Gujarat High Court
Ahmedabad Municipal Corporation vs Dipak Virambhai Parmar on 30 July, 2014
Author: Akil Kureshi
Bench: Akil Kureshi
C/SCA/4236/2004 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 4236 of 2004
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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AHMEDABAD MUNICIPAL CORPORATION....Petitioner(s)
Versus
DIPAK VIRAMBHAI PARMAR....Respondent(s)
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Appearance:
MR HS MUNSHAW, ADVOCATE for the Petitioner(s) No. 1
MR TR MISHRA, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
Date : 30/07/2014
ORAL JUDGMENT
1. Ahmedabad Municipal Corporation has filed this petition Page 1 of 12 C/SCA/4236/2004 JUDGMENT challenging the award dated 14.11.2003 passed by the Labour Court, Ahmedabad, in Reference (LCA) No.2130/1994.
2. Brief facts are as under :
2.1. Respondent was engaged as a typistcumclerk on a vacant post under the Family Welfare department by the Corporation under order dated 6.4.1993, for a period of thee months or till regularly selected candidate is available, whichever is earlier. There was no immediate extension of such employment, on or around 6.7.1993, when the validity period of the engagement expired.
However, as per the workman he continued in service in the same position after that date also. On 29.9.1993, his term of engagement was extended from 8.9.1993 to 7.11.1993. after giving break of one day on 7.11.1993.
2.2. On 9.11.1993, his engagement was extended for a further period of two months from 8.11.1993 upto 7.12.1993. It was specified that this period of stop gap engagement shall not be extended further. Case of the workman is that beyond 7.12.1993 also, the workman continued to discharge his duties as typistcumclerk with the Corporation right upto 25.4.1994 when his service was terminated without following any procedure provided under section 25F of the Industrial Disputes Act. The workman therefore, raised the abovenoted industrial dispute in which the Labour Court held that his termination was illegal. Consequently, directed the employer to reinstate him with 25% backwages.
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3. Learned counsel Shri Munshaw for the Corporation vehemently contended that the petitioner was engaged on fixed term contractual employment. He worked under such orders upto 7.12.1993 after which his engagement was not extended. He submitted that even if the workman was engaged for a few days thereafter, termination of such arrangement would not require following the procedure provided under section 25F of the Industrial Disputes Act. For such purpose, he relied on the decisions of Supreme Court in case of Bhavnagar Municipal Corporation v. Salimbhai Umarbhai Mansuri reported in (2013) 14 Supreme Court Cases 456 and Karnataka Handloom Development Corporation Ltd. v. Sri Mahadeva Laxman Raval reported in (2006) 13 Supreme Court Cases 15.
4. On the other hand, learned counsel Shri Mishra submitted that the Labour Court held that the workman had completed more than 240 days of actual work prior to his termination. Admittedly, procedure under section 25F of the Industrial Disputes Act was not followed. Retrenchment of the workman was thus illegal. He relied on the decision of Supreme Court in case of Devinder Singh v. Municipal Council, Sanaur reported in (2011) 6 Supreme Court Cases 584.
5. From the record, it emerges that the workman was engaged initially on contractual fixed term appointment as a typist cumclerk by the Corporation for three months from 6.4.1993. He continued to discharge his duties almost uninterruptedly, barring two artificial breaks, upto Page 3 of 12 C/SCA/4236/2004 JUDGMENT 7.12.1993. This was covered under three different appointment orders making the appointment purely fixed term appointments. For the period between 6.7.1993 to 6.9.1993, no written appointment order was issued. However, as is apparent from the order of extension of engagement dated 29.9.1993, the Corporation gave one day break on 7.9.1993. If the workman was not under engagement, the question of giving break would not arise. Even otherwise, this order was passed on 29.9.1993. The period of engagement was shown from 8.9.1993 to 7.11.1993 clearly indicating that though without written order, the workman was in actual service.
6. Even after 7.12.1993, the last date of extension of the engagement of workman, under a written order, he continued to work as typistcumclerk with the Corporation. This is the findings of the Labour Court supported by oral as well as documentary evidence produced by the workman. In addition to his own deposition, he had also produced inward registers to establish this fact. The workman thus worked right from 6.4.1993 till 25.4.1994 with few days breaks here and there. His services were terminated without following any procedure. No notice or notice pay or retrenchment compensation were paid.
