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Allahabad High Court · body

1992 DIGILAW 1332 (ALL)

Reno Sagar Power Company Ltd. v. Presiding Officer, Labour Court

1992-09-29

M.L.BHAT

body1992
JUDGMENT : M.L. BHAT, J. 1. By this judgment the two writ petitions-writ petition No. 20666 of 1990 and 19683 of 1991 -- are being decided. In writ petition No. 19683 of 1991 the Petitioner has challenged the recovery proceedings in pursuance of the order passed by the Respondent No. 1 dated 2-7-1991. The validity or otherwise of those recovery proceedings are dependent on the award passed by the Labour Court in favour of the workman, who is one of the Respondents in both the writ petitions. Therefore, the judgment in writ petition No 20666 of 1990 will govern the other petition also. 2. By its award dated 5-2-1990 the Labour Court has held that the retrenchment of the workman was in violation of the provisions of the Uttar Pradesh industrial Disputes Act, hereinafter referred to as 'the Act, therefore, it has quashed the retrenchment of the workman and ordered his reinstatement with back wages. The Petitioner has challenged the said award through the medium of this writ petition, 3. It appears that the workman was appointed by the order dated 2-5-1983 as Fitter Grade III on a fixed salary of Rs. 280/- plus dearness allowance per month. His appointment was probationary for a period of six months with effect from the date he joined or for such extended period as was feed by the management at their option. During the period of probation his services could be dispensed with without notice. After his probation if he was confirmed, his appointment was to continue for an indefinite period. The appointment order had provided the workman's duties and obligations arid arrangement for his residential accommodation, leave, travelling expenses and Provident Fund etc. 4. On 18-7-1984 the workman's services are said to have been terminated by a written order informing him that his service were no longer required by the Petitioner with immediate effect. He was also informed that he will be paid one month's wages in lieu of notice in addition to 15 days wages. The termination order also directed him to hand over charge of all the papers, documents tools etc. etc. to one Mr. Bose and obtain No Dues Certificate from all concerned departments. He could then collect his dues from the Time Office/Accounts Department after submitting the required 'No Dues Certificate'. The workman seems to have raised an industrial dispute, which was referred to the Labour Court. etc. to one Mr. Bose and obtain No Dues Certificate from all concerned departments. He could then collect his dues from the Time Office/Accounts Department after submitting the required 'No Dues Certificate'. The workman seems to have raised an industrial dispute, which was referred to the Labour Court. The reference was whether the termination of the Petitioner's service was proper and legal. If it was not so, what relief could be granted to the workman. The Labour Court seems to have passed the award after providing opportunity to both the sides to file written statements. 5. The Labour Court has found that the workman had worked from 2-5-1983 to 17-7-1984 continually and immediately before the termination of his services he had completed 240 days in 12 months of his service and he was, therefore, entitled to retrenchment compensation in terms of Section 6-N of the Act. The termination order was given to the Petitioner on 19-7-1984 terminating his services with effect from 18-7-1984. The Petitioner had not produced any evidence to prove that before issuing the termination order the workman was paid retrenchment compensation. On 18-7-1984 the workman was not allowed to work. The petitioner had admitted before the Labour Court that in lieu of one month's notice the workman was offered 15 days salary. However, it was not clear whether the offer to the workman was made on 18-7-1984 when he was not allowed to work. The termination order was Served on the workman on 19-7-1984. According to the Petitioner three vouchers were made for paying the amount due to the workman including 15 days salary in lieu of one month's notice. The Petitioner's case is that the workman had not accepted the offer of payment made to him on 19-7-1984. This plea was not believed by the Labour Court and it is stated in the award that the vouchers, which are alleged to have been prepared, were not produced in Court. The Labour Court has held that in fact the vouchers appear to 'have been prepared on 19-7-1984. The termination was made effective on 18-7-1984. Therefore, at the time of termination of the workman's services no attempt was made to make him any payment and no payment was offered to him. The vouchers, which are said to have been prepared, was a post termination event. The termination was made effective on 18-7-1984. Therefore, at the time of termination of the workman's services no attempt was made to make him any payment and no payment was offered to him. The vouchers, which are said to have been prepared, was a post termination event. According to the Labour Court it was necessary that the payment doe to the Petitioner u/s 6-N of the Act was made before the termination order was served on him. The Labour Court has also held that the workman was retained after the completion of probation period, there-fore, he has acquired vested right to be dealt with in accordance with the procedure laid down under the Act if his services were required to be terminated. 