Karnataka High Court
Management Of Guest Keen Williams Ltd. vs Presiding Officer, Ii Addl. Labour ... on 24 September, 1991
Equivalent citations: ILR1991KAR3731, 1992(1)KARLJ255
Author: S. Mohan
Bench: S. Mohan
JUDGMENT
S. Mohan, G.J.
1. Since Writ Appeal No. 1669/1991 arises out of an interlocutory order dated June 18, 1991 made in Writ Petition No. 13266/1991 directing the appellant to pay to the second respondent a sum of Rs. 25,000/- subject to reinstating the second respondent and paying him the current wages, we asked the learned counsel on both sides whether we could have the writ petition itself disposed of on merits. They agreed to this course. That is how the writ petition also has come up before us. Since the judgment in the writ petition will govern the writ appeal as well, we propose to deal with the writ petition first.
2. The second respondent-workman was appointed by the appellant-petitioner in February 1974 on a temporary basis as a Helper. He was given intermittent work till September 1974. Thereafter his services were dispensed with. Again he was employed by the appellant from February 25, 1978 and he continued in the said employment till August 20, 1978. From August 21, 1978 he was appointed as a probationer. He was confirmed from February, 26, 1979 after completion of probationary period. After confirmation, he became very irregular in his attendance. He used to remain absent unauthorisedly and without prior permission or even sanction of the appellant.
The workman availed E.S.I. leave on April 1, 1981 and April 2, 1981. Normally he should have resumed duty from April 3, 1981. However, he did not report for work. He remained absent without permission or intimation on and from April 3, 1981 till April 15, 1981. Consequently, the appellant informed the workman by its letter dated April 15, 1981 that having regard to Clause 20 of the Certified Standing Orders of the Company he must be deemed to have left the services of the appellant-Company with out notice thereby terminating his contract of service. Even after receipt of this letter the workman did not offer any explanation. He went to the Company only on November 21, 1981 and took the necessary Forms for settling his Provident Fund Claims. Thereafter on November 23, 1981 he wrote a letter to the appellant demanding reinstatement. This was followed by a legal notice dated November 16, 1982 Wherein also he reiterated his demand for reinstatement. Since his demand was refused he raised an industrial dispute. That came up for conciliation before the Deputy Labour Commissioner, Bangalore, Region No. 1 on December 9, 1982 and it ended in failure. Thereafter the State Government referred the dispute to the first respondent - Labour Court - for adjudication. That was registered as Reference No. 86/1985. The first respondent passed an Award on December 24, 1990 directing the appellant to reinstate the workman with continuity of service, full back wages and other consequential benefits for reasons stated in the Award. In so doing, the first respondent held that striking off the name of the workman with effect from April 3, 1981 on the ground of abandonment of service was bad in law. Aggrieved by this Award, the present writ appeal had come to be filed.
3. Mr. Dolia, learned counsel for the petitioner-appellant, would submit as under :-
The interpretation of the Labour Court on Section 73 of the E.S.I. Act is incorrect. The said section categorically states :-
"No employer shall dismiss, discharge, or reduce or otherwise punish an employee during the period the employee is in receipt of sickness benefit or maternity benefit, nor shall he, except as provided under the regulations, dismiss, discharge or reduce or otherwise punish an employee during the period he is in receipt of disablement benefit for temporary disablement or is under medical treatment for sickness or is absent from work as a result of illness duly certified in accordance with the regulations to arise out of the pregnancy or confinement rendering the employee unfit for work."
Where, therefore, the certificates produced before the first respondent (exhibits W-1 to W-5) clearly lay down that they are not intended to be used for claiming benefits or excusal of contributions, without even nothing the same the first respondent gives the benefit of the said section to the workman. Regulation 55 of the E.S.I. Regulations also postulates that the certificates will have to state the disease from which the workman is suffering. These certificates are bald in nature. Forms 8, 9 and 10 prescribed by these Regulations also reiterate this viz. that by reason of a particular disease the workman is absent. That sickness is required to be stated. Nothing of that kind is stated here.
The consequence of dismissing an employee in contravention of Section 73 of the E.S.I. Act would attract prosecution under Section 85(d) of that Act. Therefore, in the teeth of these provisions, the first respondent was not justified on the basis of the evidence produced before it, to conclude that Section 73 of the E. S.I. Act would be applicable to the workman.
As a matter of fact, the certificates W-1 to W-5 have not even been properly proved by examining the doctors who issued those certificates. Therefore, they are inadmissible in evidence. Even assuming they are admissible in evidence, they are inherently defective.
The workman does not have a consistent case with regard to the sickness. In his evidence as WW-1 he would say that be was suffering from vibration as a result of loss of blood during the period April 1 to 30, 1981. However, in the lawyers notice (Ex. M-8) it is stated that the workman was on E.S.I. leave as he was suffering from general Diabetes.
Where Clause 20 of the Standing Orders applies there is no decision of the employer to terminate the service in a case of voluntary abandonment. As a matter of fact the taboo contained in Section 73 of the E.S.I. Act is also only to that effect requiring the employer not to dismiss or terminate. If it is case of voluntary abandonment, Section 73 will not apply, it is Clause 20 of the Standing Orders that will apply. This vital distinction between an order emanating from the employer terminating or discharging the services of the workman as against the workman himself terminating his contract of services by operation of Clause 20 of the Standing Orders has not been properly appreciated. In support of this submission, reliance is placed on Buckingham and Carnatic Co. Ltd. v. Venkatayya, (1963-II-LLJ-638). Reliance is also placed on Binny Ltd. v. Presiding Officer (1986-I-LLJ-237), in which it has been stated that abandonment implies no retrenchment.
The Certificate, Ex. W-1, is dated April 7, 1981. That is stated to have been handed over on April 2, 1981. Therefore, it is inherently impossible that it was ever handed over.
Yet another important point is that at no point of time in any particular year the workman worked for 240 days. Under such circumstances, there is no scope for applying Section 25-F of the Industrial Disputes Act, 1947, at all. Therefore, Section 2(oo) of the I.D. Act relating to retrenchment cannot arise. Concerning this the first respondent has not properly appreciated the evidence placed before it viz. Ex. M-6 the attendance register and the admission of the workman himself. On the contrary, the first respondent wrongly puts the burden on the appellant-management and has thoroughly misdirected itself. For these reasons, the Award of the first respondent-Labour Court which suffers from various infirmitics, requires to be set aside.
4. Mr. M. C. Narasimhan, learned counsel for the workman, would submit that a careful reading of Clause 20 of the Standing Orders would clearly disclose that this is not a case of voluntary retirement by a deemed abandonment. Having regard to the fact that under Clause 25(6) of the Standing Orders there is discretion on the part of the Management to take disciplinary action for habitual absence without permission for more than ten consecutive days, any action taken under Clause 20 of the Standing Orders must be held to be retrenchment. Venkatayya's case (supra) dealt with the scope of Scope of Section 73 of the E.S.I. Act. Whatever was stated in that connection cannot govern a case of retrenchment arising under Section 2(oo) of the I.D. Act. The Statutes are different, namely, the Industrial Disputes Act widely differs from the Employees' State Insurance Act, the former aiming at keeping industrial peace and harmony while the latter is a socio-beneficial legislation to the workmen. If that be so, the rulings relating to retrenchment arising under Section 2(oo) of the I.D. Act alone must apply.
