1 INTRODUCTORY SYNOPSIS 1. The Employer-Employee Relationship--an Evolution 2. Good Employee is an Asset 3. No Hire and Fire at Will 4. Dismissal of an Employee 5. Discharge or an Employee 6. Retrenchment 7. Distinction Between Dismissal and Termination 1. The Employer-Employee Relationships--an Evolution Times have changed in every respect. This change is more discernible in the economic and industrial fields. The concept of traditional animosity between the two classes of employers and employees has also undergone change beyond recognition. Animosity has given way to cooperation and hatred to loyalty. It is incentive that works better than disciplining. Trust not mistrust has injected a sense of responsibility among the workers. This change is certainly a welcome sign for establishing a cordial and congenial atmosphere between the employers and employees. It has been possible because of compulsions and realisation of ground realities. The Berlin Wall of Balkanisation of mental attitude has almost been razed to the ground in many of the leading industrial houses and most of the others are happily following suit. The main reason for mistrust towards each other i.e., employer and worker was feudalism on one side and communism on the other side. If one system believed more in suppression and exploitation, the other advocated class annihilation. Two fundamental facets of the Industrial Revolution were; division of labour and mass production of goods and services. Profits and higher profits provided the stimuli for the success of industrial revolution. Consequently there emerged two distinct classes in society, profit taker and wage earner. Mass production was predicted upon market economy necessitating mass consumption. Economists have developed a theory which among other things says that society revolves around free market. Each consumer has, "a complete and consistent system of preferences that always allows him to choose among the alternatives open to him; he is always completely aware of what his alternatives are; there are no limits on the complexity of the computations he can perform in order to determine which alternatives are best." The area of preferences, choices and options for consumers determines the range of competition, price being the essential determinant. Profit being the margin between the cost price of a product and its sale price, greater margin ensures higher profits. Labour charges impinge on profits, where economies of scale are undertaken at the cost of wage earner. Laissez faire, the governing politico-- economic doctrine of the nineteenth century, drew wool over the eyes of the political managers of the society. Communist revolution in the Soviet Union, leading to the establishment of the dictatorship of the proletariat opened a new chapter in the struggle of the working class for liberation from being a factor of production to partner in industry. During this transition narcissistic social trends had already become visible and were frequently commented upon and even uncontrovered. It may sound incredible but it is a fact that laissez faire is now apparent in a different
manner. Earlier there was non-interference because of state inaction but now the state is being made redundant because of the action of the market forces that operate for the production. Earlier in the absence of state action in the form of positively enforceable legal norms, workmen slowly united to seek improvement in wages and working conditions. Community of interest with triumph of business enterprise, strike became an effective weapon to snatch benefits from reluctant employers. Concerted employee activities in support of demands for higher wages and improved and humane working conditions were met, in the early decades of the nineteenth century, with criminal prosecution. They were treated as common conspiracies which were rendered criminal because of the illegality of the means employed or the ends sought. As a conflict of interest was inherent between dominant or command group and subordinate or obedience group, aggressive labour movement threatened not only the much vaunted production but also to some extent national economy, the state intervened by enacting laws avowedly for the emancipation of labour. The movement for amelioration of working class accelerated with crisis in the capitalist world during the depression leading to New Deal Legislation. The body of law that emerged in fits and patches, loosely styled as labour law, in it s broadest sense embraces the entire range of legal problems that may arise when one person engages to work for another. Primarily labour law was one of the original guns fired in the war on poverty. Labour law functionally deals with groups of people rather than individuals. This follows from the law of unionisation, collective bargaining and strikes as well as picketing. Development of labour law all over the world is over a rough terrain. In the course of its development in United States, it was once contended that the labour of a human being is a commodity and unionization may attract an article of commerce. Nothing contained in the anti-trust laws should be construed to forbid the existence and operation of labour organization instituted for the purpose of mutual help or to forbid or restrain individual members from lawfully carrying out the legitimate objects thereof. It was proclaimed as the Magna Carta of individuals. For determination of concept of employment, the essential ingredients are: (i) Employer - one who employs, i.e., engages the services of other person; (ii) Employee - one who works for another for hi re; and (iii) Contract of employment - the contract of service between the employer and the employee whereunder the employee agrees to serve the employer subject to his control and supervision. supervision .1 In another case, the Supreme Court has held that when relationship of employer and employee is disputed, it is required to be determined in presence of all the parties who are interested in the subject-matter of reference before the Labour Court. Court . 2 ______________ 1.
Workmen
(SC):
of
Nilgiri
Coop.
Marketing
Society
Ltd.
v.
State
of
Tamil
Nadu,
2004
LLR
351
MANU/SC/0100/2004 : AIR 2004 SC 1639.
2. G.M., Tanda Thermal Pozver Project v. Jai Prakash Srivastava, 2008 LLR 30 (SC): AIR 2007 SC (Supp) 696.
The various factors that may have to b e considered to determine the relationship of employer and employee are as follows: In determining whether one acting for another is a servant or an independent contractor, the following matters of facts, among others are considered: (a) the extent of control which, by the agreement the master may exercise over the details of the work; (b) whether or not the one employee is engaged in a distinct occupation or
business; (c) the kind of occupation with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the ti me or by the job; (h) whether or not the work is a part of the regular business of the employer; and (i) whether or not the parties believe they are creating the relationship of master and servant. 2. Good Employee is an Asset Few years ago If you'd have asked the senior executives what their company's most valuable assets were, chances are they would have talked about the brand, goodwill, plant and machinery and so on. But ask them this question today, and 'people' will most likely figure in the ensure. An organisation is made up of competencies which we can loosely call 'capital'. Its key components are 'customer capital', 'structural capital'. Its key components are 'customer capital', 'structural capital' and 'human capital'. In this era of globalisation and modernization, organisations are becoming increasingly competitive, dynamic, innovative and productive. Globalisation has certainly thrown new challenges before HR persons as they have to prepare employees to meet the challenges of knowledge-based economy and to respond to the dynamics of the work environment with technological skill and a high level of thinking. They too, in fact, assure the role of business development managers and evolve themselves as service providers to their internal and external customers. Just as it is vital for every establishment to attract the right talent, it is equally important for them to retain that talent. Today's situation is such that companies are constantly vying with each other to offer better perks to their employees. While the nature of these perks may differ across levels, there is a need to offer something beyond just the pay packages. Stock options, exposure to other markets, substantial incentives on meeting targets foreign trips these are all initiatives that have gained a lot of acceptance in the last few years. And this does go a long way in retaining people. It is important for one to keep in mind that it is not healthy for organizations to face attrition on a reasonably regular basis. It is a fact that no employer will dismiss or terminate or retrench an employee unless he is compelled to do so. An employer is always interested in production, rendering of services and performance of duties as assigned to an employee. An employee is also bound to maintain discipline and perform his duties diligently and efficiently. As long as the employee works sincerely, the employer will not disturb or dislocate the employee but when there is dereliction on the part of an employee, the employer is left with no option but to punish him or even to get rid of him if i f the latter is adamant and does not adhere to norms of discipline in performing his duties. If, however, any employee becomes incorrigible, the law provides ways and means to an employer to dismiss, discharge or retrench him. The employer will have to observe certain procedures and his action should never smack of mala fide intention, otherwise that will not stand the scrutiny of the court. It must be noted here that the labour laws in India are
codified and they have been further expanded by judicial interpretations and verdicts. Once the codified law stepped in to regulate relations between unequal partners in industry, judiciary acquired a role for which it was largely unsuited. Labour, as conceived, is a course which should lead to an appreciation of the interplay between law and life. Judiciary ignored the human element, stuck to outmoded notions of contract Jaw and the harsh economic law of demand and supply. As labour law is concerned with governance of workmen in industrial establishments, collective bargaining when successfully resorted to, excluded court's interference. The traditional right of an employer to hire and fire his workmen at his will has been subjected to many restraints. Industrial Tribunals can by their award make a contract which is binding on both the parties creating a new right and imposing new obligations arising out of the award. There is no question of the employer agreeing to the new contract, it is binding even though it is unacceptable to him. The creation of new obligations is not by the parties themselves. Either or both of them may be opposed to it, nevertheless it binds them. Thus the idea of some authority making contract for the workmen and employer is a strange and novel idea and is foreign to the contract. As has already been said there is change in the concept of master and servant. One who invests capital is no more a master and one who puts in labour is no more a servant. They are employer and employees, the former may hire the latter but he can no more fire them at his will. The interest of the employees is in many respects protected by legislation. Both are now parties in an enterprise, without one yielding to the higher status of another but as co-sharer in the partnership. Even the right of labour participation in the management has been given legislative recognition. 3. No Hire and Fire at Will An employer has the freedom to select anybody according to his requirements but he does not have the liberty to fire a workman as per his will. After the introduction of the Industrial Disputes Act in 1947, this has become all the more difficult for an employer. Knowledge of the Industrial Disputes Act and also his rights and responsibilities is always in the interests of an employer. But those employers who care two hoots about the laws and their rights repent later. Industrial Disputes Act, is, in fact, a post i ndependence enactment. The industrial law in pre-independence days was in a rudimentary form. But later on with the development of industry, the industrial law developed side by side. The economic growth of the country depends upon the industrial development. Therefore, the progress of a country law plays an important role in the national economy of the country. The object of the industrial relations legislation, in general, is industrial peace and economic justice. The development of labour laws has been a slow process. It has mainly two objectives. One is regulatory and the other is industrial peace and harmony. In fact both are intertwined. If labour laws provide a reasonable amount of social security and protection to workers, they also give rights to employers which can be exercised for maintaining the harmony in the establishment. Although good management generally does not opt for adopting deterrent methods to curb and control indiscipline and misconduct of workers; yet many times it becomes necessary to take recourse to harsh methods. Modern management believes more in motivation, cooperation and incentives than rigours of discipline, confrontation and detraction. However, it is absolutely necessary for a personnel manager to know the basics of labour laws to deal with contingencies. 4. Dismissal of an Employee Dismissal is the biggest punishment which an employer can give to an employee. It is the termination of services by way of punishment for some misconduct or for unauthorised and prolonged absence from duty. There is a vital difference between dismissal and discharge. Discharge is the termination of a contract by notice or payment of wages in lieu of notice, whereas dismissal implies not merely a termination without notice or payment, but essentially indicates a measure of punishment.1 The word, 'dismiss' or remove in Article 311
of the Constitution comprehends every termination of the services of a government servant. This becomes clear in Moti Ram Deka v. General Manager, North East Frontier Railways,MANU/SC/0261/1963 : AIR 1964 SC 600: (1964) 5 SCR 683: 1964 (2) SCA 372. The dismissal of any employee is easier said than done. The employer is bound to give an opportunity to the employee to explain his conduct and to show cause why he should not be dismissed. The general rule is that in this process, there should be no violation of what is known as the principles of natural justice, ______________ 1. Minerva Mills Ltd, v. Arbitration Tribunal, 1949 (4) DLR 37.
which ensures that punishment is not out of all proportions to the offence. In fact, there is no provision for summary dismissal. Before dismissal the employee may be placed under suspension and a proper enquiry is conducted to enquire about the misconduct of the employee. During the suspension the employee receives a subsistence allowance. The management's action must not suffer from vindictiveness and capricious attitude. Undoubtedly, the management has power to direct its own internal administration and discipline; but the power is not unlimited and when a dispute arises, industrial tribunals1 /labour courts have been given the power to see whether the termination of service of workman is justified and to give appropriate relief. In cases of di smissal for misconduct the tribunal/labour court does not, however, act as a court of appeal and substitute its own judgment for that of the management. It will interfere-(i) when there is want of good faith, (ii) when there is victimisation or unfair labour practice, (iii) when the management has been guilty of a basic error or violation of the principles of natural justice, and (iv) when on the material the finding is baseless or perverse. These are four exceptions which confer jurisdiction on industrial tribunals to interfere with managerial discretion and apply with equal force to the determination of the question of the quantum of punishment. When a case of dismissal or discharge of an employee is referred for industrial adjudication the industrial tribunal/labour court should first decide as a preliminary issue whether the domestic enquiry has violated the principles of natural justice. When there was no domestic enquiry or defective enquiry is admitted by the employer, there will be no difficulty. But when the matter is in controversy between the parties then the question must be decided as a preliminary issue. On the decision pronounced it will be for the management to decide whether it will adduce any evidence before the labour court. If it chooses not ______________ 1. Minerva Mills Ltd. v. Arbitration Tribunal, 1949 (4) DLR 37.
to adduce any evidence, it will not be thereafter permissible in any proceeding to raise the issue. 5. Discharge of an Employee It is a permanent separation of an employee from the pay-roll for violation of company rules or for inadequate performance.
A discharge becomes necessary: (i) when the volume of business does not justify the continuing employment of the persons involved; (ii) when a person fails to work according to the requirements of the job either because of incapacity or because he has deliberately slowed down work, or because there is no suitable place where he can be transferred; and (iii) when he forfeits his right to a job because of his violation of a basic policy often involving the safety of others, the morale and discipline of a group. Causes of discharge A discharge seldom arises suddenly or from a single impulsive act. Many causes account for it. Some of these are: (a) Frequent causes: Inefficiency, indifference, violation of rules.
dishonesty,
drunkenness,
carelessness
or
(b) Infrequent causes: Accidents, insubordination, personal conduct, uncleanliness, infraction of rules, destructive negligence, wastefulness, and physical unfitness. (c) Other causes: Carelessness, lack of co-operation, laziness, tardiness in starting work, frequent absence without leave, dishonesty, lack of specific skill, preventing promotion, adverse attitude towards the organisation. Discharge Procedure To avoid unnecessary grievances arising from discharges, proper rules should be framed to govern them. To demonstrate that a discharge is justified and does not arise out of unfair discrimination or personal prejudice of the supervisor, following evidence needs to be produced: (1) Permanent records of all merit ratings made by supervisors; (2) Permanent records of ratings of the defendant's traits maintained by persons other than the foreman; (3) A memorandum bearing on the efforts made by the foreman/supervisor to help the defendant to overcome his weakness; (4) A copy of any warning that had been sent to him; (5) The letter of discharge, especially if the l etter states the cause of the discharge. Discharge should be made in accordance with the Standing Orders/Service Rules. The action taken should be bona fide and is neither a punitive measure nor a case of victimisation: (a) The reasons for discharge should be clearly stated. (b) The individual concerned should be adequately informed about the reasons for his discharge. (c) The supervisor, in charge of initiating discharge action, should be fully conversant with rules and regulations of the organisation. (d) The facts regarding the violation of rules and regulations should be carefully analysed.
(e) Line officials should handle the discharge affairs. (f) Adequate provision should exist for review of the discharged employee's case. (g) A discharged employee needs a reasonable notice or an equivalent pay in lieu of notice. It carries with it certain penalties, such as difficulty of re-employment, loss of benefits and, in certain cases, the loss of a part of the provident fund, etc. 6. Retrenchment The Industrial Disputes Act, 1947 as originally enacted made no provision for the payment of 'retrenchment' compensation to the retrenched workmen. It is necessary to know what is retrenchment. 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) the 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. Striking off the name of a workman from rolls by the employer amounts to termination of service and such termination of service is retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. Such retrenchment in violation of Section 25F of the Act is invalid. Retrenchment as defined in Section 2(oo) of the Industrial Disputes Act does not comprehend discharge on the closure of business. Retrenchment connotes that the business is being continued, but that a portion of the staff or the labour force is discharged as surplusage and the termination of the services of all the workmen as a result of the closure of the business cannot, therefore, be properly described as retrenchment. What is retrenchment and what steps are to be taken while retrenching the workers have been discussed hereinafter in a separate Chapter of the book. Sub-clause (bb) has been inserted by the Amending Act, 49 of 1984 w.e.f. 18th August, 1984 to the Industrial Disputes Act, 1947 with an object to exclude some terminations from the ambit of the definition of 'retrenchment' e.g., when the termination of the service of a workman is as a result of the non-renewal of the contract of employment between the employer and the workman concerned, on its expiry; the termination of the contract of employment in terms of a stipulation contained in the contract of employment, in that behalf. The first part relates to a termination of the service of a workman as a result of a nonrenewal of the contract of employment between the employer and the workman concerned, on its expiry. The second part refers to 'such contract' being terminated under a stipulation in that behalf, contained therein. 7. Distinction Between Dismissal and Termination Ordinarily, the punishment of termination is a punishment lesser than the punishment of dismissal in as much as the dismissal carries along with it a stigma while the termination does not. The dismissal of an employee may disqualify him from future employment but the termination does not.1 _______________
1. Rajendra Singh Shekhawal v. Labour Court-III, Kanpur and Ms. Elgin Mills Co. Ltd. Kanpur, 1993 LLR 116.
2 FIRST STEP TOWARDS DISMISSAL/ DISCHARGE OF AN EMPLOYEE SYNOPSIS 1. Misconduct--Meaning of 2. Whether Misconduct should be Wilful? 3. Considerations to Determine whether an act or Omission Amounts to 'Misconduct' 4. 'Misconduct' not Enumerated in Certified Standing Orders 5. Concept of Misconduct is Variable 6. Implied Terms of Contract of Employer and Employee Relationship 7. Broad Enumeration of Acts and Omissions Constituting Misconduct 8. Exhaustive List of Misconduct In order to maintain discipline an employer has to initiate disciplinary action against a delinquent employee. The first step is to ascertain whether a particular act or omission on the part of an employee amounts to misconduct. This is being dealt with under the following heads-1. Misconduct--Meaning of The word 'misconduct' though not capable of precise definition, its reflection receives its connotation from the context, the delinquency in its performance and its effect on the discipline and the nature of duty. It may involve moral turpitude, it must be improper or wrong behavior, unlawful behavior, willful in character, a forbidden act, a transgression of established and definite rule of action or code of conduct but not mere error of judgment, carelessness or negligence in performance of duty, the act complained of bears a forbidden quality or character.1 __________ 1. Solanki Laxmansing Kesarsing v. State of Gujarat, 1994 LIC 1679.
In another case, the Allahabad High Court has held that 'misconduct' is not defined in the Industrial Disputes Act, 1947 or U.P. Industrial Disputes Act, 1947. Ordinarily misconduct refers to "improper behaviour, intentional wrong doing or deliberate violation of a rule of standard behaviour". Obviously a conduct on the part of an employee inconsistent with the faithful discharge of his duties towards his employer can fall within the ambit of 'misconduct' unless it be of trifling nature. A 'misconduct' on the part of an employee obviously has to be in respect of some positive act or conduct which would be quite incompatible with any express or implied term of relationship of employee with the employer. 1 Also a misconduct cannot be defined in universally applicable terms. What constitutes misconduct depends upon circumstances of each case. Generally speaking, acts subversive of discipline or detrimental to the interests of the employer may be considered as misconduct. In other words, discreditable acts which render an employee unworthy of employment constitutes misconduct. The Appellate Authority is called upon to consider whether the acts which the employee has committed are discreditable acts rendering him unworthy for the job. This cannot be done without considering the nature of the acts committed. There may be acts which are so trivial that they do not partake the character of
unworthy or discreditable behaviour. Bad handwriting, scoring out entries and untidy work are not desirable qualities. But such acts committed innocently do not have the element of bad behaviour which is another name for misconduct, the word 'misconduct' employed in sub-sections (1) and (2) of Section 18 of Kerala Shops & Establishments Act, 1968 excludes acts and errors which fall short of unworthy and discreditable behaviour .2 Thus a misconduct is not capable of precise definition. In a given set of facts, indiscipline while carrying out official duties may lead to misconduct; but that does not m ean indiscipline is always a misconduct.3 The Karnataka High Court has also held that there is no definition of 'misconduct' in the Industrial Disputes Act, 1947 or _________ 1. Infant Milk Food Factory v. Labour Court, 1994 (69) FLR 1132. 2. P.K. Varghese & Company v. Vacco, 1994 II CLR 250. 3. Savani Transport (Pvt.) Ltd. v. Savani Transport Employees' Association, 1994 LLR 578.
in the Industrial Employment (Standing Orders) Act, 1946. Misconduct literally means wrong or improper conduct. It means intentional wrong doing. It would include unlawful behaviour. A conduct which is blameworthy would be misconduct. If by the commission or omission of the acts of the employee, the employer suffers loss or it generates an atmosphere destructive of discipline, the same is misconduct. There will be several acts of the employee which will expose him to penal consequences. These acts would no "doubt be a misconduct in industrial parlance. In such cases, the employer is free to decide reasonably what action should be taken in that matter. Broadly stated all offences with penal consequences are misconducts but not all misconducts an offence.1 The first duty of the employee is to obey the orders which the employer is justified in giving under the terms of employment. All orders concerning the work which the employee is required to do and the time, the manner and the place of performing it are presumable and in the absence of any special circumstances within the control of the employer. Misconduct is made of two words 'Mis' means badly and 'conduct' means behaviour. In fact, 'misconduct' is a relative term and occurs in various enactments and so it has to be construed with reference to subject-matter and the context in which it occurs, having regard to the scope of the enactment under reference. It literally means, conduct amiss, to mismanage, wrong or improper conduct, bad behaviour, unlawful behaviour or conduct. The synonyms are--misbehaviour; misdemeanour; mismanagement; misdeed; delinquency; offence. It implies a wrongful intention and not a mere error of judgment. It does not necessarily imply corruption or criminal intent. An omission to do what is expected of a person to do constitutes misconduct whereas if such failure is directed to intentionally cause mischief or loss to any person then it is called wilful misconduct .2 This shows that, 'misconduct' is a specific word with a specific connotation. It is not mere inefficiency or slackness. It is something far more negative, and certainly, deliberate disobedience of a superior authority would be a species of misconduct. Where the employer levels the charge of _________ 1. Jyoti Home Industries v. Presiding Officer, labour Court, 1995 LLR 940. 2. Jamunadas Ramjas v. East Indian Railway Co. Ltd., AIR 1933 Pat 530.
'misconduct', i.e., a charge of some negative act or of conduct which would be quite incompatible with the express and implied norms of the relationship of the workman to the employer, there must be material in support of such a serious charge. Such a charge cannot be brought against a workman for not having obeyed the directions of a third party who was
not a person in authority over the workman, even though such third person had some interest in the business of the employer.1 But when the standing orders provide, inter alia, that any act subversive of discipline would be an act of misconduct, then even though sleeping during office hours has not been included in the standing orders as an act amounting to misconduct, it would be covered by the words, "any act subversive of discipline" because it is an elementary rule of discipline that a workman has to do his duty while in office and not indulge in sleep.2 Misconduct committed by the workmen in front of the factory comes within the certified standing orders as if it has been within the premises of the factory.3 Raising provocative and abusive slogans in the premises of the workshop is a misconduct.4 Employees of Coir Board dissuading customers from purchasing new carpets from the showroom and volunteering to repair old ones and receiving advance for the same, this is a misconduct squarely covered by the Boards' Employees (Conduct) By-laws, 1968.5 Any breach of an express or implied duty on the part of the employee, unless it be of a trifling nature, would amount to misconduct.6 'Misconduct' arises if a person does what he should not have done and does not do what he should have done or any unbusiness-like conduct, including negligence or want of necessary care.7 'Misconduct' is doing something or omitting to do something which is wrong to do or omit whereas the person who is guilty of the act or the omission knows that the act which he is doing, or that which he is omitting to do, is a wrong thing to do or omit, it, therefore, ___________ 1. Presidency Talkies v. N.S. Natrajan, (1968) 34 FJR 180, 2. Manekchowk and Ahmedabad Manufacturing Co. Ltd. v. I C Ahmedabad, (1967-68) 32 FJR 34. 3. Ram Asrey v. Labour Couri-II, Kanpur, 1990 LLR 330. 4. Balwant Singh v. New Suraj Transports Co., 1989 (2) LLJ 217. 5. Rama Worrier (M) v. Coir Board, 1989 LLR 393: 1989 I LLN 466. 6. Gulab Ram Chand Nakle v. Lok Sewa Transport Co., 1958 ICR 705 (IC). 7. Bengal Nagpur Riy. Co. Ltd. v. Moolji Sicka and Co.,
MANU/WB/0137/1930 : AIR 1930 Cal 815: ILR 50 Cal 585.
follows that the misconduct may or may not be wilful .1 When a person has entered into the position of a servant and if he does something incompatible with the due or faithful discharge of his duty to his master, the latter has a right to dismiss him . 2 Any breach of an express or implied duty on the part of the employees unless it be of a trifling nature, affords justification for a dismissal. The primary duties being fidelity, care, honesty and punctuality, breach of these duties will entitle his master to dismiss . 3 An act of pushing the traffic controller may be a miscounduct but cannot be an act of no trust or no confidence .4 In the undermentioned case the Punjab & Haryana High Court has held that raising of provocative and abusive slogans in the premises of the employer is a misconduct .5 Both in law and in ordinary speech, the term 'misconduct' usually implies an act done wilfully with a wrong intention and as applied to professional acts, even though such acts are not inherently wrongful, it also means dereliction of or deviation from duty. Even assuming that a particular act is by 'negligence' and not a 'misconduct', such a negligence which amounts to dereliction of or deviation from duty cannot be excused .6 The Karnataka High Court in one case held that non-issuance of a ticket to the passenger by the conductor even after having received the fare and thereby not accounting that money to the credit of his master which the conductor is expected to maintain as part of his duties, if he lacks honesty and integrity in the matter then he is not conducting himself as provided in the Karnataka State Road Transport Corporation (K.S.R.T.C.) (Conduct & Discipline) Regulations, 1971, If he does not act as expected in regard to his conduct then he has committed misconduct.7 The word 'misconduct' is a generic term while insubordination, neglect to work, etc. are species thereof .8 Before any punishment is inflicted on an employee, his fault is
____________ 1. Lewis v. G.W. Railway Co., (1877) 3 QBD 195. 2. Pearce v. Foster, (1886) 17 QBD 536. 3. T. Mathews v. Nestle's Products (India) Ltd., 1964 LLJ 500. 4. Abdul Habib Khan v. Maharashtra State Road Transport Co., 1989 LLR 36. 5. Balwant Singh v. New Suraj Transport Company (P) Ltd., 1989 LLR 283. 6. In the matter of Maqbool Alikhan,
MANU/AP/0039/1957 : AIR 1958 AP 116 (FB): 1958 Cr LJ 155.
7. Deputy General Manager, K.S.R.T.C. v. B. Sriramulu, 1989 LLR 267. 8. G.S. Mishra v. Union of India, 1961 (3) FLR 195.
established and that fault is technically called a 'misconduct'. Any act of the employee in malingering, i.e., feigning sickness in order to avoid his duty amounts to gross violation of duty and it cannot be said that he has committed this mistake because of young blood running in his veins and his devotion to the cause of the Union. 'Young blood' hardly provides any ground to show leniency towards an undisciplined youth from whom society expects a greater degree of discipline.1 The term, 'misconduct' also includes neglect of duties and responsibilities. For instance, failure to decide material question which has got important bearing on the case would amount to misconduct. 2 This shows that the meaning of the word 'misconduct' varies from case-to-case due to different requirements in each establishment but the underlying idea will always remain the same that it is an act which is either prejudicial to the establishment to which a person belongs or is inconsistent with the duties of a person which he owes to the establishment or society to which he belongs. In one case, a constable was found in a drunken condition while on duty and making noise and it was held that it was a grave misconduct.3 Consumption of liquor time and again while on duty is a misconduct. Dismissal from service was held to be justified .4 This further shows that the term 'misconduct' does not necessarily imply corruption or criminal intent and thus no precise scale of gradation to arithmetically compare the gravity of one from the other can be laid down.5 The definition of the term, 'misconduct' as given in Stroud's Judicial Dictionary runs as under: Misconduct means, misconduct arising from ill motive; acts of negligence, errors of i nnocent mistake do not constitute such misconduct. In industrial jurisprudence, amongst others, habitual or gross negligence constitutes misconduct but in one case in the absence of standing orders governing the employee's undertaking, _______________ 1. Gem Cinema, Jaipur v. B C Ojha, 1977 (34) FLR 318. 2. Ganga Ram v. Risal Singh, AIR 1974 P&H 36: 1973 Cr LJ 570. 3. Bhagwat Prasad v. Inspector General of Police, MR 1970 P&H 81: LLR 1968 (1) P&H 388. 4. Mulji Mangal of Bombay v. The India Water Proofing Company, 1988 LLR 52. 5. R. Bhadada v. Jodhpur University, 1977 Lab IC 509.
unsatisfactory work was treated as misconduct in the context of discharge being assailed as punitive.1 The concept of misconduct in employer and employee relationship is based upon the nature and relationship itself and implied and express conditions of service. This will
include the conditions that the employee would be trustworthy, that his acts would justify the confidence of the employer, that he will not act so as to prejudice or damage any interest of the employer, that he will not act or conduct himself in a way which is inconsistent or incompatible with the faithful discharge of his duties to the employer, that he would not behave in an unwilling manner and that he would not be habitually negligent. 2A single act of omission or error of judgment would ordinarily not constitute misconduct, though if such error or omission results in serious or atrocious consequences the same may amount to misconduct.3 In this case, it was found that the two mistakes committed by the employee while checking the load-sheets and balance charts would involve possible accident to the aircraft and possible loss of human life and, therefore, the negligence in work in the context of serious consequences was treated as misconduct.3 In view of the foregoing discussion, it is, however, difficult to believe that lack of efficiency or attainment of highest standards in discharge of duty attached to public office would ipso facto constitute misconduct. There may be negligence in performance of duty or error of judgment in evaluating the developing situation but would not constitute misconduct unless the consequences directly attributable to negligence would be such as to be irreparable or the resultant damage would be so heavy that the degree of culpability would be very high. An error can be indicative of negligence and degree of culpability may indicate the grossness of the negligence. Carelessness can often result in more harm than deliberate wickedness or malevolence. Leaving aside the classic example of the sentry who sleeps at his post and allows the enemy to slip through, there are other more familiar examples, instances of which are, a railway cabinman signalling ________ 1. Management of Utkal Machinery Ltd. v. Shanti Patnaik, (1966) 2 SCJ 470:
MANU/SC/0245/1965 :
AIR 1966 SC
1051: 1966 (12) FLR 45: (1966) 1 LLJ 398: 1966 SCD 505. 2. ST. Tiwari v. Central Railway, 1960 (1) LLJ 167. 3. P.H. Kalyani v. Air France, Calcutta, (1964) 2 SCR 104:
MANU/SC/0137/1963 : AIR 1963 SC 1756: 1963 (1) LLJ
679: 1964 (1) SCJ 566.
in a train on the same track where there is a stationary train causing head on collision; a nurse giving intravenous injection instead of intramuscular, causing instantaneous death; a pilot overlooking an instrument showing a snag in engine and the aircraft thus crashing and causing heavy loss of life. Misplaced sympathy can be a great evil .1 2. Whether Misconduct should be Wilful? In fact, the term 'misconduct' is wide enough to include wrongful commission or omission whether done or omitted to be done intentionally or unintentionally, or to put it in another way a 'misconduct' arises if a person does what he should not have done and does not do what he should have done or any unbusiness like conduct, including negligence or want of necessary care.2 When it is the duty of the employer to provide against such ordinary contingency as rain water forcing itself into the wagon, then the fact that rain water did enter the wagon and caused damage to it is itself sufficient to show that proper and requisite precautions were not taken by the employer .3 Thus a misconduct need not be wilful. 3. Considerations to Determine whether an act or Omission Amounts to 'Misconduct' If an act has nothing to do with the relationship of employer and employee or the latter's duly or work as an employee, it would not be a misconduct because it will have no effect on the terms and conditions of service of the employee .4 The rule of law is that where a person has entered into the position of servant, if he does anything incompatible with the due or faithful discharge of his duty to his master, the latter has a right to dismiss him. The relationship of master and servant implies necessarily that the servant shall be in a position to perform his duty duly and faithfully, and if by his own act he prevents himself from doing
so, the master may dismiss him. The circumstances which will put ____________ 1. Nuvinchandra Co-operative Shakeroband Shah v. Manager, Ahmedabad Departmental Stores Ltd., 1978 (19) Guj LR 108. 2. B.N. Railway Company v. Moiji Sicka I Co., 3. Jatindra Kumar Jain v. Union of India,
MANU/WB/0137/1930 : AIR 1930 Cal 815: ILR 58 Cal 585.
MANU/BH/0051/1957 : AIR 1957 Pat 147.
4. Gulab Ramachand Nakale v. Lok Sewa Transport Company Ltd., 1958 ICR 705 (IC).
a servant into the position of not being able to perform his duty in a due manner, or of not being able to perform his duty in a faithful manner is impossible to enumerate. Innumerable circumstances have actually occurred which fall within that proposition and innumerable circumstances which have not yet occurred, will occur, which will also fall within the proposition.1 This shows that any breach of an express or implied duty on the part of a servant, unless it be of a trifling nature, affords justification for a dismissal. The primary duties being obedience, fidelity, care, honesty and punctuality, conduct opposed to the due fulfilment of these duties will entitle the master to dismiss the servant. Similarly, if a servant conducts himself in a way inconsistent with the faithful discharge of his duty in the service, it is misconduct which justifies immediate dismissal. That need not be a misconduct in the carrying on of the service or the business and it is sufficient if it is misconduct which is prejudicial or is likely to be prejudicial to the interests or to the reputation of the master.2 So, in order to decide as to what act is contrary to the faithful discharge of duties on the part of an employee, we have to see the basic nature of relationship of master and servant as discussed earlier. The test of employer and employee relationship is that the employee will abide by the instructions of the employer regarding the manner in which the work is to be done. The reason is that when a person enters into a contract of employment as an employee, he impliedly agrees to abide by the instructions of the employer in respect of the manner of performing his duties and obligations. But if a servant is guilty of such a crime outside his service place so as to make it unsafe for a master to keep him in his employ, the servant may be dismissed; and if the servant's conduct is so grossly immoral, that all reasonable men would say that he cannot be trusted, the master may dismiss him.3 An employee arranged for the special worship of God 'Lord Ganpati' when his office was shifted to another wing of the same building honestly believing that such a worship would result better efficiency of his official function. It has been held by the Division _______________________ 1. T. Mathews v. Nestle's Products (India) Ltd., 1964 (1) LLJ 500. 2. S. Govinda Menon v. Union of India, 1967 (2) LLJ 249 (SC):
MANU/SC/0329/1967 : AIR 1967 SC 1274: 1967 (2)
SCA 20. 3. Madho Singh Daulat Singh v. State of Bombay,
MANU/MH/0179/1960 : AIR 1960 Bom 285: 1960 (1) LL] 291.
Bench of Kerala High Court that such conduct would not amount to misconduct.1 4. 'Misconduct' not Enumerated in Certified Standing Orders The law does not stand still. It is always in motion. A decision given today is obsolete tomorrow. The law is changing. In the last two decades or so, the rate of change has been such that the classical law of contract no longer accords with the fact of the mode rn world in employment relationship. In labour law the contract has been banished. Statutory intervention has reduced law of contract to a vanishing point. It is no longer a relationship of ordinary master and servant in which the rights of the parties are regulated solely by contract and where certain terms and conditions of service are deemed to be implied in the contract of service. The modern relationship of employer and employee is much less personal than the old relationship of master and servant. Today, the modern relationship of
employer and employee has a strong statutory flavour and/or a constitutional protection which cannot be varied by the parties. Several decisions, that 'acts of omission or commission under the certified standing orders are not exhaustive but only illustrative and that mere omission of a certain type of misconduct in the certified standing orders or service rules did not mean that an employee could not be dismissed on that ground even though not over ruled are deemed to be no longer good law and cannot be accepted as binding. It is not open to an employer to fish out some conduct as 'misconduct' and punish the employee if otherwise it has not been comprehended in any of the enumerated acts of misconduct. It cannot be accepted that even if an act or omission does not fall in any enumerated misconduct, yet for the purpose of service regulations, it would nonetheless be a mi sconduct punishable as such.2 In the undernoted case, it has been held that private conduct of an employee not defined to be misconduct under the relevant rules is not misconduct liable for any disciplinary action. Any disciplinary action taken would be clearly without the authority of law.3 The employees must know in advance which act _________ 1. C.P. Peethambran v. Superintendent of Police, 1996 Lab IC 150. 2. Management of M/s Tata Engineering Locomotive Co. Ltd. v. Presiding Officer, Industrial Tribunal, 1989 (59) FLR 648. 3. Ch. Satya Narain v. Dock Labour Board, 1989 (1) CLR 529.
or omission would constitute 'misconduct' as to be visited with penalty. 'Penalty' is imposed for 'misconduct'. Removal or dismissal from service on account of misconduct constitutes 'penalty' in law. It is a well-settled cannon of penal jurisprudence that the employee sought to be charged for misconduct must have adequate advance notice of what act or omission would constitute 'misconduct', he must know in advance which action or what conduct would constitute 'misconduct' as to be visited with penalty. Where 'misconduct' when proved entails penal consequences, it is obligatory for the employer to specify and define it with precision and accuracy so that any ex post facto interpretation of some incident may not be camouflaged as 'misconduct'. The object of framing Service Rules under Article 309 of the Constitution of India and the Standing Orders which are certified under the Industrial Employment (Standing Orders) Act, 1946 is to make it clear to both the parties on what terms and conditions the employees are offering to work and the employer is offering to engage them. Such terms and conditions of employment should be wellestablished and should be known to the employees before they accept the employment. In one case, the Industrial Tribunal had held that the alleged misconduct had taken place outside the working hours. The Supreme Court has held that even disorderly behaviour outside the factory, constitutes misconduct, however, every such behaviour unconnected with employment would not constitute misconduct within the relevant standing orders and that in such a case it would nonetheless be necessary to establish casual connection between the misconduct and the employment, and not wherever the misconduct is committed ignoring the language of the standing order if it has some impact on the employment, it would be covered by the relevant standing orders. In order to avoid any ambiguity being raised in future and a controversial interpretation question being raised, their Lordships made it abundantly clear and incontrovertible that the casual connection in order to provide linkage between the alleged act of misconduct and employment must be real and substantial, immediate and proximate and not remote or tenuous. Their Lordships also gave an illustration to succinctly bring out the difference. "One workman severely be laboured another (sic) for duty on the next day. Would this absence permit the employer to charge the assailant for misconduct as it had (sic) on the working in the industry. The answer is in the negative." It was observed that the employer cannot take advantage to weed out workmen for incidents that occurred far away from his establishment.1 The decision of the Supreme Court in the undernoted case2 in reaching the conclusion that the management was guilty of victimisation. Yet in another case3 decided by the Supreme Court, the respondent workman entered the club set
up by the appellant and misbehaved with all and sundry present. He was persuaded to leave and when he went out, he kept on abusing the official at the club. He was charge-sheeted. An enquiry followed and he was dismissed. The order of dismissal was set -aside by the Tribunal, but was restored by the Supreme Court in appeal by the company. There was no suggestion that the club premises did not form part of the establishment of the company. The decision appears to be on the facts of the case only without the slightest reference to the question whether the place where misconduct was committed had any relevance. To enable an employer to peacefully carry on his industrial activity, the Industrial Employment (Standing Orders) Act, 1946 confers powers on him to prescribe conditions of service including enumerating acts of misconduct when committed within the premises of the establishment. Where, therefore, the misconduct when proved entails penal consequences, it is obligatory on the employer to specify and, if necessary, define it with precision and accuracy so that any ex-post facto interpretation of some incident may not be camouflaged as misconduct. In one case, the gravamen of the two heads of charges was that the delinquent was guilty of misconduct as prescribed in Rule 4(1)(i) and (iii) of the Act which read as under: 4(1) Every employee shall at all times: (i) maintain absolute integrity; (ii) .............................................. (iii) do nothing which is unbecoming of a publ ic servant. __________ 1. Glaxo Laboratories (India) Ltd. v. P O Labour Court, Meerut,
MANU/SC/0247/1983 :
AIR 1984 SC 505: 1983 Lab IC 1909:
(1984) 1 SCC 1. 2. Bharat Iron Works v. Bhagubhai Balubhai Patch
MANU/SC/0345/1975 : AIR 1976 SC 98: (1976) 1 SCC 518.
3. British India Corporation Ltd. v. Bakshi Sher Singh, (1962) 23 FJR 484: 1976 Lab IC 4.
It was under the heading 'General' and Rule 5 which bears the heading 'misconduct' enumerated various acts of omission and commission to be treated as 'misconduct'. While construing the above Rules, their Lordships of the Supreme Court observed:1 Rule 4 is vague and of a general nature and what is unbecoming of a public servant may vary with individuals and expose employees to vagaries of subj ective evaluation. What in a given context would constitute conduct unbecoming of a public servant to be treated as misconduct would expose a grey area not amenable to objective evaluation. Where misconduct when proved entails penal consequences, it is obligatory on the employer to specify and, if necessary, define it with precision and accuracy so that any ex post facto interpretation of some incident may not be camouflaged as misconduct... Rule 4 styled as 'General' specifies a norm of behaviour but does not specify that its violation will constitute misconduct. In Rule 5 it is nowhere in any of its sub-clauses which specified misconduct. It would, therefore, appear that even if the facts alleged in the two heads of charges are accepted as wholly proved, yet that would not constitute misconduct as prescribed in the Rule and no penalty can be imposed for such conduct. Rule 25 which prescribes penalties specifically provides that any of the penalties therein mentioned can be imposed on an employee for misconduct committed by him. Rule 4 does not specify a misconduct... It is, thus, well-settled that unless either in the certified standing orders or in the service regulations an act or omission is prescribed as 'misconduct', it is not open to the employer to fish out some conduct as 'misconduct' and punish the employee even though the alleged misconduct would not be comprehended in any of the enumerated misconducts.2
The impact of the above pronouncements of the Supreme Court, therefore, is that no disciplinary action against a delinquent employee can be initiated or taken in respect of an act of misconduct not defined in the Standing Orders certified under the _____________ 1. A.L. Kalra v. Project and Equipment Corporation of India Ltd., 1984 Lab IC 961 (SC):
MANU/SC/0259/1984 : AIR
1984 SC 1361. 2. Rasikalal Vaghojibhai Patel v. Ahmedabad Municipal Corporation, (1985) 66 FJR 225 (SC): 1985 LLR 8.
Industrial Employment (Standing Orders) Act, 1946 or the other service rules or regulations or even where such acts of omission and commission are vaguely defined. However, some courts have taken a different view depending upon the facts and circumstances of the cases. In one case the charge against an employee was that despite repeated instructions given first by the foreman and later by the Assistant Superintendent, the concerned workman refused to carry out the repair which resulted in losses to the management running into several lakhs of rupees. He was removed from the job; while removing the worker, the management took into account his previous record. Secondly, the offence was very grave that the management cannot be accused of having acted arbitrarily in awarding the extreme punishment of dismissal. It has been held that the refusal by the workman concerned of clear instruction was persistent and, therefore, furnished a valid ground sufficient to warrant the punishment meted out by the management. In any case, the punishment cannot be characterised as shockingly out of proportion.1 5. Concept of Misconduct is Variable There is no fixed rule of law defining the degree of misconduct justifying dismissal from service and it is always a question of fact in each individual case whether the misconduct in question is inconsistent with the fulfilment of the implied or express conditions of service.2 But 'misconduct' by which again is meant conduct inconsistent with the due and faithful discharge of the duties such as breach of confidence or promoting insubordination, conduct prejudicial to the employer's interest, an act of dishonesty in the course of service, etc., have been held to justify dismissal.3 In other words, in the absence of Standing Orders, it would be open to the employer to consider reasonably what conduct can be properly treated as misconduct. It would be difficult to lay down any general rule in respect of this problem. Acts which are subversive of discipline would constitute misconduct; rowdy conduct in the course of working hours would constitute misconduct; misbehaviour committed even outside working hours but with the employees of the said concern may, ______________ 1. Hindalco Pragatisheel Mazdoor Sabha, Renukoot, Mirzapur v. State of Uttar Pradesh, 1992 LLR 24. 2. Cloustan v. Carry, 1906 AC 122. 3. Law of Master and Servant by F.R. Batt, 3rd Edn., Chapters IV and VII.
in some cases, constitute misconduct, if the same is of such a character that the employee would not be regarded as worthy of employment and it may, in certain circumstances, be liable to be called misconduct, but this will naturally depend upon the circumstances of each case. 1 The industrial law interprets what is just and proper in a developing society and it has, therefore, naturally to be consistent with the current notions of right and wrongs which have changed and now no one will think it to be a sufficient misconduct justifying dismissal as previously when the act of a servant who went to visit his dying mother without permission was held to be sufficient justifying his dismissal. We are living in a flux and the ideas are still developing and they are constantly being modified from time-to-time. Since the gravity of misconduct varies from place to place and as such an assault and threat upon general Supervisor of the Hospital by the delinquent employee becomes more grave and serious and does not stand on the same footing as an occasional or isolated instance of a breach of discipline on the shop fl oor of a factory.2
6. Implied Terms of Contract of Employer and Employee Relationship In every contract of service there is an i mplied condition that the employee will work faithfully. If he does not work faithfully, the employer is entitled to ask for rescission of the contract. It is said to be an implied term of fidelity. It is also an implied term of contract that the servant will be subordinate and will work in accordance with the discipline set up by his employer. It is also an implied term that an employee will personally perform the contract and will not assign the performance of the contract to any other person. Another implied term of the contract under the common law is the obligation on the part of the employee to account for in respect of monies and properties received by him either from his employer or from anybody else on his behalf. The obligation to account for is a direct corollary of the obligation to faithfully perform duties. The obligation is assumed because in the absence of any such assumption the contract of employment will be unworkable or in any case it is an assumption based on ________________________ 1. Agnani v. Badridas, 1963 (1) LLJ 684: 1963 (6) FLR 440 (SC). 2. Breach Candy Hospital & Research Centre v. Babulal B. Pardeshi, 2001 LLR 1171 (Bom HC).
equitable grounds in view of the peculiar nature of the contract itself. The liability of personal performance on the part of an employee gives rise to another implied term of the contract of competence. This means that the employee has warranted that he is reasonably fit for the job which he undertakes. In other words, if after entering i nto service he becomes incompetent for any reason then the employer is entitled to put an end to the contract. The concept of misconduct in employer and employee relationship is based upon the nature and relationship, itself an implied and express condition of service. This will include the conditions that the employee would be trustworthy, that his acts would justify the confidence of the employer, that he will not act so as to prejudice or damage the interests of the employer, that he will not act or conduct himself in a way which is inconsistent or incompatible with the faithful discharge of his duties to the employer, that he would not behave in an insulting manner and that he would not be habitually negligent.1 In one case, the following acts on the part of an employee have been held to be misconduct1:-1. Any act or conduct which is prejudicial or is likely to be prejudicial to the interest of the employer or to the reputation of the employer. 2. Any act or conduct inconsistent or incompatible with the due or peaceful discharge of the workman's duty to his employer. 3. Any act or conduct of a worker which makes it unsafe for the employer to retain him in service. 4. Act or conduct of the employee which is so grossly immoral so as to make him untrustworthy in the eyes of reasonable men. 5. Any act or conduct of the employee which makes it impossible for the employer to rely on his faithfulness. 6. An act or conduct of the employee is such as to open before him temptations for not discharging his duties properly. 7. Any act of the employee which disturbs the peaceful functioning at the place of work.2 __________________ 1. Sharda Pd. Onkar Pd. Tiwari v. Central Railway, 1960 (1) LLJ 167. 2. Shalimar Rope Works Mazdoor Union v. Shalimar Rope Works, 1953 (2) LLJ 876.
