DENIAL OF EMPLOYMENT AMOUNTS TO RETRENCHMENT

[Mr. M. GOVINDARAJAN]

Chapter V A of the Industrial Disputes Act, 1947 deals with lay-off and retrenchment. In case of lay off and retrenchment employee is eligible to get compensation under Chapter V A. Sec. 25C deals with the right of workmen laid off for compensation. Sec. 25 F deals with the conditions precedent to retrenchment of workmen. Sec. 25F provides that 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 15 days average pay for every completed year of continuous service or any part thereof in excess of 6 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.

The issue to be discussed in this article whether denial of employment by the employer to the employees amounts to retrenchment with reference to decided case law as discussed in the ensuing paras.

In ‘T. Selvan V. Labour Court, Coimbatore and another’ – 2012-III-LLJ-443 (Mad) the management employed 300 workers as apprentices.  The said workers were given promise that they will be taken in the regular employment after their training was over.  The company became sick and the matter was referred to BIFR for framing the rehabilitation scheme.  No production took place from February 1998.  The regular workers as well as the trainees were stopped from working on suspension of operation of the machineries.  On restoration of the position it was reported that the trainees were not allowed to work or denied employment. 

An industrial dispute was raised by the trade union under Section 2(k) of the Industrial Dispute Act representing 233 apprentices. Before the Conciliation Officer the management took the plea that due to the suspension of operation of the machineries, apprentice trainees were affected. Even the permanent employees were given no work on the principle of ‘no work no pay’. After normalization the apprentice trainees never report for training.  Therefore the question of terminating of their services does not arise and they themselves have stopped from work. The workers contended that it was wrong on the part of the management to state that they were absent.  From 07.05.1998 they have not been given any work   They were orally informed that their services were no longer required.  When they asked for written letter to that effect, the management did not give any such letter to any of the workers and it was wrong to contend that they were trainee apprentices.

Since he could not bring mediation the Conciliation Officer gave a failure report.  The case was referred to the Labour Court.  The claim statement was filed by the workers before the Labour Court.   The Management filed counter affidavit before the Labour Court in which they contended the following:

• The workers did not come to work for 24 days in a month and their work was unsatisfactory;
• During the period of suspension, due to financial crisis no training was permissible;
• After 7.05.1998 they did not come to work;
• The proceedings before BIFR were still continuing and the management started to give work to the permanent workers and even the trainees came to work;
• It is only because they refused to come to work, the situation arose and hence there was no case for any non employment;
• Subsequent to their not coming to work, they have indulged in number of illegal and criminal activities including obstructing the willing apprentices from coming into mills, which led to filing of a criminal case before the police;

The Labour Court held that not only the workers are not terminated from service, but it is only because the workmen’s conduct in not coming to work despite notices were issued to them and further held that the workers are not entitled for any relief.

Against this order the present writ petitions were filed before the High Court.  The workers contended that since they have joined the Bharatiya Mazdoor Sangam, they were victimized.  They have sent letters through the trade union on 18.06.1998, 05.04.1999 and 10.05.1999 requesting the management to allow the workers to report for work.  But the management selectively sent letters to few workers to report for work.  The workers through their trade union also undertook hunger fast demanding job for all the terminated workers.  taxmanagementindia.com

The question framed by the Court is whether all the workers in these writ petitions were addressed by the management to come for duty after the suspension of operation. The Court perused the documents and found that there was no such communication sent to the present petitioners when the situation has been made and therefore the workmen can come back for their alleged work. The termination of the workmen as evidenced under Section 2(s) of the Industrial Disputes Act includes even the apprentices. 

The Court further held that admittedly the management is covered by the provisions of Chapter V A of the Ac in which case they could lay off or retrenchment or closure, which requires prior permission of the appropriate authority constituted under the State Government.  In this case, the suspension of operation was followed by the rehabilitation of BIFR scheme and the operation was under suspension.   Once the situation has arisen the management ought to have informed each of the workers that there is likelihood of resumption of work and they should report for work.  But the management only sent to the workers selectively.  Subsequent to the denial of employment, there were certain activities, which are not likely to the management, cannot be a ground to deny the relief to the workmen, though such things can have some bearing on the nature of relief to be given. 

On account of suspension of operation, the petitioners have not been given training and thereafter there was no direction to the workers to resume duty or for apprentice of in what capacity it has to be presumed.  In fact, there was a termination in this case, not preceded by any notice for any reasonable cause or for any punishment given for any kind of misconduct. Even all other events listed out came subsequent to the non employment and for which there was no specific overt act attributed against any of the workers involved in the criminal activities.  The Court presumed that on 07.05.1998 the workers were denied employment and it will amount to retrenchment and that they are eligible for appropriate retrenchment compensation under Section 25 F of the Industrial Disputes Act. The Court ordered that each of the workers covered by the industrial dispute are entitled to six months waves, considered that they have worked for 3 years as apprentices approximately.