Gujarat High Court
Sharadbhai Parbhubhai Morarbhai ... vs Vyara Nagarpalika on 19 March, 2018
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/6430/2016 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6430 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6431 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6432 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6433 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6434 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6435 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6436 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6437 of 2016
With
R/SPECIAL CIVIL APPLICATION NO. 6438 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER Sd/-
1 Whether Reporters of Local Papers may be allowed to Yes
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
SANJAYBHAI KRUSHNAJI NIMBAJI MALI
Versus
VYARA NAGARPALIKA
Appearance:
MR DS VASAVADA(973) for the PETITIONER(s) No. 1
MR AK CLERK(235) for the RESPONDENT(s) No. 1
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RULE SERVED(64) for the RESPONDENT(s) No. 2
CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 19/03/2018
COMMON ORAL JUDGMENT
1. Heard Mr. Vasavada, learned advocate for the petitioners and Mr. Clerk, learned advocate for the respondent Nagarpalika.
2. In this group of petitions common facts and common issues are involved. Learned advocates have also put forward similar and common submissions in respect of all matters and the learned advocates also submitted that all matters, being similar and identical, may be heard and decided together. Therefore, the petitions are heard together and decided by this common order.
3. The captioned petitions are taken out by the original claimants before learned Labour Court.
4. In the captioned petitions all petitioners have prayed for similar relief. The relief prayed for in SCA No. 6430 of 2016 is, therefore, reproduced herein below:-
"7(B)Your Lordships may be pleased to hold that the action of respondent no. 2 in allowing the reference in part and awarding the lump sum of Rs.50,000/-is illegal, violative of Section 25F of the Industrial Disputes Act which is mandatory in nature and therefore, the impugned award which is annexed at Annexure-C deserves to be modified accordingly.
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(C)Your Lordships may be pleased to modify the impugned award (Annexure-C hereto) pass;ed in Reference No. 329 of 2002 dated 14.8.2015 by directing respondent no. 1 to reinstate the petitioner with full backwages and continuity of service. Alternative (C)Your Lordships may be pleased to modify the impugned award (Annexure-C hereto) passed in Reference No. 329 of 2002 dated 14.8.2015 by enhancing the compensation equivalent to full backwages upto the date of passing the judgment and benefit of gratuity and retrenchment compensation and notice pay including the revision of wages;"
5. So far as factual background involved in the captioned petitions is concerned it has emerged from the record that somewhere in 1998-99 respondent Nagarpalika engaged present petitioners on ad-hoc and daily wage basis, as Clerk in octroi department.
5.1 Somewhere in February 2002 Nagarpalika discontinued petitioners.
5.2 Feeling aggrieved by the said decision of Nagarpalika 9 (Nine) petitioners raised industrial dispute. Appropriate government passed 9 separate but identical orders of reference which culminated into Reference No. 329 of 2002, Reference No.330 of 2002, Reference No. 327 of 2002, Reference No.328 of 2002, Reference No.331 of 2002, Reference No.326 of 2002, Reference No. 325 of 2002, Reference No.324 of 2002, Reference No. 332 of 2002 5.3 Before learned labour Court the claimants filed their Page 3 C/SCA/6430/2016 JUDGMENT separate but almost similar statement of claims. The gist of the allegation and claim by the claimants in their respective statement of claim are summarized by the learned Labour Court in paragraph No. 4 of the award. The said gist of the allegation by the claimants reads thus:-
"4.... Applicant appeared through his advocate and filed his statement of claim vide exhibit-7, averred that he is workman as per the definition of the Industrial Dispute Act, Section 2(S). opponent is liable to continue and pay regular wages. Industrial Dispute act applicable to the opponent institution. He is working since last four years as clerk with honesty. His last salary is Rs. 2400/- p.m. Opponent has never given any notice or warning during the service period for any misconduct. Opponent not providing attendance card, pay slip, identity card etc. from beginning and violating labour laws. So many time applicant has complained to the higher officer of the opponent institution. As a result of victimisation on 01.02.02, applicant was on duty as usual opponent denied the applicant to continue his service. When applicant asked the reason, for termination of the service, opponent informed that Octroi Department closed hence his service is terminated. Opponent has not given any notice, notice pay in lieu of notice, retrenchment compensation or conducted departmental enquiry. A workman who has joined his service later on are in service. New workmen also employed after termination of service of the applicant. This act of opponent, termination of service of applicant is illegal, void ab initio, unreasonable, arbitrary, victimisation and followed unfair labour practice also against the principle of natural justice and provision of the model standing orders. 80 applicant has prayed to declare the action of the opponent is illegal, arbitrary, of victimisation, followed unfair labour practice, against the principle of natural justice so applicant is entitled to reinstate with continuous service and back wages."
