Kerala High Court
M.S. Abbobacker vs Hmt Ltd. And Anr. on 1 March, 1988
Equivalent citations: (1988)IILLJ323KER
JUDGMENT V. Bhaskaran Nambiar, J.
1. In the dispute between a workman and employer regarding retrenchment, we should have thought that the controversy in this original petition can no longer be in challenge in view of a Division Bench ruling of this Court in H.M.T. Ltd. v. Labour Court (1983) 63 FJR 28. But a learned single Judge of this Court has referred this writ petition for consideration by a larger Bench on the ground that certain points highlighted in the reference order have not been considered by the Division Bench. It may be accidental that the employer before the Division Bench in 1983 and also before us happens to be the same, namely, H.M.T. Ltd., Kalamassery. We shall extract the reference order to understand the implications of the questions involved for determination:
The Labour Court held in exhibit P-4 award chat the petitioner had lost his lien on the post he was holding, under Standing Order No. 19(4), owing to overstayal of leave and failure to furnish the necessary explanation. The employer had not terminated his services and the Labour Court had no grounds to interfere.
2. Counsel for the petitioner contends that loss of lien involuntarily suffered by or inflicted on an employee under such circumstances would amount to 'retrenchment' as defined in Section 2(00) of the Industrial Disputes Act; and counsel for the first respondent would point out that no such point had been taken before the Labour Court.
3. I do not think the employee should be debarred from raising the question at this stage. It is a pure question of law to be decided on undisputed facts. The discretion of the court in a matter like this must be exercised in favour of an unemployed person.
4. The next question, therefore, is whether the petitioner's contention should be accepted, by following the decision in H.M.T. Ltd. v. Labour Court (supra). Mr. Pathrose Mathai for the company submits that the decision requires reconsideration for at-least two reasons:
(i) Section 2(00) has since been amended to exclude from its purview termination or loss of employment by reason of a stipulation in the contract of employment; this amendment is declaratory in nature, amounting to a parliamentary exposition of what the law was even before the amendment; and
(ii) Section 25-N of the Act requires the employer to get prior permission for retrenchment and failure to do so is an offence. No employer could apply for permission to retrench in a case where an employee overstays his leave and suffers the consequences. Parliament cannot be understood to have included within the purview of Section 2(00) and Chapter V-A of the Act anything the employer could not comply with.
It is also pointed out that H.M.T. Ltd. v. Labour Court (supra), is under appeal before the Supreme Court.
I think the matter requires consideration by a larger Bench, and I accordingly adjourn the hearing of the original petition to such a Bench, to be duly constituted by the Chief Justice.
2. On the facts found by the Labour Court, it is now no longer in dispute in this writ petition that the petitioner lost his lien as he did not report for duty within eight days of the expiry of leave on 19th November 1976, and did not explain to the satisfaction of the manager his inability to return to duty before the expiry of his leave. He reported for duty only on 11th December, 1976. Clause 19.4 of the Standing Orders of the company, applicable to the petitioner's case, reads thus:
19.4. If a workman remains absent beyond the period of leave originally granted or subsequently extended he shall lose his lien on his appointment unless he (a) returns within 8 days of the expiry of the leave and (b) explains to the satisfaction of the manager his inability to return before the expiry of his leave.
The appointment automatically terminates when the lien, the right to hold the post, is lost. This aspect is no longer in doubt in view of the decision of the Supreme Court in National Engineering Industries v. Hanuman 1967 II LLJ 883, where it has been held thus at 886:
Where, therefore, a standing order provides that a workman would lose his lien on his appointment, if he does not join his duty within certain time after his leave expires, it can only mean that his service stands automatically terminated when the contingency happens.
3. Termination of the services of a workman will amount to retrenchment according to the definition of the expression in Section 2(00) of the Industrial Disputes Act unless it falls in any of the enumerated exempted categories in that provision itself. Clause 2(00), as it stood in 1976, prior to its amendment in 1984, reads thus:
"(00) '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....
4. Termination of appointment of the workman "for any reason whatsoever" constitutes retrenchment unless specifically excluded by Section 2(00) itself. This is settled law in view of the ruling of the Constitution Bench of the Supreme Court in Hariprasad Shivshankar Shukla v. A.D. Divikar (1975) II FJR 317.
5. It is this principle that was applied in Santosh Gupta v. State Bank of Patiala 1980 II LLJ 72, by the Supreme Court when it was held that the discharge of the workman on the ground that she did not pass the test which would have enabled her to be confirmed, was "retrenchment" and, therefore, the conditions under Section 25-F have to be complied with.
