to treat the contract as a continuing contract notwithstanding the misconduct or breach of duty of the servant, then the contract is for all purposes a continuing contract subject to the master's right in that case to claim damages against the servant for his breach of contract. But in the present case after declining to dismiss the workman after electing to treat the contract as a continuing one the employers took upon themselves to suspend him for one day in other words to deprive the' workman of his wages for one day, thereby assessing their own damages for the servant's misconduct‑at the sum which would be represented by one day's wages. They have no possible right to do that. Having elected to treat the contract as continuing it was continuing. They might have had a right to claim damages against the servant, but they could not justify their act in suspending the workman for the one day and refusing to let him work and earn wages." Rowlatt, J. agreed with this judgment and observed‑ "As regards the point of substance it is obvious that I the em ployer has no implied power to punish the workman by suspend ing him for a certain period of his employment, the contract subsisting all the time. He has power if the occasion arises but there is no finding in the present case that the occasion had arisen‑to dismiss a workman and propose anew employment to begin on the next day which the workman may or may not accept. The facts, however, do not support that view of the case. The appeal should be allowed." The principle decided by this case is that if an employer has a power to dismiss an employee, but has no express or implied power to punish him by suspension the contract of em ployment subsists and the employee is entitled to claim damages or wages for the period of suspension. The above authority was distinguished in the case of Wallwork v. Fielding and others ((1922) 2 K B 66). In that case, the plaintiff who was a Sergeant of Police was reduced to the rank of third class constable, but disputing the validity of that order he refused to obey the direction to parade as a third class constable. The Watch Committee suspended him from duty and stopped his pay until further orders. The matter was further enquired Into by the police authorities and ultimately the plaintiff accepted their decision and returned to duty as a third class constable. He claimed to recover his pay during the period of suspension, but this was disallowed on the ground that there was a power of ordering suspension ; that the power to suspend the operation of a contract necessarily suspended its whole operation including not only the performance of duty, but also the right to pay during the period of suspension, (per Lord Sterndale M. R). Warrington L. J. who expressed his concurrence with the above finding, further observed:‑

"It is said that tine power to suspend does not involve the power to abstain from payment of salary. In my opinion that argument is unfounded for this reason. The relations are those of employer and employed. If the; employed is suspended from his functions as an employed person, It seems to me the effect of that is to suspend the relation of employer and employed for the time being to‑excuse the servant or the employed person from performing his part of the contract, and at the same time to relieve the employer from performing his part of the contract. It would be a most extraordinary thing if suspension (assuming that there is power to effect suspension) were to be so one sided that the servant were to be excused from performing his part of the contract while the employer was to remain liable to perform his. It seem to me that suspension suspends for the time being the contractual relation between the parties on both sides, the suspension, therefore, by the Watch Committee does, involve suspension of payment by them, as well as of the performance of the duty by the police constable." The rule which was the basis of this decision empowered the Watch Committee at any time to suspend or dismiss any constable whom they "thought negligent in the discharge of his duty or otherwise not fit for the same." Similarly, in Bird v. British Celanese Ltd. ((1945)1 All E L R 488) it was held that where the suspension is in accordance with the terms of the contract of employment as a penalty for disobedience, the whole contract was suspended in the sense that the operation of the mutual obligations of both parties was suspended; the workman ceased to be under any present duty to work, and the employer ceased to be under any consequential duty to pay. Marshall v. The English Electric Co. Ltd. ((1945) 1 All E L R 653) was also a case of suspension imposed as a penalty and the case has been decided on the above principle. These three latter cases establish a principle as is found in the Halabury's Laws of England, Third Edition, Vol. XXV, page 518 para 989‑- "In the absence of any express or implied term to the con trary, the master cannot punish a servant for alleged miscon duct by suspending him from employment and stopping his wages for the period of the suspension Where however, such a term is included in the contract, its not rendered void by the statutory provision restricting deductions from workmen's wages for or in respect of fines, for the intention of the parties is taken to have been that for the period of suspension mutual duties and rights, including the right of wages, would be suspended." But this principle is to be confined only to cases where suspen sion is a punishment for some misconduct as distinguished from cases where it is not a punishment. The following dicta were evolved In Secretary of States v. Srandar Nath Kosvani (A I R 1938 Cal. 759) on the basis of English authorities :‑-- (1) There is not implied power in the employer to punish a servant by suspension (1915) 1 K B 698), if a servant is sus pended when there is no power of suspension, he can sue for damages for not being allowed to work, if he was ready to work. (2) If there is a power to suspend a servant, the effect of the suspension is to suspend the contract of service as a whole with the result that the servant