Management of Diocesan Press vs Labour Court, Madras and Another

The short question arising for decision in this writ petition is whether an employee governed by the Employees State Insurance Act, 1948

(hereinafter referred to as the Act) is eligible to receive wages as per the conditions of service for the period during which he was on sick leave

without deduction of the sickness benefits that he has received under the Act from the wages payable to him by the employer. The facts leading to

the filing of this writ petition may be set out as follows. The second respondent, Vithyaraj filed along with the other employees Claim Petition No.

1050 of 1970 on the file of the Labour Court, Madras under S. 33C(2) of the Industrial Disputes Act for computation of certain benefits due to

them in terms of money. We are not concerned in this writ petition with the claims made by the other two employees. The Second Respondent had

made an additional claim for half salary for the period between 2-10-1969 and 4-11-1269 during which period he was on sick leave and was

receiving benefits under the Act. Originally the claim petition was allowed by the Labour Court. Against the Order of the Labour Court the

employer filed W.P. No. 2118 of 1973. This Court allowed the writ petition in so far as the claim of the Second Respondent to wages for the

period of sick leave was concerned and this Court remand the matter for fresh disposal on the said point with a direction to the Labour Court to

consider the effect of Regulation 97 of the Employees'' State Insurance (General) Regulations, 1950 (hereinafter called the Regulations). After

remand the Labour Court has passed an order on 14th September 1977 passed an order on 14th September 1977 upholding the claim of the

Second Respondent for being paid half wages for the period 2-10-1969 to 4-11-1969. In these circumstances, the employer has filed this Writ

Petition to quash the order of the Labour Court dated 14-9-1977.

Officer, Labour. The contention of the learned counsel for the petitioner is as follows : (1) Since the employee has received sickness benefit

under the Act he is not entitled to receive wages for the period during which he was on sick level. If he is allowed to receive wages for the period

during which he was on sick leave, he has the double advantage of receiving the salary as well as the sickness benefits under the Act. (2) Even if it

is held that he is eligible to get wages for the period during which he was on sick leave, the employer is entitled to deduct the sickness benefits

received by the employee under the Act from the wages payable to the employee, for the corresponding period. On the other hand, the learned

counsel for the second Respondent contended that Standing Order No. 11(xii) provides for payment of half wages for the period during which an

employee was on sick leave and so long as the standing order has not been amended, the employee is entitled to get wages for the period during

which he was on sick leave. The sickness benefits that he has received under the Act have nothing to do with his right to receive wages as per the

conditions of service for the period during which he was on sick leave.

Section 46(1)(a) of the act provides for periodical payments to any insured person in case of his sickness if certified by a duly appointed

medical practitioner. This periodical payment is called the sickness benefit. Sections 47 and 49 of the Act deal with the eligibility of employees for

sickness benefit. Section 50 of the Act deals with maternity benefit. Section 51 deals with the disablement benefit. Section 56 provides for medical

benefits to the insured person or under certain circumstances to the members of his family. Section 58 provides for reasonable medical, surgical

and obstetric treatment being extended to the employees and members of their families. The Act does not provide for any leave being granted to

an insured person during the period of the sickness. It is not possible to come to a conclusion on a reading of the various provisions of the Act that

the various benefits that are conferred on an insured person and the members of his family were conferred in substitution of the insured person''s

right to get leave salary for the period during which he was on sick leave. In Hindustan Times Ltd. v. Their Workmen. 1963 1 L.L.J.108, It has

been held as follows : ""The benefit that the workmen will get under the act cannot affect the question of sickness leave being provided for the

workmen. This Act does not provide for any leave to the workmen on the ground of sickness. In providing for periodical payments to an insured

worker in case of sickness (sickness benefits) or for medical treatment or attendance to him or the members of his family, the Legislature did not

intend to substitute any of these benefits for the workmen''s right to get leave on full pay an the ground of sickness.

In The Alembic Glass Industries Ltd., Baroda Vs. The Workmen, . The workmen''s demand for grant of sick leave and its accumulation upto a

period was rejected by the employers on the ground that the Employees'' State Insurance Act, 1948 provided more than adequate sickness

benefits, and that any additional benefits would place a financial burden on the industry and would adversely affect other industries in the region.

The Tribunal, to which the dispute was referred, partly granted the workmen''s demand. On appeal to the Supreme Court it was contended that S.

