1957 (10) TMI 21 - SC - Indian Laws

Supreme Court ruling on workmen reinstatement after lock-out, termination for prolonged absence upheld

The Supreme Court upheld the Tribunal's decision that workmen were entitled to be reinstated without conditions after a lock-out, granting compensation ... Construction of lock-out and recall notices - effect of a lock-out vis-a -vis discharge of employees - employer's discretion to treat absence due to arrest under standing orders - justiciability of dismissal on misconduct by industrial tribunals - victimisation and want of good faith in disciplinary action - compensation for forced unemploymentConstruction of lock-out and recall notices - effect of a lock-out vis-a -vis discharge of employees - Proper construction of the notices dated 23-8-1953, 17-9-1953 and 23-9-1953 and whether the Company's notice operated as a discharge or as a lock-out permitting unconditional resumption of employment by those reporting within prescribed dates. - HELD THAT: - The Court held that the language of the notices, read together and against the surrounding facts, demonstrated an intention to declare a lock-out and to refuse employment during the period of closure rather than to effect an absolute termination of service. The phrase that services 'shall be deemed to be discharged' was construed in context as signifying refusal to employ while the works were closed. The subsequent notices calling for resumption of work showed that employees on the rolls of 23-8-1953 who reported by the specified dates were to be taken back without conditions, and those reporting later would be considered subject to conditions. Extrinsic evidence as to the workmen's subjective understanding was unnecessary where the notices themselves yielded a clear intention. The Court therefore affirmed the Tribunals' construction and conclusion that the employees who reported within the dates were entitled to reinstatement as of right.Notices construed as a lock-out with conditional recall; employees who reported within the time fixed were entitled to resumption of employment without condition.Proof of satisfactory evidence for absence - Whether the Company proved that the workmen who reported after the earliest recall date failed to produce evidence satisfactory to the Company for their earlier absence and therefore lost any right to reinstatement. - HELD THAT: - The Court found the evidence regarding interviews and reasons for non-joining to be conflicting and noted the Company did not produce documentary records said to embody interview results. In the absence of clear proof that each workman failed to satisfy the Company about his absence, the Tribunal's finding that some men were selected for non-reinstatement on broader scrutiny of conduct (association with the Action Committee, participation in meetings, etc.) could not be displaced. The appellant Company therefore failed to establish that non-production of satisfactory evidence was the valid and uniform reason for withholding reinstatement.Company did not satisfactorily prove that the respondents were disentitled to reinstatement for failure to produce satisfactory evidence of absence.Compensation for forced unemployment - Whether the Industrial Tribunal erred in awarding half basic pay as compensation for the period after October 2, 1953, and refusing compensation for the period before that date. - HELD THAT: - The Court observed that no substantial question of principle arose requiring interference. The Fifth Industrial Tribunal had exercised its discretion on the facts - distinguishing the antecedent period (where the workmen's conduct contributed to the situation) from the later period and awarding half basic pay accordingly. The Supreme Court found no error of principle in the Tribunal's assessment of compensation.Tribunal's award of compensation (half basic pay for the post-2 October period and refusal for earlier period) upheld.Employer's discretion to treat absence due to arrest under standing orders - application of standing orders - Whether Standing Order No. 9 required mandatory reinstatement where employees were absent because they had been arrested and had applied for leave which the Company refused. - HELD THAT: - Relying on precedent, the Court held that Standing Order No. 9, which makes absence without leave for 14 consecutive days a ground for automatic discharge, is not inflexible. However, an application for leave does not, as of right, prevent operation of the Standing Order; whether leave should be granted is a matter of employer's discretion. Where arrests are many and would paralyse operations if leave were universally granted, the employer may refuse leave unless there is mala fide victimisation. The Tribunals' approach treating every application for leave while under arrest as arresting the operation of the Standing Order was therefore reversed in respect of the seven named workmen whose terminations under the standing order could be supported.Employer's discretion to refuse leave in such circumstances upheld; the Tribunals misdirected themselves in treating Standing Order No. 9 as invariable excuse for absence on arrest.Justiciability of dismissal on misconduct by industrial tribunals - victimisation and want of good faith in disciplinary action - Whether the dismissals/reinstatements in individual misconduct cases (Samar Sen, Abharani Debi, Himansu Chattoraj) were justified or required interference by the Tribunal/Court. - HELD THAT: - On Samar Sen the Court accepted concurrent findings of the Tribunals that he fell within the statutory definition of 'workman' and that dismissal was vitiated by victimisation (his role as Action Committee Secretary) and illness; reinstatement with half pay was upheld absent special circumstances warranting interference. In Abharani Debi's case the Tribunal's conclusion that the charge was baseless and enquiry findings perverse was endorsed, and interference with dismissal was justified. As to Himansu Chattoraj, the Court found that the Tribunal's reasoning was inconsistent: though satisfied he had indulged in prejudicial activities, the Tribunal nevertheless held the charge-sheet not proved and ordered reinstatement; that order was found unsustainable: either the suspension charge required completion of enquiry or, if misconduct was established, permission to dismiss should have been granted. The Tribunal's reinstatement of Chattoraj was therefore set aside.Samar Sen and Abharani Debi: reinstatement justified; Himansu Chattoraj: reinstatement unjustified and set aside.Scope of appellate interference with tribunal facts - Extent to