8. Use of filthy or abusive language against co-employees, officers or employer.1 9. Insulting behaviour and insubordination as to make it impossible to retain the relation of master and servant.2 10. Habitual neglect of duties which a worker is paid. 11. Habitual neglect of duties which causes or tends to cause serious and harmful consequences. 12. Theft, fraud or dishonesty in connection with the employer's business. 3 13. Illegal strike. 14. Breach of duty; absence without leave; non-performance of job duties; disobedience of orders.4 15. Breach of discipline; disrespect to or assaulting superiors or subversion of discipline; disrupting relations with co-workers. 16. Delinquencies like telling lies, committing theft, fraud, dishonesty, disloyalty and corruption, damage to property or goodwill. 17. Disobedience or disrespectful conduct.5 An implied term is that term which is supposed to be in the minds of the parties at the time of the contract and although the parties did not so express it, they had agreed to carry out the same.6 In other words, an employment contract includes not only what is expressly stated, but also what is necessarily implied duty from the nature of the relationship created.7 It is the implied duty of the servant to be loyal, diligent, faithful and obedient.8 An ________________ 1. Jaichand Bansal v. I.T., 1964 (1) LLJ 289 (Bom HC). 2. Edwards v. Lavy, 1860 (2) F&F 94. 3. Employers of Firestone Tyre & Rubber Co. (P) Ltd. v. Workmen, 1968 (2) SCJ 83: (1986) 1 SCR 307. 4.
Calcutta
686:
Jute
Manufacturing
Co.
Ltd.
v.
Calcutta
jute
Manufacturing
Workers'
Union,
1961
(2)
LLJ
MANU/SC/0248/1961 : AIR 1966 SC 1731: (1961-62) 21 FJR 347: 1962 (4) Fac LR 7: 1962 II SCJ 260.
5. Jagmohan Das Jagjivan Das Mody v. State of Bombay, 1962 (2) LLJ 507:
MANU/GJ/0055/1962 :
AIR 1962 Guj
197. 6. Joginder Nath Chatterjee & Sons v. Chandeshwar Singh, 1951 (1) LLJ 217. 7. N.Y. Dawrinzis v. Merchants' Despatch Transport Co., 274 NYS 174: 152 Misc. 716. 8. Burnotein v. Upper Manufacturing Co., 60 AIR 770.
implied warranty is really founded upon the presumed intention of the parties and upon reasons.1 7. Broad Enumeration of Acts and Omissions Constituting Misconduct It is very hard to lay down any exact list of misconduct or to provide the exhaustive list of acts and omissions which shall be treated as misconduct in relation to an industry. When an employee does some act contrary to the accepted rules, it is misconduct. When a group indulges in such an activity it becomes indiscipline. Indiscipline is a general term while misconduct is a specific term. Where the Standing Orders of an establishment define acts and omissions constituting
misconduct, an order of dismissal can be passed only in terms of such Standing Orders and not otherwise. But where there are no such Standing Orders it is open to the employer to take action against his employees for any act of misconduct meriting dismissal. What is misconduct will depend upon the circumstances of each case. It is, however, not possible to lay down any general rules in the context but it can be said that in the absence of any standing orders, what constitute misconduct has to be decided reasonably and in accordance with commonsense. The test is simple that misconduct is conduct which is inconsistent with the fulfilment of an express or implied condition of service. It is a violation of the definite rule; it is a failure on the part of the employee to carry out instructions or comply with the regulations.2 Now what constitutes 'misconduct' is briefly stated in the Model Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 and various other rules and regulations governing the service conditions of industrial employees. A large number of industrial establishments have their own set of standing orders. Such standing orders defining misconducts are not exhaustive but only illustrative. Though it is not possible to lay down comprehensively what acts of commission or omission would constitute misconduct, proper guidance is, however, available in the Model Standing Orders or ____________ 1. Morrock's case (1889) 14 PD 64. 2. W.M. Agnani v. Badridas, 1963 (1) LL] 684 (SC): 1963 (6) FLR 440 (SC).
Standing Orders framed as a part of the rules made under the Industrial Employment (Standing Orders) Act, 1946. Para 14(3) of Schedule 1 to the Industrial Employment (Standing Orders) Central Rules, 1946 prescribes the following acts and omissions on the part of an industrial employee as misconduct: (a) Wilful insubordination or disobedience whether alone on in combination with others to any lawful and reasonable order of a superior. (b) Theft, fraud or dishonesty in connection with employers' business or property. (c) Wilful damage to or loss of employers' goods or p roperty. (d) Taking or giving bribes or any ill egal gratification. (e) Habitual absence without leave or absence without leave for more than ten days. (f) Habitual negligence or neglect of work. (g) Riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline. (h) Frequent repetition of any act or omission for which a fine may be imposed to a maximum of two per cent of the wages in a month. (i) Striking work or inciting others to striko work in contravention of the provisions of any law or rule having the force of l aw. Para 23 of Schedule 1 to the Bombay Industrial Employment (Standing Orders) Rules, 1948, relating to the Model Standing Orders similarly lays down the following acts and omissions on the part of a workman that shall amount to misconducts: (a) Wilful insubordination or disobedience, whether or not in combination with another, of any lawful and reasonable order of a superior. (b) Going on illegal strike or abetting, inciting, or acting in furtherance thereof.
(c) Wilful slowing down in performance of a work, or abetment or instigation thereof. (d) Theft, fraud or dishonesty in connection with the employer's business or property. (e) Taking or giving bribes or any ill egal gratification. (f) Habitual absence without leave, or absence without leave for more than ten consecutive days or overstaying the sanctioned leave without sufficient grounds or proper or satisfactory explanation. (g) Late attendance, on not less than four occasions within a month. (h) Habitual breach of any standing order or any law applicable to the establishment or any rules made thereunder. (i) Collection without the permission of the Manager of any money within the premises of the establishment except as sanctioned by any law for the time being in force. (j) Engaging in trade within the premises of the establishment. (k) Drunkenness, riotous, disorderly or indecent behaviour on the premises of the establishment. (1) Commission of any act subversive of di scipline or good behaviour on the premises of the establishment. (m) Habitual neglect of work or gross or habitual negligence. (n) Habitual breach of any rules or instructions for the maintenance and running of any department, or the maintenance of the cleanliness of any portion of the establishment. (o) Frequent repetition of any act or omission for which a fine may be imposed under the Payment of Wages Act, 1936. (p) Canvassing for union membership or the collection of union dues within the premises of the establishment except in accordance with any law or with the permission of the Manager. (q) Wilful damage to work in process, or to any property of the establishment. (r) Holding meetings inside the premises of the establishment without the previous permission of the Manager except in accordance with the provisions of any law for time being in force. (s) Disclosing to any unauthorised person any information in regard to the process of the establishment which may be in the possession of the workman in the course of his work. (t) Gambling within the premises of the establishment. (u) Smoking or spitting on the premises of the establishment where it is prohibited by the employer. (v) Failure to observe safety instructions notified by the employer or interference with any safety device or equipment installed within the establishment. (w) Distribution or exhibiting within the premises of the establishment handbills, pamphlets, posters and such other things or causing to be displayed by the means of signs or writing or other visible representation or any matter without previous
sanction of the Manager. (x) Refusal to accept a chargesheet, order or other communication served in accordance with these standing orders. (y) Unauthorised possession of any lethal weapon in the establishment. 8. Exhaustive List of Misconduct Notwithstanding to the general meaning of the terms of misconduct, the following acts and/or omissions, which are illustrative and not exhaustive, shall be treated as serious misconducts:-(i) Wilful slowing down in performance of work or abetment or instigation thereof or fasting with an explicit view to i nfluencing the employer's decisions. (ii) Going on or participating in an illegal strike or abetting for the same. (iii) Theft, fraud, breach of trust, or dishonesty by misappropriation of funds in connection with or damage to the Employer's business or property of another employee/officer within the work premises. (iv) Non-observance of safety measures or failure to use safety appliances like helmets, seatbelts, etc., or interference with safety devices or fire fi ghting equipment or disobedience of a safety instruction by the superior. (v) Carrying Employer's goods, files or office documents to the house/home or any other place outside the work premises without prior permission in writing of the Employer. (vi) Unauthorised use of any of the Employer's facility/ equipment or any other thing for personal use. (vii) Leaking any information relating to official matters to outsiders, as they are confidential. (viii) Giving false information regarding one's name, father's name/husband's name, date of birth, qualifications, details of previous service/salary particulars, address, etc., at the time of securing employment or thereafter. (ix) Habitual late attendance and/or absence without leave and/or late attendance on more than three occasions within a month or similar omissions of leaving the premises before time. (x) Assaulting, abusing or intimidating any employee of the Employer either within the premises or at any other place. (xi) Demanding, taking or giving bribes/gifts or any illegal gratification or indulging in any corrupt practice and/or lending or borrowing money to and from subordinate employees. (xii) Carrying on directly or indirectly or benami transactions in the office premises: (xiii) Money lending business and/or (xiv) Other private business without the written permission of the Management or having private financial dealings with persons or firms, etc., having business relations with the Employer for the sale and purchase of any materials, equipments or supply of labour, if any, or for any other purpose. (xv) Holding meetings within the work premises or any other premises owned by the
Employer without the previous written permission of the Management. (xvi) Habitual neglect of work or negligence in work. (xvii) Refusal to work on a job or a mission, which does not call for any additional skill or experience and can be done by the employee/officer without adversely affecting his service conditions. (xviii) Obtaining or attempting to obtain l eave of absence on false pretext. (xix) Attempting to obtain any benefit under false pretext or by making false statements. (xx) Bringing or possessing or using alcoholic drinks, charas, bhang, ganja, within the Employer's premises or reporting for work while under the influence of alcoholic drinks, drugs or narcotics. (xxi) Refusal to accept a charge sheet, an order or any other communication from the Management either in person by post or through courier. (xxii) Publication of any article relating to the work of the Employer without obtaining prior written permission of the Employer. (xxiii) Handling or attempting to handle any machine, equipment, apparatus or vehicle not entrusted to the charge of the employee. (xxiv) Interfering in the work of other employees and/or the Management. (xxv) Habitual breach or gross and/or deliberate violation of the Service Rules and internal regulations. (xxvi) Doing private or personal work within the work premises without the previous permission of the Management. (xxvii) Refusal to work on holidays or on off days when required to do so, refusal to work overtime, in the exigencies of Employer's business/work notwithstanding any statutory provisions. (xxviii) Refusing to undergo training as and when required by the Management. (xxix) Photo or otherwise copying and taking the extracts of official documents with a view to keeping/storing them at home or to maintain files at home will be considered breach of trust. (xxx) It is considered breach of trust if one employee comes to know about the breach of trust done by another staff member, and if this matter is not disclosed immediately to the Management. (xxxi) Breach of confidentiality or a loss of confidence by any act against the interests of Management or organisation. (xxxii) No actions linking Management with activities of other NGO, international organisation or local authorities can be decided without the prior agreement. (xxxiii) Striking work or adopting go-slow methods, either singly or alongwith others in contravention of these Service Rules or any statute, law, agreement, memorandum of settlement agreed from time-to-time and for the time being in force. (xxxiv) Inciting, whilst on the premises of the Employer, any employee or employees to strike work or adopt go-slow methods.
(xxxv) Drunkenness, fighting, riotous, indecent or disorderly behaviour or conduct likely to cause breach of peace or conduct endangering the life or safety of any other person. (xxxvi) Any act subversive of discipline and efficiency, and any act involving moral turpitude committed within the premises of the Employer, and outside if the same has bearing on the services of the employee. (xxxvii) Indiscipline or breach of any rules or instructions for the maintenance and or instructions for the running of any department or maintaining its cleanliness. (xxxviii) Distributing or exhibiting inside the premises of the Employer any newspaper, and bill(s), pamphlets or poster(s) without the previous written sanction of the Management. (xxxix) Threatening or intimidating any employee within the premises of the Employer or outside concerning matters relating to the Employer. (i) Gambling or playing cards, etc., within the premises of the Employer. (ii) Spitting, gossiping within the premises of the Employer. (lii) Sleeping or dozing whilst on duty. (liii) Resorting to picketing, hunger strike against any officer whether within the premises of the Employer or outside it relating to the matters concerning the Employer. (liv) Absence from place of work without the permission of the departmental head. (lvi) Theft of property belonging to other employees inside the premises of the Employer. (lvii) Interference, tampering with records, attendance register, etc., either pertaining to himself/herself or to any other employee. (lviii) Wilful non-cooperation with fellow employee for proper discharge of duty at any time. (lix) Giving interview to press, radio, television without the permission of the Management. (lx) Loitering, idling or wasting time during working hours or staying within the premises of the Employer after authorised hours of work without permission. (lxi) Not wearing the complete uniform provided by the Management, if any, during working hours or wearing the uniform improperly while on duty. (lxii) Eve-teasing or sexual harassment in the premises of the Employer or transport provided by the Employer, if any. (lxiii) Any other act or omission subversive of discipline or prejudicial to the interest of the Company/ Organisation. The above enumeration is only illustrative but not exhaustive. 1 There may be many more acts which may constitute misconduct. The employers may frame their own standing orders suited to the peculiar exigencies of their industries and establishments. It is not possible to provide for every type of misconduct in the standing orders for justifying disciplinary action against the workman.2 What is misconduct would naturally depend upon the circumstances
of each case. Where there are standing orders, there ________________ 1. Ct. New Victoria Mills Co. Ltd. v. Labour Court, 1970 Lab IC 428. 2. Express Newspaper (P) Ltd. v. I.T., 1961 (1) MLJ 100.
should be no difficulty because they define misconduct. In the absence of standing orders, the question would have to be dealt with reasonably and in accordance with commonsense. As to what acts can be treated as misconduct, therefore, would depend on the facts and circumstances of each case.1 For modulating the quantum of punishment, a distinction has to be made between mere technical misconduct which leaves no trial of indiscipline on one hand and a misconduct resulting in damage to the employer's property or serious misconduct which though not directly causing damage may be conducive to grave indiscipline, for instance, acts of violence against the management or other employees or riotous behaviour, in or near the place of employment on the other. But the scope of misconduct for the purposes of industrial adjudication is wider than that of criminal offence such as theft.2 However, there is no fixed rule of law defining the degree of misconduct which will justify dismissal.3 Misconduct in industrial employment can broadly be dealt with under the following three major heads for purposes of convenience of treatment:-I. Misconduct affecting suitability of employee for a particular employment. II. Misconduct affecting discipline. III. Misconduct affecting morality. __________ 1. W.M. Agnani v. Badri Das, 1963 (1) LLJ 684 (SC): 1963 (6) FLR 440 (SC). 2. New Victoria Mills Co. ltd. v. labour Court, 1970 Lab IC 428. 3. Bell v. lever Bros., (1932) AC 161.
3 SECOND STEP TOWARDS DISMISSAL/ DISCHARGE OF AN EMPLOYEE SYNOPSIS (a) Charge-sheet and its Service 1. Object of a Charge-Sheet 2. Essential Ingredients of a Charge-Sheet 3. Drafting of a Charge-Sheet 4. Competent Authority for Issuing of Charge-Sheet (b) Service of Charge-sheet
1. By Personal Service 2. Compliance of Standing Orders/Service Rules for Serving the Charge-Sheet 3. Serving Charge-Sheet through Postal Authorities (c) Formats of Charge-sheets (i) When an employee is in the habit of absenting from duties (ii) When an employee assaults and fights in the premises of the factory (iii) When an employee is in the habit of coming late (iv) When an employee is guilty of disobedience and wilful insubordination (v) When an employee is guilty of dishonesty (vi) When an employee incites other workers to abstain from performing their duties and to stage violent demonstration (vii) When an employee avails leave on false grounds (viii) When the conduct of an employee involves bad faith and dishonesty (ix) When an employee holds meeting of the union within the premises of the establishment (x) When an employee neglects his duties (xi) When an employee is guilty of neglecting duties, irregular attendance and lack of punctuality (xii) When an employee over-stays of his sanctioned leave (xiii) When an employee fails to perform his duty during working hours (xiv) When an employee is drunk while on duty and misbehaves with his superiors (xv) When an employee is guilty of wilful damage to the property and insolent behaviour towards his superior officer (xvi) When an employee is guilty of indulging in riotous and disorderly behaviour in the premises of the establishment (xvii) When an employee indulges in resorting to strike, insubordination and picketing (xviii) When an employee is guilty of unlawful assembly, shouting slogans and causing damage to property of the factory/mill (xix) When an employee factory/establishment
is
guilty
of
smoking
at
a
prohibited
place
of
the
(xx) When a worker resorts to illegal strike during the subsistence/operation of the settlement (xxi) When an employee stages demonstration and incites other workers to join him for agitation and to cause loss/damage to the property of the factory (xxii) When an employee stays inside the factory premises during strike (xxiii) When an employee fails to comply with transfer order
(xxiv) When an employee slows down the work/ production (xxv) When an employee does not attend to h is work properly (xxvi) When an employee takes unauthorised benefit of service with the employer and works for a competitor (a) CHARGE-SHEET AND ITS SERVICE 1. Object of a Charge-Sheet The purpose of the charge-sheet is to know what exactly is the case the workman has to answer. Even if the domestic enquiry is vitiated, the Labour Court has a duty to give the management an opportunity to prove its case, provided such an opportunity is asked for before proceedings are closed. Even if no domestic enquiry is held or if the domestic enquiry held is invalid, it is now well-settled that the management can justify the action by leading relevant evidence before the Tribunal. If an employer dismisses a workman on the spot, it cannot be stated that he has no remedy when a dispute is raised. The entire matter will be at large before the Tribunal and the Tribunal has to come to a finding on the basis of the evidence adduced before it as to whether the management was right and further as to what relief, if any, the employee is entitled to. Just because no charge was framed before the dismissal or no enquiry was held, it cannot be stated that when the dispute is referred, the management will be directed to reinstate the workman with back-wages without giving an opportunity to the management to prove its case before the Tribunal.1 A 'charge-sheet' under labour laws is a memorandum of charges, i.e., acts or omissions alleged to have been committed by an employee. It consists of facts and allegations which the person issuing wants to establish against the employee committing a breach of rules of misconduct in terms of the standing orders or any act inconsistent with the ful filment of the obligations implied in the contract of employment. In short, a charge-sheet is an allegation of misconduct, misbehaviour, indiscipline, lack of interest in work, negligence, etc., on the part of the employee. It is not used in the sense in which it has been used in Section 410 of the Criminal Procedure Code, 1898.2 It, therefore, follows that a charge-sheet is a memorandum of accusations which are levelled against an employee who commits a breach of any rules, regulations, standing orders or an implied terms of contract. In other words, a charge-sheet is nothing but a paper or document containing the alleged acts of misconduct against an employee. A charge-sheet seeks to fulfil one of the basic postulates of the rules of natural justice that a fair and reasonable opportunity of being heard should be given to the person arraigned which obviously would not be possible unless he is specifically told of the accusations levelled against him.3 Although the concept of charge-sheet in domestic enquiries derives its sustenance from the criminal law, it is not identical in both types of proceedings. The object of a charge-sheet is derived from the principles of natural justice that a person who has misconducted himself should know about his guilt so that he may state his views in reply to the charges as enumerated in the charge-sheet. ________________ 1. Subaida Cloth Stores v. Labour Court, 1992 LLR 132. 2. V. Venkataraman Rayadu v. Province of Madras,
MANU/TN/0219/1946 :
AIR 1946 Mad 375: 1946 (1) Mad LJ
249. 3. State Bank of Bikaner and Jaipur v. Prabhu Dayal Grower, 1995 (2) CLR 1158.
Fair hearing pre-supposes a precise and definite catalogue of charges so that the person charged may understand and effectively meet it. If the charges are not precise and are indefinite, then the person charged cannot understand them and defend himself effectively,
and the resulting enquiry would not be a fair and just enquiry.1 2. Essential Ingredients of a Charge-Sheet Though different situations will require different charge-sheets, one requisite feature of every charge-sheet is that charges must be specific in all possible details besides being accurate so that the acts of misconduct on the part of the delinquent employee must be brought home because otherwise the entire proceedings will come to naught. The whole object of furnishing a charge-sheet is to give an opportunity to the person who is charged with misconduct and the rules of natural justice also require that a person charged with an offence should know precisely the nature of the offence so that he may be able to explain what he has to say about it and prove his innocence in the matter. So, the purpose of the charge-sheet being to acquaint fully the employee about the nature of the charges levelled against him, it must contain full details and must be in writing and must be signed by the disciplinary authority and should not be vague.2 A charge-sheet for gross negligence without alleging or giving particulars pertaining to negligence will be vague and will result in perversity of the enquiry held against the delinquent employee who established by evidence produced in the enquiry to the effect that he was diligent.3 3. Drafting of a Charge-Sheet Under Industrial Law, there is no form prescribed for a charge-sheet. Ordinarily, a chargesheet would indicate the proposed punishment but there is no hard and fast rule about it. The only requirement is that it must be drawn in a clear and unambiguous language, mentioning the charges levelled against the person concerned and other necessary particulars specifically _____________ 1. G. Chandrakanth v. Guntur District Milk Producers' Union Ltd. Represented by its General Manager, Sangam Dairy, 1994 LLR 983. 2. Ananthanarayan v. S R, 1956 (1) LLJ 29 Mad. 3. Arvind Kumar Hira Lal Mehta v. Bank of Baroda, 1993 LR 30.
and precisely. The employee must know what are the allegations against him and it is enough if the employer informs the employee by means of a charge-sheet that he was wilfully slowing down the production. It is incumbent upon the employer to furnish to the employee all the necessary particulars showing the acts or omissions on his part before he is called upon to meet the charges. If the charges are framed in a form different from the standard form, if any, then that by itself will not invalidate the proceedings unless it is shown that by such deviation the employee was seriously prejudiced . 1 This shows that though the charge-sheet should be clear and precise, yet it is not required to be framed with the precision of a charge-sheet as in a criminal proceeding.2 A charge-sheet has to convey to the delinquent employee the exact nature of alleged misconduct to enable him to meet the charges effectively hence, it should be precise and no vague.3 Care must be taken to see that it contains all the facts and for this, the standing orders as well as the service rules which define various kinds of misconduct must be read carefully. An occasional lapse which ordinarily may be regarded as a misconduct, such as absence without leave or late attendance or negligence of duty, may not be stressed or over reacted against unless such a lapse acquires the character of being rather habitual. In such an event, the word "habitual" is an essential constituent of the charge and must be mentioned in the charge-sheet. All care must be taken to ensure that the charge-sheet mentions all the essential ingredients of a particular misconduct. In addition to the above, the chargesheet should also contain the particulars of time, place of occurrence and the manner in which the incident alleged to have taken place so as to remove vagueness and make the
charge definite by mentioning these essential factors. When the charge is for striking work in contravention of the provisions of law then the provision which is said to have been contravened must be mentioned in the charge-sheet otherwise the charge-sheet would be vague.4 If a _______________ 1. Sudhendra Narayan Sinha v. Union of India, 1968 Lab IC 1935. 2. A.R.S. Chaudhary v. Union of India, 1957 (1) LLJ 494. 3. Sri Venkatesh Gururao Kuratti v. The Syndicate Bank, Rep. by the Chairman & Managing Director, Manipal, 2004 LLR 697 (Kant HC). 4. United States of America v. Henry, AIR 1955 (NOC) 528 (SC).
person is in the habit of disobeying the instructions of his superiors then each act of disobedience is separate and must be mentioned separately in the charge-sheet so that the employee concerned knows the actual incidents for which he is charged.1 But when there is nothing to indicate that there are any rules of the establishment under which the employee is required to obey the orders then the charge of disobedience of orders, which were not enforceable under any rules, can never be the basis of any order of dismissal or removal.2 While framing a charge, any document or record which is looked into or relied upon must be disclosed in the charge-sheet so that the employee may have the opportunity of dealing with it.3 The reason is that an employer cannot justify his action on any ground other than those contained in the charge-sheet .4 This shows that great care has to be taken while framing the charge-sheet against an errant employee .5 When the expression, "it has been reported against you" is used in the charge-sheet and the reports are relied upon but the persons who made the reports are not examined then this is a serious defect in the charge-sheet and would vitiate the enquiry.6 Where the expression used in the charge-sheet was, "it has been reported against you", it was contended that the charge was based on reports but neither the reports were produced nor the reporters were examined and that in this way, there was violation of the principles of natural justice. This was not accepted because the employer might have received verbal information and when no such report was used against the employee then the enquiry was not vitiated.7 While drawing up a charge-sheet, care must also be taken to see that the language used in it does not show that the employee is guilty. Their Lordships of the ______________ 1. Prem Shankar Misra v. State, 1957 (2) LLJ 177. 2. Northern Railway Cooperative Credit Society Ltd. v. I.T., (1966) (2) SCJ 379 (SC). 3. Phulbari Tea Estate v. Workmen, 1959 (2) LLJ 663 (SC):
MANU/SC/0137/1959 : AIR 1959 SC 1111.
4. Laxmi Devi Sugar Mills v. Nand Kishore, 1956 (2) LLJ 439:
MANU/SC/0065/1956 :
AIR 1957 SC 82: 1956 SCR
916: 1957 SCA 10. 5. Punjab National Bank v. Their Workmen, 1959 (2) LLJ 666 (SC):
MANU/SC/0120/1959 :
AIR 1960 SC 160:
(1959) 17 FJR 199: 1960 SC] 999. 6. Sur Enamel and Stamping Works Ltd. v. Workmen, 1963 (2) LLJ 367:
MANU/SC/0158/1963 :
AIR 1963 SC
1914: 1963 (7) FLR 236: 1964 (3) SCR 616: 1965 (1) SCJ 334. 7. Hindustan Milkfood Manufacturers v. Workmen, Punjab Government, Gazette Part I, dated 6th August 1965 1334.
Supreme Court observed that ambiguous and loose language in the charge-sheet ought to be avoided because it is likely to create an apprehension in the mind of the employee that the authority issuing the charge-sheet has already decided the case against him .1 To conclude all the foregoings, for the convenience of ready reference, for a charge-sheet
to be effective the following conditions must be satisfied: 1. The charge-sheet must be specific and must set-out all the necessary particulars. It will serve no useful purpose at all to presume that the employee is fully informed of the charges because of any previous proceedings against him. 2 2. It is imperative to hold a regular enquiry before terminating the services of a workman. The enquiry itself must be preceded by serving on the workman concerned a regular charge-sheet devoid of any vagueness. Any warning that might have been given to him previously or from time-to-time or that his attention had been drawn to any fault, lapses on his part previously can, by no means, take the place of a regular enquiry.3 3. Vague accusation which the workman cannot possibly follow should not be made in the charge-sheet.4 The test to determine as to whether the charge-sheet is imprecise and vague is as to whether it conveys to the delinquent employee the exact nature of alleged misconduct and does not enable him to meet the charges effectively.5 4. The charge-sheet must accurately and precisely state whether the act of commission or omission constituting misconduct is in violation of any standing order or not.6 _________________ 1. Powai Tea Estate v. M K Barkatakt, 1965 (2) LLJ 102 (SC): (1965) 11 FAC LR 1. 2. Amulya Ratan Mukherjee v. Deputy Chief Mechanical Engineer, Eastern Railway,
MANU/WB/0005/1961 :
AIR
1961 Cal 40. 3. British India Corporation Ltd. v. N.T. Gandhi, AIR 1955 (NUC) 6118 (LAT). 4. Modi Sugar Mills Ltd. v. Mazdoor Sabha, (1952-53) 4 FJR 219(LAT). 5. Sri Venkatesh Gururao Kuratti v. The Syndicate Bank, Rep. by the Chairman & Managing Director, Manipal, 2004 LLR 697 (Kant HC). 6. Chini Mills Karamchari Union v. R.B. Lachmandas Manoharlal and Sons, Civil Appeal No. 197 of 1951 decided on 29-51952 (LAT).
5. Where the charge is for unauthorised collection of subscription on the work premises, the purpose for which such a subscription was collected need not be stated. But the time, date and place i.e., when and where the collection was made must be clearly mentioned.1 6. The charge-sheet must be signed by the competent authority. 7. When under the standing orders or service rules an act, such as absence without leave, late attendance, negligence or disobedience is misconduct, when it is committed habitually then in such a case the word, "habitual" forms an essential constituent of the charge and must be expressly mentioned in the charge-sheet. 8. Similarly, if the standing orders or service rules provide that damage to property or disobedience or insubordination must be "wilful" then the wilfulness is an essential part of the charge and must be stated i n the charge-sheet. 9. If theft or dishonesty is a misconduct only if it is committed in connection with the employer's business or property then this must be so stated in the charge-sheet in all its details. 10. If the charge is for arrogant conduct towards a superior then it must be so stated in the charge-sheet giving the occasion on which the misconduct was
committed and in respect of which particular superior. 2 11. When an employee is charged for habitually disobeying the instructions then each set of disobedience on his part must be separately mentioned in details in the charge-sheet.3 12. The time and date of the incident should be mentioned in the charge-sheet in order to avoid vagueness and to enable the employee to take the defence of an alibi.4 13. When an employee is charged for using objectionable and offending language then the actual words used must be stated i n the charge-sheet. ___________ 1. Mazdoor Congress v. ]K Cotton Manufacturers Ltd., 1952 (2) LLJ 559 (LAT). 2. S.V. Naidu v. Blackwood India Ltd., 1957 (2) LLJ 340. 3. Chittranjandas v. State,
MANU/SC/0068/1963 : AIR 1963 SC 1696: 1964 (2) SCJ 311.
4. Macelence and Co. Ltd. v. Gaya Prasad, 1955 (2) LLJ 86.
14. While verbiage is to be avoided, use of any abbreviations such as "etc. "must be equally shunned. Phrases such as "any other document" is vague and ineffective and so, only reference should be made to a specific thing or a particular person. 15. It is important to remember that the language of a charge-sheet while being precise must not give the impression that the employer has taken the question of the employees' guilt as a foregone conclusion. 16. As far as practicable, the language of a charge-sheet must be simple and be one which is commonly understood or in common usage.1 17. When the previous record of the employee is relied upon, then sufficient particulars of the previous bad record should be specified in the charge-sheet. 18. When the charge to be levelled is that an employee altered the relevant entries in the record with some ulterior motive then in such a case, the workman should be informed as to what precisely was the motive being attributed to him for so doing because unless this is done, the charge-sheet would suffer from the disqualification of vagueness.2 19. Mere cataloguing for recital of charges without the requisite details, makes a charge-sheet open to question of its validity and i s an exercise in futility. 20. Another important point on which caution is necessary is to make use of the term, "about" in relation to the date and time of a particular incident of mi sconduct. 21. A valid charge-sheet must be in precise terms as there is no room for using loose or vague terms which fail to convey in the correct sense a charge brought out against an employee. 22. In the case of a theft, it is most necessary to mention full particulars of the goods or articles stolen. 23. Full particulars with regard to the date and time of the incident including the place of occurrence must be indicated.3 _____________
1. Allen Berry and Co. Ltd. v. Workmen, 1953 (2) LLJ 299. 2. State of Uttar Pradesh v. Saligram, AIR 1960 Alt 543. 3. State of Uttar Pradesh v. Mohammad Sharif, 1982 (45) FLR 289 (SC).
24. The charge-sheet should also not be issued with a bias and closed mind as may indicate the drawing up of a positive conclusion against the delinquent and requiring him to dispel the same.1 25. Workman charged with having instigated strike and subsequently executing a document of good behaviour, cannot be punished in absence of any evidence of his going back on such assurance.2 26. Another equally important point to be noted while drawing up a charge-sheet is that a workman charged for tempering and falsification of weighment sheets cannot be punished for having been found guilty of carelessness and negligence.3 27. If particulars of misconduct are not i ncorporated in the charge-sheet, then it will not be considered in the charge-sheet and the entire enquiry will become a farce in which principles of natural justice are not complied with. In such cases, the dismissal order is liable to be quashed.4 28. It is the duty of the employer to indicate to a delinquent employee served with the charge-sheet not only the precise nature of charges, but also the documents, if any, upon which the charges are based.5 4. Competent Authority for Issuing of Charge-Sheet Any person who has got the power to appoint has also the power to take disciplinary action. In other words, the appointing authority has got the power to issue or frame the charge-sheet.6 It, therefore, follows that the framing of the charge-sheet, holding of enquiry, notice to show cause, are all steps to be taken by the ______________ 1. Surendra Chandra Das v. State of West Bengal, 1982 LLR 41. 2. Ameteep Machine Tools v. Labour Court, Haryana,
MANU/SC/0310/1980 :
AIR 1980 SC 2135: 1980 Lab IC
1297: 1981 LLR 10 (SC): 1980 57 FJR 63. 3. Lakshmaiah v. Zonal Manager, Food Corporation of India, 1982 (2) LLJ 369: 1982 LLR 132-33 (AP HC) (DB). 4. Miraj Taluka Girni Kamgar Sangh v. The Manager Shrce Gajanan Weaving Mills, Sangli, 1992 (64) FLR 171 (Bom): 1992 (2) LLJ 686: 1992 LLR 105. 5. Sunderial Dhanra; Kasliwal v. Karamveer Kakasaheb Wagh Sakhar Karkhana Ltd., 1995 LLR 247. 6. Lekhraj Sathram Das v. N.M. Shah,
MANU/SC/0010/1965 : AIR 1966 SC 334: 1966 (1) SCR 120: 1966 (1) SCJ
24: (1966) 5 Law Rep. 6.
disciplinary authority. In the absence of any provision permitting expressly or by implication, the delegation of disciplinary power to a particular person, no one shall have any authority to frame on his own initiative any charge against an employee and proceed to enquire into them.1 It is well-established that an authority competent to impose a penalty or to dismiss an employee can issue or frame the charge-sheet .2 The exercise of disciplinary powers extends not only to appointment and dismissal but also to the initiation of disciplinary action against an employee by framing charges against the employee and in suspending him and in the absence of any statutory provision permitting expressly or impliedly delegation of disciplinary powers, any authority other than the disciplinary authority has no power to frame the charge-sheet .3 It is, therefore, obvious that when the charge-sheet is required to be framed by the manager, then the charge-sheet issued by
the section-in-charge is not in order. Where the appointing authority of the delinquent official was the Commissioner of Municipal Corporation of Delhi but the charge-sheet was issued by the Deputy Commissioner (T), it has been held that the action as initiated by the Deputy Commissioner (T) was without jurisdiction and void ab initio.4 However, where a committee was appointed and empowered to frame charge-sheet and hold an enquiry against the delinquent employee, it has been held by the Karnataka High Court that the function of framing the charge-sheet or holding of enquiry could be validly delegated.5 Where the charge memo was issued by a person who had not been delegated the powers under the Standing Order which fact has been challenged in the court, it has been held that the disciplinary enquiry is held only for the purpose of establishing the guilt of a particular workman. Beyond that there is no logic in ________________ 1. Manihar Singh v. S.P. United Khasi Jaintia Hills, Shillong, 1969 (2) LLJ 493. 2. D.S. Garewal v. State of Punjab,
MANU/SC/0154/1958 :
AIR 1959 SC 512: 1959 SCJ 399: 1959 SCA 364; see
also Hutchevs v. State of Mysore, AIR 1963 Mys 66. 3. Shardul Singh v. State of Madhya Pradesh,
MANU/MP/0050/1966 : AIR 1966 MP 193: 1966 MPLJ 145: 1967 Jab
LJ 21; see also Manihar Singh v. Superintendent of Police, 1969 (2) LLJ 493. 4. Britannia Biscuit Co. Ltd. v. Workmen, Calcutta Gazette, Pt. IC, dated 7th November, 1969, p. 3612. 5. Karnataka Rashtriya Education Society, Bidar v. Educational Appellate Tribunal, 1985 II SLR 273.
stating that the charge memo must be issued by the competent officer. There is no question of any competent officer issuing a charge memo .1In one case, the Allahabad High Court has held that if the charge-sheet is not signed by the competent authority, it would not mean that the compliance of the certified standing order has been made. In this case the charge-sheet was signed by Sri V.K. Varman on behalf of the Head of the Department.2 (b) SERVICE OF CHARGE-SHEET There are several methods of serving a charge-sheet on the delinquent employee. For making the service of charge-sheet proper and valid, observance of certain procedural norms is unavoidably necessary. 1. By Personal Service A charge-sheet is to be served upon an employee by handing it over to him personally. After having handed over the charge-sheet to the employee concerned his signatures should be obtained on the duplicate office copy of the charge-sheet in token of the employee having received it. In the event of such an employee declining to sign in token of acknowledgement, the person serving the charge-sheet should make a note of this fact on the office copy of the charge-sheet but it should invariably be done in the presence of at least two witnesses whose statement must also be taken immediately afterwards so that if and when necessary their testimony could be obtained to that effect. In other words, by their corroborating evidence the refusal of acknowledgement on the part of the concerned employee could be conclusively proved.3 It commonly happens sometimes that after serving a charge-sheet on the employee concerned his signatures are obtained on a peon-book as a token of proper service of it. Subsequently, when the matter comes up for industrial adjudication the employee finds it open to him to take the plea that no charge-sheet was served on him although he did receive ______________ 1. S. Nagaiah v. Indian Aluminium Company Ltd., 1991 LLR 37.
2. M/s. Bharat Heavy Electricals Ltd. v. The Presiding Officer, Labour Court, Uttar Pradesh, Meerut, 1996 Lab IC 1178. 3. Bata Shoe Co. (Put.) Ltd. v. D.N. Ganguly,
MANU/SC/0220/1960 : AIR 1961 SC 1158: 1961 (1) LLJ 303: (1961-
62) 20 FJR 91: 1962 II SCJ 6: 1961 (2) FLR 183.
some other communication on a particular date for which his signatures were obtained on the peon-book for the peon-book cannot usually conclusively prove the correct identity of the communication sewed on the employee concerned. Bearing in mind these possibilities, it is always expedient to obtain the signatures of the employee concerned on the duplicate or office copy of the charge-sheet instead of relying on the peon-book .1 When, however, the personal service of charge-sheet to the employee is not feasible then it should be sent by registered post acknowledgement due.2 The position hitherto considered will be different to alter in case of existence of a provision in the certified standing orders to the effect that if an employee deliberately refuses to accept a charge-sheet then in such an eventuality, he shall be deemed to have been informed in writing and the domestic enquiry may proceed without prejudice or without further reference to the employee concerned.3 In some big industrial organisations the standing orders provide the mode of serving the letter or charge-sheet on the employee concerned. Where, therefore, the mode of serving the letters or charge-sheets is prescribed in the standing orders/ service rules then that should be followed. In the absence of such a provision in the certified standing orders and personal service of the letter/charge-sheet is not feasible then it should be sent by registered post. When, however, a letter/charge-sheet is sent by registered post, there is a general presumption under Section 114 of Indian Evidence Act, 1872 that natural course of business has been followed since the post offices belong to the Government and the act performed by the postal authorities in due course of business are the official acts. In view of this, it is natural to presume that if a letter is proved to have been posted, the natural course of business would have been followed and in ordinary course of business would be deemed to have been delivered to the addressee. The presumption is greater in case of registered letters. If a letter properly directed is proved to have been put into the post office, it is presumed that the l etter reached the destination at the _______________ 1. Moradabad Water Supply Co. v. Workmen, 1951 (2) LLJ 296. 2. Prayag Type Foundry v. Electrical and Engineering Workers Union, (1956-57) (11) FJR 353 (LAT). 3. Goodyear India Ltd. v. I.T., 1968 Lab IC 1599.
proper time according to the regular course of business of the post office, and was received by the person to whom it was addressed. The posting in due course of a letter raises a presumption that it has reached the addressee. A post office seal on an envelop which has been posted may be presumed to be genuine, at any rate where its genuineness is not expressly questioned. If the postmark be taken as genuine, it is evident that the cover bearing it was stamped on the date the impression bears. The postmark is evidence that the place or office mentioned therein was actually the place where it was affixed. The presumption is that the notice was served at the time when it would be delivered in the ordinary course of post.1 When notice is proved to have been sent by post to proper address, then only presumption may arise under Section 114 of the Evidence Act, 1872. A presumption shall arise under Section 27 of the General Clauses Act, 1897 if the notice is proved to have been sent by registered post. Section 27 of the General Clauses Act, 1897 clearly indicates the nature of that presumption. the service shall be deemed to be effected.... at the time at which the letter would be delivered in ordinary course of post. It is reasonable to hold that presumption under Section 114 of Evidence Act, 1872 when
raised shall be of that nature and no more. Both the presumptions are, however, rebuttable. When the cover containing the notice has been returned to the sender by the postal authorities then that fact is direct proof of the fact that the notice sent by post was not delivered to the party to whom it was addressed. Whether it was tendered and, if so, to whom, remains a matter to ascertain on evidence. If acceptable evidence is available that it was tendered to the party personally, then such fact may bring the service of notice within the second mode above mentioned. If, however, tender or delivery is not to the party personally but to a member of his family or a servant, then it may be effective tender or delivery only when the notice was addressed to the residence of the party. Such personal tender or vicarious tender may be effective even if i t was through the agency of post __________________ 1. Woodroof's Ameer Ali Law of Evidence, 11th Edn., Vol. 3, p. 2248 cited with approval in the case of Ayisabeevi v. Aboobacker,
MANU/KE/0051/1971 : AIR 1971 Ker 231: 1971 Ker LT 273: 1971 Ker LJ 485.
office, and proof of that tender comes from the testimony of any person present at the event, and not only by examining the postman. If the letter containing notice sent by post has not been returned to sender then it is a case where presumption operates. Whether such presumption has been rebutted depends on the acceptability of evidence denying tender or delivery offered by the defendant. Mere denial will not lead invariably to rebuttal of presumption properly raised.1 When, however, the postal peon is not examined to prove that, in fact, the addressee refused to accept the cover then there is a presumption that the letters once posted, reached their destination. But when it is defined that the postcards did not reach the addressee then the said presumption stands rebutted and thereafter it is for the sender to prove by examining the postal peon that the communication, in fact, reached the addressee.2 Ordinarily, a statement of the addressee on oath that the post cover which is said to have been refused by him was never tendered to him would be sufficient to dislodge the presumption and shifts the onus on the other to establish by evidence that the service had been duly effected. There is no rule of law that such a statement should not be accepted merely because it is made by a person who is interested in the proceedings nor is there any requirement of law that the statement on oath of a party to the proceedings must always be corroborated by any independent evidence before it could be accepted by a court of law .3 The court may raise a presumption under Section 114 of the Evidence Act, 1872 on the basis of the postal endorsement of refusal on the envelope that the registered letter was tendered to the addressee, that he refused to accept the same and that he knew the contents of the letter but the said presumption can be rebutted by the addressee by leading evidence to the satisfaction of the court. The presumption arising under Section 114 of the Evidence Act, 1872 relates to official acts being done in a regular manner and i f the court is not in a position to raise such a presumption in respect of the endorsement, the court should not exhibit the endorsement but exhibit only the returned ________________ 1. Sushil Kumar Chakravarty v. Ganesh Chandra Mitra, 62 CWN 193: AIR 1958 Cal 251. Followed in Chhay Devi v. Lohon Parashar, 1963 (67) CWN 819; Sukumar Guha v. Naresh Chandra Ghosh,
MANU/WB/0008/1968 :
AIR 1968 Cal
49. 2. Ram August Tewari v. Bmdeshzoari,
MANU/BH/0035/1972 : AIR 1972 Pat 142: 1972 BLJR 97.
3. Jagat Ram Khuller v. Battu Mal, AIR 1976 Del 111: 1975 Rajdhani LR 523.
envelope and in that case the evidence of returned envelope is itself sufficient to rebut the presumption of the letter being received by the addressee which arises under Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act, 1872. 1 This means that presumption can be rebutted by the addressee by entering into the witness box and making a statement that the registered letter bearing the endorsement "refused" was never tendered to him or refused by him and the burden then shifts to the other side and this statement can be controverted by examining the postman who made the endorsement.
