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Gujarat High Court · body

2016 DIGILAW 635 (GUJ)

Panchal Dilip Dahyalal v. Gujarat State Handicraft Development Corpn. Ltd.

2016-03-18

K.M.THAKER

body2016
JUDGMENT : K.M. Thaker, J. 1. This petition is listed at Sr. No. 4 in Today's Cause List. 2. When the petition was called out and taken up for hearing in first sitting/session, learned advocate for the petitioner was not present. On his behalf, request was made to Passover the hearing of the petition. Request was granted. Even in second sitting/sessions, when the petitioner is called out and taken up for hearing, again learned advocate for the petitioner is not. Mr. Munshaw, learned advocate for the respondent - Gujarat State Handicraft Development Corporation Limited ('the respondent' for short) is present. 3. The petition is pending since 2006. In this view of the matter, the Court considered it appropriate to decide the petition on merits after considering the material on record, instead of adjourning the hearing or dismissing the petition on ground of non-prosecution. 4. The petitioner has challenged award dated 18.1.2005 passed by the learned Labour Court at Ahmedabad in Reference (LCA) No. 1587 of 1993, whereby the learned Labour Court dismissed the reference case and rejected the relief prayed for by the petitioner. Feeling aggrieved by the award rejecting the reference, the petitioner has taken out present petition. 5. On examination of the memo of petition and the impugned award, it has emerged that present petitioner felt aggrieved by automatic termination from the employment w.e.f. 24.5.1992 in view of the terms and conditions of the contract/agreement under which he was engaged by present respondent. 5.1. Feeling aggrieved by automatic termination of his engagement - service, the petitioner raised an industrial dispute somewhere in 1997, i.e. after about 5 years, which came to be referred for adjudication to the learned Labour Court at Ahmedabad in Reference (LCA) No. 1587 of 1993. 5.2. During the proceedings before the learned Labour Court, the petitioner filed his statement of claim, wherein he alleged that he was employed by the respondent as Clerk w.e.f. 15.2.1990 and he continued as such until 24.5.1992 with salary of Rs. 1,000/- per month. He also alleged that despite the fact that during the period from 15.2.1990 till 24.5.1992, he worked sincerely his service was terminated w.e.f. 24.5.1992 without following procedure prescribed by law for retrenchment. With such allegation, in the statement of claim, the petitioner prayed that the respondent may be directed to reinstate him with consequential benefits. 6. The said reference was opposed by present respondent. With such allegation, in the statement of claim, the petitioner prayed that the respondent may be directed to reinstate him with consequential benefits. 6. The said reference was opposed by present respondent. The respondent herein filed its written statement at Exh. 6, wherein it claimed that the petitioner was engaged temporarily on fixed tenure basis for period of two years and for specified work and for such specific purpose an agreement/contract between the petitioner and the respondent was entered into and executed. According to the specific and express provisions under the said agreement the petitioner was employed w.e.f. 15.2.1990 till 24.5.1992 and by virtue of the provisions under the agreement/contract, the said engagement would automatically come to an end w.e.f. 24.5.1992. It was also claimed that in view of such express provision and specific agreement, the engagement of the petitioner would fall within purview of clause (bb) of section 2(oo) of the Industrial Disputes Act, 1947 ('the Act' for short). It was also claimed that in view of the express provision and specific contract, the petitioner was aware from the first day that he was engaged temporarily and only for fixed tenure upto 24.5.1992 and that he had consciously accepted the said condition and thereafter entered into the agreement and that, therefore, his claim for reinstatement and other benefits was not justified. It was also claimed that specific contract was in operation w.e.f. May 1990 to May 1992 and on expiry of the period of contract, the engagement automatically came to an end and therefore also the claim of the petitioner was unjustified. 6.1. Subsequently, the respondent placed relevant document on record under the list of document (Exh. 12). The respondent placed further document on record at Exh. 15 in the light of the order passed by the Court below Exh. 9. 6.2. Subsequently, the deposition of the petitioner was recorded at Exh. 16 and the deposition of the witness of the respondent was recorded at Exh. 24. 6.3. After the stage of evidence was closed, the learned Labour Court heard the submissions by learned advocates for the petitioner and the respondent. 6.4. 9. 6.2. Subsequently, the deposition of the petitioner was recorded at Exh. 16 and the deposition of the witness of the respondent was recorded at Exh. 24. 6.3. After the stage of evidence was closed, the learned Labour Court heard the submissions by learned advocates for the petitioner and the respondent. 