Managing Partner Bharat Hotel v. Labour Court Ernakulam
1993-03-03
M.M.PAREED PILLAY
body1993
DigiLaw.ai
JUDGMENT 1. Petitioner in O.P. 11213 of 1991 (hereinafter referred to as the Management') challenges Ext. P-1 award of the Labour Court, Ernakulam (second respondent). O. P. 1022 of 1992 is filed by the first respondent in O.P. 11213 of 1991 (hereafter referred to as 'the Union') challenging the denial of backwages to the workers. The Union has also challenged the finding of the second respondent that enquiry with regard to 12 workers was valid and proper. 2. The following points arose for consideration before the second respondent: (i) Whether the dismissals of all the workmen are an act of victimisation and motivated by malafides and unfair labour practice ? (ii) Whether the enquiries conducted by the enquiry officers are legal and proper and their findings are supported with legal evidence? (iii) Whether the dismissal of other workers without conducting the enquiry is legal and justifiable. (iv) Whether the alleged settlement between the Management and 12 employees is legal and proper? (v) What reliefs the dismissed workers are entitled to? 3. In the claim statement filed by the Union it is contended that 67 workmen were dismissed by the Management illegally. The statement filed by the Management shows that services of nine workers were terminated as they were probationers. Services of four employees were terminated as deserters. 39 employees were dismissed from service after conducting domestic enquiry. 15 employees left the establishment voluntarily after settling their accounts with the Management The Union contended that the services of the workers were terminated by the Management purely as a vindictive measure as they joined Ernakulam Hotel Thozhilali Union and so it amounts to victimisation and unfair labour practice. Management denied the allegations regarding illegal dismissal of workmen and took up the stand that it always used to meet their just needs and demands. It is stated that as a result of union rivalry workers belonging to the Union indulged in illegal activities, that conciliatory conferences con vended were in vain and that the workers indulged in acts of force and violence and held out threats of intimidation. According to the Management, after considerable hesitation disciplinary action was taken against the delinquent workmen and in proper domestic enquiry various offences committed by them were established.
According to the Management, after considerable hesitation disciplinary action was taken against the delinquent workmen and in proper domestic enquiry various offences committed by them were established. Against M/s V. J. Antony, A. N. John and P. V. Antony the domestic enquiry was conducted by an Advocate and it was done in accordance with law and in a fair and proper manner. 13 workmen were probationers. Management contended that their services were dispensed with in accordance with service rules of the hotel. With regard to the other workmen the enquiry was done strictly in accordance with the principles of natural justice and fair play. 4. Labour Court found that 12 workers left the service voluntarily and so they are not entitled to any reliefs. The Labour Court further found that four workers deserted and to them also no relief is warranted. Despite the finding that nine workers were probationers the second respondent held that they should be reinstated as the order of termination did not show that their services were terminated for not satisfactorily completing the period of probation. With regard to six workers, second respondent found that enquiry against them was proper. With regard to the remaining workers, second respondent held that the enquiry was not legal or proper. 5. Main contention of the Management is that the second respondent failed to give it opportunity to adduce further evidence having found that the enquiry was vitiated. In the written statement itself the Management has taken up the contention that in the event of the Labour Court finding that the domestic enquiry is vitiated in any manner it should be given further opportunity to adduce evidence. Learned counsel for the Management pointed out that the failure on the part of the second respondent to afford further opportunity to the Management is in total derogation of the well accepted legal position decided in a catena of decisions by the Supreme Court. 6. As the above plea was taken at the first instance itself, contention of the Management that the denial of further opportunity by the second respondent is without any justification is really tenable. Whenever the Labour Court finds that a proper domestic enquiry was not held or where the findings recorded in such enquiry are perverse, it has complete jurisdiction to deal with the entire gamut of the controversy between the parties.
