Punjab Land Development ... vs Presiding Officer, Labour ... on 4 May, 1990
14. The decision of the Apex Court in the matter of Stale Bank of India v. N. Sundar Mani (supra), the three-Judge Bench interpreting Section 25F read with Section 2(oo) of the I. D. Act has been approved by the Constitution Bench in the case of Punjab Land Development & Reclamation Corporation Limited v. Presiding Officer, Labour Court, Chandigadh, 1990 (3) SCC 682. This clause (bb) has been inserted by amending the Act of 1984. It purports to exclude from the ambit of the definition of 'retrenchment' - (i) termination of service of a workman as a result of non-renewal of the contract of employment between the employer and the workman concerned on its expiry or (ii) termination of contract of employment in terms of stipulation contained in the contract of employment in that behalf. The first part relates to termination of service of
a workman as a result of non-renewal of the contract of employment between the employer and the workman concerned on its expiry. The second part refers to such contract being terminated under a stipulation in that behalf contained therein. The expression 'such contract' used in second part refers to contract of employment between the employer and the workman providing the mode and the manner of termination of service. Such termination of service has now specifically been excluded from the definition of 'retrenchment' of this sub-clause. The cases contemplated under both the parts, therefore, will not be 'retrenchment'. Conversely, a case not falling within either of the parts of this sub-clause will be 'retrenchment' falling within the main part of the definition. In other words, where in fact there is no non-renewal of the contract or there is no stipulation in the contract in that behalf, the termination of service will constitute 'retrenchment'. Termination of service of a casual workman on daily wages will not fall within the exception contained in sub-clause (bb) of the Act because contract of employment is referable to the contract other than engagement of casual workers on daily wages. Non-renewal of the contract employment presupposes an existing contract of employment which is not renewed. The position, however, would be different when such a contract is in reality a camouflage for a more sustaining nature of arrangement but a mode of daily wager is obtained so as to avoid the rigors of the Act. This clause does not contemplate to cover a contract such as of a daily wager and is rather intended to cover more general clause of contract where a regular contract of employment is entered into and the termination of service is an act of non-renewal of contract.