6.4. After taking into account the material on record, the deposition by the petitioner and the respondent's witness, the learned Labour Court reached to the conclusion that the petitioner was engaged under specific contract only for two years and his engagement came to an end upon expiry of the period of contract and that at the time when the petitioner was engaged, he was aware about the tenure of his engagement and the petitioner failed to prove that after his engagement came to an end on expiry of the contract, the respondent had not engaged any other person in his place or for the same work. 6.5. Having reached to such conclusion, the learned Labour Court also reached to the conclusion that the petitioner's engagement was covered under clause (bb) of section 2(oo) of the Act and since his service automatically came to an end on expiry of specific contract/agreement executed between the parties, the relief prayed for by the petitioner cannot be granted. In this view of the matter, the learned Labour Court rejected the reference vide award dated 18.1.2006. 7. The said award is brought under challenge by the petitioner. 8. As mentioned earlier, learned advocate for the petitioner has not attended the hearing and has not made any submission. The Court has, however, considered the contentions raised by the petitioner before the learned Labour Court and the Court has also considered the contentions raised by the petitioner under paragraph Nos. 15A to 15K of the memo of petition. 9. Mr. Munshaw, learned advocate for the respondent submitted that the petitioner was engaged under specific contract/agreement of employment and according to the terms of the agreement/contract, he was engaged for specified and limited period of two years and that the petitioner's service automatically came to an end on expiry of the period of contract. He submitted that the petitioner admitted before the learned Labour Court that such an agreement/contract was entered into between him and the respondent and that consequently, the period of his engagement was only of two years. He submitted that the petitioner admitted before the learned Labour Court that such an agreement/contract was entered into between him and the respondent and that consequently, the period of his engagement was only of two years. He further submitted that the petitioner was engaged with express stipulation and clarification that the tenure of his engagement would be only for specified period of two years and the petitioner was aware about the said term of appointment which he had consciously accepted. 10. I have considered the facts of the case and the documents on record as well as the contentions in the petition. 11. In the memo of petition, the petitioner himself has mentioned in paragraph No. 14 of the memo of petition that 'the present petitioner was working from 15.2.1990 as daily wager in the Purchase Store in Patan'. Then in paragraph No. 5 of the memo of petition, the petitioner has mentioned that: "5. The present petitioner wants to submit that because of the sincere and satisfactory work of petitioner, the petitioner was appointed for two years on contract basis by the respondent Corporation. So as per the contract terms the petitioner worked from 25.5.90 to 24.5.92 in the respondent's Patan center on the post of clerk." 12. The petitioner has also claimed that for the first year of the said engagement his salary was fixed at Rs. 1,000/- per month and for the second term/year his salary was fixed at Rs. 1,100/- and he was paid salary accordingly. In paragraph No. 15A under the heading 'Grounds', the petitioner has again averred and stated that: "A. The present petitioner states and submits that he worked as an apprentice for the period September 1984 to August 1985 in the respondent Corporation's Ahmedabad store and on that basis after taking interview and all the due procedure the present petitioner was taken on the post of Clerk and he has worked from 15.02.90 to 24.5.90 as a daily wager in the purchase store in Patan. And then after because of good performance of the present petitioner the respondent Corporation entered into contract with the present petitioner and as per the contract terms the petitioner worked from 25.5.90 to 24.5.92 in the respondent's Patan center on the post of clerk. And then after because of good performance of the present petitioner the respondent Corporation entered into contract with the present petitioner and as per the contract terms the petitioner worked from 25.5.90 to 24.5.92 in the respondent's Patan center on the post of clerk. And therefore the present petitioner has worked continuously for about more than 1000 days in the respondent Corporation and therefore the present petitioner is required to be made permanent in the respondent Corporation." 13. From the above-quoted averments made by the petitioner himself in the memo of petition, it becomes clear that a specific contract/agreement was entered into between the petitioner and the respondent. 14. It has emerged from the record that the period of contract was in operation from May 1990 to May 1992 and that, therefore, the petitioner came to be relieved when his engagement automatically came to an end on expiry of the term of the contract on 24.5.1992. 