Whenever the Labour Court finds that a proper domestic enquiry was not held or where the findings recorded in such enquiry are perverse, it has complete jurisdiction to deal with the entire gamut of the controversy between the parties. It is always open to the Management to rely on the domestic enquiry and alternatively advance a contention that if the enquiry is found not proper it should be given an opportunity to lead additional evidence. Merely because the Management has taken such a stand the Labour Court cannot jump to the conclusion that the enquiry was not held properly or in a fair manner. 7. In Ritz Theatre (P) Ltd. v. Its workmen AIR 1963 SC 295 = 1963 (3) SCR 461 , the Supreme Court held as follows: "The true and correct legal position is that if the employer seeks to lead evidence in addition to the evidence adduced at the departmental enquiry and the employees are also given permission to lead additional evidence it is necessary for the Tribunal first to consider the preliminary issue as to the validity of the domestic enquiry and then proceed to deal with the merits in case the preliminary issue is decided against the employer." Thus, in a case where the Labour Court while dealing with a dispute relating to the dismissal of an employee finds that no enquiry has been held or the enquiry which has been held is in derogation of principles of natural justice or unfair in any other manner or if it is found that the findings recorded by the enquiry officer are perverse, it can consider the entire matter on evidence adduced by both sides before it. The employer can adduce additional evidence to substantiate his contention before the Labour Court when according to him the dismissal is really justified. In a case where the employer has sought an opportunity to adduce evidence it cannot be just ignored on the; ground that it will be a sheer exercise in futility. 8. In Workmen of F. T. & R. Co. v. The Management AIR 1973 SC 1227 at 1241 para 33 the Supreme Court held that the employer is entitled to adduce evidence for the first time before the Tribunal even if he had held no enquiry or the enquiry held by him is found to be defective.
8. In Workmen of F. T. & R. Co. v. The Management AIR 1973 SC 1227 at 1241 para 33 the Supreme Court held that the employer is entitled to adduce evidence for the first time before the Tribunal even if he had held no enquiry or the enquiry held by him is found to be defective. The Supreme Court stressed the necessity to afford opportunity to the workman to adduce contra evidence. The stage at which the employer has to ask for such an opportunity has been pointed out by the Supreme Court in AIR 1972 SC 1031 i.e., Delhi Cloth and General Mills Company's case. The Supreme Court emphasised that the right in the management to sustain its order by adducing independent evidence before the Tribunal, if no enquiry has been held or if the enquiry is held to be defective has been given judicial recognition over a long period of years. 9. In F. T. & R. Co. of India (P) Ltd. v. Its Employees' Union AIR 1981 SC 1626 the Supreme Court held that when no enquiry has been held or the enquiry held has not been proper, the Tribunal has jurisdiction to allow the management to lead evidence to justify the action taken. In the above decision the Supreme Court relied on Bharat Sugar Mills' case 1962-3 S.C.R. 684 and held as follows: "But the mere fact that no inquiry has been held or that the inquiry has not been properly conducted cannot absolve the Tribunal of its duty to decide whether the case that the workman has been guilty of the alleged misconduct has been made out. The proper way for performing this duty where there has not been a proper inquiry by the management is for the Tribunal to take evidence of both sides in respect of the alleged misconduct." 10. Counsel for the Union submitted that this is a case where the charge itself is vague and so there is no question of affording further opportunity to the Management. In F. T. & R. Co.
Counsel for the Union submitted that this is a case where the charge itself is vague and so there is no question of affording further opportunity to the Management. In F. T. & R. Co. of India (P) Ltd. v. Its employees' Union AIR 1981 SC 1626 = 1982 1 SCC 20 the Supreme Court held that even in a case where it is found that proper charge sheet has not been served on the workmen the Tribunal is entitled to ask the parties to lead evidence to enable the Tribunal to decide the merits of the dispute. In the above case the Supreme Court relied on the decision in Ritz Theatre (P) Ltd. v. Its Workmen AIR 1963 SC 295 where the Supreme Court held: ''.....................if it appears that the departmental enquiry held by the employer is not fair in the sense that proper charge had not been served on the employee or proper or full opportunity had not been given to the employee to meet the charge, or the enquiry has been affected by other grave irregularities vitiating it, then the position would be that the Tribunal would be entitled to deal with the merits of the dispute as to the dismissal of the employee for itself. The same result follows if no enquiry has been held at all. In other words, where the Tribunal is dealing with a dispute relating to the dismissal of an industrial employee, if it is satisfied that no enquiry has been held or the enquiry which has been. held is not proper or fair or that the folding recorded by the Enquiry Officer are perverse, the whole issue is at large before the tribunal. This position also is well settled." 11. In East India Hotels v. Their Workmen AIR 1974 SC 696 the Supreme Court has categorically held that in a case where no enquiry has been held by the employer or if the enquiry held by him is found to be defective, the Tribunal can satisfy itself about the legality and validity of the order and that the Tribunal should give an opportunity to the employer and employee to adduce evidence, 12. Counsel for the Union contended that the charges against the workmen are vague and as there is ample evidence of unfair labour practice and victimisation the Labour Court was not bound to afford a second opportunity to the Management.
