Jinnatben Amadbhai Bhatti vs Bagasara Nagar Palika

Mr. K.M. Thaker, J.(Oral)—Heard Mr. Mishra, learned advocate for the claimants - workmen and Mr. Parikh, learned advocate for the employer - Nagarpalika.

This group of petitions is, in substance, cross petitions inasmuch as the workmen and the employer Nagarpalika have filed their respective petitions against same awards.

In Special Civil Application Nos.257/2012, 583/2012 and 795/2012, the claimants - workmen have challenged award dated 7.9.2011 passed by the learned Labour Court, Amreli in Reference (LCA) No. 9 of 2009 and the award dated 6.9.2011 passed by the learned Labour Court at Amreli in Reference (LCA) No. 7 of 2009 and the award dated 5.9.2011 passed by the learned Labour Court at Amreli in Reference (LCA) No. 6 of 2009 whereby the learned Labour Court directed the employer Nagarpalika to pay Rs.50,000/as lump sum compensation in lieu of the directions to reinstate the workmen in the said three reference cases. The claimants are aggrieved by the decision of the learned Labour Court whereby the claim for reinstatement is rejecte by the learned Labour Court.

3.1. The said three awards are also challenged by the employer Nagarpalika in Special Civil Application Nos.6507/2012, 6505/2012 and 6506/2012 respectively. The employer Nagarpalika is aggrieved by the order directing the Nagarpalika to pay Rs.50,000/- towards lump sum compensation.

So far as the factual background involved in this group of petitions is concerned, it has emerged from the record and submissions by learned advocates for the claimants and the Nagarpalika and from the awards that the three claimants concerned in these cases were engaged on daily wage basis as �Tedagar� in Kindergarten (Balmandir) run by Bagasara Nagarpalika. It appears that somewhere in 2001 policy decision to close down the said Kindergarten (Balmandir) was taken and the Collector issued order closing down the said Balmandir. Consequently, on closure of the said Balmandir, three claimants, who were engaged on daily wage basis, raised industrial dispute.

4.1. The appropriate Government referred the dispute raised by the three claimants for adjudication to the learned Labour Court at Amreli. The said dispute were registered as Reference (LCA) No. 6 of 2009, 7 of 2009 and 9 of 2009.

4.2. Before the learned Labour Court, there claimants filed their respective statements of claim. The statements of claim filed by the claimants were on almost similar lines and all three claimants had made similar claims and allegations in their respective statements of claim. The claimants alleged that they were working as Tedagar in Balmandir and at the relevant time, their salary was Rs.110 per day. It was claimed that they were working since June 2003 as Tedagar in the Balmandir run by the Nagarpalika and suddenly in may 2009, the Nagarpalika served notice and discontinued their service with the excuse that the Balmandir were to be closed down. The claimants also alleged that their service were discontinued without following procedure prescribed by law and the Nagarpalika did not pay compensation despite the fact that they had worked continuously for more than 10 years in the Balmandir run by the Nagarpalika. It was also alleged that their services were not terminated for any misconduct but they came to be terminated without any fault on their part, the Nagarpalika discontinued their service without displaying seniority list and/or without conducting domestic inquiry and without payment of notice pay or compensation.

4.3. The Nagarpalika opposed the reference cases and allegations by the claimants. The Nagarpalika claimed that the claimants had not approached the learned Labour Court with clean hands, inasmuch as they had suppressed the fact that before raising industrial dispute and before the orders of reference were passed, the claimants had approached the learned civil court, however, since they failed in their application for interim relief, they raised industrial dispute and approached the learned Labour Court. The Nagarpalika also claimed that since policy decision to close down the Balmandir was taken by the office of Collector and the Collector had passed the orders to close down the Balmandir, the said three claimants were relieved w.e.f. 1.5.2009. It was also claimed that since the claimants had approached civil court, the claimants had to be continued in service and that therefore, they were temporarily engaged in the octroi department of the Nagarpalika and subsequently, they were relieved after the said case/applications for stay were rejecte.

