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Judgment
Bellie, J.—The order of the second respondent, the Presiding Officer, Second Additional Labour Court, Madras, in Industrial Dispute No.
442 of 1981 holding that the non-employment of the Writ Petitioner K.S. Ramarathinam is justified and his not entitled to any relief and
consequently dismissing the dispute raised is challenged in this writ petition.
The case of the writ petitioner is that he was employed as a general worker in the first respondent Company on a monthly pay of Rs. 425. He
questioned the management''s act of retrenching him and wanted reinstatement by filing Section 2-A petition before the Labour officer. Conciliation
attempts failed. He was senior most worker and he was retrenched, without any reasons and compensation. No proper notice has been given to
him. The requirement of law have not been complied with by the management before he was served with the termination order. Hence he is entitled
to be reinstated.
As against this the case of the first respondent-management company (for short ''management'') is that the management was non-productive and
incurring losses and therefore the Office was reorganised and rationalised and in that process the Petitioner had to be retrenched. The petitioner
was Assistant to the Technical Director and even the Technical Director''s post was later abolished. There was only one post in the category of
Assistant. The petitioner was offered compensation and he did not collect it. It was only after due adherance to the law the notice of termination
was served,.
The second respondent-Labour Court on consideration of the evidence adduced by both sides held that the petitioner was an Assistant to the
Technical Director. It further held that the requirements of law have been complied with by the management and there is nothing illegal in the
retrenchment. He therefore dismissed the dispute.
In this writ petition it is argued on behalf of the petitioner that the petitioner is a worker within the meaning of the Industrial Disputes Act and the
mandatory requirements of Section 25-F have not been complied with and hence the retrenchment is illegal. It is the definite case of the petitioner
that he was a general worker. According to the respondent he was. Assistant to the Technical Director. May be the petitioner was called an
Assistant but that does not necessarily mean that he is not a worker. As per the definition of ''workmen'' in Section 2(S), unless it is the
management''s case that the petitioner is employed mainly in a managerial or administrative capacity, he has to be taken to be a worker. The
management has not produced may document as to the actual nature of work of the petitioner. Hence if he is called an Assistant to Technical
Director he must be held to be a workmen.
The learned Counsel for the petitioner submits that no notice or payment in lieu of notice as per Section 25-F(a) and no retrenchment
Compensation as per Section 25-F(b) have been given. As per these provisions no workman employed in any industry who has been in continous
service for not less than one year under an: employer shall be retrenched by that employer until 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; and the workman has been paid, at the time of retrenchment, compensation which shall be equivalent of fifteen days''
average pay (for every completed year of continuous service) or any part thereof in excess of six months. The management has given Ex. W. 1
notice dated 21.5. 1981 to the petitioner purporting to terminate his service from an earlier date i.e., 7,5.1981. This is according to the
Management the termination notice. Certainly this cannot be taken as one month''s notice of termination. As regards payment of one month salary
in lieu of one month''s notice as an alternative no payment has been made. However the case of the Management is that there was already amount
due from the petitioner to the Management and that amount has been adjusted and hence it can be taken that one month salary in lieu of notice has
been paid. Whether there was an amount due from the petitioner to the Management that was sufficient for adjustment towards the payment of
One month salary is not free from doubt.-The Tribunal seems to state that the petitioner has in his evidence admitted that there was such an amount
due-. But on reading of the evidence it is found to be not so. Even otherwise we are of the view that even if there was any amount due from the
petitioner to the management as per the account of the Management still the management shall comply with the mandate of law by paying one
months'' salary in lieu of one month''s notice if no such notice has been given.
Then as regards the petitioner''s case that he has not been paid retrenchment compensation, admittedly the petitioner has been in continuous
service for more than three years and that being the case he must be paid retrenchment compensation which is equivalent to 15 days average pay
per year for three years. His salary is admitted by Rs. 425 per mensem. Therefore as retrenchment compensation he must be paid Rs. 425/2 x 3 =
637.50. In this respect also the case of the Management is that his amount has been adjusted towards the amount due from the petitioner to the
management. As regards this too there is no admitted amount to such an extent. Even otherwise as in the case of amount payable in lieu of notice,
as discussed above, the management is bound to pay retrenchment compensation even if there is any amount due from the petitioner to the
Management. A reading of Section 25-F(a) and (b) clearly shows that it enjoins on the Management that it should pay the said amounts to the
workman under any circumstance. If there is any amount due from the petitioner to the Management on any account that can be recovered from
him but that cannot be adjusted towards the amount payable under Clauses (a) and (b). That Section 25-F(a) and 25-F(b) are mandatory is clear
from the decision of the Supreme Court in Bombay Union of Journalists and Others Vs. The State of Bombay and Another, . In that decision in
page 33 it is stated thus:
Clause (a) of Section 25F, therefore, affords a safeguard in the interests of the retrenched employee; it requires the employer ether to give him one
month''s notice or to pay him wages in lieu thereof before he is retrenched. Similarly, Clause (b) provides that the workman has to be paid at the
time of retrenchment, compensation which shall be equivalent to 15 days'' average pay for every completed year of service, or any part thereof in
excess of six months. It would be noticed that his payment has to be made at the time of retrenchment, and this requirement again provides a
safeguard in the interests of the workman; he must be given one month''s notice or wages in lieu thereof and he must get retrenchment
compensation as prescribed by Clause (b). The object which the Legislature had in mind in making these two conditions obligatory and in
constituting them into conditions precedent is obvious. These provisions have to be satisfied before a MLJ 64 workmen can be retrenched. The
hardship resulting from retrenchment has been partially redressed by these two clauses, and so, there is every justification for making them
conditions precedent.
As seen above, the retrenchment notice Ex.71 is dated 21.5. 1981 and this does not give one month''s time. Therein it is stated to the effect that
the amounts payable under Clauses (a) and (b) of Section 25-F will be paid to him on his acknowledgment of that letter. But no amount has been
paid and on the other, hand it is only in the statement annexed to their letter Ex.W.3. dated 16.6.1981 the management have shown that after
deducting the amounts payable under Clauses (a) and (b) of Section 25-F the petitioner is due to the Management a sum of Rs. 225.48. This is
certainly not complying with the mandatory provisions of Section 25-F (a) and (b). In this connection we will refer to a decision in M/s. National
Iron and Steel Co. Ltd. v. The State of West Bengal AIR 1967 S.C. 1206. In that case termination, notice was dated November 15,1958 and the
termination was to take effect from 17th November, 1958, The workman was asked to collect his dues, i.e. one months wages in lieu of notice of
termination of his services from the cash office on November 20, 1958 or thereafter during working hours. On these facts the Supreme Court said
that:
Manifestly, Sec- 25-F, had not been complied with under which it was incumbent on the employer to pay the workman, the wages for the period
of the notice in lieu of the notice. That is to say, if he was asked to go forthwith he had to be paid at the time when he was asked to go and could
not be asked to collect his dues afterwards.
We are therefore of the clear view that the Management failed to comply with the requirements of Section 25-F (a) and (h) and therefore the
termination order is invalid. Hence we are unable to agree with the finding of the Labour Court upholding the termination order. Consequently
therefore we set aside the order of the Labour Court and direct the first respondent-Management to reinstate the petitioner and pay him the
backwages.