When Section 73 of the E.S.I. Act talks of discharge it must be held to be a punishment or at any rate must partake the character of punishment. As a matter of fact Regulation 98 of the E. S.I. Regulations also talks of discharge. They must be read together to give proper effect. Besides, while interpreting Clause 20 of the Standing Orders it cannot be read in isolation. On the contrary, one must have regard to the various other clauses of the Standing Orders including Clause 15 Retrenchment, Clause 22(b) the workman terminating his own service by notice, and clause 25(6) misconduct on the ground of continuous absence. Further, Clause 32 clearly says that these Standing Orders are not in any way to be construed in derogation of any other law applicable. Therefore, the concept of retrenchment as dealt with by Section 2(oo), I.D. Act will remain unaffected. In support of this State Bank v. N. S. Money, (1976-I-LLJ-478), para 8 is cited. Again in Delhi Cloth and General Mills Co. Ltd. v. Shambhu Nath Mukherjee (1978-I-LLJ-1), it was held that the striking off was bad in law. In Hindustan Steel Ltd. v. Labour Court, Orissa (1977-I-LLJ-1), it was held that by efflux of time there would be termination. In L. Robert D'Souza v. Executive Engineer, Southern Railway (1982-I-LLJ-330), where the name was struck off, again it was held to be a case of retrenchment. Then again in Veeranarayana v. Management of New Chitra Talkies, a learned single Judge of this Court took the view that if the stand of the employer of abandonment is not established it will amount to retrenchment. In this case the plea of voluntary abandonment raised by the appellant not having been established it is a clear case of retrenchment falling within Section 2(oo), I.D. Act, and therefore, Section 25F, I. D. Act would apply.
Where the workman resorted to strike and on that score it was held to be a case of abandonment and his name was struck off that was held to be bad in G. T. Lad v. Chemicals and Fibres of India, (1979-I-LLJ-257).
The scope of abandonment as against retrenchment has come to be clearly laid down in Punjab L. D. & R. C. Ltd. v. P. O. Labour Court, (1990-II-LLJ-70). The ratio of that judgment would apply to this case.
Equally in the Full Bench Judgment of Kerala High Court in L, Robert D'souza v. Executive Engineer, Southern Railway, (Supra), which came up for consideration before the Supreme Court as seen from (1982-I-LLJ-330) (supra), this distinction is clearly pointed out. Therefore, these decisions help the workman.
A Division Bench of the Kerala High Court in H. M. T. Ltd. v. Labour Court, Ernakulam (1983-I-LLJ-337) rejected the narrow concept of retrenchment.
Further, in Naresh Chandra Das v. Seventh Industrial Tribunal (1982-II-LLJ-64), Where the workman's services came to be terminated in accordance with the Standing Orders for continued absence, such termination was held to fall under Section 2(oo), I. D. Act. This view of the Calcutta High Court has met with the approval from other High Courts, viz., Kerala High Court in M. S. Abbobacker v. H. M. T. Ltd., (1988-II-LLJ-323) Patna High Court in Deshraj Sood v. Industrial Tribunal (1985-I-LLJ-74), Orissa High Court in Madhabananda Jeena v. Orissa State Electricity Board, (1990-I-LLJ-463).
The Ruling which squarely applies to this case is Deshraj v. P. O., Industrial Tribunal (1985-I-LLJ-74), where the service came to be terminated automatically under the Standing Orders consequent to the loss of lien by work man on consecutive absence; it was held to be a case of retrenchment within the meaning of Section 2(oo), I.D. Act attracting Section 25-F, I.D. Act. This case fully supports the workman.
Even assuming that a different view of retrenchment is possible, exercising writ jurisdiction under Article 226 of the Constitution of India the view taken by the Labour Court should not be disturbed.
It is well settled in law that discharge takes the characteristic of punishment as seen from State Bank of India v. Workmen of State Bank of India (1990-II-LLJ-586), Management of Spencer & Co. v. Addl. Labour Court, Madras (1980-II-LLJ-469) and R. Thaakar Prasad v. Phoenix Mills (1976-I-LLJ-93).
In any event, the matter should be viewed in the light of Section 11A, I.D. Act As to how the matter is to be approached could be gathered from paragraph 15 of (1976-I-LLJ-93).
Even in case of civil servant where he was removed from service for overstay after expiry of leave it was held that Article 311 would apply, vide Jai Shander v. State of Rajasthan (1966-II-LLJ-140).
In Deokinanda Prasad v. State of Bihar (1971-I-LLJ-557) even five years absence was not treated as serious.
The next question will be whether abandonment will fall under voluntary retirement. As seen from Desikachari v. The Mail (1961-II-LLJ-771) in case of voluntary retirement there is a volition on the part of the employee. That is not the case here. On the contrary, by operation of Standing Order, Clause 20 where certain consequence is to follow that cannot amount to voluntary retirement. If, therefore, Section 2(oo) I.D. Act applies, the Standing Orders of the Company will have to be so construed as to yield to Section 25-J, I.D. Act since that section has a overriding effect. Consequently, Section 2(oo) must be given full effect. If by series of decisions, by striking off the name abandonment has been held to be retrenchment, the same view has to be adopted. In W.P. No. 3292/1984 decided on November 12, 1985 a learned single Judge of this Court has spelt out the scope of retrenchment.
Turning to Exhibits W-1 to W-5 for marking all these documents no objection was taken by the appellant-management. Therefore, now it is not open to the appellant to contend that they have not been properly proved. No doubt, there may be minor inconsistencies, but on that score it cannot be said it is a case of there being no sickness at all especially when a factual finding is rendered by the Labour Court. The objection as to the nature of sickness etc., was not put forth in the Labour Court.
As regards 240 days working, the witness of the Management himself has admitted. Hence one need not go beyond the admission. Of course he will try to get over the admission in re-examination. Here again the factual finding does not call for any interference. Consequently, the writ petition is liable to be dismissed.
5. In reply, Mr. Dolia, learned Counsel for the petitioner, would submit, relying on National Engg. Industries Ltd. v. Hanuman (1967-II-LLJ-883), that merely because under Clause 25(6) of the Standing Orders there is an alternative provision for taking disciplinary action that does not mean that clause 20 of the Standing Orders must be interpreted as one by way of punishment. If it is established that no act had emanated from the employer putting an end to the services of the workman, the question of retrenchment cannot arise at all. The language in Section 2(oo) of the I.D. Act and Section 73 of the E.S.I. Act is similar in that the employer shall not dismiss or discharge. Where by the continuous absence without permission Standing Order Clause 20 deems voluntary abandonment, it cannot be said that the management had discharged or put an end to the services of the workman and therefore it is a case of retrenchment, In Robert D'Souza's case (supra) regard was had for Rule 2505 of the Railway Establishment Manual and the accent was on notice of termination of service.
It cannot be said that a strike would amount to abandonment. In the case of a strike the workman wants to remain in service, merely wants better service conditions or fight for more benefits. To equate, therefor, strike with voluntary abandonment is wrong. Reliance placed on Punjab L.D. & R.C. Ltd's case (supra) is out of context. As seen from paragraph 83, even a case of disciplinary enquiry is held to fall under Section 2(oo) of I.D. Act, and that is evident from paragraph 11. That is not the position here.
Assuming for a moment that it is a case of retrenchment, the more important question will be whether Section 25-F of I. D. Act applies. Only when a workman has worked for 240 days in a year there is scope for application of the said section. That is not so here because that is spoken to by the Management Witness MW-1 both in examination-in-chief and re-examination. It is equally admitted by the workman himself.
Lastly it is submitted that in any event where the retrenchment was held to be void the workman was held entitled only to compensation as seen from (1990-II-LLJ-70) paragraph 84, and Workmen of Coimbatore Pioneer B Mills Ltd. v. Labour Court (1980-I-LLJ-503).
Having regard to the above arguments, the following points arise for our consideration.
(i) Whether Section 73 of the E.S.I. Act would apply to the facts of this case ?
(ii) Does the present case fall under voluntary abandonment or is it a case of retrenchment ?
(iii) Whether the workman had put in 240 days of work in a year ?
(iv) What is the relief, if any to which the workman is entitled ?
7. First, we analyse the facts. The following are the admitted facts :-
The second respondent-workman was appointed temporarily as a Helper in February 1974 by the appellant-Management. He worked intermittently till September 1974 and thereafter his services were dispensed with. He was again taken as temporary Helper on February 25, 1978 and he continued to work as such till August 24, 1978. From August 25, 1978 he was appointed as probationer and was confirmed as Helper on February 27, 1979. He was absent for 9 days during July-December 1979. He was given a warning in writing on February 13, 1980. During 1979-1980 he did not work continuously for 240 days. He was on E.S.I. leave on April 1, 1981 and April 2, 1981 and thereafter he remained absent without permission from April 3, 1981 to and April 14, 1981. On April 15, 1981 he was informed by the appellant by a letter that having regard to Clause 20 of the Standing orders of the Company he abandoned his employment. On November 23, 1981 he wrote a letter to the appellant demanding reinstatement. In that letter he did not mention anything about the ESI Certificates said to have been sent through WW-2. As his demand for reinstatement was refused, he raised an industrial dispute which came up for conciliation before the Deputy Labour Commissioner or December 9, 1982. As the conciliation ended in failure, the State Government referred the dispute to the Labour Court - first respondent - for adjudication. The first respondent passed an Award on December 24, 1990 direction reinstatement of the workman with continuity of service, back wages etc., for the following reason :-
(a) The services of the workman were terminated when he was availing ESI leave, which is violative of Section 73 of the ESI Act.