Counsel for the Union contended that the charges against the workmen are vague and as there is ample evidence of unfair labour practice and victimisation the Labour Court was not bound to afford a second opportunity to the Management. There is no force in the above contention. Even in a case where charge is found to be vague or a perusal of the domestic enquiry papers reveals highly partisan approach or when it is found that the enquiry report has been prepared in wanton disregard of principles of natural justice and fair play second opportunity to adduce evidence cannot be denied to the Management in a case where they have sought it at the appropriate time. Union's contention that the charges against the workers are very vague and as the circumstances in the case would establish unfair labour practice and victimisation the Labour Court was not bound to afford a second opportunity to adduce evidence to the Management is indeed difficult to be accepted. The well settled legal position is that in a case where the Tribunal finds that the domestic enquiry is improper or in a case where there was no enquiry at all it has always the power to direct the parties to lead evidence to ascertain the correct state of facts. In that view of the matter, second respondent's direction to reinstate the 39 workers cannot be justified. 13. The second respondent held that the domestic enquiry conducted against 7 workers does not suffer from any infirmity. Counsel for the Management submitted that despite the said finding second respondent allowed them to be reinstated and this is basically erroneous. According to him, second respondent lacked jurisdiction to sit in judgment over the decision of the Management as an appellate body and he relied on East India Hotels v. Their Workmen AIR 1974 SC 696 where the Supreme Court held: "When a proper enquiry has been held by an employer and the finding of misconduct has support from the evidence adduced at the said enquiry, the Tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body.
The interference with the decision of the employer will be justified only when the enquiry is unfair or the findings arrived at in the enquiry are perverse or have no basis in evidence or the management is guilty of victimisation, unfair labour practice or malafide or the punishment is harsh and oppressive. The Tribunal cannot, reappraise the evidence and arrive at a conclusion different from that arrived at by the domestic Tribunal." With regard to these workers counsel for the Union submitted that the Labour Court's direction to reinstate them cannot be interfered with by this Court. Counsel pointed out that these workers were having blemish less record of service and as the Labour Court has considered every aspect of the matter into consideration and exercised its power under S.11A of the Act this Court can interfere with it only on really compelling grounds. 14. In Ved Prakash v. M/s Delton Cable India (P) Ltd. AIR 1984 SC 814 = 1984 (2) SCC 569 Supreme Court held that in the absence of any record to show of any previous adverse remarks against the employee the extreme penalty of dismissal from service ordered by the management is shockingly disproportionate regard being had to the charge framed against him. The Supreme Court held: "We are also of the opinion that no responsible employer would ever impose in like circumstances the punishment of dismissal to the employee and that victimisation or unfair labour practice could well be inferred from the conduct of the management in awarding the extreme punishment of dismissal for a flimsy charge of abuse of some worker or officer of the management by the appellant within the premises of the factory." In Rama Kant Misra v. State of U.P. AIR 1982 SC 1552 = 1982 (3) SCC 346 the Supreme Court held that punishment must be proportionate to the misconduct'. The Supreme Court had occasion to consider impact of S.11A. Supreme Court held thus: "The labour court or tribunal has jurisdiction and power under S.11A of the Industrial Disputes Act to substitute its measure of punishment in place of that awarded by the employer and the Supreme Court, exercising jurisdiction under Art.136 over the decision of the labour court or tribunal, can examine whether the labour court or tribunal had properly approached the matter for exercising or refusing to exercise its power under S.11A.
