Madras High Court
K. Rajendran vs Director (Personnel), Project And ... on 6 March, 1991
Equivalent citations: (1995)IIILLJ240MAD
JUDGMENT
T. Somasundaram, J The prayer in the writ petition is as follows:
1. "For the reasons mentioned in the accompanying affidavit, it is prayed that this Hon'ble Court may be pleased to pass orders and issue directions as may be deemed fit and in particular issue a writ in the nature of certiorarified mandamus quashing that portion of last appointment order, dated 26th June 1986, in Ref. No. PEC. Ms. PERS:RECTT; 86 issued to the petitioner by the second respondent which says that his services would be liable to be terminated at the end of 44 days as it has now been done by the order, dated 30th July 1986, and direct the respondents to regularise his services and award costs and render justice".
2. The case of the petitioner is as follows: The respondent Corporation, hereinafter called 'the respondent' selected the petitioner for the post of messenger for its Madras office and by the letter, dated 24 March 1983, the respondent offered the petitioner the appointment for the said post for a period of 44 days. The order, dated 24 March 1983, runs as follows:
"Projects and Equipment Corporation of India, Ltd., Madras-600 001. PEC : MS: PERS: RECT :83 24 March 1983.
Sri K. Rajendran, 11, Oil Monger Street, Royapettah, Madras-600 014.
Sub : Offer of appointment as messenger on daily wages.
Dear Sir, We have pleasure to offer you the appointment for the post of messenger for a period of 44 days purely on daily wages basis subject to the following terms and conditions: (1) You will be paid at the rate of Rs. 11,60 per day of your attending the duties in the office. You will not be entitled to any other pay/allowance/perquisites or any other facility to which the regular employees of the Corporation may be entitled to from time to time. (2) Appointment offered is on daily wages basis taking effect from the date of your joining the duty and is liable to be terminated without assigning any reason and without any notice at any time during your service with the Corporation. (3) You will have no claim whatsoever for consideration for the regular appointment. (4) Your appointment is specifically for the period mentioned above and you will not be paid for the period of your absence from the duties. (5) You should also bring with you copies of educational certificates duly attested and original certificates at the time of joining.
Should you agree to the terms and conditions of appointment referred to above, you may please return the duplicate copy of this letter duly signed in token of your acceptance and also report for duties immediately but not later than 28 March 1983, failing which this offer will stand automatically withdrawn and cancelled.
Yours faithfully, (Sd.) N. Ramamohan, Resident Manager".
The petitioner accepted the offer of appointment and joined duty immediately. After the expiry of the 44th day referred to in the order of appointment the petitioner was given one day break in service and was reappointed in the same post with the same condition, similar appointment orders were given to the petitioner on twenty-five occasions, during the period from 24 March 1983 to 26 June 1986. The terms of appointment in all the twenty-five appointment orders are similar to the one extracted above. The last appointment order was dated 26 June 1986. On 30 July 1986, the petitioner received a telex message from the Bangalore office of the respondent stating that the petitioner's service as messenger is no longer required after the expiry of the 44 days as per the last appointment order, dated 26 June 1986. The telex message, dated 30 July 1986, terminating the service of the petitioner runs as follows:
"We regret to advise you TT the PEC WUD no longer need your services after the expiry of your tenure as per Let. No PEC: Ms. PERS :RECTT; 86 of 26th June 1986, your service with PEC will stand terminated then".
It is this order, dated 30 July 1986, that is challenged in this writ petition.