(b) The termination would amount to retrenchment within the meaning of Section 2(oo) of the I.D. Act. In such an event it must beheld that the management had violated the provisions of Section 25-F of the I.D. Act in so far as it had not paid the retrenchment compensation and notice pay.
8. Under these circumstances, the first question is as to the applicability of Section 73 of the ESI Act. We will now extract the said section :-
"73. Employer not to dismiss or punish employee during period of sickness, etc. (1) No employer shall dismiss, discharge or reduce or otherwise punish an employee during the period the employee is in receipt of sickness benefit or maternity benefit, not shall he, except as provided under the regulations, dismiss, discharge or reduce or otherwise punish an employee during the period he is in receipt of disablement benefit for temporary disablement or is under medical treatment for sickness or is absent from work as a result of illness duly certified in accordance with the regulations to arise out of the pregnancy or confinement rendering the employee unfit for work.
(2) No notice of dismissal or reduction given to an employee during the period specified in sub-section (1) shall be valid or operative".
A reading of this section clearly discloses that there is statutory embargo on the on the employer not to dismiss or punish an employee during the period of sickness. It is also clear that during that period the employee must be in receipt of sickness benefit. These are the two postulates of Section. 73 of the ESI Act. If therefore, in contravention of sub-section (1) of Section 73 of ESI Act, a notice of dismissal or discharge is given, it shall not be valid or operative. While we are on this section, we should also refer to Section 85 of ESI Act which reads as follows.
"85. Punishment for failure to pay contributions etc. If any person -
XXX XXX XXX
(d) in contravention of Section 73 or any regulation, dismisses, discharges, reduces or otherwise punishes an employee, XXX XXX XXX He shall be punishable -
(i) XXX XXX XXX
(ii) Where he commits an offence under any of the clauses (b) to (g) (both inclusive), with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both".
Thus it will be clear that any contravention of Section 73 of the ESI Act would not only render the dismissal or discharge invalid but would also expose the management itself to the peril of prosecution. It cannot be over-emphasized that for the operation of this Section an action must emanate from the Management. On the contrary, if Standing Orders Clause 20 applies, could it be said that the management had acted in bringing about the dismissal or discharge ? It will be appropriate to refer to Standing Orders Clause 20 which reads as follows :-
"20, Absence without leave : Any workman who remains absent for ten consecutive working days, without prior sanction shall be deemed to have left the C1ompany service without notice thereby terminating his contract of service. If he gives an explanation to the satisfaction of the Management for such absence the Company may, at its direction, permit the workman to re-join duty. If the workman is allowed to re-join duty, the Company at its discretion may credit the unauthorised absence against leave, if any, due to the workman or convert the whole or part of his unauthorised absence as leave without wages".
We may straightway say that the latter part of this Standing Order in relation to explanation of the workman and the Management exercising its discretion does not arise, because no such explanation was ever offered by the workman for the Management to exercise its discretion. This Standing Order deems a particular stated of affair viz. The workman terminating his contract of service. It was this notice which was given to the workman as per Ex. M-2 which reads as follows :-
"No..
Sri T. Hanumantharayappa, April 15, 1981.
T-59, 3rd Cross, Mariyappanapalya, Srirampuram, Bangalore-560 021.
Dear Sir, Our records reveal that you have been absenting yourself from work without permission or intimation from April 3, 1981 till date, Under the circumstances, you are deemed to have left the services of the Company without notice, thereby terminating your contract of service.
A copy of this letter is being sent to you separately under Certificate of Posting.
We are advising our Accounts Department to pay your dues, if any.
Yours Faithfully, for GUEST KEEN WILLIAMS LTD.
Sd/....."
The stand of Management-appellant, therefore, is that the workman brought an end to his contract. In this regard, we may also refer Ex. M-1 wherein earlier a warning had been issued, and it reads as follows :-
"Guest Keen WILLIAMS Ltd. Rajajinagar, Bangalore - 10.
From :
To-Sri. TT. Hanumantharayappa Works Manager, Ref : IRM/PO/1929/1980 Date : 13-2-1980 Warning On a review or your attendance records for the period July 1, 1979 to December 31, 1979, it has been noticed that you remained absent without leave as per details shown below :-
Month Days Hours
-------------------------------------------------July 1979 2 0 August 1979 2 0 September 1979 1 0 October 1979 2 0 November 1979 1 0 December 1979 1 0 Total 9 0
You will realise that such unconscionably high absenteeism on your part not only results in lower earning to you but it also affects production.
The Management would have been justified in charge-sheeting you for habitual absence without leave and taking disciplinary measures against your. However, with a view to affording an opportunity to improve your attendance, it has been decided not to inflict upon you any server punishment in this in instance but to warn you for the high absenteeism during the period in question.
Sd/- ........
Work Manager."
Dealing with the scope of Section 73 of the ESI Act, one of the leading authorities of the Supreme Court is Buckingham & Carnatic Co. Ltd. v. Venkatayya (supra). As to the applicability of the said section it has been succinctly pointed out under more or less identical circumstances including a Standing Order like the present Standing Order Clause 20, as follows (1963-II-LLJ-638 at 642-643) :
"... Let us first examine Standing Order 8(ii) before proceeding any further. The said Standing Order reads thus :-
Absent without leave : Any employee who absents himself for eight consecutive working days without leave shall be deemed to have left the Company's service without notice thereby terminating his contract of service. If he gives an explanation to the satisfaction of the management, the absence shall be converted into leave without pay or dearness allowance.
Any employee leaving the company's service in this manner shall have no claim for re-employment in the mills.
But if the absence is proved to the satisfaction of the management to be one due to sickness, then such absence shall be converted into medical leave for such period as the employee is eligible with the permissible allowances.
This Standing Order is a part of the certified Standing Orders which had been revised by an arbitration award between the parties in 1957. The relevant clause clearly means that if an employee falls within the mischief of its first part, it follows that the defaulting employee has terminated his contract of service. The first provision in Clause (ii) proceeds on the basis that absence for eight consecutive days without leave will lead to the inference that the absentee workman intended to terminate his contract of service. The certified Standing orders represent the relevant terms and conditions of service in a statutory form and they are binding on the parties at least as much, if not more, as private contacts emboding similar terms and conditions of service. It is true that under common law an inference that an employee has abandoned or relinquished service is not easily drawn unless from the length of absence and from other surrounding circumstances an inference on that effect can be legitimately drawn and it can be assumed that the employee intended to abandon service. Abandonment or relinquishment of service is always a question of intention, and normally, such an intention cannot be attributed to an employee without adequate evidence in that behalf. But where parties agree upon the terms and conditions of service and they are included in certified Standing Orders, the doctrines of common law or considerations of equity would not be relevant. It is then a matter of constructing the relevant term itself. Therefore the first part of standing Order 8(ii) inevitably leads to the conclusion that if an employee is absent for eight consecutive days without leave, he is deemed to have terminated his contract of service and thus relinquished or abandoned his employment.
The latter part of this clause, however, provides that the employee can offer an explanation as to his absence and if his explanation is found to be satisfactory by the management, his absence will be converted into leave without pay or dearness allowance. Now this clause is in substance a proviso to its first part. Before effect is given to inference of relinquishment of service which arises from the first part of the clause, an opportunity is given to the employee to offer an explanation and if the said explanation is treated as satisfactory by the management, the inference of termination of contract of service is rebutted and the leave in question is treated as leave without pay or dearness allowance. This latter clause obviously postulates that if the explanation offered by the employee is not found to be satisfactory by the management the inference arising from the first part prevails and the employee shall be deemed to have terminated his contract of service with the result that the relationship of master and servant between the parties would be held to have come to an end. With the remaining part of the said Standing Order we are not concerned in this appeal.