5.4 The Nagarpalika opposed the reference and allegations by the claimants and the relief prayed for by them. The gist of the objection and contention raised by the Nagarpalika and factual backdrop mentioned by the Nagarpalika is summarized by the learned labour Court in paragraph No. 5 of the award which reads thus:-
"(5)....there is no cause of action arise for the reference. Also barred by joinder of the parties and non joinder of parties. There is no industrial dispute in existence between the parties so reference legally not maintainable. Opponent institution is not falls within the section 2 (J) of the industrial Dispute Act, so when no Industrial Dispute Act applicable reference not legally maintainable required to be decide first by framing preliminary issue. Applicant was performing his duty as daily wage workman. In such case provision of section 25 (F) is not legally applicable. So principle laid down by the Hon'ble Supreme Court in the case of Himanshu Vidhyarthi Case applicant is not legally entitle to get relief. Assistant Labour Commissioner has no any power or Page 4 C/SCA/6430/2016 JUDGMENT jurisdiction to refer the reference so legally not maintainable. Applicant is civil servant so provisions of B.C.S.R. are applicable and relief is to be regulate according to this provisions and not as per the Industrial Dispute Act. Assistant Labour Commissioner has not applied his mind before refer this reference, so bad in law. Applicant is not appointed after following technical procedure or as per legal provisions. Applicant was employed according to requirement for special purpose, in such cases section 25 (F) of the Act is not applicable so not require to follow any procedure accordingly.
Applicant has also not continuously worked for 240 days. As per the Cases decided by the Hon'ble Supreme Court, Range Forest Officer V. B. Hamidani and UP. Avas Nigam Vs. B. Kanak continuous service of the 240 days to be proved by the applicant with necessary evidence. Applicant is not entitled to any relief till he proves this fact. According to the order of the Government Octroi abolished so service of the applicant is no more required in such circumstances provisions of Industrial Dispute Act is not applicable. In above circumstances labour court can not grant any relief and reference is legally not maintainable. As there is no work of octroi in opponent institution, applicant is discontinued from 31.01.02 so no question arise to reinstate. Applicant is ot terminated as a punishment so no question arise to hold departmental enquiry. Relieved according to the government order no question of victimisation or unfair labour practice arise. Applicant can not compare with the permanent employee and pray for such relief. Well settled principle of law in the case of Amreli Nagar Palika by the Hon'ble Gujarat High Court and in the case of Halvad Nagar Palika by Hon'ble Supreme Court, applicant is not entitled to get relief prayed in this reference deserves to be dismissed."
5.5 From the details mentioned by the claimants and the Nagarpalika in their statement of claims and written statements, it has emerged that:-
(a) the nagarpalika engaged the claimants on ad-hoc and daily wage basis
(b) the claimants were engaged in octroi department
(c) the prescribed procedure for purpose of selection and recruitment, as prescribed by the applicable rules, was not followed by the nagarpalika at the time when the claimants came to be engaged
(d) the claimants came to be engaged in 1998-99 and within 3 years the State Government abolished octroi w.e.f. May 2001
(e) according to the nagarpalika, the said decision of the Page 5 C/SCA/6430/2016 JUDGMENT State Government compelled the nagarpalika to discontinue the service of the claimants
(f) according to nagarpalika, those employees who were engaged and were working in octroi department on regular basis as permanent employees had to be accommodated in different department, however the persons who were engaged in octroi department on ad-hoc and daily wage basis (and not as regular and permanent employees) could not be accommodated.
(g) consequently the petitioners came to be relieved w.e.f. February 2002 5.6 Feeling aggrieved by the said action of respondent the claimants raised industrial dispute which culminated into above mentioned reference cases.
5.7 After the parties concluded pleadings, learned Labour Court received evidence from both the sides. Upon conclusion of the evidence and rival submissions learned Labour Court passed impugned awards whereby learned Labour Court, awarded Rs. 50,000/- as lumpsum compensation in lieu of reinstatement and backwages.
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6. From the award it comes out that learned Labour Court proceeded on the premise that the action of the respondent viz. reliving the claimants on abolition of octroi, amounts to retrenchment and since retrenchment compensation was not paid to the claimants the termination of the service of the claimants was illegal.
7. Feeling aggrieved by the said awards the claimants have taken out captioned petitions and prayed for above quoted relief. The petitioners claim reinstatement or enhanced compensation.
