2006 (11) TMI 544 - SC - Indian Laws

Whether the action of the management of State Bank of India Region III the Mall Kanpur in relation to their Jhanstongang Branch Allahabad in terminating the services of Shri Mahatma Mishra Ex-messenger with effect from 4.9.1982 and not considering him for further employment as provided under section 25-H of the Industrial Disputes Act is justified? Held that - Although in a given case the Industrial Tribunal or the Labour Court may grant appropriate relief its discretion should be exercised judiciously. An employee after termination of his services cannot get a benefit to which he was not entitled to if he remained in service. It is one thing to say that services of a workman was terminated in violation of mandatory provisions of law but it is another thing to say that relief of reinstatement in service with full backwages would be granted automatically. Even in a case where service of an employee is terminated in violation of Section 25-F of the Industrial Disputes Act he would not be entitled to grant of a permanent status. Regularisation does not mean permanence. The impugned judgments cannot be sustained which are set aside accordingly. The respondent however has obtained idle wages for a long time. Although he was not entitled thereto keeping in view the fact and circumstances of this case we do not direct refund of the said amount. The appeal is allowed.

Issues Involved:
1. Legality of termination of services.
2. Applicability of Section 25-H of the Industrial Disputes Act.
3. Entitlement to permanent status and reinstatement.
4. Award of back wages.
5. Unfair labour practice.
6. Judicial discretion in granting relief.

Detailed Analysis:

1. Legality of Termination of Services:
The respondent, appointed on a temporary basis for 88 days in 1982, had his services terminated. The Labour Court opined that the termination was illegal due to the absence of a written notice and deemed it an unfair labour practice. However, the Supreme Court found that the termination was in accordance with the contract of employment and did not require compliance with Section 6-N of the U.P. Industrial Disputes Act. Thus, the termination was not illegal.

2. Applicability of Section 25-H of the Industrial Disputes Act:
The Labour Court and the High Court erroneously applied Section 25-H of the Industrial Disputes Act, which pertains to re-employment of retrenched workmen. The Supreme Court clarified that this section was not applicable as the respondent's appointment was temporary and for a fixed period. The respondent's appointment did not meet the criteria for Section 25-H to be invoked.

3. Entitlement to Permanent Status and Reinstatement:
The Labour Court suggested that the respondent could have acquired permanent status had he continued beyond 88 days. The High Court, while denying permanent status, still ordered reinstatement. The Supreme Court emphasized that the respondent, having worked only for 88 days, was not entitled to permanent status or reinstatement. It was noted that reinstatement can only be directed if the termination is illegal, which was not the case here.

4. Award of Back Wages:
The Labour Court awarded full back wages, which the High Court modified to exclude further back wages while maintaining reinstatement. The Supreme Court found this approach flawed, as the respondent was not entitled to any relief, including back wages, due to the legality of the termination. The Court reiterated that back wages are not automatically granted and must be judiciously considered.

5. Unfair Labour Practice:
The Labour Court concluded that the termination constituted unfair labour practice. The Supreme Court disagreed, stating that unfair labour practice requires evidence of continuous employment with artificial breaks to deprive permanent status. The respondent's case did not meet this criterion, as his employment was not continuous and was for a fixed term. The Court cited precedents, including the case of Regional Manager, State Bank of India v. Raja Ram, to support this view.

6. Judicial Discretion in Granting Relief:
The Supreme Court highlighted that judicial discretion under Section 11-A of the Industrial Disputes Act must be exercised judiciously. Relief such as reinstatement with back wages should not be granted automatically and must consider the legality of termination. The Court referenced the judgment in Secretary, State of Karnataka and Others v. Umadevi (3) and Others, emphasizing that regularization does not imply permanence and should not be granted without following due process.

Conclusion:
The Supreme Court set aside the judgments of the Labour Court and the High Court, finding that the respondent was not entitled to reinstatement or back wages. The Court noted that while the respondent had received idle wages for a long time, no refund was directed. The appeal was allowed, and no costs were imposed.

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