SC's larger bench to decide issue of laid off staffs' dues

A two-judge bench of the Supreme Court has referred to a larger bench the matter involving the question whether employees opting for voluntary retirement scheme (VRS) would also be entitled to a "lay off compensation." Lay off compensation is normally paid by the management when a unit temporarily shuts down operations due to unavoidable reasons like shortage of raw material. A bench of Justices S B Sinha and V S Sirpurkar said the issue needed to be settled by a larger bench as over the years there have been conflicting judgments by various courts, including the apex court, on the rights of the employees vis-a-vis dual benefits. In some cases, the courts have ruled that once employees avail VRS, they would not be entitled to any other compensation. In other cases, it was held that those availing VRS cannot be denied their statutory benefits like lay off/lock out/retrenchment compensation as provided under the Industrial Dispute Act, 1947. For instance, in the A K Bindal case, the apex court had ruled that an employee receiving an amount of compensation is precluded from raising any further claim. Whereas in another case involving the National Building Corporation, the apex court had ruled that even if an employee has been discharged from service, he/she cannot be prevented from seeking a lay off compensation. The two-judge bench referred the matter to a larger bench in connection with the case of A Satyanarayana Reddy and other employees of Nagarjuna Cooperative Sugars Limited, an erstwhile Government of Andhra Pradesh undertaking. They had challenged the denial of the "lay off" compensation allegedly due to them. According to the aggrieved workmen, between 1st August 1995 and 6th September 2002, the company had laid them off work. Under the provisions of the Industrial Dispute Act, 1947, employees who are laid off are entitled to a "lay off compensation." The workmen alleged the management of their company refused to extend the compensation on the ground that they have availed a VRS scheme which was extended to them after the company was taken over by a private management in Karnataka. The aggrieved employees filed a writ petition before the Andhra Pradesh High Court and their appeal before a division bench was also dismissed, on account of which they moved the apex court. The two-judge bench of apex court, while referring the issue to a larger bench, said that, normally, on opting for a voluntary retirement scheme the workmen would cease to have any claim against the management. "However, the same prima facie in our opinion would not mean that a statutory right of opting for lay off compensation, unless expressly waived, may continue to remain within the realm of legal right," the bench observed, while referring the issue to a larger bench.

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