8. Mr. Vasavada, learned advocate for the petitioners submitted that when the learned labour Court reached to the conclusion that the claimants' services were discontinued in breach of statutory provision then learned Labour Court should have awarded reinstatement with consequential benefits. According to learned advocate for the petitioners, the decision of learned Labour Court to grant alternative relief instead of reinstatement and backwages is unjustified. He further submitted that if according to learned Labour Court it was appropriate to Page 7 C/SCA/6430/2016 JUDGMENT mould the relief and to grant compensation in lieu of reinstatement and backwages then in that event learned Labour Court ought to have awarded higher compensation equivalent to full backwages instead of awarding only Rs.50,000/-. According to him Rs.50,000/- is inadequate and the rate of compensation should be substantially enhanced.
9. The submissions by learned advocate for the petitioners are opposed by Mr. Clerk, learned advocate for the respondent. He submitted that actually in light of the facts and circumstances of the case, the reference deserved to be rejected and the claimants were not entitled for any relief in view of the fact that their service came to be discontinued on account of abolition of contract which resulted into closure of the department. He submitted that nagarpalika made its best efforts to accommodate the employees engaged in octroi department however with great difficulty the corporation could accommodate regular and permanent employees in the octroi department and there was no scope or possibility to accommodate ad-hoc and daily wage employees. He further submitted that actually Page 8 C/SCA/6430/2016 JUDGMENT nagarpalika had also received instruction from the Director of the Municipalities to relive the employees on ad-hoc and daily wage basis who were working in the octroi department. According to learned advocate for the respondent- nagarpalika the financial position of the Nagarpalika is very weak and it does not have enough funds or resources to bear additional burden however with a view to putting end to the proceedings the Nagarpalika has paid the amount and the claimants accepted the amount, though under protest. According to learned advocate for the respondent there is no justification in the grievance raised by the claimants and their demand to grant reinstatement or to enhance the rate of compensation.
10. I have considered rival submissions and material available on record as well as impugned awards.
11. From the material available on record it appears that there is no dispute with regard to the date on which the claimants came to be engaged.
11.1 It is also not in dispute that the procedure prescribed for selection and recruitment was not followed when the Page 9 C/SCA/6430/2016 JUDGMENT claimants came to be engaged. Actually, the claimants, during their deposition, accepted that they were not even registered with Employment Exchange and their names were not forwarded by the Employment Exchange at the time when the nagarpalika engaged them.
11.2 It is also not in dispute that the petitioners came to be engaged on ad-hoc and daily wage basis and that they worked as such until they came to be discontinued upon abolition of octroi and closure of the department where they were working.
11.3 It is also not in dispute that upon abolition of octroi, octroi department came to be closed down and the regular and permanent employees who were working in octroi department were accommodated in different departments however, persons who where working on ad-hoc and daily wage basis could not be accommodated for want of vacancy and that therefore all ad-hoc and daily wage employees of octroi department came to be relieved.
11.4 It is relevant to note that even learned Labour Court has, after appreciation of evidence reached to the Page 10 C/SCA/6430/2016 JUDGMENT conclusion that the claimants were engaged and were working as daily wagers and they were engaged on ad-hoc and daily wage basis without following procedure prescribed for selection and recruitment.
12. On this count it is appropriate to take into account the findings recorded by learned Labour Court to the effect that:-
"It is also admitted by the opponent in his affidavit as well as in his cross examination that applicant was daily wage workman...............In cross examination, applicant has admitted that he has joined the service in the year 1998 but not given any appointment letter. He was appointed as daily wage workman. He has not any knowledge about the terms and conditions of the appointment. When he was appointed municipality was collecting octroi. He has also knowledge that permanent employees were also working. Applicant receiving Salary according to the working days. His presence was maintained in the daily base workmen register. There is evidence produced to show, worked for more than 240 days in a year. It is also admitted by the applicant that after abolition of octroi decided by the state government, some employees are absorbed in other departments whereas some employees are terminated. It is also admitted by the applicant that after octroi abolished his service were continued. When octroi abolished 10 workmen are working on daily wage basis and approximately 50 employees are permanent. He has not knowledge that how the permanent employees are appointed. His name is not registered in employment exchange. After his termination other employees are appointed but whether their educational qualification are higher or not he can not say. Also specifically admitted that he was daily wage workman and terminated due to octroi department closed.
