Kerala High Court
Life Insurance Corporation Of India vs Ushakumari on 10 July, 2009
Author: V.K.Mohanan
Bench: V.K.Mohanan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 39055 of 2002(Y)
1. LIFE INSURANCE CORPORATION OF INDIA,
... Petitioner
Vs
1. USHAKUMARI,KIZHAKUMKARA MODIYIL,
... Respondent
2. N,.SURESHKUMAR,PULICKILATHU HOUSE,
3. MAYA.C. THARIYAPARAMBU NIKARATHU
4. ARAVINDAN UNNITHN,
5. GIRIJAKUMARI,KAKKANATTU HOUSE,
6. JYOTHI G.PRABHU, KIZHAKEDATHU HOUSE,
7. UNION OF INDIA,REPRESENTDED BY SECRETARY
8. THE INDUSTRIAL TRIBUNAL,
For Petitioner :SRI.M.PATHROSE MATTHAI (SR.)
For Respondent :SRI.D.KISHORE, ADDL.CGSC
The Hon'ble MR. Justice V.K.MOHANAN
Dated :10/07/2009
O R D E R
V.K.MOHANAN, J.
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O.P. No.39055 OF 2002
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Dated, the 10th day of July 2009
JUDGMENT
The Life Insurance Corporation of India represented by its Manager (L& HPF), Divisional Office, Ernakulam is the petitioner (in short, 'the LIC' for reference) which preferred this writ petition challenging Ext.P8 award passed by the Industrial Tribunal - the 8th respondent herein. It is also prayed for a declaration that Ext.P8 award is grossly illegal and wrong, and, to issue a writ of certiorari quashing Ext.P8 award dated 16.8.2002.
2. Exts. P1 to P6 are appointment orders issued by the LIC appointing respondents 1 to 6 as Assistants in various branches in the temporary vacancies for a certain period specifically noted in the respective appointment orders. Respondents 1 to 6 raised industrial disputes which were referred to the Industrial Tribunal, Alappuzha, by the Government of India, the 7th respondent herein, under section 10 of the Industrial Disputes Act (hereinafter referred OP39055/02 -:2:- for short,'the I.D.Act' only). The references were taken on file as I.D.Nos.64/99, 65/99, 68/99, 69/99, 70/99 and 71/99. The Tribunal considered all the above disputes together since the issues referred for adjudication were same and the contentions raised were also identical. During trial, common evidence was adduced, common arguments were heard and the I.D. cases were disposed of by a common award. In all these cases, by the common award, the Tribunal has found that the termination of workmen in all these cases were mere camouflage just to deny the protection ensured in the Industrial Dispute Act, especially in Section 25F and 25 G of the I.D.Act. It is also held that the management cannot invoke the provision contemplated in Section 2(oo)(bb) of the I.D.Act for the termination effected in all those cases and thus declared that all the terminations effected are ab initio void. On the basis of the above finding and declaration, reliefs were granted in each cases separately but such reliefs are more or less same. In all those cases, it is held that the workmen would be deemed in service till their services are validly OP39055/02 -:3:- terminated by the management. It is the above award challenged in this writ petition on various factual and legal grounds.
3. A brief facts, that led to the disputes which are worth and relevant for appreciating the legal contentions advanced , and for proper consideration of the issues involved in this case, are as follows:
The Ist respondent was appointed and engaged as temporary Assistant in the Divisional Office, Kottiyam from 8.10.97 to 9.12.98 and her service was terminated on 1.12.98.
The 2nd respondent was appointed and engaged as temporary Assistant in the branch at Mundakkayam for the period from 26.2.1998 to 5.4.98 and according to the LIC, when the work was completed, he was posted in BSU department from 6.4.98 to 10.6.98 and thereafter posted in the Mundakkayam Branch office from 16.6.98 to 30.11.98 and the service was finally terminated on 30.11.98. Similarly, the 3rd respondent was appointed and engaged from 15.3.97 to 12.6.97 and after a short beak of 4 days, the 3rd respondent was again OP39055/02 -:4:- appointed for the period from 16.6.97 to 30.11.98. The 4th respondent was appointed and engaged for the period from 14.10.97 to 10.2.98 and subsequently for the period from 26.2.98 to 25.4.98 and thereafter his services were also terminated. The 5th respondent was appointed and engaged on temporary basis from 25.4.98 to 20.11.98. Similarly, the 6th respondent was appointed and engaged on temporary basis from 3.12.97 to 5.3.98 and her service was also terminated on completion of the said period. Respondents 1 to 6 had raised industrial disputes alleging wrongful retrenchment from the service of the LIC and sought reinstatement. The industrial disputes raised by respondents 1 to 6 were I.D.Nos.64/99, 65/99, 68/99, 69/99,70/99 and 71/99 respectively. In all these cases, the issue referred was as to "whether the action of the management in terminating the service of the workmen was justified? If not, what relief the workmen entitled to?" Respondents 1 to 6 filed claim statements before the Tribunal. The claim was on the basis of OP39055/02 -:5:- the Sections 25F and 25H of the I.D.Act and also requested for regularization of their services. It is also contended that the acts of the petitioner are illegal , unjust and vitiated by mala fide and void ab initio, and also claimed for the reinstatement with full back wages and continuity of services.
4. Against the claim statements preferred by the workmen, the petitioner management filed reply statement stating that the appointments of the workmen were on contract and purely on temporary basis, to clear the backlog work which was existing at the time of the appointment. According to the management, the appointments of the workmen, as evidenced by the appointment orders itself, were on temporary basis and their employment would be governed by the provisions of the Life Insurance corporation of India (Employment of Temporary Staff & Instructions) Rules 1993, ( for short as "Rules" and "LIC Act") respectively. It is also the specific contention of the petitioner management that the appointments were only contractual and purely on adhoc basis and therefore, the OP39055/02 -:6:- workmen are not entitled to get other benefits on account of their employment. According to the management/petitioner, the appointment would automatically cease on the expiry of the period or at any time prior thereto if the petitioner/management decides to terminate the service without assigning any reason and therefore, there is no retrenchment so as to attract Section 25-F of the I.D.Act. During the enquiry in the Tribunal, from the side of the management, one witness was examined as MW1. Besides the above, documentary evidence such as M1 to M21 were marked. From the side of the workmen, one Exhibit was produced as W1. Except the case of I.D.No.70/99, in all other cases, one witness each was examined from the side of the workmen as WW1 who is none other than the workman concerned. Thus, the Tribunal after considering the entire materials and evidence on record, and also after considering the various legal provisions, and the authorities cited before it, passed the final award, Ext.P8 dated 20.7.2002, which was published as per Ext.P7 notification.