Before the Supreme Court can exercise the discretion under S.11A, it has to be satisfied that even though misconduct is proved and a penalty has to be imposed, the extreme penalty of dismissal or discharge was not justified in the facts and circumstances of the case meaning thereby that the punishment was either disproportionately heavy or excessive. In order to avoid the charge of vindictive ness justice, equity and fair play demand that punishment must always be commensurate with the gravity of the offence charged." Counsel for the Union also relied on Jitendra Singh v. Shri Baidyanath Ayurvey Bhawan Ltd. AIR 1984 SC 976 and contended that under S.11A of the Act there is wide discretion in the Tribunal in the matter of modulating the punishment and that the High Court has no power to interfere with it under Art.227 of the Constitution of India. The Supreme Court observed: "Under S.11A advisedly wide discretion has been vested in the Tribunal in the matter of awarding relief according to the circumstances of the case. The High Court under Art.227 of the Constitution does not enjoy such power though as a superior court, it is vested with the right of superintendence. The High Court is indisputably entitled to scrutinise the orders of the subordinate tribunals within the well accepted limitations and therefore, it could in an appropriate case quash the award of the Tribunal and thereupon remit the matter to it for fresh disposal in accordance with law and directions, if any. The High Court is not entitled to exercise the powers of the Tribunal and substitute an award in place of the one made by the Tribunal as in the case of an appeal where it lies to it. 15. In Management of Hindustan Machine Tools Ltd., Bangalore v. Mohd. Usman and another 1984 (1) SCC 152 the Supreme Court held that where the punishment imposed by the employer is disproportionately excessive Labour Court in exercise of its discretion under S.11A can reduce the punishment. S.11A confers jurisdiction on the Labour Court to evaluate the severity of misconduct and to assess whether punishment imposed by the employer is commensurate with the gravity of misconduct.
S.11A confers jurisdiction on the Labour Court to evaluate the severity of misconduct and to assess whether punishment imposed by the employer is commensurate with the gravity of misconduct. In the above decision it is further laid down that the power under S.11A is specifically conferred on the Labour Court and if the Labour Court after evaluating the gravity of misconduct held that punishment of termination of service is disproportionately heavy in relation to misconduct and exercised its discretion the Supreme Court in the absence of any important legal principle would not undertake to re-examine the question of adequacy or inadequacy of material for interference by the Labour Court. Thus, even in a case where the Labour Court held that the domestic enquiry was conducted properly and without prejudice to the worker it can analyse the evidence to decide whether the dismissal of the worker was justified. It is within the jurisdiction of the Labour Court to consider the propriety and justifiability of the punishment in the case and direct reinstatement if found necessary. 16. As the Labour Court has held that the properly conducted enquiry has not established any serious charge warranting the punishment of dismissal or termination of service of those employees this Court cannot re-appreciate the evidence and substitute its own finding. This Court cannot re-appreciate the findings of the Tribunal especially in the proceedings under Art.227 of the Constitution of India. In Babhutmal v. Laxmibai AIR 1975 SC 1297 the Supreme Court held: "The power of superintendence of High Court under Art.227 being extraordinary is to be exercised most sparingly and only in appropriate cases. This power, as in the case of certiorari jurisdiction, cannot be invoked to correct an error of fact which only a superior court can do in exercise of its statutory power as a court of appeal. The High Court cannot in guise of exercising its jurisdiction under Art.227 convert itself into a court of appeal when the legislature has not conferred a right of appeal and made the decision of the subordinate court or tribunal final on facts. The High Court cannot, while exercising, jurisdiction under Art.227, interfere with findings of fact recorded by the subordinate court or tribunal. Its function is limited to seeing that the subordinate court or tribunal functions within the limits of its authority.
