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1986 DIGILAW 293 (PAT)

S. C. Das, Chairman, Hindustan Steel Employees consumers co-operative Stores v. State of Bihar

1986-09-10

U.P.SINGH

body1986
JUDGMENT U. P. Singh, J. This application is directed against the order of the Labour Court, Ranchi, directing reinstatement of the employee (Respondent no. 3) with full back wages. The order was on an application of the employee filed under section 26 of the Bihar & Shops establishment Act, 1953 (in short' the Act') 2. The facts are these, Respondent no.3 was employed as a Sales Manager of the Ration wing of Hindustan Steel Employees Consumers Co-operative Stores on a monthly salary of Rs. 175/-per month. The appointment was temporary with' effect from 1.9.1973. In accordance with the conditions mentioned in the appointment letter (Annexure-1) the service was terminable at any time without assigning any reason after giving one month's notice or on payment of one month's salary in lieu thereof. Various charges of shortage of money and commodities in the stores were alleged. The charges are contained in Annexures 2, 4, and 7. He was asked to explain and Annexure-3 is his explanation. Besides these, various other charges including incompetence and negligence etc. were levelled against the employee (Annexure-5.) In order to realise the shortages of money, his salary for the months of December, 1973 and January, 1974 was withheld. It is admitted that no domestic enquiry was conducted. In pursuance of the terms of contract of employment, the service were terminated. Thereafter, the employee filed a complaint under section 26 of the Act. The Labour Court, after hearing the part is and considering each and every matter on record directed reinstatement with full back wages. The said order of the Labour Court dated 5-5-1979 (Annexure-12) has been challenged by the employer. 3. The petitioner's counsel contended that the provision of the Act, is not applicable to this case because the employee (Respondent no.3) was neither dismissed nor discharged. His services were simply terminated. 4. When the complaint was filed before the Labour Court, the term ‘otherwise terminated' had not been included in section 26 the Act, to be a cause of action for filing a complaint under section 26 of the Act. Section 26 as amended by Act, 2 of 1975 reads as follows.- 26 (1). His services were simply terminated. 4. When the complaint was filed before the Labour Court, the term ‘otherwise terminated' had not been included in section 26 the Act, to be a cause of action for filing a complaint under section 26 of the Act. Section 26 as amended by Act, 2 of 1975 reads as follows.- 26 (1). No employer shall dismiss or discharge or otherwise' terminate the employment of any employee who has been in his employment continuously for a period of not less than six months, except for a reasonable cause and after giving such employee at least one month’s notice or one month's wages in lieu of such notice: Provided that such notice shall not be necessary' where the service of such employee are dispensed with on a charge of such misconduct as may be prescribed by the State Government supported by satisfactory evidence recorded at an enquiry held for the purpose: (2). Every employee. dismissed for discharged or whose employment is otherwise terminated, may make a complaint in writing, in the prescribed manner, to a prescribed authority within 90 days of the receipt of the order of dismissal or discharge or termination of employment on one or more of the following grounds, namely. (i) there was no reasonable cause for dispensing with his services; or (ii) no notice was served on him as required by sub-section (i); or (iii) he had not been guilty of any misconduct as held by the employer; or (iv) no compensation as prescribed in sub-section (i) was paid to him before dispensing with his service. (3) Notwithstanding anything contained in sub-section (2) where the order of dismissal or discharge was received by an employee at any time before the commencement of the Bihar Shops & Establishments (Amendment) Act, 1959, he may make a complaint in writing in the prescribed manner before a prescribed authority within sixty days of the commencement of the said Act. Provided that such complaints, if any, pending before an authority prescribed prior to the commencement of the said Act, shall dispose of the same in accordance with the provision of this Act." 5. In view of the proviso to section 26 (3) of the Act, I am unable to accept the petitioner's contention. The terms are unambiguous. Provided that such complaints, if any, pending before an authority prescribed prior to the commencement of the said Act, shall dispose of the same in accordance with the provision of this Act." 5. In view of the proviso to section 26 (3) of the Act, I am unable to accept the petitioner's contention. The terms are unambiguous. It provides that such complaint, if any, pending before an authority prescribed prior to the commencement of the Act, shall be deemed to have been duly filed before an authority prescribed after such commencement and the said authority shall dispose of the same in accordance with the provisions of this Act. 6. Thus, even though, the term 'otherwise' terminated' was included in sub-section (2) of section 26 of the Act, after filing of the complaint in this case, when it was pending before the prescribed authority, the proviso to sub-section (3) of section 26 of the Act, will be applicable to the present case and the said complaint shall have to be disposed of by the prescribed authority in accordance with it. 7. It must be held on the facts of this case that the services of Respondent no. 3 were terminated on the ground of misconduct of shortages of money and commodities in the stores. This is obviously from Annexure 2, 4 and 7. Besides these, various other charges including the Act, of incompetence and negligence etc. were added and alleged against the employee vide Annexure 6, In view of these allegations of misconduct of shortages of money and commodities in the stores and charges of incompetence and negligence it is difficult to accept the petitioner's contention that the impugned order was a termination simpliciter. Admittedly, no domestic enquiry was held to prove the charges of misconduct. In view of the allegation made by the Management and their reasons for terminating the service based on these allegation, the truth of such charges of misconduct alleged by the employer