OP39055/02 -:7:-
5. Challenging the above award, the petitioner preferred this writ petition reiterating the contention taken before the Tribunal. According to the LIC, under Regulation 8 of the LIC (Staff) Regulations, they can employ staff in Classes III and IV on a temporary basis subject to such general or special directions as may be issued by the Chairman of the corporation from time to time. According to the petitioner, under the sub-regulation (2) of Regulation 8, no person so appointed on temporary basis shall only by reason of such appointment be entitled to absorption in service of the Corporation or claim preference for recruitment to any post. In order to substantiate the contention before this Court, the petitioner has produced Exts.P1 to P6 which are the appointment orders with respect to respondents 1 to 6. The specific grounds raised in this writ petition is to the effect that respondents 1 to 6 are bound by Regulation 8 and as such, the provisions of the I.D.Act were not applicable to the respondents with respect to matters covered by Section 48(2) (cc) of the LIC Act. According to the petitioner, the OP39055/02 -:8:- respondents are not retrenched employees, since they are governed by Regulation 8 of the Regulation. Therefore, the Tribunal is wrong in not holding that the respondents were appointed purely under Regulation 8 of the LIC (Staff) Regulation (hereinafter referred for short as "Regulation" only) and that the provisions of ID Act were excluded to the extent covered by the said Regulation. It is also contended that in view of the amendment brought to the ID Act, 1947, the matters covered by the Rules that brought under section 48 (2)(c) read with Section 48 (2) (cc) excluded the application of the provisions of the ID.Act or any other Act. It is also contended that though the respondents worked for a short period or they were continued to be appointed from time to time on adhoc basis, they cannot claim regularization in service as there is no rule in the LIC for regularization of adhoc employees and, especially, when Regulation 8(2) prohibits absorption in service. It is also the contention of the LIC that when statutory rules are made for recruitment, appointments shall be only in accordance with the rules and OP39055/02 -:9:- therefore, persons like respondents 1 to 6 who were appointed for a short span cannot be regularaised.
6. I have heard the learned senior counsel Sri M.Pathrose Mathai, appearing for the petitioner as well as Sri B.Ashok Shenoy, the learned counsel appearing for respondents 1 to 6. I have also perused the materials on record.
7. In the foregone paragraphs, I have already referred certain facts connected with the appointment of respondents 1 to 6. Exts.P1 to P6 are the appointment orders of respondents 1 to 6 issued by the petitioner which would show that their appointments were provisional basis and for a particular period, and the workmen were again appointed on expiry of the term of appointment but after short break. In order to appreciate the contentions advanced by both the petitioner as well as respondents 1 to 6, and the finding of the Tribunal, some more inevitable facts and evidence are required, which need serious consideration and proper appreciation.
OP39055/02 -:10:-
8. Ext.M1 produced before the Tribunal is nothing but Ext.P10 which is the scheme in force in the LIC which is a guideline issued as per circular dated 28.6.93 by the Central office of the LIC. The Tribunal in its award quoted certain portions of the said circular and the Tribunal has found that the temporary appointments in respect of staff in Class III can be made in three contingencies such as :
"(i) Permanent vacancies pending recruitment of staff on regular basis;
(ii) vacancies arising out of absence on maternity leave by a regular female employee or when the regular employee proceeds on sick leave for a period exceeding one month;
(iii) Adhoc vacancies sanctioned by the Zonal Manager to cope up with the work of a seasonal nature." (emphasis supplied) When the management witness was examined as MW1, he had deposed that the last permanent recruitment in the LIC was done in the year 1993. According to him, after that, whenever there was requirements, temporary appointments OP39055/02 -:11:- were resorted to. While appreciating the evidence of MW1, the Tribunal has found that MW1 had no case that all these temporary appointments were not because of any maternity leave of female employee or sick leave of any other regular workman or even to fill up the adhoc vacancies sanctioned by the zonal manager to cope up with the work of seasonal nature. It is also brought on evidence that Exts.M18 to 21 are temporary appointment registers which will show that irrespective of any particular season, temporary appointments were being made almost on regularly throughout the year.
The Tribunal further observed after perusing the record that the only difference is that the duration for such appointments were from one month to three months at a time. Thereafter only extensions. So it is found that these temporary appointments were made not to meet any workload of any season or to fill up a gap that occurred due to the maternity leave or sick leave. Thus the Tribunal has rightly concluded that these temporary appointments were made only because of the non-availability or regularly recruited candidates in the OP39055/02 -:12:- select list. The Tribunal has also found that the posts occupied by the workmen concerned were of permanent nature and they could have been continued in the same post till the new recruits come. From the above facts, it is crystal clear that the LIC of India carry on its business and management using temporary appointees without conducting any recruitment process and making appointment to the regular post after 1993. It is on the basis of the above materials and finding, the Tribunal held that in order to avert any kind of claim for regularization or absorption in service, the management was creating artificial break in the service of workmen and they were also very particular that as far as possible, no workman should have the minimum 240 days of continuous service in a preceding 12 months to stake claims under Section 25-F of the I.D.Act. The Tribunal, after considering the evidence of MW1, has held that the system of temporary appointment continued even in the year 2000, and there is no select list for enabling the management corporation to make regular appointment. The Tribunal took OP39055/02 -:13:- a view that no sanctity need be given to the contractual appointments of these workmen, and further , held that the management was not within their right to terminate the services of the workmen on expiry of period of contract of employment. Thus the Tribunal has categorically found that the termination were mere camouflage just to deny the protection ensured in the Industrial Dispute Act, especially, in Section 25-F and 25-G, and the management cannot invoke the provision contemplated in Section 2(00)(bb) of the ID Act for this kind of termination.