It is true that absence without leave for eight consecutive days is also treated as misconduct under Clause 13(f) of the Standing Orders. The said clause refers to the said absence and habitual absence without leave. In other words, the position under the Standing Orders appears to be that absence without leave for more than eight consecutive days can give rise to the termination of the contract of service either under Standing Order 8 (ii) or may lead to the penalties awardable for misconduct after due inquiry is held as required by the relevant Standing Order. The fact that the same conduct is dealt with in two different Standing Orders cannot affect the applicability of Standing Order 8 (ii) to the present case. It is not as if the appellant is bound to treat Venkayayyas's absence as constituting misconduct under Standing Order 13(f) and proceed to hold an enquiry against him before terminating his services. Dismissal for misconduct as defined under Standing Order 13 may perhaps have different and more serious consequences from the termination of service resulting from the Standing Order 8(ii). However that may be, if Standing Order 8(ii) is applicable, if would be no answer to the appellant's case under Standing Order 8(ii) to say that Standing Order 13(f) is attracted.
This position is not seriously in dispute."
Again after extracting Section 73 of the ESI Act, the judgment proceeds as under (pp. 645-646) :-
"Mr. Dolia's suggestion is that the general policy of Section 73 is to prevent dismissal, discharge, reduction or other punishment being imposed on an employee who is ill if it is shown that he has received sickness benefit. There are other cases mentioned in this section to which it is not necessary to refer for the purpose of dealing with Mr. Dolia's argument. According to Mr. Dolia, the operation of Section 73 is confined to cases of illness for instance, and it prohibits the imposition of any penalty wherever it is shown that in respect of the illness in question, the employee has received sickness benefit. In the present case, the employee has received sickness benefit, and so, for the said sickness, no penalty can be imposed on him. That, in brief, is the contention which Mr. Dolia has presented before us.
On the other hand, Mr. Sastri argues that the works used in the section are capable of only one construction. The section merely prohibits any punitive action being taken against the employee during the period of his illness and he urges that the prohibition is not confined to punitive action in respect of illness alone but extends to punitive action in respect of all kinds of misconduct whatever. What the section says is, during the period that the employee is ill, no action can be taken against him whatever may be the cause for the said action.
Mr. Sastri also contended that the clause "during the period the employee is in receipt of sickness benefit" can cover the period during which the sickness benefit is actually received by him, and so, he suggests that since during the period of Venkatayya's illness itself no sickness benefit had been received by him, Section 73(1) is wholly inapplicable. We are not impressed by this argument. In our opinion the clause 'during the period the employee is in receipt of sickness benefit' refers to the period of his actual illness and requires that for the said period of illness, sickness benefit should have been received by him. It is quite clear that in a large majority of cases, sickness benefit would be applied for and received by the employee after his sickness is over, and so to hold that the period there referred to is the period during which the employee must be ill and must also receive sickness benefit, would make the section wholly unworkable. That is why we do not think that they limitation which Mr. Sastri seeks to introduce by suggesting that sickness benefit must be paid during the course of illness itself, can be read into the section.
Even so, what is the effect of Section 73(1) ? In considering this question it would be useful to take into account the provisions of sub-section (2). This sub-section provides that no notice given to an employee during the period specified in sub-section (1) shall be valid or operative. Thus, it is clear that the giving of the notice during the specified period makes it invalid, and it is remarkable that the notice is not in regard to dismissal, discharge or reduction in respect to dismissal, discharge or reduction in respect of sickness alone, but it includes all such notices issued, whatever may be the misconduct justifying them. Thus there can be no doubt that the punitive action which is prohibited by Section 73(1) is not confined to punitive action proceeding on the basis of absence owing to sickness; it is punitive action proceeding on the basis of all kinds of misconduct which justifies the imposition of the penalty in question. What Section 73(1) prohibits is such punitive action and it limits the extent of the said prohibition to the period during which the employee is ill. We are free to confess that the clause is not very happily worded, but it seems to us that the plain object of the clause is to put a sort of a moratorium against all punitive action, during the tendency of the employee's illness. If the employee is ill and if it appears that he has received sickness benefit for such illness, during that period of illness no punitive action can be taken against him. That appears to us to be the effect of that part of Section 73(1) with which we are concerned in the present appeal. If that be do, it is difficult to invoke Section 73 against the appellant, because the termination of Venkatayya's services has knot taken place during the period of his illness for which he received sickness benefit.
There is another aspect of this question to which it is necessary to refer. Section 73(1) prohibits the employer from dismissing, discharging, reducing or otherwise punishing an employee. This seems to suggest that what is prohibited is some positive action on the part of the employer, such as an order passed by him after dismissing, discharging or reducing or punishing the employee. Where termination of the employee's services follow automatically either from a contract or from a Standing Order by virtue of the employee's absence without leave for the specified period, such termination is not the result of any positive act or order on the part of the employer, and so, to such a termination the prohibition contained in Section 73(1) would be inapplicable. Mr. Dolia no doubt contended that the word 'discharge' occurring in Section 73(1) should be liberally construed and he argued that termination or service even under Standing Order 8 (ii) should be held to be a discharge under Section 73(1). We are not prepared to accept this argument. In considering the question about the true denotation of the work 'discharge' in Section 73(1), it is relevant to bear in mind the provisions of Section 85(d) of the Act. Section 85(d) provide that if any person in contravention of section 73 or any regulation, dismisses, discharges, reduces or otherwise punishes and employee, he shall be punishable with imprisonment which may extend to three months or with fine which may extend to five hundred rupees, or with both. In other words, the contravention of Section 73(i) is made penal by Section 85, and so it would not be reasonable to put the widest possible denotation on the word 'discharge' in Section 73(1). The word 'discharge' in Section 73(1) must, therefore, in the context, be taken to be a discharge which is the result of a decision of the employer embodied in an order passed by him. It may conceivably also include the case of a discharge where discharge is provided for by a Standing Order. In such a case, if may be said that the discharge flowing from the Standing Order is, in substance, discharge brought about by the employer with the assistance of the Standing Order. Even so, it cannot cover the case of abandonment of service by the employee which is inferred under Standing Order 8(ii). Therefore, we do not think the High Court was justified in taking the view that the termination of Venkatayya's services under Standing Order 8(ii) to which the appellant has given effect by refusing to take him back, contravenes the provision of Section 73(1)."
It is also clear from this ruling that a case falling under absence without leave under Standing Order Clause 20 whereby deeming voluntary abandonment would arise, is taken out of the purview of Section 73 of ESI Act, because if the termination of the employee's services follows automatically either from a contract or a Standing Order by virtue of employee's absence without leave for a specific period, such termination is not the result of any positive act or order on the part of the employer.
The allied question is whether the second respondent workman was in receipt of sickness benefit or was under medical sickness or absent from work as a result of illness between April 3, 1981 and April 14, 1981. The relevant evidence in this regard is the Certificate Ex. W-1, Which we extract :-
"Employees' State Insurance Corporation Information of sickness Sri T. Hanumantharayappa ... is/has been needing medical treatment from April 1, 1981. He is fit to resume work on April 8, 1981.
Date : 7-4-191 Sd/- Dr. T. S. Siddeswara Insurance Medical Officer ESI Dispensary.
..... This Certificate is intended for your employer. It is in your interest that it be delivered to him immediately.
Not to be used for claiming benefits or excusal of contributions."
It is evident from the above document Ex. W-1 that the workman was needing medical treatment from April 1, 1981 and he was fit to resume duty on April 8, 1981. It is rather strange that the workman in his evidence would state that he handed over this document to the management personally on April 2, 1981 while in cross-examination he would say that on April 7, 1981 he gave it to WW-2 Chandrashekharaiah who produced it before the management on April 12, 1981. Yet in another place the workman would say that on April 13, 1981 Chandrashekharaiah told him that he went to his native place and forgot to hand-over the ESI Certificate to the management and he wanted to band-over the same on April 13, 1981 but the management refused to receive it. Thus it will be clearly seen that the evidence is wholly unsatisfactory in this regard.
