2014 (11) TMI 386 - HC - Indian Laws

Termination of employment - Non issuance of SCN, enquiry or without making the payment of retrenchment compensation - violation of the terms of Section 25-F of the Industrial Disputes Act, 1947 - Appellant was appointed on contractual basis - There was no break in his service and inspite of a policy of regularisation dated 23.01.2001, which provided that persons having 3 years of service were entitled to be regularised - whether the petitioners were only contractual employees in view of the agreement that they had entered into and the benefit of Section 25-F of the Act would not be applicable to them and whether the provisions of Section 2(oo)(bb) of the Act would be attracted in the facts and circumstances of the present case. Held that - services of the workman were terminated inspite of the fact that the workman had completed 240 days in the preceding year. The provisions of Section 2(oo)(bb) provides an exception to the retrenchment of the workman on account of non-renewal of the contract between the employee and the employer or on the expiry of such contract being terminated under stipulation in that behalf, as contained in the said contract of employment, which has been examined time and again by this Court. It is not the case of the respondent-Council that there was any break in the service and it was only that the workmen were working on contract basis and even the request for regularisation had been made for all contractual employees by the Council which was rejected by the State Government on 24.08.2001. Thus, it would be clear that even proposal for regularising the services of the contractual employees was subject matter of consideration and the workman having completed 240 days were, thus, entitled for the benefit of the protective umbrella of Section 25-F and the mandatory provisions as laid down under it had to be followed before dispensing with the services of the workmen. Appointments were made in violation of the appointment letter and requirements had not been complied with and in such circumstances, reinstatement was not justified. In the present case, as noticed above, the job of the Keyman does not exist, as per the provisions of the Municipal Act but the respondent-Council had employed the petitionersworkmen for a period between 4 years to 8 years and a contract agreement was got executed by them. Practice of unfair labour has been alleged in the petition and in the evidence wherein it has been stated that the agreements were got signed at the time of giving the salaries and the respondents had acted as war slave lords who had treated the workmen like slaves. The Sectional Officer has admitted in evidence that the job of Keyman is to regulate the flow of water through valves installed in pipes in particular areas daily and the job is of perennial nature. The job of the Keyman existed even after 31.02.2002. It has also been admitted that the workman was employed as per rules and the proceedings of Section 25-F have not been followed. One dominant factor which weighs with this Court is that admittedly, there is no post under the rules and therefore, relief of reinstatement, in such circumstances, cannot be granted. The workman was appointed at that point of time to overcome the exigency of the situation and the Municipal Council made an effort to get their services regularised but the Government declined the said request in the absence of any post and in such circumstances, it has been held that reinstatement cannot be directed. Accordingly, following the principles laid down by the Division Bench, a sum of ₹ 20,000/- is granted as compensation for each completed year and the workmen will be entitled to the compensation as per the table attached as Schedule A . Apart from the compensation, the workmen will also be entitled for cost of litigation to the tune of ₹ 20,000/- each, in view of the litigation which they have been fighting since their illegal termination on 31.03.2002 and since a period of more than one decade has passed by since then. The amount, as indicated, be paid to the workman within a period of 2 months from the date of receipt of a certified copy of this order, failing which, the same will carry interest @ 9% per annum, from the date of this order - Decided in favour of appellant.

Summary

Issues Involved:
1. Applicability of Section 2(oo)(bb) of the Industrial Disputes Act, 1947.
2. Entitlement of the workmen to relief under Section 25-F of the Act.
3. Allegations of unfair labour practices by the Municipal Council.
4. Determination of appropriate relief: reinstatement or compensation.

Issue-wise Detailed Analysis:

1. Applicability of Section 2(oo)(bb) of the Industrial Disputes Act, 1947:
The primary issue was whether the workmen were contractual employees under Section 2(oo)(bb) of the Industrial Disputes Act, 1947, which exempts certain terminations from being classified as retrenchment. The Labour Court had accepted the Municipal Council's argument that the workmen were on a contractual basis for a specific job and period, thereby not entitled to reinstatement. The agreements provided by the Municipal Council indicated that the workmen were employed on a year-to-year basis, which automatically expired after one year.

2. Entitlement of the Workmen to Relief under Section 25-F of the Act:
The workmen argued that their termination violated Section 25-F, which mandates notice and compensation before retrenchment. They claimed continuous employment from 1993 to 2002 without any breaks, and their termination without notice or compensation was illegal. The Labour Court failed to appreciate that the work was of a perennial nature, and the workmen had completed 240 days of continuous service, making them eligible for protection under Section 25-F.

3. Allegations of Unfair Labour Practices by the Municipal Council:
The workmen alleged that the Municipal Council resorted to unfair labour practices by engaging them on a contractual basis to avoid regularization. They claimed that the agreements were fabricated and signed under duress. The Labour Court did not adequately consider these allegations. The High Court noted that the job of a Keyman was of a perennial nature, and the workmen had been employed for several years, indicating an unfair labour practice to deprive them of regular employment status.

4. Determination of Appropriate Relief: Reinstatement or Compensation:
The High Court observed that although the workmen were entitled to relief under Section 25-F, reinstatement was not feasible due to the absence of a sanctioned post. The Court referred to precedents where compensation was awarded instead of reinstatement in cases of technical violations of Section 25-F. The Court decided to grant compensation of Rs. 20,000 for each completed year of service, along with Rs. 20,000 for litigation costs, to be paid within two months, failing which interest would accrue at 9% per annum.

Conclusion:
The High Court allowed the writ petitions, holding that the workmen were entitled to compensation due to the unfair labour practices and the perennial nature of their job. The Labour Court's reliance on Section 2(oo)(bb) was incorrect, and the workmen's termination without complying with Section 25-F was illegal. However, reinstatement was not granted due to the lack of a sanctioned post, and compensation was deemed the appropriate relief.