61 of the Employees State Insurance Act debarred a person entitled to any of the benefits under that Act from receiving similar benefit under the

provisions of any other Act and as such the workmen were not entitled to the benefit of sick leave. Shinghal, J, speaking for the Court observed as

follows : ""The Employee''s State Insurance Act, does not deal with the question of, sick leave. The schemes of the benefits admissible under the

Act does not cover the workman''s demand for sick leave to the extent allowed by the Tribunal. Section 61 is not applicable because the benefits

granted by the Tribunal are not similar to those admissible under the Act.

In view of the above it is not possible to accept the first contention of the learned counsel for the petitioner that since the employee has received

sickness benefits under the Act he is not entitled to receive wages for the period during which he was on sick leave. I, therefore, reject the first

contention of the learned counsel for the petitioner.

The second contention of the learned counsel for the petitioner is that the employer is entitled to deduct the sickness benefits received by the

employee under the Act from the wages payable to the employee. On the other hand, the learned counsel for the second respondent contends that

so long as Standing Order No. 11(xii) which provides for payment of half wages for the period during which an employee was on sick leave has

not been amended, the employee is entitled to get wages for the period during which he was on sick leave, and the sickness benefits received by

the employee under the Act have nothing to do with his right to receive wages as per the conditions of service for the period during which he was

on sick leave. I do not agree with the learned counsel for the second respondent. Section 46(1) of the Act confers sickness benefit on the

employee, S. 49 states that subject to the provisions of the Act and the regulations a person qualified to claim sickness benefit in accordance with

S. 47 shall be entitled to receive such benefit at the rates specified in the First Schedule for the period of his sickness. Therefore, an employee is

not entitled to the sickness provisions of the Act and the Regulations made thereunder. Regulations 97 of the Regulations reads thus;

Discontinuation or reduction of benefits - An employer may discontinue or reduce the benefits payable to his employee under conditions of their

service, which are similar to the benefits conferred by the Act to the extent specified below, namely;

(a) from the date of commencement of the first benefit period following the appointed day for his factory or establishment

(i) sick leave on half-pay to the full extent;

(ii) such proportion of any combined general purposes and sick leave on half-pay as may be assigned as sick leave but in any case not exceeding

50 per cent of such combined leave;

(b) * * *

Provided that where an employee avails himself of any leave from the employer for sickness, maternity or temporary disablement, the employer

shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he may be entitled under the Act for the

corresponding period"".

From the proviso to Regulation 97 it is clear that if an employee avails himself of any leave on the ground of sickness the employer shall be

entitled to deduct from the leave salary of the employee the amount of benefit to which he may be entitled under the Act for the corresponding

period. In Bareilly Electricity Supply Co. Ltd. v. Workmen 1979 1 l L.L.J.352, the question that came up for consideration before the Supreme

Court was ""whether the employer can deduct half-day''s wages corresponding to the sickness benefit to which the workmen are entitled under the

E.S.I. Act, in the event of their not availing themselves of the benefits under the E.S.I. Scheme"". The Supreme Court answering the question in the

negative observed as follows : ""In the first place; S. 46 of the E.S.I. Act would show that employees who are covered by the E.S.I. Act are

entitled to certain benefits subject to the provisions of the E.S.I. Act. It is, therefore, not as if the workmen are entitled to the benefits absolutely

and without compliance with the conditions laid down by the Act or the Regulation. Secondly, the proviso to Regulation 97 says that the employer

shall be entitled to deduct from the leave salary of the employee, the amount of benefit to which he may be entitled under the E.S.I. Act for the

correspondent period of his sickness. A workmen does not become entitled to the amount payable to him by way of sickness benefit unless in the

first instance he chooses avail himself of the sickness benefit. That benefit cannot be forced on him. This would show that the employer''s right to

make a deduction from the employee''s sick leave wages can only be exercised in respect of those days of sickness leave for which the workman

has actually availed of the sickness benefit."" In the present case, it is not disputed that the second respondent has availed himself of the sickness

benefit under the Act. Therefore, as per proviso to Regulations 97 of the Regulations the employer is entitled to deduct the benefit received by the

employee under the Act from the leave salary payable to him,

In the result, the order of the first respondent dated 14-9-1977 is quashed. The writ petition is allowed, but under the circumstances without

costs.

Mr. Somayajee, advocate at my request assisted me as amicus curise and placed all the relevant case laws on the subject. I am glad to express

my sense of appreciation and thanks for the valuable assistance rendered by Mr. Somayajee.