RAMACHANDRAN v. LABOUR COURT — 1982 DIGILAW 19 (KER)

Judgment :- 1. Standing 0.19(4) of the certified Standing Orders of the 2nd respondent, the Hindustan Machine Tools Ltd., Kalamassery, marked Ext. M-3 in Ext. P-1 award in I. D. No. 220 of 1979 (old No. I. D. No. 19 of 1978) on the file of the 1st respondent, the Labour Court, Ernakulam, provides as follows: "Absence without leave: If a workman remains absent beyond the period of leave originally granted or subsequently extended, he shall lose his lien on his appointment unless be (a) returns within 8 days of the expiry of the leave; and (b) explains to the satisfaction of the manager his inability to return before the expiry of his leave." Whether the termination of service of an employee by the application of the above standing order would amount to 'retrenchment' as defined under S.2(oo) of the Industrial Disputes Act (Act 14 of 1947) (the Act) and whether such termination without compliance with the provisions of S.2SF of the Act would be illegal are the questions of law raised in this writ petition. 2. The facts are brief; and those touching the questions of law raised in the writ petition are concerned, are not in dispute. The petitioner, a carpenter employed in the 2nd respondent company, was granted leave till 15-12-1976. He reported for duty on 27-12-76, but he was refused permission to enter the factory. Though thereupon he sent a leave application supported by a medical certificate for the period, 16-12-1976 to 23-12-1976, (25th and 26th being holidays) the 2nd respondent, instead of granting the leave applied for, issued notice terminating the services of the petitioner purporting to be in exercise of the power under standing 0.19(4). The conciliation efforts having failed, on receipt of the report with respect to that, the Government referred the matter to the 1st respondent for adjudication under S.10(1)(e) of the Act. Ext. P-1 is a copy of the award in which the 1st respondent held that there was no termination of the service of the petitioner, but it was a case of automatic loss of lein by the workman's absence without leave. It is the correctness of this decision that is under challenge in this writ petition. 3. Ext. P-1 is a copy of the award in which the 1st respondent held that there was no termination of the service of the petitioner, but it was a case of automatic loss of lein by the workman's absence without leave. It is the correctness of this decision that is under challenge in this writ petition. 3. Industrial Employment (Standing Orders) Act, 1946 Standing Orders Act) was enacted with a view to require employers in industrial establishments to define conditions of employment under them and to make the said conditions known to the workmen employed by them. S.3 of the said Act provides for the submission of draft standing orders; S.4 provides that the standing orders would be certified; (a) if provision was made therein for every matter set out in the Schedule which was applicable to the industrial establishment; and (b) the standing orders were otherwise in conformity with the provisions of the Act. S.13 (2) of that Act provides: "(2) An employer who does any act in contravention of the standing orders finally certified under this Act for his industrial establishment shall be punishable with fine which may extend to one hundred rupees, and in the case of a continuing offence with a further fine which may extend to twenty five rupees for every day after the first during which the offence continues." The matters to be provided in the standing orders under that Act are as enumerated in the Schedule to that Act. Item 8 in the schedule is concerned with termination of employment, and the notice thereof to be given by the employer and workmen; and item 11 provides: "Any other matter which may be prescribed." Rule 3 of the Rules (the Rules) framed by the Central Government in exercise of the powers conferred on that Government by S.15 of the Standing Orders Act provides: "Save as otherwise provided in sub-rule (2), the Model Standing Orders for the purposes of the Act shall be those set out in Schedule I appended to these rules." Standing 0.10 (e) of the Model Standing Orders in Schedule I to the Rules provides as follows: "a) If a workman remains absent beyond the period of leave originally granted or subsequently extended, he shall lose lien on his appointment unless he (a) returns within ten days of expiry of his leave; and (b) explains to the satisfaction of the manager his inability to return on the expiry of his leave; In case, the workman loses, as aforesaid, his lien on the appointment, he shall be entitled to be kept on the 'badli list'." 