Research › Search › Judgment

Orissa High Court · body

2009 DIGILAW 54 (ORI)

MANAGEMENT OF CAPITAL URBAN HOUSE BUILDING COOPERATIVE SOCIETY LTD. v. GOVERNMENT OF ORISSA

2009-01-21

S.C.PARIJA

body2009
JUDGMENT : S.C. Parija, J. - This writ petition by the management of Capital Urban House Building Co-operative Society Ltd., Bhubaneswar, is directed against the award dated 21.08.2003, passed by the Labour Court, Bhubaneswar, in I.D. Case No. 5 of 1998, holding that the action of the management in terminating the services of the workman, opposite party No. 3, with effect from 8.10.1996 is neither legal nor justified and the workman is entitled to reinstatement in service with 50% back wages. 2. The case of the respective parties before the Labour Court was as follows: (a) The workman-opposite party No. 3 claimed that he was appointed as Junior Engineer under the Petitioner -management, after being duly selected by an interview, conducted by the management, with effect from 26.04.1995 with a consolidated salary of Rs. 1,500/- per month and continued to work as such under the management, till termination of his service on 8.10.1996. He received his consolidated salary of Rs. 1,500/- per month till June 1996 and thereafter from July, 1996 to September, 1996, he received a consolidated salary of Rs. 2,000/- per month. During his tenure in the establishment of the management, he had worked efficiently, sincerely and to the satisfaction of the management but without any rhyme and reason the management terminated his service with effect from 8.10.1996, without following the principles of natural justice and without complying the requirements prescribed u/s 25F of the Industrial Disputes Act (I.D. Act for short). Accordingly it was pleaded by the workman that there was no allegation of any misconduct against him and no departmental proceeding or any enquiry has been conducted by the management, before terminating his service. It was further pleaded by the workman that at the time of termination of his service, no notice or notice in lieu of pay and retrenchment compensation has been paid to him. Accordingly the workman prayed for his reinstatement in service, with full back wages. (b) The case of the management was that the project namely, Dumuduma Plotted Scheme started in the year 1992, in order to provide developed plots of land at Dumuduma in Bhubaneswar to the small economic group of people. For early completion of the civil work of the scheme, the management had engaged the workman to work on daily wage basis with effect from 26.04.1995, as a Junior Engineer, to assist the Site Engineer of Dumuduma Plotted Scheme. For early completion of the civil work of the scheme, the management had engaged the workman to work on daily wage basis with effect from 26.04.1995, as a Junior Engineer, to assist the Site Engineer of Dumuduma Plotted Scheme. The purpose of engagement of the workman was for early completion of the project and since the major portion of the civil work of the said plotted scheme was completed in the month of September, 1996, the management was of the view that there was no work for giving further engagement to the workman and accordingly the Secretary of the management drafted a letter for disengagement of the workman but prior to the service of the said letter of disengagement, the workman had already abandoned the job and left the work site voluntarily, without any information to the competent authority of the management. The management pleaded that no interview was conducted by the management for selection of the workman nor the workman was a regular employee of the management and as the workman left the work voluntarily, without any intimation to the management, he has no legal right to claim for his reinstatement. 3. On the basis of the pleadings of the parties, the Labour Court framed the following issues: (i) Whether the action of the management of Capital Urban House Building Co-operative Society Ltd., Bhubaneswar in terminating the services of Sri Subrat Kumar Panda, Junior Engineer with effect from 8.10.96 is legal and/or justified ? (ii) If not, to what relief Sri Panda is entitled ? 4. Both parties led the evidence in support of their respective cases. The Labour Court on consideration of the evidence on record, came to find that the workman was appointed as a Junior Engineer under the management with effect from 26.4.1995 and worked till the date of his termination on 8.10.1996. While terminating the services of the workman, the management has not given any notice or pay in lieu of such notice and retrenchment compensation and on the contrary, the management has taken the plea that the workman had abandoned the job with effect from 10.10.1996. While terminating the services of the workman, the management has not given any notice or pay in lieu of such notice and retrenchment compensation and on the contrary, the management has taken the plea that the workman had abandoned the job with effect from 10.10.1996. It was not disputed that Dumuduma Plotted Scheme had been closed in the year 1996 and another housing project of the management had been started at Aiginia in Bhubaneswar, in the year 1998, where one Rabindra Kumar Sarab, Junior Engineer and Indramani Jena, Assistant Engineer, have been appointed by the management and they are still continuing under the said management. The Labour Court further found that the management has admitted that the workman has completed 527 days of continuous service under the management, without any break and other employees like Rabindra Kumar Sarab and Indramani Jena have been subsequently regularized in their respective services