6. The Petitioner in the writ petition has stated that the workman's services could be terminated without notice during the period of probation. His probation period could be extended or he could be confirmed. After the completion of the workman's period of probation, he was not confirmed, therefore, he remained a probationer. His performance was found not satisfactory, therefore, he was not confirmed. The management terminated his services before confirming him on the ground that his performance was not satisfactory. There was no necessity of holding a domestic enquiry or to give chargesheet to the workman. The workman could not claim the status of a permanent employee without there being any order in this regard from the Petitioner. It is stated that the workman's services were terminated on 18-7-1984 and he was offered IS days salary in lieu of notice as retrenchment compensation in accordance with Section 6-N of Act. The termination of his services, therefore, cannot be said to be illegal. Under the standing orders of the company, which were applicable in the case it is required that if the employment of any workman is terminated, the wages earned by him and other dues payable to him shall be paid to him by the employer before the expiry of second working day from the day on which his employment was terminated provided No Dues Certificate as per the rules of the company is submitted by the workman concerned within 24 hours before his termination of service. Acting under the provisions of the aforesaid standing orders of the company he was asked to produce the No Dues Certificate. 7. Acting under the provisions of the aforesaid standing orders of the company he was asked to produce the No Dues Certificate. 7. It is contended by the Petitioner that the award passed by the Respondent No. 1 is illegal and against the facts brought before it. The workman was only a probationer and his services could be terminated at any time. The workman could not claim confirmation because he was not confirmed at any time. Section 6-N of the Act is said to be not applicable to the case. The Petitioner has committed no default. 8. The Petitioner has filed a supplementary affidavit also. It is stated that the workman was served with the order of termination on 19-7-1984 in the office of the Petitioner and along with the termination order he was supplied with three vouchers prepared by the Time Office for various payments which are enumerated in para 5 of the affidavit. It is sought to be canvassed that the Petitioner has complied with Section 6-N of the Act. Copies of statements of some witnesses and that of the Petitioner before the Labour Court are annexed with the supplementary affidavit. The vouchers supplied to the workman had to be presented by him before the Accountant Cash Counter at the time of payment of his dues. This procedure is said to have been known to the workman. 9. The case of the other side-workman - is that he had acquired the status of permanency after the extended period of probation was over. His services were terminated without following the procedure under the Act. He was found inefficient and not suitable, therefore, he was entitled to be dealt with in accordance with law before his services could be terminated. It is contended that as probationer also he was entitled to get retrenchment compensation u/s 6-N of the Act. The retrenchment compensation in lieu of one month's notice was not paid to him at the time of termination of his services. Therefore, there is violation of the provisions of Section 6-N of the Act, which would vitiate the order of termination. 10. During the course of arguments the learned Counsel for the Petitioner did not contest that the provisions of Section 6-N of the Act are applicable to the Petitioner also. Therefore, there is violation of the provisions of Section 6-N of the Act, which would vitiate the order of termination. 10. During the course of arguments the learned Counsel for the Petitioner did not contest that the provisions of Section 6-N of the Act are applicable to the Petitioner also. Therefore, as a probationer also, before the workman's services were terminated, he was entitled to be paid retrenchment compensation in accordance with Section 6-N of the Act lays down the procedure for retrenchment of a workman and makes some conditions precedent to retrenchment of a workman. The said Section is reproduced below : 6. N. Conditions precedent to retrenchment of workman -- 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 notice. Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies the date for the termination of service. (b) the workman has been paid at the time of retrenchment compensation which shall be equivalent to fifteen day's average pay for every completed year of service or any part thereof in excess of six months ; and (c) notice in the prescribed manner is served on the State Government. 