cannot insist on working or claim his pay for the period of suspension. Same view was adopted in Bundha Moti Lal Bora v. Ahmadabad Municipal Borough (A I R 1943 Bom. 9) and Rora Ram v. Divisional Superinten dent, N. W. R., Lahore (A I R 1954 Pb. 298). These authorities do not appear to have considered that the principle laid down in Wallwork v. Fielding was confined to cases where the suspension was ordered by way of punishment and not to cases where it was ordered during the enquiry, and are not of any assistance. The case of Peoples Cooperative Bank Ltd. Patna City v Rameshwar Prasad Varma (A I R 1942 Pat. 452) was decided on the basis of the dictum in Warburton v. Taff Valley Railway Co.' and was relied upon in Cooperative Central Bank, Daryapur v. Trimbak Narayana Shingan Wadikar (A I R 1945 Nag. 183). It was held that it not having proved that the Bank had the power to suspend, it cannot be held that it had power to withhold the plaintiff's salary during the period of sus pension. The case of Warburton v. Taff Valley Railway was held to be an "authority for the proposition that where an employer is entitled to suspend an employee and withhold the wages during the period of suspension, the employee is entitled to wages during the period of suspension if he is dismissed at the end of that period." If this be the principle, there is no reason why an employee should not get these wages if ultimately he is re‑instated. The qualification laid down in these authorities that salary for period of suspension can be claimed if the power to suspend was not vested in the employer, does not appear to be correct, because according to the present view the power to suspend the employee during act enquiry for misconduct against hire is implicit in the contract of employment, see Mosharraf Humain v. The Chairman, East Pakistan School Text Board, Dacca (P L D 1968 Dacca 818) and M. Noman v. Dacca Improvement Trust and others (P L D 1964 Dacca 671). This also appears to be the view of West Pakistan High Court and our Supreme Court. ' See Mohammad Ayyub v. Government of West Pakistan (P L D 1957 Lah. 487) and Mohammad Hayat v. Province of West Pakistan (P L D 1964 S C 321). In the case of Mohammad Ayyub it was observed that the relevant rule give, the Government the power to suspend its servants during the pendency of inquiry into charges against them, but even in the absence of such a rule there would have been no difficulty in holding that such of the pleasure of the Government which has not been taken away by the Constitution or the rules thereunder must be deemed to include the power of sus pension within reasonable limits. In the case of Mohammad Hayat decided by the Supreme Court, the above observation in the judgment of Mohammad Ayyub was cited with approval and it was held that suspension is not only within the power of the Government but within the responsibilities of the executive and the executive authority acts within the pleasure of the Governor, when it suspends a public employee from the discharge of the duties of his office, pending an inquiry into his actions. Certain principles have been laid down for such cases by the Supreme Court of India in Lakshami Devi Sugar Mills Ltd. v. Pt. Ram Sarup and others and Management of Ranipur Colliery v. Guban Singh ((1959) 16 F J R 176). Both these cases were under provisions equivalent to section 30 (2) of the Industrial Disputes Ordinance, 1959. In the case of Lakshami Devi Sugar Mills Ltd., it was held that suspension without pay pending inquiry as also pending permission of the Tribunal under the relevant section could not be considered to be a punishment such suspension without pay ment of salary would only be an interim measure and would last till the application for permission to punish the workman was made and the Tribunal has passed orders. It was, however, observed that "if the permission was accorded the workman would not be paid during the period of suspension but if the permission was refused, he would have to be paid for the whole period of suspension, the principle on which this observation is based is further clarified in another place in the same judgment in the following words :‑ "If the permission is granted, the ban would be lifted and the employer would be at liberty, if he so chooses thereafter to deal out the punishment to the Workman, on such action being taken by the employer the workman would be entitled to raise industrial dispute which would have to be referred to the appropriate Tribunal for adjudication by the Government on proper steps being taken in that behalf. When such industrial dispute comes to be adjudicated upon. by the appropriate Tribunal the workman would be entitled to have all the circums tances of the case scrutinised by the Tribunal and would be entitled to get the appropriate relief at the bands of the Tribunal. If on the other hand such permission is refused, the parties would be relegated to the status quo when the employer would not be able to deal out the punishment which he intends to do to the workman." In the case of Management of Ranipur Colliery v. Guban Singh, also the same view has been repeated. The principle of these two authorities of the parallel Indian jurisdiction appears to be that the question whether the contract of service subsisted or not during the period of suspension is dependent upon the decision of the Industrial Court and if permission to dismiss employee is granted the contract of service will be deemed to have remained under suspension during the period of suspension of the employee but if it is not so granted the parties would be relegated to the status quo and the contract of service shall be deemed to have subsisted all along. This view also finds support from the view of the Supreme Court of Pakistan in Divisional Superintendent, N. W. R., Lahore v. Mohammad Sharif (PLD 1963 SC 340). Respondent Mohammad Sharif in the case before the Supreme Court was discharged from service but in a suit filed by him, he obtained declaration from the civil Court that his removal was illegal and that he continued to be an employee of the Railway administration. By