Opponent has stated in his deposition that applicant was daily wage workman. There is different rules for the appointment of the regular and permanent employee. Only due to the decision of the state government octroi abolished in all municipalities of the state and department closed required disengagement of a service of the workmen. But only due to humanitarian approach, opponent tried to continue the service of the workmen for one or two year. But as such there is no availability of work to allot them work. So it is not true that violation of section 25 (F), as such this provision is not applicable. As workmen were working on daily basis and not appointed following due recruitment legal procedure. They were called and appointed as and when work available. They are paid wages on the basis of the days for they worked as per wages fixed by the government. Applicant is not terminated on account of punishment but no work available. Applicant was terminated as per the oral order of the president of the institution. Permanent employees are absorbed in other departments and daily wage workman are disengaged as their services are not required. It is also admitted by the opponent in cross examination that he has not any knowledge that whether at the time of termination of the service of the applicant with other nine workmen retrenchment compensation notice pay or legal dues were paid or not. So considering the deposition and cross examination of the parties and appreciation of the documentary evidence as well, the fact came on record before the court that applicant was appointed as daily wage employee as per the requirement of the institution. Not working as permanent employee. From the documentary evidence produced by the opponent vide exhibit-41 (In Ref. Case No. 323/02) salary statement of the applicant from 01.09.2000 to 30.09.2000, clearly shows that applicant was daily wage workman as his attendance marked only for the day he is attending his duty."
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13. Under the same issue learned Labour Court has also recorded following observations and findings:-
"When applicant has admitted appointed as daily wage basis in the institution. The salary statement produced by the opponent also shows that applicant was appointed as daily wager. The documentary evidence produced by the applicant, Statement provided by the chief officer of the opponent institution dated 10.02.2009, exhibit-19 showing details of attendance of the applicant for the years from 1998-1999 to 2001 to 2002, total working days of the workmen. It Shows that applicant has worked for the year 2001-2002 is 280 days. The Ld. Advocate of the applicant has submitted that opponent has not complied the provision of section 25F of the Act. Applicant has worked for more than 240 days according to the statements are provided by the opponent. When there is no contradictory evidence has been brought on record by the opponent to show that applicant has not worked for 240 days in a year preceding the date of the termination, applicant service illegally terminated entitled to get protection according to the law. The act of the opponent is void ab initio. The Ld. Advocate of the opponent has submitted that applicant was only appointed as daily wager workman so not required to follow the conditions oi the section 25F according to the Himanshu Vidhyarthi Case. Applicant was not appointed according to the legal procedure or following recruitment rules."
14. Even on plain reading it comes out from the award that
(a) though the factum of abolition of octroi was not in dispute before learned Labour Court; and
(b) the fact that on abolition of octroi, the octroi department came to be closed-down, and
(c) the fact that the claimants came to be relieved on account of closure of octroi department; and
(d) despite the fact that even the ground on which the claimants came to be relieved (i.e. closure of octroi department) was also not in dispute and
(e) though even learned Labour Court recorded the finding that upon abolition of octroi, the octroi department came to be closed, the learned Labour Court overlooked that termination on account of retrenchment and termination on Page 12 C/SCA/6430/2016 JUDGMENT account of closure are two different concepts and the Court, despite such position, proceeded on the premise that Section 25F of Industrial Disputes Act was attracted and applicable in present case.
14.1 It is pertinent that from the award it comes out that learned Labour Court, on one hand, recorded findings of fact that the octroi department is closed down whereas, the Court, on the other hand, invoked and applied Section 25F of I.D. Act.
14.2 The said premise and the said finding disregard the fact that:
(a) in case of closure of department Section 25F would not be applicable; and
(b) when all ad-hoc and daily wage employees in octroi department came to be relieved on account of such compelling circumstances, question of seniority / last -
come - first go would not arise and consequently Section 25 G would not be attracted and,
(c) after the petitioners came to be relieved and octroi department came to be closed, question of engaging any one Page 13 C/SCA/6430/2016 JUDGMENT for same work in same department also would not arise. Thus, Section 25-H would not be attracted.
15. On this count it is necessary to note that the Labour Court has recorded that:-
"It is undisputed fact that applicant is daily wage workman of the opponent institution. Applicant has stated in the statement of claim that he is working since last four years. His service is terminated on 01.02.2002 only due to octroi abolished as per the state government policy and octoi department in which applicant is working is closed.
...So when octroi is abolished by the State Government by notification in such circumstances in my view opponent has closed the department after following due procedure...."