Even then the question would be whether Ex. W-1 evidences receipt of sickness benefit by the workman. At this juncture ESI Regulations 55 to 58 become material, and we will only extract Regulation-55 :-
"55. Medical Certificate : The appropriate form of a medical certificate shall be filled in ink or otherwise as may be specified by the Director-General by the Insurance Medical Officer in his own handwriting and shall contain a concise statement of the disease or disablement which in the opinion of the Insurance Medical officer necessitates abstention from work on medical grounds or renders the person temporarily incapable of work. The statement of the disease or disablement in the medical certificate shall specify the nature thereof as precisely as the Insurance Medical Officer's Knowledge of the condition of the insured person at the time of the examination permits."
The relevant Forms are Forms 8, 9 and 10. In all these Forms one thing is clear viz. the abstention from work on medical ground by reason of certain illness must be stated. Only then whether the workman is receiving sickness benefit or not could be arrived at because as stated above that is one of the requirements of Section 73 of the ESI Act during which period alone the moratorium would be operative. Ex. W-1 which is already extracted above clearly indicates that it is not to be used for claiming benefits or excusal of contributions. That is so with respect to all Certificates Exs. W-2 to W-5. Added to this, it is not the case of the workman that W-2 was ever handed over to the Management, though an attempt was made by WW-2 Chandrashekharaiah who stated that it was sought to be delivered on April 14, 1981. This evidence conveniently overlooks the fact that Ex. W-2 had come to be issued on April 15, 1981. Equally there is no evidence that W-3 to W-5 were ever handed over to the management. More than above all this, the evidence of the workman as to the nature of the sickness is this :-
"I was on ESI leave from April 1, 1981 to April 30, 1981 as I was suffering from vibration as a result of loss of blood. It is true because of the said sickness I did not work in the factory from April 3, 1981 to April 14, 1981."
This evidence is contradictory to what was stated in the lawyer's notice dated November 16, 1982 where in paragraph 2 it is stated thus :-
"My client states that he was on ESI leave with effect from April 1, 1981 as he was suffering from general diabetes."
So, as to the exact nature of illness there is no consistent evidence. The only conclusion possible, therefore, is that the workman was not availing sickness benefit. Besides, with regard to the handing over of the documents/certificates and the nature of sickness the evidence is far from satisfactory. The first respondent-Labour Court in its Award would state thus :-
"It is also seen from the records that the name of the 1st party is removed from the rolls when 1st party was availing ESI leave and therefore the action of the management is in contravention of Section 73 of the said Act. I have given my best consideration to the evidence and the documents about the fact of the case and I am of the opinion that the management has not considered the case of the 1st party who was sick and was availing ESI leave."
For our part, we are unable to uphold this finding of the Labour Court as the scope of Section 73 of the ESI Act as laid down in Venkatayya's case (supra) has not been kept in mind by the Labour Court. This finding equally ignores the vital contradictions pointed out in including the important fact that the certificates W-1 to W-5 are not to be used for claiming sickness benefit, leave alone, the non-specification of the nature of the sickness. Hence we conclude that this finding of Labour Court is unsupportable in law.
9. The next point for consideration is whether this is a case of voluntary abandonment or retrenchment within the meaning of Section 2(oo) of the I.D Act. We have already extracted Standing Order 20. It has also been noted that the latter half of the Standing Order has no application to the facts of this case since it is nobody's case that the workman gave his explanation for his absence and the appellant management had not exercised its discretion. The management issued the letter Ex. M-2, dated April 15, 1981 as a sequel to the noting made in Ex. M-6 which reads as follows :-
"Guest Keen Williams Ltd., Rajajinagar, Bangalore - 10.
Attendance Particulars Name : T. Hanumantharayappa Designation : Helper 15-4-1981.
C.C. No. 1929 Dept. Stamping
XXX XXX XXX
Not worked after 22-3-1981.
Remarks : Received ESI Certificate covering his absenteeism from April 1, 1981 to April 2, 1981. Further there is no information of intimation and he is remaining unauthorisedly absent from 3-4-1981 as on date.
April 1981 1 ESI O 2 ESI O 3 AB 1 4 Ab 2 5 W/o O 6 Ab 3 7 Ab 4 8 Ab 5 9 Ab 6 10 Ab 7 11 W/o O 12 Ab 8 13 Ab 9 14 Ab 10th day 15 No information after 6.30 a.m. Note Mr. Hanumantharayappa has remained absent for ten consecutive working days (details above) without prior sanction. He is to be treated as having left the service of the Company without notice thereby terminating his contract of service as per S.O. 20 (Discussed with W.M. & approved by him).
Sd/-
M. L. Santhanam for Time Office."
Therefore, the stand of the management is that the workman himself had terminated his contract of service. The argument of Mr. M. C. Narasimhan is that it is punitive in character. We are unable to agree. It has already been seen by reading Venkatayya's case (supra) that merely because there is a provision under Standing Order 25(6) for taking disciplinary action for habitual absence without permission which is one of the alternatives available for the management, the effect of Standing Order 20 is not in any way diluted. Under Standing Order 20 there is a deeming clause, in other works a fiction. It is well settled that when there is a deeming clause the dictum as propounded by Lord Asquith which met with approval at the hands of the Supreme Court is to be applied. The said dictum of Lord Asquith in East End Dwellings Co. Ltd. finsbury Borough Council, 1952 AC 109, is as follows :-
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequence and incidents which, if the putative state of affairs had in fact existed, must inevitably, have flowed from or accompanied it .... The Statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the evitable corollaries of that state of affairs."
Therefore, it must have its effect for all intents and purposes. We are unable to agree that Venkatayya's case (supra) cannot be made applicable to a case arising under the Industrial Disputes Act. In this connection, we may quote Section 2(oo) of the I.D. Act :-
"(oo) 'retrenchment' means the termination by the employer of the services of a workman for any reason whatsoever, otherwise than as 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."
It would be clear that this also, like Section 73 of the ESI Act, talks of termination by the employer. We will now refer to the decision in State Bank v. N. S. Money (1976-I-LLJ-478). In paragraph-9 it is stated thus (pp. 481-482) :
Without further ado, we reach the conclusion that if the workman swims into the harbour of Section 25-F, he cannot be retrenched without payment, at the time of retrenchment, compensation computed as prescribed therein read with Section 25B. But, argues the appellant, all these obligations flow only out of retrenchment, not termination outside that species of snapping employment. What, then, is retrenchment ? The key to this vexed question is to be found in Section 2(oo) which reads thus :-
XXX XXX XXX For any reason whatsoever - very wide and almost admitting of no exception. Still, the employer urges that when the order of appointment carries an automatic cessation of service, the period of employment works itself out by efflux of time, not by act of employer. Such cases are outside the concept of retrenchment and cannot entail the burdensome conditioned of Section 25-F. Of course, that a nine-days' employment, hedged in with an express condition of temporariness and automatic cessation, may look like being in a different street (if we may use a colloquialism) from telling a man off by retrenching him. To retrench is to cut down. You cannot retrench without trenching or cutting. But dictionaries are not dictators of statutory construction where the benignant mood of a law and, more emphatically, the definition clause furnish a different denotation. Section 2(oo) is the master of the situation and the Court cannot truncate its amplitude."
Here also what is emphasised is termination.
Now we will proceed to deal with cases relating to striking off on account of voluntary absence. In D. C. & G. Mills v. Shambhu Nath, (1978-I-LLJ-1) the striking off was in the following manner (p-3) :
"... it appears from the letter written by the management to the workman on January 19, 1966, that -
'your name has been automatically struck off the rolls under the provisions of the Standing Orders with effect from August 28, 1965, for continued absence without intimation'.
This is the only reply which the workman got from the management to his letter dated August 16, 1965."