4.4. After the stage of pleadings were concluded, the claimants and the Nagarpalika placed their respective evidence on record before the learned Labour Court. Upon conclusion of the stage of evidence, the learned tribunal heard rival contentions and after taking into account evidence available on record and the submissions by the learned counsel for the claimants and the Nagarpalika, the court reached to the conclusion that the Nagarpalika had terminated the services of the claimants without following procedure prescribed by Section 25F and since the service of the concerned claimants were terminated without payment of retrenchment compensation, the Nagarpalika should be directed to reinstate the concerned workmen, however, having regard to the fact that the Balmandir have been closed down and two claimants had reached 50 years of age whereas the third claimant was 42 years old, the relief should be appropriately modified and instead of granting reinstatement, appropriate compensation should be awarded. The learned Labour Court, having regard to such conclusion, passed the impugned awards and directed the Nagarpalika to pay Rs.50,000/as lump sum compensation in lieu of reinstatement.

4.5. As mentioned earlier, both the Nagarpalika as well as the claimants are aggrieved by the said direction. Hence, present petitions.

Mr. Mishra, learned counsel for the claimants, submitted that the workmen had worked for almost 15 to 20 years with the Nagarpalika, i.e. initially in the Balmandir and subsequently, in octroi department, and their services came to be terminated without following procedure prescribed by law. He submitted that the fact that the claimants were terminated in violation of Section 25F of the Act is established and even the learned Labour Court has recorded finding of fact that the services of the claimants are terminated in violation of Section 25F of the Act. He further submitted that in view of the fact that the services of the claimants came to be terminated without following procedure prescribed by law, the learned Labour Court ought to have directed the Nagarpalika to reinstate the workmen and the direction to pay compensation and that too only Rs.50,000/is not justified and the impugned awards may be set aside and the Nagarpalika may be directed to reinstate the claimants.

Mr. Parikh, learned counsel for the Nagarpalika, submitted that the claimants came to be discontinued in view of the policy decision to close down the Balmandir. He submitted that the Balmandir have been closed down and the work which the claimants performed is now not available. In view of the said hard reality, the decision by the learned Labour Court of not passing the direction to reinstate the claimants cannot be faulted. He further submitted that actually, even the direction to pay lump sum compensation is not justified in view of the fact that the concerned claimants were working on daily wage basis and that they were not regularly selected employees and that therefore, they had no right over the post or to continue in service and that therefore, any direction either to reinstate the claimants or even to pay compensation could not have been passed. He submitted that the concerned persons were appointed without following procedure for selection and recruitment and the allegation that the said claimants were working with the Nagarpalika in the Balmandir since 1990 and/or that at the relevant time, they had worked for almost 15 to 20 years are incorrect. He submitted that actually, the learned Labour Court has committed error in holding that the Nagarpalika committed breach of Section 25F of the Act when the service of the claimants were discontinued. He submitted that the learned Labour Court also committed error in awarding lump sum compensation.

6.1. At this stage, it is relevant to mention that during the hearing of present petitions, Mr. Parikh, learned counsel, on the basis of the instructions by the competent officer of the Nagarpalika submitted and stated that actually, the Nagarpalika had paid compensation to the claimants at the time when their services were discontinued and the amount payable towards compensation was paid directly in the bank accounts of the claimants. It is also necessary to mention at this stage that Mr. Mishra, learned counsel for the claimants, however, vehemently disputed and denied the said submission and statement by Mr. Parikh, learned counsel for the Nagarpalika. The learned counsel for the Nagarpalika could not show any evidence in support of his claim. There is nothing on record to demonstrate that the compensation was paid to the claimants.

I have considered the submissions by learned counsel for the claimants and learned counsel for the Nagarpalika. I have also considered the impugned awards and the material on record.

It is not in dispute that the concerned claimants were appointed as and they were working as daily wagers. It is also not in displute that the claimants were originally engaged/appointed on daily wage basis as Tedagar and they worked as such in the Balmandir run by the Nagarpalika. Their initial appointment was in the Balmandir and until the Balmandir came to be closed down in May, 2003 and after the government''s policy decision and pursuant to the order by the Collector, they were engaged in octroi department and they continued to work with the octroi department. These facts are undisputed.