11. The learned Counsel for the Petitioner submitted that the law does not require that retrenchment compensation should be paid to a workman u/s 6-N of the Act before his retrenchment is ordered. It could be paid at the time of issuance of the order of termination of service. The retrenchment compensation was offered to the workman. He refused to accept it and left the office of the company. Thereafter it was sent to him through money order, which is said to have been accepted by him. He submitted that there is no violation of Section 6-N of the Act, therefore, the impugned award of the Labour Court was against law. It is contended that the workman was not a permanent employee. Thereafter it was sent to him through money order, which is said to have been accepted by him. He submitted that there is no violation of Section 6-N of the Act, therefore, the impugned award of the Labour Court was against law. It is contended that the workman was not a permanent employee. He was on extended probation, period of probation was completed by him, that could not make him confirmed at the expiry of the period of probation unless there was an order confirming him after the period of probation. The workman's service could therefore, be terminated and no procedure was to be followed for termination of his service. He has relied on a judgment in K.A. Barot v. State of Gujrat ILR 1992 431 (February part). It is held by the Supreme Court that in the absence of a rule to the contrary, probation does not get confirmed after the period of probation unless there is specific order made in this regard. However, on the expiry of period of probation the workman's status is something more than probationary, other than the confirmed employee. Reliance is placed by the learned Counsel for the Petitioner on a judgment in the case of Brigadier B.B. Chadha v. M/s. Balmar Lawrie and Company Ltd.1989 (1) UP LB EC 95, wherein it has been held that where performance of a probationer was found unsatisfactory his service could Determinated and the termination of service of a probationer for his unsatisfactory performance could not be termed as arbitrary or malafide. The order of termination cannot cast any stigma on the probationer and is valid. 12. It is true that the workman was not confirmed. His initial period of probation was six month. The same was extended by a further period of six months, so he was to remain on probation for one year. In May, 1984 he had completed the period of probation and he did not get the status, of a confirmed employee merely because he had completed one year probation period unless there was an express order in writing confirming him against the post. No such order was passed. He, therefore, is not to be treated as a confirmed Workman of the Petitioner concern but is to be treated as other than a confirmed employee but not as a probationer in terms of the judgment in K.A. Barot's case (Supra). No such order was passed. He, therefore, is not to be treated as a confirmed Workman of the Petitioner concern but is to be treated as other than a confirmed employee but not as a probationer in terms of the judgment in K.A. Barot's case (Supra). The workman was temporary workman, who had rendered more than one year's service and had completed 240 working days immediately preceding 12 months. Therefore, he could claim protection of Section 6-N of the Act before his services were terminated. As probationer also he could be governed by Section 6-N of the Act, After the completion of the probation and after having rendered one year’s service he had the protection of Section 6-N of the Act. He, therefore, was to be paid at the time of retrenchment compensation equivalent to his 15 days average pay as retrenchment compensation in lieu of one month's notice. He was entitled to one month's notice in writing indicating the reasons for retrenchment and at the expiry of one month's notice he could cease as a workman or he was to be paid retrenchment compensation in lieu of such notice. So the compensation in lieu of one month's notice is also to be paid before retrenchment and not after the retrenchment. The expression used in Section 6-N of the Act would show that retrenchment compensation cannot be paid after the retrenchment order is issued. It has to be paid at the time of retrenchment itself or any time before that. The retrenchment compensation is an alternative to one month's notice. The retrenchment becomes effective at the expiry of one month's notice period but it has to be given in advance and if notice is not given then compensation is also to be given in advance of retrenchment. The payment of retrenchment compensation is an essential condition, which must happen prior to the actual retrenchment. In the present case it is revealed from the record that retrenchment compensation was offered to the workman on 19-7-1984 i.e. one day after termination of his service. The offer of payment of retrenchment compensation was also not unconditional. The workman was asked to obtain 'No Dues Certificate' first, thereafter he could claim all his dues which had fallen due to him on account of his retrenchment. The offer of payment of retrenchment compensation was also not unconditional. The workman was asked to obtain 'No Dues Certificate' first, thereafter he could claim all his dues which had fallen due to him on account of his retrenchment. The learned Counsel for the Petitioner wanted to explain this condition by saying that the workman had other dues payable to him for which he was required to get 'No Dues Certificate'. The condition for payment of other dues was made dependant on the workman's obtaining 'No Dues Certificate'. This condition in the impugned order did not relate to the payment of compensation. However, this is not so. The workman was asked to collect the dues which would include his dues on account of retrenchment compensation only after he would obtain 'No Dues Certificate. 