If the postman is not examined then the statement made by the addressee on oath remains unrebutted and the refusal of the registered letter cannot be held to have been established.2 Presumptions under Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act, 1872 are independent of each other. 3 The preponderance of judicial opinion is that a presumption of due service can be drawn merel y from the postal endorsement and it is not necessary to produce the postman in evidence. But the endorsement is only a rebuttable evidence and is not the conclusive proof. If contrary evidence is given or facts and circumstances are brought on record which militate against the said presumption then the presumption will not be drawn. To put it into different terminology, the said presumption is displaced in case the defendant denies that the letter was offered to him and refused by him. So, in case the employer relies upon the postal endorsement alone then this may not be sufficient when the employee comes into the witness box and deposes that no such letter was offered to hi m. It, therefore, follows from the above discussion that under Section 114 of the Evidence Act, 1872 the court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. The court may, thus, presume that the _____________ 1. Memon Adambhai Haji Ismail v. Bhaiya Ram Das,
MANU/GJ/0099/1975 :
AIR 1975 Guj 54: 15 Guj LR 655:
1975 Ren CR 116. 2. Meghju Kanji Patel v. Kundanmal Chananlal Mehatani,
MANU/MH/0114/1968 :
AIR 1968 Bom 387: 70 Bom LR
253: 1968 Mah LJ 490. 3. Om Prakash Bahal v. A.K. Shroff, AIR 1973 Del 39: 1972 Ren CR 960: 1973 Ren CJ 149.
common course of business or of any office has been followed i n the particular case. Where a notice sent by post in a registered cover is returned by the postman with the endorsement that the addressee refused to receive it and the posting of notice has been proved, there arises a presumption under Section 114 of the Evidence Act, 1872 that the addressee did refuse to receive it, and the posting of notice has been proved, th ere arises a presumption under Section 114 of the Evidence Act, 1872 (hat the addressee did refuse to receive it even though the postman has not been produced to prove tender and refusal. Undoubtedly, the presumption is one of fact and rebuttable. It can never be regarded as conclusive. The presumption is not rebutted by denial on oath by the addressee unless it is believed by the court.1 It is not always necessary in such cases, to produce the postman who tried to effect service. The denial of service by a party may be found to be incorrect from its own admissions or conduct.2 It also happens that the registered envelopes are returned by the postal authorities with the endorsement, 'not found', 'not known' or 'left', etc. It means that the postal authorities were unable to contact the addressee and in such cases even if the endorsement is believed, there is no service of the charge-sheet on the person concerned. In such cases, the employer is required to either send the charge-sheet again on the same address or adopt alternative methods of serving the charge-sheet on the workman concerned. In such circumstances, it would be futile for the employer to presume that the charge-sheet should be deemed to have been served on the ground that the workman himself avoided to receive the same and it should be deemed to have been refused, unless there is sufficient material on record to support the same. It is now well settled that in such cases the charge-sheets must be published in a newspaper having a wide circulation in that area with the name of the workman concerned in the regional language otherwise it cannot be said that the management did all that it could do to serve the charge-sheet on the workman. The public notice must be such as would come to the knowledge of the __________________
1. M.P. Swami v. Mangaram Agarwalla,
MANU/OR/0004/1979 : AIR 1979 Ori 11: 46 Cut LT 197.
2. Radha Kishan v. State of Uttar Pradesh,
MANU/SC/0146/1962 : AIR 1963 SC 822: 1963 (1) Cri LJ 154: 67 Pub
IR 429: 1965 (2) SCA 1: 1962 (2) SCJ 814: (1965) 2 SCR 213; Puvada Venkateswara Rao v. Chidamana Venkata Ramana,
MANU/SC/0493/1976 : AIR 1976 SC 869: (1976) 2 SCC 409.
person concerned.1 It also happens on some occasions that a registered cover containing the charge-sheet or notice calling for enquiry is delivered to some other person and the acknowledgement slip is signed by him. It may also happen that some other person may refuse to receive the registered envelope. In all such cases there is no proper service of the charge-sheet. When the receipt of registered letter is signed by someone at the other end then the presumption is that he received it on behalf of the defendant. The presumption is, however, rebuttable.2When, however, there is a provision in the certified standing orders or service rules laying down the procedure for serving the charge-sheet and/or other important notices of the company on the concerned employees then it would be more than sufficient if such a provision in the standing orders in strictly adhered to and complied with. In the absence of such a provision in the certified standing orders, the law as discussed above may be followed. A similar view was taken in another case where Rule 40 of the Andhra Pradesh Industrial Disputes Rules provided, inter alia, that a notice, summon, process or order may be served either personally or by registered post. When the notice was returned by the postal authorities with the endorsement, "evading to take delivery", it was held that the requirements of the rule were not complied with. While so holding it was observed that when there was only evasion to take delivery of the notice, Section 114 of the Evidence Act, 1872 and Section 27 of the General Clauses Act, 1897 would not apply, and evasion to take delivery would not treat the act of evasion as equivalent to service as it only empowers the court after being satisfied about the evasion, to order substituted service. Since the employee had not refused to take delivery of the notice but had only evaded taking delivery, it was held, the requirements of the State Rules had not been complied with.3 ________________ 1. Bata Shoe Co. (P) Ltd. v. D N Ganguly,
MANU/SC/0220/1960 : AIR 1961 SC 1158: 1961 LLJ 303: (1961-62) 20
FJR 91: 1962 (2) SCJ 8. 2. Commissioner of Hazaribagh Municipality v. Fulchand Agarwala,
MANU/BH/0102/1966 : AIR 1966 Pat 434: 1966
BLJR 808. 3. G. Seshagiri Rao v. Labour Court, Guntur, 1979 (39) FLR 327 (AP HC) (DB).
2. Compliance of Standing Orders/Service Rules for Serving the Charge-Sheet When personal delivery of a charge-sheet to a worker is not found to be feasible then it could be sent to him by registered post with acknowledgement due. 1 Usually, the standing orders of an industrial establishment provide for the mode of serving the charge-sheet on the workman concerned and where one is prescribed, it should be followed. It is then obvious that there are no hard and fast rules or methods for serving of charge-sheet which has to be followed at all costs unless, of course, the standing orders require a particular method of service. In exceptional circumstances extraordinary mode of serving the chargesheet may be necessary to followed.2 When the standing orders do not provide for service of the notice or charge-sheet by displaying on the company's notice board and when such communications keep on returning without being served by registered post, in such an event the proper course for an employer would be to publish the notices alongwith specific charges against each individual concerned separately in regional language newspapers having a wide circulation in the area. If this i s not done, any disciplinary action that may be taken would be invalid for want of proper service of charge-sheet to the workmen concerned.3 To illustrate the point, mention may be made of an instance of a strike when the workmen involved were presumed to have left for their native place with the commencement of the strike. The charge-sheets were sent to them by registered post but they were returned unserved as the workmen concerned were not found in their village.
The company had also issued notices in certain newspapers that disciplinary action was going to be taken against some of the workmen. But no names were specifically mentioned of those participating in an illegal strike yet they were required to submit their explanations within a time-limit set otherwise face dismissal. As the concerned workmen failed to submit their explanations, they were dismissed from service. On ____________________ 1. Prayag Type Foundry v. Electrical and Engineering Workers' Union, (1956-57) 11 FJR 353 (LAT). 2. McKenzie (G) & Co. Ltd. v. Workmen, 1959 (1) LLJ 285 (SC):
MANU/SC/0104/1958 : AIR 1959 SC 389: (1958-
59) 15 FJR 258. 3. Bata Shoe Co, Pvt. Ltd. v. D.N. Ganguly, 1961 (1) LLJ 303 (SC): (1961-62) 20 FJR 91: (1962) 2 SCJ 8:
MANU/SC/0220/1960 : AIR 1961 SC 1158.
a reference made to the Industrial Tribunal, it transpired that the workmen concerned were not aware of any charges against them not the date by which they were to submit their explanation nor the date on which any enquiry was to take place. Consequently, the Tribunal ordered their reinstatement. On appeal, the Supreme Court confirmed the award of the Tribunal.1 If, on the other hand, the certified Standing Orders or Service Rules provide as to how or in what manner or by what procedure a charge-sheet should be served, in such a case the general provisions as discussed above are not applicable. In the Standing Orders of a certain company it was provided that the service of a charge-sheet will be deemed to be valid by affixing or displaying such a charge-sheet on the notice board of the company concerned. When evidence was adduced that such a charge-sheet remained displayed or remained affixed to the notice board for over a month or for a reasonable length of time and at the same time the charge-sheet served under registered post with acknowledgement due was returned unserved then the display of the notice on the notice board was deemed as due service and good in law. In such circumstances the publication of the notice in newspapers was not necessary .2 This case was mentioned in reference in a subsequent case of Bata Shoe Company. In this case, the distinctive feature was the absence of any standing orders to rely on. The whole thing, therefore, boils down to this that if the standing orders so provide, a charge-sheet or notice displayed on the notice board both inside and outside of a mill or factory must be taken as notice duly served on the person concerned. 2 These underlying principles were followed in yet another case.3 From the foregoing, two issues become outstandingly clear viz., (a) that the mode of serving a notice or a charge-sheet or any other important communication must be clearly stated in the certified Standing Orders and/or Service Rules and (b) that once they are so stated, they must be strictly followed and the prescribed procedure must be adhered to. To further illustrate the point, the Andhra Pradesh Industrial Rules may be cited. Those rules, inter _________________ 1. Bata Shoe Co. Pvt. Ltd. v. D.N. Ganguly, 1961 (1) I.LJ 303 (SC): (1961-62) 20 FJR 91: 1962 (2) SCJ 8:
MANU/SC/0220/1960 : AIR 1961 SC 1158.
2. G. Mckerzie and Co. Ltd. v. Workmen, 1959 (1) LI J 285 (LC):
MANU/SC/0104/1958 : AIR 1959 SC 389: (1958-
59) 15 FJR 258: 1959 SCJ 670: 1959 Mad LJ (Cri) 461. 3. Goodyear India Ltd. v. I.T. Han/ana, (1968) 34 FJR 143.
alia, provided that a notice, summons, process or order may be served either personally or through registered post. The restriction the rule imposes is worthy of note. It has provided no other alternative to or provision for service except personally or by registered post. It has not provided for what will happen if a person evades to take delivery of notice. A question may arise as to what would happen in case it has not been provided for a person
evading acceptance of a notice. In a case where the notice was returned to the sender by the postal authorities with the endorsement, "evading to take delivery", it was held that in such a case the requirement imposed by the rule was not fulfilled. It was observed that the provisions of Section 114 of the Evidence Act and Section 27 of the General Clauses Act were not applicable when there was mere evasion to take delivery of a notice. The Civil Procedure Code also does not provide that deliberate evasion may be taken as notice duly served even if the evidence clearly proves such evasion. It only empowers the court that after being satisfied about the evasion, it may order for a substituted mode of service. Evasion has not been equated to refusal. Since there was no refusal on the part of the employee concerned but mere evasion to accepting delivery, the service rules cannot be regarded to have been satisfied or complied with.1 This view is reinforced by the principle that where procedure of serving a notice has been laid down, the prescribed procedure must be adhered to and followed strictly.2 3. Serving Charge-Sheet through Postal Authorities As stated earlier, usually the standing orders of every industrial concern or establishment provide for the mode of serving a charge-sheet or a notice to an employee concerned. Where such a procedure has been laid down, it must be i nvariably followed. In the event of certified standing orders failing to lay down any such procedure, and employee who refuses (as against evades) to accept a charge-sheet he shall be deemed to have been informed in writing of charge against him. Where personal service of a charge-sheet is not feasible, it should be sent by registered post with acknowledgement due. _________________ 1. G. Seshagiri Rao v. Labour Court, Guntur, 1979 (39) FLR 327. 2. Aluminia Mazdoor Sangh v. Ratna Construction Company, 2003 ILR 409 (Ori HC).
Under Section 114 of the Indian Evidence Act, 1872 there is a general presumption that regular course of business has been followed in serving a notice of charge-sheet through the postal service, ipso facto, official duties or acts. In view of this, it is natural to presume that when a letter is proved to have been posted then the natural course of business would have been followed and in ordinary course the letter should be deemed to have been delivered to the addressee and the presumption is greater in case of registered letters. Similarly, a certificate of posting raises a presumption that a letter was posted as described in the certificate, but before any presumption can be drawn in any case, it must be proved as a fact that the names and addresses were written on the article in question and that article was sent to the post office and the post office had given the certificate. In the absence of such proof, no presumption can be drawn as to the receipt of the article by mere production of a certificate from the post office since fraudulent procurement of certificates from the post office is a growing cancer and has become so notorious that a court can take judicial notice of it.1 The Punjab & Haryana High Court has also held that certificate of posting is no proof that the letter was received by the addressee and as such no reliance can be placed on such certificate .2 But where the postal cover has been correctly addressed and has been sent by registered post, the presumption with regard to service would arise under both the provisions of Section 114 of the Indian Evidence Act, 1872 and Section 27 of the General Clauses Act, 1897. The evidence of actual lender and the refusal to accept delivery is not necessary to bring about the presumption. Such an evidence would be wholly redundant to raise the presumption because if such an evidence is necessary, such evidence by itself would be sufficient to prove service . 3 Though, ordinarily a statement of the addressee on oath that the postal cover which is said to have been refused by him, was never tendered to him would be sufficient to dislodge the presumption and shift the onus on the other side to establish by evidence that the service had been duly effected. There is no rule of law that such a statement should not be accepted merely because it is made by a person who is interested in the proceeding ____________________
1. Ramashankar Prasad v. Sindri Iron Foundry (P) Ltd.,
MANU/WB/0104/1966 :
AIR 1966 Cal 512: 70 Cal WN
520: (1966) 1 Com LJ 310. 2. Canara Bank v. Central Government Industrial Tribunal, 1994 LLR 189. 3. Jagat Ram Khuller v. Battu Mal, AIR 1976 Del 111: 1975 Rajdhani LR 523
nor is there any requirement of law that the statement on oath of a party to the proceedings must always be corroborated by any independent evidence before it could be accepted by a court of law.1 It, therefore, follows that the court may raise a presumption under Section 114 of the Indian Evidence Act, 1872 on the basis of the postal endorsement of refusal on the envelope that the registered letter was tendered to the addressee, that he refused to accept the same and that he knew the contents of the letter but the said presumption can be rebutted by the addressee by leading evidence to the satisfaction of the court. The presumption arising under Section 114 of the Evidence Act, 1872 relates to official acts being done in a regular manner and if court is not in a position to raise such a presumption in respect of the endorsement, the court should not exhibit the endorsement but exhibit only the returned envelope and in that case the evidence of returned envelope is itself sufficient to rebut the presumption of the letter being received by the addressee which arises under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872.2 In other words, presumption can be rebutted by the addressee by coming upto the witness box and making a statement that the registered letter bearing the endorsement 'refused' was never tendered to him or refused by him and the burden then shifts to the other side and this statement can be controverted by examining the postman who made the endorsement. In case the postman is not examined then the statement made by the addressee on oath remains unrebutted and the refusal of registered letter cannot be held to have been established.3 Presumption under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872 are independent of each other.4 The above discussion shows that the preponderance of judicial opinion is that a presumption of due service can be drawn merely from the fact of postal endorsement and it is not necessary to produce the postman in evidence. But the endorsement is only a rebuttable evidence and is not conclusive proof. If contrary evidence is given of facts and _______________ 1. Jagat Ram Khuller v. Battu Mai, AIR 1976 Del 111: 1975 Rajdhani LR 523. 2. Memon Adambhai Haji Ismail v. Bhaiya Ramdas,
MANU/GJ/0099/1975 : AIR 1975 Guj 54: 15 Guj LR 655: 1975
Ren CR 116. 3. Meghju Canji Patel v. Kundanmal Chamanlat Mehatani,
MANU/MH/0114/1968 : AIR 1968 Bom 387: 70 Bom LR
253: 1968 Mah LJ 490. 4. Om Parkash Bahal v. A K Shraff, AIR 1973 Del 39: 1972 Ren CR 960: 1973 Ren CJ 149.
circumstances are brought on record which militate against the said presumption then the presumption will not be drawn. In other words, the said presumption is displaced in case the defendant denies that the letter was offered to him and refused by him. So, in case the employer relies upon the postal endorsement alone then this may not be sufficient when the employee comes upto the witness box and deposes that no such letter was offered to him. Since the above principles are also applicable in domestic enquiries in private employment, it is better in case of controversy to summon the postman. Sometimes it also happens that the registered envelopes are returned by the postal authorities with the endorsement, 'not found', 'not traceable', 'not known' or 'left', etc. It means that the postal authorities were unable to contact the addressee and in such cases even if the endorsement is believed, there is no service of the charge-sheet on the person concerned. In such cases, the employer is required to either send the charge-sheet again on the same address or adopt alternative methods of serving the charge-sheet on the
workman concerned. Under such circumstances it would be futile for the employer to presume that the charge-sheet should be deemed to have been served on the ground that the workman himself avoided to receive the same and it should be deemed to have refused, unless there is sufficient material on record to support the same. It is now wellsettled that in such cases the charge-sheets must be published in a newspaper having a wide circulation in that area in the names of the workmen concerned in the regional language otherwise it cannot be said that the management did all that it could do to serve the charge-sheets on the workmen. The public notice must be such as would come to the knowledge of the person concerned.1 On some occasions it also happens that a registered cover containing the charge-sheet or notice calling for enquiry is delivered to some other person and the acknowledgement slip is signed by him. It may also happen that some other person may refuse to receive the registered envelope. In all such cases there is no proper service of the charge-sheet. In one case it was held that ______________________ 1. Bata Shoe Co. (P) Ltd. v. D.N. Ganguly,
MANU/SC/0220/1960 :
AIR 1961 SC 1158: 1961 (1) LLJ 303; Rohtas
Industries (P) Ltd. v. Shiv Prasad, 1971 (1) LLJ 190: (1961-62) 20 FJR 91: (1962) 2 SC] 8.
when the receipt of a registered letter is signed by someone at the other end then the presumption is that he received it on behalf of the defendant. The presumption is, however, rebuttable.1 Since the service of a charge-sheet is essential for taking any disciplinary action, it is desirable to have a provision in the standing orders or service rules that the charge-sheets or notices displayed on the notice board would be sufficiently served on the workmen concerned for all purposes. It must, however, be remembered that in case the relevant rule provides for service of notices, etc. either personally or by registered post then the rule should be strictly followed. For instance, in such a case the rule shall not be said to have been complied with if the first notice, is returned with the postal endorsement 'not available' and the subsequent notices are also returned unserved with an endorsement, 'evading to take delivery' because there is an evasion to take delivery and the rule does not treat that act as equivalent to service, particularly when the registered envelope is not returned with the postal endorsement 'refused to take deli very'. 2 (c) FORMATS OF CHARGE-SHEETS (i) When an employee is in the habit of absenting from duties To ......................... ......................... It is reported that: You have been absenting yourself from duty w.e.f............without prior permission/application or even intimation. In the past also you have remained absent without obtaining prior sanction of leave, details of which are given below: (Herein give the details of absence) Sudden absence dislocates the normal work of the establishment/factory, while repeated such absences, on your part, notwithstanding oral and written warnings issued more particularly on....(date) have adverse effect both on output as well as on discipline. _______________ 1. Commissioner of Hazaribagh Municipality v. Fulchand Agarwala, BLJR 808.
MANU/BH/0102/1966 : AIR 1966 Pat 434: 1966
2. G. Seshagiri Rao v. Labour Court, Guntur, 1979 (39) FLR 327 (AP HC DB).
(Hereinafter give details of warnings) Habitual absence from duty is a serious misconduct under service rules/standing order No........................ No........................1 and major punishment of dismissal from service can be awarded. In view of the above, you are called upon to explain expl ain in writing within..................days as to why an appropriate disciplinary action should not be taken against you. If you fail to submit your explanation within the specified time, it shall be presumed that you accept the charges to be correct and have no explanation to offer. In that event the Management will be at liberty to take an appropriate action without further reference to you. In the meantime, you are suspended from service with immediate effect till further orders. (ii) When an employee assaults and fights in the premises of the factory To ........................... ........................... It is reported by the Foreman of your department that at...............(time) while on duty you have severely beaten Shri...................intentionally Shri...................intentionally to humiliate him hi m among his colleagues.
on...............(date) another co-worker
(State the facts if different than those stated here) Your past record also reveals that on....................at about.............you went to the duty point of.....................another worker to intimidate and beat him. On..................when there was a minor issue in respect of assignment of duties, you tore the uniform of one of your co-workers and later on you assaulted the said worker with a knife/lathi/iron rod. (Last para as per earlier charge-sheets) (iii) When an employee is in the habit of coming late To ......................... ......................... ____________________ 1. Usha Suryakant Guram v. Lyka Labs. Ltd., 2002 LLR 184 (Bom HC). Delete if there are no service rules/standing orders.
Whereas your work is of such a nature that any delay in starting your work has repercussions on the production in the establishment. And Whereas it is the bounden duty of an employee to be regular and punctual in reporting for work. And Whereas despite several verbal as well as written warnings you have been frequently coming late, which resulted in the dislocation of work. The details of your late coming are given below: (Here give the details of late l ate coming)
(Last para as per earlier charge-sheets) (iv) When an employee is guilty of disobedience and wilful insubordination To ............................ ............................ That on...................(date) at...............(time) the Production Manager................called you in his cabin and asked you to explain your conduct about the faulty operation of....................machine. of....................machine. On this you told the Production Manager that you knew the job of the operation of the said machine much better than him and that he is incompetent to ask anything about work. When you were told not to behave in such fashion, you shouted at the Production Manager that he can do whatever he likes. You don't care for anyone. Thereafter you violently opened the door of the cabin and went away. The aforesaid behaviour on your part is highly reprehensible and amounts to misconduct and breach of rules of discipline. (Last para as per earlier charge-sheets) Note: Obedience to superior officer and loyalty to the employer are inherent in the judicial relationship of employer and employee and need not be prescribed in the rules or the contract of service. It is, therefore, the duty of an employee to obey those orders which the employer is justified in giving under the terms of employment; all orders concerning the work which the employee is to do and the time, manner and place of performing it are presumably, in the absence of special circumstances, within the control of the employer. Without willingness by an employee to accept the authority of superiors who are competent to give orders, no industrial undertaking of any kind or as a matter of fact, any kind of organization, can function. The reason is that the responsibility for the conduct of an enterprise rests squarely on the management and the responsibility for maintaining discipline is also on the management. Disobedience is also styled insubordination and perhaps on ultimate analysis the two words have much the same meaning, though their implications have been held to be di fferent in industrial adjudication. (v) When an employee is guilty of dishonesty To ................................. ................................. It is reported against you as under: That in the capacity of Purchase Assistant in the Purchase Department, you have been dishonestly receiving commission, as well as gratification from the suppliers by giving preferential treatment in purchases as per details given below: (Herein give the details) You are very well aware that receiving commission or gratification is strictly prohibited and is undesirable and thus your conduct amounts to serious misconduct, including moral turpitude. (Last para as given in i n earlier charge-sheets) When heavy shortage of stock was found, the dismissal of bill Clerk has been held to be
justified such it amounted to dishonesty on his part. part.1 In another case, it has been held that dismissal of a doctor for making false claim of LTC will be justified . 2 A hotel employee had admitted to have stolen Rs. 150/- from the room occupied by her. His dismissal was found proportionate to the misconduct of dishonesty. dishonesty.3 ______________ 1. Senior Regional Manager, Tamil Nadu Civil Supplies Corporation Ltd. v. Presiding Officer, 2003 LLR 84 (Mad HC). 2. V. N. Rajan (Dr.) v. Chairman National Dairy Development Board, Gujarat, 2003 LLR 26 (Mad HC). 3. Ram Kumar v. I.T.D.C. (Ashoka Hotel Units), 2002 LLR 527 (Del HC).
(vi) When an employee incites other workers to abstain from performing their duties and to stage violent demonstration To ......................... ......................... On.................(date) at.....................(time) you incited the workers of the factory to abstain from work and abetted them to organise violent demonstration with a view to intimidate the management into conceding to the unreasonable and unjustified demands of the workers. The slogans as shouted and/or responded by you have been most abusive, defamatory and amounted to personal vilification of the executives of the Company and besmirching the image and goodwill of the Company. The demonstration continued for over...............hours when you declared to repeat the same daily and that agitational activities will be intensified. (Last para as stated earlier) Note: Staging of demonstration at the premises of the establishment is not permissible since the workers have no fundamental right. (vii) When an employee avails leave on false grounds To ............................. ............................. Whereas on.....................(date) you applied for grant of leave from................to.................on the grounds that ....................... (herein specify the grounds for which the leave was granted). And whereas considering the justification of your going on leave on the basis of the grounds/reasons mentioned in your application, the leave as applied for was granted to you. But later on, it was found that the grounds on which the leave was applied for and obtained were false. (Last para as given in the earlier charge-sheets) (viii) When the conduct of an employee involves bad faith and dishonesty To .........................
......................... You have been working in the company...................as cashier/ storekeeper and in the capacity you are incharge of company's cash/particles. On...................(date) at...................(time) cash/ stores were checked by...................(name of the officer and designation) and it was found that...................(quantity) of cash/ particles was short which you could not explain. (Last para as per earlier charge-sheet) (ix) When an employee holds meeting of the union within the premises of the establishment To ................................ ................................ On...................(date) at...................(time) a union meeting was held at...................(place) inside the premises of the establishment/factory wherein you have instigated the other employees to...................(State the substance of provocative speech). The said meeting was held during working hours without permission of the management. As you are aware that holding of such unauthorised meeting is not permissible in the premises of the establishment and is breach of discipline. (Last para as per earlier charge-sheets) Note: Unless the permission is granted, the union meetings cannot be held at the premises of the employer since there is no fundamental right for anyone to hold meetings in government premises. The fact that those who work in a public office can go there but it does not confer on them the right of holding a meeting at that premises even if it be the most convenient place to do so. The fact that the citizens of this country have freedom of speech, freedom to assemble peacefully and freedom to form associations or unions does not mean that they can exercise those freedoms in whatever place they please. The exercise of those freedoms will come to an end as soon as the right of someone else to hold his property intervenes. Such a limitation is inherent in the exercise of those rights. The validity of that limitation is not to be judged by the tests prescribed by sub-articles (2) and (3) of Article 19 of the Constitution. In one case it has been held that the directions issued by the General Manager on June 19, 1965 which prohibits the holding of meeting within the railway premises including open grounds forming part of those premises will not be violative of Article 19(a)(1) to (c) of the Constitution .1 (x) When an employee neglects his duties To ......................... ......................... In the capacity of Supervisor in...................section/department it was your duty to see that the production of the workers in the section/department under your charge was maintained at a fair level and there was no damage. It was, however, noticed that during (period from...................to...................) you did not supervise the section properly on account of which the production of workers in the section supervised by you was very low as compared to the production in other sections and in other shifts the particulars of which are as under: S.
Name
of
Production during the period from
Damage
No.
section
.............. to .............
percentage
1. 2. 3. 4. Or You were attending and/or working on...................(date) at................... (time) on...................machine. During the said operation the machine or...................part of the machine broke-down on account of your negligence, in working and/or ________________ 1.
Railway
300:
Board,
representing
the
Union
of
India,
New
Delhi
v.
Niranjan
Singh,
1969
(18)
FLR
MANU/SC/0507/1969 : AIR 1969 SC 966: 1969 Lab IC 1368: 1969 (2) Lab LJ 743: 1969 (8) SCR 548.
attending the said machinery as a result of which an accident took place. You are directed to show cause by...................(date) why disciplinary action should not be taken against you for negligence of work. If no reply is received by the time fixed, the management shall have the right to proceed ex parte. Or You were posted at...................(gate) and it was your duty to see that nobody removes any article belonging to the company without a proper gate pass issued by...................authority and takes out of the factory. On...................(date) at...................hours Shri...................removed...................(articles) and without your knowledge/connivance the articles could not have been removed and taken out of the factory without gate pass. (Last para as per previous charge-sheets) (xi) When an employee is guilty of neglecting duties, irregular attendance and lack of punctuality To .................... ................... You have been employed as a Receptionist-cum-Telephone Operator in the establishment and your duty calls for punctuality and regular attendance but you do not observe your duty hours strictly nor you are regular in attendance. In spite of several warnings given to you between .....................(date) and...................(date) you have been found to be in the habit of leaving the duty place during the duty hours without prior permission from your immediate superior. It has further been reported that you have been found sitting in the canteen whereas you are expected to be on your duty/desk and for which you have been reprimanded several times. Besides, you have been habitually coming late to the office which is evident from your attendance record re-produced below: (Herein give the dates and the ti me when the employee has come late) Furthermore, you have remained absent without obtaining prior sanction of leave or submitting application for leave, the details of which are given below:
(Herein give the dates when the employee has remained absent) (Last para as per earlier charge-sheets) (xii) When an employee over-stays of his sanctioned leave To ........................... .......................... On...................(date) you obtained leave for...................(days) on the ground that your wife was seriously ill and your presence was necessary to attend to your ailing wife (state if there is any other ground). Even though your leave expired on...................(date) you continued to remain absent from...................(date) without obtaining prior permission or intimation for overstaying after the expiry of leave period. The above omission on your part, when proved, would constitute a gross and serious misconduct. You are, therefore, charged for committing breach of certified Standing Orders No...................by absenting yourself without leave for more than eight consecutive days without any sanction. Or Whereas you proceeded on leave duly granted to you from...................to...................and whereas you have failed to report for duty on the expiry of the said leave and have thus overstayed and remained aibsent from...................to................... without obtaining prior sanction of leave or without even an application or intimation for grant of further leave. Now, therefore, you are hereby called upon to show cause as to why you should not be proceeded against under the Service Rules/Standing Orders. (Last para as per previous charge-sheets) Note: An analysis of the decisions of the High Court and of the Supreme Court on the point, shows that even after the expiry of the eight days of the leave originally granted or subsequently extended, the employee is required to report for duty and offer explanation for his absence without leave or permission. It is obligatory on the part of the employer to consider such explanation and if he is not satisfied with the explanation, he should indicate to the employee, the reasons for which he considers the explanation unsatisfactory and give an opportunity to the employee to prove the same. The employee will then be entitled to prove his explanation by production of the relevant evidence. It is only when the employee fails to justify his absence in spite of the opportunity given to him as aforesaid, that the deeming provisions of the standing order in question will provide for the legal fiction of the abandonment of service. The legal fiction of the abandonment of service will thereafter come into operation, irrespective of the intention on the part of the employee. 1 The Supreme Court has held that an employer cannot strike off the name of a workman when he absents himself or overstays of his leave eight consecutive days even when the certified standing order so provide. Holding of an enquiry will be an imperative to comply with the principles of natural justice.2 (xiii) When an employee fails to perform his duty during working hours To .......................... .......................... That on...................(date) at...................(time) while you were holding the post of...................you were found absent during duty hours between...................,(time)
to...................(time). It is pertinent to state here that you are in the habit of leaving your work place without permission or leave (herein give details of occasions when he was found absent during duty hours). (Last para as per previous charge-sheets) When an electrician refused to attend failure of electricity, it amounted to serious misconduct and his dismissal from service has been held to be justifi ed. ed.3 _________________ 1. G.T. Lad v. Chemicals & Fibres of India Ltd., 1979 LLR 29: 1979 (38) FLR 95 (SC):
MANU/SC/0264/1978 : AIR
1979 SC 582: (1979) 1 SCC 590. 2. D.K. Yadau v. J M A Industries Ltd., 1993 LLR 584 (SC): 1993 AIR SCW 1995:
MANU/SC/0529/1993 : (1993) 3
SCC 259. 3. Management of Tan India Ltd., Wattle Division, Mettupalayam v. 1. Presiding Officer, Labour Court, Coimbatore, 2. J.C. Sekar, 2002 LLR 510 (Mad HC).
(xiv) When an employee is drunk while on duty and misbehaves with his superiors To ................................ ................................ On...................(date) at...................(time) while on duty you were noticed in a state of drunkenness and were not able to hold yourself properly. When asked about such behaviour, you not only behaved in a disorderly and rude manner with Shri...................your immediate superior in the office/factory/mill but, on the contrary, you created a disorderly scene and used most abusive and threatening language. When asked to produce yourself for medical examination, you became furious and went away by using threatening and abusive language. l anguage. The above acts on your part being of a grave and serious nature make you liable for severe disciplinary action. You are hereby directed to submit your explanation within three days from the receipt thereof. Should you fail to submit your explanation within the stipulated time, it will be deemed that you admit the charges and have no explanation to offer. Note: Drunkenness is a serious charge which warrants punishment of dismissal. However, in one case the Supreme Court has taken a lenient view in setting-aside the dismissal of a driver who was dismissed for consumption of liquor while on duty. After considering the facts and circumstances of the case, the Supreme Court confirmed the order of the Labour Court for reinstatement directing as a punishment that the driver should not be given three annual increments in the time scale and that he would not be entitled to back-wages. back-wages .1 In another case decided by the Rajasthan High Court, the charge against the driver was that he was in drunken state and demanded Rs. 10 from his colleague conductor and on the refusal by the latter, he inflicted grievous injuries. It has been held that the dismissal, as awarded, will be justified. justified.2 The Bombay High Court has held that the Labour Judge was absolutely in error when he came to conclusion that the ______________ 1. Jaswant Singh v. Pepsu Roadways Transport Corpn. 1981 Lab IC 7 (SC). 2. Rajasthan State Road Transport Corpn. v. Habib Khan, 1993 LLR 294 (Raj HC).
management could not prove that on the date in question at the relevant time the
workman was on duty and that he was drunk. While quashing the award of the Labour Court, the High Court held that instead of reinstatement, the workman stands restored from 14.1.1980 and will be given all terminal benefits within six months during which the workman shall hand over vacant possession of the quarter occupied by him .1 (xv) When an employee is guilty of wilful damage to the property and insolent behaviour towards his superior officer To ........................ ........................ In the capacity of Peon in the office, your duties inter alia are carrying files and articles as given to you to be kept and/ or delivered from one place/person to another. It is reported that you have not been handling the files and articles properly since you are in the habit of throwing valuable things carelessly with the result that damage is caused to the company. In this respect you have been warned orally as well as in writing by our letters dated...................and................... On...................Mr...................gave you...................(articles) to be handed over to Mr...................and you carelessly threw it on the table of Mr...................knowing that the...................(articles) the...................(articles) were to be delivered urgently. When Mr...................told you not to do so then you uttered the following words: (Reproduce the words uttered by the delinquent employee) (Last para as per earlier charge-sheets) (xvi) When an employee is guilty of indulging in riotous and disorderly behaviour in the premises of the establishment To .............................. .............................. ______________ 1. Bai Jerbai Wadia Hospital v. Shankar Ramchandra Mali, 1993 LLR 54 (Bom HC).
Time and again you have been quarrelling with your fellow workmen on petty matters and disturbing the orderly and disciplined work in the office of the establishment. You have been repeatedly reprimanded/warned, but you have not mended your ways. It is reported that on...................you along with your colleagues Sarvshri...................started quarrelling with................... and................... By the aforesaid conduct you along with...................have acted riotously and indulged in disorderly manner at the premises of the establishment. Now, therefore, you are charged with having committed a breach of Standing Order No...................by appearing to have indulged in riotous and disorderly behaviour in the premises of the establishment. (Last para as given in i n earlier charge-sheets) Dismissal of a workman guilty of abusing, intimidating and preventing high officials from
performing their duties has been held to be justified since the misconducts have been of grave and serious nature. nature .1 In another case, the Bombay High Court being held that termination of a workman for refusing to load material, obstructing and threatening other workers will be justified. justified.2 (xvii) When an employee indulges in i n resorting to strike, insubordination and picketing To ........................... ........................... It is reported that you have been persistently engineering all sort of indiscipline amongst the workers and intimidating those who do not follow your approach to the detriment of the interest of discipline, good name, reputation and goodwill which the management/company enjoys. By devious means you have been indulging in spreading malicious and false propaganda against the management/company. management/company. Not only this, you have also extended ________________ 1. R. Kannabiran v. Deputy Commissioner of labour, 2002 LLR 1016 (Mad HC). 2. Eknath Laxman Parab v. Alkem laboratories (Pvt.) ltd., 2003 LLR 140 (Bom HC).
your agitational and militant activities amongst other workers. Your activities have been extended to wilful breaking, damaging and destroying the property, movable as well as immovable. By your aforesaid activities, the management/company has been subjected to heavy financial losses. That on...................(date) you quarrelled with Shri................... inside the premises of the Establishment/Company/Factory/Mill Establishment/Company/Factory/Mill and threatened him with personal injuries. That, by false and defamatory propaganda you misled your co-workers to stay away from their duties and responsibilities and to join the demonstration, picketing, gherao and agitation led by you. You continued to stage 'Dharna' and picketing outside the premises near the entrance of the Factory/Establishment/ Factory/Establishment/ Company/Mill. That on...................(date) you alongwith Shri................... organised a meeting outside the gate of the Establishment/ Company/Factory/Mill alongwith outsiders after which you shouted slogans of an objectionable nature, disturbing the peace and normal functioning of the Establishment/Company/Mill/ Factory. That due to your instigation, your co-workers have been guilty of gross misconduct by intentionally flouting the order to return to duty and continued wilful absence. That, you are coming to the premises but have been neglecting duties and responsibilities in total defiance and disregard to your superiors and instead, you have been devoting all your time and energy in fomenting trouble and conducting unceasingly objectionable activities in and around the premises and thus, you have succeeded in disturbing the normal functioning and working of the Establishment/Company/Factory/Mill from ...................(date) ...................(date) onwards. That under your leadership, instigation and abetment, the agitators illegally gheraoed the Works Manager in his office on (date) and coerced and intimidated him to agree to sign some papers concerning your illegal and unjustified demands and kept him in illegal restraint in his office and did not even allow him to use his telephone from...................(time) to...................(time) or to answer the call of nature. The police had to be called upon to release the Works Manager from the illegal gherao. That in the light of the above mentioned facts, you have wilfully offended and violated the
standing order/service rules and in particular the following: 1. 2. 3. 4. (Last para as per previous charge-sheets) (xviii) When an employee is guilty of unlawful assembly, shouting slogans and causing damage to property of the factory/ mill To ............................... ............................... It is reported that on.....................(date) at.....................(time) you alongwith other workers assembled at the factory/mill's gate and started shouting/raising inflamatory and defamatory slogans amounting to personal vilification of the senior executives. Not only this, you alongwith others caused complete blockade for the movement of men and material preventing even willing workers from entering inside the factory. As a result of your abetment/ instigation, the agitating workers, as led by you, forcibly entered into the factory premises by breaking the main gate and have beaten the watchman. Thereafter, you alongwith others attacked the Security Officer, intimidated and ridiculed him. The window panes of the Security Office were smashed (herein state the other damages caused by the agitators). More damage to the property of the factory could be avoided only by timely arrival of the police/ reinforcement of the security staff. (Last para as per previous charge-sheets) (xix) When an employee factory/establishment
is
guilty
of
smoking
at
a
prohibited
place
of
the
To ..................... ..................... It is reported against you as under: That you while on duty at.....................(time) on.....................(date) were found smoking within an area where smoking is prohibited. That the misconduct as aforesaid, if proved, amounts to a wilful breach of the rules, entailing deterrent punishment because if a fire had been caused by your aforesaid act, it might have caused death and destruction all over the area. (Last para as per previous charge-sheets) (xx) When a worker resorts to illegal strike during the subsistence/operation of the settlement To .....................
..................... It is reported against you as under: That on.....................(date) at.....................(time) you alongwith other workers stopped the work jointly and went on a strike in support of the demands as contained in the charter of demand No.....................dated.....................addressed to the management by labour union.....................The demands are already covered by a subsistent settlement dated.....................between the parties. (Last para as per previous charge-sheets) (xxi) When an employee stages demonstration and incites other workers to join him for agitation and to cause loss/damage to the property of the factory It is reported against you as under: 1. That you have incited the workers of the factory to abstain from work and abetted them to organise violent demonstration with a view to intimidate the management to concede to the unreasonable and unjustified demands of the workers. The slogans as shouted and/or responded by you on.....................(date) at.....................(time) have been most abusive, defamatory and amounted to personal vilification of the executives. You have been repeatedly advised that staging of demonstration lowers and besmirches the image of the company and also for redressal of demands/grievances, you should resort to legal and prescribed forums/avenues. 2. That you have incited the workers to cause damage to the property of the factory as a result of which actual damage has been caused to such property, machinery and material (Herein give better and further details specifically). (Last para as per previous charge-sheets) (xxii) When an employee stays inside the factory premises during strike To ..................... ..................... It is reported that ever since.....................you have been striking work in a concerted manner. Not only that you have struck work but also you are remaining at the premises of the establishment and have not vacated the same despite repeated instructions by your superiors to this effect. Staying inside the factory premises during strike amounts to misconduct and as such you are liable for appropriate disciplinary action for strike and remaining at the premises of the factory despite repeated instructions given by your superiors thus disobeying lawful orders. (Last para as per previous charge-sheets) (xxiii) When an employee fails to comply with transfer order To By a letter dated..............................you were transferred from.....................(Branch) to .....................(Office) w.e.f..................... (date) in accordance with terms and conditions of your appointment as stipulated in your letter of appointment/service rules/standing orders. A reminder dated.....................was also sent to you to comply with the transfer order but you failed to comply with.
It is regretted that you have failed to make compliance in reporting for duty, as directed. Now, therefore, you are finally directed to report for duty within three days of receipt hereof and also to explain as to why disciplinary action should not be taken against you for your unauthorised and wilful absence and disobedience of order of transfer. (Last para as per previous charge-sheets) Notes: Transfers are usually effected to build up a more satisfactory work team and to achieve the following purposes: (i) To increase the effectiveness of the organisation; (ii) To increase versatility and competence of key positions; (iii) To deal with fluctuations in work requirements; (iv) To correct erroneous placement; (v) To correct incompatibilities in employee relations; (vi) To relieve monotony; (vii) To move an employee in the interests of health or age; (viii) To provide creative opportunity; and (ix) To train employees for better advancement or promotion. Non-compliance of a transfer order by the employee is an act of misconduct if the employer has a right to transfer an employee. The transfer orders are very common. The question is whether and to what extent the disobedience of transfer order is misconduct. It is generally held that the right to transfer an employee is an implied right of the employer and that exists even in the absence of contract unless there is contract to the contrary. When, however, it is mentioned in the appointment letter that the employee will work in a particular branch or establishment then it militates against any right of the employer to transfer him. Similarly, when an employee is appointed to a particular post which does not exist in any other establishment of the company then such appointment negatives any liability to be transferred at a place where no such post is in existence. There is no doubt that an employer is the best judge to know the capacity of his employees. He also knows well, where and when the capacities of any employee could best be utilised .1 But at the same time, an employer has no right to transfer his employee to a new concern started by him subsequent to the date of employment of his employee unless it is so stated in the terms of his employment that he would also be liable to be ______________ 1. M/s. Parry & Company Ltd. v. P.C. Pal,
MANU/SC/0305/1968 : AIR 1970 SC 1334: (21) FLR 266: 1969 (2) SCR
976: 1970 (2) SCJ 433 followed in Muslim Printing & P. Company Ltd. v. Secretary to Government, 1992 LLR 680 (Ker HC).
transferred to any of the existing concerns or to be started by him in future. 1 However, the right of an employer to transfer his employee from one station to another though within the discretion of the employer is always subject to the conditions that the terms of contract of employment of an employee are not adversely affected. The Punjab and Haryana High Court has held that an employer cannot draw a presumption that an employee remaining absent from duties and failure to comply with the transfer order will amount to abandonment. It will be serious misconduct and holdi ng of enquiry will be imperative.2 (xxiv) When an employee slows down the work/ production
To ..................... ..................... On the basis of reports received and production record, as maintained, you are served with following charge-sheet-1. That on.....................(date) at about.....................(time) while on duty, you in concert with others, deliberately slowed down the work and instigated others to adopt 'go slow' tactics. You have threatened those workers who did not want to toe the l ine of action shown by you. 2. That while your prior production was.....................per day, your production on.....................and thereafter has been deliberately brought down to .....................which is much below the normal production of a worker of average efficiency. 3. That the above acts/omissions on your part are highly objectionable being prejudicial to the interest of the company which has to compete with other efficiently and economically run enterprises. 4. That despite repeated advice by your superiors not to adopt 'go slow' tactics, you did not adhere to the actual norms of production which you have been maintaining earlier but instead, kept on idling away your time. _______________ 1. Kundan Sugar Mills v. Ziyauddin, 1960 (1) LLJ 266: 1961 (18) FJR 108:
MANU/SC/0202/1960 :
AIR 1960 SC
650: 1960 (2) SCR 918. 2. Saraswati Industrial Syndicate Ltd., Yamuna Nagar v. Shri jai Bhagwan, 1995 LLR 45 (P&H).
5. That as a result of your 'go slow' tactics and instigating others to slow down, the work/production has considerably gone down, resulting into financial loss to the company. (Last para as per previous charge-sheets) (xxv) When an employee does not attend to his work properly To ..................... ..................... It is reported against you that on.....................(date) at.....................(time) you were not found on your duty point and were found near the lavatory and idling away your time. When asked for by your Supervisor/Foreman as to what you were doing there, you misbehaved with him by saying that he has no right/ business to question and that you will do work according to your sweet-will and will not adhere to his directions. This is not the only instance, but in the past also you have been neglecting your duties and stopping work deliberately, thus impairing the normal production. (Last para as per previous charge-sheets) (xxvi) When an employee takes unauthorised benefit of service with the employer and works for a competitor To .....................
