Warsaliganj Sahkari Chini Mill Mazdoor Union v. State of Bihar and others
Background
Seasonal workers of sugar factories that had stopped crushing years earlier sought "retaining allowance" (a payment to keep seasonal workers notionally attached to the factory between seasons). The High Court held that since the factories were not crushing at all, the seasonal workers were not entitled to any retaining allowance, and the workers' unions appealed to the Supreme Court. By the time of the hearing, an "Exit Settlement" scheme for winding up the closed factories had come into the picture.
Decision Breakdown
The Supreme Court noted that although the factories were shut, the affected seasonal workers had actually been kept on the rolls and retired only on reaching the superannuation age of 60, apparently to preserve pensionary benefits. The Court held it would be just and fair that the notional retaining allowance the workers would otherwise have received be factored into calculating their pensionary benefits or their entitlements under the Exit Settlement scheme, while clarifying the workers were not entitled to actual cash retaining allowance for the non-functional period. The Court directed the respondents to act on this within four months and disposed of the appeals accordingly, with no order as to costs.
Lesson Learnt
Even where a benefit (like retaining allowance) cannot be paid in cash because a factory is not functioning, courts can still direct that it be notionally reckoned for calculating pension or exit/settlement dues, balancing the employer's financial reality against workers' legitimate long-term entitlements.