15.1 Having regard to above mentioned undisputed facts, applicability of Section 25F of the I.D. Act does not arise in present case and the said provision would not be applicable in light of the facts of the case, however learned Labour Court imported said provision, applied it to the Nagarpalika's action and faulted said action on ground that Nagarpalika committed breach of said provision. 15.2 Having held that the octroi department came to be closed on abolition of octroi, the Court also recorded that:-
"....No notice given or any amount paid in lieu of such notice or paid retrenchment compensation. Termination of the service of the applicant is not based on departmental inquiry, no charges and not by way of punishment, then it becomes illegal retrenchment.
......It is admission of the opponent that applicant service was terminated from 01.02.02 but at that time whether notice, notice pay or retrenchment compensation paid or not is not in their knowledge. Opponent has not produced any evidence to show that they have complied the provision of section 25(F) of the Act...."
16. From the award it emerges that the Labour Court Page 14 C/SCA/6430/2016 JUDGMENT ignored that (a) the nagarpalika relieved the claimants who were engaged on ad-hoc and daily wage basis, on account of abolition of octroi which resulted into closure of the octroi department; and that (b) when the department is closed down and the services of the ad-hoc and daily wage employees are discontinued on account of closure of the department, then the provision under Section 25F of the I.D. Act would not apply and that therefore the action cannot be invalidated on ground of violation of Section 25F of I.D. Act.
16.1 It is pertinent to note that in paragraph No. 15, while dealing with the issue No. 2, learned Labour Court itself, after appreciation of the evidence available on record, reached to and recored the conclusion that:-
"As there is no work available in the octroi department and already closed, in such circumstances, it is settled by now that reinstatement may not necessarily follow in all cases....."
16.2 From the said observation by learned Labour Court it becomes clear that learned Labour Court not only reached to the finding that upon abolition of octroi, the Nagarpalika closed down octroi department but learned Labour Court also found that "work is not available in octroi department."
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17. Despite such facts learned labour Court paused question about violation of Section 25F of I.D. Act in paragraph No. 10 of the award and observed that:-
"Only question requires to decide that violation of Section 25(F) or not?"
17.1 Thus, the premise on which learned Labour Court proceeded and the premise on which the decision / conclusion and final decision are based, are erroneous. 17.2 However, it is not necessary to enter into further deliberation and discussion about said discrepancies, defects and anomaly in the award because the Nagarpalika has not challenged the award. The Nagarpalika has accepted the award and even complied the award. Since there is no challenge against learned Labour Court's observation in light of Section 25F of the I.D. Act, further deliberation and discussion on this count is not necessary. Suffice it to say that the premise and conclusions of the award are erroneous.
18. Despite this position this Court considered it necessary to mention above noted facts [viz. that the learned Labour Court lost sight of relevant aspect and proceeded on Page 16 C/SCA/6430/2016 JUDGMENT erroneous premise and erred in considering the petitioners' discontinuance as retrenchment (instead of discontinuance on account of closure of department)] because the petitioners have raised their claim and taken out captioned petitions only on strength of said conclusion - rather on the basis of erroneous findings - and direction by learned Labour Court.
18.1 It is pertinent to note that the demand for enhanced compensation or for reinstatement is raised on the solitary and singular premise that Labour Court has held the termination in violation of Section 25F of I.D. Act and that therefore the petitioners should be awarded reinstatement or enhanced compensation (i.e. compensation at higher rate).
18.2 Foregoing discussion has brought out that the premise on which learned Labour Court proceeded and based the findings and decision is erroneous.
18.3 Therefore, the claim-demand which is founded only on such findings by learned Labour Court cannot yield any benefit for the claimants.
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18.4 The premise on which the demand is raised and the foundation on which the demand is based is weak, faulty and unjustified.
18.5 In light of foregoing discussion and in view of facts of present case this Court would, ordinarily, remand the case of reconsideration in accordance with applicable provision. However, before adverting to this aspect it is appropriate to deal with the decision on which learned Counsel for petitioners relied to support the demand for higher compensation.
19. At this stage it is appropriate and necessary to take into account the decision in case of U.P. State Sugar Corporation v. K.K.Sinha (2017 II LLJ 170), on which the learned advocate for the petitioners placed reliance. The facts involved in the cited decision are materially different from the facts involved in present case. Therefore, the said decision does not assist the petitioners.
20. The learned advocate for the petitioners relied on the said decision for very limited purpose viz. to support the Page 18 C/SCA/6430/2016 JUDGMENT submission that the compensation awarded by learned Labour Court is inadequate.