bad to be decided after giving full opportunity to the employee to refute those accusations in a proper domestic enquiry. In view of the allegation made by the Management and their reasons for terminating the service based on these allegation, the truth of such charges of misconduct alleged by the employer bad to be decided after giving full opportunity to the employee to refute those accusations in a proper domestic enquiry. In the case of the Associated Corporation of Industries (India) private Limited v. Additional Commissioner for workmen's Compensation the Madras High Court held that where the management terminated the services of its employee by issuing notice alleging incompetence and inefficiency against him, it was necessary for the management to hold domestic enquiry to prove the charges against the employee. In the present case admittedly no. domestic enquiry was held and the employee was not given opportunity to refute or disprove the accusations made against him in a domestic enquiry held for this purpose. In the absence of such an enquiry, a mere notice terminating the service of the employee was not sufficient. How could it then be said that the employer terminated the service of the employee for a reasonable cause. 8. As aforesaid, on a plain reading a section 26, it must be held that an employee can be dismissed or discharged only for a reasonable cause and after giving atleast one month's notice or one month's wages in lieu of notice. The employer must establish that the service of the employee were terminated far a reasonable cause inspite of any condition imposed in the appointment letter to the contrary. In the present case, the term of contract was contrary to the provisions of section 26 of the Act, and, as such it would not be binding. The contention, therefore, that the employer was competent to terminate the services in view of the terms or appointment that his service can be terminated at any time without assigning' reasons, cannot be accepted to. The term of employment of an employee wherever they run counter to the statutory principles of rules must give way to the statute which has been made for the benefit of the employees, The employer must have some reasonable cause for the termination of the services of his employee. Even under the Industrial dispute Act, the legal position is the, same. The standing order supersedes any contractual terms of employment agreed upon between the employer and the employees if they are in contravention of it. Even under the Industrial dispute Act, the legal position is the, same. The standing order supersedes any contractual terms of employment agreed upon between the employer and the employees if they are in contravention of it. Where the terms of employment between 'the employee and employer are in conflict with the standing order, the standing order' would prevail. Crompton Greaves Ltd. Vs. The Presiding Officer. 9. In order to find out whether the order of termination is one of termination simpliciter under the provision of contract or standing order, the tribunal has ample jurisdiction to go in to all the circumstances which led to the order of termination simpliciter. The form of the order of termination is not conclusive of the true nature of the order for, it is possible that the form maybe merely a camouflage for an order of dismissal for misconduct. It is, therefore, open to the tribunal to go behind the form of the order and look at the substance. If it comes to the conclusion that though in form the order amounts to termination simpliciter, in reality, it cloaks a dismissal for misconduct, it will be open to the tribunal to set aside the order as a colourable exercise of power by the Management. See; Chartered Bank, Bombay V. Chartered Bank Employees' Unions. 10. In the case of Management Shahadara(Delhi) Saharanpur Light Railway Co Ltd. Vs. S.S. Railway workers Union, it was held by the Supreme Court that the right to contract in industrial matters is no longer an absolute right and statutes dealing with industrial matters abound with restrictions on the absolute right to contract. The doctrine of hire and fire, for instance, is now completely abrogated both by statutes and by industrial adjudication, and even where the services of an employee are terminated by an order of discharge simpliciter, the legality and propriety of such an order can be challenged in industrial tribunals. Referring to the provision of the' Bihar Shops and Establishments Act, 1953 it was stated that during, the last decade or so statutes have been passed such as the Bihar shops and Establishment Act, 1953, which requires reasonable cause for dispensing with the services of an employed by an order of discharge simpliciter. Referring to the provision of the' Bihar Shops and Establishments Act, 1953 it was stated that during, the last decade or so statutes have been passed such as the Bihar shops and Establishment Act, 1953, which requires reasonable cause for dispensing with the services of an employed by an order of discharge simpliciter. If reasons for discharging an employee are furnished to the employee concerned not only has the satisfaction of knowing why his services are dispensed with but it become easy for him in appropriate case to challenge the order on the ground that it is either not legal or proper which in the absence of knowledge of those reasons it may be difficult if not impossible for him to do. Therefore, the decision cited by the petitioner in the case of the State of U. P. V. Ram Chandra Trivedi is not applicable to the present case. In the facts of this case, it must be held the order of termination of service simpliciter was founded on misconduct. The case of Jagdish Vastralaya and others v. State of Bihar & others was decided before the amendment of 1975 was introduced in section 26 of the Act, which was amended by Act, 2 of 1975. Therefore, these provisions were not noticed in the said judgment. 11. In this view, the employee (Respondent no. 3) is entitled to be reinstated. In absence of the domestic enquiry to prove the charges of misconduct against the employee, notice of termination of the service by the employer along with one month's salary in view of notice was not sufficient. I, therefore, affirm the finding of the Labour Court directing reinstatement of the employee (Respondent no. 3) with full back wages. 12 This application is accordingly dismissed but in the circumstances of this case, there will be no order as to costs Application dismissed.