9. Now I shall consider the contentions advanced by both the counsels for the petitioner as well as the respondents under the above factual and legal premises:
10. Sri M.Pathrose Mathai, the learned senior counsel appearing for the petitioner, in his persuasive argument, advanced two fold contentions to assail the findings of the Tribunal and its award. The first contention is based upon the factual inputs available in this case. According to him, as evidenced by Exts.P1 to P6, respondents 1 to 6 were OP39055/02 -:14:- appointed on contract basis for a definite period temporarily and such factual inputs attract section 2(00)(bb) of the I.D.Act and the termination of respondents 1 to 6 will not come within the purview of "retrenchment " and therefore, section 25F, 25- G and 25-H are not at all attracted and hence, the finding of the Tribunal is factually incorrect and legally unsustainable. The learned counsel invited my attention to Section 2(00) and (bb) of the I.D.Act which says:
"(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; 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 on that behalf contained therein; or} So, according to the learned counsel, as evidenced by Exts.P1 OP39055/02 -:15:- to P6, the appointment of the workmen was for a particular period and the services were terminated on the expiry of such contract . It is submitted that in the appointment orders itself it is stated their tenure of office and the termination was not for non-renewal of contract of employment. So, the termination in the present case will come within the exclusive clauses of Section 2(oo) retrenchment, namely, Section 2(oo) (bb). Thus, the termination of the respondents 1 to 6 are not retrenchment and hence the petitioner corporation cannot be held liable under sections 25-F, 25-G and 25H.
11. Besides the above provisions of the I.D.Act, the learned counsel also invited my attention to the LIC of India (Staff) Regulations 1960. Regulation 8(1) reads:
"8(1) Notwithstanding anything contained in these Regulations, a Managing Director, Executive Director (Personnel), a Zonal Manager or a Divisional Manager may employ staff in Classes III and IV on a temporary basis subject to such general or special directions as may be issued by the Chairman from time to time.
(2) No person appointed under sub-regulation (1) shall only by reason of such appointment be entitled to absorption in the service of the Corporation or claim OP39055/02 -:16:- preference for recruitment to any post."
The learned counsel also invited my attention to Ext.P10 "Instructions", which is none other than Ext.M1 marked in the Award. Ext.P10 instructions are issued by the Chairman in terms of clause 4 of the Regulation. Thus the learned counsel submitted that the appointment orders like Exts.P1 to P6 were issued strictly in accordance with Ext.P10 and also Regulation 8 of the Regulations. Such provisions enable the LIC to make appointment on temporary basis for a limited period and such contractual appointment envisages automatic termination from work. Therefore, such terminations are protected Section 2(oo)(bb), and those termination will not amount to retrenchment. In support of the above contention, the learned counsel relied on the decisions reported in Punjab SEB v. Sudesh Kumar Puri (2007 (2) SCC 428); Municipal Council, Samrala v. Sukhwinder Kaur (2006(6) SCC
516); Jayabharath Printers v. Suresh Kumar (2000 (1) KLJ 1028); M.Venugopal v. Divnl. Manager, LIC of India, Machilipatanam (AIR 1994 SC 1343) OP39055/02 -:17:-
12. Another legal contention stressed by the senior counsel for the petitioner is that the Tribunal has exceeded its jurisdiction and passed the award and hence it is perse illegal. According to the learned counsel, the observation, finding and direction issued by the Tribunal as per the award amount to overriding effect of the LIC Act , Rules, Regulations and Instructions issued by the Chairman of LIC. It is the case of the learned counsel that the LIC is created through special enactment and its function and business are governed by the provisions of such Act and Rules framed thereunder. The Regulations and Instructions are issued under the provisions of the Act and Rules. Therefore, according to the learned counsel, the provisions of the I.D.Act has no application as the same are excluded by the provisions of the LIC Act, Rules, Regulation and Instruction. Therefore, the finding of the Tribunal that the workmen are entitled to get the benefit of Section 25-F and 25-H of the I.D.Act is illegal and unwarranted.
13. The learned counsel invited my attention to various OP39055/02 -:18:- sections of the LIC Act 1956. According him, section 23 of the Act provides that the Corporation may employ number of persons as it thinks fit for the purpose of enabling to discharge its function under the Act. Section 48 of the Act enables the Central Government to make rules to carry out the purposes of the said Act. Similarly, it is pointed out that Section 49 of the LIC Act 1956 authorize the Corporation to make Regulations. Thus, According to the learned counsel , the rules framed under section 48(2)(c) read with Sect.48 (2) (cc) and the Regulations made under section 49 has got independent existence not withstanding any other law including the I.D.Act. Thus, according to the learned counsel, appointment of respondents 1 to 6 as per Exts.P1 to P6 are purely on temporary basis and the same was done in exercise of the powers vested upon the petitioner under Regulation 8 of the Regulations which formed as per Section 49 of the Act and hence the provision of ID Act has no application. According to the learned counsel, the Tribunal overlooked the above provisions and in effect, the direction issued by the Tribunal OP39055/02 -:19:- has an overriding effect over the above legal provisions for which the Tribunal has no jurisdiction. In support of this contention, the learned counsel cited the following decisions. A.V.Nachiane & Anr. v. Union of India (AIR 1982 SC 1126); M.Venugopal v. Divnl.Manager,LIC of India, Machilipatnam (AIR 1994 SC 1343); Mrs. Asha Ramachandran v. Ambekar (AIR 1994 SC 2148); T.Full Time Temp. LIC EMP W.ASSN. v. S.D.M, LIC (1993 (1) LLJ (Mad.)1030).