application under section 15 of the Payment of Wages Act, he claimed his salary from the date when he was discharged to the dale when he was restored to his post, and this claim was allowed by the authority under the Payment of Wage; Act. The decision was upheld up to the Supreme Court. The Railway Administration had resisted the application on the ground that the claim was not for wages during the period in question because the respondent did not work for that period and under conditions of service the period was of absence and was to be treated as extraordinary leave without pay. It was held that the contract of service subsisted during the period for which wages had not been allowed and it was observed that‑ "Here we may mention that in a subsisting contract of em ployment there are certain obligations upon the employer and also upon the employee and also certain rights as between them. These obligations generally are that the employer is bound to pay wages and the employer is bound to serve. There may, however, be cases where the employee without rendering service and yet may not do so because the employer for some reason does not give him opportunity to render that service. In such a case the mere fact that the employee is not given work or cannot render service to employer will not derogate from the right to receive wages from the employer. It also appears from the amplified portion of the definition that some emphasis has been laid on the expression 'any sum payable to such person by reason of the termination of the employment. This shows that any sum which is payable by reason of the termination of the employment is also wages for the purpose of the Act. Therefore, when the service of an employee is terminated without notice, fn such a case the sum which is payable to him in lieu of notice will be considered as wages, though he may not render any service during that month. Enough has been said to show that the definition of 'wages' cannot be confined to 'earned wages' only and that the claim of the respondent would thus be clearly covered by the definition In the Act." An objection was raised on the basis of rule 2044 of Railway Establishment Code, Vol. 11, that the respondent could be entitled only to full pay for period of suspension if he was honourably acquitted otherwise he could get such proportion of such pay and allowances as the Revising or appellate Authority may prescribe. Their Lordships held that "the Railway Administration, however, did not elect to make any order under this rule after re‑Instatement of the employee. In these circumstances the Authority was justified to hold that the claimant was entitled to the payment of full wages for the relevant period." The principle of the authority clearly is that if discharge on dismissal of an employee is held to be illegal the contract or service is deemed to be subsisting. The grant of permission to dis miss or the refusal to grant such permission by the Industrial Court will furnish the necessary test of legality or illegality of order or suspension and consequently of suspension or subsistence of the contract of service during the period of suspension. Section 30(2) of the Industrial Disputes Ordinance, 1959, cannot be interpreted as giving unfettered power to an employer to suspend the employee. He can exercise the power at his own risk and he must be prepared to pay full wages of the employee for the period of suspension of the permission to dismiss is refused by the Industrial Court. Any other interpretation of section 30(2) would frustrate the object of that provision which is to save an officer of the Trade Union from victimisation. The case may be judged from another angle also, In many cases, such order of suspension may partake of the character of victimisation and may be passed with the object of depriving an employee of his right to earn his wages. In such cases the suspension of an employee may be a punishment directly attracting the principle laid down in Standing Order No. 13, clause (5) o ther Industrial and Commercial Employment (Standing Orders Ordinance, 1960. The line between a case of suspension as a punish ment and a case of suspension as an interim measure can be drawn only by the ultimate decision of the Industrial Court to permit dismissal or to refuse to accord such permission. If the employer is permitted under section 30(2) to dismiss a employee, the suspension order would be justified and would be an order passed under the above said section. 1f, however, such permission is disallowed by the Court the order of suspension would be deemed not to have been passed under section 30(2) as an interim measure. In the present case the petitioner withdrew his application for permission to dismiss the respondents and did not give the Court an opportunity to adjudicate upon the question of the correctness of the proceedings taken by the petitioner against the respondents. By withdrawing a petition under section 30(2) the petitioner himself conceded that the order of suspension was not correct. There is another way of looking at the matter. By withdrawing his application and by depriving the Industrial Court of its right to adjudicate upon the matter, the petitioner by his own conduct frustrated the provi sions of section 30(2) of the Industrial Disputes Ordinance, and he cannot take advantage of his right to suspend the respondents under that provision. I may make it clear that I have decided this case on the contentions raised and grounds urged by the learned counsel for the petitioner. The effect of the respondents, shoving any repen tence or their giving any guarantee for good behaviour for the future or Its effect on the right of the respondents to claim damages, or the question of estoppel were neither agitated before me by the yearned counsel for the petitioner nor, while trying to interpret the relevant provisions of law, I have taken those matters into consideration. The upshot of the discussion Is that there is no merit in this revision petition which is dismissed, but in view of the importance of the legal points involved, there will be no order as to costs. Petition dismissed.