which this Court will reappraise factual findings of Industrial Tribunals on appeals by special leave. - HELD THAT: - The Court reiterated that it will not act as a court of first instance re-evaluating evidence unless exceptional circumstances, grave injustice, mala fides, or perverse findings are shown. Absent such circumstances, concurrent factual findings of the Tribunals will not be disturbed.No interference with Tribunal facts except where findings are perverse or show mala fides; ordinary factual conclusions maintained.Relief in part by setting aside tribunal awards - Final disposition of the four appeals (C.A. Nos. 44, 45, 336, 337) and relief in respect of identified workmen. - HELD THAT: - Applying the foregoing conclusions, the Court dismissed Civil Appeals 44, 45 and 337. Civil Appeal 336 succeeded in part: the Tribunals' decisions were set aside in respect of eight named workmen (seven absent-without-leave terminations under the standing order and Himansu Chattoraj whose reinstatement was unjustified), while in all other respects the awards below were left intact.Civil Appeals 44, 45 and 337 dismissed; Civil Appeal 336 partly allowed in respect of eight named workmen; otherwise awards upheld.Final Conclusion: The Supreme Court construed the August and September 1953 notices as a lock-out with a conditional recall, upheld the Tribunals' entitlement findings for those who reported within the specified dates, rejected the Company's general plea that the notices effected absolute discharge, declined to disturb Tribunal awards of compensation, affirmed employer discretion under the standing order in cases of arrest-related absence (resulting in partial allowance of C.A. 336 for specified workmen), sustained reinstatement where dismissal was tainted by victimisation or was baseless, set aside the reinstatement ordered for one workman where the Tribunal's reasoning was inconsistent, and disposed of the appeals accordingly. Issues Involved:1. Justification of keeping workmen out of employment.2. Entitlement of workmen to employment, relief, and/or compensation.3. Justification of discharge and/or suspension of workmen.4. Interpretation of notices issued by the Company.5. Legality of lock-out and discharge.6. Evaluation of evidence and findings by the Industrial Tribunal and Labour Appellate Tribunal.Issue-wise Detailed Analysis:1. Justification of Keeping Workmen Out of Employment:The Company declared a lock-out on August 23, 1953, due to continued illegal stoppages of work and slow-down tactics by the workers. The notice stated that the services of all other workers shall be deemed to be discharged with effect from August 24, 1953. The lock-out was lifted on September 17, 1953, with a notice requiring employees to resume work by September 19, 1953, or by October 2, 1953, with satisfactory evidence of absence. The Tribunal found that the Company scrutinized the conduct of the workmen to determine their association with the Action Committee and took back some workmen while refusing others. The Tribunal held that the Company was not justified in keeping the workmen out of employment without any conditions if they reported for duty by the specified dates.2. Entitlement of Workmen to Employment, Relief, and/or Compensation:The Tribunal awarded reinstatement to the workmen who reported for duty by October 2, 1953, and granted half salary as compensation for the period from October 2, 1953, to the date of actual return to duties. The Tribunal found that the workmen were entitled to be taken back into employment without condition. The Labour Appellate Tribunal dismissed the Company's appeal on merits and the workmen's appeal for full compensation on the ground that it did not involve any substantial question of law. The Supreme Court upheld the Tribunal's decision, stating that the workmen were entitled to be taken back as of right and without any condition.3. Justification of Discharge and/or Suspension of Workmen:The Tribunal classified the workmen into four categories: (1) those whose services were terminated for absence without permission for 14 consecutive days, (2) those dismissed for major misdemeanour, (3) those suspended but whose cases could not be disposed of finally, and (4) those dismissed for disobedience of orders and other activities in pursuance of a concerted plan of 'go-slow' strike. The Tribunal ordered reinstatement of 25 out of 74 workmen and granted compensation to 24 of the workmen directed to be reinstated. The Supreme Court found that the Tribunal misdirected itself regarding the true scope and effect of the Standing Order on absenteeism and held that the Company's decision to terminate the services of workmen absent without permission for 14 consecutive days was justified.4. Interpretation of Notices Issued by the Company:The Supreme Court held that the notices dated August 23, 1953, and September 17, 1953, did not terminate the services of the workmen but merely refused to employ them during the lock-out. The notices allowed the workmen to resume work without any conditions if they reported for duty by the specified dates. The Court found that the words used in the notices sufficiently and clearly brought out the Company's intention and did not require reference to other evidence in the record.5. Legality of Lock-out and Discharge:The Court did not pause to decide the questions of the illegal nature of the strike declared by the workmen and the legality of the lock-out declared by the Company, as it was unnecessary for the present appeals. The Court noted that the reluctance to pronounce on the conduct of the workmen prior to August 23, 1953, did not signify approval of that conduct.6. Evaluation of Evidence and Findings by the Industrial Tribunal and Labour Appellate Tribunal:The Court found that the Tribunal's decision regarding the seven workmen absent without leave for 14 consecutive days was erroneous and set aside the decision in respect of these workmen. The Court upheld the Tribunal's findings regarding Samar Sen, Abharani Debi, and Himansu Chattoraj, stating that there were no exceptional or special circumstances or grave injustice to justify interference with the Tribunal's findings of fact. The Court dismissed the appeals of the Company and the workmen, except for the appeal concerning the seven workmen absent without leave, which was allowed.Conclusion:Civil Appeal No. 44, Civil Appeal No. 45, and Civil Appeal No. 337 were dismissed. Civil Appeal No. 336 was partly allowed, and the decision of the Tribunals below was set aside in respect of eight workmen. The parties were directed to bear their own costs.