14. On the other hand, Sri B.Ashok Shenoy, the counsel appearing for respondents 1 to 6, the workmen, vehemently argued supporting the finding and Ext.P8 award of the Tribunal. According to the learned counsel, the Tribunal has not exceeded its jurisdiction and the direction issued is in conformity with the provisions contained in Ext.P10 Instruction of the Chairman of the LIC and Regulation 8 of the Regulations and rightly in accordance with the provisions contained in the I.D.Act. The learned counsel submitted that the Tribunal has specifically declined the request of the workmen for regularization in the service of the LIC. OP39055/02 -:20:- According to the learned counsel, the observation of the Tribunal is that the termination of respondents 1 to 6 from the service of the petitioner is not in accordance with the Section 25-F and therefore, till their services are terminated, in accordance with a valid retrenchment order, they can continue under the petitioner LIC. According to the learned counsel, there is no conflict between the provisions of the I.D.Act and the provisions of LIC Act, Rules, Regulations and Ext.P10 instruction. The learned counsel submitted that the Tribunal has come into such conclusion after analysing the evidence and materials on record and after considering the various provisions of law, the Regulations, guidelines which are relevant in the matter. It is also the contention of the learned counsel that the order of the Tribunal is not against the provisions of the Regulation or Ext.P10 instruction or the LIC Act. The learned counsel pointed out that the approach made by the petitioner LIC appointing respondents 1 to 6 regularly but on temporary basis with intervening short break, is impermissible in law. Such a practice is seriously criticized OP39055/02 -:21:- through various judicial pronouncements. The finding of the Tribunal also is to that effect and thus, the Tribunal has directed the petitioner to comply with the provisions of section 25-F. After inviting my attention to various portions of the Award of the Tribunal, the learned counsel pointed out that the Tribunal did not direct the petitioner to either absorb or regularize the service of the workmen as apprehended by the petitioner. Therefore, the order of the Tribunal is not against Sub-Regulation 2 of Regulations 8 and hence, the provisions of the I.D.Act are attracted and therefore, the order of the Tribunal is absolutely within its competence. The learned counsel placed reliance on the following decisions in Director, Tourism Department v. Industrial Tribunal (2005 (1) KLT 320); Mallika Rajam v. State of Kerala (2002(3) KLT
77) ; Haryana State Electronics Development Corpn.Ltd v. Mamni (2006 (2) LLJ 744(SC); Madhya Pradesh Bank Karmachari Sangh (M.P) v. Syndicate Bank & Anr.(1997 (3) LLJ (Suppl.) 536); Alexander Yesudas Maikel (1996(1) LLJ
533); Balbir Singh v.Kurukshetra Central Co.Op.Bank Ltd. & OP39055/02 -:22:- Ors. (1990 (1)LLJ 443); Mohan Lal v. The Management of M/s.Bharat Electronics, Ltd., ( AIR 1981 SC 1253) ; Krishna Bahadur v. Purna Theatre & Ors. (AIR 2004 SC 4282 ); LIC of India v. Suresh, R. (ILR 2008 (2) (Kerala) 537).
15. I have carefully considered the arguments advanced by the learned Senior counsel Sri M.Pthrose Mathai as well as Sri B.Ashok M.Shenoy appearing for the respondents. I have also perused the materials and evidence on record. It is true that the petitioner LIC can appoint persons on temporary basis for limited period as they deem fit so as to carryout its business and to discharge its function. As contended by the learned Senior counsel for the petitioner, Section 23 of the LIC Act, 1956 provides that the Corporation may employ such number of persons as it thinks fit for the purpose of enabling it to discharge its functions under the Act. Section 48 deals with the powers to make rules including the rules relating to the terms and conditions of service of the employees and agents of the Corporation, including those who became employees and agents of the Corporation. Similarly, Section 49 OP39055/02 -:23:- empowers the Corporation with the previous approval of the Central Government to make Regulations not inconsistent with the Act and the rules made thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provision of the Act. Section 49(2) enables the Corporation to make Regulations in particular and without prejudice to the generality of the provisions contained in the Act. Section 49(2) (b) deals with the method of recruitment of employees and agents of the Corporation. Thus, as per clause 4 of the Regulation, the Chairman is authorised to issue instruction or direction as necessary to give effect to and carry out the provision of the Regulations and in order to secure effective control over the staff employed in the Corporation. Thus, Regulation 8 deals with temporary staff. Regulation 8(1) says that , notwithstanding anything contained in these Regulations, the authorities mentioned therein may employ staff in Class III and IV on a temporary basis subject to such general or special direction as may be issued by the Chairman from time to time. Sub-Regulation 2 to regulation 8 OP39055/02 -:24:- make it clear that no person appointed under sub-regulation (1) shall only by reason of such appointment be entitled to absorption in the service of the Corporation or claim preference for recruitment to any post. Thus the above provision empowers the LIC to make temporary appointment to limited period .
16. Ext.P10 is the instruction issued by the Chairman of the LIC, to regulate the employment of staff in Class III and IV on a temporary basis in terms of Sub-regulation (1) of Regulation 8 in exercise of the authority vested with the Chairman under Regulation 4 of the Regulations. Clause 4 of Ext.P10 instruction deals with scope of employment and sub- clause (i) to Clause IV of Ext.P10 instruction deals with temporary appointments to class III post. Clause (b) of Sub- clause (i) deals with circumstances under which employment of temporary staff in Class III posts may be made. I am not repeating the three circumstances under which the temporary appointment can be made as the same were already indicated earlier when discussed the observation of the OP39055/02 -:25:- Tribunal in the award. Thus, going by the above provisions, it can be seen that the Act, Regulation and the Instruction enable the Corporation to appoint persons on temporary basis so as to discharge its function and to carry out its business. Unless there are such provision, the LIC may not be in a position to effectively carry out its business and discharge its functions, otherwise it will ultimately adversely affect the LIC.
17. Therefore, the question to be considered is whether the LIC is justified in repeatedly appointing the same person to the same post with short intervening break or different persons to the same post, which are permanent, to which no regular recruits are available, under the guise of exercising those powers?
18. As per the materials and evidence on record, it is clear that after 1993, no recruitment was done and no appointment was made to the post like the present one, though the same are lying vacant. MW1 when examined, he had categorically stated that even after 2000, appointments OP39055/02 -:26:- are being made to permanent post on temporary basis and the present appointments are not made to meet any of the contingencies contemplated by clause 4(1)(b) of Ext.P10 instruction. It is also came out in evidence that no select list is available for making appointment on regular basis. It was under the above circumstances, the Tribunal ,after considering the various authorities, came into the conclusion that no sanctity need be given to the contractual appointments of the workmen done by the petitioner and thus found that the management was not within their right to terminate the services of the workmen on expiry of period of contract of employment. In the light of the materials and evidence on record which referred above, I am of the view that the above findings of the Tribunal is absolutely correct.