8.1. Of course, there is dispute with regard to the total length of service of each of the three claimants, inasmuch as learned counsel for the claimants would contend that the claimants have worked for 15 to 20 years whereas the Nagarpalika claims that they worked with the Balmandir only for 6 years.

8.2. It is also not in dispute that during Diwali period and Summer period, the Balmandir did not work and that therefore, the claimants were not required/were not called for work during the period of vacation.

8.3. It is also not in dispute that when the claimants were engaged, any procedure prescribed by applicable rules was not followed nor their names were forwarded nor sponsored by the employment exchange.

8.4. It is also not in dispute that the claimants had at the relevant time, raised demand for regularisation in service and the said demand case was rejecte by the learned Tribunal. Thus, the claimants'' demand for regularisation in service stood rejecte. The said aspect also establishes the fact that the concerned claimants were not regular and permanent employees, but they were working on daily wage basis.

8.5. It is also not in dispute that the policy decision to close down the Balmandir was taken in 2001, however, the said decision was implemented but for some administrative reasons, it was given effect in June 2003 and consequently, the service of the claimants came to be discontinued in May 2003.

8.6. The learned Labour Court has taken note of and also accepted the fact that the Balmandir have been closed down. The learned Labour Court has also taken note of the fact and accepted that the work for which the claimants were engaged came to an end with the closure of Balmandir and that the service of the claimants were discontinued on account of closure of Balmandir.

Another important aspect which emerges from the award is that the learned Labour Court has taken note of the fact that after the Balmandir were closed down, the Nagarpalika for some time engaged/continued the claimants in octroi department and subsequently, the Nagarpalika relieved the claimants from said octroi department in 2009. Thus, according to the observations and findings recorded by the learned Labour Court in the impugned awards, the concerned claimants appear to have worked for about 5 to 6 years in the octroi department and at the time when their services were discontinued and they were relieved, they were engaged in the octroi department.

9.1. In light of such facts, the learned counsel for the claimants contended that the workmen had worked for more than 15 to 20 years. So as to support the said contention, the claimants club the services of the claimants in the Balmandir as well as in the octroi department. On the other hand, learned counsel for the Nagarpalika would contend that the claimants are not justified in clubbing their service with the Balmandir with their engagement in the octroi department. The learned counsel for the Nagarpalika would contend that since at the time of closure of the Balmandir, certain court matters were pending and certain orders restraining the corporation from terminating the services of the claimants were in operation, the Nagarpalika had to continue the concerned workmen and that therefore, for some period, they were engaged in octroi department and subsequently, when the cases/restraint orders came to be vacated, the claimants were relieved from service and that therefore, the service with the Balmandir cannot be and should not be clubbed with the service in the octroi department.

Reverting back to the discussion by the learned Labour Court in the awards, it is necessary to note and mention that though the learned Labour Court has taken into account the fact that on closure of the Balmandir the concerned claimants were relieved from their services and for sometime they were engaged in the octroi department, the learned Labour Court does not appear to have taken into account the office orders passed by the Nagarpalika engaging the workmen in octroi department and consequently, the learned Labour Court does not appear to have taken into account as to whether the claimants were engaged as fresh employees in the octroi department or they were merely transferred from Balmandir to octroi department and their services were considered continuous. Without taking into account the orders under which the claimants were engaged in the octroi department and the total length of services with the octroi department, the learned Labour Court could not have reached to the conclusion that before the services of the claimants came to be discontinued, they had worked for 15 to 20 years. If the hiatus in their service with the Nagarpalika i.e. the gap or break in service between the appointment in the Balmandir and the appointment in the octroi department is to be taken as separate appointments, then, the observations by the learned Labour Court that the concerned workmen had worked for about 20 years would be without any basis and contrary to the facts of the case as well as record. The said observations appear to have been made without taking into account the appointment orders, if any, or the terms and conditions and the appointments of the concerned claimants in the octroi department. In light of the facts of the case, the decision of the learned Labour Court to club the appointment in Balmandir with the appointment in octroi department does not withstand the test of legality and propriety.