under the management. Although the management has taken the plea of abandonment of service by the workman with effect from 10.10.1996 but neither any enquiry nor any departmental proceeding has been initiated against the workman, to establish the said fact. 5. The Labour Court, on the basis of evidence on record, also came to find that there was no allegation of misconduct against the workman during his tenure of service in the establishment and without any justification and without complying with the provisions of Section 25F of the I.D. Act, the management has terminated the services of the workman with effect from 8.10.1996, which is illegal and unjustified. The Labour Court further found that even after closure of the Dumuduma Plotted Scheme, another housing project has been started by the management at Aiginia in Bhubaneswar and the said project is still continuing. The Labour Court also found from the evidence adduced by the parties, that other employees who were engaged along with the present workman are still in service under the management and are engaged in housing project at Aiginia, while the services of the workman has been terminated. It was further found that the reasons for termination has not been mentioned in the termination order (Ext.1) and the said fact has also been admitted by the management witness (M.W. 1), who is in evidence has clearly stated that the termination order (Ext.1) does not indicate the reasons for termination. 6. It was further found that the reasons for termination has not been mentioned in the termination order (Ext.1) and the said fact has also been admitted by the management witness (M.W. 1), who is in evidence has clearly stated that the termination order (Ext.1) does not indicate the reasons for termination. 6. On the basis of such evidence on record, the Labour Court came to hold that even if the plea of the management that the workman had abandoned his work is accepted, then also the service of the workman could not have been terminated in the manner, as has been done, without complying with the provisions of Section 25F of the I.D. Act, in view of the settled position of law that the compliance of Section 25F of the I.D. Act is mandatory, as otherwise, the order of termination becomes void. Accordingly the Labour Court, on the basis of the evidence on record, came to hold that the management having not complied with the statutory requirements of Section 25F of the I.D. Act, the action of the management, in terminating the services of the workman, with effect from 8.10.1996, was illegal and unjustified. The Labour Court further found that there is nothing on record to show that the workman has been gainfully employed elsewhere since the date of his termination and therefore the workman is entitled to back wages. The Labour Court accordingly issued the following direction: That the action of the management of Capital Urban House Building Co-operative Society Ltd., Bhubaneswar, in terminating the services of Sri Subrat Kumar Panda, Junior Engineer, with effect from 8.10.96 is neither legal nor justified. The workman Sri Panda is entitled to be reinstated in service with 50% (fifty percent) back wages. 7. learned Counsel for the Petitioner -management submits that as the engagement of the workman, opposite party No. 3, was for a fixed period, till the completion of the Dumuduma Plotted Scheme project, the services of the workman automatically stood terminated with the completion of the said project, as provided u/s 2(bb) of the I.D. Act and therefore the same does not amount to retrenchment and accordingly the question of complying with the provisions of Section 25F of the I.D. Act does not arise. It is further submitted that as the workman abandoned his job and left the service even before issue of formal notice of his disengagement, as per Ext.1, the same cannot be termed as 'retrenchment', so as to attract the mandatory provisions of Section 25F of the I.D. Act. Section 2(oo) of the Act defines 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include: (a) voluntary retirement of the workman, or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (c) termination of the service of a workman on the ground of continued ill health. Section 25F prescribes mandatory procedure to be followed before the retrenchment becomes valid and legal and violation thereof visits with invalidation of the action with consequential results. 8. The scope of Section 2(oo) vis-a-vis Section 25F of the I.D. Act came up for consideration before the apex Court in the case of State Bank of India v. N. Sundra Money, reported in 1976(32) FLR (SC), wherein it has been held as under: A break-down of Section 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 has the employee's service been terminated ? Verbal apparel apart, the substance is decisive. A termination is 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 however produced, may be, the present may be a hard case, but we can visualize abuses by employers, by suitable verbal devices, circumventing the armour of Section 25F and Section 2(oo). Termination embraces not merely the act of termination by the employer, but the fact of termination however produced, may be, the present may be a hard case, but we can visualize abuses by employers, by suitable verbal devices, circumventing the armour of Section 25F and Section 2(oo). 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. To write into the order of appointment the date of termination confers no mokaha from Section 25F(b) which is inferable from the proviso to Section 25F(1). 