Lal Chand v. The Management of M/s Rail India Technical Economic Services Ltd

13. Mr. G.S. Chaturvedi, learned counsel for the respondents argued before this Court in support of the impugned Award. Learned counsel submitted that learned Labour Court has appropriately analyzed the nature of employment and rightly reached the conclusion that the petitioner was in a casual and contractual employment subject to periodic extensions, and hence his termination cannot be termed as ‘retrenchment’ as defined under Section 2(oo) of the Act.

14. Learned counsel for the respondents further submitted that no question of retrenchment arises in petitioner’s case as he was employed in a reserved category post against which no permanent recruitment could have been made. The petitioner was well aware of the fact that his employment is completely contractual and temporary in nature and his tenure solely depends on respondent’s requirement and periodic extensions. His service tenure came to an end by the expiry of the stipulated period which is covered by Section 2(oo) (bb) of the Act, hence no retrenchment is made. Since the present matter is not a case of retrenchment, Section 25-F of the Act is not attracted.

15. In order to buttress his argument, learned counsel for the respondent placed reliance on Judgments of the Hon’ble Supreme Court in Nand Lal v. Housing & Urban Development Corporation Ltd. (HUDCO), 2006 SCC OnLine Del 1225; Escorts Ltd. v. Presiding Officer, (1997) 11 SCC 521; MD, Karnataka Handloom Development Corpn. Ltd. v. Sri Mahadeva Laxman Raval, (2006) 13 SCC 15.

LEGAL ANALYSIS

16. Heard arguments advanced by the learned counsel for the parties and perused the documents placed on record and judgments relied upon by the parties.

17. In the present matter, it is an undisputed fact that petitioner was employed as a casual worker on daily wage basis in respondent organisation in the year 1989 wherein his tenure was periodically extended for 3/6 months. He went to serve the respondent organisation for more than 2 years till 22.10.1991. It is the case of the petitioner/workman that his service was illegally terminated by the respondent w.e.f 22.10.1991.

18. The main issue to be decided in the present matter is whether the alleged termination of the petitioner falls under the exception of ‘retrenchment’ as provided in Section 2 (oo) (bb) of the Act.

19. At this juncture, it is important to examine the legislative history of the Section 2(oo)(bb) of the Act. Section 2(oo)(bb) was introduced into the Act, by way of an amendment in the year 1984. Section 2(oo) of the Act, as it stands prior to the amendment, reads, inter alia, as follows:

22. The Hon’ble Supreme Court in S.M Nilajakar (Supra), further explained the meaning of the word ‘retrenchment’ in view of the newly added Section 2(oo)(bb) of the Act. The relevant portion of the above-mentioned judgment of the Hon’ble Supreme Court, reads, inter alia, as follows: “12. 'Retrenchment' in its ordinary connotation is discharge of labour as surplus though the business or work itself is continued. It is well-settled by a catena of decisions that labour laws being beneficial pieces of legislation are to be interpreted in favour of the beneficiaries in case of doubt or where it is possible to take two views of a provision. It is also well-settled that the Parliament has employed the expression "the termination by the employer of the service of a workman for any reason whatsoever" while defining the term "retrenchment", which is suggestive of the legislative intent to assign the term 'retrenchment' a meaning wider than what it is understood to have in common parlance. There are four exceptions carved out of the artificially extended meaning of the term 'retrenchment', and therefore, termination of service of a workman so long as it is attributable to the act of the employer would fall within the meaning of 'retrenchment' de hors the reason for termination. To be excepted from within the meaning of 'retrenchment' the termination of service must fall within one of the four excepted categories. A termination of service which does not fall within the categories (a), (b), (bb) and (c) would fall within the meaning of 'retrenchment'.

13. The termination of service of a workman engaged in a scheme or project may not amount to retrenchment within the meaning of Sub-clause (bb) subject to the following conditions being satisfied:-

(i) that the workman was employed in a project or scheme of temporary duration;

(ii) the employment was on a contract, and not as a daily-wager simplicitor, which provided inter alia that the employment shall come to an end on the expiry of the scheme or project;

(iii) the employment came to an end simultaneously with the termination of the scheme or project and consistently with the terms of the contract.

(iv) the workman ought to have been apprised or made aware of the abovesaid terms by the employer at the commencement of employment.