3. Sri S. Ayyathurai, learned counsel for the petitioner, submitted that the petitioner has put in more than 240 days of continuous service within a period of one year as per Section 25B of the Industrial Disputes Act, 1947, hereinafter called the Act; and that respondent should have complied with the mandatory conditions of Section 25F of the Act before terminating the service of the petitioner and since it has not complied with the mandatory conditions of Section 25 of the Act the order of the respondent terminating the service of the petitioner is illegal and liable to be set aside. The learned counsel for the petitioner would further submit that the act of the respondent in appointing the petitioner only for 4 days as daily-wage employee for the period from 24 March 1983 up to 8 September 1986, is an unfair labour practice and, therefore, the impugned termination order is bad in law. On the other hand Sri Balasubramaniam, learned counsel for the respondent, submitted that though the petitioner worked for more than three years in the office of the respondent with a break, since each order of appointment is a separate one for a specified period of 44 days Sub-clause (bb) of Clause (cc), Section 2 of the Act alone is applicable to the case of the petitioner and, therefore the termination of the service of the petitioner will not amount to retrenchment within the meaning of Section 2(oo) of the Act and consequently there is no violation of Section 25F of the Act.
4. The main question we have to examine in this case is, whether the termination of the service of the petitioner amounts to retrenchment within the meaning of Section 2(po) of the Act and whether there is violation of Section 25 of the Act. The case of the respondent is that Section 2(oo)(bb) alone is applicable to the facts of the present case and, therefore, it is not a case of retrenchment. The relevant portion of Section 2(oo) of the Act runs as follows:
"'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-
(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."
Sub-clause (bb) to Clause (oo) of Section 2 of the Act was added in 1984. The said Sub-clause (b) is an exception which must be interpreted narrowly. Of course, the intention of the Parliament in enacting Sub-clause (bb) to Clause (oo) of Section 2 of the Act was to exclude certain categories of workers from the definition of "retrenchment". But, there is nothing in Sub-clause (bb) which enables an unscrupulous employer to terminate the services of the workers on the ground of non-renewal of their contract even when the work for which they were employed subsists. The exception as contained in Sub-clause (bb) will have to be strictly construed and Clause (bb) should be made applicable only to such cases where the work ceases with the employment or the post itself ceases to exist. Clause (bb) cannot be made applicable to a case when the employer resorts to contractual employment as a device to simply take it out of Clause(oo) of Section 2 of the Act notwithstanding the fact that the work for which the workmen are employed continues or the nature of duties which the workman was performing are still in existence. The Bombay High Court in Dilip Hanumantrao Shirke and Ors. v. Zilla Parishad, Yavatmal, and Ors. :1990 (1) LLJ 445 (Bom) dealing with the scope and ambit of Sub-clause (bb) of Clause (oo) of Section 2 of the Act has observed as follows in Paras 6 and 7.
"The expression 'termination by the employer' of the service of a workman for any reason whatsoever, has been interpreted by the Supreme Court in the case of State Bank of India v. N. Sundaraimoni: 1976 (1) LLJ 478. 'The words for any reason whatsoever', were given the widest meaning admitting of no exception. It further observed that whatever the reason, every termination spells retrenchment. A termination can take place by either active step of the master or running out of the stipulated term. Therefore, what emerges from the decision is that the termination embraces not merely the act of termination of the employer but the fact of termination howsoever produced. To make appointments for specific periods did not absolve the management from complying with the conditions stipulated under Section 25F of the Industrial Disputes Act at the time the period of employment comes to an end. The benefit of law laid down by the Supreme Court was extended to all the workmen, even to those who were employed for specific work or for a particular job and even to casual labourers who were engaged merely to complete casual nature of work. It appears that the Legislature with the intention to protect a class of employment enacted one more exception to Clause (oo) of Section 2 by introducing Sub-clause (bb) in addition to the three already existing. The said subclause takes out a class of employment from the definition of 'retrenchment' and that class is where the termination of service is on account of non-renewal of a service contract between the workman and the employer or where contractual employment comes to an end on the basis of stipulation contained therein. The exception as contained in Sub-clause (bb) will have to be strictly construed as it takes away certain rights of workmen which such workmen have been enjoying earlier to the amendment.