7. Two things thus emerge. Firstly, the workman had completed more than 240 days of work during 12 calendar months preceding the date of termination and second that his services were terminated without following the requirement of section 25F of the Industrial Disputes Act.
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8. The moot question however, is did section 25F apply? This question gives rise to short but interesting question of interplay of section 25B(2) and 2(oo)(bb) of the Industrial Disputes Act. As is well known, section 25F of the Industrial Disputes Act lays down condition precedent for retrenchment of a workman. Such requirements would arise when the employer desires to retrench the workman who has been in continuous service for not less than one year. Terms 'continuous service' is defined in section 25B of the Act as under :
"25B. Definition of continuous service For the purposes of this Chapter, (1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman; (2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually Page 5 of 12 C/SCA/4236/2004 JUDGMENT worked under the employer for not less than
(i) ninetyfive days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case."
9. In turn section 2(oo) of the Industrial Disputes Act defines the term 'retrenchment' as to mean the termination by the employer of the service of a workman for any reason whatsoever, otherwise, than as a punishment by way of disciplinary action. Clause (bb) of section 2(oo) however, provides that term retrenchment would not include "termination of the service of the workman as a result of the nonrenewal 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".
10. In view of such statutory provisions, the question is can the workman, in the present case, be stated to be in continuous service of the employer for not less than one year. Section 25B of the Industrial Disputes Act provides for definition of term 'continuous service'. Our case for apparent reason does not fall in subsection(1) thereof. Subsection (2) provides interalia that where a workman is not in continuous service within the meaning of clause (1) for a period of one year, he shall be deemed to be in continuous service under an employer, for a period of one year, if he has during the period of twelve calendar months preceding the date of reference to which calculation is to be made, actually worked under the employer for not less than 240 days. The fact that the workman did complete Page 6 of 12 C/SCA/4236/2004 JUDGMENT 240 days of actual service during the 12 calendar months before the relevant date is undisputable. It is true that substantial portion of this actual working of 240 days came during a period when the workman was under written contract of fixed term employment under the employer. In terms of section 2(oo)(bb) of the Industrial Disputes Act, at the end of every such term, termination of employment may not be categorised as retrenchment. If retrenchment of service therefore, is in terms of conditions contained in such contractual employment, there would be no question of judging the validity of such termination on the anvil of section 25F of the Industrial Disputes Act since such disengagement would not amount to retrenchment. This however, does not mean that the work actually put by the workman would be obliterated for all purposes. The fact that the workman rendered his services with the employer would still remain and would count towards considering whether in terms of section 25B(2) of the Industrial Disputes Act, he had actually worked for 240 days or not. Section 25B(2) of the Industrial Disputes Act refers only to actual work of over 240 days. It does not make any distinction between engagement under the fixed term contractual engagement and one which is outside of such contract between the employer and the employee.
11. The Industrial Disputes Act is a labour welfare legislation. Section 25F of the Act provides certain minimum security to a workman, who has rendered his services over a long period of time under the same employer. Clause(a) of section 25F requires the employer to give one month's notice or notice pay in lieu of such Page 7 of 12 C/SCA/4236/2004 JUDGMENT notice before effecting his termination. Clause(b) thereof requires payment of retrenchment compensation at the rate of 15 days for every completed year of service or part thereof in excess of six months. These conditions are treated as condition precedent before valid and effective termination of service of workman can be brought about. In essence, such requirements would provide a buffer, a security to the workman who finds himself out of the employment after years of service with the same employer. If he has rendered 10 years of service, he would atleast have one month notice or notice pay in addition to five months of salary in form of retrenchment compensation to enable him to find alternative employment. Effect of section 2(oo)(bb) on interpretation of section 25B(2) of the Industrial Disputes Act, therefore, must be seen in light of such provisions.
12. In case of Devinder Singh v. Municipal Council, Sanaur(supra), the workman was engaged on fixed term basis. The last term was extended for six months from 1.5.1996. His service was discontinued with effect from 30.9.1996 without following the requirements under section 25F of the Industrial Disputes Act. It was in this background the Apex Court observed as under :
"27. The plea of the respondent that the action taken by it is covered by Section 2(oo)(bb) was clearly misconceived and was rightly not entertained by the Labour Court because no material was produced by the respondent to show that the engagement of the appellant was discontinued by relying upon the terms and conditions of the employment."Page 8 of 12
C/SCA/4236/2004 JUDGMENT 13. In case of Workmen of American Express
International Banking Corporation v. Management of American Express International Banking Corporation reported in AIR 1986 Supreme Court 458, the term 'actually worked under the employer' used in section 25B(2) of the Industrial Disputes Act came up for consideration before the Supreme Court. It was held and observed that such terms cannot mean only those days only when the workman worked with hammer, sickle or pen, but must necessarily comprehend all those days during which he was in the employment of the employer and for which he had been paid wages either under express or implied contract of service or by compulsion of statute, standing orders etc. Thus Sundays and other paid holidays are also to be taken into account for the purpose of reckoning the total number of days on which the workman could be stated to have actually worked.