15. It is not the case even of the petitioner that he was continued by the respondent even after expiry of the contract period, i.e. after 25.5.1992 and his service was subsequently terminated and/or that after he was relieved some other person was engaged for same work at same place. 16. In this view of the matter, it becomes clear that the petitioner was undisputedly engaged by virtue of a specific, separate and express contract/agreement which specifically and expressly provided that the tenure of his engagement would be two years. 17. Even during his oral evidence before the learned Labour Court, the petitioner admitted above-mentioned facts and the learned Labour Court has expressly recorded the petitioner's admissions, during his deposition, in paragraph No. 12 of the award. 18. The learned Labour Court has recorded in paragraph No. 12 of the award that the petitioner entered into the agreement (Mark 12/2) and accepted that he was engaged by virtue of the said contract for the period from May 1990 to May 1992. 19. The learned Labour Court has also recorded in paragraph No. 12 of the award that the petitioner also accepted and admitted that after May 1992 i.e. after he was relieved any other person has not been engaged/employed by the respondent at same place i.e. at Patan. 20. In paragraph No.12 of the award, the learned Labour Court has discussed the agreement which was executed between the petitioner and the respondent. 20. In paragraph No.12 of the award, the learned Labour Court has discussed the agreement which was executed between the petitioner and the respondent. The learned Labour Court has also taken into account the decision in case of Balbir Singh v. Kurukshetra Central Co-operative Bank Limited, [ 1990 (1) LLJ 443 ]. 21. After detailed discussion about the provision under section 25F the terms and conditions of the contract and about the admission by the petitioner as regards the contract/agreement and his admission as regards the fixed tenure of his engagement, the learned Labour Court has expressly and specifically recorded in paragraph No. 16 of the award that the factum of the specific written agreement/contract between the parties is not in dispute and that from the petitioner's evidence it emerges that after considering the terms and conditions of the contract, the petitioner had consciously accepted the terms including the condition with regard to the tenure of his engagement (viz. two years) and that the service of the petitioner came to an end automatically on expiry of the term mentioned in the contract and agreed/accepted by the petitioner. 22. The learned Labour Court has also recorded in paragraph No. 16 that the petitioner failed to establish that after his engagement automatically came to an end, any other person was engaged by the respondent for the same work. Having recorded such finding, the learned Labour Court has rejected the reference. 22.1. 22. The learned Labour Court has also recorded in paragraph No. 16 that the petitioner failed to establish that after his engagement automatically came to an end, any other person was engaged by the respondent for the same work. Having recorded such finding, the learned Labour Court has rejected the reference. 22.1. When the factum about the specific contract containing express provision with regard to total tenure of engagement is not disputed and when it is also proved - admitted by the workman - that the workman was engaged under and by such specific contract and when it is also established that the engagement of the respondent had come to an end, and he was discontinued and relieved on expiry of the term of the tenure mentioned in the contract and it was not even claimed by the workman, much less established, that when his engagement came to an end automatically upon expiry of the term any other person was engaged for the same work (in other words when it is proved that in place of the concerned workman any other person was not employed for same work and at same place), then the allegation or claim of the petitioner that his termination was in breach of section 25F cannot be accepted and it should be accepted that the claimant's case falls under clause (bb) of section 2(oo). 22.2. The said section 25F obliges an employer to pay, in case of retrenchment of an employee, compensation at the rate and in the manner prescribed by section 25F. The said retrenchment compensation has to be paid at the time of retrenchment. 22.3. The term 'retrenchment' is defined under section 2(oo) of the Act. 22.2. The said section 25F obliges an employer to pay, in case of retrenchment of an employee, compensation at the rate and in the manner prescribed by section 25F. The said retrenchment compensation has to be paid at the time of retrenchment. 