..................... You have been engaged as Roving (Travelling) Salesman in order to boost the sales of the product of the company and to canvass and promote the sales of the products in different areas which have been assigned to you. It has been brought to our notice that in addition to the products of this company, you have been carrying the samples of the products of M/s.....................one of our competitors and promoting their sales by booking orders for them. Accordingly, you have acted in a manner prejudicial to the interest of the company and as such you derelicted with your duties and assignments. You are very well aware that you cannot engage yourself in any work other than those of thi s company. (Last paras as given in the earlier charge-sheets)
4 THIRD STEP TOWARDS SUSPENSION OF AN EMPLOYEE SYNOPSIS 1. Suspension--Meaning of 2. Kinds of Suspension 3. An Employer has a Right to Suspend an Employee 4. Circumstances Justifying Exercise of Right of an Employer to Suspend an Employee 5. Suspension Should be Ordered Carefully 6. Suspension Allowance 7. Subsistence Allowance under Industrial Employment (Standing Orders) Act, 1946 8. Suspension Allowance Includes all Compensatory Allowances 9. Effect of Non-Payment of Suspension/Subsistence Allowance 10. Format of suspension order/letter to an employee when the criminal proceedings are pending against him 11. Format of Suspension Order/Letter to an Employee During the Pendency of Disciplinary Proceedings 1. Suspension--Meaning of The word 'suspension' means 'temporary deprivation of one's office or position; the action of suspending or condition of being suspended; the action of debarring or state of being debarred especially for a time, from a function or privilege; temporary deprivation of one's office or position; the state of being temporarily kept from doing, deprived of, something'.1 'Suspension' thus connotes temporary cessation of something as right, work or labor. 'Suspension' is different from 'dismissal'. When an employee is suspended from
the office he holds, it is merely direction, that so long as he holds the office, and until he _______________ 1. Oxford English Dictionary Vol. X, p. 258.
is legally dismissed, he must not do anything in the discharge of the duties of the office. That is to say, the employer is regarded as issuing an order, which because the contract is subsisting, the servant must obey; and that order, for so long as it remains in force, prevents the servant from performing his part under the contract, however ready and willing he may be to perform it. It is the master always assuming that the contract between them invests him with such a power who has chosen to prevent the servant from doing the work which the latter otherwise would be bound to do . 1 The basic idea underlying the root word 'suspend' and all its derivatives is that a person, while holding an office and performing its functions or holding a position or privilege, should be interrupted in doing so and debarred for the time being from further functioning in the office or holding the position or privilege. He is intercepted in the exercise of his functions or his enjoyment of the privilege and put aside, as it were, for a time, excluded during the period from his functions or privileges.2 During suspension, a servant is only prevented from di scharging the duties of his office for the time being, on the other hand, 'reduction in rank' implies bringing down to a lower rank or position of dignity, either in the same cadre or giving a lower place either in the same class of officers or to a lower class of officers. A suspended employee cannot discharge his duties during suspension while an employee reduced in rank has to discharge his duties irrespective of the rank he holds.3 2. Kinds of Suspension Three kinds of suspensions are known to law. An employee may be suspended as a mode of punishment or he may be suspended during the pendency of an enquiry against him if the order appointing him or statutory provisions governing his service provide for such suspension. Lastly, he may merely be forbidden from discharging his duties during the pendency of an enquiry against him which act is also called suspension .4 _______________ 1. Akhileswara v. Cochin Devaswom Board,
MANU/KE/0139/1959 :
AIR 1959 Ker 390: 1959 Ker LR 484: 1959
Ker LT 463; see also Law Lexicon Vol. 2, 1982 Edn., p. 704. 2. Hemanta Kumar v. S.N. Mukherjec,
MANU/WB/0114/1954 : AIR 1954 Cal 340 (343); see also Mohd. Azam v.
State of Hyderabad, AIR 1958 AP 619 (623): (1957) 2 Andh WR 464. 3. Dandapani v. State of Orissa,
MANU/OR/0090/1953 : AIR 1953 Ori 329: ILR (1953) Cut 517.
4. V P Gindroniya v. State of Madhya Pradesh,
MANU/SC/0502/1970 :
AIR 1970 SC 1494: 1970 (2) SCJ 573:
1970 (2) Lab LJ 140.
3. An Employer has a Right to Suspend an Employee The right to suspend as a measure of punishment as well as the right to suspend the contract of service during the pendency of an enquiry are both regulated by the contract of employment or the provisions regulating the conditions of service. But the last category of suspension referred to earlier is the right of the master to forbid his servant from doing the work which he had to do under the terms of the contract of service or the provisions governing his conditions of service at the same time keeping in force the master's obligations under the contract. In other words, the master may ask his servant to refrain from rendering his service but he must fulfil his part of the contract. The legal position as regards master's right to place his servants under suspension is now well-settled, that under the ordinary law of master and servant the power to suspend the servant without pay cannot be implied as a term in an ordinary contract of service between the master
and the servant but must arise either from an express term in the contract itself or a statutory provision governing such contract. Ordinarily, in the absence of such a power either in express terms in the contract or under the rules framed under some statue would mean that the master would have no power to suspend a workman and even if he does so in the sense that he forbids the employee to work he will have to pay the wages during the so-called period of suspension. Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the suspension has the effect of temporarily suspending the relationship of master and the servant with the consequence that the master is not bound to pay.1 4. Circumstances Justifying Exercise of Right of an Employer to Suspend an Employee The following circumstances may justify the exercise of the right to suspend an employee pending enquiry into the acts of misconduct alleged to have been committed by him- ______________ MANU/SC/0116/1959 : MANU/SC/0029/1960 : AIR 1961
1. Management Hotel Imperial, New Delhi v. Hotel Workers' Union, (1960) 1 SCR 476: AIR 1959 SC 1342; see also T. Cajee v. U. Jormanik Sem, (1961) 1 SCR 750: SC
276:
1961
(2)
SCA
1:
1961
(1)
SCR
750;
R.P.
Kapur
v.
Union
of
India,
(1964)
5
SCR
431:MANU/SC/0275/1963 : AIR 1964 SC 787: 1966 (2) Lab LJ 164; Dharam Singh v. U.P. Warehousing Corporation, 1986 (2) SLR.
(a) where the continuance of the employee may endanger industrial peace or security or where the suspension of the employee may be in the interest of the industry itself or its employees in general; (b) where the continuance of the employee at work place may prejudice investigation, trial or any enquiry, e.g., apprehended tampering with witnesses or documents; (c) where continuance at work place of the employee is likely to seriously subvert discipline at the work place where he is working; (d) where the continuance at work-place of the workman may be against wider industrial interest, e.g., if serious act of misconduct is committed and it is considered necessary to place the employee under suspension to demonstrate the policy of the management to deal strictly with workers involved in such cases; (e) where preliminary enquiry into allegations made has revealed a prima facie case justifying criminal or departmental proceedings which are likely to lead to his conviction and/or dismissal or removal from service; and (f) where the employee is suspected to have engaged himself in activities prejudicial to the interest of the security of the company. Even in the above circumstances, an employee may be placed unde3r suspension only in respect of misdemeanour of the following types-(i) an offence of conduct involving moral turpitude; (ii) corruption, embezzlement, theft or misappropriation of company's money; (iii) serious negligence and dereliction of duty resulting in considerable loss to the company; (iv) desertion of duty; (v) refusal or deliberate failure to carry out written orders of supervisory staff; (vi) where it is necessary in the interest of the company itself and the employees in
general; and (vii) where the continuance of employee may endanger industrial peace and harmony and discipline as well. While placing an employee under suspension the competent 3authority should also consider whether the purpose of suspension cannot be served by transferring the employee from his post to a post where he may not repeat the misconduct or influence the investigations, if any, in progress. 5. Suspension Should be Ordered Carefully The power of suspension should be exercised with circumspection, care and after due application of mind. Normally, a sort of preliminary enquiry or investigation is gone through for ascertaining the prima facie view of the matter and whether the circumstances impel recourse to suspension. When they do, the power may be exercised in accordance with the rules on the subject. In such a situation, the disciplinary authority must make a fair and proper assessment of the affair in the given circumstances, and carefully scrutinise that prima facie there exist grave and compelling circumstances, which in the light of the material available and collected during the preliminary investigation would lead to the likelihood of removal or dismissal of the employee from service. It may be that formulation of exact punishment that may be finally awarded is not possible at this stage, but a proper judgment exercised can certainly prevent unnecessary harassment and humiliation of suspension. Recourse to suspension may not be deemed as a matter of routine pointing out to reckless and cavalier exercise of power without the necessary circumspection and adequate application of mind.1 6. Suspension Allowance During suspension the services of an employee do not come to an end. He continues to be a member of the service in spite of the order of suspension. The real effect of the order of suspension is that though he continues to be a member of the service, he is not permitted to work, and further during the period of his suspension he is paid only some allowance generally called 'suspension allowance' or 'subsistence allowance' which is normally less than his salary, instead of pay and allowances he would have been entitled to if he had not been suspended. There _______________ 1. Delhi Electric Supply Undertaking, New Delhi v. G.P. Satsangi, 1984 Lab IC 54.
is, therefore, no basis for thinking that because of the order of suspension, he ceases to be an employee.1 Where, however, there is no provision in the certified standing order for payment of subsistence allowance during the period of suspension pending enquiry, the provision of Section 10A of the Industrial Employment (Standing Orders) Act, 1946, automatically applies. Therefore, under Section 10A of the Act, the employer is under an obligation to pay subsistence allowance during the period of suspension pending enquiry.2Otherwise, the law is that a workman may be suspended pending enquiry and disciplinary action. If after the enquiry the misconduct is proved, the workman is dismissed and is not entitled to any wages for the suspension period, but if the enquiry results in his reinstatement, he would be entitled to full wages for the suspension period also alongwith reinstatement unless the employer instead of dismissing him may award a lesser punishment by way of withholding part of his wages for the suspension period.3 7. Subsistence Allowance under Industrial Employment ( Standing Orders) Act, 1946 Item 9 of the Schedule to the Industrial Employment (Standing Orders) Act, 1946, relates to suspension or dismissal for misconduct and acts of omissions which constitute
misconduct. The relevant Certified Standing Order relating to the establishment concerned will, therefore, govern the matter. The amendment dated the 11th May, 1982 as published in the Gazette of India, Extraordinary Pt. II, Section (1) inserting Section 10A provides as under: 10A. Payment of subsistence allowance (1) Where any workman is suspended by the employer pending investigation or inquiry into complaints or charges of misconduct against him, the employer shall pay to such workman subsistence allowance-(a) at the rate of fifty per cent of the wages which the workman was entitled to immediately preceding the date of such suspension, for first ninety days of suspension; and ________________ 1. State of Maharashtra v. Chandrabhan, MANU/SC/0396/1983 : 803: MANU/SC/0396/1983 : (1983) 3 SCC 387.
AIR
1983
SC
2. Western India Tanneries v. M.R. Bhope, 1991 (1) LLN 993. 3. Kesoram Cotton Mills v. Gangadhar, 1963 (2) LLJ 371 (SC): MANU/SC/0144/1963 : AIR 1964 SC 708. (b) at the rate of seventy-five per cent of such wages, for the remaining period of suspension if the delay in the completion of disciplinary proceedings against such workman is not directly attributable to the conduct of such workman. (2) If any dispute arises regarding the subsistence allowance payable to a workman under sub-section (1), the workman, or the employer concerned, may refer the dispute to the Labour Court, constituted under the Industrial Disputes Act, 1947 (14 of 1947), without the local limits of whose jurisdiction the industrial establishment wherein such workman is employed is situate and the Labour Court to which the dispute is so referred shall, after giving the parties an opportunity of being heard, decide the dispute and such decision shall be final and binding on the parties. (3) Notwithstanding anything contained in the foregoing provisions of this section, where provisions relating to payment of subsistence allowance under any other law for the time being in force in any State are more beneficial than the provisions of this section, the provisions of such other law shall be applicable to the payment of subsistence allowance in that State. 8. Suspension Allowance Includes all Compensatory Allowances Rule 5 of the Model Standing Orders provides that subsistence allowance shall be equal to one half of the basis wages, dearness allowance and other compensatory allowances. It has been held in one case, that the service charges to a suspended employee of a hotel will be included in the compensatory allowance for the purpose of calculating subsistence allowance to be paid to such an employee otherwise the word, 'compensatory allowance' will be meaningless because nothing has been brought out as to what other kind of compensatory allowances a workman would be entitled from the management.1 ________________ 1. Rajindra Shiva Karkera of Bombay v. Hotel Natraj, 1988 (2) CLR 456: 1989 (58) FLR 115.
9. Effect of Non-Payment of Suspension/Subsistence Allowance Following the decision in Madhav Hayawandanraa Hoskot v. State of Maharashtra , 1 it was held in State of Maharashtra v. Chandrabhan,2 by the Supreme Court that any departmental enquiry made without payment of subsistence allowance is violative of Article 311(2) of the Constitution. It was further observed that any criminal trial of a civil servant under suspension without payment of the normal subsistence would be violative of that Article. Similarly, payment of subsistence allowance at the normal rate pending the appeal filed against the conviction is a step that makes the right of appeal fruitful and it is, therefore, obligatory. Reduction of the normal subsistence allowance to the nominal sum of Re. 1 per month on conviction of a servant under suspension in a criminal case pending appeal filed against the conviction, whether he is on bail or has been lodged in prison on conviction pending consideration of his appeal is an action which stultifies the right of appeal and is consequently unfair and unconstitutional.3 It has been held that departmental enquiry without paying subsistence allowance to the workman during this period of suspension vitiates the enquiry.4 The Bombay High Court has further buttressed this point and has ruled that suspension of an employee without paying subsistence allowance during the pendency of departmental enquiry vitiates the same.4 It has also been held that there is no question of any dispute regarding the rate at which the subsistence allowance has to be paid and the material on record is absolutely clear to show that even remotely the workman cannot be held responsible for the delay in completion of enquiry, hence the decision of the Industrial Tribunal in violating the enquiry on the ground of violation of the p rinciples of natural justice is upheld,5 ___________________ 1.
MANU/SC/0119/1978 : AIR 1978 SC 1548: (1978) 3 SCC 544: 1978 Cr LJ 1678.
2. 1983 (4) FLR 203 (SC):
MANU/SC/0396/1983 : (1983) 3 SCC 387.
3. Sudhir Chandra Sakar v. Tata Iron & Steel, 1984 Lab IC 790 (SC); see also T.C. Srinivasa Murthy v. Bharat Earth Movers, 1983 (1) LLN (NOC) 7. 4. Western India Tanneries v. M R Bhope, 1991 (1) LLN 993: 1991 (62) FLR 887. 5. Bharat Petroleum Corporation Ltd. v. Ramnath Jagdish Tiwari, 1995 LLR 259.
However, an enquiry will not be vitiated due to non-payment of suspension allowance when the delinquent employee continued to participate in the enquiry and also did not make a claim even when the matter came before the court. Such a plea was taken by the workman only in his replication and also, it was not supported by evidence . 1 Also, in another case, the Delhi High Court has held that if an employee stops to participate in enquiry since the suspension allowance was not being paid, the enquiry will not be vitiated.2 10. Format of suspension order/letter to an employee when the criminal proceedings are pending against him To ..................... ..................... Whereas a case against Shri.....................(name and designation) in respect of a criminal offence is under investigation/inquiry trial. Now, Therefore, the undersigned in exercise of his powers under clause No.....................of the Standing Order/ Service Rules hereby places the said Shri.....................under suspension with
immediate effect. It is further ordered that during the period of suspension Shri.....................shall not leave the station without obtaining prior permission of the undersigned. During the period of suspension the said Shri.....................will be entitled to subsistence allowance as provided in Standing Orders/Service Rules (to be mentioned only when there is such provision). Manager/Competent Authority C.C.: 1. Accounts Department. 2. Time Office. For information and necessary action. ____________ 1. C.I. Poulose v. The President, Pindimane Service Cooperative Bank Ltd., 1996 LLR 603. 2. J.P. Sharma v. Punjab National Bank, 1996 LLR 92.
11. Format of Suspension Order/Letter to an Employee During the Pendency of Disciplinary Proceedings To ..................... ..................... Whereas the charges amounting to gross misconduct/ misconducts and indiscipline against you have been levelled in accordance with Service Rules/ Standing Order No.....................as per charge-sheet dated.....................sent to you. Now, Therefore, you are hereby placed under suspension with effect from.....................under clause..................... of the Factory/ Company Rules/ Standing Orders. Your suspension has been considered necessary in order to maintain proper discipline in the Factory/Company/Establishment and to conduct proper enquiry against you. You will be entitled to receive a subsistence/ suspension allowance of Rs.....................during the period of suspension. Directions to employee to report for attendance at the premises of factory/establishment in private sector are not desirable. You are further required to report yourself daily at.....................(time) at.....................(place) to the undersigned/time office to receive communication intended for you. Dated.....................
Manager/Competent Authority.
5 FOURTH STEP TOWARDS DISMISSAL/DISCHARGE OF AN EMPLOYEE
SYNOPSIS 1. Explanation of the Employee in Response to the Charge-sheet 2. Termination of a Confirmed Employee Sans Enquiry not Valid even though the Reasons were Recorded 3. Domestic Enquiry--Necessity of 4. Conviction of an Employee by Criminal Court itself cannot Form Basis for Straightaway Dismissal 5. Validity of Standing orders Dispensing with Enquiry 6. Circumstances when the Employee Admits his Guilt 7. Enquiry Officer--Appointment of 8. Objections by Workmen to the Appointment of an Enquiry Officer 9. An Enquiry Officer Should Neither be a Complainant nor a Witness 10. An Enquiry Officer Subordinate to the Witnesses 11. A Partner of Firm as an Enquiry Officer 12. The Disciplinary Authority can also hold an Enquiry if the Standing Orders so Provide 13. An Enquiry Officer Should not be Appointed at the Time of Framing the Charges 14. Enquiry Officer Should not be the Prosecutor 15. When an Enquiry Officer is said to b e biased 16. Representation by a Lawyer/Union Leader in the Enquiry 17. Representation by a Lawyer When the Matter Pertains to Exceptional Circumstances 18. An Employee has a Right to be Represented by a Lawyer if the Management is being Represented by a Legally Trained Person 19. An Employee can be Allowed a Lawyer to Represent, if no Representation by a co-employee is Available 20. Representation by a Trade Union Leader 21. Appointment of Presenting Officer by an Employer 22. Procedure for Holding an Enquiry and Recording Evidence 23. Findings/Report of the Enquiry Officer 24. Enquiry Report Must be Provided to the Concerned Employee 25. Formats of notices pertaining to enquiry (i) Letter to the Enquiry Officer for holding of enquiry (ii) Letter to the concerned employee intimating time, date and venue of enquiry (iii) Letter from, an Enquiry Officer to an employee intimating time, date and venue of enquiry
(iv) Letter to an employee intimating about holding of enquiry when he fails to send his explanation (v) Covering letter along with enquiry report to employee asking him to submit his comments on the findings of enquiry (vi) Letter to an employee along with enquiry report with proposed punishment and asking for his explanation 26. Standing Orders to be Followed while Imposing Punishment 1. Explanation of the Employee in Response to the Charge-sheet On receipt of the explanation from an employee in response to the charge-sheet, two contingencies may arise. The first is that in his explanation the employee may admit the charge and plead for leniency with the assurance that he will not repeat it. If, however, the employee pleads for leniency with the assurance that he will not repeat it and also assures the employer of good behavior then in such circumstances the management should not insist on initiating disciplinary proceedings against him thereafter because otherwise when an industrial dispute is raised the employer may be held guilty of bad faith.1 The second contingency is that the employee may refute the charge. In that eventuality considering the gravity of the act or omission on the part of the delinquent employee, the employer may initiate disciplinary proceedings against him. But if the workman admits his guilt, then there is no __________________ 1. Ameteep Machine Tools v. Labour Court, Haryana,
MANU/SC/0310/1980 :
AIR 1980 SC 2135: 1980 Lab IC
1297: 1981 LLR 10: 1980 57 FJR 63.
obligation on the management to lead evidence in the first instance, as tendering of evidence in such contingency would be mere empty formality.1 The employee in his explanation voluntarily admits the charge against him or makes an unconditional and unqualified confession without coercion or undue influence then the matter ends and there is nothing more to be done by way of enquiry and it cannot be contended that the procedure of domestic enquiry should have been applied notwithstanding such admission or confession.2 When there has been an admission of guilt by the workman himself it cannot be said that there is violation of the principles of natural justice merely because of the fact that the workman was examined in the first instance.3 In one case, the charge against the workman was that he granted overdrafts to two named parties without proper approval from the officer concerned which was admitted by the workman. A domestic enquiry was held as a result of which he was discharged. The Labour Court rejected the application of approval on the ground that he was examined even in the first instance and was also cross-examined to elicit points in support of the charge. Allowing the appeal from the decision of the Labour Court, their Lordships of the Supreme Court held that when the workman admits his guilt in his explanation to the charge-sheet then to insist upon the employer to let in evidence about the allegations will only be an empty formality. In such a case, it will be open to the employer to examine the workman himself even in the first instance, so as to enable him to offer any explanation for his conduct or to place before the employer any circumstances which will go to mitigate the gravity of the misconduct. But even then, examination of the workman, under such circumstances should not savour of an inquisition. But after examination of workman the management chooses to examine any witnesses, the workman must be given reasonable opportunity to cross-examine those witnesses and also to adduce any other evidence that he may choose . 4 Further details _______________
1. Associated Cement Co. Ltd. v. Abdul Gaffar, 1980 Lab IC 683; see also, 1980 Lab IC 219. 2. J.N. Toppe v. Tata Locomotive and Engineering Co. Ltd.,
MANU/BH/0052/1963 :
AIR 1963 Pat 177: 1962
BLJR 300. 3. Associated Cement Co. Ltd. v. Workmen, (1964) 3 SCR 661. 4. Central Bank of India v. Karunamoy Banerjee, (1967) 2 LLJ 739:
MANU/SC/0213/1967 :
AIR 1968 SC 266:
1968 (1) SCR 251: 1968 (1) SCWR 254.
have been given under the caption 'when the workman admits his guilt'. 2. Termination of a Confirmed Employee Sans Enquiry not Valid even though the Reasons were Recorded The standing orders of Steel Authority of India Ltd. provided that the disciplinary authority can terminate the services of an employee and/or dismiss him without holding any enquiry in appropriate case after recording the reasons therefor. The appellant terminated the services of an employee after recording reasons but without any enquiry. It has been held that it is unfortunate that a public sector undertaking will keep a provision in its standing orders authorising it to terminate the service of an employee and/or dismiss him from service after recording reason but without holding enquiry. It was further held that such a provision is reminiscent of the days of 'hire and fire'. Thatapart, when the services of the respondent employee were terminated for an incident of illegally taking out of the plant some material belonging to the appellant, there is no reason why an enquiry could not be conducted in respect of the incident . 1 It has been held that the composite order of di smissal containing the charges and the reasons for the order of dismissal is valid. It is the substance and not the form which is really relevant and required to be looked into.2 However, when the services of an employee are terminated on the ground of moral turpitude of a serious nature and when undesirable social consequences are apprehended or are likely to follow such enquiry, the nonholding of an enquiry into the misconduct does not invalidate the termination. But the burden of proving the undesirable social consequences with appropriate reasons lies on the employer. Where a watchman allowed some anti-social elements during the night time to assemble in the premises of the institution for gambling and also allowed them to bring girls into the institution for immoral purposes, his services were out rightly terminated without holding an enquiry, the High Court upheld the decision of the authorities.3 __________________ 1. Steel Authority of India Ltd. v. Dilip Kumar Dcbanath, 1988 LLR 351. 2. P. Selvaraj v. The Management, Brakes India Ltd., 1991 LLR 165. 3. Sindhu Education Society, Jaripatka, Nagpur v. Kacharu Jairam Khobragade, 1994 LIC 565.
3. Domestic Enquiry--Necessity of Howsoever undesirable and indisciplined an employee may be, the employer cannot dispense with his services without following a meticulous procedure. With the growing industrialisation of the county, the disputes between employers and workmen have also grown manifold. A variety of disputes arise for which a knowledge of industrial law has become a necessity. For the administration of Industrial law, a large volume of case law has accumulated. In order to keep peace and harmony in an industry, without stultifying the rights and obligations of both the employers and the workmen, it is imperative that they should be educated of t heir limitations, rights and obligations, laid down in industrial law. Sometimes even technical default--not observing the prescribed procedure, entails prolonged litigation between the employees and their employers, much to their annoyance, expense and waste of energy. In almost all disciplinary cases,
conducting of a domestic enquiry is, therefore, a necessity. Even in case of abandonment of service, an employer has to give notice to a workman and hold an enquiry since it is for an employer to prove such abandonment.1 4. Conviction of an Employee by Criminal Court itself cannot Form Basis for Straightaway Dismissal An employee was arrested by the police for alleged commission of an offence under the Indian Penal Code, 1860 and Arms Act, 1959. He pleaded guilty and was convicted. However, he was released under the Probation of Offenders Act, 1958. He was dismissed from service on such conviction; the dismissal was challenged by the concerned employee. It has been held that no doubt, convictions by the criminal court for an offence involving moral turpitude and punishable with imprisonment, form the basis for disciplinary action being taken, mere arrest will not enable the disciplinary authority to take disciplinary action. In fact, a charge was framed only on the basis of the arrest of the employee by the police and while the disciplinary proceedings were pending, the criminal court convicted him for a different charge. Since the charge levelled against the employee in the disciplinary proceedings and the conviction by the crimi nal court ________________ 1. Gaurishanknr Vishwakarma v. Eagle Spring Industries (P) Ltd., 1988 (I) LLN 259: 1988 (1) CLR 38.
are for different offences and one does not have any relation to the other, it has been held by the Madras High Court that on the basis of conviction by the criminal court, straight-away a punishment of removal from service cannot be imposed.1 It is a settled principle of law that a criminal enquiry is quite distinct from a domestic enquiry. The rules applicable to a domestic enquiry, do not apply to cases of criminal enquiry or trial.2 5. Validity of Standing orders Dispensing with Enquiry Standing Order conferring power upon the General Manager to dismiss a workman without enquiry if he is "satisfied that it is inexpedient or against interest of security to continue to employ the workman" is violative of the basic requirement of natural justice. A Standing Order which confers such arbitrary, uncanalised and drastic power to dismiss a workman by merely stating that it is inexpedient or against the requirement of natural justice inasmuch as the General Manager can impose penalty of such a drastic nature as to affect the livelihood and put a stigma on the character of the workman without recording reasons why disciplinary inquiry is dispensed with and what was the misconduct alleged against the workman, is reminiscent of the days of 'hire and fire'. Even under proviso (b) of Article 311 (2) of the Constitution, which permits dispensing with the services of an employee without following the normal procedure of holding enquiry, a safeguard is introduced that the concerned authority must specify reasons for its decision why it was not reasonably practicable to hold the enquiry. By a catena of decisions it has been laid down that where an Order casts a stigma or affects one's livelihood, before passing the Order, principles of natural justice namely a reasonable opportunity to present one's case and controvert the adverse evidence must have full play. This minimum requirement cannot and should not be dispensed with to control wide discretionary power and to guard against the drastic power to inflict such a heavy punishment as denial of livelihood and casting a stigma without gi ving the slightest _______________ 1. Sundram v. Pallavan Transport Corporation Ltd., 1988 (56) FLR 40. 2. Vasant Ladoo Naik v. Kohinoor Mill No. 1, 1992 (65) FLR 452: 1992 CLR 853.
opportunity to the workman to controvert the allegation and even without letting him
know what is his misconduct. In this case the order dispensing with the enquiry did not state the nature of the misconduct alleged against the workman and also as to what prompted the General Manager to dispense with the normal procedure of holding an enquiry. The court directed that the workman be paid Rs. 1,50,000 by way of back-wages and future wages and the relevant Standing Order be recasted and brought in conformity with the second proviso to Article 311(2) of the Constitution.1 6. Circumstances when the Employee Admits his Guilt There is no hard and fast rule that where the facts are indisputable or that they are admitted, it is not necessary to observe the principles of natural justice. The pleas of the employer that in view of the fact that the employee has made admissions before the investigating officer, no enquiry was necessary, cannot be accepted. It is futile to contend that no regular enquiry was necessary, or contemplated for passing the order terminating the services of the petitioner. Enquiry is a condition precedent for inflicting penalty of termination of service. 2 However, it has been held that there is no doubt that if a workman against whom disciplinary proceedings are instituted, admits his guilt, there is no necessity for the management to hold an enquiry.3 7. Enquiry Officer--Appointment of In order to inspire the confidence in the charge-sheeted employee, it is necessary that the enquiry officer should be a person who is known for his open mindedness and unbiased attitude. He should not nurse any pre-conceived notions and he must be independent in his approach to his task. This is a cause sine qua non and an inescapable condition that a person who is in anyway whatsoever personally involved in an enquiry as an eyewitness to the incident form in the cause of action, or he is a _______________ 1. Workmen v. Hindustan Steel Ltd., 1985 (50) FLR (SC):
MANU/SC/0213/1984 : AIR 1985 SC 251.
2. State Bank of Bikaner & Jaipur v. Jagdish Chandra Khadgwat, 1986 (2) LLN 986. 3. Hindustan Aeronautics Ltd. v. B. Gulab Singh, 1986 (52) FLR 443: 1986 (1) LLN 430.
person due to whose behaviour the workman has to face a charge of misconduct, if he is involved in the cause of enquiry in any other way, in such circumstances a person cannot be an Enquiry Officer. When the disciplinary authority decides to order an enquiry, it may hood the same itself or appoint an Enquiry Officer for that purpose in the absence of a provision to the contrary in the Service or Discipline Rules concerned. The Enquiry Officer functions only as a delegate of the disciplinary authority, whose conclusions and recommendations may or may not find favour with the disciplinary authority.1 In one case it has been held that a lawyer in the absence of any special bias can hold an enquiry.2 8. Objections by Workmen to the Appointment of an Enquiry Officer In private employment a domestic enquiry is mistrusted; essentially because the chargesheet is given by the employer and the enquiry is also held by an officer or an outsider appointed by the employer. The employer, as such represents both; the Prosecutor and the Judge. A suspicion of bias is inevitable in such a situation. This is the main reason that the delinquent employees do not have faith in the Enquiry Officer. They participate reluctantly and take every possible step to frustrate the enquiries. They raise a number
of objections right from the validity of the appointment of the Enquiry Officer. They also demand to be represented either by a lawyer or the union leaders. They ask for a number of documents whether relevant or not. Also the delinquent employees or their representatives do not restrict the cross-examination of witnesses and the Enquiry Officer has to take a decision under the gi ven circumstances. Generally, a worker raises an objection as to the appointment of the Enquiry Officer that he is not an independent person or otherwise. He may also contend that the appointment of the Enquiry Officer has not been made by a competent authority, or that he is not a person of open mind or is biased against him, or ______________ 1. Ningaiah v. Cauvery Gramin Bank, Mysore, 1995 LLR 177. 2. E.R. Sankaran v. I. Mettur Government Servants Cooperative Stores Ltd., Salem, 2001 LLR 132 (Mad HC).
that he himself is a witness to the acts of misconduct alleged against him. While, therefore, appointing an Enquiry Officer, the basic principle that no one should sit in judgment in his own cause or in which he interested, should be kept in view. In the administration for justice, public policy requires that for a person to be appointed as an Enquiry Officer, he must be independent, and unbiased so that the employee proceeded against may have confidence in him. This is based on two time honoured principles of public policy, namely:-(i) that no man should be a judge in his own cause; (ii) that justice should not only be done but manifestly and undoubtedly seem to be done. If a person is acting judicially, he should be free from bias, fi nancial or otherwise either in favour or against the party to a dispute. He should not bring himself to the position where bias can reasonably be inferred to exist. What is true of judicial bodies or persons acting in a judicious capacity is equally true of those who are called upon to discharge quasi-judicial functions such as that of an Enquiry Officer. In fact, Enquiry Officer is in the position of a judge and, therefore, he must not be personally interested, either directly or indirectly in the subject-matter of a domestic enquiry. He should be completely impartial in deciding the matter before him.1 The underlying principle is Nemo debet esse judex in propria causa--i.e., no man shall be judge in his own cause and deciding authority must be impartial and without bias.2 Similarly, if a person is a witness, then he should not be appointed to act as an Enquiry Officer. It is not open for a person to depose against an employee and at the same time to be a judge of the matter. In such a case, it would be impossible for him to disbelieve his own statement. In other words, a person should not be pl aced in the position of Judge in the same matter in which he is to depose .3 In such a case, it hardly matters whether this is done ________________ 1. Gullapalli Nageshware Rao v. A.P.S.R.T. Corporation, AIR 1969 SC 308: 1959 SCJ 967; see also Bhikan Bobla v. State of Punjab, AIR 1963 Punj 255 (1963) 65 Punj LR 368; Saxwin Farmer (India) Ltd. v. I.T., 1962 (4) FJR 207. 2. Rattan Lai Sharma v. Managing Committee, Dr. Hari Ram (Co-education) Higher Secondary School, 1993 (67) FLR 364 (SC): 1993 LLR 647. 3. S. Rangarajan v. Srirangam Janopakara Bank Ltd., 1962 (2) LLJ 482:
MANU/TN/0025/1963 :
AIR 1963 Mad
76.
in good faith or whether the truth lay that way, because the spectacle of a Judge hopping
on and off the Bench, to act first as Judge then as witness; to determine whether he should believe himself in preference to another witness starting to say the least. 1 The two roles cannot obviously be played by one and the same person and it is futile to suggest that he should in the circumstances keep the scales even .2 A person having pecuniary interest is totally disqualified to act as an Enquiry Officer because pecuniary interest is more serious.3 The enquiry can be held either by an officer of the establishment or by an outsider, including a lawyer appointed by the employer for the purpose. But the appointment of a person to act as Enquiry Officer should not be made in a light-hearted manner since the entire fabric of the disciplinary proceedings rests on the findings of the Enquiry Officer.4 The Rajasthan High Court has held that where the Standing Order of a company provides for appointment of an officer as the Enquiry Officer in a Departmental Enquiry, it means a responsible person and not necessarily an officer of the company. As advocates are known as officers of the court, there should be no objection to the appointment of an advocate as an Enquiry Officer, if he is not in the service of the company. Appointment of an advocate will repose confidence, in the workman and will not prejudice his case . 5 The Bombay High Court has held that it is by now well-settled law that as long as no bias can be imputed to the Enquiry Officer, the fact whether he was a paid professional or a whole time employee of the employer, does not affect the validity of the enquiry held by him.6 A lawyer must normally be presumed to be a man without bias or prejudice as he is trained in law.7 A person is not disqualified from acting as an Enquiry Officer at a domestic enquiry merely because he is the employer's lawyer who is paid a remuneration for acting as ______________ 1. State of Uttar Pradesh v. Mohd. Nook, AIR 1958 SC 86: 1958 SCJ 242: 1958 SCR 595: 1958 SCA 73. 2. Andhra Scientific Co. Ltd. v. Seshagir Rao, 1959 (2) LLJ 717. 3. Mineral Development Ltd. v. State,
MANU/SC/0015/1959 : AIR 1960 SC 468.
4. Satan Motors (P) Ltd. v. Vishwanath, 1964 (2) LLJ 139 (SC): (1966-67) 29 FJR 517. 5. Capstan Meters (India) Ltd. v. The judge, Labour Court, 1991 LLR 501. 6. Khandu Krishna Bhogade v. Kalyani Steel Ltd., 1995 (1) CLR 58: 1995 LLR 253. 7. N. Narichan v. R.K. Nenu Nair, 1972 KLJ 113: 1964 (2) LLJ 139.
an Enquiry Officer and was previously engaged by the employer to represent him in industrial adjudication.1 It is a matter of common knowledge that many employers are not adequately equipped to conduct an enquiry against an erring employee charged with misconduct. The employer may be illiterate; even if he is literate, he might be unfamiliar with the judicial procedure of holding an enquiry, he might be the person whom the employee had disobeyed and from that point of view the prosecutor and the judge would be rolled into one; as a consequence, he might be considered as having a bias against the employee. But none of these circumstances by its own force can preclude the employer from holding the enquiry and from discharging the statutory obligations placed on him. This shows that even if the punishing authority acts as an Enquiry Officer it cannot be said that such an authority is disqualified to hold a domestic enquiry . 2 But this case should not, however, be construed to mean that a person who is a main witness in the case can hold the enquiry. Where the manager himself presided over the enquiry, recorded the statements, cross-examined the labourers who were the offenders, he has made and recorded his own statements on facts and also questioned the offending labourers about the truth of his own statements recorded by himself, in other words, the manager did not keep his function as the Enquiry Officer distinct but became witness, prosecutor and manager in turns; it was observed that as a result of this infirmity, the record of the enquiry was not recorded properly. This means that the enquiry should
always be entrusted to a person who is not a witness. It has been observed that many delinquents request for the transfer of the proceedings to another Enquiry Officer. But such requests should be made before the management and not before the Enquiry Officer.3 9. An Enquiry Officer Should Neither be a Complainant nor a Witness The Supreme Court has held that the enquiry, which is conducted by the persons who were not only in the position of ___________________ 1. Saran Motors (P) Ltd. v. Vishwanath, 1964 (2) LLJ 139 (SC): (1966-67) 29 FJR 517. 2. Srirangan Janokpakara Bank Ltd. v. Rangarajan, 1964 (1) LLJ 22. 3. Punjab financial Corporation v. Union Territory of Chandigarh, 1991 (63) FLR 492: 1991 (2) LLN 207: 1992 (2) LLJ 825.
Judges but also as prosecutors and witnesses, stood vitiated on the ground of breach of the principles of natural justice. As to the tests of the likelihood of bias, what is relevant is the reasonableness of the apprehension in that regard in the mind of the party . 1 The proper approach for the judge is not to look at his own mind and ask himself, however, honestly, "Am I biased?", but to look at the mind of the party before him. Thus viewed, the conclusion becomes inescapable that having regard to the position of the Master qua the petitioner, the Enquiry Committee which consisted of the Head Master and Shri R.Y. Walawalkur cannot be held to be independent. Such a committee cannot enjoy the confidence of impartiality which is expected of an authority enjoined to perform judicial or quasi-judicial functions.2 In a writ-petition against dismissal of an employee after enquiry, the High Court set aside the enquiry and ordered a fresh enquiry. The same Enquiry Officer conducted a fresh enquiry and submitted his report, holding that the appellant was dismissed from service and his writ-petition was also dismissed. This appeal reached the Supreme Court. It was held that the Enquiry Officer submitted his report and styled it as an 'additional enquiry report'. He had considered his earlier report while giving in the fresh report. It is patent that there has been no fresh application of mind and that the appellant did not have a fair opportunity of presenting his case to an Enquiry Officer unbiased by preconceptions.3 Where there is no provision in the Standing Orders requiring that only a local officer of the company could be appointed as an Enquiry Officer then in such a case the appointment of an officer serving in the company at some other place as Enquiry Officer cannot be said to cause prejudice to the employee, specially when such an officer could be expected to take a more detached and impartial view of things in comparison with a local officer. This apart, when the employee does not raise objection to the appointment of such officer at the initial stage and in fact appears before him in the course of an enquiry and submits to his jurisdiction then also it cannot be said that the employee was in _______________ 1. Meenglas Tea Estate v. The Workmen,
MANU/SC/0139/1963 : AIR 1963 SC 1719: (1964) 1 SCJ 98.
2. Madhukar Janardan Mulay v. State of Maharashtra, 1989 FLR 41. 3. Heera Prasad v. State Bank of India, 1993 II CLR 266 (SC).
any way prejudiced on account of such appointment .1 The pre-requisites of a person to
be an Enquiry Officer may, thus, be summarized: (a) The appointment of the Enquiry Officer should be made by an authority competent to take disciplinary action against the workman concerned.2 (b) Before making the appointment of a person to act as Enquiry Officer, it must be seen that he is a person with open mind, a mind which is not biased against the workman concerned.3 (c) For a person to be an Enquiry Officer, he must be a responsible officer of higher status, commanding respect from the workmen. He should not be a person of lower status and should not be judge in his own cause.4 (d) A person having personal knowledge is disqualified to act as Enquiry Officer. In other words, the enquiry should not be entrusted to a person who had himself witnessed the alleged incident.5 (e) A biased person is also totally disqualified to conduct a domestic enquiry.6 10. An Enquiry Officer Subordinate to the Witnesses It is a well-settled principle that the person appointed to hold an enquiry should be a responsible officer of high status commanding respect from a majority of workmen. In the enquiry, the workman may also raise the objection that the Enquiry Officer being subordinate to the principal witnesses shall not be in a position to take an independent decision. It may, therefore, be kept in mind that the person conducting the enquiry should not be subordinate to the officer who is a witness to it. There can, however, be no assumption in cases where the Enquiry Officer is an employee of the management that he would not act impartially _________________ 1. Sheo Sampatlal v. State of Uttar Pradesh, 1983 LLR 60: 1983 Lab IC 325. 2. Baldev Singh v. Secretary, 1969 SLR 682. 3. B.R. Rao v. Registrar of Cooperative Societies, 1970 SLR 7.
MANU/SC/0427/1969 : AIR 1970 SC 150: 1970 (1) SCJ 381: 1970 (1) SCR 457; see also Sunit Kumar Ghosh v. Ajit Kumar ,MANU/WB/0086/1969 : AIR 1969 Cal 492: 1969 Cr LJ 1234: 73 4. A.K. Kraipak v. Union of India, Cal WN 212. 5. Associated Cement Companies Ltd. v. Their Workmen, 26 FJR 289 (SC). 6. Hareram Samanta v. Superintendent of Police, 1961 (3) FLR 274.
and would decide the case in favour of the management .1 When in an enquiry the delinquent employee is given reasonable opportunities for access to the record, crossexamination of witness to defend himself, the enquiry cannot be vitiated for the reasons that it was held by an officer of the establishment .2 As stated above, in some cases an objection is taken that one of the witnesses before the Enquiry Officer is a superior officer and since the Enquiry Officer could hardly disbelieve his own superior deposing against the delinquent he is prejudiced. The appointment of such a person may, therefore, be avoided.3 The presence of a senior officer in the enquiry may also influence the management's witnesses particularly when a junior person is appointed to hold the enquiry and, therefore, this may also be avoided.4 11. A Partner of Firm as an Enquiry Officer Where there were 25 employees and the partner was working as a Manager who had issued the charge-sheet, and it was he who held the enquiry and passed the final order,
it was held that it was impossible to imagine that in such a concern there could be a separate officer for serving charge-sheet, for holding enquiry and for passing final order of dismissal. It was further held that there was no violation of natural justice because the same person gave charge-sheet, held enquiry and passed order.5 12. The Disciplinary Authority can also hold an Enquiry if the Standing Orders so Provide Where the question arose as to whether the involvement of Manager at all stages of domestic enquiry violated the principles of natural justice or whether it can be said that employer became a judge in his own cause, it has been held that the Manager was performing his functions under the Standing Orders when he commenced disciplinary proceedings against the 1st respondent by issue of a charge-sheet. He was so acting when he conducted _______________ 1. Delhi Cloth & General Mills v. Labour Court, 1970 (1) LLJ 23 (SC): 19 FLR 349. 2. M.O. Frances v. Bank of Cochin, 1988 LLR 19: 1988 (1) CLR 49. 3. Bennet Coleman & Co. Ltd. v. Workmen, 1955 (2) LL] 458 (LAT). 4. Saxby & Farma (India) Pvt. Ltd., v. I.T., 1962(2) LLJ 52. 5- Jaisingh Bapu More v. New Polytex Industries, 1986 (2) CLR 274: APS Lab Cas 106.
the enquiry thereto. He was also so acting when, upon consideration of the findings, he awarded appropriate punishment. He was not a judge in his cause, for there is nothing to show, nor has it been argued that he had any personal interest in the matter. Looking to the position that the highest administrative officer of the appellants was the disciplinary authority by virtue of the Standing Orders and was therefore, obliged to issue chargesheet, hold the enquiry, consider its findings and impose punishment if necessary, it cannot be said that bias can or should be i nferred.1 13. An Enquiry Officer Should not be Appointed at the Time of Framing the Charges The appointment of an Enquiry Officer cannot be made at the time of framing the charges on the delinquent employee since the disciplinary authority should first consider the explanation submitted by the employee and after considering the explanation should decide as to whether the articles of charges shall be enquired into and if so, whether it is to be done by the disciplinary authority itself or by appointing an Enquiry Officer. Where the disciplinary authority appointed the Enquiry Officer at the time when the charges were framed against the delinquent employee; it was held that the delinquent was, therefore, prejudiced since the disciplinary authority while appointing the Enquiry Officer at the time of framing the charges could not apply its mind in considering the explanation submitted by the concerned employee. If the explanation of the employee would have been considered by the disciplinary authority, there might have been a possibility that the charges could have been dropped in view of the admission of some of the charges warranting minor punishment. It has also been held that the participation of the delinquent employee in the enquiry would not debar the delinquent from challenging the validity of the enquiry being held against him. The principle of estoppel will not apply in such an eventuality.2 ______________ 1. Dawn Mills Company Ltd. v. Sukhdeo Prasad Dhaneshwar, 1989 CLR 79: 1988 (57) FLR 839. 2. Bhagirthi Sahu v. Orissa University of Agriculture and Technology, 1989 Lab IC (NOC) 15.