19. The next question to be considered is whether the Tribunal is justified in conducting such enquiry and arriving into such finding or else should the Tribunal confine its enquiry only to the correctness of Exts.P1 to P6 on the basis of Section 2(oo)(bb) of the ID Act in the light of the LIC Act and OP39055/02 -:27:- Rules, Regulation and Instructions thereafter.
20. The Tribunal in its award considered the decision reported in Jayabharat Printers v. Labour court, Kozhikode (1994 (2) LLJ 373}. In that decision this Court held that Section 2(00)(bb) has to be strictly interpreted and it is necessary to find out whether the letter of appointment is a camouflage to circumvent the provisions of the Industrial disputes Act, which confers permanency to a worker who has continuously worked for 240 days. The Senior counsel Sri M. Pathrose Mathai pointed out that the said decision of the learned Single Judge of this Court was set aside by a Division Bench of this Court as per the decision reported in Jayabharath Printers v. Suresh Kumar (2000(1) KLJ 1028) . On a close reading of the above decision of the Division Bench of this Court, it appears that the dictum laid down by the learned Single Judge in Jayabharat Printers & Publishers v. Labour Court, Kozhikode & Ors (1994 (2)LLJ 373) is not held as illegal or incorrect. What the learned Single Judge held was that Section 2(00)(bb) has to be strictly interpreted and it OP39055/02 -:28:- is necessary to find out whether the letter of appointment is a camouflage to circumvent the provisions of the Industrial Disputes Act, which confers permanency to a worker who has continuously worked for 240 days. It is also held by the learned Single Judge that the nature of employment must be judged by the nature of duties performed and not on the letters issued by the employer. If contractual employment is resorted to as a mechanism to frustrate the claim of the employee to become regular or permanent against a job which continues or the nature of the duties is such that the colour of contractual employment is given to take it out from section 2 (oo), then such agreement cannot be regarded as fair or bona fide and Sec.2(oo) (bb) cannot be extended to such cases where the job continues and the employee's work is also satisfactory but periodical renewals are made to avoid a regular status to the employee. The above finding and observation has not so far been held incorrect or illegal by the Division Bench. In the said decision, the Division Bench has simply held that termination of service of a workman as a OP39055/02 -:29:- result of non-renewal of the contract of employment on its expiry does not amount to retrenchment. In order to come into such conclusion , the Division Bench has considered only Ext.P1 therein and no further enquiry was conducted as observed by the learned Single Judge in the said decision.
21. However, in the decision reported in Haryana State Electronics Devpt.Corpn. Ltd. v. Mamni (2006(2) LLJ 744) (SC), a Division Bench of the Apex Court has held that the Appellant-Corporation was found appointing respondent therein as Junior Technician for a period of 89 days and re- appointing her after a gap of one or two days, on regular basis. Such an action, the Supreme court said, could not be considered bona fide and was adopted to defeat the rights available to the respondent under Section 25-F of Industrial Disputes Act, 1947. Consequently, Section 2(oo) (bb) of the act was not attracted. It is also held that as the respondent therein was appointed on ad hoc basis, her services could not be regularised, even if she was reinstated. In this juncture, it is relevant to note that in that case the appellant OP39055/02 -:30:- is the Haryana State Electronics Development Corporation Ltd. and the Honourable Supreme Court repelled the contention of the appellant , which was similar to the one taken in this case.
22. The Bombay High Court, in the decision in Alexander Yesudas Maikel. Perfect Oil Seals and IRP & Ors. (1996 (1) LLJ 533), has held that one cannot lose sight of the fact that clause (bb) has itself been restrictively interpreted and the judicial consensus is that if the post continues and the work continues clause (bb) cannot be said to operate as a charter for unscrupulous employers to jettison their workmen. This decision was relied on by the Tribunal. Another decision relied on by the Tribunal is that of Madhya Pradesh High Court reported in M.P.BK. Karmachari Sangh v. Syndicate Bank & Anr. (1997(3) LLJ (Suppl) 536) in which it is held that "(i) the provisions of Section 2(oo)(bb) of the I.D.Act are to be construed benevolently in favour of the workman; (ii) the exception embodied in that provision OP39055/02 -:31:- cannot extend to a mala fide non renewal of the contract of employment; or to a case where the work was of a continuous nature and there was nothing on record to show that the work had come to an end". In another decision in Director, Tourism Department v. Industrial Tribunal (2005 (1) KLT 320), a Division Bench of this Court has found that "appointment of earlier sweeper was regularised and promoted and Saraswathy was appointed in that vacancy. Work of a sweeper is necessary in the guest houses. It is a regular work". It is also found that though the petitioner in that case was appointed as a daily rated worker, not for any extra need, but for doing the regular work of the establishment and the need continued even after the termination of her services. The Division Bench further found that " in this case, it is not disputed that Sarawsathy was employed continuously for a period of more than three years and she was paid daily wages of Rs.24/- and her services were OP39055/02 -:32:- terminated without complying with the provisions of S.25F. Therefore, she is deemed to have continued in service and she is entitled to backwages. She is entitled to backwages only at the rate of last drawn wages till she is reinstated. We also note that the Tribunal rightly did not regularise her service. After reinstatement, for any valid reasons, if her services have to be terminated, it can be done only after complying with the provisions of S.25F of the Act. There is no jurisdictional error or patent illegality in the impugned award passed by the Industrial Tribunal." So, in the present case also posts are available. So, respondents 1 to 6 can continue to be engaged.
23. On examination of the facts involved in the present case, in the light of the above authorities, it can be seen that respondents 1 to 6 were repeatedly appointed in the service with intervening short break and as held by the Tribunal, such OP39055/02 -:33:- practice cannot be recognized or promoted. The petitioner- Corporation is a public institution, which will definitely come within the purview of definition of "State" as envisaged under article 12 of the Constitution of India, is expected to have fair and transparent dealings in the matter of employment and other conditions. Such public undertaking, like LIC, wherein the ultimate control is vested with the Central government, shall always act as a "model employer" to others. They shall not be permitted to exploit the unemployed by utilising the unemployment in this country, for which the unemployed hands are in no way responsible. If the practice adopted by the LIC is approved, certainly it will amount to giving green signal not only to the LIC but also to other private employers for denying statutory right of the workers and unemployed youth and to subject them for exploitation.