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 Section 25F and automatic extinguishment of service by effluxion of time cannot be sufficient. Xx xx xx xx Words of multiple import have to be winnowed judicially to suit the social philosophy of the statue. 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 compositive 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. Dexterity of diction cannot defeat the articulated conscience of the provision. 9. The aforesaid interpretation of the word 'retrenchment' has been subsequently applied and followed by the apex Court in the case of Hindustan Steel Ltd., v. State of Orissa, reported in 1976(33) FLR (SC). 10. In a subsequent decision of the apex Court in the case of L. Robert D'souza Vs. 9. The aforesaid interpretation of the word 'retrenchment' has been subsequently applied and followed by the apex Court in the case of Hindustan Steel Ltd., v. State of Orissa, reported in 1976(33) FLR (SC). 10. In a subsequent decision of the apex Court in the case of L. Robert D'souza Vs. Executive Engineer, Southern Railway and Another the Hon'ble Court, with reference to the definition of the expression 'retrenchment' in Section 2(oo) of the I.D. Act, has held, as follows: Therefore, we adopt as binding the well-settled position in law that if termination of service of a workman is brought about for any reason whatsoever, it would be retrenchment except if the case falls within any of the excepted categories, i.e. (i) termination by way of punishment inflicted pursuant to disciplinary action; (ii) voluntary retirement of the workman; (iii) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; (iv) or termination of the service on the ground of continued ill health. Once the case does not fall in any of the excepted categories the termination of service even if it be according to automatic discharge from service under agreement would nonetheless be retrenchment within the meaning of expression in Section 2(oo). 11. In the case of Punjab Land Development and Reclamation Corporation Ltd., Chandigarh Vs. Presiding Officer, Labour Court, Chandigarh and Others a Constitutional Bench of the Supreme Court while considering the scope of the word 'retrenchment', defined in Section 2(oo) of the I.D. Act and analyzing such definition has accepted the wider literal meaning adopted by the Supreme Court in N. Sundra Money and Hindustan Steel cases, rejecting the narrow, natural and contextual meaning. The Hon'ble Court observed as under: The last submission is that if retrenchment is understood in its wider sense what would happen to the rights of the employer under the Standing Orders and under the contracts of employment in respect of the workman whose service has been terminated. There may be two answers to this question. Firstly, those rights may have been affected by introduction of Sections2(oo), 25F and the other relevant sections. There may be two answers to this question. Firstly, those rights may have been affected by introduction of Sections2(oo), 25F and the other relevant sections. Secondly, it may be said, the rights as such are not affected or taken away, but only an additional social obligation has been imposed on the employer so as to give the retrenchment benefit to the affected workmen, perhaps for immediate tiding over of the financial difficulty. Looked at from this angle, there is implicit a social policy. As the maxim goes - Stat pro ratione voluntas populi; the will of the people stands in place of a reason. 12. The above views of the Supreme Court with regard to the meaning and scope of the term retrenchment' as defined in Section 2(oo) and its application to Section 25F of the I.D. Act has been affirmed and reiterated in a subsequent decision of the apex Court in the case of D.K. Yadav v. J.M.A. Industries Ltd. 1993(67) FLR (SC). 13. In the instant case, the management admits the appointment/engagement of the workman as a Junior Engineer and that he has rendered continuous service for more than one year (for 527 days) in the establishment. No materials have been produced by the management to show that the appointment of the workman was purely contractual and for a fixed period and only for a particular scheme or project and his services stood automatically terminated with the expiry of the period or on termination of such scheme. Further the letter of termination (Ext.1) does not reveal the reasons for such termination from service and therefore the management cannot take resort to Section 2(oo)(bb) of the I.D. Act. Moreover the plea of the management that the workman had voluntarily abandoned his job and left the service of the management, without any intimation, is also not supported by any materials on record. In any case, no action by way of a disciplinary proceeding having been initiated against the workman for such unauthorized absence, the bald plea of the management regarding abandonment of service cannot be sustained. Hence the action of the management amounts to illegal retrenchment of the workman in violation of the mandatory provisions contained in Section 25F of the I.D. Act. 14. Hence the action of the management amounts to illegal retrenchment of the workman in violation of the mandatory provisions contained in Section 25F of the I.D. Act. 14. Applying the principles of law as discussed above to the facts of the present case and considering the findings of the Labour Court as given in the impugned award and the reasons assigned in support of the same, no impropriety or illegality can be said to have been committed by the Labour Court, so as to warrant any interference by this Court. The writ petition being devoid of merits, the same is accordingly dismissed. Final Result : Dismissed