14. The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a scheme or project which was to last only for a particular length of time or upto to occurrence of some event, and therefore, the workman ought to know that his employment was short-lived. The contract of employment consciously entered into by the workman with the employer would result in a notice to the workman on the date of the commencement of the employment itself that his employment was short-lived and as per the terms of the contract the same was liable to termination on the expiry of the contract and the scheme or project coming to an end. The workman may not therefore complaint that by the act of employer his employment was coming to an abrupt termination. To exclude the termination of a scheme or project employee from the definition of retrenchment it is for the employer to prove the abovesaid ingredients so as to attract the applicability of Sub-clause (bb) abovesaid……..”

23. Hence as per the law laid down by the Hon’ble Supreme Court in S.M Nilajakar (Supra), the following principles can be deduced:

(i) The legislative intent is to assign the term 'retrenchment' a wider meaning than what it is understood to have in common parlance.

(ii) There are four exceptions carved out of the term 'retrenchment', and therefore, termination of service of a workman so long as it is attributable to the act of the employer would fall within the meaning of 'retrenchment' de hors the reason for termination.

(iii) A termination of service which does not fall within the categories (a), (b), (bb) and (c) would fall within the meaning of 'retrenchment'.

(iv) The termination of service of a workman engaged in a scheme or project may not amount to retrenchment within the meaning of Sub-clause (bb) subject to the following conditions being satisfied:-

(i) that the workman was employed in a project or scheme of temporary duration;

(ii) the employment was on a contract, and not as a daily-wager simplicitor, and

(iii) the employment came to an end simultaneously with the termination of the scheme or project and consistently with the terms of the contract.

(iv) the workman ought to have been apprised or made aware of the abovesaid terms by the employer at the commencement of employment.

(v) The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a scheme or project which was to last only for a particular length of time or upto to occurrence of some event, and therefore, the workman ought to know that his employment was short-lived.

(vi) To exclude the termination of a scheme or project employee from the definition of retrenchment it is for the employer to prove the abovesaid ingredients so as to attract the applicability of Sub-clause (bb) abovesaid.

24. As per the perusal of the record of the present case, this Court notes the following facts:

(i) The petitioner/workman was initially appointed as a

(ii) Subsequently vide office order No. RT/285 of 1989 dated 30.11.1989, he has been transferred to Hindi Section/Corporate office on the existing terms and conditions against the vacancy caused by the transfer of Mr. Ram Raj, Messenger to project office as Messenger cum Driver.

(iii) Vide letter dated 06.03.1990, his tenure was extended for a further period of 3 months w.e.f 02.02.1990. Thereafter his service was extended from time to time. Last extension was vide Office order No. RC-35 of 1991 dated 07.05.1991. Vide the said office Order, his tenure was extended for 6 months from 01.05.1991 or till the posting of a regular SC/ST Candidates whichever is earlier. Hence his tenure was till 31.10.1991 unless a SC/ST candidates appointed against the said post.

(iv) It is the case of the petitioner/workman that he was not allowed to resume his job w.e.f 22.10.1991, i.e, even prior to the expiry of the term of his tenure, i.e, 31.10.1991.

(v) It is also an admitted position that the termination of the petitioner was not by way of punishment. Further no compensation whatsoever has been paid to the petitioner/workman.

(vi) The respondent organisation in its written statement had taken a stand that the petitioner/workman was engaged by the respondent organisation for a „certain project‟ for a specific period of time and his service was automatically terminated on the expiry of the said period of time. The burden of proving the said fact was on the respondent, however, the respondent miserably failed to prove the same. (vii)MW-1 in his evidence stated that the petitioner was appointed against a reserved category post, quota post for SC/ST and the respondent organisation could not have appointed any person permanently against the said post. This stand is contrary to the stand taken by the respondent in its written statement.

(viii) During his cross examination, MW-1 admitted that the petitioner was not appointed for any particular project. He also admitted that in the respondent organisation there are other messengers working on casual basis.

(ix) The petitioner/workman placed on record recommendation letter dated 23.05.1991 (Exhibit WW1/1) issued by Mr. M.L Tiwari, Dy.GM (SW)/UT whereby Mr. M.L. Tiwari recommended the name of the petitioner to the higher authorities for giving grade rate of pay in place of daily wages due to his „continuous and satisfactory performance‟ in the said post for over 15 months. This shows that the performance of the petitioner was satisfactory.