14. In case of Surendra Kumar Verma etc. v. The Central Government Industrial TribunalcumLabour Court, New Delhi and another reported in AIR 1981 Supreme Court 422, the Apex Court observed as under :
"Act 36 of 1964 has drastically changed the position. S. 2(eee) has been repealed and S. 25B(2) now begins with the clause "where a workman is not in continuous service.... for a period of one year". These changes brought about by Act 36 of 1964 appear to be clearly designed to provide that a workman who has actually worked under the employer for not less than 240 days during a period of twelve months shall be deemed to have been in continuous service for a period of one year whether or not he has in Page 9 of 12 C/SCA/4236/2004 JUDGMENT fact been in such continuous service for a period of one year. It is enough that he has worked for 240 days in a period of 12 months; it is not necessary that he should have been in the service of the employer for one whole year. So we hold that Usha Kumari and Madhu Bala are in the same position as the other appellants."
15. In case of Viney Kumar Majoo v. State and others reported in AIR 1968 Rajasthan 227, it was observed that the avowed object of the amendment of section 25B made by Industrial Disputes (Amendment) Act (36 of 1964) was to confer certain benefits on the workmen and this being a beneficent piece of legislation has to be so construed as to advance the underlying object of conferring benefits on workmen and it should not be so construed as to deny such benefits.
16. In case of Madhya Pradesh Bank Karmachari Sangh (MP) v. Syndicate Bank and another reported in 1996 LAB IC 1161, it was observed as under :
"It may be seen that Section 2(oo)(bb) is to be construed strictly in favour of workman as far as possible, which is a benevolent provision and has to be implemented in law and spirit. Clause(bb) which has been inserted in the statute in the year 1984, is in the nature of an exception. Such was the view expressed in case of Balvirsingh v. Kurushetra Central Cooperative Bank, 1990 61 Fac LR 438(P&H)."
17. In my opinion, therefore, the entire period of service rendered by the workman would count towards computing the actual work rendered by him with the Corporation for the purpose of section 25B(2) of the Industrial Disputes Act. Thus considered the Labour Court correctly held that Page 10 of 12 C/SCA/4236/2004 JUDGMENT he had completed the requisite number of days and thus should be deemed to have worked continuously for a period of more than one year. His services therefore, could not have been terminated without following the requirements of section 25F of the Industrial Disputes Act. Admittedly, when he was terminated on 25.4.1994, such termination was not in terms of any stipulation in that behalf contained in contract of employment. Termination was outside of any contractual engagement. Termination was thus illegal.
18. In Case of Bhavnagar Municipal Corporation v. Salimbhai Umarbhai Mansuri (supra ) involved different facts. In the said case, the workman had worked only for 54 days under two separate orders. He had accepted the terms and conditions of contractual employment. Such appointment was liable to be terminated, upon expiry of period specified in the contract of appointment. Under such circumstances, Supreme Court held that termination of the workman did not amount to retrenchment. Likewise in case of Karnataka Handloom Development Corporation Ltd. v. Sri Mahadeva Laxman Raval(supra), the workman was appointed under separate letters stating that such appointment was purely contractual for a fixed period. In such circumstances, the Supreme Court held that even assuming the workman had worked for more than 240 days, he cannot claim his services should be continued because his service was purely contractual. Termination of his contract does not amount to retrenchment.
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19. Coming to the question of relief, salient features of the case are that the workman worked just over one year before his services came to be terminated. More than 20 years have passed since then. In his deposition, he admitted that during the regular selection process, he failed in the typing test, another candidate was therefore, appointed. In view of order for reinstatement with 25% backwages, I therefore, direct the petitioner Corporation to pay a sum of Rs. 1 lakh to the respondent towards full settlement of all his claims. This shall be done latest by 30.9.2014.
20. The petition is disposed of in above terms. Rule is discharged.
(AKIL KURESHI, J.) raghu Page 12 of 12