In discussing this aspect, in paragraph-13 it is stated thus (p. 5) :
"On the face of it, the order striking off the name of the workman from the rolls on August 24, 1965 is clearly erroneous. No order, even under Section 27(c) of the Standing Orders, could have been passed on that date. The clause in the Standing Orders reads as follows :-
'if any workman absents for more than eight consecutive days his services shall be terminated and shall be treated as having left the service without notice.' The workman last attended work on August 14, 1965. August 15 was a public holiday. He was, therefore, absent from work only from August 16. So even under the Standing Orders the workman was not absent for more than eight consecutive days on August 24, 1965. The order is, therefore, clearly untenable even on the basis of the Standing Order. It is not necessary to express any opinion in this appeal whether 'eight consecutive days' in the Standing Orders mean eight consecutive working days."
Thereafter in paragraph-15, it is observed thus :-
"Striking off the name of the workman from the rolls by the management is termination of his service. Such termination of service is retrenchment within the meaning of Section 2(oo) of the Act. There is nothing to show that the provisions of Section 25-F(a) and (b) were complied with by the Management in this case. The provisions of Section 25-F(a) the proviso part, and (b) are mandatory and any order of retrenchment, in violation of these two peremptory conditions precedent, is invalid."
Therefore, the whole thing turned upon the interpretation of 'eight consecutive days' as found in the Standing Order.
In Hindustan Steel v. Labour Court, Orissa, (AIR) 1977 SC 31, (1977-I-LLJ-1) the headnote in (AIR) reads :-
"Termination of service by running out of time stipulated in the contract of service amounts to retrenchment. Non-compliance of Section 25-F(b) renders the retrenchment illegal. In the circumstance the Labour Court was held justified in granting the relief of reinstatement with full back wages."
This has no application to the facts of the case of hand.
In Robert D'Souza v. Executive Engineer, Southern Railway, (1982-I-LLJ-330) the striking off in view of the absence was based not on any Standing Order but on the account of a letter written to the workman, as is clearly seen from the following facts narrated therein (pp. 331-332) :
"Appellant L. Robert D'Souza joined service as gangman at Mangalapuram in Southern Railway on July 1, 1948. In course of his service he was transferred to various places. When he was last working as Lascar at Ernakulam, on October 8, 1974 the Executive Engineer (Construction), Ernakulam intimated him that his services were deemed to have been terminated from September 18, 1974, from which date the appellant was said to have absented himself from duly. This letter has an important bearing on the issues raised in this appeal, and therefore, relevant portion may be extracted here :-
'You have absented yourself unauthorisedly from September 18, 1974 and hence your services are deemed to have been terminated from the day you have absented yourself. Please note.
Since you are no longer on the rolls of this office you should vacate the quarters allotted to you immediately failing which action will be taken to evict you.' ..."
This case arose from a decision of the Full Bench of Kerala High Court in L. Robert D'- Souza v. Executive Engineer, Southern Railway, (1979-1-LLJ-211) and in paragraph 3, the Full Bench of Kerala High Court said thus (pp. 213-214) :
"It is submitted by the respondent that such unauthorised absence amounted to voluntary abandonment of work and that in any event the petitioner being only a casual labourer working on projects, who is governed by the relevant provisions of Chapter XXV of the Manual, his service will be deemed to have terminated under Rule 2205 when he absented himself from duty. According to the respondent since the petitioner's services as casual labourer stood automatically terminated by reason of the operation of the provision contained in Rule 2505 aforementioned the question of giving him an opportunity to be heard did not arise. The petitioner had himself stayed away from work and absented himself from duty and the respondent has only refused to take him back since the petitioner's services stood automatically terminated under the rule referred to above. .... According to Respondents the impugned letter Ex. P-11 is not an order terminating the service of the petitioner but only a communication intimating to him the fact of termination of service that had already been brought about by the operation of the deeming provision in Rule 2505 consequent on the petitioner's unauthorised absence from duty and calling upon the petitioner to vacate the official quarters which he was occupying. In answer to the contention raised by the petitioner that the termination of his service is illegal since the provisions of Section 25-F of the Act were not complied with by the respondents it is submitted by the respondents that the petitioner has not been retrenched from the service of the railway and hence Section 25-F is not at all attracted to this case. The respondents contend that in order to constitute retrenchment the termination of service of the employee concerned must have been effected on the ground that he had become surplus to the requirements of the employer. It is submitted that in the present case the termination of the petitioner's service was automatically brought about by the operation of the principle laid down in Rule 2505 of the Manual and it was not at all a case of the discharge of an employee on the ground of surplusage."
When this came up in appeal before the Supreme Court, the Supreme Court stated as follows (pp. 337-338, 343) :
"Rule 2505 may as well be extracted. It reads as under :-
'2505. Notice of termination of service - Except where notice is necessary under any statutory obligation, no notice is required for termination of service of the casual labour. Their services will be deemed to have terminated when they absent themselves or on the close of the day.
Note : In the case of a casual labourer who is to be treated as temporary after completion of six month's continuous service, the period of notice will be determined by the rules applicable to temporary Railway Servants'.
26. There is no dispute that the appellant would be a workman within the meaning of expression in Section 2(s) of the Act. Further, it is incontrovertible that he has rendered continuous service for a period over twenty years.
Therefore, the first condition of Section 25-F that appellant is a workman who has rendered service for not less than one year under the Railway administration, an employer, carrying on an industry, and that his service is terminated which, for the reasons herein before given, would constitute retrenchment. It is immaterial that he is a daily - rated worker. He is either doing manual or technical work and his salary was less than Rs. 500/- and the termination of his service does not fall in any of the excepted categories. Therefore, assuming that he was a daily rated worker, once he has rendered continuous uninterrupted service for a period of one year of more, within the meaning of Section 25-F of the Act and his service is terminated for any reason whatsoever and the case does not fall in any of the excepted categories, not withstanding the fact that Rule 2505 would be attracted, it would have to be read subject to the provisions of the Act, Accordingly the termination of service in this case would constitute retrenchment and for not complying with per-conditions to valid retrenchment, the order of termination would be illegal and invalid."
This case has no relevance since the position is totally different here.
In G. T. Lad v. Chemicals and Fibres of India (supra) it was held that absence from duty during strike was not abandonment of service on the part of the workmen. In the case of strike, as rightly contended by Mr. Dolia, the workmen want to remain in service and want better service conditions or facilities. Therefore, an intention to abandon cannot arise. Hence this ruling has no application here.
Now we will turn to Punjab L. D. & R. C. Ltd. v. Labour Court, Chandigarh, (1990-II-LLJ-70). In paragraph 5 it is stated thus; (p. 73) :
"5. Respondent Nos. 2-6 were employed on probation by the appellant, a partnership firm on June 12, 1975. Respondent Nos. 2-5 assaulted a supervisor and being afraid of police remained absent from March 29, 1976 and abandoned their jobs and their services were terminated. Respondent No. 6 stopped attending duties from August 9, 1975 and he left the service of his own accord. The Labour Court by its Award dated September 16, 1980 held that their termination amounted to Retrenchment and was illegal for non-compliance with the provisions of section 25-F of the Act and they were entitled to reinstatement with full back wages. The Management's writ petition challenging the Award having been unsuccessful, it has appealed."
In paragraph 12 it dealt with striking off. It may be mentioned here that it is not stated as to for what reason the striking off came to be done.
In paragraph 71 it is stated thus (p. 92) : ".... There would be no volitional element of the employer. Their express exclusion implies that those would otherwise have been included. Again if those cases were to be included, termination on abandonment of service, or on efflux of time, and on failure to qualify, although only consequential or resultant, would be included as those have not been excluded. Thus, there appears to be a gap between the first part and the exclusion part. Mr. Venugopal, on this basis, points out that cases of voluntary retirement, superannuation and tenure appointment are not cases of termination by the employer and would therefore any any event, be outside the scope of the main provisions and are not really provisos."
However, as seen from paragraph 83 even a case of disciplinary enquiry is held to fall within the meaning of Section 2(oo) and we will extract that paragraph along with paragraph 11 (p. 74, 95) :
"11. C.A. No. 8456 of 1983.
The respondent was dismissed by the appellant-Corporation after disciplinary enquiry by order dated May 28, 1971 paying one month's wages in advance. The workman having raised an industrial dispute, the Labour Court, Aurangabad by its Award dated November 9, 1979 held the order of termination to be legal and proper. The Respondent's writ petition therefrom was allowed and the Award was quashed and the workman was declared entitled to reinstatement. Hence this appeal.