14. Enquiry Officer Should not be the Prosecutor It has been held that an Enquiry Officer should always behave like an impartial person. Once he has started behaving like the prosecutor, the very enquiry gets vitiated because this amounts to adopting of wrong procedure during the enquiry.1 15. When an Enquiry Officer is said to be biased It has been held by the Bombay High Court that the learned Single Judge was wrong in coming to the conclusion that the writ petitioner could not be permitted to raise the question of real likelihood of bias, as he did not raise the same during the course of the enquiry proceedings. Admittedly the inspector, who conducted the enquiry was the immediate subordinate to the complainant in the case. The real likelihood of bias is written large on the face of the enquiry. The entire enquiry was, thus, held to be vitiated and accordingly, entire proceedings including the penalty were quashed .2 The Karnataka High Court has held that the rule says that the officer selected as an Enquiry Officer should be sufficiently senior. This only means that the Enquiry Officer should be sufficiently senior in rank, it does not mean that the officer selected thus should be senior to the delinquent officer. There is no allegation as well to the effect that the 2nd respondent (Enquiry Officer) is not a senior officer. It has further been held that there is no factual basis to infer the allegations contained in the petition. Vague suspicion cannot be made a ground for bias. It is well-settled law that unlike pecuniary bias in the case of personal bias as now alleged, the delinquent officer has to establish that due to the circumstances alleged there "is a real likelihood of bias in the Judge". Nothing has been established that the mind of the 2nd respondent is biased against the petitioner.3 Natural justice stipulates that no man should be judge of his own cause and delinquent be fairly hears. An Advocate of company can be an Enquiry Officer and no bias can be presumed.4 _________________ 1. Shanti Lal Motilal Marzvadi v. Guest Keen Williams Ltd., 1992 (65) FLR 360 (Bom): 1992 (2) LLJ 847. 2. Abusali v. The Commandant, 1995 LLR 61. 3. K.G. Shenoy v. Disciplinary Authority, 1995 LLR 139. 4. Biecco Lawrie Ltd. v. State of West Bengal, 2009 LLR 1057 (SC).
When an enquiry officer took the assistance of law officer as prosecution witness, the enquiry will be vitiated.1 16. Representation by a Lawyer/Union Leader in the Enquiry Generally speaking the real and true criterion in each case is whether the refusal of representation generates prejudice or embarrassment and if that result is likely to ensue, the refusal of permission for defence through counsel would plainly lack the element of reasonableness. The right of representation to be exercised by a workman depends upon the discretion of the employer or the Enquiry Officer but such a discretion is required to be exercised in accordance with the peculiar facts and circumstances of each case. The said right also depends upon the existence of Standing Orders or Service Rules to that effect applicable to the workmen of the establishment.2 However, the position would be different when the charge-sheeted workman is illiterate. In such a case, the workman should be allowed to be assisted by one of his colleagues even in the absence of any provision in the Standing Orders.3 In private employment it is necessary that the principles of natural justice should be followed. Though the right to representation through counsel cannot be claimed as of
right even in the case of a public servant in whose case enquiry is held in accordance with Rule 15(5) of the Central Civil Services (Classification, Control and Appeal) Rules, 1957, the principle is that when a man is charged with the breach of a rule entailing serious consequences, he is not likely to be in a position to present his case in the best way possible, particularly, when the accusation against him threatens his very livelihood. In such a situation, he cannot be expected to act calmly and with deliberation. In cases where the Standing Orders do not authorise the employer to utilise the services of a labour law adviser but such __________________ 1. Shailendra Kumar v. Bihar State Pollution Control Board, 2009 LLR 540 (Pat HC). 2. State v. Nityanand Behidar, AIR 1962 Ori 106; see also Dunlop Rubber Co. (India) Ltd. v. Their Workmen,
MANU/SC/0211/1964 :
AIR 1965 SC 1392: 1965 (1) LLJ 426; Kalindi (N) v. Tata Locomotive
Engineering Co. Ltd., 1960 (2) LLJ 448 (SC). 3. Workmen of Madura Co. (India) Ltd. v. Labour Court, 1968 (1) LLJ 498.
an adviser is engaged for the purpose then a similar facility should also be extended to the workman. Where the court had not found that either from the nature of the scope of the enquiry, or the unequal position of the contestants, such as that the enquiry was being conducted by a trained lawyer or one experienced in conducting enquiries, that the workmen were at a disadvantage and had suffered prejudice, the case was remanded back by observing that the position required re-examination after taking all aspects into account.1 In order to find out whether the petitioner, in fact, needs legal assistance or not to defend his case, one has to find out: (i) whether it is really a fight between the two unequal; (ii) whether the charge is simple, plain and understandable enough to an everage man of ordinary understanding or is it of complex nature; (iii) whether the charge against the d elinquent is such where some documents are required to be proved or disproved either because they are false or fabricated; (iv) is it a case where there are a number of witnesses to be examined and crossexamined; (v) is it a case where some expert witness is required to be cross-examined; and (vi) what is the intellectual capacity, status and experience of the delinquent facing the departmental proceedings. Merely because in any departmental proceeding, the Enquiry Officer happens to be a trained person thats by itself does not mechanically vest any right in the delinquent to have legal assistance of a lawyer, irrespective of the facts and circumstances of that particular case. Thus, the ultimate answer as regards the right of delinquent to have legal assistance in matter of departmental inquiry rests entirely upon the facts and circumstances of that particular case, and more particularly on the answer to the following two questions:- _______________ 1. Kavitha Movie House v. M.A. Abdul Khader, 1979 Lab IC 263; see also Dunlop Rubber Co. Ltd. v. Workmen,
MANU/SC/0211/1964 :
AIR 1965 SC 1392; Kalindi (N) v. Tata Locomotive and Engineering Co. Ltd..
1960 (2) LLJ 228; State of Madhya Pradesh v. Chintaman Sadeshiva Waishampayan, AIR 1961 SC 1623: 1961 Jab LJ 702.
(i) whether the case against the delinquent employee presents any legal complexity, making him totally handicapped to defend his case; and (ii) whether the delinquent facing the inquiry proceedings is academically and psychologically fit and competent enough to defend himself in absence of outside legal assistance. The answer to the above two questions holds the key to the problem whether the delinquent is entitled to legal assistance in a departmental enquiry or not.1 The Supreme Court has held that the right of a workman to be represented by an advocate depends upon the service rules or Standing Orders of the organisation and as such an employee cannot insist for representation by an advocate when there are no such rules.2 17. Representation Circumstances
by
a
Lawyer
When
the
Matter
Pertains
to
Exceptional
It has been held that though the court should discourage the involvement of a legal practitioner in simple domestic enquiries like disciplinary enquiries for avoiding complications and delay, yet the court cannot ignore the necessity of such a representation in exceptional cases where refusal of such a representation would constitute failure of the enquiry itself, principles of natural justice demand conceding such a claim. No general rule can be laid down iii this respect but the issue must be left for consideration in the light of the facts of each individual case. Where the allegations pertained to commission of fraud and forgery on the part of the employee, the court held that if such an allegation has been made in the Court, the employee would have a right of representation by an advocate.3 It has been held that it is true that a charge-sheeted employee in a departmental proceeding is not entitled to the assistance of a lawyer as a matter of right, but such assistance in the interest of natural justice should be given where the situation demands it. In the instant case, the petitioner was __________________ 1. Shri K.C. Mani v. Central Warehousing Corporation, 1994 LLR 312. 2. Cipla Ltd- v. Ripu Daman Bhanot, 1999 LLR 534 (SC):
MANU/SC/0264/1999 : AIR 1999 SC 1635.
3. Indian Photographic Company Ltd. v. Saumitra Mohan Kumar, 1984 Lab IC 42: 1983-2 CHN 298: 1983 II LLN 796: 1984 (1) LLJ 471: 1984 (47) FLR 246.
asked to meet a complicated question of law which, obviously, was not possible for him to meet without the assistance of a lawyer. That being so, the refusal of such an assistance amounted to violation of the principles of natural justice. 1 The Bombay High Court has held that where the accusations levelled against delinquent were of such serious nature that even if the most trifling of accusations if established, the delinquent would be dismissed from service, and the nature of accusation was also complicated, difficult and likely to embarrass the delinquent in the absence of legal aid, permission to be represented by a lawyer was given.2 The right to be represented by a counsel in an enquiry cannot be claimed as a matter of right. However, in a case where the delinquent is not in a position to express himself or his livelihood is at stake, or that his social or financial status is likely to be ruined, or where several complicated questions are raised which the delinquent is unable to comprehend, the question of such delinquent employee being afforded the assistance of a counsel can be considered.3 In another case also, it has been held by Karnataka High Court that the refusal by the Disciplinary Authority to allow an employee to be represented by a lawyer was not justified when the delinquent employee was also facing criminal trial and the result of enquiry was likelihood of his dismissal from service.4 18. An Employee has a Right to be Represented by a Lawyer if the Management is
being Represented by a Legally Trained Person If the rules prescribed for such an enquiry did not place a negative embargo on the right of the delinquent employee to be represented by a legal practitioner, the matter would be in the discretion of the Enquiry Officer whether looking at the return of charges, the type of evidence and complex or simple issues that may arise in the course of enquiry, the delinquent employee in order to afford a reasonable opportunity to defend himself should ________________ 1. Hansila Prasad Pandey v. Bank of India, 1986 (2) LLN 525. 2. K.D. Anpet v. State of Maharashtra, 1988 I CLR 244. 3. K.G. Shenoy v. Disciplinary Authority, 1995 LLR 139. 4. N. Balasubramanian v. Can Bank Financial Services Ltd., 1996 (74) FLR 2047: 1996 LLR 995.
be permitted to appear through a legal practitioner. Why do we say so? Let us recall the nature of enquiry, who held it, where it is held and what is the atmosphere. Domestic enquiry is claimed to be a managerial function. A man of the establishment do the role of a Judge. It is held in the establishment office or a part of it. Can it even be compared to the adjudication by an impartial arbitrator or a court presided over by an unbiased judge. The Enquiry Officer combines the role of a Judge and Prosecutor, both rolled into one. Witnesses are generally employees of the employer who directs an enquiry into misconduct. Add to this uneven scales, the weight of legally trained minds on behalf of employer simultaneously denying that opportunity to delinquent employees. The weighted scales and tilted balance can only be restored if the delinquent is given the same legal assistance as the employer enjoys. Justice must not only be done but must seem to be done is not an euphemism for courts alone, it applies with equal vigour and rigour to all those who must be reasonable for fair play in action. The Supreme Court has clearly ruled that in a criminal trial where prosecution is in the hands of public prosecutor, accused for adequate representation must have legal aid at State costs. This will apply mutatis mutandis to cases before domestic tribunals. Where the management appoints its legal adviser and unior Assistant Legal Adviser as Presenting-cumProsecuting Officers then it signifies that, according to the management, the issues that would arise in the enquiry would be such complex issues involving intricate legal propositions that the Enquiry Officer would need the assistance of the Presenting-cumProsecuting Officer. In such a case, where the management directs two of its law officers to conduct the enquiry as prosecutors, it cannot deny such legal representation to the delinquent employee. In such cases, even in the absence of rules to that effect, the management is not precluded from acceding to the request of the employee for a lawyer because the rules do not enact a negative initiation. We have reached a stage in our onward march to fair play in action that where in an enquiry before a domestic tribunal the delinquent if pitted against a legally trained mind, if he seeks permission to appear through a legal practitioner the refusal to grant this request would amount to denial of a reasonable request _________________ 1. Board of Trustees of the Port of Bombay v. Dilip Kumar Raghvandranath Nadkarni, 1983 (46) FLR (SC): MANU/SC/0184/1982 : AIR 1983 SC 109: (1983) 1 SCC 124.
to defend himself and the essential principles of natural justice would be violated.1 In such a case, one can go as far as to say that the Enquiry Officer in order to be fair and just, where he finds the employer appointing legally trained persons as Presenting -cumProsecuting Officers must enquire from the delinquent employee before commencement of enquiry whether he would like to take the assistance of a legal practitioner. The option then is with the delinquent employee. In this connection, reference may be made to a weighty observation on this point, where despite constitutional exhibition the Supreme
Court conceded such a right.1 It has been held that 'Legal practitioner' cannot be read within a narrow sense as is commonly understood. It is enough if the prosecuting officer without being a legal practitioner is a legally trained mind with his ability and vast experience as a prosecutor in domestic enquiries. It was, therefore, held that where on behalf of the employer an inspector who had been looking after the domestic enquiries for several years with his ability and vast experience was allowed to appear and the employer claimed that he was entitled to be represented by a legal practitioner, it is clear that in such a case, the employee cannot be denied to be represented by a person having legal knowledge and if the enquiry is carried on denying opportunity to the employee of legal assistance such domestic enquiry and the finding thereon and the action taken on that basis would be vitiated.2 Legal assistance to a poor or indigent person, who is charge-sheeted and put in jeopardy of his livelihood, is a constitutional imperative mandate not only by Article 39A but also by Articles 14 and 21 of the Constitution. It is a necessary sine qua non of justice and where it is not provided, injustice is likely to result and undeniably every act of injustice corrodes the foundations of democracy and rule of law, because nothing rankles more in the human heart than a feeling of injustice and those who suffer and cannot get justice because they are priced out of the legal system, lose faith in the legal process and a feeling begins to overtake them that democracy and rule of law are merely slogans of the rich and the powerful and to protect the establishment and vested interests.3 ______________ 1. A.K. Roy v. Union of India, (1982) 2 SCC 271 (334): AIR 1982 SC 710. 2. C.S. Deshpande v. Government of Maharashtra, 1991 (2) LLJ 1. 3. Sheela Barse v. State of Maharashtra,
MANU/SC/0382/1983 :
AIR 1983 SC 378: 1983 Cr LJ 642: (1983) 2
SCC 96.
Where it was contended by the delinquent workman that, in as much as he was not allowed to engage and be represented by an advocate during the course of disciplinary proceedings against him and as such there was denial of reasonable opportunity to him; the fact remained that the workman was represented by an office bearer of the workers' union, who was also Legal Secretary of the union whereas the management, on the other hand, was represented by a Matriculate holding a diploma in Mechanical Engineering. The workman himself was a graduate and was competent to defend himself. In the circumstances, it would not be said that refusal to allow the workman to be represented by an advocate amounted to denial of reasonable opportunity, which vitiated the enquiry.1 Where the management was not being assisted by a trained lawyer and as such the workman was not pitted against a person trained in law, the workman cannot avail the assistance of a lawyer to defend him.2 It has been held that when the management is not represented by a law graduate, the employee cannot be represented by an advocate.3 Where the workman, a checking clerk in the bank was dismissed from service after a domestic enquiry finding him guilty on the charges framed against him based on a complaint by a depositor in the Bank. The workman challenged the enquiry as the same was conducted by the Law Officer of the Bank and that the Management had its Personnel Officer as Presiding Officer and t hat the workman was not given an opportunity to defend him by a lawyer. It has been held by the Kerala High Court that when the workman had reasonable opportunities for access to the records, to cross-examine the witnesses and to lead his evidence, the enquiry cannot be vitiated irrespective of the fact that the enquiry was held by an officer of the Bank. Where the rules of the bank do not give a right to the employee to avail legal assistance to defend his case; the Bank appointed its Secretary as the Presenting-cum-Prosecuting Officer who was not a legally trained man. The Enquiry Officer was an advocate. The employee did not allege any bias against the Enquiry Officer. It cannot, therefore, be said that proceedings against the
employee are vitiated on ________________ 1. Escorts Ltd., (Tractor Division) v. Labour Court, Faridabad, (1986) 69 FJR 273. 2. M.O. Francis v. Bank of Cochin, 1988 LLR 19. 3. Ram Vinod Jha v. Labour Court, Faridabad, 1990 LLR 187.
account of principles of natural justice as he was denied the assistance of a legally trained man.1 It has been held that the employee facing a domestic enquiry cannot take the assistance of a lawyer when the employer is represented by a retired Deputy Superintendent of Police since he is not a legally trained person. 2 Where a charge against the employee was simple, no complicated fact was involved and the management was not represented by either a lawyer or a person well versed in law, the employee being represented by another employee, it was held that the employee was not entitled to the assistance of a lawyer in the disciplinary proceedings against him .3 It was further held that when there is no such rule, it is the discretion of the Enquiry Officer to allow a worker to be represented by a lawyer except that the worker is pitted against a legally trained person as the representative of the management. Thus, the enquiry as conducted by the Law Officer will not be vitiated. If the charge-sheet runs into 25 pages and more than 300 documents have been appended thereto, in such a case the deli nquent workman cannot be denied to obtain the help of a person trained in law because he cannot defend himself without the assistance of legal practitioner.4 19. An Employee can be Allowed a Lawyer to Represent, if no Representation by a coemployee is Available Where the Model Standing Orders provided that an employee will be represented by a coemployee and not by a lawyer. There was no provision in the Standing Order for appointing representing officer. The Corporation has been appointing representing officers in the enquiry who are experienced persons. The delinquent air hostess, sought permission to be represented by a lawyer in the domestic enquiry as she was unable to get assistance by any of her co-employees. The permission was refused and the petitioner challenged the said order. It has been _____________________ 1. A. Vee3arayan v. Central Bank of India, Bombay, 1993 (67) FLR 443: 1993 (1) LLJ 1136: 1993 IC LR 631. (??????? 2,3,4 footnote missing??????)
held that no doubt the Corporation has appointed experienced persons in its employment as representing officers irrespective of the fact that there was no provision in the Standing Orders for appointment of representing officer, the petitioner was thus entitled to be represented by a legal officer or legally trained person to represent her in order to avoid breach of Article 14 of the Constitution since a similar facility was being denied to the delinquent employee. It was further observed that the delinquent employee has no friends in the Corporation as it may happen to a newly recruited person who may be unable to secure a person who would be a match to the presenting officer of the management then the demand as made cannot be denied.1 20. Representation by a Trade Union Leader Where the Model Standing Orders permitted representation to the workman of an officebearer of the trade union of which the workman is a member; the workman requested that he should be represented by a trade unionist but the Enquiry Officer rejected his request on the ground that it was not open to the workman to be represented by an
outsider, The enquiry was held to be unfair and thus vitiated.2 However, a contrary view has been expressed where the Standing Order of the company provided that an employee can be represented in an enquiry by any of his co-employees, hence refusal to allow an outsider office-bearer or a trade uni on leader will not violate the principles of natural justice.3 Where the workman requested to be represented by the President of the Mercantile Employees' Association, it was rejected on the ground that the nominated person was an outsider and not a member of the union. The workman boycotted the enquiry which was then held ex-parte and the worker was dismissed. The court ruled that it was against the principles of natural justice.4 The right of representation by a workman through a representative in the enquiry is not absolute. Many enquiries are held against bank employees and a question has arisen as to ____________________ 1. Pushpa lyenger v. Indian Airlines Corporation, 1988 (2) LLN 749. 2. Abdul Khadar v. Labour Court, Hyderabad, 1988 LLR 352. 3. M/s. Derby Textiles Ltd., Jodhpur v. Mahamantri Derby Textiles Karamchari and Shramik Union, Jodhpur, 1991 LLR 329. 4. M/s. Delhi Bottling Co. (P) Ltd. v. Shri A.N. Tripathi, 1993 LLR 510.
whether a representative/who has represented in more than one enquiry can represent in the third enquiry. The Supreme Court has held that no restriction can be laid and the regulation, restricting the right of representation irrespective of number of enquiries, will not be legal. In a case before the Rajasthan High Court in Satish Prasad v. State Bank of Bikaner and Jaipur,1 the court has given reference to various cases. In N. Kalandi v. Tata Locomotive and Engineering Company Ltd. Jamshedpur, 2 the Hon'ble Supreme Court observed as under: "It is helpful to consider in this connection the fact that ordinarily in enquiries before domestic tribunals the person accused of any misconduct conducts his own case. Rules have been framed by Government as regards the procedure to be followed in enquiries against their own employees. No provision is made in these rules that the person against whom an enquiry is held may be represented by anybody else. When the general practice adopted by domestic tribunals is t hat the person accused conducts his own case, we are unable to accept an argument that natural justice demands that in the case of enquiries into a charge-sheet of misconduct against a workman he should be represented by a member of his union. Besides it is necessary to remember that if any enquiry is not otherwise fair, the workman concerned can challenge its validity in an industrial dispute." The Hon'ble Supreme court further observed as under: "Our conclusion therefore is that a workman against whom an enquiry is being held by the management has not right to be represented at such enquiry by a representative of his union; though of course an employer in his discretion can and may allow his employee to avail himself of such assistance." Again this question came to be considered by Hon'ble Supreme Court in Crescent Dyes and Chemicals Ltd. v. Ram Naresh Tripathi ,3Hon'ble Supreme Court observed as under, in Para 11, at page 767; "A delinquent appearing before a Tribunal may feel representation is implied in the l arger entitlement of a fair
that
the
right
to
______________ 1. 2009 (3) LLN 377. 2.
MANU/SC/0237/1960 : AIR 1960 SC 914: 1 FLR 23: 1960 2 LLJ 226 (SC).
3. 1993 (1) LLN 761 (SC): 1993 AIR SCW 1106:
MANU/SC/0469/1993 : (1993) 2 SCC 115.
hearing based on the rule of natural justice. He may, therefore, feel that refusal to be represented by an agent of his choice would tantamount to denial of natural justice. Ordinarily it is considered desirable not to restrict this right of representation by counsel or an agent of one's choice but it is a different thing to say that such a right is an element of the principles of natural justice and denial thereof would invalidate the enquiry. Representation through counsel can be restricted by law as for example, Section 36 of the Industrial Disputes Act, 1947, and so also by Certified Standing Orders. In the present case, the Standing Orders permitted an employee to be represented by a clerk or workman working in the same department as the delinquent. So also the right to representation can be regulated or restricted by statute. Such provisions in fact serve to underline the importance attached to the right to representation." Considering the various decisions of the English Court referred in para 12 of 1993 (1) L.L.N. 761 (vide supra), of the judgment, the Hon'ble Supreme Court further observed as under: "It seems clear to us that the right to be represented by a counsel or agent of one's own choice is not an absolute right and can be controlled, restricted or regulated by law, rules or regulations. However, if the charge is of a serious and complex nature, the delinquent's request to be represented through a counsel or agent could be conceded." In Para 13 of the judgment, it has been held that the law in India also does not concede an absolute right of representation as an aspect of t he right to be heard, one of the elements of principle of natural justice. After discussing the various decisions of the elements of principle of natural justice. After discussing the various decisions of the English Courts as well of the Hon'ble Supreme Court, the Hon'ble Supreme Court held that it is clear from the above case-law that the right to be represented through counsel or agent can be restricted, controlled or regulated by statute, rules, regulations or Standing Orders. A delinquent has not right to be represented through counsel or agent unless the law specifically confers such a right. The requirement of the rule of natural justice in so far as the delinquent's right of hearing is concerned, cannot and does not extend to a right to be represented through counsel or agent. In the instant case the delinquent's right of representation is regulated by the Standing Orders which permitted a clerk or a workman working with him in the same department to represent him and this right stood expanded on Sections 21 and 22(ii) permitting representation through an officer, staff member or a member of the union, albeit on being authorised by the State 'Government. The object and purpose of such provisions is to ensure that the domestic enquiry is completed with dispatch and is not prolonged endlessly. Secondly, when the person defending the delinquent is from the department or establishment in which the delinquent is working he would be well conversant with the working of the department and the relevant rules and would, therefore, be able to render satisfactory service to the delinquent. Thirdly, not only would the entire proceedings be completed quickly but also inexpensively. In Cipla Ltd. v. Ripu Daman Bhanot,1 this contention was raised that though the service rules allow the assistance of a co-representative in the
departmental enquiry, the respondent therein, nevertheless, was entitled to be represented by a practicing advocate in the departmental proceedings as the questions involved in those proceedings were complicated which could not be tackled by the respondent therein as he was not aware of the basic principles of legal proceedings or their implications, or, for that matter, the manner in which those proceedings were to be conducted. Relying on the decisions of Hon'ble Supreme Court in N. Kalandi case (vide supra), Dunlop Rubber Company (India) Ltd. v. Workmen,2 and Crescent Dyes and Chemicals Ltd. case (vide supra), where in it has been laid down that the right to be represented in the departmental proceedings initiated against a delinquent employee can be regulated or restricted by the management or by the Service Rules, the Hon'ble Supreme Court held that the right to be represented by an advocate in the departmental proceedings can be restricted and regulated by statutes or by the Service Rules including the Standing Orders, applicable to the employee concerned. The whole case-law was reviewed by this Court in Bharat Petroleum Corporation, Ltd. v. Maharashtra General Kamgar Union, (vide supra), wherein it was held that a delinquent employee has no right to be represented by an advocate, in the departmental proceedings and that if a right to be represented by a coworkman is given to him, _______________ 1. 1999 (2) LLN 1032: 2.
MANU/SC/0264/1999 : AIR 1999 SC 1635.
MANU/SC/0211/1964 : AIR 1965 SC 1392 the departmental proceedings would not be bad only for the reason that the assistance of an Advocate was not provided to him. While dismissing the writ petition, as filed by the petitioner asking for representation by one Sh. L.N. Jalani, the Court concluded that there is no vested or absolute right in any charge-sheeted employee to representation either through a counsel or through any other person unless the statute or Rules/Standing Orders provide for such a right. Moreover, the right to representation through someone, even if granted by the rules, can be granted as a restricted or controlled right. Refusal to grant representation through an agent does not violate the principles of natural justice. Rule 153.8 of the case before the High Court provides for assistance to a charge-sheeted employee by an agent. Thus, a restricted right of representation has been granted by Rule 153.8. Even if no right of assistance had been granted by the Rules, there would be no illegality or unconstitutionality. How then can it be said that when a restricted right is granted, the said restricted right is unconstitutional. On the premises the Hon'ble Supreme Court upheld the constitutional validity of Rule 153.8. Though the petitioner is not a member of the trade union of bank employees but he being an employee of the bank seeks to be represented by way of defence representative, namely, Sri L.N. Jalani, who is a trade union leader of a registered trade uni on of the bank employees. The Clause 12 of the Chapter 19 of service condition of the bank employee provides to the extent that an employee against whom disciplinary action is proposed or likely to be taken and the chargesheet being served shall also be permitted to be defended through defence representative of a registered trade union of the bank of which he is a member or where the employee is not a member of any trade uni on of bank employees, he shall be permitted
to be defended by a representative of a registered trade union of employees of the bank in which he is employed. The respondents did not completely deny the petitioner to be represented by trade union leader. Thus, there is no absolute denial of representation to the petitioners through trade union leader. The respondents have permitted to the petitioners to be defended by the defence representative but they came with a case that the defence representative could not have more than two disciplinary cases on hand in which he is giving assistance to the departmental enquiry. It is always open for the petitioner to have the defence representative other than one who has two pending disciplinary cases on hand in which he has to give assistance. Now the question arise for consideration as to whether a person who has been defence representative handling two cases on hand rendering his assistance can be a choice of the other delinquent employee of the bank. As has been held in catena of decisions of Hon'ble Supreme Court that to be represented by the defence representative cannot be claimed as a fundamental right. Normally in the departmental enquiries, the delinquent facing the enquiry of any misconduct has to appear in his own case but where the condition of service provides that the delinquent shall be defended by a defence representative than it is always open for the delinquent employee to have the defence representative but he cannot claim a defence representative at his choice, who is otherwise defence representative in other two pending disciplinary cases on hand in which such defence representative has to give assistance. Yet the choice is available to the employee but it is limited to the extent in respect of the defence representative, who has two pending disciplinary case on hand in which he has to give assistance. This controversy specifically came to be considered by the Hon'ble Supreme Court in Indian Overseas Bank case 1, wherein the note to the relevant Regulation was to the effect that the officer-employee shall not take the assistance of any other employee who has two pending disciplinary cases on hand in which he has to give assistance. The language of the note which was subject-matter of consideration by the Hon'ble Supreme Court in Overseas Bank case and the language of the circular Annexure 8, dated 4 April, 2006, under challenge in the instant writ-petition is almost identical and similar. In the instant case, the language used in Annexure 8 is that an employee cannot take assistance or be defended by any representative/employee who has two pending disciplinary cases on hand in which he has to give assistance. Keeping in view the various decisions of Hon'ble Supreme Court referred hereinabove, the order impugned cannot be said to be violative of any fundamental right of the petitioners. _______________ 1. 2002 (4) LLR 32 (SC)
21. Appointment of Presenting Officer by an Employer The Kerala High Court has held that appointment of presenting officer in the disciplinary enquiry is not mandatory and non-appointment of the presenting officer will not render the enquiry invalid. It was also held that no illegality has been committed by the Enquiry Officer in putting questions to the delinquent as the examination was intended only to give him an opportunity to explain the circumstances appearing against him. Putting of questions to witnesses and the delinquent by the Enquiry Officer will not vitiate the enquiry.1 22. Procedure for Holding an Enquiry and Recording Evidence
Jurisprudence lays down the highest emphasis on the principles of natural justice. Domestic enquiries are, in fact, in consonance with the principles of natural justice, the requirement of holding domestic enquiries has been laid down in some rules and regulations of public sector and private sector units as well as in the Standing Orders framed under Industrial Employment (Standing Orders) Act, 1946 by awards of settlements under the Industrial Disputes Act, 1947. Even where no procedure for enquiry has been laid down by any rules, awards or settlements, the employers are required to follow a reasonable procedure for the simple reason that otherwise their action is liable to be set aside by the industrial adjudicators. Such principles are commonly known as principles of natural justice. The principles underlying the domestic enquiries are essentially calculated to ensure job security to the workman and so, the employer has to justify the disciplinary action which he proposes to take against any employee by holding a domestic enquiry i n a fair and impartial manner. The Supreme Court, other High Courts and the Madhya Pradesh High Court have held that rigid rules of Evidence Act not appli cable in the domestic enquiries.2 Care must always be taken to see that the domestic enquiries are not reduced to empty formalities but these should be conducted with scrupulous regard to the requirements of the _________________ 1. H. Rajendra Pai v. Chairman, Canara Bank, 1991 (1) BC 248: 1989 (58) FLR 673. 2. R.K. Geete v. Deputy Managing Dire ctor
and Corporate Development Officer, 2008 LLR 966 (MP HC).
principles of natural justice to safeguard the position of the person against whom a domestic enquiry is being conducted so that he may be able to meet the charges levelled against him. Neither the Industrial Employment Standing Orders) Act nor Industrial Disputes Act, 1947 or any other statute provides the procedure of holding an enquiry. The law and procedure has developed by case law. Hereinafter, the procedure for recording of evidence and preparation of findings is given below for the guidelines of subscribers: Enquiry proceedings into the charge-sheet No............... dated...............issued to Shri...............(Name and designation) Time............... Date................ Place of Enquiry............... Present: (1) Concerned employee, Shri.......................................................... (2) Workers' representative, Shri.................................................... (3) Management's representative, Shri......................................... The contents of the charge-sheet No...............dated ...............were read over and explained to the employee. Since the concerned employee does not admit the charge(s) let the proceedings of the
enquiry be recorded. Or As the concerned employee admits the charge(s) levelled against him, it is not necessary to proceed further with the enquiry, but to record his statement. Procedure for Recording Evidence Since the Management has to prove the charge's), the evidence of the Management should be recorded first. The Management's representative should narrate in detail the circumstances leading to the charge-sheet and it should be supported by the documentary evidence, if any. The worker should be allowed to inspect original documents/record produced in the enquiry. If any pre-recorded statements are to be used in evidence, the concerned worker must be given an opportunity to cross-examine the person whose statement has been so recorded. Such a person can be examined as a witness de novo. Examination of the witnesses in support of charge(s) Management's witness No. (MW 1) Statement of Shri............................................ Shri...................................................................... .............................................. .................... (Name and designation) (Record of Statement) Date...............
......................................................... (Signature of the witness)
Read over, explained and admitted, that the above statement has been correctly recorded in my presence. Date...............
.................................................................. (Signature of the concerned employee)
Date..............
.............................................. .................................................................. .................... (Signature of the employee's representative)
Date..............
.............................................. .................................................................. .................... (Signature of the Enquiry Officer)
(After recording the statement of the witness, the concerned employee be asked by the Enquiry Officer whether he desires to cross-examine the witness, and if so desired, he should proceed further with the cross-examination). cross-examination). Q. (By Q. (By the concerned employee or his representative) A. (By Shri.............................................. Shri......................................................witness) ........witness) (If the concerned employee refuses to cross-examine or does not wish to cross-examine the witness it should be recorded by the Enquiry Officer that an opportunity was given to the concerned employee and/or his representative to cross-examine the witness but he did not ask any question or refused to cross-examine.) Read over, explained and admitted, that whatever is recorded above, has been recorded in my presence. Date......................
................................................................. (Signature of the concerned employee)
Date.....................
.................................................................. (Signature of the Management's representative)
Date............... ....
................................................................ (Signature of the Enquiry Officer with date and rubber stamp)
If some clarifications are to be sought from the witness(es) in support of the charge(s), the management's representative may put specific questions to seek certain clarifications and these clarifications must be recorded in the enquiry proceedings. Re-examinations should be permitted only if there is any ambiguity. Same procedure is to be adopted for recording the evidence of other witnesses. When witnesses of the Management are examined, the Enquiry Officer should record the statement of the Management's representative to the effect that the Management has no other witness to produce, hence he closes his evidence. Date.......................
................................................................ (Signature of the Management's representative)
When the examination of witness of the Management in support of charge(s) is over, the concerned worker be asked to make a statement or proceed with his evidence. Date.....................
................................................. .................................................................. ................. (Signature of the concerned employee)
Date...................
.............................................. .................................................................. .................... (Signature of the employee's representative)
Date..................
.............................................. ................................................................... ..................... (Signature of the Management's representative)
Date.................
.............................................. ...................................................................... ........................ (Signature of the Enquiry Officer)
After the statement of the concerned employee is recorded, the Enquiry Officer should ask the Management's representative whether he would like to cross-examine the worker or his witness(es). Q........................... Q........................................ ............................. ................................... ................................... ..................... ..... A............................ A.......................................... .............................. ................................ ............................... ...................... ....... Date...............
........................................................................ (Signature of the concerned employee)
Date..............
......................................................................... (Signature of the employees' representative)
Date...............
........................................................................ (Signature of the Management's representative)
Date...............
........................................................................ (Signature of the Enquiry Officer)
If the Management's representative has no questions to ask from the concerned employee, a statement to this effect should be recorded in the following manner: "Opportunity given to the Management's representative to cross-examine the concerned employee, but he has no questions to ask from the concerned employee". Thereafter the concerned worker should be asked to produce his witness(es). Employee's witness (EW 1) Statement of Shri............................................ Shri.................................................................. ...................... (Name, designation and address) (Record of the Statement) Date.....................
................................................. .................................................................. ................. (Signature of the witness)
Read over, explained and admitted that the statement of E.W. 1 has been recorded in my presence. ................................................. ........................................................................ ....................... (Signature of the employee) Date..............
................................................. ........................................................................ ....................... (Signature of the Enquiry Officer)
The Management's representative should be asked to cross-examine the witness(es) and if he cross-examines the witness(es), it should be recorded. If the Management's representative does not want to cross-examine the witnesses), the Enquiry Officer should record this in the following manner: "The Management's representative does not want to cross-examine the witness(es) of the worker, despite an opportunity given to him to this effect." Date.......................
................................................................ (Signature of the Management's representative)
Date.......................
................................................................ (Signature of the concerned employee)
Date......................
................................................................. (Signature of the employees' representative)
Date......................
................................................................. (Signature of the Enquiry Officer) O fficer)
Same procedure is to be followed f ollowed for other witnesses and after the production of the evidence of the concerned employee, the Enquiry Officer should record the statement of the concerned employee to the effect that concludes and closes his evidence and the concerned employee should be asked to endorse the statement. The enquiry should be formally concluded with the following remarks: Received copies of the proceedings from page............... to...............
Date...............
....................................................................................... (Signature of the concerned employee)
Date..............................
....................................................................................... (Signature of the Management's representative)
Date...............
....................................................................................... (Signature of the Enquiry Officer)
In a domestic enquiry, no arguments are required to be advanced by either of the parties after producing evidence for or against. The Enquiry Officer, should thereafter, submit his written findings to the Management. 23. Findings/Report of the Enquiry Officer In the matter of charge-sheet No...............date............... issued by M/s...............(hereinafter referred to as Management) to Shri...............(hereinafter referred to as concerned employee). PRESENT ......................................... (Name and Designation of the Enquiry Officer) APPEARANCES (1) Shri...............(Management's representative) (2) Shri............... (Concerned employee) (3) Shri...............(Representative of the concerned employee) REPORT This report is the subject-matter of enquiry instituted by M/s...............hereinafter called the 'Management' against Shri...............hereinafter called the 'Concerned employee' and arises out of the charge(s) framed against him in the charge-sheet No...............dated...............whereby the Management has levelled the charges which, in brief, are as under: (Briefly narrate the charges) Since the concerned worker has denied the charges, the Management's representative who was directed to produce the evidence in support of the charges, has produced the following documents: (Herein give the details and description of the d ocuments). 1.................................................................................. 2.................................................................................. 3.................................................................................. The Management has further produced oral evidence producing..............................(number) witnesses, who have stated......................... (Here narrate in seriatum the important points of evidence of witnesses of the Management). The concerned employee has produced the f ollowing documents: (Herein give the detail and description of the documents)
by
1.......................................................................... 2.......................................................................... 3.......................................................................... The worker concerned has further produced oral evidence by producing...............(number) witnesses who have stated ......................................... (Herein narrate in seriatum the important points of evidence of witnesses of the concerned employee). Guidelines for preparing the findings/report by the Enquiry Officer: (i) The 'finding' report should be self-contained. (ii) The facts should be briefly stated and embody the reasons for the conclusions arrived at. (iii) The conclusion should be based on the evidence l ed by the parties. (iv) There should not be any perversity. (v) There should not be any bias or partiality. (vi) The Enquiry Officer should not recommend the punishment even when the charges as levelled are proved against the delinquent employee. Note:The report of the Enquiry Officer must be a speaking order in the sense that the conclusion is to be supported by reasons. When the Enquiry Officer did not apply his mind to the evidence and merely reproduced in his report the stages through which the enquiry had passed, it has been held by the Supreme Court that there was no enquiry worth the name. The order of termination of the services based on such a report would be unsustainable.1 24. Enquiry Report Must be Provided to the Concerned Employee The Supreme Court has held that the right to receive the copy of the report of enquiry is essential for reasonable opportunity to be given to the delinquent employee. It is also a principle of natural justice since the findings recorded by the Enquiry Officer ______________________ 1. Anil Kumar v. Labour Court, Jullundur, (1985) 67 FJR 85 SC:
MANU/SC/0207/1985 :
AIR 1985 SC 1121:
(1985) 3 SCC 378.
form an important material before the disciplinary authority which alongwith the evidence recorded during the enquiry is taken into consideration for arriving at a final decision regarding the allegations levelled on the delinquent employee. Their Lordships observed that if the Enquiry Officer was to record only the evidence and forward it to the disciplinary authority that would not constitute additional material before the disciplinary authority of which the delinquent employee has no knowledge. But when the Enquiry Officer goes further and records his findings, which may or may not be based on evidence on record or are contrary to the same or in ignorance of it, then such findings are additional material unknown to the employee, but taken into consideration by the disciplinary authority while arriving at a final decision. Further, the findings might have been recorded by the Enquiry Officer without considering the relevant evidence on record, or by misconstruing it or unsupported by it. If such finding is to be considered by
the disciplinary authority, the principles of natural justice require that the employee should have a fair opportunity to meet, explain and controvert it, before he is punished.1 However, the Supreme Court has held that unless prejudice is caused for nonsupply of the enquiry report will not vitiate the enquiry.2 Thus non-furnishing of enquiry report to employee on dismissal will not vitiate the same. 3 The Kerala High Court has also held that unless prejudice is established by the non -supply of enquiry report, the order of punishment cannot be interfered with by the Industrial Tribunal.4 The same view has been taken by the Madras High Court in holding that non-furnishing of enquiry report to delinquent will not be violative of principles of natural justice.5 Notwithstanding alone, it is desirable to furnish the enquiry report to the delinquent alongwith show cause notice. ________________ 1. Electronic Corporation of India Ltd. v. B. Karunakar, 1994 LLR 391. 2. State Bank of Patiala. v. S.K. Sharma, 1997 LLR 268 (SC):
MANU/SC/0438/1996 :
AIR 1996 SC 1669:
(1996) 3 SCC 364. 3. Union Bank of India v. Vishwa Mohan, 1998 LLR 420 (SC):
MANU/SC/0272/1998 : AIR 1998 SC 2311: (1998)
4 SCC 310. 4. Undumbanchota Estate Workers' Union v. Indian Cardamom Research Institute, 1998 LLR 259 (Ker HC). 5. S. Muthusaravanan v. Deputy Registrar, Cooperative Societies (Housing), Special Officer, Avinashi Co-operative Housing Society, Avinashi, Coimbatore, 1999 LLR 834 (Mad HC).
25. Formats of notices pertaining to enquiry (i) Letter to the Enquiry Officer for holding of enquiry To ................................ ................................ There is a complaint against Shri...............(name, designation and address) and it is considered expedient to hold an enquiry into the misconducts alleged under Standing Order No............... as enumerated in the charge-sheet dated............... Accordingly, it has been decided to appoint you as the Enquiry Officer to conduct enquiry into the charge/charges levelled against Shri............... daily during office hours and complete your enquiry by the...............except for unforeseen reasons and submit your report immediately thereafter to the undersigned. The complaint, charge-sheet, explanation by the worker and other relevant papers are sent herewith. You are also requested to keep in safe custody the record of all the proceedings of the enquiry. The report of the said enquiry must accompany the order-sheet. On the order-sheet you should please take the signatures of the worker if any information is given to him personally. All the persons concerned including witnesses and the Management's representatives have been hereby informed accordingly. Manager/Competent Authority Encl. As above. C C: 1. The Management's representative.
2. Concerned employee. (ii) Letter to the concerned employee intimating time, date and venue of enquiry To ................................ ................................ Sub: Your explanation dated...............in response to the charge-sheet dated............... We are in receipt of your explanation dated...............in response to the charge-sheet dated............... After careful consideration of your explanation which has been found unsatisfactory, it is considered desirable and necessary to conduct an enquiry into the charges levelled against you. You are hereby informed that the enquiry will be conducted by Shri............... Advocate, who has been entrusted with this assignment and will hold the enquiry at...............a.m/p.m on...............in the factory premises. You are, therefore, directed to attend and participate in the inquiry proceedings with all the necessary documents, evidence and witness(es) that you may seek to rely upon in your defence. You are further intimated that if you fail to attend the enquiry proceedings without sufficient cause on the appointed date and time, it will be open to the Enquiry Officer to proceed ex-parte without notice to you. Manager/Competent Authority Or We acknowledge the receipt of your explanation dated...............in reply to our letter of charges dated...............The explanation submitted by you has been found to be unsatisfactory. Therefore, it has been considered necessary to hold an enquiry into the charges levelled against you. Shri...............(name and designation) has been deputed to hold the enquiry in the capacity of an Enquiry Officer. He will intimate you the time, date and venue of the enquiry. You will be given full opportunity to defend yourself and to produce your evidence in defence and/or to cross-examine the witnesses of the Management in accordance with the principles of natural justice. You are advised to be present at the scheduled timings of the enquiry proceedings till its completion. The relevant papers have been sent to the Enquiry Officer and can be inspected in his presence or in the presence of a person authorised by him on his behalf. Should you fail to present yourself at the enquiry, without sufficient cause, the enquiry may be proceeded ex-parte, on the presumption that you admit the charge(s) and have no defence to offer. Manager/Competent Authority Or This has reference to the charge-sheet dated...............and your explanation dated...............Since your explanation is found unsatisfactory, it has been decided to hold a domestic enquiry and Shri...............is appointed as an Enquiry Officer for the purpose, you will be given full opportunity to defend yourself in accordance with the principles of natural justice. Therefore, you should cooperate fully in completion of the enquiry expeditiously. All the relevant papers have been sent to Shri...............which you can inspect, if you so desire. Manager/Competent Authority
CC to: Shri..........................................................Enquiry Officer. All the connected papers pertaining to the employee are enclosed herewith. Please conduct the enquiry and send your findings after its completion. Note: The Enquiry Officer can also intimate, time, date and venue of enquiry. The format will require minor changes. (iii) Letter from an Enquiry Officer to an employee intimating time, date and venue of enquiry To ................................ ................................ As you might be knowing, the undersigned has been appointed as an Enquiry Officer to hold enquiry into the acts of misconduct alleged to have been committed by you as mentioned in the charge-sheet No...............dated...............served on you. The enquiry will be held by the undersigned at............... (place) on...............(date) at...............(time) and on further dates, if found necessary. The enquiry will preferably be conducted daily or on such convenient dates as may be fixed between...............and...............hours. As such you are hereby informed to present yourself and participate in the enquiry. You are informed that you can bring with you any co-worker as your representative to assist you in the enquiry proceeding, if you so desire. If you intend to cross-examine the witnesses who will be examined against you, you will be given full opportunity to cross-examine them. Therefore, you are hereby informed to keep oral and documentary evidence ready, which you will be relying upon in the enquiry. If the said documents are with the management, you should intimate the undersigned............... days prior to the holding of the enquiry. You are also informed that if you fail to present yourself at the enquiry on the date/dates, the enquiry may be conducted and completed in your absence and the report will be submitted to the management on the basis of the record and evidence available. Enquiry Officer Dated............... (iv) Letter to an employee intimating about holding of enquiry when he fails to send his, explanation To ................................ ................................ It is found that you have failed to submit your explanation in response to the chargesheet dated...............served on you. It appears that you have no explanation to offer in your defence. Although we are within our rights to take an appropriate action against you, yet it has been considered expedient to hold an enquiry into the charges levelled against you. Accordingly, you are hereby advised to present yourself at...............(place) at...............(time) a.m./p.m. on...............for the purposes of the said enquiry. Shri...............(name and designation) has been appointed as Enquiry Officer to hold the
enquiry. At the enquiry, you will be given full opportunity to conduct your defence by producing your witnesses and cross-examining company's witnesses. The relevant papers have been sent to the Enquiry Officer which can be inspected in his presence or in the presence of a person authorised by him i n this behalf. Should you fail to present yourself as directed, the enquiry will proceed ex-parte, on the presumption that you admit the charges and you have no defence to offer. Manager/Competent Authority (v) Covering letter alongwith enquiry report to employee asking him to submit his comments on the findings of enquiry To ................................ ................................ This has reference to the charge-sheet dated...............and your explanation dated...............Since your explanation, after consideration, was found unsatisfactory and to afford you an opportunity to defend yourself, an enquiry was ordered to be held by an independent and impartial Enquiry Officer. You have participated in the enquiry by producing your evidence and to cross-examine the witnesses of the management. We have received the enquiry report from the Enquiry Officer and as such the same is enclosed herewith for your comments, if any. Your comments must be received within one week from the receipt of the enquiry report. Yours faithfully, For and on behalf of the Management Authorised Signatory Encl: Enquiry Report In Managing Director E.C.I.L. v. B. Karurnakar, 1994 LLR 391, the Supreme Court has held that the concerned employee must be furnished with a copy of enquiry report alongwith a show-cause notice about proposed punishment. However, in D.S.P. Rao v. A.P.S.R.T.C., 1996 LLR 878, the Division Bench of Andhra Pradesh High Court has held that the concerned employee be furnished with a copy of report and be asked to give his comments. (vi) Letter to an employee alongwith enquiry report with proposed punishment and asking for his explanation To ................................ ................................ Whereas you have been charge-sheeted for grave and serious misconduct vide chargesheet dated...............calling upon your explanation and whereas your explanation was found unsatisfactory. Accordingly, it was decided to hold an enquiry into the misconduct as enumerated in the charge-sheet by appointing an independent and impartial Enquiry Officer to look into the charges and to give his findings on completion of the enquiry.