24. In the light of the particular facts and circumstances involved in the case and in view of the settled position of law, as per the judgments referred to above, including the Honourable Supreme Court and various other High Courts, I OP39055/02 -:34:- am of the view that the petitioner LIC , under the guise of exercising their powers under the LIC Act, Rules and Regulations made thereunder and as per Ext.P10 Instruction, shall not defeat the right of the workmen as available under section 25F, 25G and 25H of the I.D.Act. While posts are available for appointment, either on regular basis or on temporary basis, there is no justification for the termination of the respondents 1 to 6 from the service of LIC. The I.D.Act is a social welfare legislation and the provisions of the Act provide for investigation and settlement of industrial disputes. In the present case, it cannot be held that the dispute, arose at the instance of the petitioner/management, is a bona fide one as the management deliberately terminated the service of respondents 1 to 6 so as to frustrate the claim of the workmen to continue in the regular or permanent posts, which continues. It is the admitted fact of the petitioner that after 1993, no recruitment was done and no appointment is made to the regular post and even after 2000, the temporary appointments are effected regularly. Therefore, on a strict OP39055/02 -:35:- interpretation of Section 2(oo)(bb), it can be seen that Exts.P1 to P6 orders were issued with a view to circumvent the benevolent provisions of the I.D.Act and to deny the statutory benefit to respondents 1 to 6. Therefore Section 2(oo)(bb) cannot be extended to the rescue of the petitioner, especially, where the job/post continues and periodical renewals or appointments are made to avoid continued status to the workmen. If the appointments are made only for one particular term in exercise of the powers vested with the LIC as mentioned above, and those appointments are made under the circumstances mentioned in clause (iv) (i)(b) of Ext.P10 Instruction, the argument of the learned Senior counsel for the petitioner would be justified. But in the present case, the facts and circumstances involved, especially in the light of the evidence of MW1, it can be seen that these appointments are not made under any of the above said circumstances. Therefore, the petitioner management is not justified in terminating respondents 1 to 6 by invoking Section 2(oo)(bb). Therefore, the argument of the learned counsel under that OP39055/02 -:36:- count fails.
25. The other legal point argued by the learned counsel for the management is that in view of Regulation 8, the provisions of the I.D.Act are not applicable with respect to the matters covered by Section 48(2) (cc) of the LIC Act. Thus in short, respondents 1 to 6 are not retrenched employees since they are covered by Regulation 8 of the Life Insurance Corporation (Staff) Regulations and therefore, the Tribunal is wrong in overlooking Regulation 8 of the Regulations and LIC Act and applying the provisions of the I.D.Act which excluded to the extent covered by the above Regulation. So, according to the learned counsel, the proceedings, findings and award of the Tribunal has an overriding effect over the provisions of the LIC Act and Regulation made thereunder and therefore, the Tribunal erred in exercising the jurisdiction conferred on it. The learned counsel for the petitioner invited my attention to various provisions of the LIC Act, Regulation, which I have already referred in the previous paragraph. In support of the above contention, the learned counsel firstly OP39055/02 -:37:- placed reliance upon the decision of the Apex Court in M.Venugopal v. Divnl.Manager, LIC of India, Machilipatnam (AIR 1994 SC 1343). In the light of the facts and circumstances involved in that particular case, the Apex Court has held that the amendments introduced in Section 48 of the Corporation Act have clearly excluded the provisions of the Industrial Disputes Act, so far they are in conflict with the rules framed under S.48(2)(oo). (emphasis supplied). It is further held that the result whereof will be that termination of the service of the appellant shall not be deemed to be a "retrenchment" within the meaning of Section 2(oo), even if sub-sec.(bb) had not been introduced in the said section. The Apex Court has further held that once section 2(oo) is not attracted, there is no question of application of S.25-F on the basis of which the termination of the service of the appellant can be held to be invalid. In paragraph 15 of the above decision, the Apex Court has held :
"Even under general law, the service of a probationer can be terminated after making overall assessment of his performance during the period of OP39055/02 -:38:- probation and no notice is required to be given before terminating his service".
In the head note of that decision, it is stated that such termination being effected under stipulation contained in contract read with Regulation 14 is not retrenchment within Section 2(oo) of I.D.Act - even otherwise regulations framed under section 48(2)(cc) have overriding effect over provisions of Industrial Disputes Act. The facts and circumstances involved in the present case is entirely different from that of the decision referred above. In the present case, the workmen were repeatedly appointed to a permanent post or fresh persons to same post with short break as per Regulation 8 of the Regulations. In the above case, the appointment was on the basis of Regulation 14 and the appellant therein was a probationer. In that case it is found that the contract of employment entitling Corporation not to confirm probationer in case he fails to achieve target fixed in regard to his performance . Therefore, the Apex Court, after considering Regulation 14 of the Regulation and on the basis of the OP39055/02 -:39:- undisputed facts regarding the failure of the appellant therein in achieving the target fixed as per the appointment order itself are attracted, the termination was in terms of the contract and hence, it cannot be termed as retrenchment. In the present case, there is no such contractual obligation to be performed within a stipulated period. The only clause contained in the appointment orders is that the same are for specific period. Therefore the above decision as such is not applicable in the present case. But in the same decision, the Apex Court has held that the amendment introduced in Section 48 of the LIC Act have clearly excluded the provisions of the the I.D.Act , so far they are in conflict with the rules framed under section 48 (2)(oo). In the present case, there is no conflict between the provisions of the LIC Act, Regulation, and the I.D.Act. Regulation 8 of the Regulations authorised the LIC to employ staff in Class III and IV on temporary basis. A single appointment made on the basis of the above provision and the termination of service on expiry of such appointment period cannot be treated as retrenchment as envisaged by OP39055/02 -:40:- Section 2(oo) of the I.D.Act because such termination will come within the purview of Section 2(oo)(bb)of the I.D.Act. In such situation, there is no conflict. But in the case of respondents herein, under the guise of Regulation 8 of the Regulations, they were repeatedly appointed with short intervening breaks. The above practice cannot be approved on the basis of the provisions of the LIC Act, Rules and Regulations made thereunder. Therefore, the provisions of the I.D Act clearly attracted as there is no conflict.
