1969 (9) TMI 108 - SC - Indian Laws

Whether the order of reinstatement can be said to be improper as urged by counsel? Held that - The regional manager might well feel that if the respondent was capable of collecting evidence against the company he might in future collect perhaps evidence of a more dangerous and harmful nature. Obviously if he cannot repose confidence in the respondent if reinstated he cannot make any use of Ms services as a stenographer. In the circumstances we think that the tribunal ought not to have directed his reinstatement despite its conclusion that the termination of his services was wrongfully made but ought to have awarded suitable compensation instead. As to the suitable compensation considering the fact that the respondent had served the company only for a year and that it is not too difficult nowadays for competent stenographers to obtain suitable employment we think it fair to direct the company to pay to him compensation equivalent to one year s salary at the rate of 307 per month. Set aside the order of reinstatement passed by the tribunal and order the appellant-company to pay to the respondent compensation equivalent to twelve months salary at the rate of 307 per month with interest thereon at the rate of 6 per cent per annum from 17 July 1967 till payment

Summary

Issues:
1. Dispute over the nature of the respondent's appointment - probationer or permanent employee.
2. Allegations of termination being punitive rather than a simple termination.
3. Validity of the order of dismissal without holding an inquiry.
4. Tribunal's direction for reinstatement and payment of salary.
5. Company's appeal against the reinstatement order and argument for compensation instead.

Analysis:

1. The appellant-company appointed the respondent as a stenographer without issuing a formal letter of appointment initially. The company claimed the appointment was as a probationer for one year, while the respondent contended it was agreed to be a permanent position. The respondent argued that the company's claim of probation was an afterthought to justify termination. The respondent approached the Labour Commissioner for a formal appointment letter, leading to the issuance of the same later. The company terminated the respondent's services, citing no longer required. The tribunal found the company failed to prove probationary appointment and deemed the termination punitive rather than a simple dismissal.

2. The tribunal concluded that the respondent's termination was a dismissal, not a simple termination, as it was perceived as a punitive action without holding a proper inquiry. The tribunal directed reinstatement of the respondent and ordered payment of half his salary from the termination date until reinstatement. The respondent's evidence of being made to work on external matters without extra payment, and retaining copies of such work, influenced the tribunal's decision regarding the nature of the dismissal.

3. The company appealed the tribunal's order, contesting the reinstatement direction. The Supreme Court acknowledged that in cases of wrongful dismissal, reinstatement is the usual remedy. However, it highlighted exceptions where reinstatement may not be appropriate, such as loss of employer's confidence in a position of trust. The court considered the nature of the respondent's role as a stenographer involving confidential matters and the potential breach of trust due to retaining copies of external communications.

4. The court determined that reinstatement of the respondent was not expedient due to the loss of employer's trust and the confidential nature of the stenographer's role. Instead, the court ordered the company to pay compensation equivalent to one year's salary to the respondent. The decision was influenced by the respondent's short tenure, the small size of the company's establishment, and the sensitive nature of the stenographer's duties.

5. The court partially allowed the appeal, setting aside the reinstatement order and directing the company to pay compensation equal to twelve months' salary to the respondent with interest. Each party was ordered to bear their own costs, except for a nominal payment to the amicus curiae.