And whereas the Enquiry Officer has held the enquiry from time-to-time and has granted ample opportunities to you by observing the principles of natural justice and the relevant rules.1 And whereas the Enquiry Officer has submitted the report alongwith his findings to the management which has been carefully considered by the management. While going through the enquiry proceedings, documents and the evidence, the management is satisfied that the principles of natural justice and the relevant rules have been meticulously observed and followed by the Enquiry Officer. The findings of the Enquiry Officer reveal that the main charges as levied in charge-sheet have been duly proved against you. The management, thus, concurs with the findings of the Enquiry Officer. While considering the charges as levied and proved against you, the management is of the considered opinion to impose upon you the major penalty of dismissal from service.2 The management has considered your previous conduct and there are no extenuating circumstances for milder punishment. Now, therefore, you are hereby called upon to show cause as to why you should not be dismissed from the service. Your comments and explanation, if any, should reach the management within one week from the receipt of this show cause notice failing which it will be presumed that you have no explanation to offer. In that eventuality, the management shall be at liberty to proceed further without making any further reference to you to this effect. We are also enclosing herewith a copy of the report of the Enquiry Officer with his findings. For and on behalf of the Management of ................................................................ Authorised Signatory Encl: Copy of Enquiry Report Dated............... ________________ 1. Delete which is not applicable. 2. Modify if punishment other than dismissal is proposed.
In Electronic Corporation of India Ltd. v. B. Karunakar, 1994 LLR 391, the Constitutional Bench of the Supreme Court has held that an employer must furnish a copy of enquiry report to the employee even when the proposed punishment does not pertain to dismissal, discharge, removal or reduction in rank. 26. Standings orders to be Followed while Imposing Punishment The Management is not only required to scrupulously follow the procedures laid down therein but was otherwise bound to comply with the principles of natural justice while awarding punishment upon an employee. If a misconduct has been committed within the purview of the provisions of the Standing Order, whether certified or Model, the workmen should be punished. The gravity of the offence, the impact the same would have on the other workmen as also the fact as to whether the same will have an adverse effect over the functioning of the industry are relevant considerations. The facts of the case were that Krishna Kishore Yadav, Intervenor and one R.P. Singh were employed with the respondent. They were said to be Union leaders. On or about 17-
2-1984, the respondent received a complaint from one G. Natarajan with regard to acts of misconduct committed by the said workmen in the factory premises contending that while he was having discussions with one Shekhar Rao, representative of the contractor known as M/s. Techno Fab, the said workmen came and asked him as to whether there existed any arrangement for grant of first aid or not, whereto he replied that such a provision has to be made by the Company and not by the Contractor. Discussion therein ensued. The matter should be discussed with the Personnel Manager of the Company. One Shri Dara Singh, another contractor being M/s. S.D. Construction also reached there. The same question was asked to Mr. Dara Singh to which also he replied that the grant of making provision of first aid was the duty of the Management and not that of the Contractor. The workmen started misbehaving with the said persons using indecent and unparliamentary languages. They were abused in a harash tone whereto an objection was raised by Shri Dara Singh where upon he was abused in filthy languages and threatened him with dire consequences. He was also assaulted by iron rod by the intervenor before the Hon'ble Court. Thereafter Shri Dara Singh also picked up an iron rod, R.P. Singh also picked up another iron rod in his hand. With the intervention or the officer and some workers, they were separated. The said workmen thereafter instigated the workers to stop the work. Disciplinary proceeding was also initiated. The delinquent workmen were placed under suspension. In the departmental proceedings, they were found guilty. An industrial dispute was raised whereupon the appropriate government referred the dispute for adjudication by a Labour Court, Jamshedpur. Before the Labour Court, a plea was raised by the workmen that they as Secretary and Vice-President of the workers of the Company had gone to Shri Natarajan and others for ventilating their grievances, but the management with a view to victimize them and by way of resorting to unfair labour practices had placed them under suspension. Since the charges were proved and resulted into dismissal of the workmen which were upheld. The Apex Court held that Management is not only required to scrupulously follow the procedures laid down therein but was otherwise bound to comply with the principles of natural justice. If a misconduct has been committed within the purview of the provisions of the Standing Order, whether certified or Model, the workmen should be punished. The gravity of the offence, the impact the same would have on the other workmen as also the fact as to whether the same will have an adverse effect over the functioning of the industry are relevant considerations.1 _______________ 1. Usha Breco Mazdoor Sangh v. Management, M/s. Usha Breco Ltd., 2008 (118) FLR 400: 2008 LLR 619: 2008 (3) LLN 84: 2008 (2) LLJ 945 (SC).
6 FIFTH STEP TOWARDS DISMISSAL/DISCHARGE OF AN EMPLOYEE SYNOPSIS 1. Principles to Determine Punishment 2. Consideration of Past Conduct of an Employee
3. Implication of Section 11A of the Industrial Disputes Act, 1947 4. Who Can Pass an Order of Punishment When Dismissal/Discharge of an Employee is Held to be Justified (i) For Absence from Duty when it is Habitual (ii) For using abusive language and threatening a superior (iii) For causing accident by a driver (iv) For suppressing past conviction while filling the form of employment (v) For deliberate delay by the workman in complying with the lawful orders of the superior and refusal to work on duty (vi) For disobedience and insubordination (vii) For disobedience, insulting and threatening a superior (viii) For dishonesty and fraud (ix) For disobedience to the transfer order (x) For dissuading customers (xi) For driving the vehicle rashly and negligently (xii) For drunkenness while on duty (xiii) For falsification of accounts and disobedience of the orders of the superiors (xiv) For using foul and filthy abuses towards female employees (xv) For committing fraud and dishonesty (xvi) For inciting workers to 'go slow' (xvii) For resorting to 'go slow' tactics (xviii) For insulting the customers because they did not use the services of the employee privately (xix) For irregularity in reporting to duty and leaving office before ti me (xx) For coming late and assaulting the superior (xxi) For misappropriation of money and assault (xxii) For molestation of female worker (xxiii) For carrying on money-lending business within premises of an establishment (xxiv) For moral turpitude and deliberate act of dishonesty (xxv) For doing personal work (xxvi) For persistent refusal to perform duties (xxvii) For riotous behaviour at premises of the factory (xxviii) For sleeping by a watchman, responsible for guarding vital installation
(xxix) For subverting discipline (xxx) For theft of company's property (xxxi) For failure of an employee to comply with transfer order (xxxii) For threatening and intimidating the superior (xxxiii) For non-issuing of tickets and not accounting money to the credit of Corporation by the bus conductor (xxxiv) For vulgarity in ladies' hostel (xxxv) For not achieving norms of production (xxxvi) Sexual harassment at work place When Dismissal/Discharge of an Employee is Held to be Unjustified (i) For absence from duties without enquiry (ii) For abusing the mistri (iii) For assaulting a co-workman (iv) For misconduct committed by the workers away from the work place (v) For bigamy (vi) For want of proper charge-sheet (vii) For consumption of liquor by a driver and endangering safety of the passengers and public (viii) For drunkenness while on duty (ix) For levying false allegations against the employer (x) For gambling/playing cards at work place (xi) For resorting to 'go slow' tactics (xii) For gross negligence (xiii) For loss of temper when the employee has served for 30 years (xiv) For loss of confidence when an employee i s holding confidential or responsible post which has been misused by him (xv) For over-staying leave and leaving station (xvi) For failure on the part of the Enquiry Officer who has not given proper opportunity to the workman to repel the charges (xvii) For refusal to work beyond duty hours (xviii) For refusal onto the part of an employee to work in a sister concern (xix) For refusal to operate tail gas fan machine for want of t raining (xx) With retrospective date (xxi) For shortage of Rupees One Lakh which was due to defective locking system of the
bank (xxii) For instigating others for illegal strike (xxiii) For passive participation in strike without holding of an enquiry (xxiv) From the date of suspension (xxv) For theft of 2 litres of engine oil and air bag/hammer FORMATS (i) Format of Notice of Discharge to an Employee after enquiry is hel d (ii) Format of Notice/Order notifying discharge/dismissal when the Punishing Authority does not agree with all the 'Findings' of th e Enquiry Officer (iii) Format of Notice of Termination of Service awarded but held in abeyance pending the Competent Authority's permission (iv) Format of Order of Dismissal awarded but held in abeyance pending the Competent Authority's permission 1. Principles to Determine Punishment No employer will dispense with the services of an employee unles s he is compelled to do so. The employer is interested in the smooth and efficient functioning of his business and the said business is conducted with the help of workmen, employer, supervisors and officers and if any violation of discipline is permitted or ignored, then it may give rise to a serious situation and sometimes it may become difficult for the officers and coworkmen to discharge their duties smoothly and efficiently thereby making the smooth and efficient functioning of the organisation impossible. Hence any indiscipline which affects the production and smooth running of the business is viewed very seriously. Same is the position with regard to acts and omissions which though do not disable the employer from carrying on the business in an efficient manner, they are fraught with extreme risk to the business and it is for that reason that such acts are also treated as serious misconducts. The seriousness of an act of misconduct is viewed not from any moral or social point of view but of its effect on the business. The employer expects good behaviour from his members not only towards himself, but towards his officers and other workmen and he certainly fails in his duty if he cannot keep members of his organisation within power bounds of morality and if any employee or workman misbehaves, it is not only his duty but moral and social obligation also, in the interest of other co-employees and coworkmen to express his resentment on such misbehaviour and punish the delinquent so that objectionable conduct may not be repeated by the employee or workman concerned and the other employees may also refrain from doing the same. The question that arises is what are those acts and omissions of which a serious view can be taken by the employer and the extreme punishment of dismissal is justified. In one case, petitioner was found guilty of dishonesty and fraud, prejudicial to the interest of the company. The action of the employee amounted to criminal offence involving moral turpitude and penalty of removal from service was held to be neither arbitrary nor excessive or grossly disproportionate to the misconduct held proved.1 In another case an employee of the Bank was suspended during pendency of disciplinary proceeding on the charge of unauthorised withdrawal of a certain amount from the savings bank account of a customer. For the proved charges, the dismissal of the employee was held to be in order.2 The facts of a case were that the petitioner was charge-sheeted for carrying 20 passengers without ticket and a domestic enquiry was held against him. He was found
guilty by the Enquiry Officer and was dismissed. The Labour Court, ordered his reinstatement without back wages and a fine of Rs. 100. The Industrial Court, however, restored the order of dismissal. The petitioner approached the High Court. It has been held that having regard to the gravity and seriousness of misconduct, the termination was neither colourable exercise of ____________ 1.
R.S. Mehta v. New India Assurance Co. Ltd., 1988 LLR 15: 1987 (55) FLR 782.
2. M.O. Francis v. Bank of Cochin, 1988 LLR 19.
power nor an act of victimisation, thus Industrial Court was justified in reversing the order of Labour Court.1 Consumption of liquor time and again while on duty is a misconduct. Dismissal from service was held to be justified.2 In another case it has been held that if an employee dissuades the customers of the establishment to buy new carpets by volunteering to repair the old carpets, he will be guilty of serious misconduct to justify his dismissal from services.3 In another case it has been held that irregular attendance and arrogant behaviour on the part of the employee amounts to misconduct and punishment of removal from service in the facts and circumstances of the case, therefore, cannot be faulted with.4 If an employee absents himself from duty continuously, the management can discharge him from service even if no formal chargesheet is issued. Such a discharge would not be bad in law.5 In one case the services of an employee were terminated for having committed misconduct by consuming liquor and creating a nuisance under the influence of liquor by undressing himself in the canteen of the lady doctors' hostel. The Labour Court, however, reinstated him in service without wages and treated this act as a single act of misconduct. The High Court, however, observed that such an act of immorality cannot be tolerated and even the Labour Court itself had remarked in its award that the behaviour of the workman in the lady doctors' hostel is highly condemnable.6 Awarding reinstatement to a workman by the Labour Court will not be justified when he has been guilty of damaging property, stoppage of work and assaulting the senior officers of the Company .7 Stopping of an officer by a workman near the factory gate amounted to grave _____________ 1. Devki Nandan Tiwari v. State Industrial Court, Madhya Pradesh, 1991 LLR 113. 2. Mulji Mongol of Bombay v. The India Water Proofing Company, 1988 LLR 52. 3. M. Rama Warner v. Coir Board, Ernakulam, 1989 LLR 393; 1989 1 LLN 446. 4. Chandra Kant Tatoba Kumbhar v. The Chief, Agricultural Produce Market Committee, 1989 LLR 166. 5. Management of M/s. Tata Engineering and Locomotive Company Ltd. v. The Presiding Officer, Industrial Tribunal, 1990 LLR 8. 6. Post Graduate Institute of Medical Education and Research, Chandigarh v. Labour Court, Chandigarh, 1989 LLR 328 7. Cement Corporation of India v. State of Himachal Pradesh, 1996 LLR 232.
misconduct, justifying dismissal from service and the Industrial Tribunal must grant its approval to the employer as held by the Punjab & Haryana High Court .1 Similarly, dismissal of an employee after enquiry for unauthorisedly driving the vehicle has been held to be valid.2 In another case, the Bombay High Court has held that the dismissal of reckless driver will be justified.2 Dismissal of an employee for suppression of material particulars of his previous conviction has been held to be justified by Bombay High Court.3 The dismissal of an employee for sleeping during night shift and switching off the oven of the laboratory has been held to b e misconduct.4 The fundamental principle that should be kept in view while awarding punishment is that
the punishment should be commensurate with the nature of the offence. The punishing authority has to ensure that punishment is not shockingly disproportionate, regard being had to the particular conduct and the past record of the workman charged. The question of punishment is linked with the gravity of the charge and the penalty that is inflicted is proportionate to the guilt. An out of proportion punishment to the gravity of charge may indicate victimization. Dismissal for victimization would vitiate the enquiry , 5 whereas in another case, the Rajasthan High Court has held that dismissal of an employee guilty of theft will be justified even when he has been acquitted by the criminal court . 6 The facts of a case were that the petitioner was served with a charge-sheet that he had committed theft of a small piece of reign cloth. In the departmental enquiry, he was found guilty and theft of property involved was extremely negligible and insignificant. Even under Section 95 of the Indian Penal Code, offences of trival nature are not taken note of. Taking into consideration the gravity of offence the order of dismissal was held to be not sustainable. Reinstatement without back wages would meet the ends of ______________ 1. Nestle India Ltd., Moga v. Jaswinder Singhk, 1996 LLR 1044. 2. Shriram v. Maharashtra State Road Transport Corporation, 1994 LLR 383. 3. Tara Chand v. Maharashtra State Road Transport Corporation, 1994 LLR 382. 4. N. Mohandas v. Southern Industrial Polymers (Pvt.) Ltd., Ranipet, 1995 LLR 1038. 5. M/s. Wings Wear Corpn. v. Their Workmen, 1989 Lab IC 974. 6. Suraj Prakash v. The Judge, Labour Court, Kota, 1996 LLR 29.
justice.1 The facts of one case were that a peon was dismissed from service for not reporting for duty and remaining away without permission. It was held that the maximum punishment of dismissal from service was in a sense disproportionate to the gravamen of the offence committed by the delinquent.2 Similarly a bank employee who committed certain irregularities in the discharge of his duties and there was no mention that the Bank suffered any loss as a result of those irregularities; the punishment of termination was held to be disproportionate to the gravamen of the charge. The punishment should not be unduly harsh or excessive.3 In another case, the petitioner was charged for accepting damaged bags and thus causing loss to the employer to the tune of Rs. 26670.50. The punishment of reduction in rank was held to be disproportionate and it was ordered that recovery of loss would meet the ends of justice.4 In a case one of the petitioners slapped a fellow employee and the other tried to assault him. The dismissal or discharge of the petitioner for the misconduct was held to be not justified.5 The facts of another case were that the employee who having put in 38 years' service used harsh words to the Labour Officer when the latter told him about the change of his working hours. The employee was dismissed from service. The High Court held that dismissal was disproportionate to the misconduct. The misconduct being minor in nature the maximum punishment, if merited, was suspension for a few days or fine or stoppage of increment, etc.6Issuing tickets by a bus conductor in the reverse order does not amount to dishonesty but an act of gross negligence and termination of the services of the employee was held to be not legal. Reinstatement with forfeiture of back wages will be appropriate punishment.7 In another case, the workman was dismissed from service for taking part in the illegal strike but the employer took no steps to connect this workman with violence or any overt act. Apart from this, ________________ 1. Arun v. Maharashtra State Road Transport Corporation, 1991 LLR 445. 2. Ramu v. District judge, Kolar, 1989 LIC 1919.
3. G.A. Sharma v. Chairman, Syndicate Bank, 1989 Lab IC 1471. 4. Lalit Chandra Baruah v. Assam State Warehousing Corporation, 1989 LIC 1715. 5. Gancsh Rajan Sewai v. M/s. Benett Coleman & Co. Ltd., 1989 LIC 534. 6. A.A. Fernandes v. Modern Mills Ltd., 1989 (59) FLR 470. 7. Raghuvir Singh v. Industrial Court of Madhya Pradesh, Indore, 1989 LLR 287.
action was not taken against all the workmen on strike. In the circumstances, the extreme punishment of dismissal was held improper and the workman was ordered to be reinstated.1 In fair exercise of discretion, the punishment should not be ridiculously low nor unduly harsh for the misconduct by an employee . 2 In another case the employee was charge-sheeted with another employee. Charges against the petitioner were more serious than the other. The other employee was let off with a minor penalty because he was a young man and the petitioner was di smissed from service. It has been held by the High Court that if on humanitarian grounds a lenient view could be taken in respect of an employee that he was a young man, there appears to be no reason as to why a similar view cannot be taken in respect of the petitioner who was at the fag end of his career.3 In one case it has been held that the disciplinary authority committed a grave error in mentioning in the show cause notice regarding proposed punishment that the petitioner had committed gross misconduct, by misappropriating a huge amount belonging to the Corporation which is not true and no such finding has been given by the Enquiry Officer and as a matter of fact there was no charge levelled against the petitioner that he had misappropriated any huge amount belonging to the Corporation. Termination order was quashed and minor penalty imposed .4 In the undermentioned case it has been held that propriety or adequacy of the punishment is not required to be considered by the Tribunal. However, when the punishment is shockingly disproportionate keeping in view the particular misconduct and the past record as no reasonable employer would have imposed in such circumstances, punishment may be treated as showing victimisation or unfair labour practice.5In one case the petitioner was dismissed from services on grounds of misconduct, namely, issue of used ticket to a passenger. The petitioner did not deny that he issued one used ticket and collected 0.80 paise. The High Court held that it is difficult to hold that the lapse committed by ____________ 1. M. Vijay Kumar v. Calico Chemicals Plastic, 1988 LLR 89. 2. Vidya Bhushan Pandey v. Principal, KGM College, 1989 LLR 147: 1989 (58) FLR 338. 3. P.D. Gupta v. Reserve Bank of India, 1989 LLR 330. 4. Kishan Gupta v. M.C.D., 1988 (56) FLR 171. 5. Hind Construction & Engineering Co. Ltd. v. Their Workmen,
MANU/SC/0210/1964 :
1965 (2) SCR 85: AIR
1965 SC 917.
the petitioner is so outrageous or atrocious as to warrant the extreme penalty of removal. He did not, on the fact disclosed, misappropriate any money. The charge of misappropriation having not been proved the order of dismissal was set-aside and petitioner was ordered to be reinstated without back wages. 1 Refusal of the the workman to work beyond scheduled hours on a single solitary occasion will not be deemed as a serious misconduct to warrant the punishment of his dismissal .2 Likewise in another case when the employee was dismissed from service for carrying ticketless passengers from whom he had already recovered the fare, but had entered all the tickets in the additional trip sheet and deposited the amount and had not misappropriated the income of the Corporation, the High Court held that the punishment of termination was too harsh, which amounts to victimisation. Impugned order was quashed and the case was remanded back to the Industrial Court to decide afresh the
question of punishment.3 In other words, having decided that the delinquent employee had committed an act of misconduct, the quantum of punishment to be awarded to him must bear reflection of his previous service record and must also be decided in the light of extenuating or aggravating circumstances which might exist. But when it is clear that the penalty of dismissal from service inflicted on the workman was based on the gravity of the charges proved against him and not his previous record then there is no room whatsoever to think that but for his previous record, the punishing authority would not have imposed the order of dismissal. When in one case, the reference in the order to the previous record was not for the purpose of justifying a higher penalty than that warranted by the nature and gravity of the charge proved against the workman and was only for the purposes of pointing out that there was no extenuating circumstance justifying the award of a lesser penalty, it was held that it could not be said that but for his previous record, the punishing authority would not have imposed the order of dismissal.4 In short, where the past record is not the effective ______________ 1. S.K. Sheriff v. Andhra Pradesh State Road Transport, 1988 LLR 88. 2. Abdul Khader v. Lower Court, Hyderabad, 1988 LLR 352. 3. R.P. Ambaram Verma v. Presiding Officer, Industrial Court, 1990 LLR 153. 4. Nathuram Dansena v. State of Madhya Pradesh, 1961 (1) LLJ 660 (MP HC).
reason for dismissal, the action is not vitiated. But in case the previous record is proposed to be considered against the workman then such previous record must be brought to the notice of workman concerned and he should be given a chance to explain, otherwise the workman will be prejudiced and the principle of natural justice that no record of material should be relied upon against a person without giving him an opportunity to explain the same, will be violated.1 Where in a case, apart from allowing the passengers without ticket, the workman was visited with punishment for not less than 13 occasions for various types of misconducts such as shortage of cash, absence without leave, non-issuance of luggage ticket, excess cash, issuing tickets of lesser denominations, etc., such a shady background cannot be dismissed summarily as has been done by the Labour Court with the remarks that the record is "not so clean". The Bombay High Court held that the Labour Court has misdirected itself in holding that the dismissal was harsh and excessive without discussing the past record of the workman.2 Removal of a workman for assaulting his co-worker will also be disproportionate to misconduct.3 However, punishment of removal from service of an employee will not be disproportionate when he refuses to comply with the transfer order and handing over of charge as held by Delhi High Court.4 When an allegation is not proved or does not amount to misconduct, the employer cannot plead 'losing of confidence'.5 In another case the petitioner was placed under suspension and served with a charge-sheet for not observing departmental procedure in checking of goods. Another employee was also involved in the said transaction. In the departmental enquiry the Enquiry Officer found both the persons guilty. The petitioner was dismissed from service with retrospective effect. However, the other employee was let off with stoppage of three increments. The ________________ MANU/BH/0206/1967 : 1970 I LLJ 174 (Pat HC); see MANU/SC/0121/1957 : AIR 1957 SC 882: 1958 SCJ 142: 1958 SCA 110.
1. State of Bihar v. Ajudhya Jha, T.R. Verma,
also, Union of India v.
2. Maharashtra State Road Transport Corporation v. Suryakant Dhondiba Mane, 1988 (56) FLR 95: 1987 LLR 367. 3. Cadbury India Ltd. v. V.B. Save, 1996 LLR 602.
4. Ram Kishan Sharma v. Municipal Corporation of Delhi, 1996 LLR 842. 5. Subrao Masnu Kole v. Daulat Sahekari Sakhar Karkhana Ltd., 1988 (I) CLR 52 (Bom DB): 1988 (1) LLN 110.
petitioner challenged the order of dismissal. It was held that this order on the face of it appeared to be unfair, unreasonable and arbitrary. The dismissal is too harsh and it has to be set-aside. The order of dismissal was modified i n the stoppage of three increments without future effect and petitioner was ordered to be reinstated. It was also held that in the absence of any rule authorising imposition of punishment of dismissal with effect from the date of suspension is invalid .1 The facts of another case were that the respondent, who was holding the post of Financial Controller had gone on tour and had stayed at a hotel. With the prior information and permission of the Manager he had taken with him few of his family members who stayed with him at the hotel in the same room. The petitioner submitted a bill of hotel charges amounting to Rs. 272. He then made an enquiry from the hotel and came to know that the bill included charges in respect of his family members. He accordingly deposited Rs. 100, the excess amount with the company before the institution of any enquiry. After about two years of this incident the company initiated proceedings for over drawal of Rs. 100 against the respondent. The Enquiry Officer found him guilty and he was accordingly dismissed from service. The respondent challenged his dismissal before the High Court. A single Judge of the Calcutta High Court held that there was no justification for initiating any enquiry after two years of the incident and imposition of punishment of removal was unjustified. The company filed an appeal against the order of the Single Judge. The Division Bench held that quantum of punishment is the discretion of the punishing authority and except in an exceptional case where punishment cannot but shock the conscience of the court and appears to be wholly perverse and unreasonable, interference by the writ court on the quantum of punishment is not warranted. The gravity of the offence should be judged on the facts of a case. If the misconduct alleged against the delinquent officer is accepted to have been established, the punishment of removal from service cannot be held to be unreasonable or arbitrary or shockingly harsh because the delinquent officer was the Financial Controller of the company and a very high degree of integrity was expected of him. It also held that conduct of the delinquent officer in _______________ 1. Mrs. Usha Kumar v. Super Bazar Cooperative Stores Limited, 1991 LLR 320.
causing enquiry in the hotel on his own about the correct position in billing and refunding the over payment without being asked to do so only indicated a sense of integrity and honesty. It was further held when a finding is made by the disciplinary authority not on the basis of any evidence but on surmise and conjecture such finding is a perverse finding and/or no finding in law and the writ-court will be quite competent to interfere with such perverse finding. As in the instant case the finding about the alleged misconduct of the delinquent officer has in fact rested in the realm of surmise and conjecture and not on the basis of any cogent and positive evidence; such finding cannot be sustained. Accordingly no punishment can be imposed on the delinquent officer on account of the charges levelled against him. The impugned disciplinary proceedings and the punishment imposed was, therefore, quashed .1 Where the charge against the petitioner was that she being in control of records of the personnel had manipulated the records relating to herself and thereby took 21/2 days' unauthorised leave and was unpunctual in attendance. A disciplinary proceeding was started against her. The Enquiry Officer found her guilty. She was accordingly dismissed from service. The petitioner challenged her dismissal in the High Court. It was held that if there was any manipulation it was to the extent of taking 21/2 days unauthorised leave. At the most this could be careless and entirely excusable having regard to the workload that the petitioner was burdened with. The dishonesty was so slight that it must be ascribed to inadvertence. The punishment was accordingly set-aside. At the request of the petitioner she was given 75% of the back wages instead of reinstatement . 2 In one case the workman was charged for stealing of a complimentary air bag. The workman did not
dispute the charge and tendered an unqualified apology. He was, however, dismissed from service. The Labour Court rejected the plea of the management about loss of confidence and held that punishment was disproportionate to the gravity of misconduct and, therefore, ordered reinstatement with back-wages, and stoppage of three increments. The High Court held that Labour Court ought to have awarded compensation instead of reinstatement.3 The Himachal Pradesh ________________ 1. Hindustan Paper Corporation v. Manindra K. Ghosh, 1991 LLR 342. 2. Bhagirathi Vishandutt Makholia v. Kemp & Co. Ltd., 1991 LLR 327. 3. Air Lanka Ltd. v. John William Nathan, 1991 LLR 78.
High Court has also held that awarding of reinstatement to a workman by the Labour Court will not be justified when he has been guilty of damaging property, stoppage of work and assaulting of senior officers.1 However, in another case, the Madras High Court has held that the dismissal of an employee for theft of a hammer will not be justified. 2 The Supreme Court has held that the smooth functioning will be adversely affected if a workman, guilty of misconducts, is not punished .3 Also punishment should not be disproportionate to the misconduct.4 From the above cases as well as the principles laid down for determination of quantum of punishment various factors are to be taken into consideration by the disciplinary authority, more particularly when the punishment pertains to dismissal or discharge of a workman. To make it easier to decide the punishment the ration of the cases is given where the dismissal/discharge of an employee is held to justifi ed as well as unjustified. 2. Consideration of Past Conduct of an Employee Past conduct of an employee is as important factor in coming to a decision regarding punishment to be awarded to him for his misconduct. In one case, the Madras High Court observed: .... in the present case, the misconduct viz., participation in an illegal strike, is a very serious one and there is no question of a milder punishment being inflicted if the management had given weight to the Standing Order relating to past conduct. The misconduct per se was sufficient to justify the dismissal because of its serious nature. Therefore, there is no scope at all for entertaining any apprehension that the management failed to give due weight to the provision of Standing Order regarding past good conduct of the workers in fixing the quantum of punishment or that if it had done so, a different result would have followed. Reference was made to an unreported decision in W.P. 166 of 1953 in which it was observed: __________________ 1. Cement Corporation of India v. State of Himachal Pradesh, 1996 LLR 232. 2. Suraj Prakash v. The Judge, labour Court, Kota, 1996 LLR 29. 3. Usha Brew Mazdoor Sangh v. Management of M/s. Usha Breco Ltd., 2008 LLR 619 (SC). 4. Management of Aurofood Pvt. Ltd. v. S. Rajulu, 2008 LLR 561 (SC).
Where a worker is guilty of a serious offence inviting dismissal, very little will turn upon the previous record of the worker. The fact that a person had a previous good record can hardly weigh with the management when it finds that the worker by inciting an illegal strike was paralysing the working of the industry.
If, in such an instance, the management proceeded to dismiss the person, I am unable to see how the failure to take into account the previous record vitiates the final order. What the Standing Order merely says that the management shall take into account the gravity of the misconduct, the previous record if any of the workman, and any other extenuating or aggravating circumstances. There may be cases where the gravity of the offence, standing by itself, would justify the dismissal, and no amount of previous good conduct might offset the gravity of the misconduct. It would depend upon the facts of each case whether the order of dismissal is liable to be interfered with for such a reason as this 1. The Gujarat High Court has observed that for imposing punishment upon an employee pertaining to indiscipline on his part, the punishing authority has to keep in mind his socio-economy background and his past record 2. The case of Mahalakshmi Textiles Mills v. Labour Court, Madurai ,3 was distinguished and it was stated: The facts in that case showed that the misconduct of the worker was comparatively trivial, viz., overstaying of leave. Prima facie, the punishment of dismissal for such a trivial fault will be disproportionate and this seems to have been the justification for the court to hold that was proper case where the provision of the Standing Order relating to your conduct should have been taken into account. Because if it had been taken into account, there was every likelihood of the punishment being l ess severe. In that case, the order awarding the punishment was quashed and the matter remitted to the management for fresh action after fresh notice and enquiry. _________________ 1. Salar Works v. Their Workmen, 1976 (32) FLR 422. 2. Ahmedabad Municipal Transport Service v. Mohmad Salim J. Shaikh, 2004 (3) CLR 714 (Guj HC). 3. 1963 (2) LLJ 68.
In one case, while dismissing an employee, the manager referred to his previous conduct also. It was urged on his behalf that his service record was not produced before the Tribunal. Rejecting it the Supreme Court observed: All that the appellant was expected to do in present proceedings was to prove that a proper enquiry had been held before S was dismissed and that had been done by leading oral evidence and producing documentary evidence on behalf of the appellant that the reference to the blemished past record of S was untrue and that he had in fact not been warned or punished in the past. Therefore, it was not necessary for the appellant to produce the book of S. In another case the Division Bench of Rajasthan High Court while upholding the dismissal of a driver relied upon his past conduct when he had been visited with the punishment of withholding of three annual increments with cumulative effect after holding the enquiry. The punishment was meted out to him for abusing and misbehaving with the time-keeper of the Corporation.1 The Supreme Court has held that past conduct of an employee is a relevant factor for imposing punishment.2 When in past record workman is reprimanded, no leniency can be shown to him.3 3. Implication of Section 11A of the Industrial Disputes Act, 1947 Section 11A of the Industrial Disputes Act, 1947 is intended to give powers to a Labour Court, Tribunal or National Tribunal as the case may be, in case of discharge or dismissal of workman referred to therein, to set aside the order of discharge or
dismissal, where necessary, and direct reinstatement or award any lesser punishment. In other words, the section has the effect of altering the law by abridging the rights of the employer in as much as it gives power to t he Tribunal for the first time to di ffer both with a finding of misconduct arrived at by an employer as well as the punishment imposed by him, _________________ 1. Rajasthan State Road Transport Corporation v. Habib Khan, 1993 LLR 294. 2. Biecco Lawrie Ltd. v. State of West Bengal, 2009 LLR 1057 (SC). 3. Ahmedabad Electricity Co. Employees Coop. Vividhkarayakari v. Nilesh M. Delhiwala, 2009 LR 1103 (Guj HC).
Even where the dismissal of a workman by an employer on grounds of misconduct is preceded by a proper and valid domestic enquiry, Section 11A of the Industrial Disputes Act, 1947 now empowers the Labour Court or Tribunal to reappraise the evidence and examine the correctness of the finding of the enquiry. Section 11A further empowers it to interfere with the punishment and alter the same. Previously, the adjudicating authorities had no power to interfere with the findings of misconduct recorded in the domestic enquiry unless one or the other infirmities pointed out by the Supreme Court existed. In other words, the tribunal had no power to interfere in a disciplinary proceeding unless the finding of the management was perverse or the punishment was so harsh as to led to an interference of victimization or unfair labour practice. By Section 11A of the Industrial Disputes Act, 1947 this position has been changed. Once the misconduct was proved, the tribunal had no power to alter the punishment unless it was harsh, indicating victimization. The power t o interfere with the punishment and alter the same has how been conferred on the tribunal by Section 11A of the Industrial Disputes Act, 1947. The Supreme Court has held that the Labour Court or Industrial Tribunal has wide powers by virtue of Section 11A of the Industrial Disputes Act, 1947 as it can set aside the order terminating the services and direct reinstatement with back wages. It can also temper justice with mercy and give an opportunity to the erring workman to reform himself .1 However, in one case the Rajasthan High Court has set aside the award of Labour Court in awarding reinstatement to a workman, even the presiding officer of the Labour Court himself found the workman was guilty of misappropriation. The only reason which has been assigned by the Labour Court has been due to rising unemployment and to give one more chance to workman to improve his conduct. The High Court held that this was not a convincing reason on the part of Labour Court in exercising powers under Section 11A of the Industrial Disputes Act particularly when the workman earlier on _______________ 1. Scooter India Ltd. v. Labour Court, Lucknow, 1989 LLR 70:1989 (1) LLN 303.
two occasions has been punished for misconduct hence the workman did not deserve any sympathy.1 In another case, the Gujarat High Court has held that the dismissal of a bus cleaner has been rightly set-aside by the Labour Court by exercising its powers under Section 11A of the Industrial Disputes Act in granting reinstatement with 25% back-wages when the charge on the part of the bus cleaner pertained to only absence from duty and not dishonesty or misappropriation to justify hi s dismissal from service 2. In one case the Punjab and Haryana High Court has held that the test to be applied in the applicability of Section 11A of the Industrial Disputes Act, 1947 is to see whether the punishment imposed was so shockingly disproportionate to the misconduct
attributed as would betray malice on the part of the employer, or, in other words, one i s to see if imposition of a particular punishment is a colourable act on the part of the employer, or not. What is required to be seen is as to what a reasonable employer would have done in the circumstances of the case, and if a reasonable employer could have imposed the impugned punishment, the Labour Court would not have the power to interfere. What is to be examined, on the facts of each case is the nature of misconduct that has been attributed to the workman. In the instant case the Enquiry Officer was required to enquire six charges against respondent No. 3 and all were said to have been proved before the Enquiry Officer. It is significant that some of the charges made and proved pertained to the case of abusive and filthy language towards the superior and also commission of an assault against the said functionary while he was coming out of the factory. No doubt the charges with regard to coming late to duty or being under productive could not be said to be of the magnitude so as to justify interference with the award of the Labour Court in writ-jurisdiction but the charges of abuse and assault are of a different category altogether. The charge of beating the supervisor has also been proved and this, is a very serious matter. The misconduct attributed to the workman being of very serious nature, interference by the Labour Court under ______________ 1. Rajasthan State Road Transport Corporation v. Mool Singh, 1995 (71) FLR 735. 2. Ahmedabad Municipal Transport Service v. Mohmad Salim J. Shaikh, 2004 (3) CLR 714 (Guj HC).
Section 11A of the Industrial Disputes Act, 1947 was not uncalled for .1 In another case, the Madras High Court has held that a perusal of the award of the Labour Court showed that there was sufficient indication in that award of the fact that the Labour Court was aware and alive of the norms and requirements of Section 11A of the Act. Having found the misconduct of the appellant to have been proved, it then proceeded to consider the desirability to interfere with the punishment imposed by the management. While considering the relief to be granted, the Labour Court took into account the various mitigating circumstances which have been extracted in this judgment. The approach of the Labour Court thus was perfectly right. The Labour Court recorded a finding that in the totality of circumstances the charges proved do not warrant the extreme punishment of di smissal. The parliament by enacting Section HA of the Industrial Disputes Act, 1947 had advisedly left wide discretion for the Labour Court or the Tribunal and, in our opinion, that discretion was exercised by the Labour Court, both judicially and judiciously. There was no error apparent on the face of the award or the proceedings of the Labour Court warranting any interference in exercise. Thus, the award of the Labour Court did not merit any interference at all.2 Dismissal of the worker, guilty of riotous behaviour including beating the officials of the Company, using abusive language and slogans, will not be interfered by the High Court in exercise of its jurisdiction under Section 11A of the Industrial Disputes Act . 3 When an enquiry, as held against a workman, has been vitiated by the Labour Court on the ground that his past record of service was not taken into consideration while imposing the punishment whereas the fact remained that the absence of the workman for over five months was as stated in the warning followed with show-cause notice, as issued to the workman, who has not rebutted also, hence the High Court has rightly set aside the award of the labour Court in setting-aside the reinstatement with _________________ 1. Rattan Chand Harjas Rai (Mouldings) Pvt. Ltd. v. State of Haryana, 1992 LLR 366. 2. T. Muthuswamy v. P.O. Labour Court, Coimbatore, 1991 LLR 837. 3. Ram Prasad Prajapati v. Labour Court (Uttar Pradesh) at Allahabad, 2004 LLR 17: 2003 (99) FLR 667 (All HC).
back-wages.1 The Labour Court has misdirected itself in exercising the discretionary powers under Section 11A of the Industrial Disputes Act to reinstate a dishonest workman into service since the interest of the public must take precedence over the interest of the individual workman.2While exercising its powers under Section 11A of the Industrial Disputes Act providing for discretion to the Labour Court, the Labour Court is to see whether the punishment is proportionate to the misconduct or not but at the same time would not have directed reinstatement to a workman who was not alive.3 The Labour Court, under Section 11A of Industrial Disputes Act, can examine whether the charges were levied in a vindictive manner to victimise the workman.4 Labour Court should interfere with the punishment under Section 11A of the Industrial Disputes Act only when it is disturbing to the conscientious and is highly disproportionate to the misconduct.5 Unless punishment imposed by Disciplinary Authority shocks the conscience of Court/Tribunal, there is no scope for interference.6 The Court should not interfere with the administrative decision e.g., imposing punishment on an employee unless it was illogical or suffered from procedural impropriety or was shocking to the conscience of the Court, in the sense that it was in defiance of logic or moral standards. When habitual negligence and unauthorized absence were proved against the workman, the Tribunal should not have set aside the dismissal.7 The Industrial Tribunal, in exercise its powers under Section 11A of I.D. Act, has shown misplaced sympathy to a _____________ 1. Puratchi Talaivar MGR Transport Corporation Ltd. v. Industrial Tribunal, 2004 LLR 138 (Mad HC). 2. State of Haryana v. Sukhbir Singh, (2004) 1 LLJ 317: 2004 LLR 184 (P&H HC). 3. H.M.T. Watch Factory v. Late Francis Xavier, 2004 LLR 306 (Kant HC) 4. G. Ravichandran v. (1) Presiding Officer, Labour Court, Coimbatore, (2) Management of Lakshmi Mills Ltd., Coimbatore, 2004 LLR 656 (Mad HC) 5. Bharat Heavy Electrtcals Ltd. v. M. Chandrasekhar Reddy,
MANU/SC/0061/2005 :
(2005) 2 SCC 481: AIR
2005 SC 2769: (2005) 1 CLR 959: 2005 LLR 258 (SC). 6. Damoh Panna Sagar Rural Regional Bank v. Munna Lal Jain,
MANU/SC/1081/2004 : (2005) 10 SCC 84: AIR
2005 SC 584: (2005) 104 FLR 291: (2005) 1 LLN 662: 2005 LLR (SN) 413 (SC). 7. Hindustan Petroleum Corporation Ltd. v. D.N. Vidhate, (2003) 4 LLN 541: (2003) 3 CLR 598: 2005 LLR 432 (Bom HC).
workman who was chronically absenting himself .1 The Labour Court has erred in exercising its power under Section 11A of the Industrial Disputes Act by modifying the punishment of dismissal of a workman who has been habitually misbehaving with his coworkers and superiors by using filthy language and even assaulting them. Setting aside dismissal of a workman, habitually misbehaving with co-workers and superiors, will not be proper exercise of Section 11A of the I.D. Act.2 Modification of punishment of dismissal of bus conductor guilty of embezzlement in directing re-appointment will be unjustified.3 In another case, the Andhra Pradesh High Court has held that Modification of punishment of dismissal of an employee after holding enquiry, trying to take out, surreptitiously, 1.75 litres of oil will not be justified.4 Modification of punishment of the workman can be made by the Labour Court/Industrial Tribunal and the High Court will interfere only in exceptional circumstances. Labour Court would be required, under form reporter Section 11A of the I.D. Act, to examine the quantum of punishment one the charge, against a workman have been proved.5 Section 11A of the Industrial Disputes Act confers powers on the Labour Court to direct reinstatement of the dismissed or discharged workman on such terms and conditions, if
any, as it thinks fit or give such other relief to the workman including award of any lesser punishment as the circumstances of the case may require. Once the charges are levied against a workman are held to have been proved, then the question which the Labour Court would be required to examine, under Section 11A of the Industrial Disputes Act, is regarding the quantum of punishment. The Labour Court cannot dilute the punishment in matters of serious misconduct despite wide powers to reappraise the _____________ 1. Reserve bank of India v. The Presiding Officer, 2005 LLR 509 (Kant HC) 2. Mafatlal Engineering Industrial Ltd., Baroda v. Ishwerbhai K. Makwana, 2005 LLR 575: 2005 Lab IC 1297 (Guj HC). 3. C. Jambunathan v. Management of Dheeran Chinnamalai Transport Corporation Ltd., 2005 LLR 660: 2005 (105) FLR 688 (Mad HC) 4. Cochin Shipyard Ltd., v. Industrial Tribunal, 2005 LLR 724: 2005 (2) KLT 760 (Ker HC). 5. Chunduru Muralidhara Rao v. Labour Court, Guntur, 2005 LLR 1040 (AP HC).
evidence and examine the correctness of the order of punishment.1 When there was no clean acquittal in the criminal trial, the reduction of punishment by the Labour Court will not be justified. The Labour Court can interfere in the punishment only when it shocks its conscience from Reporter.2 Modification of punishment of dismissal of an employee to a minor punishment i.e., stoppage of increment with 50% vacj-wages will not be justified when the employee has been guilty of negligence besides withdrawing the amount of Company by losing the confidence whereafter he was dismissed from service only after holding of enquiry. The Labour Court was not justified in interfering with the punishment, imposed by the management, purely on sympathy.3 Although the Labour Court is vested with wide discretions to modify the puni shment, yet such a discretion should not be exercised arbitrarily .4Merely because the Labour Court did not modify punishment, it would not mean that it has not exercised the discretion vested under Section 11A of the I.D. Act.5 Labour Court must exercise its powers judiciously under Section 11A of the I.D. Act.6 Tribunal has erroneously exercised its powers under Section 11A of the I.D. Act is setting aside the termination of a casual labourer .7 Even in a case where service of an employee is terminated in violation of Section 25F of the Industrial Disputes Act, he would not be entitled to grant of a permanent status as such the Tribunal has misdirected in setting aside the termination by erroneously exercising its powers under Section 11A of the Industrial Disputes Act. In cases of punishment, adjudicator can ________________ 1. Uttar Pradesh State Road Transport Corporation v. State of Uttar Pradesh, 2005 LLR 1130 (Uttr HC). 2. Road Transport Corporation Pvt. Ltd. v. The Presiding Officer, Labour Court, Dehradun, 2006 LLR 386 (All HC). 3. South Indian Bank Ltd. v. V.C. Krishnakumar, 2006 LLR 415 (Ker HC). 4. Divisional Electrical Engineer (Operation) Delhi Transport Corporation. Bhimavaram, West Godavari District v. T. Pallapa Rao, 2006 LLR 591 (AP HC). 5. B. Devadanam v. Labour Court (III), Hyderabad, 2006 LLR 989 (AP HC). 6. State of Rajasthan v. Sarjeet Singh, 2007 LLR 7 (SC): 2006 (10) SCALE 417.