22.3. The term 'retrenchment' is defined under section 2(oo) of the Act. The said section 2(oo) of the Act reads thus: "2(oo) '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; (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;" 22.4. On plain reading of section 2(oo), it comes out that the said clause provides, inter alia, that termination of service which occurs on account of non-renewal of contract of employment would not amount to retrenchment, provided the contract of employment expressly contained such specific stipulation. It also emerges from the said provision that the said clause (bb) of section 2(oo) carves out an exception within the purview of section 2(oo) of the Act Since the said clause carves out an exception from a provision which is framed with the object of providing security to the workmen against 'hire-and-fire' policy, the said clause (b) must be interpreted strictly and narrowly so that the scope and/or object of section 2(oo) or section 25F is not frustrated. The said clause (bb) excludes certain mode of cessation of service from the purview of the term 'retrenchment' which, otherwise, embraces all termination [except those which are excluded under section 2(oo) of the Act]. Illustratively, termination of service on account of non-renewal of contract of employment or termination of the contract of employment in accordance with the specific condition or stipulation in the contract are excluded from the purview of the term 'retrenchment'. 23. Illustratively, termination of service on account of non-renewal of contract of employment or termination of the contract of employment in accordance with the specific condition or stipulation in the contract are excluded from the purview of the term 'retrenchment'. 23. Having regard to the object of section 25F and the scope and purpose of the term 'retrenchment' defined under section 2(oo), the expression 'contract of employment' need not be given wide meaning which may enable unscrupulous employer to abuse or misuse the said exception. The said clause (bb) must be read in a manner which would enhance the object of section 25F and it should be read in manner which would favour and protect the workman so that the provision may not be misused as a subterfuge to employ workman for permanent or perennial nature of work by executing, from time to time, consecutive contracts of employment or by injecting gaps of few days/a week between two contracts. 23.1. Such arrangement would create a facade which would give an impression that the concerned person was engaged only for fixed period whereas actually the apparent gap would be, in reality, nothing but artificial break. 23.2. It is pertinent that such arrangement is, ordinarily, entered into with a view to holding a lever so that the service of such workman can be discontinued at the will of the employer and in case of dispute it can be claimed that termination was on account of non-renewal of the contract. 23.3. It is abundantly clear that when the legislature introduced said provision i.e. clause (bb) in August 1984 it was never intended to give rise or boost or encouragement to such type of arrangements or to provide a shield for such arrangements. 23.4. Therefore, in cases where plea is raised on strength of clause (bb) of section 2(oo), then it would be Court's obligation to lift the veil and ascertain as to whether the contract of employment is genuine and bona fide and the work/job in respect of which the contract was entered into or the appointment letter was issued, is not a work/job of permanent and/or perennial nature for the concerned establishment. Thus, the said clause cannot be read to mean that the provision takes in its fold contract of employment related even to work/job which are of permanent or perennial nature. Thus, the said clause cannot be read to mean that the provision takes in its fold contract of employment related even to work/job which are of permanent or perennial nature. The field of operation of the said clause is restricted to bona fide and genuine contract of employment for work/job which are not of permanent or perennial nature but are of genuinely limited and fixed duration. 23.5. The mischief by an employer of engaging persons for work of permanent and perennial nature by entering into contract for specified period and relieving or discontinuing them upon expiry of the period stipulated in such contract and then entering into similar type of contract for same work with the same or other person and thereby giving artificial breaks to frustrate an employee's continuity in service, cannot be allowed and cannot be encouraged by allowing inclusion of such unjust contracts which aim at frustrating right of employees and object of the provision of which it forms part. 24. When the said provision is construed by keeping in focus above mentioned aspect, then it becomes clear that the said clause takes in purview only those contracts which are bona fide and genuine and are entered into with object of hiring person for specific job and for specific period until the specified work/job would continue or is likely to continue and the need for engaging person after expiry of such contract would also not survive. The employer can claim coverage and protection under clause (bb) of section 2(oo) of the Act and the appointment of a person may fall within the purview of clause (bb) of section 2(oo) of the Act or termination of employment may not amount to retrenchment, if (a) contract of employment is related to job/work which is related to a project/scheme which is of limited and fixed tenure/duration; (b) the job/work in respect of which the contract is entered into is not of permanent or perennial nature in the concerned establishment; (c) a specific contract is executed/specific letter of