21. Mr. Vasavda, learned advocate for the petitioners submitted that in the cited decision the concerned workman had worked for only 1 year and 2 months, however in the said case, the Apex Court has awarded compensation to the extent of Rs.2.5 lakhs. With such submission learned advocate demanded hike in compensation amount.
22. In this context, it is necessary to note that the said decision is rendered in light of the fact of the case and by said decision Hon'ble Court has not declared that the said rate is inflexible and / or minimum standard and Hon'ble Apex Court has not laid down universal formula that in all cases where Court considers appropriate to award compensation, then compensation should be paid at that rate i.e. Rs. 2.5 lakhs for every year of service. While determining the amount Hon'ble Apex Court would have taken into account several factors.
22.1 The quantum of compensation depends on several factors including the nature of workman's employment and Page 19 C/SCA/6430/2016 JUDGMENT his status i.e. whether the concerned and affected workman was a permanent workman, whether his appointment was regular or irregular, total length of service rendered by concerned workman, the reason and circumstances which brought about the termination i.e. whether the circumstances were compelling and beyond employer's control or termination was unjustified the ground on which termination is held / declared unsustainable.
23. In present case, it has emerged from the evidence that the claimants were engaged irregularly and on adhoc and daily wage basis. Their services came to be discontinued on account of abolition of octroi and closure of department. The Nagarpalika, in facts of the case, was left with no alternative to discontinue the claimants. However, the learned Labour Court has, without examining the case from the said perspective, proceeded only on the premise that the provision under Section 25F were attracted but the nagarpalika did not follow procedure prescribed by said Section 25F.
24. More important aspect is that, in the cited decision Page 20 C/SCA/6430/2016 JUDGMENT Hon'ble Apex Court approved labour Court's decision and found that the award was not based on erroneous consideration and / or relevant facts and connected aspects were considered.
24.1 Whereas in present case it is found that the award is based on erroneous consideration and relevant facts and aspects have not been considered.
24.2 Another important distinguishing feature is that unlike in cited decision the employer, in present case, did not voluntarily terminate the employees but the employer, in present case, faced compelling circumstances and was left with no option.
24.3 Third important distinguishing feature in present case is that the petitioners were entitled - at the relevant time - for merely closure compensation calculated in accordance with formula prescribed under Section 25FFF. 24.4 Further, in view of short tenure of their ad-hoc and daily wage service (of less than 4 years / 5 years) the petitioners were not eligible for gratuity.
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24.5 In this view of the matter the amount awarded by learned labour Court cannot be termed meagre or inadequate.
25. So far as the decision in case of Rajkumar v. Director of Education and others (2016 II LLJ 257) is concerned, it is necessary to mention that even in the said case, the facts involved are materially different from the facts involved in the present case.
25.1 On plain reading of the decision in case of Rajkumar (Supra), it comes out that there was no dispute with regard to applicability of Section 25F. In the said decision, it emerged that the employer terminated service of the claimant without following procedure prescribed under Section 25F, though the said provision was, undisputedly, attracted and applicable.
25.2 In present case, foregoing discussion has brought out that the learned Labour Court failed to examine the case from the perspective that the service of the claimants came Page 22 C/SCA/6430/2016 JUDGMENT to be discontinued on account of closure of Octroi department upon abolition of octroi.
25.3 Ordinarily in such case this Court, as mentioned earlier, would remand the proceedings for reconsideration. However, in present case both sides expressed reservation - rather resentment against said course of action. Having regard to the said stand and also having regard to the fact that termination occurred in 2002 and almost 16 years have passed since then, it would not be proper to remand the case after so many years because ultimately, as observed by learned Labour Court, the claimants would be entitled only for compensation because direction to reinstate the claimants is incapable to comply and it would be, therefore, improper, unreasonable, impracticable to pass such direction which even to the Court's knowledge cannot be complied. It is pertinent that the learned Labour Court has, on appreciation of evidence, recorded the finding that "there is no work available in octroi department" and the "department is already closed". Thus even after remand the relief by way of reinstatement would not be available and it would not be possible for Labour Court to grant said relief.
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On overall consideration it appears that "remanding the proceedings" is not appropriate course of action in present case.
25.4 After examining the case in light of provision under Section 25F, the learned Labour Court observed, inter alia, that:
"Finding about breach of Section 25-F of the Industrial Disputes Act, 1947 is recorded, whether that would automatically entail relief of reinstatement for the workman? As there is no work available in the octroi department and already closed, in such circumstances, it is settled by now that reinstatement may not necessarily follow in all cases of illegal retrenchment especially when it comes to be the case of daily-waged workman.