6. In this case also there is termination of the service of the workman, the petitioner. The termination was not on account of voluntary retirement or attaining the superannuation age and, therefore, it is retrenchment within the meaning of Section 2(00). It is not disputed that Section 25-N of the Industrial Disputes Act applicable to the industry was not complied with in the instant case. Violation of Section 25-N thus invalidates the retrenchment and entails reinstatement of the petitioner.
7. But, contends counsel, Shri Pathrose Mathai, for the first respondent, the definition of the expression "retrenchment" in Section 2(00) does not apply in the context to cases where Section 25-N is attracted. According to him, when retrenchment has already taken effect from the date when the workman absented without any cause, there was no question of giving the workman any further notice and obtaining any prior permission as contemplated under Section 25-N. He elaborates by submitting that only where any positive act on the part of the employer is required to effect retrenchment, can the definition of retrenchment apply to cases covered by Section 25-N and where retrenchment takes effect on account of any conduct of the workman alone. Section 25-N, which posits some action of the employer to effect retrenchment, does not arise.
8. This contention was not considered in the form in which it is advanced before us by the earlier Division Bench. Still it has to be noted that in that decision (1983) 63 FJR 28, it was held thus:
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'.
The learned Judges have referred to all the important Supreme Court decisions also.
9. It is difficult to accept this contention of Sri Pathrose Mathai for more than one reason. The employer has to fulfil the condition imposed under Section 25-F or Section 25-N, as the case may be, if the retrenchment has to be upheld under the Industrial Disputes Act. Even where no positive act on the part of the employer was required for termination of the services of the workman, the Supreme Court has applied Section 25-F. Thus where the services are to be terminated on account of non-; passing of the test by the employee, the Supreme Court has held that it was a case of retrenchment which was invalid if the conditions prescribed under Section 25-F were not complied with. The contention that the element of a positive act on the part of the employer is required to constitute retrenchment under the Act, cannot be accepted. The conduct of the workman alone can result in retrenchment. But that retrenchment gets statutory validity only when the duties imposed on the employer are discharged and where statutory conditions are fulfilled by him.
10. The Industrial Disputes Act does not contemplate two classes of retrenchments, some to which Sections 25-F and 25-N apply and others to which these Sections are inapplicable. All retrenchments under the Act are subject to the rigour of Section 25-F and Section 25-N, as the case may be. The definition of retrenchment in Section 2(00) cannot thus be ruled out as repugnant to Section 25-F or Section 25-N.
11. It is also not possible to agree with the contention of Shri Pathrose Mathai that the conditions imposed under Section 25-N cannot be complied with in cases where retrenchment has already taken place on account of the conduct of the workman. There may be retrenchment in fact but there has to be retrenchment in law also. The conduct of the workman constituting retrenchment in fact, i.e., the conduct of the workman entailing termination resulting in retrenchment as a fact gives rise to the subsequent positive acts on the part of the employer which alone give validity to the retrenchment. It is only then that there is retrenchment in law also. The cause of retrenchment may be the conduct of the workman; but the axe of retrenchment falls only on the fulfilment of the conditions under Sections 25-F and 25-N. There is thus no impossibility of performance of the conditions stipulated under Section 25-N even where the conduct of the workman alone entails retrenchment.
12. It is thus clear that in the present case, there was no compliance with Section 25-N and the retrenchment of the petitioner is invalid. The award of the Labour Court, exhibit P-4, that retrenchment of the petitioner is valid is, therefore, set aside. The matter is remitted back to the Labour Court, Ernakulam, for making a fresh award in the light of the observations in this judgment and according to law. It is pertinent to note that the same Labour Court has taken a different view following H.M.T. Ltd. v. Labour Court, (supra) in another award, which is challenged by the management in O.P. No. 9077 of 1983 which is also disposed of today by a separate judgment, Considering the fact that this is an old dispute, the Labour Court will dispose of the matter expeditiously.
13. Immediately after the judgment was pronounced, the counsel for the first respondent made on oral request for certificate for leave to appeal to the Supreme Court. It was submitted before us that this Court granted leave to appeal from the decision in H.M.T. Ltd. v. Labour Court, (supra) and the appeal is pending before the Supreme Court. The same question arises in this O.P. also. We, therefore, certify that a substantial question of law of general importance which needs to be decided by the Supreme Court arises in this original petition and, therefore, we grant leave.