appointment is issued which expressly provides such specific term which clearly stipulates nature of job/work - the likely tenure for the work and clearly mentions the period for which the person is engaged; (d) the appointment is contractual for remuneration as per the terms of contract and not merely on daily wage basis; (e) the cessation of the employment shall be simultaneously with the end of project work/expiry of project i.e. employment and project should be co-terminus; (f) the concerned person is informed that his employment is for specific project/scheme or specific work and for specific/fixed period; (g) successive/repeated contracts for same work is/are not executed with same/other person; (h) the person has accepted the appointment with knowledge about and after being informed about the limited or fixed period of employment is entered into between employer and the person employed thereunder is aware about the terms and more particularly about limited and specific tenure of his employment then it could claim benefit under clause (bb) of section 2(oo). 24.1. However, if it is established that the contract is entered into for type of work which is of permanent or of perennial nature for the concerned establishment and even after expiry of the period of contract, the said work would continue and the employer will have to engage the same person by executing fresh contract or he will have to engage another person, then such contract would not come within purview of sub-clause (b) of the Act since it would not be bona fide and genuine contract but it would be a subterfuge to circumvent the obligation or consequences of retrenchment and to frustrate rights of an employee by giving artificial breaks with aid of successive contracts. 24.2. 24.2. In such facts and circumstances the contract would amount to unjust means and method and design for giving artificial breaks in employment to deprive the workman from his legal rights and frustrate his rights and claims which would be otherwise available under law. 24.3. Such method and design cannot be accepted and/or cannot judicially acknowledged and cannot be approved but must be deprecated. 25. However, so far as the present case is concerned, after analyzing and assessing entire evidence on record, the learned Labour Court found, and was satisfied and it came to the conclusion, that the contract was genuine and bona fide and after the period of contract came to an end any other person for the same work was not engaged at same place/at Patan by the respondent. 26. The said aspect establishes that the work for which the petitioner was engaged was of specific duration and the respondent required a person for executing the specific work during specified period and therefore, the contract was entered into and upon expiry of the period of contract any need for renewal of the contract or for executing fresh contract did not arise. 26.1. It was established before the learned Labour Court that any other person was subsequently not engaged by the respondent. Further, it was established that the petitioner was informed and was aware about limited tenure of his employment. Thus, the ingredients of bona fide contract exist and were established before the learned Court. 26.2. In this view of the matter, from the facts of the case and evidence available on record, it is established that the contract entered into by and between the respondent board and the petitioner was genuine and bona fide and that, therefore, it came within purview of sub-clause (b) of the Act. 26.3. Consequently, the engagement of the petitioner was in the purview of clause (b) of section 2(oo) and that, therefore, the provision of section 25F, as rightly concluded by the learned Labour Court, was not attracted. 27. The learned Labour Court has not committed any error in holding that in present case, breach of section 25F is not established. 27.1. 26.3. Consequently, the engagement of the petitioner was in the purview of clause (b) of section 2(oo) and that, therefore, the provision of section 25F, as rightly concluded by the learned Labour Court, was not attracted. 27. The learned Labour Court has not committed any error in holding that in present case, breach of section 25F is not established. 27.1. The learned Labour Court has not committed any error in rejecting the said claim and contention of the petitioner and the final decision/award of the Court do not suffer from any infirmity and the learned Labour Court has not committed any error of law or jurisdiction. 27.2. The finding and conclusion recorded by the learned Labour Court are based on the documents and other material available on record as well as clear admission of relevant facts by the petitioner himself. 27.3. The learned Labour Court has recorded sufficient and cogent reasons in support of the finding and conclusion and the reasons are supported by relevant evidence. 28. The petitioner has failed to establish that the findings and conclusions recorded by the learned Labour Court are perverse and he has not made out any ground or contention against the impugned award and the decision by the learned Labour Court. 29. In the result, the petition fails and deserves to be rejected and is accordingly rejected. Rule is discharged.