83. The result is that C.A. No. ... 8456 of 1983 ..... are dismissed with costs quantified at Rs. 3,000/- in each appeal."
Therefore, this case, in our considered view, does not advance the case of the workman here.
In H. M. T. Ltd. v. Labour Court, Ernakulam (1983-I-LLJ-337) it has been held thus (pp. 338-339) :
"..... The narrow or restricted meaning sought to be given to the term termination as calling for a positive voluntary act by the employer of passing an order putting an end to the service of the employee is not warranted. The term takes in all cases where there is the factum of termination. Of course certain category of cases could be exempt from the scope of termination as pointed out by the Supreme Court in the decision in L. Rober D'Souza v. Executive Engineer, Southern Railway (1982-I-LLJ-330). Reference may be made in this context to para 6 of that Judgment where the Court sums up thus :-
"Therefore, we adopt as binding the well-settled position in law that if termination of service of 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 services 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)."
It may be so. But that does not mean, where it is a case of voluntary abandonment, Section 2(oo) can be pressed into service.
Naresh Chandra Das v. Seventh Industrial Tribunal (1982-II-LLJ-64) is a case where the service came to be terminated in accordance with a Standing Order for continued absence. At page 70 it was held thus :
"In my view. Mr. Sengupta is justified that in later decisions viz. in Santosh, Gupta's case (supra), the Supreme Court has clearly observed that in Sundara Money's case the Supreme Court has interpreted Section 2(oo) in the widest possible term and even if the termination is effected not by any voluntary action on the part of the employer, such termination also becomes retrenchment within the meaning of Section 2(pp). In view of the said decisions of the Supreme Court made in Santosh Gupta's case and in Mohan Lal's case, it does not appear to me that there is any further scope to hold that simply because of the action of the employee, his service stood terminated, and the employer was not responsible for such termination the same was not retrenchment within the meaning of Section 2(oo)."
The same view is adopted in M. S. Abbobacker v. H. M. T. Ltd., (1988-II-LLJ-323) and in Deshraj Sood v. Industrial Tribunal (1985-I-LLJ-74).
In Madhabananda Jena v. Orissa State Electricity Board, (1990-I-LLJ-463), it is stated in paragraph 5 as follows (p. 465) :
"Striking out the name of the petitioner, a workman under the Industrial Disputes Act, from the Muster Roll amounts to termination of his service and such termination of service is retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act as held by the Supreme Court in Delhi Cloth and General Mills Co. Ltd. v. Shambhnath Mukherji, (1978-I-LLJ-1) and reiterated by the Court in the case of L. Robert D'Souza v. The Executive Engineer, Southern Railway and Another (1982-I-LLJ-330) ....."
Again Desh Raj v. P. O. Industrial Tribunal, reads, (1985-I-LLJ-74 at 77) (para 9) :-
"Whether the termination of service is brought about the voluntary or involuntary action, whether that result is produced by overt act or by operation of the provisions of Standing Order, the termination would be Retrenchment within the meaning of Section 2(oo) since the fact of termination is only relevant, howsoever produced is irrelevant for the applicability of Section 25-F. Once the termination does not fall in any one of the excepted categories enumerated in Section 2(oo), the termination of service even if it be according to automatic discharge from service under an agreement or by efflux of time or by the default of the workman it would be retrenchment attracting the compliance of Section 25-F (a) and (b) of the Act."
In requires to be carefully noted that in not one of these rulings, the decision of the Supreme Court reported in Venkatayya's case (1963-II-LLJ-638) was ever considered because that has far reaching effect.
In Management of Spencer & Co. v. Addl. Labour Court, Madras, (1980-II-LLJ-469), the regulation that comes to be considered was Regulation - 16 which reads as follows :-
"16. Any employee who absents himself for eight consecutive working days without leave, shall be deemed to have left the Company's service without notice, thereby terminating his contract of service. If he gives an explanation to the satisfaction of the Secretary, the absence shall be converted into leave without pay or dearness allowance.
Any employee leaving the company's service in this manner shall have no claim for re-employment by the Company.
But, if the absence is proved to the satisfaction of the Secretary to be one due to sickness, then such absence shall be converted into sick leave for such period as the employee is eligible."
This is totally different from Standing Order Clause 20 with which we are concerned.
Even the decision of the Bombay High Court in R. Thakar Prasad v. Phoenix Mills, (1976-I-LLJ-93) has no relevance since an application for leave was there on September 14, 1967 and that is evident from the following extract of paragraph 17(p. 107) :-
"17. In the present case on the facts which we have stated, it is apparent that the employee had made an application for extension of leave on September 14, 1967 i.e., prior to the day on which the leave originally granted to him was to expire. The said application was accompanied by a medical certificate stating that the employee was suffering from jaundice. That application for extension of leave was for 20 days."
In Desikachari v. The Mail, (1961-II-LLJ-771) the Madras High Court, dealing with voluntary retirement, held thus (headnote) (p. 772) :-
"The word retire has been defined in the Concise Oxford Dictionary as 'cease from or give up office or profession or employment' The meaning of the word, therefore, Postulates a voluntary act on the part of the employee. In its use in the reflexive, the word 'to retire' would mean 'to remove from service'. That would be a case of removal and not retirement. Section 2(oo) of the Industrial Disputes Act used the works 'Voluntary retirement. It follows that unless the termination of the service is the result of a voluntary move on the part of the employee, he cannot be said to have 'voluntarily retired. A mere submission of the employee to the termination of service by the employer cannot be said to be a voluntary act of the former. This is particularly so in a case where the employer has the power under the terms of the employment to terminate the service, although such power has to be exercised after notice or on giving pay in lieu of notice. A voluntary retirement is the act of the employee, just as dismissal or removal from service is the act of the employer. Neither apathy nor submission on their employee's part would alter the essential character of the termination of service of an employee. The concession shown by the management to extend the services by few months and the acceptance of the employee of the same would not amount in law to a case of voluntary retirement of the employee on the expiry of the extended period. The fact in the instant case clearly showed that the employee had no choice or option to retire or not to retire. What the employee did was nothing more than accept the benefit the employer was willing to give. No conditions were attached to the benefit of extension of service.
Negativing the further contention raised on behalf of the management that it was a case of retirement of a workman on reaching the age of superannuation falling within the exception (b) to Section 2(oo) of the Industrial Disputes Act held :-
In the absence of any terms of the contract of service providing for retirement of the employee on reaching a particular age or in the absence of any finding, Standing Orders having statutory sanction regarding the age of superannuation, the termination of service of an employee on his reaching a particular age would not fall within exception (b) to Section 2(oo) of the Industrial Disputes Act.
Negativing the further contention raised on behalf of the management that the definition of retrenchment in Section 2(oo) of the Industrial Disputes Act would cover a case of a discharge or surplus and not such an instance held :-
Without deciding the question as to whether retrenchment of personnel within the meaning of Section 2(oo) of the Act would apply to termination of the service of an employee for any reason other than by way of punishment in a continuing industry, the facts of the instant case clearly showed that it was a case of discharge of surplus labour. The management itself in the instant case proceeded on the footing that it was case of retrenchment and hence they offered the payment of retrenchment compensation of the employee. No evidence had been rendered in the instant case to show that the discharge was not made with a view to reduce the establishment or that somebody else was appointed in his place. It is no doubt for the concerned employee to show that he was retrenched in order to entitle him to relief under-Section 25-F of the Industrial Disputes Act, which he did by producing the letters of the management in which they distinctly admit that the employee would be paid retrenchment benefits. The admission of the management to pay retrenchment compensation evidenced by their letters could not be ignored in determining the question in dispute."
This decision has no application since as we have pointed out above it was not by the act of the management but it was by operation of the Standing Order 20 that the workman himself has terminated his contract of service. We are unable to accept the argument advanced on behalf of the workman that the construction of Standing Orders will have to yield to Section 25-J of the I.D. Act since it has an overriding effect. This argument ignores the language of Section 2(oo) of the I.D. Act. Only if it falls under Section 2(oo), Section 25-J will come into play. Having regard to the leading pronouncement in Venkatayya's case, (1963-II-LLJ-638) we are not persuaded to conclude that in case of the workman terminating his service it would amount to 'discharge' within the meaning of Section 2(oo) of the I.D. Act.