4. Sri M. Rajasekharan Nayar, the counsel for the petitioner, submitted that by whatever name it might have been described, the effect of the purported exercise of the power under standing 0.19(4) was the termination of the service of the employee otherwise than as a punishment inflicted by way of disciplinary action; and it being not a voluntary retirement of the workman or the retirement of the workman on reaching the age of superannuation in terms of the contract of service, it amounted to 'retrenchment' as defined in S.2(00) of the Act. According to him the petitioner had been denied employment without following the procedure prescribed in S.25F of the Act which provides: "25F. Conditions precedent to retrenchment of workmen. According to him the petitioner had been denied employment without following the procedure prescribed in S.25F of the Act which provides: "25F. Conditions precedent to retrenchment of workmen. No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice: Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette." 5. Sri. Pathrose Mathai, the counsel for the 2nd respondent company, however, strongly argued in defence of the action of the management, contending that there was no termination of service to attract the provisions of S.2 (00) and 25F of the Act. According to him all that the 2nd respondent did was to give the intimation to the petitioner regarding his having lost his lien on the appointment; and that could not be characterised as an order terminating the petitioner's service; in fact there was no overt act at all in regard to termination of service on the part of the management. His reasoning is that the petitioner by his own act of absenting without have for a period of not less than eight days, had lost his lien on the appointment, and it being a case of automatic cessation of the lien, the management had no obligation to conform to the conditions precedent to retrenchment mentioned in S 25Fof the Act. In support of his contention he cited the decisions of the Supreme Court in Bagalkot Cement Co. Ltd. v. Pathan (R K.) (1962-F L. L. J. 203), Buckingham & Carnatic Co. v. Venkatiah (AIR. 1964 SC. 1272), Rohtak & Hissar Districts Electric Supply Co. In support of his contention he cited the decisions of the Supreme Court in Bagalkot Cement Co. Ltd. v. Pathan (R K.) (1962-F L. L. J. 203), Buckingham & Carnatic Co. v. Venkatiah (AIR. 1964 SC. 1272), Rohtak & Hissar Districts Electric Supply Co. v. State of U. P. (1956-11 L.L.J. 330) and the judgment of the Supreme Court in Civil Appeal No. 549 of 197 dated 25-7-1967 in National Engineering Industries Ltd. v. Hanuman (Supreme Court Labour Judgments 1950-67, Vol. II, page 1037). The burden of his argument was that the Supreme Court had repeatedly held that the certified standing orders represted the relevant terms and conditions of service in a statutory form and they were binding on the parties atleast as much, if not more, as private contract embodying similar terms and conditions of service. He also contended that if a case like the present one, where the employee automatically ceased to be on the rolls of the company, was to be treated as one of retrenchment, the termination would become impossible, particularly in view of the provisions contained in S.25G of the Act which provides: "25G. Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employedin that category, unless for reasons to be recorded the employer retrenches any other workman." and S.25H which provides for preference to such retrenched workmen who offer themselves for re-employment over other persons, and particularly to S.25N(1) in Chapter VB of the Act which provides: "25N. (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice: Provided that no such notice shall be necessary if the retrenchment is under as agreement, which specifies a date for termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; (c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette, and the permission of such Government or authority is obtained under sub-section (2)." The Supreme Court in State Bank v. N. S Money (AIR. 1976 S.C.1111) has held: "A break-down of S.2(oo) unmistakably expands the semantics of retrenchment. 'Termination for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So the sole question is has the employee's service been terminated? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of S.25F and S.2(00). Without speculating on possibilities, we may agree that'retrenchment' is no longer terra incognita but area covered by an expansive definition. It means 'to end, conclude, cease'. In the present case the employment ceased, concluded, ended on the expiration of nine days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from S.25F (b) is inferable from the proviso to S.25F(1) (sic) (Section 25F (a) ?). It means 'to end, conclude, cease'. In the present case the employment ceased, concluded, ended on the expiration of nine days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from S.25F (b) is inferable from the proviso to S.25F(1) (sic) (Section 25F (a) ?). True the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract S.25F and automatic extinguishment of service by effluxion of time cannot be sufficient. ~~~ ~~~ ~~~ ~~~ ~~~ ~~~ So screened, we hold that the transitive and intransitive senses are covered in the current context. Moreover, an employer terminates employment not merely by passing an order as the service runs. He can do so by writing a composite order, one giving employment and the other ending or limiting it. A separate, subsequent determination is not the sole magnetic pull of the provision A pre-emptive provision to terminate is struck by the same vice as the post-appointment termination." In the still later decisions of the Supreme Court in Hindustan Steel v. Labour Court (AIR. 1977 SC 31), Delhi Cloth & General Mills Ltd. v. Shambhu Nath Mukerjee (1978-1 LLJ.1) and Santhosh Gupta v. State Bank of Patiala AIR. 1980 S.C.1219) this dictum laid down by the Supreme Court has been given greater emphasis. Incidentally it may be noticed that the theory that to attract the provisions of S.2(00) and 25F of the Act there should be surplusage of employees propounded by this Court in Robert D' Souza v. Southern Railway (1979 KLT. 290 F. B.) has been given a go-by by the Supreme Court in Santhosh Gopta's case. The decision of the Supreme Court has been followed by a Division Bench of this Court later in Prabhkaran v. General Manager, K. S. R. T. C. (1981 KLT 164). 6. 290 F. B.) has been given a go-by by the Supreme Court in Santhosh Gopta's case. The decision of the Supreme Court has been followed by a Division Bench of this Court later in Prabhkaran v. General Manager, K. S. R. T. C. (1981 KLT 164). 6. What procedure was to be followed in effecting the termination of service of the employee where the standing order provided that the workman would lose his lien on his appointment if he did not join duty within a certain time after his leave expired, and that contingency happened, does not appear to have been raised before the Supreme Court in Hanuman's case referred to above and also in the earlier case in Buckingham & Carnatic Co. v. Venkatiah (AIR 1964 S.C 1272). The practical difficulties incidental to the treating of automatic termination by virtue of the operation of the relevant clause in the standing order as retrenchment under S.2(00) of the Act, with reference to S.25G, 25H and 25N, is no justification for effecting termination of service either by striking off the name of the employee from the rolls or by deeming that the employee had lost the lien on the appointment in the circumstances of the case This is so not only for the reason that the provisions in the Act are clear, but also for the reason that the lingering doubts, if any, have been removed from our minds by the decision of the Supreme Court in N. S. Money's case followed in later decisions. The provision "In case, the workman loses, as aforesaid, his lien on the appointment, be shall be entitled to be kept on the 'badli list"' contained in Clause.10(e) of the model standing order in Schedule I to the Rules safeguards the interest of the employee to some; extent and standing orders of the companies, which, though certified, but do not conform to that requirement, may have to be suitably amended to ensure that the employee, who is not in a position to join duty within a certain period after the expiry of the leave granted to him, does not automatically lose his job and the means of livelihood. For the foregoing reasons I find that the 1st respondent Labour Court has committed an error of law in declaring that the 2nd respondent did not terminate the petitioner's service, but the petitioner had, due to his absence without leave, automatically lost his lien on the appointment. I would, therefore, quash Ext. P-1 award, and direct the 1st respondent to adjudicate the dispute referred to it afresh according to law and in the light of the observations made in this judgment as expeditiously as possible, at any rate within four months from the date of receipt of a copy of this judgment. The writ petition is disposed of as above. There will be no order as to costs. Communicate a carbon copy of this judgment to the 1st respondent, Labour Court, Ernakulam, forthwith. Carbon copy of the judgment may be granted to the Government Pleader free of charge and to the counsel for the petitioner and the counsel for the 2nd respondent on usual terms if applied for in that behalf.