MANU/SC/8557/2006 :
(2006) 8 SCC 508 : 2006 SCC (L&S) 2032:
7. Regional Manager, State Bank of India v. Mahatma Mishra, 2007 LLR 98 (SC): 2006 (11) SCALE 258.
examine propriety under Section 11A of the Act .1 Under Section 11A of the Industrial Disputes Act the Industrial Tribunal should be slow in interfering with conclusion in domestic enquiry.2 4. Who Can Pass an Order of Punishment A punishment has to be awarded by the employer or by an officer who has been specifically mentioned as punishing authority in the existing conditions of services or in the Standing Orders of the establishment to whom power has been delegated by the employer to award punishment. In case of such companies, where an officer has not been specified as punishing authority in the existing condition of service or Standing Orders, the company can delegate powers by a resolution or by executing a power of attorney in favour of the concerned officer. In one case the Company's Works Manager punished two workmen, one with dismissal and the other with demotion after a proper enquiry. The Labour Court found that the domestic enquiry held by the appellant company was a proper enquiry and that the findings against the workmen were valid, but the Company's Works Manager had no power to direct dismissal or demotion under the Standing Orders and that it was the company and not its Works Manager who had the authority to pass such orders. In its appeal by special leave to Supreme Court, the company contended that on a proper construction of Standing Order No. 27, the Works Manager had the authority to pass the orders in question and assuming that the company alone had the power, the company includes its principal executive officer. The Supreme Court observed: Standing Order 2 makes a clear distinction between the company, its board of directors and its officers. In view of the clear distinction drawn, it is not possible to say that the company includes its officers. The company, no doubt, could delegate its disciplinary powers unless such delegation is debarred by its articles of association which ______________ 1. Gujarat State Road Transport Corporation v. D.V. Chauhan, 2007 LLR (SN) 223 (Guj HC). 2. Employers in relation to the Managment of West Bokaro Colliery of M/s. TISCO Ltd. v. Concerned Workmen, Ram Praresh Singh,
MANU/SC/0814/2008 : AIR 2008 SC 1162; 2009 LLJ 220 (SC): (2008) 3 SCC 729.
regulate the conduct of its business. In the absence of a delegation of power it is the company and not the Works Manager who can exercise the power of punishment under Standing Orders 23 and 27.1 It is obvious that when a company has to exercise its powers in connection with management of the business it is not all the shareholders of the company that have to meet to exercise the power. How the company will regulate its business is prescribed in its articles of association. In law, therefore, delegation of the functions of the company may properly be made having regard to the exigencies of the business and articles of association.2 In one case, a charge-sheet was issued by the Deputy Commissioner and action was initiated by him against the delinquent officer whereas the appointing authority was the Commissioner of Municipal Corporation of Delhi. It has been held that the enquiry could be initiated by the Commissioner only since he was the appointing authority. Thus, the disciplinary action as initiated by the Deputy Commissioner was without jurisdiction and void ab initio.3 An order of termination passed by officer subordinate to the appointment authority will
be without jurisdiction. Hence, illegal as held by Calcutta High Court . 4 Even termination of an employee by appellate authority and not by disciplinary authority, will be set aside since the concerned employee looses his right to appeal.5 WHEN DISMISSAL/DISCHARGE OF AN EMPLOYEE IS HELD TO BE JUSTI FIED (i) For Absence from Duty when it is Habitual Absence from duty for a short period or for a day or two is not an offence serious enough to merit dismissal, but during the period of his duty if a workman leaves the premises without permission and does so repeatedly, then it becomes a serious misconduct and he may be punished and even discharged. In _____________ 1. Hindustan Brown Boveri Ltd. v. Their Workmen, 1968 (1) LLJ 571. 2. Jabalpur Electric Supply Co. v. Tambhu Prasad, 1962 (2) LLJ 216 (SC). 3. Municipal Corporation of Delhi v. Om Parkash Sharma, 1989 (I) Delhi Lawyer 199. 4. Gostha Benarijana v. Calcutta State Transport Corporation, 2000 LLR 1076 (Cal HC) (DB). 5. Electronics Corporation of India v. G. Muralidhar, 2001 LLR 597 (SC).
another case, the attendance record of the workman established that he was a chronic defaulter, he had not given up the habit of attending office at his convenience and then behaving in an arrogant fashion. His removal from service was held not to be harsh, it was further held that the order of the minister cannot be faulted because the time has come when it is necessary to observe some discipline and some norms of good behaviour in employment.1 The Kerala High Court has also held that the dismissal of a 'workman' guilty of habitual absence will be justified .2 In another case the Madras High Court has come up with a categorical judgment in this regard which says that if an employee has lost the confidence of the employer due to habitual and frequent absence from duties, his dismissal by the management will not be unjustified. It was further held that if the Labour Court orders for the reinstatement of the employee, it would perpetuate the ruptured feeling between the parties which would be harmful for both.3 In another case, the secretary of the trade union of workmen cannot claim immunity from punishment for breaking discipline more than any other worker. Absence without permission and without any application amounts to gross violation of discipline entailing dismissal. Where such a secretary was in the habit of loitering outside his place of work without the permission of his departmental head and did not desist from doing so even though warned, his services can be dispensed with.4 In one case, an employee absented from duties for 62 days and also his attendance record in the past was also unsatisfactory. The management initiated disciplinary proceedings and dismissed him from service. The Labour Court set aside the dismissal since other workers who have absented were not dismissed. The Delhi High Court accepted the petition and upheld the dismissal of the employee 5. In another case, the Bombay High Court has held that _______________ 1. Chandrakant Tatoba Kumbhar v. The Chairman Agriculture Produce Market Committee, 1989 LLR 166. 2. K.I. Varkey v. FACT Ltd., 1993 LLR 263. 3. M. Arungiri v. Bata India Ltd., 1991 LLR 71. 4. Burn & Co. Ltd. v. Their Workman, (1958-59) 15 FIR 338: 1959 (1) LLJ 450: AIR 1959 SC 529.
5. India Tourism Development Centre v. Presiding Officer, Labour Court, 2000 LLR 262 (Del HC).
dismissal of a driver guilty of habitual absence from work will be justified.1 Dismissal of a workman for habitual absence will be justified even if the workman stating that his absence was due to ill-health and injury suffered during the sports events, will not be tenable when not supported with any material and as such the award of the Labour Court granting reinstatement with 50% back-wages will be set aside and the dismissal has been upheld by the High Court .2 Habitual absence of a bank employee will justify his dismissal from service more particularly when he has availed as many as 70 months' leave including extraordinary leave without pay and allowance, hence the Industrial Tribunal has shown misplaced sympathy in directing his reinstatement and as such the High Court upheld the termination in the writ petition .3 In the case of continuous and unauthorized absence, the compliance of principles of natural justice in holding full-fledged enquiry may not be necessary when the workman has failed to give satisfactory explanation for not reporting to duty and it could be presumed that he had no intention to continue in the employment.4 Dismissal of a bus conductor for unauthorized absence on numerous occasions, as made by the Transport Corporation after holding of enquiry and upheld by the Labour Court, will not be interfered by the High Court in the writ petition since there is no illegality whatsoever in the award of the Labour Court. Absence, on the part of a workman when unauthorized and frequent, justifies his dismissal from service hence neither the Labour Court not the High Court will grant any relief .5Absence, when continuous and unauthorized, by an employee of a transport corporation running public utility services to the passengers by playing buses, will not amount to minor but major misconduct and as such the Labour Court has misdirected itself in awarding _______________ 1. Brihan Mumbai Municipal Corp. v. The General Secretary, BEST Workers' Union, 1999 LLR 232 (Bom HC). 2. The General Manager, Hindustan Zinc Ltd. v. Union of India, 2005 LLR 328 (Raj HC). 3. Reserve Bank of India, Bangalore v. The Presiding Officer, The Central Govt. Industrial Tribunal Labour Court, Peenya, 2005 LLR 510 (Kant HC). 4. Viveka Nand Sethi v. Chairman, J&K Bank Ltd., 2005 LLR 641 (SC):
MANU/SC/0351/2005 :
(2005) 5 SCC
337. 5. O. Krishan v. Management of Dheeran Chinnamalai Transport Corporation Ltd., Tiruchirapalli, 2005 LLR 900 (Mad HC).
reinstatement, even though without back-wages and the High Court also erred in dismissing the writ petition filed by the Corporation.1 Unauthorised absence for 112 days on the part of a driver of a public transport will amount to major misconduct to justify his dismissal from service. Hence reinstatement with full back-wages as awarded by the Labour Court to a workman who has unauthorisedly absented for as long time is liable to be set aside since the judgment as relied upon by the Labour Court was over-ruled by the Supreme Court and hence the High Court has set aside the order of the Labour Court .2 Dismissal of bus conductor for absenting unauthorisedly and not reporting for duty despite three letters will be justified when an enquiry has been held and he had failed to participate in the enquiry and also the medical certificate that too subsequent to the date of charge-sheet should not have been believed by the Labour Court or the Industrial Court in setting aside the dismissal and hence the High Court restored the order of dismissal from service .3 Dismissal from service of a workman for habitual absence was not justified hence the Labour Court was not correct in setting aside his dismissal and granting reinstatement whereas in the writpetition and appeal, the High Court declined the continuity of service hence in appeal the Apex Court upheld the dismissal by quashing the orders of the High
Court.4 Dismissal of a workman for unauthorized absence, as ordered by the Management, has been wrongly interfered by the Tribunal awarding reinstatement with back-wages and the Award has also been erroneously confirmed by the High Court in writ-petition and the appeal hence the Supreme Court set aside the Award and the orders of the High Court since the facts of the dispute pertained to unauthorized absenteeism and not the abandonment as wrongly misconceived by the Tribunal.5 Dismissal of a workman, guilty of habitual absence that too after the enquiry has been held where he failed _____________ 1. North Eastern Karnataka R.T. Corpn. v. Ashappa, 2006 LLR 744 (SC):
MANU/SC/8174/2006 : AIR 2006 SC
2164: MANU/SC/8174/2006 : (2006) 5 SCC 137. 2. Delhi Transport Corporation v. Balram Singh, 2006 LLR 1258 (Del HC):
MANU/SC/8174/2006 :
(2006) 5
SCC 137. 3. Brihan Mumbai Municipal Corporation v. Dashrathsatyawan Gawade, 2007 LLR 205 (Bom HC). 4. M/s. L&T Komatsu Ltd. v. Mr. N. Udayakumar, 2008 LLR 113 (SC). 5. New India Assurance Co. Ltd. v. Vipin Behari Lal Srivastava, 2008 LLR 440 (SC): AIR 2008 SC 1525: (2008) 3 SCC 446.
to participate, has been wrongly set aside by the High Court hence liable to be restored.1 The High Court will not interfere in award of the Labour Court rejecting the dispute of the bus conductor who has remained away from work unauthorizedly for 130 days and his dismissal was made by the management after holding of disciplinary proceedings wherein the charge against the workman was proved . 2 Dismissal of workman for unauthorized absence, after holding an enquiry, will be proper and justified.3 Termination of a driver for unauthorized absence, without prior intimation or sanction of leave that too after holding of an enquiry, should not have been set aside because (i) the Labour Court observed that the enquiry as held has been fair and proper; (ii) the Labour Court failed to give any reason in support of setting aside the punishment; (iii) the Labour Court erred in not considering that the workman has been habitual absentee and there have been 11 instances for similar misconduct in the past and (iv) also that the dispute has been raised by the workman after 5 years of his alleged dismissal from service.4 (ii) For using abusive language and threatening a superior The facts of one case were that the petitioner threatened his superior with the words "for sins already committed by you, you have lost one child and at least take care of the remaining children". A person who has lost a child will feel greatly hurt when it is pointed out to him that he had lost the child on account of his sins. Only a person who has lost a child knows this agony and to hear another person saying that it is on account of his sins is like adding fuel to fire. Such words are worse than causing an injury . 5 In another case, the Punjab and Haryana High Court held that slapping an officer by a workman near the factory gate amounted to grave and serious misconduct justifying his _______________ 1. Chairman and MD, V.S.P. v. Goparaju Sri Prabhakara Hari Babu, 2008 LLR 715. 2. Shri Jai Singh v. Delhi Transport Corporation through its Chairman, 2008 LLR 1050 (Del HC). 3. Depot Manager, Andhra Pradesh State Road Transport Corporation v. V. Surender, 2009 LLR 225 (SC). 4. Divisional Controller, G.S.R.T.C. v. N.K. Makwana, 2009 LLR 921 (Guj HC). 5. S. Palani v. Bajaraj Textiles, Theni, 1991 LLR 456.
dismissal from service and the Industrial Tribunal must grant approval.1 The Supreme Court has held that the dismissal of a workwoman in dispensing with the enquiry will be justified when she has behaved violently and by hurling chappal on Manager and abusing him in the most filthy language; besides that in the past also she has committed misconducts.2 The Supreme Court has held that dismissal of a workman for using abusive language cannot be held to be disproportionate when the Labour Court and the High Court have held that the language used by the workman was filthy which cannot be tolerated by any civilized society hence the use of such abusive language against a superior officer, that too not once but twice, in the presence of his subordinate cannot be termed to be an indiscipline calling for lesser punishment.3 When the bank employee was charged with misconduct of abusing Branch Manager and customers, and Labour Court and the Single Judge also were of the opinion that the punishment imposed on the respondent-workman was not at all disproportionate to the gravity of the misconduct committed by him, the Labour Court was not at all justified in interfering with the punishment imposed by the Management purely on consideration of sympathy by converting punishment of dismissal from service into one of suspension for a period of one year. The past conduct of the bank employee showed that in spite of being given several opportunities to mend his ways, he remained recalcitrant and indulged in similar misconduct time and again.4 Dismissal of a workman for shouting abuses will not be disproportionate to the misconduct when his past record was also not satisfactory.5 Using abusive language against superior officers will be a major misconduct to justify punishment not lesser than dismissal from service.6 Dismissal of an employee (peon-cum _______________ 1. Nestle India Ltd., Moga v. Jaswinder Singh, 1996 LLR 1044. 2. Engineering Laghu Udyog Employees' Union v. Judge, Labour Court and Industrial Tribunal, 2004 LLR 331 (SC): AIR 2004 SC 4951: (2003) 12 SCC 1. 3. Mahindra and Mahindra Ltd. v. N.B. Naravade, 2005 LLR 360 (SC):
MANU/SC/0138/2005 :
AIR 2005 SC
1993: (2005) 3 SCC 134. 4. South Indian Bank Ltd. v. V.G. Krishnakumar, 2006 LLR 415 (Ker HC). 5. Premier Automobiles Ltd. v. H.S.T. Hegde., 2007 LLR 118 (Bom HC). 6. Jarnail Singh v. Presiding Officer, Labour Court, Patiala, 2007 LLR 245 (P&H HC).
frash) has been rightly upheld by the Labour Court when the workman has been present in the Head Office in a state of drunkenness and has absurd abuses using choices of abuses against the General Manager hence the High Court will not interfere.1 (iii) For causing accident by a driver When the services of the bus driver were terminated f or causing an accident, it has been held that his dismissal will be valid since in this case the bus driver was driving the bus rashly and negligently and the bus collided against a tractor and resulted in damage of the bus. The retention of such an employee will be dangerous to the life of passengers and the public.2 (iv) For suppressing past conviction while filling the form of employment While joining the company, the employee suppressed the particulars of his past conviction for gambling for as many as five times. It has been held that his dismissal will
be justified.3 (v) For deliberate delay by the workman in complying with the lawful orders of the superior and refusal to work on duty Once misconduct is established, maximum punishment stipulated therefor can be awarded. But, there may be a case where the facts and circumstances may justify the award of lesser punishment. In such cases the Labour Court has full discretion to substitute its wisdom with regard to quantum of punishment for that of the wisdom of the employer and award lesser punishment. Keeping in view the facts of the case, no leniency was called for.4 (vi) For disobedience and insubordination The conduct of the workman consisted of declining to type out delivery challans which was a part of his duty, by refusing to obey the lawful orders of the superior officer this amounted to insubordination. If there was no valid reason justifying such _________________ 1. Harnek Gill v. State Bank of Patiala, through its General Manager, Head Office, The Mall Patiala, 2009 LLR 980 (P&H HC). 2. Shriram v. Maharashtra State Road Transport Corporation, 1994 LLR 383. 3. Tara Chand v. Maharashtra State Road Transport Corporation, 1994 LLR 382. 4. Hindalco Workers' Union v. Labour Court, Allahabad, 1994 LLR 379.
conduct, the disobedience would amount to an act of indiscipline. A subordinate officer or employee on duty, is bound to obey the lawful order of a superior officer. The concept of obedience is implicit in the fact that the official receiving the order is subordinate to the officer giving the order and a lawful order has to be obeyed unless there is strong justification for not complying with such a lawful order. It is this conduct of declining to obey an order, which not only results in disobedience, but the conduct would also amount to insubordination. Where a workman disobeys a lawful order, he can be said to be guilty of insubordination and it need hardly be stated that misconduct arising from disobedience and insubordination would also amount to indiscipline. A stenographer is an essential part of any commercial or administrative office. The very fact that a responsible employee like a stenographer indulges in deliberate disobedience of a lawful order is sufficient to warrant a punishment of dismissal.1 (vii) For disobedience, insulting and threatening a superior The employer and his officers are entitled to give all reasonable and legal directions regarding the manner in which the work of the establishment should be conducted and if their directions are flouted and workers behave in an insubordinate manner, then the proper functioning of the establishment becomes impossible, and therefore, such disobedience or insubordinate behavior is also a serious misconduct .2 Assaulting and abusing the factory manager outside the factory premises will amount to misconduct and the dismissal of the workman will be justified.3 (viii) For dishonesty and fraud Acts of dishonesty and fraud certainly constitute misconduct of a serious nature, which not only attract dismissal, but much else as their legal consequences . 4 The Punjab and Haryana High Court has held that a bus conductor guilty of collecting fare from _____________
1. Sarabhai M. Chemicals and Electronics Ltd. v. M.S. Ajmere, 1980 (40) FLR 439. 2. Pure Golukdib Colliery v. Workmen, 1960 (1) FLR 470 (IT). 3. Narayanan v. State of Tamil Nadu Madras, 1999 LLR 382 (Mad HC): 1991 (1) LLN 693. 4. Workmen of Dema Dim Tea Estate v. Dema Dim Tea Estate, 1963 (1) LLJ 250 (SC): 1962 (5) FLR 372.
passengers and pocketting even Rs. 9.70 will be liable to be dismissed since it will amount to serious misconduct.1 A bank employee working as an appraiser who availed loan at concessional rate of interest of his personal needs, has acted in a prejudicial manner, his dismissal has been held to be justified even it has not been established that the bank has not suffered loss.2 The Madras High Court has held that the dismissal of a mechanic charge-sheeted for forging the signatures of the customers will be justified.3 Dismissal from service of cash clerk will not be disproportionate to the misconduct when he has put thumb impression of other co-employees and such irregularities on the part of delinquent cannot be termed as unintentional mistake.4 The conduct of the workman in tampering with the attendance register for the purpose of getti ng wages for four days is reprehensible and is a gross misconduct hence the Labour Court illegally exercised its discretion in exercise of its discretion in exercise of its power under Section 11A of the Industrial Disputes Act by directing reinstatement of workman in services. The award, therefore, cannot be sustained in law.5 Dismissal of a bank employee for misappropriating the funds will be justified, particularly hen the charges as levied have been proved against him in the enquiry as held by the Enquiry Officer. Also acceptance of amount from a customer by a bank employee and delivering the pass-book with fictitious entries will amount to serious misconduct and the punishment of dismissal will not be disproportionate.6 Termination of a railway booking clerk for over-charging the amount of ticket will be disproportionate to the misdemeanour when it has been fixed in the enquiry held against him and also the quantum of amount as misappropriated being small will have no bearing.7 The Division Bench of the Delhi High _____________ 1. State of Punjab v. Harjinder Singh, 1993 LLR 52. 2. T. Krishnamurty v. Management of Indian Bank, 1995 (1) LLJ 816. 3. Godrej & Boyce Mfg. Company Ltd., Madras v. Principal, Labour Court and H.V. Shivaji, 1997 LLR 70 (Mad HC). 4. Ajit Kumar Ghanty v. Coal India Ltd., 2003 LLR 509 (Cal HC). 5. Ballarpur Industries Lid. v. Presiding Officer, Labour Court, Bhubaneswar, 2004 LLR 474 (Ori. HC). 6. Shyam Bahadur v. Bank of Baroda, 2005 LLR 333 (All HC). 7. Nilesh R. Mandra v. Union of India, 2008 LLR 974 (Bom HC).
Court will not interfere with the findings of the learned Single Judge in upholding dismissal of the workman who has been guilty of theft and was also convicted hence the appeal, as filed, is liable to be rejected. Hence grant of relief has been rightly declined by the adjudicator when the dispute, as raised by the workman as guilty of theft was belated and even the writ petition against the Award was also after a long lapse of time.1 (ix) For disobedience to the transfer order An employee who disobeyed the lawful order of his transfer was dismissed from service after proper enquiry, it has been held that his dismissal for disobedience of the transfer order was justified2. In another case the Delhi High Court has held that the removal of an employee from service will not be disproportionate to the misconduct when he
refused to comply with transfer order and handing the charge 3. (x) For dissuading customers Undoubtedly, dissuading customers of the employer by a workman will amount to a serious misconduct. In one case, the main charge against the workman was that he dissuaded customers of the management from purchasing new carpets from the Coir Board show room and volunteered to repair old carpets and received an advance of Rs. 60 for the repair. His termination was confirmed by the Division Bench of Kerala High Court saying that it amounted to serious misconduct.4 (xi) For driving the vehicle rashly and negligently The Bombay High Court has held that a driver of public transport guilty of rash and negligent driving and causing an accident will be liable to be dismissed. 5 ____________ 1. Vijay Pat Singh v. N.D.M.C., 2008 LLR 483 (Del HC). 2. Banmali Patel v. Authority of India Ltd., 1986 Lab IC 1685: 1986 (2) LLN 967. 3. Ram Kishan Sharma v. Municipal Corporation of Delhi, 1996 LLR 842. 4. M. Rama Warrer v. Coir Board, Ernakulam, 1989 LLR 393. 5. Divisional Controller MSRT Wardha v. Dyaneshwar, 1993 LLR 212; also see Shriram v. Maharashtra State Road Transport Corporation, 1994 LLR 383.
(xii) For drunkenness while on duty The charge against the driver was that he was in a drunken state and demanded Rs. 10 from his colleague conductor and on refusal by the latter, he inflicted grievous injuries. It has been held by the Rajasthan High Court that the dismissal as awarded will be justified.1 The dismissal of a driver found under the influence of alcohol while driving the bus will be justified.2 The Madras High Court has also held that the dismissal of a workman, coming to the factory in a drunken state, abusing the superiors and threatening the security guards will be justified.3 (xiii) For falsification of accounts and disobedience of the orders of the superiors The Labour Court seems to think that dispensation of leniency unrelated to facts is a virtue in itself. May be, it is not pleasant for any authority to impose punishments. But, when a situation requires imposition of punishment in the interests of efficiency and discipline, the plain requirement of the situation cannot be glossed over by professions of equity and compassion. Misguided sympathy is no more than a maudlin sentiment. The workman held an office of trust. The manner of his functioning was bound to have an impact on the efficiency and reputation of the financial institution which employed him. Beyond dispute, he had tampered with the accounts. To say that the punishment was not commensurate with the gravity of the misconduct either meaning that the misconduct (offence) was not grave, or meaning that the punishment was harsh prima facie, does not appear to be correct. A broader approach is not justified when the findings of misconduct stand. The Labour Court misdirected itself. The award is, thus, quashed to the limited extent it varied the punishment imposed by the management. The case remitted to the Labour Court for considering the question of punishment with reference to the facts of the case in accordance with law and the principles indicated in this judgment.4
_____________ 1. Rajasthan State Road Transport Corporation v. Habib Khan, 1993 LLR 294. 2. Municipal Corporation of Greater Bombay v. Siddheshwar Shivaji Kamble, 1999 LLR 1190 (Bom HC). 3. C. Muthumanickam v. Management of Kongarar Spinners Ltd., Udumalpet v. Presiding Officer, Labour Court, Coimbatore, 2004 LLR 937 (Mad HC). 4. Kottarakkara Co-operative Urban Bank Ltd. v. A Sreenivasan, 1991 LLR 45.
(xiv) For using foul and filthy abuses towards female employees A conductor in a public transport bus was accused of uttering foul and vulgar language against a lady doctor. His behaviour was characterised as barbaric. The punishment of dismissal was held to be appropriate.1 (xv) For committing fraud and dishonesty The misconduct alleged and proved against the employees is one of fraud and dishonesty. The punishment awarded cannot be said to be excessive or harsh. In the circumstances it cannot also be said that it tantamounts to victimization or unfair labour practice. There is, therefore, no need to remand the matter for reconsideration. 2 The conduct of the workman in tampering with the attendance register for the purpose of getting wages for four days is reprehensible and is a gross misconduct hence the Labour Court illegally exercised its direction in exercise of its power under Section 11A of the Industrial Disputes Act by directing reinstatement of workman in services. The award, therefore, cannot be sustained in law.3 Dismissal of a bus-conductor receiving the fare and not issuing the tickets is rightly upheld by the Industrial Tribunal. 4 Setting aside dismissal of the bus-conductor for not issuing tickets to 20 passengers is not justified.5 Serving meals by a hotel employee without Kitchen Order Token (KOT) as well as bill and not depositing the money as received on the same day will amount to serious misconduct to justify his dismissal from service. 6 Dismissal of an employee for defalcation, as imposed by the Corporation, will not be interfered by the High Court and the plea of the employee that he did not have opportunity to contest the audit report as taken before the High ________________ 1. I.G.V. Narayanan v. Pallavan Transport Co. Ltd., 1984 (1) LLN 518. 2. Haileyburia Tea Estates Ltd. v. Estates' Staff Union of South India, 1990 (61) FLR 63. 3. Ballarpur Industries Ltd. v. Presiding Officer, Labour Court, Bhubaneswar, 2004 LLR 474. 4. Horam Singh v. Delhi Transport Corporation, 2006 LLR 1216 (Del HC). 5. Uttar Pradesh State Road Transport Corporation, Dehradun v. Suresh Pal, 2006 SCC 108: 2006 SCC (L&S) 1905: AIR 2006 SC 3227: (2006) 6 SLR 27: 2006 LLR 1267 (SC). 6. K. Balakrishnan v. Hotel Tamilnadu, Nilgiris, 2008 LLR 183.
Court for the first time will not be taken into consideration.1 Dismissal of a workman bus-conductor for misappropriation, that too after holding of an enquiry where the charges were duly proved, will not be interfered by the High Court whereby the Labour Court has upheld the punishment as imposed by the Management .2 Dismissal of a bus conductor for misconducts of allowing 39 passengers to travel without tickets and also using bad language towards the checking staff which have been established before the Enquiry Officer resulting which dismissal has been confirmed by the Labour Court and also upheld by the learned single j udge hence the Division Bench will not interfere in the
appeal filed by the dismissed conductor.3 The Supreme Court has held that dismissal of a bus-conductor in not issuing tickets, that too when charges were proved in the enquiry and also he was on probation, has been wrongly set aside by the Labour Court and upheld by the High Court hence is liable to be set aside. Even though the Labour Court has held that the enquiry as held against a bus conductor for not issuing tickets is fair and proper, but it overlooked that the charges were duly proved and in the past also he has been found not issuing tickets to the passengers on five occasions hence it erred in awarding the reinstatement which has been wrongly upheld by the High Court.4 Non-issuing of tickets by the conductor, even after receiving the fare, will amount to misappropriation and his dismissal will not be interfered.5 (xvi) For inciting workers to 'go slow' In one case, a worker, while on duty, shouted and incited co-workers inside the shed to stop their work one hour earlier than the scheduled time of ending the work. Then, he made them form a procession and led them out of the shed. It was held that the punishment of dismissal in that case was not excessive since _______________ 1. Rajesh Prasad v. Bihar State Food Civil Suppliers Corporation, 2009 LLR 555 (SN) (Jhar HC). 2. Varinder Pal v. Presiding Officer, Industrial Tribunal-cum-Labour Court, Chandigarh, 2009 LLR 643 (P&H HC). 3. Mahatam Singh v. U.P. State Road Transport Corporation, Lucknow, 2009 LLR 396 (All HC). 4. Rajasthan S.R.T. Corporation v. Kamruddin, 2009 LLR 689 (SC). 5. H.K. Shekar v. Karnataka State Road Transport Corporation, 2009 LLR 1037 (Kant HC).
the Standing Order stipulated that inciting any worker to strike work or indulging in disobedience of any lawful and reasonable order of the superior officer, will constitute misconduct for which he was liable for dismissal.1 (xvii) For resorting to 'go slow' tactics When wheat products were being delivered to different customers under the permit of the government, then it is a serious faux pas on the part of the workmen to stop some lorries on the plea that the goods were meant for the blackmarket and spread false rumours affecting the reputation of the company 2. If a worker in his defence makes reckless allegations against a superior, such conduct may be taken into consideration in awarding punishment3. (xviii) For insulting the customers because they did not use the services of the employee privately An employee insulted the customers because they did not make use of the services of the employee privately. No commercial firm can tolerate such behaviour and, therefore, the penalty of dismissal in the circumstances is not excessive. The punishment is not shockingly disproportionate.4 (xix) For irregularity in reporting to duty and leaving office before time The record of the employee unmistakably establishes that he is chronic defaulter and was twice removed from service earlier, but on humanitarian consideration was taken back. Despite that, he had not given up his habits of attending office at his convenience and then behaving in an arrogant fashion. The order of the Minister cannot be faulted because the time has come when it is necessary to observe some discipline and some
norms of good behaviour in the Government and semi-government offices.5 In ______________ 1. Kesuram Cotton Mills Ltd. v. Gangadhar, AIR 1954 SC 708; Prabhu Shivaprasad v. Rajnagar Spinning and Weaving Co. Ltd., 1957 ICR 795 (IC). 2. Reform Flour Mills (P) Ltd. v. First Labour Court, 1962 (4) FLR 232. 3. Ahmedabad Electricity Co. Ltd. v. Dhisla Hira, 1956 ICR 1148 (IC). 4. Eastern Electric & Trading Co. v. Baldev,
MANU/SC/0344/1975 : (1975) 4 SCC 684: 1975 SCC (L&S) 382.
5. Chandra Kant Tatoba Kumbhar v. The Chairman, Agriculture Produce Market Committee, 1989 (58) FLR 793: 1989 (1) LLN 632.
one case, the Bombay High Court has held that dismissal of an employee for habitually late coming be justified.1 (xx) For coming late and assaulting the superior It is significant that some of the charges made and proved pertained to the case of abusive and filthy language towards the superior and also commission of an assault against the said functionary while he was coming out of the factory. No doubt the charges with regard to coming late on duty or being under productive could not be said to be of the magnitude so as to justify interference with the award of the Labour Court in writ-jurisdiction but the charges of abuse and assault are of different category altogether. The charges of beating the supervisor have also been proved and this misconduct being of a very serious nature, interference of the Labour Court under Section 11A of the Industrial Disputes Act, 1947 was not uncalled for .2 (xxi) For misappropriation of money and assault Charges of misappropriation of money and assault proved against the employee. The punishment of dismissal was aptly awarded.3 (xxii) For molestation of female worker Employee molesting a female worker amounts to riotous conduct and constitutes gross misconduct. The conduct of the offender was obscene; even an ordinary person would unhesitatingly be irritated by it. In one case, it has been held that the management is well within its rights to dispense with the service of an employee if such misconduct is proved. In the given case, the enquiry was held by the tribunal since the employer had terminated the service of the delinquent employee without holding of an enquiry. 4 ______________ 1. Air India Ltd. v. N.P. Wadkar, 2001 LLR 619, (Bom HC). 2. Rattan Chand Harjas Rai (Mouldings) Put, Ltd. v. State of Haryana, 1992 LLR 366. 3. S. Visweswariah v. New India Assurance Co. Ltd., 1989 (58) FLR 568. 4. M.M. Deb v. Presiding Officer, Industrial Tribunal, Dibrugarh, 1985 Lab IC 254.
It has been held by the Supreme Court that even trying to molest amounts to molestation when the behaviour of the employee did not cease to be outrageous. 1 (xxiii) For carrying on money-lending business within premises of an establishment Decisions have been given that carrying on of any money-lending business within the premises of an establishment, with fellow workmen/employees, is an undesirable
activity. In a number of cases it has been stated that the relationship of creditor and debtor inter se the workman creates disturbing differences, which are not conducive to smooth and harmonious working within the premises. Carrying on moneylending/interest business within the premises, may be treated as subversive of, discipline.2 In another case, a workman who had lent money to a number of fellow workmen at exorbitant interest and had collected repayment within the factory premises was charge-sheeted by the employer. The explanation of the workman that the merely collected the money within factory premises and this did not constitute a misconduct, was rejected.3 (xxiv) For moral turpitude and deliberate act of dishonesty There are a few special circumstances in which dishonesty becomes more serious. Although the court may have sympathy for an employee who is going to lose employment; when the employee is guilty of an offence involving moral turpitude for a deliberate act of dishonesty, then the court cannot interfere. No employer can retain such an employee specially in banks which will amount to indirectly encouraging dishonesty. It cannot be contended that in similar cases lighter punishment was given. His case has to be judged on its own facts and circumstances and there cannot be a common standard of leniency.4 In another case, it has been held ________________ 1. National Textile Corpn. Ltd. v. Yasmin Rustum Lentin, 1999 LLR 169 (SC):
MANU/SC/0053/1998 : AIR 1999
SC 106: 1998 (1) SCALE 183. 2. Janwadhan Sharma v. Hukam Chand Mills Ltd., 1950 (1) LLJ 740 (IC). Bhagoji Rashoo Ambakar v. New Great Eastern Spinning and Weaving Co., 1950 ICR 900 (IC); Digwadih Colliery v. Ranjit Singh, 1964 (2) LLJ 143; Digwadih Colliery v. Their Workmen, 1960 (1) FLR 379 (IT); jute Seshadri and H.A.L., 1984 (47) FLR 157; Hindustan Aeronautics Ltd. v. B. Gulab Singh, 1986 FJR 132. 3. Hindustan Aeronautics Ltd. v. Gulab Singh, 1986 Lab IC 1403: 1986 (1) LLN 430: 1986 (32) FLR 443. 4. K.G. Jani v. State Bank of Saurashtra, 1983 (3) SLR 233.
that the dismissal from service of an employee of the Electricity Board for moral turpitude pertaining to his arrest under the Suppression of Immoral Traffic in Women and Girls Act will be justified hence the Labour Court has grossly erred in setting aside the dismissal including overlooking the gravity of offence 1. (xxv) For doing personal work No employer, as a rule, ever expects, much less approves of any of hi s employees doing any sort of personal and private work during the hours of his duty. This also precludes his activities concerning the union. In one instance, an employer expressed his view that avoiding performance of allotted duties and instead involving himself and his time in personal and private work on the premises of the undertaking, should be listed separately as a misconduct as per standing orders in force. The Industrial Court, Bombay, took the view that it was obvious that a worker was not supposed to do any personal or private work on the premises of the mill during working hours. If he does so, it will amount to misconduct arising from an act being subversive of discipline. To prevent any such difficulty from arising, rules could be made or instructions could be issued so as to prohibit any personal or private work being done during working hours, so as to ensure smooth and orderly working of the undertaking. Habitual breach of any such rules or instructions, will be regarded as a serious misconduct and the employer can take action against such erring employees .2 A stenographer employed in a company was found to be doing private typing work
during office hours. The management discharged him from service for loss of confidence which was upheld by the Industrial Court. The Bombay High Court in writ-petition did not interfere in the discharge of the p etitioner.3 _______________ 1. Superintending Engineer, Thiruvannamalai Electricity System, v. Presiding Officer, labour Court, Vellore, 2004 LLR 942 (Mad HC). 2. Textile Mills, Baroda v. Their Workmen, 1952 (2) LLJ 225. 3. West Coast Paper Mills, Employees Union, Bombay v. A.B.M. Shaikh, 1999 LLR 462 (Bom HC).
(xxvi) For persistent refusal to perform duties In one case the charge against an employee was that despite repeated instructions given first by the foreman and later by the Assistant Superintendent, the concerned workman refused to carry out the repair which resulted in losses to the management running into several lakhs of rupees. And he was removed from the job; while removing the worker the management took into account his previous record. Secondly, the offence was very grave so, the management cannot be accused of having acted arbitrarily in awarding the extremen punishment of dismissal. It has been held that the refusal by the workman concerned of clear instructions was persistent and therefore, furnished a valid ground sufficient to warrant the punishment meted out by the management. In any case, the punishment cannot be characterised as shockingly out of proportion.1 (xxvii) For riotous behaviour at premises of the f actory Riotous or disorderly behaviour of a workman inside a factory or business premises is always deserving condemnation and it is to be regarded as an act, which is subversive of discipline and calls for action. In one case, certain workers not only behaved in a disorderly manner while on the premises of the company, but al so incited other workers. Not being satisfied with this, further they forced their entry i nto the manager's room and confined (gheraoed) him in his room. Having confined him, they behaved in an insolent manner and even threatened him. It was held that their reprehensible behaviour made them guilty of a grave misconduct. 2 (xxviii) For sleeping by a watchman, responsible for guarding vital installation The facts of the case were that the watchman was supposed to guard very vital installation and was found sleeping while on duty and such circumstances are absolutely irresponsible and unpardonable. The Industrial Tribunal had exceeded its jurisdiction and erred in interfering with the punishment of dismissal awarded by the employer for acts subversive of ___________________ 1. Hindalco Pragatisheel Mazdoor Sabha, Renukoot, Mirzapur v. State of Uttar Pradesh, 1992 LLR 24. 2. Ganges Printing Company Ltd, v. Their Workmen, 12 FJR 363.
discipline as stipulated by Standing Order necessary of the Certified Standing Orders of the Industrial Establishment.1 (xxix) For subverting discipline Where workmen were found in possession of 'charas', a drug, which has now become the subject of international concern, were charged with riotous and disorderly behaviour in the premises of the company. The workmen assaulted the security officer since he did
not accede to the illegal demand of the workmen to return the seized contrabands; it has been held that such an act by the two workmen amounted subverting discipline and good behaviour. While setting aside the judgment of the industrial court, the Bombay High Court has held that the misconduct of the workmen concerned were of a very serious nature justifying their dismissal from service.2 (xxx) For theft of company's property The facts of the case were that while going out of the factory, a workman was searched, and he was found in possession of the Company's property, which was stolen. In the domestic enquiry, he was found guilty of the charge and pursuant to the enquiry, he was dismissed from service (w.e.f. 1st December, 1986). The workman raised an industrial dispute and on failure of conciliation proceeding, the State Government made a reference under Section 10(1) of the Industrial Disputes Act, 1947 for adjudication of the dispute relating to his dismissal. The Labour Court, after holding that the domestic enquiry was not fairly conducted, the management was given opportunity to lead evidence to prove the charge against petitioner. After holding an independent enquiry, the Labour Court found that the charge of committing theft of employer's property was well proved against the petitioner. The Labour Court, therefore, vide impugned award, held that dismissal of the petitioner from service by the management was just and proper. It has been held that once the employee is found guilty of misconduct for a serious charge of committing theft of employer's property from the factory, no lesser punishment than the ________________ 1. Bharat Petroleum Corporation Ltd. v. Barrister Prasad, 1995 LLR 172. 2. Rajesh Dyeing & Bleaching Workers (P) Ltd. v. Sayed Boor Razvi, 1986 (53) FLR 289: 1986 (2) CLR 152: 1986 (2) LLN 696.
dismissal from service is proper.1 In another case, the offence of theft was committed by an employee, this showed that he was dishonest and his suitability and reliability to continue in service was thus affected. It was held that the employer was justified in dismissing him. The pleas of the workman that he has rendered a long period of unblemished service and the property stolen was worth Rs. 150 only, did not justify a lesser punishment. The Supreme Court also held that even an attempt to steal the employer's property was a serious charge and deserved nothing short of dismissal.2 When an employee is found guilty of theft, then there is very limited scope of generosity in imposing minor punishment. It would be against the interest of other workmen and industrial development if adequate punishment in not imposed and if he is granted reinstatement.3 An employee working in gold mines was dismissed for theft and the Labour Court awarded reinstatement. The Karnataka High Court has held that granting reinstatement to an employee guilty of theft will amount to misplace sympathy4. In another case, the Madras High Court has held that the quantum of a proportion of the stolen property being small cannot be taken as a criterion to condone the dishonest act of theft which amounts to grave misconduct.5 Merely that a workman guilt for theft of the employer's property has been acquitted in the revision by the High Court, it will not exonerate him from the charge of theft as proved against him by ample evidence duly corroborated since the findings of criminal court are not necessarily binding upon the Labour Court .6 It is settled that the quantity or amount of article, stolen by the delinquent, is not material for imposing punishment.7 Theft of property by a workman is a serious misconduct more so when in the present case it is enumerated in the Certified Standing Orders _______________
1. Suraj Prakash v. The Judge, Labour Court, Koto, 1996 LLR 29. 2. Wimco Sramik Union v. Seventh Industrial Tribunal, 1987 Lab IC 77. 3. T. Seeralan v. Second Additional Labour Court, 1986 (1) LLN 663. 4. Managing Director, Bharat Gold Mines Ltd., Kolar Gold Field v. Sundareshan, 2001 LLR 303 (Kant HC). 5. Prasad Film Laboratories v. Presiding Officer, Labour Court, Madras, 2001 LLR 407 (Mad HC). 6. Ramdas Ganpatrao Satpute v. Ballarpur Industries Ltd., 2008 LLR 109. 7. Guest Keen Williams Ltd. v. Third Industrial Tribunal, 2007 LLR 428 (Cal HC):
MANU/SC/0144/1959 :
AIR
1959 SC 1279: (1960) 1 SCR 348.
hence it has to be viewed seriously. Hence the Labour Court has erred in granting reinstatement despite holding that the enquiry, as held against the workman for theft of 10 litres paint, has been fair and proper but cautioned the workman that he should not repeat in future.1 (xxxi) For failure of an employee to comply with transfer order Failure of an employee to comply with he transfer order and to hand over the charge as well as remaining absent from duty amounts to misconduct. The penalty of removal from service without disqualification for future employment cannot be said to be disproportionate to the charges as proved in the enquiry.2 (xxxii) For threatening and intimidating the superior The facts of the case were that the misconduct that has been established against five workmen involved threatening the highest executive, viz., the President of Company, with dire consequences, wrongfully confining him in his room and compelling him to withdraw the notice. These acts of misconduct are subversive of discipline. Taking into consideration the facts and circumstances of the case as well as the interest of the industry, this is a case where it can be said that it is not desirable and expedient to direct reinstatement of these workmen.3 In another case the superior officers were talking politely though the workman was shouting and using insulting and threatening language. It is too much for a workman to say that his superior should not talk to him and if he wanted to talk, he should do it outside. Even if the worker was waiting for material for the usual work, he should have obeyed his superior by doing some other work in the meanwhile. It cannot therefore, be contended that the workman was not liable to be charge-sheeted. The incident was however not so serious that it warranted dismissal of the workman.4 In another case, an employee threatened the Bank's ________________ 1. M/s. Mangaiam Timber Products Ltd. v. Shailesh Kumar Gantayat, 2009 LLR 848 (Ori HC). 2. Shri Ram Kishan Sharma v. Municipal Corporation of Delhi, 1996 Lab IC 1397. 3. Workmen of Bharat Fritz Werner (P) Ltd. v. Bharat Fritz Werner (P) Ltd.,
MANU/SC/0470/1990 :
AIR 1990
SC 1054: 1990 Lab IC 844; Bharat-Fritz Werner (P) Ltd. v. Workmen of Bharat Fritz Werner (P) Ltd., 1990 LLR 197 (SC). 4. Balkrishna B. Tandel v. Indabrotor Ltd., Bombay, 1984 (2) LLN 590.