Without examining the terms and conditions of the claimants engagement in the octroi department and without examining the issue as to whether closure was effected and contemplated in accordance with law i.e. after complying prescribed procedure and without recording any findings on that count, the decision of the learned Labour Court to club the appointment in Balmandir with the appointment in octroi department does not withstand the test of legality and propriety. On this count, it is also relevant to note that the learned Labour Court has failed to examine as to whether there is cogent and satisfactory evidence to establish that prescribed procedure for closure of establishment was followed. The learned Labour Court ought to have considered that only if the closure of the establishment was effected in accordance with prescribed procedure then, and only then, legal and jural relationship of employer and employee would come to an end in accordance with law and in that event subsequent engagement of concerned claimants in the octroi department can be, subject to terms of appointment (i.e. conditions of appointment mentioned in appointment letter), considered fresh and may not be clubbed with past service. If, on the other hand, the relationship of employer and employee is not legally discontinued and if it is not severed in accordance with law and/or if special circumstances and facts are proved which give out/indicate continuity of service and/or if the terms of appointment in octroi department so prescribe, then subsequent appointment can be clubbed with the service prior to the closure of the establishment. Differently put, clubbing of the appointment after closure of the establishment with past service i.e. service prior to closure is justified or not depends on the facts of each case and on the evidence available on record. In present cases, it appears that the parties did not lead evidence and did not place relevant facts on record.

11.1. Unfortunately above mentioned aspects are neither discussed nor dealt with by the learned Labour Court and any conclusion or findings of fact on this count are not recorded by the learned Labour Court.

11.2. It is pertinent that without considering relevant facts and evidence learned Labour Court assumed that the service of the claimants prior to closure is continuous and without recording findings as to whether closure of the establishment was illegal and without examining terms of subsequent appointment and without examining as to whether the Nagarpalika had to continue the claimants in the octroi department (after the closure of the Balmandir) on account of pending cases and stay orders passed by the Court and if yes, then, whether the claimants were relieved on conclusion of the cases pending in the Court and whether the action of relieving the claimants was effected on vacation of the stay order and whether it can be considered as illegal retrenchment, the learned Labour Court passed impugned awards.

For the aforesaid reasons and also since any findings with regard to such factual aspects are not recorded by the learned Labour Court, the awards cannot be sustained and the proceedings deserve to be remanded to the learned Labour Court for fresh consideration and fresh decision.

Therefore, following order is passed:

[a] The impugned awards passed in Reference (LCA) No. 6 of 2009, 7 of 2009 and 9 of 2009 are, for the aforesaid reasons, set aside and the reference cases are remanded to the learned Labour Court for fresh consideration.

[b] The learned Labour Court will examine the relevant factual aspects, more particularly the provision under Section 25FFF and Section 25F of the Industrial Disputes Act and the Nagarpalika''s claim that the amount payable towards compensation was deposited directly in the account of the concerned claimants and that therefore, there is no base or justification to hold that the termination is effected in violation of statutory provision.

[c] The learned Labour Court shall also examine the case in light of the claim that the services of the claimants were discontinued on account of closure and that therefore, the subsequent engagement of the claimants cannot be clubbed with the previous appointment of the claimants in the Balmandir.

[d] The learned Labour Court will also examine the Nagarpalika''s claim that after closure of the Balmandir, the claimants were engaged in octroi department since certain cases were pending in the court and stay order against the Nagarpalika was operating.

[e] After taking into account such and other relevant aspects, the learned Labour Court will pass fresh order recording its findings of fact and reasons for its conclusion. The learned Labour Court will pass appropriate fresh awards without being influenced by the previous orders.

[f] It is clarified that this Court has not expressed any opinion on the merits as regards the relevant factual aspects and it would be for the learned Labour Court to decide all factual aspects in light of the evidence which may be placed on record by the contesting parties.

[g] In view of the fact that the claimants are out of employment since 2009 and also having regard to the fact that two claimants out of three claimants have already crossed 50 years of age, the learned Labour Court will hear and decide the reference cases as expeditiously as possible and preferably within six months from the date of receipt of certified copy of this order.

With aforesaid observations and directions, present petitions stand disposed of. Rule is made absolute to the aforesaid extent.

Petitions disposed of with observations and directions.