1981 (4) TMI 274 - SC - Indian Laws

Supreme Court declares termination void, orders reinstatement with back wages.

The Supreme Court allowed the appeal, declaring the termination of the appellant's service as ab initio void and inoperative. The appellant was deemed to ... - Issues Involved:1. Legality of the termination of the appellant's services.2. Whether the termination constituted 'retrenchment' under Section 2(oo) of the Industrial Dispute Act, 1947.3. Compliance with Section 25F of the Industrial Dispute Act, 1947.4. Eligibility of the appellant to claim retrenchment compensation.5. Appropriate relief for the appellant.Issue-wise Detailed Analysis:1. Legality of the Termination of the Appellant's Services:The appellant was employed as a Salesman at the respondent's Delhi Sales Depot and his services were terminated by a letter dated October 12, 1974, effective from October 19, 1974. The Labour Court initially directed reinstatement with full back wages but later set aside the ex-parte award and allowed the respondent to participate. The Labour Court held that the termination was in accordance with the standing orders as the appellant was on probation and found unsuitable. The Supreme Court found that the Labour Court overlooked the fact that the appointment letter did not mention probation and the respondent failed to prove any rules mandating probation. Thus, the appellant was either a temporary or permanent employee but not on probation at the time of termination.2. Whether the Termination Constituted 'Retrenchment' under Section 2(oo) of the Industrial Dispute Act, 1947:The Supreme Court held that the termination did not fall within any of the excepted categories under Section 2(oo) of the Act. The termination was not a punishment, voluntary retirement, retirement on superannuation, or due to ill-health. Therefore, it constituted 'retrenchment' as defined in the Act.3. Compliance with Section 25F of the Industrial Dispute Act, 1947:Section 25F mandates that no workman employed in any industry who has been in continuous service for not less than one year shall be retrenched without one month's notice or wages in lieu of notice, retrenchment compensation, and notice to the appropriate government. The Supreme Court noted that the respondent did not comply with these prerequisites, rendering the termination ab initio void and inoperative.4. Eligibility of the Appellant to Claim Retrenchment Compensation:The appellant was employed from December 8, 1973, to October 19, 1974. Under Section 25B(2) of the Act, a workman is deemed to be in continuous service for one year if he has worked for not less than 240 days in the preceding 12 months. The appellant satisfied this condition, making him eligible to claim retrenchment compensation.5. Appropriate Relief for the Appellant:The Supreme Court rejected the respondent's plea to award compensation instead of reinstatement. It held that since the termination was ab initio void, the appellant continues to be in service with all consequential benefits, including full back wages. The case was remitted to the Labour Court to make an appropriate award in light of the Supreme Court's findings. The respondent was also directed to pay the appellant's costs quantified at Rs. 2000 within four weeks.Conclusion:The Supreme Court allowed the appeal, set aside the Labour Court's award, and declared the termination of the appellant's service as ab initio void and inoperative. The appellant was deemed to continue in service with full back wages and other benefits. The case was remitted to the Labour Court for an appropriate award, and the respondent was ordered to pay the appellant's costs.