25. The learned Labour Court, while passing the impugned Award dated 09.08.2002, proceeded on the erroneous basis that there exists a fixed term of contract between the parties and the petitioner was engaged for a specific period for specific work. After examining the facts of the present case in the light of the law laid down by the Hon’ble Supreme Court in S.M Nilajakar (Supra), this Court is of the considered view that the petitioner’s appointment was not for any particular project. The petitioner was appointed as a daily wager for a short term initially. However, the said tenure was extended from time to time without any break in service. The petitioner had a continuous service of more than 2 years with the respondent organisation. Further his service was terminated on 22.10.1991 even before the expiry of his term of employment, i.e. 31.10.1991. No charge sheet/show cause has been issued against the petitioner. No retrenchment compensation has been given to the petitioner. The principles of natural justice have not been complied with. Hence in these circumstances, the learned Labour Court erred in holding that the petitioner’s case falls within the exception as carved out under Section 2(oo)(bb) of the Act.

26. In view of the aforesaid discussion, this Court is of the considered view that the termination of the petitioner by the respondent organisation does not fall within the exception carved out under Section 2(oo)(bb) of the Act and it amounts to ‘retrenchment’ under the Act.

27. The learned counsel for the petitioner vehemently argued that the termination of the petitioner’s service was in violation of the mandatory provisions of Section 25F of the Act. Section

25 F of the Act, reads, inter alia, as follows: "25.F Conditions precedent to retrenchment of workmen.-- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until- (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay [for every completed year of continuous service] or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette]."

28. That as held herein above, the termination of the service of the petitioner by the respondent amounts to ‘retrenchment’ for the purpose of the Act. The petitioner completed continuous period of more than two years with the respondent organisation. The service of the petitioner was terminated without paying him any notice/retrenchment compensation as envisaged under Section 25F of the Act. Hence this Court is of the considered view that the termination of the petitioner was in violation of section 25 F of the Act.

29. It is well settled principle of law that even if violation of Section 25 F of the Act is established, automatic reinstatement cannot be granted. Hon’ble Supreme Court reiterated this legal proposition recently in the judgment dated 02.09.2021 passed in Civil Appeal No. 4483/2010 titled as Ranbir Singh Vs Executive Engineer, PWD, which reads, inter alia, as follows:

6. In the light of the state of the law, which we take note of, we notice certain facts which are not in dispute. This is a case where it is found that, though the appellant had worked for 240 days, appellant‟s service was terminated, violating the mandatory provisions of Section 25F of the Act. The authority involved in this case, apparently, is a public authority. At the same time, it is common case that the appellant was a daily wager and the appellant was not a permanent employee. It is relevant to note that, in the award answering Issue No.1, which was, whether the termination of the appellant‟s service was justified and in order, and if not, what was the amount of back wages he was entitled to, it was found, inter alia, that the appellant could not adduce convincing evidence to establish retention of junior workers. There is no finding of unfair trade practice, as such. In such circumstances, we think that the principle, which is enunciated by this Court, in the decision, which is referred to in Raj Kumar (supra), which we have referred to, would be more appropriate to follow. In other words, we find that reinstatement cannot be automatic, and the transgression of Section 25F being established, suitable compensation would be the appropriate remedy.”

30. In the present case, the petitioner was working with the respondent for a period of 2 years as daily wager. His services were terminated approximately 3 decades back. There is no convincing evidence to prove that the respondent resorted to unfair trade practices or any of the petitioner’s juniors were retained in service. There is no allegation of victimisation against the respondent. Hence considering the overall facts and circumstances of the present case, this Court is of the considered view that the ends of justice will meet by reimbursing the petitioner with an adequate compensation. The petitioner worked with respondent for more than 2 years as daily wager and hence in the present case, in my opinion, the petitioner can be awarded a compensation of Rs.1,00,000/- in lieu of reinstatement.

31. In view of the detailed discussion herein above, the present writ petition is allowed, and the impugned Award is hereby set aside. The respondent is directed to pay Rs.1,00,000/- to the petitioner as compensation in lieu of reinstatement. Considering the fact that the termination is effected in the year 1991 and considerable time has already been elapsed since then, the respondent is directed to make the payment of Rs.1.00,000/- to the petitioner within 8 weeks of the receipt of this order failing which the compensation will carry 6% interest from the date of termination till the date of realisation. No order as to cost.

32. Registry is directed to send this Judgement to the Chairman & Managing Director of the Respondent for expeditious compliance.

GAURANG KANTH, J. OCTOBER 11, 2022