The High Court cannot, while exercising, jurisdiction under Art.227, interfere with findings of fact recorded by the subordinate court or tribunal. Its function is limited to seeing that the subordinate court or tribunal functions within the limits of its authority. It cannot correct mere errors of fact by examining the evidence and re-appreciating it." The award of the Labour Court directing the reinstatement of the 7 workers against whom the domestic enquiry was found properly held does not call for interference. The award to that effect is confirmed. 17. With regard to the nine probationers, admittedly there was no enquiry. In the order of termination no reason is stated. As it is not stated in the orders terminating the service of the probationers that their services were terminated on account of unsatisfactory completion of probation, second respondent held that the termination ,is illegal and invalid. Counsel for the Management argued that the above finding is totally unsustainable as the accepted legal position is that so far as a probationer is concerned there need not be any enquiry and the Management can terminate his service without assigning reason. Counsel relied on Ajit Singh v. State of Punjab 1983 (2) SCC 217 where the Supreme Court said: "Power to put the employee on probation for watching his performance and the period during which the performance is to be observed is the prerogative of the employer. Period of probation may vary from post to post or master to master. And it is not obligatory on the master to prescribe a period of probation. It is always open to the employer to employ a person without putting him on probation. The employer will have discretion in this matter subject to rules by which appointment is governed, otherwise the rule would be counterproductive. Period of probation gives a sort of locus pententise to the employee to observe the work, ability, efficiency, sincerity and competence of the servant and if he is found not suitable for the post, the master reserves a right to dispense with his service without anything more during or at the end of the prescribed period, which is styled as period of probation.
Such termination of service of a probationer will not ordinarily and by itself be a punishment because the servant so appointed has no right to continue to hold such a post any more than a servant employed on probation by a private employer is entitled to:" As the period of probation furnishes effective opportunity to the employer to closely watch the work done by the probationer and as it is the prerogative of the employer to allow the probationer to continue in employment or to dispense with his service altogether, no reason need be stated by the employer if he chooses to dispense with the probationer's service. Contention of the Union that the order issued to the probationers terminating their service does not disclose that it was found unsatisfactory and so the very termination is illegal is not tenable. As held in the cited Supreme Court decision, the termination of service of a probationer will not ordinarily amount to a punishment. 18. Service of four employees were terminated by the Management as deserters. Union's case is that this is not a case of desertion but denial of employment by the Management. Before the Labour Court cogent evidence was not there to hold that these workers were not real deserters. The Labour Court held that termination of their service as deserters is legal and proper and they are not entitled to any relief. That finding cannot be held to be perverse or suffers from any infirmity to be interfered by this Court. 19. According to the Management, 15 employees settled their account's with the Management and left the service. Union contended that settlement itself is illegal and that out of sheer frustration as a result of starvation and chill penury they were forced to leave the establishment. It is contended by the Union that the settlement is unfair and would not bind the employees. As the settlements were arrived under Clause (4) of R.58 of the Industrial Disputes Rules and as all the formalities were complied with and as the employees had signed the settlements freely and without any compulsion it would definitely bind them. It is also pertinent to note that these employees have not challenged the settlements in the claim statement specifically.
As the settlements were arrived under Clause (4) of R.58 of the Industrial Disputes Rules and as all the formalities were complied with and as the employees had signed the settlements freely and without any compulsion it would definitely bind them. It is also pertinent to note that these employees have not challenged the settlements in the claim statement specifically. The Labour Court held that in the absence of satisfactory and convincing evidence that these employees became signatories to the settlement's clue to compulsion or due to circumstances beyond their control it is not possible to hold that it is not valid. There is hardly any data for a different conclusion. 20. The finding of the second respondent that those workmen against whom no proper enquiry was held should be reinstated cannot be sustained. That finding is set aside and the case is remitted to the second respondent for fresh consideration with a direction to afford opportunity to both sides to adduce evidence. Second respondent is directed to dispose of the matter with utmost expedition and at any rate within six months after giving such opportunity and in accordance with law. The order of reinstatement of the probationers is quashed. The reinstatement of the workers against whom domestic enquiry was found to be properly held does not call for interference. The finding of the second respondent regarding those workers who have left the establishment voluntarily and the finding with regard to those workers who have arrived at settlements with the Management and left the service are confirmed. 21. Considering the evidence and circumstances of the case, the Labour Court held that the workers are not entitled to backwages. I do not consider it necessary to come to a different finding from that of the Labour Court with regard to backwages. O.P. 11213 of 1991 stands partly allowed. O.P. 1022 of 1992 is dismissed.