5. As stated above, the terminations which are included in Sub-clause (bb) are those which are brought about either because of non-renewal of the contract or because of expiry of time stipulated in the contract of employment. It needs no further explanation but the probability of the employer exploiting the labour by giving fixed tenure appointments can never be overruled and, therefore, it would be improper and unwise simply to decide the nature of employment on the basis of letter of appointment issued by the employer. The nature of employment will have to be determined with reference to the nature of duties performed by the workman and type of job the workman was entrusted with. If the workman is engaged to do a particular job which may require him to do actual work for more than 240 days in twelve calendar months such employment would be covered by the amended sub-clause because the employment comes to an end with the completion of the work. A stipulation in the contract that the employment would be for a specific period or till completion of the work may also fall within the scope and ambit of this sub-clause. But if the employer resorts to contractual employment as a device to simply take it out of the principal Clause (oo) irrespective of the fact that the work continues or the nature of duties which the workman was performing are still in existence, such contractual engagements will have to be tested on the anvil of fairness, propriety and bona fides.
May be that such fixed tenure employments are made to frustrate the claim of the workman to become regular or get himself confirmed as a permanent employee either under the rules applicable to such employment or even under the standing order. It is always open to the Court adjudicating the dispute to examine each and every case in its proper perspective and to protect the workman against the abuse of the amended provision. If this protection is not afforded, the benefit flowing from retrenchment to which every termination succumbs, would be rendered nugatory. The amended Sub-clause (bb) would apply only to such cases where the work ceases with the employment or the post itself ceases to exist or such other analogous cases where the contract of employment is found to be fair, proper and bona fide".
5A. In Balbir Singh v. Kurushetra Central Co-operative Bank Ltd., and Anr. : 1990 (1) LLJ 443 the Punjab and Haryana High Court while dealing with the scope of Section 2(oo)(bb) of the Act, has held as follows, in Para 8:
"In fact Clause (bb), which is an exception, is to be so interpreted as to limit it to cases where the work itself has been accomplished and the agreement of hiring for a specific period was genuine. If the work continues the non-renewal of the contract on the face of it has to be dubbed as mala fide. It would be fraud in law if it is interpreted otherwise".
6. In Sreenivasa Rao v. Labour Court Hyderabad, and Anr. : 1990 (2) LLJ 577 , the Andhra Pradesh High Court, interpreting Section 2(oo)(bb) of the Act, has observed as follows:
"The main part of Section 2(oo) treats as "retrenchment" a termination 'for any reason whatsoever' and the exclusionary clauses have necessarily to be strictly construed having regard to the benefits given by the Act in Section 25 for those sought to be retrenched. If Sub-clause (bb) is to be literally construed and a meaning other than the one given by Jeevan Reddy, J., is to be given for the latter Part of the Sub-clause and if the meaning contended for by the respondents is to be given to the first part of the sub-clause, then the main part of Section 2(00) will be practically rendered nugatory. It will not only cut down the wide amplitude of the plain words of the main Part of Section 2(oo) an amplitude which presumably is to be preserved and maintained by the Courts, but will indeed reduce the main part to such a narrow Lilliputian state that, having regard to today's widespread practice of contract labour on daily wages in public sector, private sector and Government departments falling under the definition of 'industry,' the very purpose of Section 25F and of other beneficial provisions of the Act will become otiose".