26. The learned Senior Counsel, in support of his argument brought to my notice another decision of the Apex Court in Life Insurance Corporation of India v. Asha Ramchandra Ambekar (Mrs.) and another ((1994) 2 Supreme Court Cases 718)}. In that case, the Apex Court after having considered the particular facts and circumstances involved in the case, held that the Courts cannot order appointment on compassionate grounds dehors the provisions of statutory regulations and instructions. It is in that case, the LIC refused to give appointments to OP39055/02 -:41:- respondent No.2 on compassionate grounds because the provision in clause 2(iii) of the 1979 Instructions and Clause 4 of the Circular dated January 20, 1987 is against granting compassionate appointment in a case where any member of the family was employed. But in that case, the High Court directed the Corporation to give appointment to the 2nd respondent. It was in this factual background in the above decision, the Apex Court has held that without examining whether the statutory preconditions for compassionate appointments were satisfied, the High Court should not have straightway directed the Corporation to give him compassionate appointment, the High Court should have merely directed the Corporation to consider the candidate's claim. There in that case, the Apex Court has held that the statutory instructions having force of law. The above dictum was laid after considering Section 49 of the LIC Act, 1956 and Regulation 4 of Life Insurance Corporation of India (Staff) regulations, 1960 and Circular No.2D/636/ASP/87. In the present case, Ext.P10 is the Instruction issued by the OP39055/02 -:42:- Chairman of LIC in exercise of his authority vested with him under Regulation 4 of the Regulations mentioned above. It is true, as instructed by Ext.P10, the petitioner can make appointments in terms of Regulation 8 of the Regulations but only under the circumstances mentioned in Clause 4 of Ext.P10. I have already referred three circumstances contemplated under Clause 4 of Ext.P10. In the present case when MW1 was examined, he had categorically stated before the Tribunal that the respondents were appointed not under any of the above circumstances but their appointments were to permanent post and no regular list of candidates recruited for permanent appointment was available in the LIC. He had also deposed that after 1993, no regular appointment was made though regular posts are available. It is also deposed that even after 2000, the provisional appointments are being done regularly. Clause 6 of Ext.P10 deals with duration of temporary employment. Towards the last portion of clause 6 of Ext.P10, it is stated:
"In no case shall a person be offered temporary OP39055/02 -:43:- employment for a specific period, say 85 days, against a continuing vacancy and, after a break of a few days, be again employed temporarily for any number of occasions (as it would amount to an unfair labour practice). As temporary employment can be made only against specified vacancies (regular or adhoc), long- duration vacancies such as those which are likely to last longer than 120 days (being the maximum number of days of privilege leave that can he granted at any one time to a regular employee) have to be filled up necessarily by candidates from the panel prepared under the Recruitment instructions and awaiting appointment on a regular basis and not by any other person".
Therefore, the Chairman of the LIC while issuing Ext.P10 Instruction in exercise of his authority under Regulation 4 foreseen the likelihood of misusing the powers which will amount to unfair labour practice and hence the same was specifically barred. But in the present case, the workmen were repeatedly appointed after short intervening break which is in total violation of Clauses VI and IV of Ext.P10 Instruction. Therefore, the decision of the Apex Court reported in Life Insurance Corporation of India v. Asha Ramchandra Ambekar {(1994) 2 SCC 718) is not relevant and applicable to rescue the petitioner. Another decision relied on by the OP39055/02 -:44:- counsel for the petitioner is Terminated Full Time Temporary LIC Employees Welfare Association v. Senior Divisional Manager L.I.C, Thanjavur ( 1993 (1) LLJ Mad. 1993). That is a case where temporary employees appointed by the LIC challenged the validity of Regulation 8 on the ground that persons appointed on temporary basis under Regulation 8 of the Life Insurance corporation of India (Staff) Regulations, 1960, claimed that they were retrenched from service, that the work for which they were recruited continued to exist and that the above staff Regulations are not applicable to them. A Full Bench of the Madras High Court in the above decision held that Regulation 8 of the Life Insurance Corpn. of India (Staff) Regulations, 1960 is valid and enforceable, and further held that there is no warrant for contending that Regulation 8 is not applicable to the temporary employees. It is also held that Sub-clause (bb) of Section 2(oo) of the I.D.Act and does not offend the provisions of Part III of the Constitution of India and it is valid and Constitutional. It does not run counter to the provisions of Secs.25F, 25G and 25H of the I.D.Act. In the OP39055/02 -:45:- above case, it is also held that the applicability of the I.D.Act is excluded from the field covered by Sec.48(2) of LIC Act. In that case, the issue referred was:
"What should be the wages and other conditions of service of Badli, Temporary and Part time Workmen of the Life Insurance Corporation of India, as well as the conditions in their absorption in their regular cadre?". (emphasis supplied) In answer to the above issue, the Madras High court upheld the validity of Regulation 8 of the Life Insurance Corporation of India(Staff) Regulations. In the present case, the nature of appointment of the workmen is entirely different from the above case. In the case on hand, even in the award under challenge, there is no direction to the petitioner to absorb the workmen to the regular cadre. Therefore, the dictum laid down by the Madras High Court in the above decision, especially, in the light of the facts and circumstances involved in this case, is not applicable. In this regard, it is also relevant to note that the Apex court in the decision in M.Venugopal v. Divnl.Manager, LIC of India, Machilipatnam (AIR 1994 SC 1343 (cited supra) has held that, the amendment introduced in S.48 of the OP39055/02 -:46:- Corporation Act have clearly excluded the provisions of the I.D Act so far they are in conflict with the rules framed under S.48(2)(oo). As the workmen in the present case are not persons for absorption and regularisation of their services in the regular cadre and the Tribunal has not directed the absorption of the workmen in the regular service of the LIC., the above decision has no relevancy in the present case.
