P. Gopal vs The Presiding Officer, Principal Labour Court and The Management of Advani Cerlikon Limited

P.K. Misra, J.—Petitioner has filed this writ petition against the award of the Presiding Officer, Principal Labour Court, Madras dismissing

the industrial dispute raised by the Petitioner.

The Petitioner was appointed as a Lab Attendant under the second Respondent initially on 13.1.1975 on temporary basis for two months and

was functioning as such from time to time. Subsequently by an order dated 22.11.1976 the Petitioner was appointed as a probationer on a

consolidated salary of Rs. 150/- per month for a period of 12 months. By the order dated 30.11.1977, the second Respondent terminated the

services of the Petitioner by passing the following order:

In terms of Clause 2 of the order cited, your probationary services are hereby terminated effective this evening. Your dues if any, will be settled by

our Accounts Department.

In the industrial dispute raised by the Petitioner, it was contended that without any valid reasons, his services have been terminated without

giving one month notice nor paying one month salary in lieu of such notice in violation of provisions contained in Section 25-F of the Industrial

Disputes Act, 1947.

The second Respondent filed objections before the Labour Court wherein it was contended that the Petitioner had been appointed on probation

for a period of one year and as he was not confirmed, before completion of the probation period, his services were dispensed with in accordance

with terms of appointment and as such the Petitioner cannot claim reinstatement in service.

Labour Court found that the Petitioner''s performance had not been satisfactory and since services were terminated during probation the order

was valid. It was further observed that since the termination of service was in accordance with the terms of contract of employment, the second

Respondent was not required to comply with Section 25-F of the Industrial Disputes Act. The aforesaid decision is under challenge in the present

writ petition.

learned Counsel for the Petitioner has submitted that as the order of probation was issued on 22.11.1976, the period of probation was

completed on 21.11.1977 and it cannot-be said that the services were dispensed with during currency of the probation period and as such the

basic premise on which the award has been passed negativing the contention of the Petitioner cannot be sustained.

There is some dispute as to whether the period of probation commenced on 22.11.1976 or on 1.12.1976. It appears that the Petitioner had

made some endorsement to the effect that pursuant to the order of appointment dated 22.11.1976. he joined the services on 1.12.1976. learned

Counsel for the Petitioner has however contended that since the Petitioner was already engaged on temporary basis even prior to 22.11.1976, it

must be taken that the period of probation stated on the date of order of appointment and not on the subsequent date. It is unnecessary to decide

this question as in my opinion even assuming that the Petitioner''s services were brought to an end during probation, the matter has to be decided

keeping in view, the provisions of the Industrial Disputes Act, particularly. Section 25-F.

There is no dispute that by 30.11.1977 the Petitioner had completed one year of service having worked for more than 240 days in the

preceding year. In the above background even assuming that the Petitioner was working as a probationer, the question arises as to whether the

Petitioner was entitled to the protection of Section 25-F of the Act. learned Counsel for the second Respondent has placed reliance upon several

decisions to the effect that if services of an employee is dispensed with during the period of probation or on the nature of work before completion

of the period of probation, such order would not amount to dismissal from services and would not be justiciable. Even though such decisions hold

good in respect of persons in government service, such contention would be of no avail where provisions of Industrial Disputes Act are applicable.

In other words, the workman coming under the purview of the Industrial Disputes Act can always claim protection available under the Industrial

Disputes Act notwithstanding the fact that his services have been dispensed with during the period of probation.

learned Counsel for the second Respondent relied upon a decision reported in 2001 LLR 260 (Krishnadevaraya Education Trust v. L.A.

Balakrishna). In the aforesaid case, the Respondent was an Assistant Professor on probation and within the probationary period, his services were

terminated. The order was challenged before the Educational Tribunal on the ground that order terminating the appointment caused a stigma and as

such could not have been passed without holding a departmental enquiry. Even though such contentions have been accepted by the Tribunal and

the High Court, the Supreme Court negatived such contentions and held that the order terminating the services during probationary period was not

available to challenge. This decision obviously is inapplicable to the present situation. In the said case question of applying or provisions of

Industrial Disputes Act did not arise and as such the ratio of the said decision would not be applicable to the present case.

Similarly the ratio of the decision reported in Ajit Singh and Others Vs. State of Punjab and Another, wherein the services of the employees

had been terminated during the period of probation and has been upheld by the Supreme Court, is of no help to the second Respondent as the

question as to whether employees were workmen and as to whether they were protected under the Industrial Disputes Act was neither raised nor

answered in the said decision.

11 . The Presiding Officer by relying upon the provisions of 2(oo) (bb) of Industrial Disputes Act, came to a conclusion that the employment

having been terminated in accordance with the terms contained in the contract, such termination was not retrenchment u/s 2(oo) of the Industrial

Disputes Act.