7. Now let us examine whether the Sub-clause (bb) of Clause (oo) to Section 2 will apply to the case of the petitioner in the light of the principles laid down in the decisions referred above. The materials available in this case go to show that the petitioner worked in the Madras office of the respondent for more than three years. The materials also disclosed that the branch office of the respondent at Madras was closed only on 31 December 1986 and on 30 July 1986, when the service of the petitioner was terminated with effect from 9 August 1986, the post of messenger in the Madras branch of the respondent and the duties performed by the petitioner continued to exist. It is not a case where the work ceased with the employment or the post of messenger itself ceased to exist from 9 August 1986. In this case, as already stated, the nature of the duties performed by the petitioner as messenger continued to exist even after the service of the petitioner was terminated. On 6 April 1984 the resident manager of the Madras office addressed a letter to the general manager of the respondent at Delhi recommending for the regularisation of the petitioner's service as a messenger. By the letter, dated 9 July 1984, from the head office of the respondent to resident manager of the Madras office, the resident manager of the Madras office was informed that the regularisation of the petitioner would be possible only after the petitioner puts in two years' service as messenger. By the telex message, dated 9 May 1985, the head office of the respondent called upon the Madras office to furnish the petitioner's bio-data for the purpose of regularising his service. On 24 June 1985, while issuing the appointment order to the petitioner for the period of 44 days, the regional manager of the Madras office requested the head office to expedite the regularisation of the petitioner's service, by the letter, dated 28 June 1985, the head office of the respondent required the branch office to state the action which the Madras office has taken to regularise the petitioner's service. By another letter, dated I July 1985, the head office of the respondent informed the regional manager of the Madras office that the competent authority has given his approval for regularising the petitioner's service and requested the regional manager to constitute an interview committee. By a telex message, dated 14 August 1985, the head office required the Madras office to submit a report of the interview committee. On 30 August 1985, the regional manager of the Madras office wrote a letter to the head office explaining the circumstances under which the interview committee could not be constituted and suggesting alternate method for regularising the service of the petitioner. By the letter, dated 3 September 1985, the head office of the respondent informed the Madras office that the suggestion given by the regional manager of the Madras office is under consideration. The above correspondences between the head office at Delhi, and the branch office of the respondent at Madras show that the post of messenger in the Madras office is a permanent post and that the petitioner was appointed purely on daily wage basis and steps were taken for regularising the service of the petitioner. On the date of termination of the petitioner's service, the post of messenger in the Madras office was available and the nature of duties performed by the petitioner in the Madras office of the respondent continued to exist.
in these circumstances, it cannot be said that the service of the petitioner was terminated on the ground that the post of messenger in the Madras office of the respondent itself ceased to exist. When we reach the conclusion that the service of the petitioner as a messenger in the Madras office of the respondent was not terminated on the ground that the post itself ceased to exist. Sub-clause (bb) of Clause (oo) of Section 2 of the Act will not apply to the facts of the present case. In other words, the said Sub-clause (bb) will not apply to the case of the petitioner, because, the respondent cannot use the terms of employment as a device to take it out of Clause (oo) of Section 2 of the Act notwithstanding the fact that the post of messenger in the Madras office of the respondent and the nature of the duties performed by the petitioner as a messenger in the Madras office of the respondent continued to exist even after the termination of the service of the petitioner with effect from 9 August 1986. Learned counsel for the respondent placed heavy reliance on the decision in J.J. Shrimali v District Development Officer, Mehsana, and Ors. [1990-I L. L N. 982], in support of his contention that the Sub-clause (bb) of Clause (oo) of Section 2 of the Act will be applicable to the facts of the present case and the termination of the service of the petitioner will not amount to retrenchment within the meaning of Section 2(oo) of the Act. The above decision is clearly distinguishable on facts. In that case the appointment orders in terms provided that the appointment was being made purely on ad hoc and temporary basis and was to last till scarcity works were in progress and the contract of employment carried a stipulation that the service of the petitioners in that case will end as soon as the scarcity relief work is wound up or ceases. The petitioners in that case were, therefore, told in no uncertain terms that the duration of their engagement was co-extensive with the duration of the scarcity-relief works meaning thereby that their services will end on the closure of the relief works. That is not the position in the present case. The various letters exchanged between the head office of the respondent at Delhi, and branch office of the respondent at Madras, go to show that the post of messenger in the Madras office is a permanent post and that is the reason why steps were taken to regularise the service of the petitioner. For reasons not known, the service of the petitioner was not regularised, on the other hand the impugned order terminating the service of the petitioner came to be passed. In these circumstances, the principle laid down in J.J. Shrimali v. District Development Officer, Mehsana, and Ors. (vide supra), cannot be applied to the facts of the present case. On the other hand, the ratio of decisions in Dilip Hanumantrao Shirke and Ors. v. Zilla Parishad, Yavatmal, and Ors. [1989 II CLR 447 ], Balbir Singh v. Kurushetra Central Cooperative Bank Co. Ltd. and Anr. [ 1990 1 CLR 838] and R. Sreenivasa Rao v. Labour Court of Hyderabad and Anr. [1990-II LLJ 577]., referred above will apply to the facts of the present case. In view of the above position, the contention of the learned counsel for the respondent that Sub-clause (bb) of Clause(oo) of Section 2 of the Act is applicable to the case of the petitioner cannot be accepted.
