1990 (5) TMI 229 - SC - Indian Laws

Chairman's appointment power questioned in workmen termination case under Industrial Disputes Act section 2(oo)

PUNJAB LAND DEVELOPMENT ANDRECLAMATION CORPORATION LTD., CHAN Versus PRESIDING OFFICER, LABOUR COURT, CHANDIGARH ETC.

The SC interpreted retrenchment under s. 2(oo) of the Industrial Disputes Act, 1947, analyzing termination of workmen's services where the Chairman ... Interpretation of 'retrenchment' u/s 2(oo) of the Industrial Disputes Act, 1947 - workmen services were terminated on the ground that the Chairman had no power to appoint them - Compliance with s. 25F for conditions precedent to retrenchment of workmen - HELD THAT:- Analysing the definition of retrenchment in s. 2(00) we find that termination by the employer of the service of a workman would not otherwise have covered the cases excluded in (a) and (b), namely, voluntary retirement and retirement on reaching the stipulated age of retirement. There would be no volitional element of the employer. Their express exclusion implies that those would otherwise have been included. Again if those cases were to be included, termination on abandonment of service, or on efflux of time, and on failure to qualify, although only consequential or resultant, would be included as those have not been excluded. Thus, there appears to be a gap between the first part and the exclusion part. Mr. Venugopal, on this basis, points out that cases of voluntary retirement, superannuation and tenure appointment are not cases of termination ’by the employer’ and would, therefore, in any event, be outside the scope of the main provisions and are not really provisos. In our view, the principle of harmonious construction implies that in a case where there is a genuine transfer of an undertaking or genuine closure of an undertaking as contemplated in the aforesaid sections, it would be inconsistent to read into the provisions a right given to workman 'deemed. to be retrenched' a right to claim reemployment as provided in section 25-H. In such cases, as specifically provided in the relevant sections the workmen concerned would only be entitled to notice and compensation in accordance with section 25-F. It is significant that in a case of transfer of an undertaking or closure of an undertaking in accordance with the aforesaid provisions, the benefit specifically given to the workmen is 'as if the workmen had been retrenched' and this benefit is restricted to notice and compensation in accordance with the provisions of section 25-F. The result is that C.A. Nos. 3241-48 of 1981, 686(NL) of 1982, 18 17 of 1982, 1898 of 1982, 3261 of 1982, 1866 of 1982, 1868 of 1982, 8456 of 1983, 10828 of 1983 and the appeal arising out of S.L.P. (C) No. 3149 of 1983 are dismissed with costs quantified at ₹ 3,000 in each appeal. It is stated that in C.A. No. 686 of 1982 the respondent has already been reinstated pursuant to the order dated 24.10.1983 passed by this Court, having regard to the fact that he has served since 1983, he shall be considered for confirmation with effect from his due date according to Rules, if he is not already confirmed by the Corporation. Thus, we dispose of C.A. No. 885 of 1980 with the direction that the two workmen involved in this appeal be paid compensation of ₹ 1,25,000 (Rupees one lakh twenty five thousand) each in full and final settlement of all claims including that of reinstatement. The payment shall be spread over a period from 11.11.1972 till date for the purpose of Income-tax. C.A. No. 4116 (NL) of 1984 was on the board, but the paper book is not available. Hence it is delinked from the series. Appeals disposed Issues Involved:1. Interpretation of 'retrenchment' u/s 2(oo) of the Industrial Disputes Act, 1947.2. Compliance with s. 25F of the Industrial Disputes Act, 1947.3. Applicability of ss. 25G and 25H of the Industrial Disputes Act, 1947.Summary:1. Interpretation of 'retrenchment' u/s 2(oo) of the Industrial Disputes Act, 1947:The central issue was whether 'retrenchment' as defined in s. 2(oo) of the Industrial Disputes Act, 1947, should be interpreted in its narrow, natural, and contextual meaning or in its wider literal meaning. The court held that 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section. The judgment emphasized that the definition's broad wording necessitates a literal interpretation, as the statute explicitly states the exclusions.2. Compliance with s. 25F of the Industrial Disputes Act, 1947:The court examined multiple cases where termination of service was challenged for non-compliance with s. 25F, which mandates conditions precedent to retrenchment. It was consistently held that failure to comply with s. 25F renders the termination illegal. For instance, in cases like C.A. No. 686 (NL) of 1982 and C.A. No. 1817 of 1982, the terminations were deemed illegal due to non-compliance with s. 25F, leading to orders for reinstatement with back wages.3. Applicability of ss. 25G and 25H of the Industrial Disputes Act, 1947:The court addressed concerns about the applicability of ss. 25G and 25H, which deal with the procedure for retrenchment and re-employment of retrenched workmen, respectively. It was argued that these sections should be interpreted harmoniously with s. 2(oo) to avoid absurd results. The court noted that while s. 25G provides the principle of 'last come, first go,' it does not apply absolutely in every case of termination. Similarly, s. 25H, which provides for re-employment, is applicable primarily when retrenchment occurs due to surplus labor.Conclusion:The court concluded that 'retrenchment' should be interpreted literally as defined in s. 2(oo) of the Industrial Disputes Act, 1947, encompassing termination for any reason except those explicitly excluded. Compliance with s. 25F is mandatory for a valid retrenchment, and ss. 25G and 25H should be applied contextually to ensure harmonious interpretation with s. 2(oo). The appeals were dismissed with costs, and specific directions were given in individual cases regarding reinstatement and compensation.