The provisions referred to above being relevant are quoted hereunder -

2(oo)-""retrenchment"" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a

punishment inflicted by way of disciplinary action, but does not include-

(a) voluntary retirement of the workman or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman

concerned contains a stipulation in that behalf; or

(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the

workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or

(c) termination of the service of a workman on the ground of continued ill-health;

It has to be seen that Explanation Clause u/s 2(bb) in Clause (oo) had been introduced by way of amendment in the year 1984 only. This

amendment, obviously does not have retrospective effect. Therefore, the contention that termination was in terms of the contract by efflux of time

and as such was not retrenchment, cannot be accepted. In the present case, action was taken in 1977, admittedly, when Clause (bb)was not

introduced.

learned Counsel for the second Respondent however submitted that even though the provision had not been made retrospective by the

Legislature, in the context in which it was introduced in the Act, it must be taken that the amendment was merely declaratory in nature declaring the

position of law which was already existing. I do not think such submission can be accepted. It cannot be said that the position contemplated under

(bb) was considered to be the settled position of law prior to such amendment. Since the provisions contained in 2(bb) are not retrospective in

nature, the reasoning given by the Labour Court upholding the order of termination by applying 2(bb), cannot be sustained.

As early as in 1957 (I) LLJ 243 (Barsi Light Railway Company Ltd. and Anr. v. Joglekar (K.N.) and Ors., a Constitutional Bench of the

Supreme Court observed that the definition of retrenchment in Section 2(oo) consists of the following four essential requirements:(a)termination of

the services of a workman, (b)by the employer,(c)for any reason whatsoever and (d)otherwise than as a punishment inflicted by way of disciplinary

action.

It is of course true that in the aforesaid decision it was held that even though such definition was wide, it will not include the case of termination on

account of very closure of the industry itself. However, such a question does not arise in the present case. The basic analysis made in the said

decision appears to have stood the test of time and followed in several later decisions.

Similar view has been expressed in The State Bank of India Vs. Shri N. Sundara Money, wherein the termination on account of expiry of the

period of employment was held to be coming within the meaning of retrenchment.

In 1980 (II) LLJ 72 (Santhosh Gupta v. State Bank of India) it was held that workman who had been discharged from the services on the

ground of failure to pass the test for confirmation in service would also amount to retrenchment and such action would be justifiable only if Section

25-F had been complied with.

It was held that unless the termination was within the scope of clauses a, b and c (at that time clause bb has not been included) of Section 2(oo),

any termination would amount to retrenchment. It was observed that retrenchment cannot be equated with notice such as termination. Ultimately it

was observed that discharge of workman on the ground that he has not passed the test for confirmation was retrenchment within the meaning of

Section 2(oo) and as such the provisions of Section 25-F had to be complied with.

Subsequently in the decision of the Apex Court decision reported in Punjab Land Development and Reclamation Corporation Ltd.,

Chandigarh Vs. Presiding Officer, Labour Court, Chandigarh and Others, the views expressed in Santosh Gupta Vs. State Bank of Patiala, were

expressly approved by the Constitution Bench.

The decisions taking similar views are a legion and it is unnecessary to multiply the authorities. It must be taken to be well settled that unless the

end of the service comes in the expected manner indicated in Clause a, b (now bb) and c, any termination would amount to retrenchment, unless of

course, the termination on account of annihilation of industry itself as was the case in 1957 (I)LLJ 243. Thus, there cannot be any doubt in the

present case that the action of the second Respondent terminating the services of me Petitioner before the completion of the probation amounted to

retrenchment within the meaning of Section 2(oo) of the Act. Once this conclusion is reached, it is obvious that such termination cannot be upheld

unless the provisions contained in Section 25F have been complied with. In the present case, admittedly notice of termination become effective on

the very same day, i.e., on 30.11.1977 and as such notice as contemplated has not been issued. In the absence of any notice, the workman has to

be paid compensation as required u/s 25F. Admittedly no such compensation had been paid. Action therefore, must be taken in this regard.

Petitioner is thus required to be reinstated.

The question is whether he should be reinstated with full backwages. Even though termination had taken place in the year 1977, the matter

remained pending as it had to cross the shores of various legal wranglings for which neither management nor workman is to be blamed in full. The

Petitioner was getting a salary of Rs. 150/- at that time. Granting full backwages to the Petitioner would be unjust keeping in view the financial

position of the management. On the other hand non-payment of any backwages would also be a travesty of justice so far as workman is

concerned. In view of the peculiar facts and circumstances of the case, interest of justice would be served by directing reinstatement with payment

of Rs. 15,000/- as compensation in lieu of backwages.

In the result, writ petition is allowed, subject to the above direction. There will be no order as to costs.