We will now refer to N. E. Industries v. Hanuman, (1967-II-LLJ-883). The weighty observation in page 887 wherein a reference is also made to Venkatayya's case are apposite and they read as follows (p. 887) :-
"The last case to which reference may be made is Buckingham and Carnatic Co. Ltd. v. Venkatayya, (1963-II-LLJ-638). That case arose under the Employees' State Insurance Act, 1948(34 of 1948). The works of the Standing Order there were specific and laid down that any employee who absents him self for eight consecutive working days without leave shall be deemed to have left the Company's service without notice thereby terminating his contract of service. In the face of those words Section 73 of the Employees State Insurance Act was held inapplicable. Though the case is not on all fours with the present case because it deals with a provision of another law, the reasoning in that cases would apply in the present case. We are therefore of opinion that Hanuman - respondent's service stood automatically terminated for he did not appear for eight days after the expiry of his leave on April 9, 1965. In this view of the matter Section 33 cannot be said to have been contravened and Section 33-A will not apply.
It is, however, argued that some difference is made by the existence of another provision in the Standing Orders. In Appendix D of the Standing Order one of the major misdemeanors is 'absence without permission exceeding ten consecutive days'. That in our opinion is an attentive provision and the appellant in this case was free to resort to any one of the provisions, unless it is shown that resort to one particular provision was due to mala fide. This in not the case of the respondent here. In the circumstances the earlier Standing Order in Section G must be held to have full force and effect and Hanuman - Respondent's service stood automatically terminated when he did not appear within 8 days of the expiry of his leave which was on April 9, 1965."
This case fully supports the stand of Mr. Dolia. Under Standing Order 20, as rightly urged by him, no voluntariness is permissible. In contradistinction Standing Order 22(b) says as follows :-
"A permanent workman desirous of leaving the services shall give in writing fourteen days notice to the Manager of his intention to do so or forfeit to the company thirteen days basic pay and allowance in lieu of notice."
Therefore, where the workman is desirous he might put an end to the service. That is entirely different from Standing Order 20.
It also requires to be noted that this High Court had in Binny Ltd. v. P. O. Labour Court, (1986-I-LLJ-237), following Venkatayya's case (1963-II-LLJ-638), held that such a case is not one of retrenchment.
Therefore, we are of the view that this is not a case of retrenchment so as to attract Section 2(oo) of the I.D. Act.
Having regard to this legal position, we are unable to subscribe to the following finding of the first respondent - Labour Court :-
"It was argued by the learned counsel for the party that here is a case of clear retrenchment without complying the mandatory provisions referred to above and therefore the 1st party is entitled for reinstatement. In support of his arguments he relied on (1990-I-LLJ-70), (1982-I-LLJ-330), (1979-I-LLJ-257). I have read the above decisions carefully. In the instant case, termination is for any reason other than those expressly excluded by the definition in Section 2(oo) of the Act. The facts of the case on hand are quite similar to the facts of the case, L. Robert D'Souza v. Executive Engineer, Southern Railway and Others, decision reported in (1982-I-LLJ-330), Considering the facts of the case on hand, principles held by our Hon'ble Supreme Court in the decision relied by the 1st party, I am of the opinion that here is a case of clear retrenchment without complying the required mandatory provisions of the I.D. Act and therefore the action of the management in terminating the services of the 1st party is illegal."
Even assuming for moment that this is a case of retrenchment, Section 25-F r/w Section 2(oo) of the I.D. Act would apply only if the workman had worked for 240 days continuously in any year.
The evidence as to whether the workman had continuously worked for 240 days in any year may now be seen :-
MW-1 : "During 1979 and 80 or ever since his employment, he has not worked 240 days continuously in a single year. ... From August 26, 1978 upto April 2, 1981 he has worked for the Company continuously. .. We do not have records to show the exact No. of working days the 1st party has worked from August 26, 1978 April 2, 1981. ... The meaning of my statement that the workman has worked for the Company from August 26, 1978 upto April 2, 1981 continuously is that his name was on the rolls of the company from August 26, 1978 to April 2, 1981 but he did not attend to his duties fully during the said period. In fact he never worked for 240 days in any of the calendar years 1978, 1979, 1980 and 1981."
WW-1 : "It is true that from the date of appointment till the date of my termination I have not worked for complete 240 days in any year. The witness volunteers at the instance of his counsel : It is not true to suggest that I have not worked for 240 days in any year from the date of my appointment till the date of my termination."
Thus it will be seen that the workman in his chief-examination has admitted that he did not work for 240 days in any year. The Labour Court has also made a note that at the instance of his advocate the workman volunteered and stated that it would not be true to say that he had not worked for 240 days in any year from the date of appointment till the date of termination. While that being so, to rely on that evidence and to ignore the prior statement, we do not think the Labour Court was justified. Even while considering the evidence of MW-1 the Management Witness, the Labour Court should have had regard to what he had stated in his re-examination also and should have considered his evidence in full. The Labour Court had gone wrong in not taking into consideration this material aspect. Considering the evidence on record we conclude that the workman had not put in work for 240 days in any year, and the following finding to the contrary recorded by the Labour Court is wrong :-
"MW-1 has stated in his evidence that the 1st party has not continuously worked for 240 days at any time, but in his cross examination he has clearly admitted that from August 25, 1978 upto April 2, 1981 he has worked for the Company continuously. This itself is sufficient to establish that the 1st party has continuously worked for more than 240 days and the allegations made by the Management in this behalf are not correct. Of course WW-1 has stated in his cross-examination that is proved that from the date of appointment till the date of termination he has not worked for complete 240 days in any year, and in the very next sentence he had denied the said suggestion. Admittedly when the management has said that the 1st Party has not worked continuously it is for the management to prove the same. The above referred cross examination of 1st party is not helpful to the management to discharge its burden in this regard. II Party has not produced attendance particulars like Ex. M-6 for the relevant period, but the same is not produced before this Court. Apart from this I have already said that there is clear admission by MW-1 that from August 25, 1978 upto April 2, 1981 1st party has worked continuously and this is sufficient to disbelieve the contention of the II party that the 1st party has not worked continuously."
In view of the foregoing findings, the only question will be as to whether the workman would be entitled to say relief. Taking an overall view and approaching the matter in a compassionate sense, we think the approach made in paragraph-84 of Punjab Land Devt. Corpn's case (1990-II-LLJ-70) is to be adopted. The said paragraph-84 reads (p. 95) :
"In view of the facts and circumstances of the case, we dispose of the C.A. No. 885 of 1990 with the direction that the two workmen involved in this appeal be paid compensation of Rs. 1,25,000/- (Rupees one Lakhs twenty five thousand only) each in full and final settlement of all claims including that of reinstatement. The payment shall be spread over a period from November 11, 1972 till date for the purpose of Income-tax"
Therefore we hold purely on compassionate grounds that the workman is entitled to a compensation of Rupees One Lakhs in quit of all claims.
10. Consequently, We answer the points formulated by us (in para 6 of this Judgment) as follows.
(i) Section 73 of the E.S.I. Act will not apply to this case.
(ii) The present case is not one of retrenchment falling under Section 2(oo) of the I.D. Act
(iii) The workman had not put in 240 days of work in any year.
(iv) In quit of all claims, the workman entitled to Rupees One Lakh as compensation.
11. In the result we allow Writ Petition No. 13266/91, quash the Award of the first respondent - Labour Court dated December 24, 1990 in Ref. No. 86/1985, and award compensation of Rupees One Lakh to the workman (2nd respondent) in quit of all claims, which shall be spread over for the purpose of income tax. The petitioner Management shall pay the said compensation. As the petitioner - Management has succeeded in the writ petition, there is no need to consider the merits of the interlocutory order which is the subject matter of Writ Appeal No. 1669/1991 which shall stand dismissed. There shall be no order as to costs.