It is true that the earlier view of the Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, Hon'ble Supreme Court and other High Courts consistently taken the view that relief by way of reinstatement with backwages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice....................Since such a workman was working on a daily wage basis and even after he is reinstated, he has no right to seek regularisation (State of Karnataka v. Uma Devi (2006) 4 SCC 1). Thus when he cannot claim regularisation and he has no right to continue even a a daily wage worker, no useful purpose is going to be served in reinstating such a workman and he can be given monetary compensation by the Court itself inasmuch as if he terminated again after reinstatement , he would receive monetary compensation only in the form of retrenchment compensation and notice pay. In such a situation, giving the relief of reinstatement, that too after a long gap, would not serve any purpose.' In light of the above legal position and having regard to the facts of the present case,namely, the workman was engaged as daily wager, worked for 3 to 3½ years. Applicant has stated in deposition that after termination of his service he tried to get employee but not get job and reaming unemployed but not produced any cogent evidence to show that he has tried but not get job and any monetary benefit after termination of service. It cannot be accepted that applicant remained unemployed because any person to maintain his life and family he has worked whatever job he has got. In above circumstances, in my view, compensation of Rs.50,000 to the applicant in lieu of reinstatement with back wages shall meet the ends of justice. Accordingly, I answer issue no.2 Partly in affirmative and pass following final order.
ORDER
1.Applicant reference partly allowed.
2. It is declared that opponent has illegally terminated service of the applicant.
3. Opponent directed to pay lump-sum amount by way of compensation Rs.50,000/- in lieu of reinstatement in service with backwages.
4. Opponent to pay the amount of compensation within 90 days from the date of publishing award to applicant, failing which opponent liable to pay interest@9% per annum.
5. Opponent to pay Rs1000/- for the cost of this reference."
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26. From above quoted observation by the learned Labour Court it comes out that learned Labour Court has (a) proceeded on the premise that present case is of illegal retrenchment (which is found to be erroneous premise); and
(b) the Court has taken into account the observation and guidelines explained by Apex Court viz. the direction to reinstate the claimants with backwages should not follow automatically and in appropriate case the Labour Court can mould the relief and the Court can, instead, grant (even in case where the retrenchment is found to be illegal, in breach of statutory provision) reasonable compensation, is based on said observation by Apex Court.
26.1 Any straight jacket formula or thumbrule cannot be laid down to determine - qualify reasonable compensation to suit all types of facts and circumstances. The quantification would, necessarily, differ from case to case and would depend on facts of each case.
27. At this stage, it is necessary to note that in ordinary and regular course the employees, in case of retrenchment or in case of closure, would be entitled to "retrenchment"
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compensation or "closure" compensation in accordance with Section 25F or Section 25FFF of I.D. Act, respectively. 27.1 The formula for payment of compensation in case of retrenchment as well as in case of closure of department is almost similar.
27.2 However material and substantive difference is that in case of retrenchment, the payment of compensation as per prescribed formula is a condition precedent inasmuch as an employer would be obliged to pay compensation at the time of compensation (i.e. on or before the date when the termination takes effect) whereas in case of closure of department, the requirement to pay the compensation is not condition precedent.
28. In present case, it is not the finding and conclusion by learned Labour Court that the termination of petitioners' service is illegal because employer did not pay compensation in accordance with Section 25FFF. 28.1 Actually the learned Labour Court has not examined the case from said perspective. The said vital aspect Page 26 C/SCA/6430/2016 JUDGMENT involved in the case is, overlooked by the learned Court. But the fact viz. that employer did not pay the compensation in accordance with Section 25FFF, is not in dispute and cannot be ignored.
28.2 While violation of the condition precedent applicable in case of retrenchment (payment of retrenchment compensation before or at the time of retrenchment) would render retrenchment void, Non-payment of closure compensation under Section 25FFF would not render the termination ab-initio void (like in case of Section 25F) because the requirement / condition to pay closure compensation (Section 25FFF) is not a condition precedent in case of closure. This vital distinction between "retrenchment" & "closure" is very relevant and pertinent in view of the facts in present case and that therefore it should have been properly considered and kept in focus by learned Labour Court. However, learned Labour Court dealt with the case as if it were case of retrenchment and that action is considered on ground of violation of the condition to pay compensation.
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28.3 Having lost the path while deciding main and substantive issue, the learned Court tried to balance the situation while addressing the issue about the relief to be granted to the workman.
28.4 The learned Labour Court addressed the issue about appropriate relief i.e. whether it should be reinstatement with backwages or in light of the facts of the case, the relief should be appropriately moulded.