8. In view of the above discussion, there is no difficulty in qoming to the conclusion that the termination of service of the petitioner in this case amounts to retrenchment within the meaning of Section 2(oo) of the Act and that the respondent has not complied with the mandatory provision of Section 25F of the Act by paying the retrenchment compensation to the petitioner and, therefore, the impugned order of the respondent terminating the service of the petitioner is bad in law and the same is liable to be set aside.
9. Learned counsel for the respondent further submitted that even if it is held that the termination of the petitioner's service amounts to retrenchment, he is not entitled to the relief of reinstatement because, subsequent to the impugned order, dated 30 July 1986, terminating the service of the petitioner, Madras office of the respondent where the petitioner was working as a messenger was closed on 31 December1986 and, therefore, at best, the petitioner wilt be eligible only for wages up to 31 December 1986 and for closure compensation. I am unable to accept this contention of the learned counsel for the respondent, because, in this case, there is no closure within the meaning of Section 25FFF of the Act. Section 25FFF deals with compensation to workmen in case of closing down of undertakings and the said section refers to a separate and distinct business or commercial or trade or industrial activity. It cannot comprehend a branch office like the Madras branch office of the respondent where only a branch manager, three clerical staff and a messenger are employed and which was admittedly doing only liaison work. In Avon Services (Production Agencies) (Private). Ltd v. Industrial Tribunal Haryana - and Ors. : 1979 (1) LLJ 1 the Supreme Court, while dealing with the meaning of undertaking for the purpose of Section 25FFF of the Act held as follows in Para 22, :
"The expression 'undertaking' is not defined in the Act. It also finds its place in the definition of the expression 'industry' in Section 2(j). While ascertaining the amplitude of the expression 'undertaking' in the definition of the expression industry noscitur a sociis canon of construction was invoked and a restricted meaning was assigned to it in Bangalore Water Supply and Sewerage Board v. A. Rajappa [1978-I L.L.N. 376]. While thus reading down the expression, in the context of Section 25FFF it must mean a separate and distinct business or commercial or trading or industrial activity. It cannot comprehend and infinitesimally small part of a manufacturing process".
In the present case, according to the respondent, the branch office of the respondent at Madras was doing only liaison work and it had only a branch manager, three ministerial staff and one messenger. If it is a case of closure of the Madras office as contended by the respondent, the services of all the staff of the branch office, viz., the branch manager, and the ministerial staff also should have been terminated. But, that is not the case here. When the Madras office was closed, admittedly, the branch manager and the other staff of respondent were transferred to the other branches of the respondent. Therefore, the contention of the learned counsel for the respondent that the contract of service of the petitioner was not renewed and his service was terminated as the branch office was closed cannot be accepted because, the service of the petitioner was terminated long prior to the date of closure of the branch office at Madras. Therefore, it has to be concluded that it is not a case of closure but it is a case of retrenchment within the meaning of Section 2(oo) of the Act. Admittedly the mandatory requirements of Section 25F of the Act have not been complied with by the respondent before terminating the service of the petitioner. Hence, the order terminating the service of the petitioner is bad in law and is liable to be set aside. Consequently, the petitioner has to be reinstated in service with back wages. As a result, the writ petition is allowed, the order challenged in this writ petition is set aside and the petitioner is ordered to be reinstated in service with back wages. Sri Ayyathuyrai, learned counsel for the petitioner, in the course of his arguments, represented that inasmuch as the Madras office of the respondent was closed with effect from 31 December 1986, the petitioner is prepared to join as messenger in any one of the branches of the respondent Corporation. Hence, the respondent is directed to reinstate the petitioner in service with back wages in any one of the branches of the respondent-Corporation. However, there will be no order as to costs.