'No retrenchment compensation was paid at the time of his retrenchment or any time before that on 18-7-1984. It was offered to him on 19-7-1984 and that offer was also conditional. The condition would make the retrenchment compensation payable to the workman only if he completed certain formalities. Therefore, the offer made to the workman after retrenchment is also not in accordance with law. There is no compliance of Section 6-N of the Act for two reasons In the first place, no retrenchment compensation was paid to the workman any time before 18-7-1984 or on 18-7-1984 when his retrenchment was made effective and the offer of payment of retrenchment compensation after his retrenchment was not valid and its validity was further tampered with by making payment of retrenchment compensation conditional of the workman's obtaining 'No Dues Certificate'. The labour court's finding that the provisions of Section 6-N of the Act were not complied with cannot be said to be bad in any manner against law. 13. The workman's period of probation had expired. He was not on probation also. That would mean that he was a temporary employee of the Petitioner, who had found his work to be unsatisfactory due to his inefficiency. The bonafide of this order is questioned by the workman before the Labour Court. He claimed that he was to be dealt with according to law, meaning there by that there should have been an enquiry about his Inefficiency and unsuitability. Such a question is cognizable under the Act and the Labour Court has jurisdiction to entertain a dispute on this count. He claimed that he was to be dealt with according to law, meaning there by that there should have been an enquiry about his Inefficiency and unsuitability. Such a question is cognizable under the Act and the Labour Court has jurisdiction to entertain a dispute on this count. In Assam Oil Company Vs. Its Workmen, AIR 1960 SC 1264 the Supreme. Court was of the view that whether or not the termination of service in given case is the result of the bona fide exercise of the power conferred on the employer by the contract or whether in substance it is a punishment fop alleged misconduct would always depend upon the facts and circumstances of each case. The employee's right to expect security of tenure is also to be taken into account in the same manner in which the employer's right to exercise his option in terms of the contract has to be recognised. If an order is passed by an employer terminating the service of his employee under the terms of the contract, the Industrial Tribunal has the authority to consider validity, propriety or legality of the said order. In this case the workman had joined the Trade Union. Therefore, they were dismissed solely for that reason. It was held that if workman were guilty of misconduct the employer was not justified in discharging the workmen without holding proper enquiry. 14. In the present case also the workman had a right to challenge the bona fides of the termination Order and the Labour Court had the occasion to hold an enquiry. On enquiry the Labour Court has come to the conclusion that the termination of the workman's service is without enquiry. No fault can be found with that finding. The workman's termination order was found bad for two reasons. Firstly it was ordered without complying with Section 6 of the Act and secondly, it was found to be without enquiry. Both the findings of the Labour Court do not suffer from any infirmity. Therefore, this Court cannot interfere with the impugned award in its writ jurisdiction under Article 226 of the Constitution of India. On examination of the award it appears that there is no error apparent on the face of the award or any kind of illegality committed by the Labour Court. The writ petition is, therefore, liable to be dismissed. 13. Therefore, this Court cannot interfere with the impugned award in its writ jurisdiction under Article 226 of the Constitution of India. On examination of the award it appears that there is no error apparent on the face of the award or any kind of illegality committed by the Labour Court. The writ petition is, therefore, liable to be dismissed. 13. Accordingly writ petition No. 20666 of 1990 fails and is hereby dismissed. 14. Since the validity of the award, which was impugned in writ petition no 20666 of 1990 has been upheld, therefore, writ petition No. 19683 of 1991 also has to be dismissed. Accordingly the said writ petition No. 19683 of 1991 would also fail. The wages payable to the workman appear to have been computed and recovery ordered by the Deputy Labour Commissioner, which was challenged in this Court because the validity of the award on which the computation was made was also under challenge. Accordingly writ petition No. 19683 of 1991 is also dismissed. 15. However, there will be no order as to costs in both the writ petitions.