28.5 The learned Labour Court examined the case from both perspective and having regard to the fact situation viz. that the department is closed down and the work which the claimants performed is not available on account of abolition of octroi, the learned Labour Court rightly reached to the conclusion that the relief of reinstatement would not be just and proper in facts of present case.
29. In present case it is pertinent that the closure of octroi department was unavoidable since it followed abolition of octroi.
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30. In present case it is also necessary to note that the claimants never challenged the action of the respondent on the ground that the closure is illegal or void or that the termination of their service is illegal on account of closure. 31 However, in present case, it has emerged that the facts are not in dispute but this is a case of inappropriate and erroneous appreciation of facts and applying incorrect / in applicable provision. In this view of the matter and in light of facts of present case, even if the mater is remanded then also the learned Labour Court will not be able to consider, much less grant, demand for reinstatement. Actually, this aspect is already, considered by learned Labour Court in the award under challenge and it is rightly appreciated. The learned Labour Court has, rightly, held that relief by way of reinstatement is not feasible and practicable and cannot be granted. Even the workmen are aware and conscious about the said decision, therefore, the petitioners have consciously, incorporated alternative prayer in present petition i.e. for enhanced compensation.
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32. Having regard to the facts of the case it cannot be said that the learned Labour Court has exercised its discretion for quantification of the compensation, erroneously or with material irregularity.
32.1 The learned Labour Court has taken into account relevant facts as well as the observations by Hon'ble Court in the decisions on which the claimants and the Nagarpalika relied.
33. In this background so far as the claim for enhanced rate of compensation is concerned, it is necessary to take into account below mentioned facts:
a. Undisputedly the claimant came to be engaged without following procedure for selection and recruitment;
b. Thus, their appointment was irregular; c. The claimants were engaged on adhoc and daily wage basis and they worked as daily wager; d. The total tenure of service by the claimants did not extend beyond 4 years; e. Their service came to be discontinued on account of
abolition of the octroi which resulted into closure of the Page 30 C/SCA/6430/2016 JUDGMENT department and not on account of voluntary act of the employer;
f. It was a matter of "circumstance beyond the contract of the Nagarpalika"
g. Undisputedly, the salary of the claimant was about Rs.2400/- per month.
34. When above mentioned facts are taken into account, then it becomes clear that the decision by learned Labour Court to award compensation and / or quantification of compensation cannot be faulted.
35. Having regard to the salary of the claimants at the time when their services came to be discontinued and also having regard to the total tenure of the services of the claimants at the time when their services came to be discontinued and the nature of their employment and the reason / circumstances on account of which their service had to be discontinued and that the department in which the claimants were engaged, is closed down on account of abolition of octroi and the work is not available, this Court is of the view that quantification of the compensation by the Page 31 C/SCA/6430/2016 JUDGMENT learned Labour Court cannot be termed arbitrary or without application of mind. The case of persons engaged on ad-hoc and daily wage basis and without following procedure cannot be equated, even for purpose of determining reasonable lumpsum compensation, with cases of regular and permanent employee who holds a "post" and has right against the post. Further when the tenure of service rendered by such daily wager is of short duration and when the engagement is discontinued on account of compelling circumstances beyond the control of employer, then such cases cannot be equated with cases where employer terminates service of permanent employee arbitrarily and without just cause.
35.1 In view of this Court, any ground to interfere with the quantification of compensation determined by the learned Labour Court is not made out.
35.2 At this stage, it is necessary to note that the claimants have also prayed for benefit of gratuity. According to the claimants, prior to the date on which the claimants came to be relieved, they had not rendered service for 5 years.
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Therefore, it would be for the claimants, to establish factual aspects and their entitlement in accordance with law, before the competent authority and establish their claim for gratuity. In present proceedings, the demand/ claim for gratuity cannot be determined.
35.3 This Court has also taken into account all aspects which are intrinsically involved in present case and have bearing on the issue related to determination of lumpsum compensation including the aspects related to the salary of the workmen at the time when their service came to be discontinued as well as total tenure of the service of the claimant and the fact that claimants have, though under protest, already accepted Rs.51,000/- paid by the Nagarpalika to comply the direction passed by learned Labour Court.
In light of the foregoing discussion and reasons, this Court does not find any error in the discretion exercised by the learned Labour Court. Therefore, the petitions are not accepted. Orders accordingly. Rule is discharged.
Sd/-
(K.M.THAKER, J) SURESH SOLANKI/Saj/Bharat Page 33