27. The learned Counsel cited another decision of the Hon'ble Supreme Court in Punjab SEB v. Sudesh Kumar Puri {(2007) 2 SCC 428), in which the Apex Court has held:
" The present case is not one of contract labour. On the contrary, there was an agreement governing the engagement. The payment was made per meter reading at a fixed rate and there was no regular employment ever offered to any of the respondents. The provisions of Section 2(oo)(bb) of the Act clearly apply to the facts of the present case. The material on record clearly established that the engagement of the respondent was for specific period and conditional. On the appointment of regular Meter Readers, the engagement was dispensed with. The contracts clearly governed the terms of engagement. Therefore, the orders passed by the Labour court and the High Court are clearly untenable".
(emphasis supplied).
OP39055/02 -:47:- From the facts involved in the above case, it can be seen that , as in the present case, the workmen were not repeatedly appointed. There was no specific agreement governing the engagement and the payment was fixed and made separate meter reading. Their works were dispensed with when regular meter readers were appointed. In the present case, no recruitment list is available for permanent appointment and the workmen were repeatedly appointed with short intervening breaks. The above approach is depreciated by the Tribunal and held that such appointments were made to defeat the very right of the workmen. Therefore, the above decision is also not applicable in the present case. In support of the submission of the learned counsel, he has also placed reliance on the decision of this Court in Jayabharath Printers v. Suresh Kumar (2000(1) KLJ 1028), which I have already referred. The Hon'ble Supreme Court had already depreciated such approach of the management in a similar case in Haryana State Electronics Devpt.Corpn Ltd. v. Mamni (2006 (2) LLJ 744), and it is held that the appellant- OP39055/02 -:48:- corporation was found appointing respondent as Junior Technician for period of 89 days and re-appointing her after a gap of one or two days, on regular basis. The Apex Court has held that such an action could not be considered bona fide and was adopted to defeat the rights available to the respondent under section 25-F of the I.D. Act ,1947, and thus, held that Section 2(oo) (bb) of the Act was not attracted. Therefore, the second legal point raised by the learned Senior Counsel for the petitioner also fails.
27. Mr. B.Ashok Shenoy, the counsel appearing for the respondents/workmen cited the following decisions: LIC of India v. Suresh.R (2008(2) ILR 537); Krishna Bahadur v. Purna Theatre & Ors.( AIR 2004 SC 4282); Mohan Lal v. The Management of M/s Bharat Electronics, Ltd. (AIR 1981 SC 1253); Balbir Singh v. Kurukshetra Central Coop.Bank Ltd., & Anr.(1990 (1)LLJ 443); Jayabharat Printers & Publishers Pvt.Ltd. v. Labour Court, Kozhikode & Ors.(1994(2) LLJ 373); Alexander Yesudas Maikel v. Perfect Oil Seals and IRP & Ors. (1996(1) LLJ 533); M.P.BK. Karmachari Sangh v. Syndicate OP39055/02 -:49:- BK & Anr.(1997 (3) LLJ 536); Haryana State Electronics Development Corporation Ltd. v. Mamni (2006 (2) LLJ 744; Mallika Rajam v. State of Kerala (2002 (3) KLT 77) and Director, Tourism Department v. Industrial Tribunal (2005(1) KLT 320). The learned Counsel submitted that there is no conflict between the provisions of the LIC Act, the Rules and Regulations made thereunder and the I.D.Act. According to the learned counsel, as pointed out by the Apex Court in the decision referred earlier, the question of giving preference to the provisions of the LIC Act and Regulation will come only when there is conflict with respect to any provision of I.D.Act. It is also pointed out that the application of the provisions of the I.D.Act is not completely taken away with respect to the appointments and service conditions of the workers appointed in the LIC. The learned Counsel rightly pointed out that what the Tribunal has held illegal is the repeated appointment of workmen with intervening short break so as to defeat their right for claim of regularisation in the regular cadre. The Tribunal has not issued any direction to the OP39055/02 -:50:- petitioner-LIC to regularise the service of the workmen. Whereas, the Tribunal has just directed the LIC to comply with the provisions of Section 25 F and the petitioner-LIC was given chance to rectify their mistake committed while retrenching the workmen. In the light of the decisions of the Hon'ble Supreme Court reported in 2006(2) LLJ 744 ; AIR 1981 SC 1253; 2008(2) ILR Ker. 537 and AIR 2004 SC 4282 (cited supra), the finding arrived on by the Tribunal are absolutely correct and no interference is called for.
28. In the light of the above discussion and in view of the legal position settled as per the above authorities, I am of the view that the facts and circumstances involved in the case attracted the provisions of the ID Act 1947 as there is no conflict between the said Act and the Rules and Regulations and Ext.P10 Instructions made thereunder. The above provision authorises the LIC to make temporary appointments under the circumstances mentioned therein which I have referred but under the guise of exercising such powers, the LIC cannot resort arbitrary and illegal methods to deny OP39055/02 -:51:- valuable right of the workers which accrued on them by the operation of the provisions of law govern the field. The Tribunal has found that in the present case, the workmen were repeatedly appointed with short intervening break so as to defeat the above right of the workmen which cannot be permitted. According to me, the above finding of the Tribunal is within its competence and jurisdiction. Neither the petitioner nor any other employer can insist the Tribunal to simply go by the terms of the appointment order alone. In order to answer the issue referred to it, the Tribunal has considered the claim of the workmen on the basis of the appointments given to them and found that the termination of the workmen is not justified as the same is against the provisions under Section 25 F of the I.D.Act and their termination as such is not saved by clause (bb) of Section 2 (oo) and accordingly in exercise of the powers vested with the Tribunal under Section 11A of the I.D.Act, the Tribunal can give appropriate relief to the workmen. Therefore, I am of the view that the Tribunal, in exercise of its jurisdiction, correctly applied the law in the OP39055/02 -:52:- facts and circumstances involved in the case, to answer the issue referred to it in favour of the workmen, and deserved reliefs were granted which, this Court cannot disturb in exercise of the power vested with this Court under Article 226 of the constitution of India.
In the result, there is no merit in the writ petition and accordingly, the same is dismissed.
V.K.MOHANAN, JUDGE kvm/-
OP39055/02 -:53:- V.K.MOHANAN, J.
O.P.No.39055/2002
JUDGMENT Dated:.10.7.2009.