cashier with murder without any sudden provocation. The services of the employee were terminated after examining the enquiry report.1 The dismissal of an executive officer of the Company for inciting employees to resort to strike, staging of dharna, abusing and intimidating the officers to implement the Vth Pay
Commission Report proportionate to the misconducts.2 (xxxiii) For non-issuing of tickets and not accounting money to the credit of Corporation by the bus conductor The term 'misconduct' is not a term in the Standing Orders of the Corporation nor definable by an exhaustively having regard to the nature of duties imposed on an employee in different establishments. One's conduct in certain circumstances may amount to misconduct. If a conductor lacks honesty and integrity, then he is not conducting himself as provided in the regulations of the Corporation.3 The Supreme Court has held that the dismissal of the bus conductor for collecting i ncorrect fare will be justified even if he has rendered 22 years of service. 4 The Andhra Pradesh High Court has also held that termination of a bus conductor failing to issue tickets to 24 passengers will be justified.5 The Delhi High Court has also held that the dismissal of a bus conductor, allowing passengers to travel without issuing tickets despite receiving the money, will be justified when an enquiry has been held and the charges as levied have been proved against him 6. The Delhi High Court has held that the dismissal of bus conductor for not issuing tickets to passengers being justified is not to be interfered by the High Court . 7 In another case the Allahabad High Court has held that the dismissal of bus __________________ 1. Sridhar Bapurao Gadhekar v. Punjab Cooperative Urban Bank Ltd., 1987 (54) FLR 788: 1987 LLN 467. 2. V.K. Kaul v. State of Madhya Pradesh, 2004 LLR 204 (MP HC). 3. Dy. General Manager, KSRTC v. B. Sriramulu, 1988 (57) FLR 62: (1987) 71 FJR 157. 4. Karnataka State Road Transport Corporation v. B.S. Halikatti, 2001 LLR 259 (SC) 5. Gummala Krishna v. Labour Court-cum-Industrial Tribunal, Visakhapatnam, 2001 LLR 333, (AP HC) 6. Delhi Transport Corporation v. Shree Kumar, 2004 LLR 1036 (Del HC). 7. Bilori v. Delhi Transport Corporation, 2009 LLR 446 (SN) (Del HC).
conductor, allowing 39 ticketless passengers to travel is justified . 1 Dismissal of a bus conductor for not issuing tickets, as proved in enquiry, is wrongly set aside as held by the Supreme Court.2 (xxxiv) For vulgarity in ladies' hostel A workman who was employed as a chowkidar in the ladies hostel of a Post-Graduate Institute under the influence of liquor had acted in a vulgar manner and being found guilty of the same, he was dismissed from service. The Labour Court held that being a single act of misconduct, it did not justify dismissal from service. However, the High Court reversed the order and held that it amounted to gross misconduct on the part of the workman. The order of dismissal of service, as issued by the employer, was maintained.3 (xxxv) For not achieving norms of production The Madras High Court has held that dismissal of a workman, that too after holding an enquiry for not meeting the norms of productivity, has been rightly upheld by the Labour Court hence the learned Single Judge has erred in setting aside the Award which has been restored.4 (xxxvi) Sexual harassment at work place The fundamental right to carry on any occupation, trade or profession depends on the
availability of a 'safe' working environment. Right to life means life with dignity. The primary responsibility for ensuring such safety and dignity through suitable legislation, and the creation of a mechanism for its enforcement, is of the Legislature and the executive. When, however, instances of sexual harassment resulting in violation of fundamental rights of women workers under Articles 14, 19 and 21 are brought before Courts for redress under Article 32, an effective redressal requires that some guidelines should be laid down for the protection of these rights to fill the legislative _____________ 1. Mahatam Singh v. U.P. State Road Transport Corporation, Lucknow, 2009 LLR 396 (All HC). 2. Rajasthan S.R.T. Corporation v. Kamruddin, 2009 LLR 689 (SC). 3. Post-Graduate Institute of Medical Education and Research, Chandigarh v. Labour Court, Chandigarh, 1989 LLR 328. 4. Management of Lakshmi Card Clothing Manufacturing Company Ltd. v. M. Ramu, 2009 LLR 366 (Mad HC).
vacuum and the laudable principle of safe working environment in an industry the evil effect of an employee's misbehaviour with women employees. Any violation is not providing safe environment would result in unwanted and unethical misconduct touching upon the dignity of an employee in an industry. Neither the employer nor the Courts can be silent spectator to this issue. Employer of course has to be very strict in the laudable object of providing a dignified safety environment in terms of Article 21 of the Constitution of India to women employee whether the Labour Court in the case on hand is justified in confirming the order of dismissal. Women constitute about one-half of the global population, but at the work place they are placed at various disadvantageous positions due to gender difference and bias. Keeping in view that of tradition-bound society, our Constitution has made number of safeguards for protecting the right and status of women and one of such provisions in this direction is sexual harassment at work place. Right to life means life with dignity. Gender equality includes protection from sexual harassment and right to work with dignity. A working woman is exposed to various hazardous situations which may lead to any kind of depravity. This may lead to violation of her fundamental rights under Articles 14, 15, 19 and 21 of Constitution of India. Sexual harassment of female employees depicts the perversion of mind, feudal mentality, debility of thinking and downright mischief. It must be dealt either by psychiatric treatment or exemplary punishment or even both. The sexual harassment, in-fact, has been going on from time immemorial but they have hardly been reported. Women face and sexual harassment in isolation irrespective of the work they do, whether they are doctors, architects, domestic workers or teachers in the cities and villages. Though the number of women in workforce is rising, there is little or no change in attitudes towards women in the mind set of the community. The risk of women at work, being victims of sexual harassment from superiors or colleagues, is endless. It is offensive and needs controlling. So, all women have good reason to be concerned about sexual conduct at work. Now, with the increased awakening in the society, the women have gradually mustered courage to face the demon i n their den. This is a welcome sign indeed. Every step taken in this direction is a definite move towards civilisation and the refinement of the society. Earlier, the female employees were deterred and dissuaded from reporting their harassment for fear of being stigmatised but now they are rightly locking the horns with the miscreants and nuisance and are largely getting the support from the Courts and well-meaning people. It is still a sad commentary on the attitude of some managements who try to hush up the matter under the impression that it would bring bad name to
their organisations. The Supreme Court of India has, in fact, always been the champion of the gender equality by linking the cases of sexual harassment with that of the onslaught on the fundamental rights. In a historic judgment Vishakha v. State of Rajasthan , 1 the Chief Justice (as then he was) Verma said that 'Gender equality includes protection from sexual harassment and right to work with dignity, which is universally recognised basic human right'. The Court also said that 'it shall be the duty of the employer or other responsible persons in work places or other institutions to prevent or deter the acts of sexual harassment and to provide the procedures for the resolution, settlement or prosecution of the acts of sexual harassment by taking all steps required'. Similarly, in Apparel Export Promotion Council v. A.K. Chopra ,2 the then Chief Justice Dr. Anand, presently Chairman of National Human Rights Commission had said that any act of a male employee towards female employee, which is against moral sanctity and does not withstand test of decency and modesty, would amount to sexual harassment. The crime gets compounded when such obscene and unbecoming overtures are made by male superiors towards female employees at the places of work. The Hon'ble Judge did not accept apology of A.K. Chopra and concluded as under: "At the conclusion of the hearing, learned counsel or the respondent submitted that the respondent was repentant of his actions and that he tenders an unqualified apology and _____________ 1. 1997 LLR 991 (SC):
MANU/SC/0786/1997 : AIR 1997 SC 3011: (1997) 6 SCC 241.
2. 1999 LLR 169 (SC):
MANU/SC/0014/1999 : AIR 1999 SC 625.
that he was willing to also go and to apologize to Miss X. We are afraid, it is too late in the day to show any sympathy to the respondent in such a case. Any lenient action in such a case is bound to have demoralizing effect on working women. Sympathy in such cases is uncalled for and mercy is misplaced." Admittedly, the Apex Court of this country has played a unique role in upholding the human rights of the citizen as enshrined in the constitution and has always shed light to dispel the darkness of inhuman and brutal attacks on the dignity of the individual but it is regrettable to note that in spite of the dictates of the Apex Court, the women's dignity has not yet been fully safeguarded. Unfortunately, our laws, as enacted with very good intentions, are still confined to statutory books because the enforcement machinery is inadequate. A long shadow persists between law and its enforcement. The judiciary has to confine its judgment on the basis of existing legislation that too when a victim dares to come forward. It has neither the sword, nor the purse to ensure that its dictates are being implemented. The mobilisation of public opinion to create the supporting environment for effective implementation is still required and as such this case will go long way in awakening of the oppressed gender. The Delhi High Court has held that an employee, guilty of sexual harassment to a superior lady officer, deserves no sympathy and by applying the principle laid down by the Supreme Court, the Labour Court has rightly arrived at a conclusion that the punishment of dismissal is justified and any interference with the punishment will amount to misplaced sympathy and will give impetus to persons with such proclivities to indulge in acts of outraging the modesty of female employees.1 In another case the Madras High Court has held that Labour Court has grossly erred in setting aside dismissal of a workman and granting reinstatement with back-wages totally ignoring that the workman has been guil ty of sexual harassment at work place more so when the complainant herself has appeared in the witness witness box in support of her
allegations hence while setting aside the Award, the High Court also held that it is open _________________ 1. Sunil Kumar v. Delhi Development Authority, 2009 LLR 1090 (Del HC).
to the Management to withdraw the amount lying/deposited with the Labour Court. 1 However, it needs utmost caution against its misuse. In C.S. Usha v. Madras Refineries Ltd. represented by its Company Secretary, Chennai,2the Division Bench of Madras High Court has observed that it is, however, true that the women work at work places and also at home with more strain. It is not an exaggeration to state that working women are kept engaged most of the time both mentally and physically not only at home but working places also and thus play a dual role. It is also not in dispute that various laws including constitution gave so many safeguards to women, particularly to the women at work places to work with human dignity. There will be no second opinion that the wrongdoer should not be allowed to go scot-free. At the same time, the employer, who is supposed to keep a vigilant eye on the victim and the delinquent, is not expected to allow the women to use the shield so presented by the Apex Court as a weapon to wreak vengeance. It is true that the High Courts, are bound by the directions of the Apex Court, but that does not mean that they can be allowed to be interpreted to suit the convenience of the women like the petitioner, for personal gain. The facts of the case were that Appellant proceeded on study leave without prior sanction, but claims study leave with pay. The Appellant demanded that it is an entitlement also alleged that she proceeded on leave on account of sexual harassment by respondent No. 2. Respondent No. 1 Management commences domestic enquiry against appellant for absence from duty without prior permission and also constituted i ndependent complaints committee to enquire into alleged sexual harassment. Appellant sought stay of domestic enquiry till her complaint for sexual harassment was enquired into, but the same is rejected by Management. In writ-petitions she claimed relief to quash charge-sheet issued to her, to grant benefits of revision of salary, promotion and study leave with pay and constitution of independent complaint mechanism after framing proper rules. Learned Single Judge dismissed writ-petitions but gave certain direction to respondent No. 1. In this writ appeal Division Bench examined facts and position of law as settled by _______________ 1. Management of Tata Tea Ltd. v. Presiding Officer, Labour Court, Coimbatore, 2009 LLR 645 (Mad HC). 2. 2001 LLR 669 (Mad HC).
the Supreme Court in the landmark judgment in the case of Vishaka v. State of Rajasthan, MANU/SC/0786/1997 : AIR 1997 SC 3011, and concluded that there was no illegality or irregularity in the order of learned single Judge which calls for any interference. The sum and substance is that while any sexual harassment of female employees must be sternly dealt with, it must also be seen that it should not be used as a ploy or stratagem by the female employees to harass their male counterparts. WHEN DISMISSAL/DISCHARGE OF AN EMPLOYEE IS HELD TO BE UNJUSTIFIED (i) For absence from duties without enquiry Absence from duty is by itself a misconduct. Therefore, before termination of service of the petitioner the allegation of unauthorised absence from duty could have been brought about. It was incumbent on the respondents to have made an inquiry by giving a charge-sheet to the petitioner and by holding an inquiry into the allegations of misconduct. Simple notice given to the petitioner that if he does not specifically explain
his absence, he will lose his lien cannot be equated with an inquiry held in accordance with the principles of natural justice. Giving of a specific charge-sheet and recording of finding of guilt ought to have preceded, for valid termination of service of the petitioner for his alleged absence.1 In another case, the services of an employee were terminated for remaining absent for two days only. It has been held by the Allahabad High Court that the termination is unjustified.2 The Karnataka High Court has held that no doubt persistant absence of an employee requires to be very firmly dealt with and is very much in public interest and such lapses should not be permitted to continue. Nevertheless, the order of dismissal appears to be too harsh in so far as the petitioner would be deprived of whatsoever has accrued to him by virtue of his earlier service and more importantly it may act as a bar for re-employment elsewhere. In these circumstances, the order of dismissal stands modified to one of the termination from service with effect from the same date. 3 In _______________ 1. Nathu Ram Saxni v. Hindustan Copper Ltd., 1993 LLR 599. 2. Awdesh Singh v. District Inspector of Schools, Deoria, 1996 Lab IC 1470. 3. A.M. Eshwarachar v. Executive Engineer (Electrical), 1995 LLR 85.
another case, it has been held that before an employee can be held to be guilty of wilful absence from duty a proper domestic inquiry should be conducted by the department by issuing show-cause notice and by framing a charge-sheet and specific finding should be recorded by the Enquiry Officer after following due procedure for conducting domestic enquiry in accordance with law, which admittedly has not be done in this case. Hence the respondents are solely responsible for their own lapse and for which the petitioner cannot be blamed.1 In another case, the only finding of the Enquiry Officer has been that the petitioner was absent without any prior intimation and on return he produced a medical certificate. Neither the genuineness of the medical certificate nor the factum of ailment has been disbelieved by the Enquiry Officer for remaining absent from duty without any prior intimation. In this circumstance, the punishment of removal from service would be grossly disproportionate particularly when the ailment could not be notified ordinarily before such ailment and when admittedly the petitioner has produced the medical certificate for such an ailment which has been certified by the proper medical officer, there cannot be any offence of the petitioner at all unless the ailment itself or medical certificate is found untrue. It appears that the said aspect has not been properly considered by the disciplinary authority or the appellate authority keeping in mind the charges levelled against the petitioner.2 (ii) For abusing the mistri The dismissal of a workman was on the ground that he has abused the mistri. It has been held by the Allahabad High Court that to dismiss a workman for this solitary incident will not be consistent with the charges. It has further been held that one month's suspension was enough punishment .3 In another case, the Supreme Court has held that the charge of abusing the Security Officer is not a serious charge, and even if proved, it would not result in total loss of confidence.4 The Madras High _____________ 1. Laxmi Narain Sharma v. State of Rajasthan, 1996 LLR 289. 2. Vircndra Singh v. Managing Director, U.P. State Road Transport Corporation, Lueknow, 1996 LLR 340. 3. M/s. Cawnopre Textiles Ltd. v. The Industrial Tribunal (IV) Uttar Pradesh, 1993 LLR 245. 4. Ved Prakash Gupta v. Delton Cable India Pvt. Ltd.,
MANU/SC/0211/1984 : (1984) 2 SCC 569: 1984 (2) SLR
5: AIR 1984 SC 914.
Court has held that voice of modulation of each person in society differs. Indiscreet, improper and abusive language show lack of culture, but mere use of such language on one occasion unconnected with subsequent positive action and not proceeded with any blame cannot permit the extreme penalty of dismissal from service.1 (iii) For assaulting a co-workman The workman was dismissed from service for assaulting his co-workman. The Labour Court found the punishment to be disproportionate and passed on award directing reinstatement without continuity of service and 50% back-wages. The workman and the management filed cross appeals in the High Court. It has been held that interference is necessary with the award passed by the Labour Court in as much as the final relief given by the Labour Court since it appears to be somewhat incongruous. An opportunity is to be given to the workman to reform hi mself .2 (iv) For misconduct committed by the workers away from the work place The Division Bench of Bombay High Court has held that an employer had a right to take action against a delinquent employee in respect of misconduct which may have occurred outside the premises of the employer, but which has a casual and proximate connection with the place of work. In this case, no such connection was established.3 (v) For bigamy Regulation No. 27 of Staff-Conduct, Discipline and Appeal Regulations provided that an employee contracting second marriage will be dismissed from service. It has been held by Guwahati High Court that admittedly the second marriage has no effect or import on the discharge of duties by an employee but the punishment of dismissal, as imposed by the employer, is a harsh one and does not bear proportion to the misconduct and it is to be deemed as irrational and perverse.4 ____________________ 1. S. Palani v. Bajaraj Textiles, Theni, 1991 LLR 456. 2. Cadbury India Ltd. v. V.B. Save, 1996 LLR 602. 3. Municipal Corporation of Greater Bombay v. Shri S.E. Phadtare, 1994 LLR 351. 4. Prafulla Kalita v. Oil and Natural Gas Commission, 1996 LLR 362.
(vi) For want of proper charge-sheet The Trial Judge had rightly set aside the dismissal from service of an employee, since the charge-sheet being the very basis of the disciplinary proceeding was defective.1 (vii) For consumption of liquor by a driver and endangering safety of the passengers and public If the driver of a bus consumes liquor while on duty, then he can endanger the safety not only of those in the vehicle but also of persons on the road but when this is the first offence; the Labour Court can hold that punishment of dismissal was disproportionate, but he is not entitled to back wages. Further, he should not be given three increments in the time scale in which he is reinstated.2 (viii) For drunkenness while on duty Drunkenness is a serious charge which warranted punishment of dismissal. However, in one case the Supreme Court has taken a lenient view in setting aside the dismissal of a driver who was dismissed for consumption of liquor while on duty. After considering the
facts and circumstances of the case, the Supreme Court confirmed the order of the Labour Court for reinstatement directing, that as a punishment, the driver should not be given three annual increments in the time scale and that he would not be entitled to back wages.3 In another case, the Bombay High Court has held that the Labour Judge was absolutely in error when he came to the conclusion that the management could not prove that on the day in question at the relevant time, the workman was on duly and that he was drunk. While quashing the award of the Labour Court, the High Court held that instead of reinstatement, the workman would stand retired from 14-1-1980 and will be given all terminal benefits within six months during which the workman shall hand over vacant possession of the quarter occupied by him.4 ______________ 1. Steel Authority of India Ltd v. Ujjal Kumar Bhowmik, 1990 LLR 77. 2. Jaswanl Singh v. Pepsu Roadways Transport Corporation,
MANU/SC/0241/1983 :
(1984) 1 SCC 35: 1984
SCC (L&S) 61: 1984 (1) LLN 263: 1983 (3) SLR 472:MANU/SC/0241/1983 : AIR 1984 SC 355. 3. Jaswant Singh v. Pepsu Roadways Transport Corporation, 1981 Lab IC 7. 4. Bai Jerbai Wadia Hospital v. Shankar Ramchandra Mali, 1993 LLR 54.
(ix) For levying false allegations against the employer It is implicit in the relationship of employer and employee that the latter has to remain under discipline. Making false allegations against a senior officer to the higher authorities and outsiders is not only an act intended to malign such an officer, but also an act sufficient to establish lack of disregard for establishment of discipline. In one case, their Lordships have held that it is therefore, not possible to agree with the learned counsel that the charges do not amount to misconduct.1 (x) For gambling/playing cards at work place An employee was found guilty of playing cards during duty hours. He was thus removed from service. The Bombay High Court held that his removal was disproportionate to the gravity of the charge. Thus instead of his removal from service, the punishment of reduction by two stages in the time scale for a period of three years without having effect of postponing future increments was ordered by the High Cour t 2. In another case, the Punjab & Haryana High Court has held that removal of a workman guilty of playing cards at the work place will be di sproportionate to the misconduct.3 (xi) For resorting to 'go slow' tactics The Supreme Court has held that 'go slow' is a mode of demonstration by the workers for their rights. If there is justification on the part of workers to resort t o such activities; the extreme punishment of dismissal will not be proper.4 (xii) For gross negligence Gross negligence is not such a serious misconduct as to justify termination of an employee. In one case, an employee was working as a bus conductor and inadvertently issued tickets to twenty-three passengers in reverse order. The employer terminated his services. The Industrial Court held that the conduct of the employee was tainted with dishonesty and as such he could not be kept in employment. However, the Madhya Pradesh High ___________________
1. Babulal Sharma v. M.P. Electricity Board, Jabalpur, 1984 (49) FLR 267. 2. Tejutal Ram Lal v. Assistant Engineer, 1988 (2) LLN 694. 3. Punjab Tourism Development Corporation, Chandigarh v. Presiding Officer, Labour Court, Amritsar, 1997 LLR 41 (P&H HC DB). 4. B.R. Singh v. Union of India, AIR 1990 SC 1: 1990 Lab IC 389.
Court, while quashing the order of termination, held that the act of the employee was an act of gross negligence and not of dishonesty to justify termination. It was further held that though dishonesty is not inferred yet some penalty deserves to be imposed on the employee. Thus, reinstatement with forfeiture of back-wages will be the appropriate punishment1. The dismissal of a watchman for habitual negligence has been held justified and the learned Single Judge erred in setting it aside on the ground that the watchman was exonerated of the charge of theft by the criminal court whereas he has been habitual defaulter in view of 13 warnings and suspensions for such dereliction of his duties in guarding the assets of the Company and as such he cannot be exonerated from the charge of negligence of duty.2 (xiii) For loss of temper when the employee has served for 30 years The petitioner had put in on the date of his dismissal, not less than 30 years' continuous service. The incident which led to the dismissal cannot be said to be more than a minor one. It is true that in the conduct of the petitioner there were elements of insubordination. It must however, be remembered that the employee who was at an advanced age and whose routine was sought to be disturbed was perturbed. He had continued to serve in the stagnated position of a clerk doing the daily routine work for a period of 30 years till the date of his dismissal. Some allowance, therefore, has to be made for the loss of temper in such situation on the part of the elderly employee. It is difficult to view the said incident except in that perspective. In any case, it could hardly be said that the incident by itself merited the ultimate punishment, namely, that of dismissal.3 (xiv) For loss of confidence when an employee is holding confidential or responsible post which has been misused by him The Supreme Court has held that in a reasonable case of a confidential or responsible post being misused, or a sensitive or strategic position being abused, it may be a risk to retain the employee, once suspicion has arisen and a disciplinary enquiry cannot be forced on the master. There, a termination simpliciter __________________ 1. Raghuvir v. Industrial Court of Madhya Pradesh, Indore, 1989 LLR 287. 2. Indian Iron & Steel Co. Ltd. v. Bhabesh Chandra Dutta, 2004 LLR 181 (Cal HC). 3. A.A. Fernandes v. Modern Mills Ltd., 1989 (59) FLR 470.
may be bona fide, not colourable, and loss of confidence may be evidentiary of good faith of the employer.1 The Bombay High Court has also held that it is clear that loss of confidence is often a subjective feeling or individual reaction to an objective set of facts and motivations. The court is concerned with the latter and not with the former, although circumstances may exist which justify a genuine exercise of the power of simple termination. Therefore a termination simpliciter may be bona fide, not colourable, and loss of confidence may be evidentiary of good faith of the employer, but these have no bearing with the present case.2
The Madhya Pradesh High Court has held that when an employer has lost confidence in the employee his retention in the employment should not be directed by the Labour Court3. A car driver will lose of confidence of the employer if he used language that he can kill the Director of the company and his wife in two minutes.4 (xv) For over-staying leave and leaving station The fault of the workman was overstaying his leave and leaving station without waiting for sanction of leave. His dismissal was not proper; after all efficient functioning in office depends on observance of rules and regulations. An employee committing breach of it is liable to be penalised. But should every such breach, result in the severest penalty? For that regulations itself provide guidelines for misconduct and breach of regulations. Violation or disobedience of regulation may become misconduct depending on gravity of breach. Depriving a person of his bread and butter without adequate justification is arbitrary exercise of power violative of constitutional guarantee under Articles 14, 16 and 21 of the Constitution. Tested on the anvil of the Supreme Court and in absence of charge or finding touching upon honesty or integrity ____________ 1. L. Michael v. Johnson Pumps Ltd.,
MANU/SC/0343/1975 :
AIR 1975 SC 661: (1975) 1 SCC 574: 1975 (3)
SCR 489. 2. B.M. Ugaie v. Ramilla Enterprises, 1995 LLR 627. 3. Madhya Pradesh State Road Transport Corporation v. Nandan Singh Yadav, 2001 LLR 401 (MP HC). 4. Sanjiv Kumar Mahapatra v. A.L. Alaspukar, 2003 LLR 204 (Bom HC).
or indiscipline or misbehaviour of petitioner the order removing petitioner from service is rendered infirm.1 (xvi) For failure on the part of the Enquiry Officer who has not given proper opportunity to the workman to repel the charges It has been held by the Allahabad High Court that a perusal of the record leaves the court with no doubt that no enquiry at all had been conducted by the said Enquiry Officers. They did not afford any opportunity to the petitioner to repel the charges levelled against him. The Enquiry Officers did not even call upon the opposite parties to adduce evidence in support of the charges levelled by them. Thus, once no enquiry was held, the enquiry report itself is vitiated. It is non-est and has no meaning in the eyes of law.2 (xvii) For refusal to work beyond duty hours Even assuming that the refusal on the part of the Katib to work beyond the scheduled hours of work technically amounted to a misconduct, it cannot be such a misconduct as to warrant the dismissal of the workman.3 (xviii) For refusal onto the part of an employee to work in a sister concern The petitioner was directed to work for a sister concern which was entirely a distinct entity, hence no misconduct was committed by the petitioner in refusing to do the work of the sister concern.4 (xix) For refusal to operate tail gas fan machine for want of training Refusal of workmen to operate a new tail gas fan machine for want of sufficient skill and absence of training for operating such a machine will not amount to misconduct since
the working on the new machine did not form part of their duty. Furthermore, the new machine required intensive training and fulfilling certain conditions before its operation. It has been held that refusal to operate the new machine in the circumstances does not amount to misconduct to justify their dismissal.5 ______________ 1. Kamal Chandra Roy Chaudhary v. Union of India, 1987 (54) FLR 801. 2. Satya Prakash Pandey v. Town Area Committee, 1994 LLR 588. 3. Abdul Khader v. labour Court, Hyderabad, 1988 (57) FLR 875. 4. SM, Renu v. The Proprietor, Mahajan Silk Mills, 1992 LLR 855. 5. The Association of Chemical Workers v. B.D. Borude (Arbitrator), 1993 LLR 462.
(xx) With retrospective date The services of the workman were terminated by an order dated 2-11-1989 effective from 1-11-1989. The record showing the petitioner to be on duty on 1-11-1989, held impugned order of termination is itself illegal since no order of termination could have retrospectively been passed particularly when the petitioner was on duty as on 1-111989.1 (xxi) For shortage of Rupees One Lakh which was due to defective locking system of the bank The petitioner, head cashier of the bank was charge-sheeted for shortage of Rupees One lakh and after enquiry he was dismissed from service. It has been held that once the Bank concedes that the cashier had taken reasonable steps and followed appropriate procedure and when it is established that the cabin arrangement was not satisfactory and that the higher authorities were made aware of the said fact, one fails to appreciate how in the present case the petitioner, who has been found to be diligent and hard working, could be branded with the charge of gross negligence. The charge-sheet is vague. The evidence, as produced, does not indicate how the petitioner was grossly negligent. On the contrary, it shows that the head cashier was a diligent employee. It is also established that he had taken all precautionary measures which he was required to take. Furthermore, the locking system was faulty. In such an event, the employee could not be punished by a severe punishment of di smissal. In fact, none of the above facts had been considered by the Enquiry Officer or by the appellate authority or even the disciplinary authority. Even with regard to the punishment none of the authorities have weighed the evidence on record and none of the authorities have considered the diligent working of the petitioner as a head cashier in the said branch. Another fact which the said authorities have not considered is that even police investigation had been completely dropped as the bank was not in a position to further prosecute either the petitioner or any alleged workman. In the circumstances the findings of the authorities are perverse.2 ________________ 1. Laxmi Narain Sharma v. State of Rajasthan, 1996 LLR 289. 2. Arvindkumar Hiralal Mehta v. Bank of Baroda, 1993 LLR 30.
(xxii) For instigating others for illegal strike The Supreme Court has laid a clear distinction even in a case of illegal strike regarding the roles which have been played by various workmen. It has b een categorically held by the Supreme Court that the punishment of dismissal or termination of services should
be imposed on such workmen as they had not only participated in the illegal strike but had fomented it and had been guilty of violence or doing acts detrimental to the maintenance of law and order in the locality where the work had to be carried on. Admittedly, in the present case there was no overact on the part of the workmen in order to establish that they indulged in any violence vis-a-vis the management or that they committed any acts of destruction regarding the machinery. Also there is no allegation of the Management before the Labour Court nor any evidence has been led and possibly it could not be led in the absence of the charge-sheet that the private respondents tried to cause any violence or bodily injury to the co-workers or to the Management. In the absence of this evidence or allegation on the charge-sheet, it will be difficult for us to hold that the Management was justified in dismissing or terminating the services of the workmen who, on account of their trade union activities, merely participated or instigated the loyal workers to continue with the illegal strike .1 This judgment has been followed by the Division Bench of Punjab & Haryana High Court. 2 (xxiii) For passive participation in strike without holding of an enquiry The dismissal order was void ab initio since no charge sheet was served and no enquiry preceded in accordance with law. The finding of misconduct about passive participation in the illegal strike came to be recorded for the first time in the course of industrial adjudication.3 ______________ 1. India General Navigation and Railway Co. Ltd. v. Their Workmen,
MANU/SC/0122/1959 : AIR 1960 SC 219:
1960 SCR 1031. 2. Ranbaxy Laboratories Ltd. v. Presiding Officer, Labour Court, Patiala, 1996 LLR 569. 3. Changunabai Chanoo Palkar v. Khatau Makanji Mills Ltd., 1992 LLR 338; see also Girni Kamgar Seva v. S.D. Kane, Industrial Court, 1995 (1) LLJ 1142.
(xxiv) From the date of suspension In the absence of any rule authorising imposition of punishment with effect from the date of suspension it is found that the order of punishment made with retrospective effect is invalid and liable to be set aside.1 (xxv) For theft of 2 litres of engine oil and air bag/hammer The entire charge against the employee was that he was taking two litres by approximation of engine oil. The cost of two litres of engine oil has been found by the Industrial Tribunal to be Rs. 20 and therefore, the Tribunal has rightly come to the conclusion that the extreme punishment of dismissal was wholly uncalled for.2 The Madras High Court has held that punishment of dismissal of an employee for stealing an airbag will be too harsh and compensation of Rs. 2 l akhs was awarded. The Bombay High Court has held that for theft by an employee pertaining to articles viz. half broken brass brush and four small pieces of brass, the extreme punishment of removal from service was not proportionate. The employee was reinstated with 50% of back-wages.3 In another case the Rajasthan High Court has held that the dismissal of an employee for theft of hammer will not be justified.4 FORMATS (i) Format of Notice of Discharge to an Employee after enquiry is held To
................................. ................................. This has reference to the charge-sheet No...............dated...............issued to you and the enquiry held thereafter. We have duly considered the report of the Enquiry Officer and are satisfied that the charges, as levelled against you have b een proved against you in the enquiry. ______________ 1. Mrs. Usha Kumar v. Super Bazar Cooperative Store Ltd., 1991 LLR 320. 2. Management of M/s. Orissa Road Transport Co. Ltd. v. M. Venkata Rao, 1993 LLR 309. 3. Air Lanka Ltd. v. John William Nathan, 1991 LLR 78. 4. Suraj Prakash v. The Judge, Labour Court, Kota, 1996 LLR 29.
In view of the serious nature of the misconduct/misconducts committed by you and fully proved against you, it has been decided to dispense with your services. However, on compassionate grounds considering extenuating and aggravating circumstances, the management, instead of dismissing you from the services has decided to impose lesser punishment of discharge with immediate effect/with effect from............... Your final payment of dues including wages for one month in lieu of notice will be made to you in the office on or before...............(date)...............during office hours on any working day after you hand over the charge. Manager/Competent Authority The Punjab and Haryana High Court has held that with the efflux of time and by age old recognised relationship of master and servant, it has become an integral part of service jurisprudence, that an authority subordinate to the appointing authority cannot terminate the service of an employee. Whether an employee is a civil servant or not is immaterial. Provisions of the General Clauses Act, 1897, coupled with the principles of natural justice and rules and regulations, statutory or otherwise, are equally effective to protect the employees against indiscriminate exercise of jurisdiction by officers subordinate to the appointing authority. Since the order of termination was null and void, the employer-Bank cannot be permitted to continue with the proceedings against the workman in order to pass a fresh order by getting the same signed by a really competent authority. Such a course is neither permissible in law nor reasonable or proper. 1 (ii) Format of Notice/Order notifying discharge/dismissal when the Punishing Authority does not agree with all the 'Findings' of the Enquiry Officer To ................................. ................................. _____________ 1. Bank of India v. Central Government Industrial Tribunal-cum-Labour Court, 1991 LLR 497.
As you are already aware, an enquiry was initiated against you over the charges as levelled in the charge-sheet No............... dated............... The enquiry has since been completed in accordance with the established procedure and the Enquiry Officer's report
has also been received, a copy of which i s enclosed herewith. On a careful consideration of the enquiry report, proceedings and other documents produced and proved in the enquiry the undersigned concurs with findings of the Enquiry Officer in so far as it relates to charges No...............and for the reasons stated in the attached Memorandum holds that the charge No............... which the Enquiry Officer has held not to have been proved, is also established in light of evidence available during the enquiry. Your legal dues will be paid to you in the office on or before...............(date)...............during office hours on any working day after you have handed over proper charge. The undersigned has, therefore, come to the conclusion that Shri...............is not a suitable person to be retained in the employment of the company/organisation/establishment. The undersigned, therefore, proposes to impose on him the penalty of discharge/dismissal from service Shri...............can submit his explanation, if any, by...............(date) which the final order will follow. Manager/Competent Authority CC to: The Accounts Department (iii) Format of Notice of Termination of Service awarded but held in abeyance pending the Competent Authority's permission To ................................. ................................. Pease refer to the charge-sheet No................dated...............issued to you and the subsequent enquiry held into the charge on...............(date). After careful consideration of the proceedings of the enquiry and the findings of the enquiry, we have come to the conclusion that the charge(s) levelled against you has/have been proved conclusively. As you have been found guilty of grave and serious misconduct(s), we would be justified in dismissing you from service. We have, however, decided to take a lenient view merely to terminate your services with immediate effect/with effect from...............(date). Since the proceedings relating to an industrial dispute are pending before...............(state the authority), Conciliation Officer, Board of Conciliation, Labour Court, or Industrial Tribunal and since prior permission of the authority is necessary for executing our decision to terminate your services, an application for permission has already been filed before the appropriate authority. Pending permission of the authority and final orders of the Management, you are hereby suspended from service with immediate effect. As the enquiry into the charges against you has been concluded and you have been found guilty, you will not be entitled to receive any subsistence/suspension allowance during this period of suspension. Manager/Competent Authority (iv) Format of Order of Dismissal awarded but held in abeyance pending the Competent Authority's permission To .................................
................................. Further to the charge-sheet No...............dated............... issued to you an enquiry was duly held on...............(date). On careful consideration of the findings of the Enquiry Officer, we have come to the conclusion that the charge(s) levelled against you has/have been fully proved and you have clearly been found guilty of misconduct/misconducts, it has been decided that you should be dismissed from the Service of the Company/Management/Organisation. Whereas proceedings pertaining to an industrial dispute are pending before the...............Officer, Board of Conciliation, Labour Court or Industrial Tribunal, and whereas a prior permission of the authority is necessary for enforcing decision to dismiss you, an application for permission has been filed before the appropriate authority (Herein state the authority before whom the industrial dispute is pending). In the meantime, pending permission of the authority and pending final orders of the Management, you are placed under suspension. Since the enquiry into the charges against you has been concluded and the charges have been proved against you, you will not be entitled to receive any subsistence/suspension allowance during the period of suspension. Manager/Competent Authority
7 RETRENCHMENT--MEANING OF SYNOPSIS 1. Retrenchment--Meaning of 2. Notice of retrenchment 3. Notice of, and application for, retrenchment of an industrial establishment under Chapter VB 4. Object of Chapter VB of the Industrial Disputes Act 5. When retrenchment contrary to provisions of Section 25N of the Act 6. Defect in application seeking permission for retrenchment-- Effect of (a) When Retrenchment of a Workman is Held to be Illegal (i) When retrenchment compensation not paid at the time of retrenchment (ii) For non-compliance of Section 25F of the Industrial reinstatement with back-wages is no longer a normal rule
Disputes
Act
(iii) When retrenchment compensation was not paid to the workman on the plea that three months' notice was given (iv) When retrenchment compensation and notice pay was prepared but not paid (v) When retrenchment compensation was not paid due to weak financial
position (vi) When an employer has drawn a presumption of abandonment due to continuous absence of an employee (vii) When a presumption was drawn that the worker has abandoned the job (viii) When services of the workman were terminated without assigning any reason even though the offer was made to collect dues from th e cashier (ix) When mere readiness on the part of the employer to send notice of retrenchment and compensation not sufficient (x) When an employee has completed 240 days (xi) When initial appointment was for 30 days but the employee continued for 2 years (xii) When a workman was initially appointed for a fixed term and re-appointed with gaps (xiii) When the services of a probationer were discontinued after completion of 22 years and no retrenchment compensation was paid (xiv) When termination qualifications
of
a
workman
was
for
not
holding
minimum
(xv) When new service conditions were imposed and services were terminated (xvi) When repeated breaks were given (xvii) When an ad-hoc/temporary worker has worked for 240 days (xviii) When the worker worked on basis of daily wages and worked for 4 years (xix) When termination without compensation has been effected after three years of service (xx) When services of the employee were discontinued (xxi) When compensation was not paid at the time of closure of the plant (xxii) When the services of a daily wager were terminated without paying retrenchment compensation (xxiii) When the notice of retrenchment has not been given to the worker (xxiv) When not even an offer to pay retrenchment compensation was made (xxv) When a worker absented himself for 3 weeks and his name was struck-off from the muster-rolls (xxvi) When the services of a workman engaged on temporary post were terminated (xxvii) When the employer presumed that the workman had abandoned the job and called him to collect his dues but did not make the payment (xxviii) When the services of a workman appointed as a casual clerk having worked for more than 240 days were terminated (xxix) When
the
retrenched
employees
were
called
upon
next
day
of
retrenchment to collect their dues (xxx) When Retrenchment is for rationalisation-notice of change will be imperative (xxxi) Effect of non-compliance with provisions of Section 25F or 25G (xxxii) Service of notice to appropriate Government (xxxiii) Defect in notice, if vitiates it (xxxiv) When termination of service is not retrenchment (b) Special Provision Relating to Retrenchment in an Establishment (c) Conditions Precedent for Valid Retrenchment (d) Application for Grant of Permission for Retrenchment (e) Deemed Permission for Retrenchment FORMATS (i) Format of notice of retrenchment (ii) Format of notice of retrenchment when there is heavy recession in the trade Important clarifications Procedure for calculation of retrenchment compensation (iii) Format of notice for permission for retrenchment of workmen to be given by an employer under Clause (d) of sub-section (1) of Section 25N of the Industrial Disputes Act, 1947 (14 of 1947) (i) Notice of, and application for, retrenchment (ii) Notice of retrenchment 1. Retrenchment--Meaning of The concept of 'retrenchment' before 1953, when its definition was inserted in the Industrial Disputes Act, always meant termination of service because the workmen had become surplus either on account of the fall in production or because of rationalisation or economy necessary to be effected, etc. In other words, the term, 'retrenchment' had been read down as relating to only to the termination of surplus staff prior to its incorporation in Section 2(oo) of the Industrial Disputes Act by Amending Act No. 43 of 1953. The definition of the term, as inserted in Section 2(oo) by the Industrial Disputes (Amendment) Act No. 43 of 1953 unmistakably expands the semantics of 'retrenchment'. The definition is very wide. It is in two parts. The first part is exhaustive and it lays down what the term, 'retrenchment' means while the second part excludes termination of service for certain reasons specified therein from the purview of the definition. The first part of the definition, when analyzed, consists of the following four essential requirements-1. termination of the service of a workman; 2. by the employer; 3. for any reason whatsoever; and
4. otherwise than as a punishment inflicted by way of disciplinary action. The words, 'for any reason whatsoever' indicate that the definition is in very wide terms and unqualified and unmitigated except with the three limited exceptions made in sub-clauses (a), (b), (bb) and (c). The second part of the definition of the term, 'retrenchment' consists of three sub-clauses (a), (b), (bb) and (c) which specifically exclude from the ambit of the definition, the termination of service of a workman for any of the following reasons-(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. (c) termination of the service of a workman on the ground of continued illhealth.1 Broadly speaking, the termination of the service of a workman by the employer which is not by way of disciplinary action or which is not a case of voluntary retirement, superannuation or non-renewal of contract of employment or termination of service due to continued ill-health, would fall within the definition of 'retrenchment' to put it into a different terminology 'retrenchment' as defined in Section 2(oo) and as used in Section 25F of the Act, has no wider meaning than the ordinary accepted connotation of the word, which means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as punishment inflicted by way of disciplinary action, and for any of the reasons falling under sub-clauses (a), (b) and (c) of the definition. The above view that 'retrenchment' means discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as punishment inflicted by way of disciplinary action, and for any of the reasons falling under subclauses (a), (b) and (c) of the definition was not followed in subsequent cases decided by their Lordships of the Supreme Court and explained by the various High Courts wherein it has been held that 'retrenchment' comprehends every case of termination by the employer than that which has been specifically excluded under _____________ 1. Barsi Light Railway Co. Ltd. v. K.N. Jglekar, AIR 1957 SC 121: (1956-57) 11 FJR 317: 1957 (1) LLJ 243:
MANU/SC/0069/1956 :
1957 SCR 121; see also Pipraich Sugar Mills Ltd. v. Pipraich Sugar Milts
Mazdoor Union, 1957 (1) LLJ 235: (1956-57) 11 FJR 262:
MANU/SC/0064/1956 :
AIR 1957 SC 95: (1950-
57) 6 SC LJ 3621; Hariprasad Shivshankar Shukia v. AD Divelkar, (1950-57) 6 SC LJ 3621.
the definition. In other words, it has been held in subsequent cases that the definition of the word, 'retrenchment' in Section 2(oo) of the Industrial Disputes Act, 1947 is not limited only to the cases of discharge of surplus labour but applies to other cases of termination of service of a workman by the employer for any reason whatsoever as well except by way of punishment for disciplinary action, voluntary retirement, superannuation or non-renewal of contract of employment and termination for continued ill-health.1 The Bombay High Court, in one case has held that wherein the court held that an analysis of the definition reveals four essential ingredients, namely, (1) there must be a termination of the service of a workman, (2) the termination must be by the employer, (3) for any reason whatsoever, and (4) otherwise than as by way of punishment inflicted by way of disciplinary action. The essential and basic element of
'retrenchment' is surplusage. In other words, when an employer in an existing and running concern or industry, finds that he has staff or labour which is in excess of the number required, the services of such as are in excess can be terminated and such termination would be termed retrenchment. The termination of service of workers due to closure of the business or industry cannot be described as retrenchment. Surplusage in a running business or industry is the very basis of retrenchment. When can an employer be faced with the problem of surplusage, i.e., having surplus staff or labour? The answer is obvious. When may want to cut down on expenditure or he may want to introduce new labour saving devices. Such is the motivation for pruning the labour or staff found to be in excess. In that event, the employer can tell his workers, "Amongst you all, A, B and C are in surplus I, therefore, do not require you. I terminate your services. Take your compensation under Section 25F of the Industrial Disputes Act, 1947 and go". That is the concept of retrenchment. It is merely the discharge of surplus ________________ 1. State Bank of India v. N. Sundara Money, 1976 (1) LLJ 478 (SC):
MANU/SC/0315/1976 :
(1976) 1 SCC
822; Hindustan Steel Ltd. v. State of Onssa, 1977 (1) LLJ 1 (SC); Delhi Cloth & General Mills Ltd., v. Shambhu Nath Mukherjee,
MANU/SC/0225/1977 :
AIR 1978 SC 8: 1978 (36) FLR 216: (1977) 4 SCC 415; Dabur (Dr. S.K.
Burman) Pvt. Ltd. v. State of West Bengal, 1978 Lab 1C 1581; Sarjoo Prasad v. Regional Manager, State Bank of India, 1979 (38) FLR 433; Assistant Personnel Officer, Southern Railway, Olvakkot v. K.T. Antony, 1978 (2) LLJ 254; The Punjab State Land Development & Reclamation Corporation Ltd. v. The Presideing Officer, Labour Court, 1990 LLR 410.
staff or labour in a running or continuing business or industry, for certain reasons as illustrated above. If the termination is for any other reason, say for loss of confidence, it is not retrenchment. Thus the expression, 'for any reason whatsoever' in Section 2(oo) of the Industrial Disputes Act, 1947, even though seemingly wide, must necessarily draw within its ambit, not any act of commission or omission on the part of the workman, but the concept of the termination of the surplus workers' service is due to reasons such as economy, rationalisation in industry, installation of new laboursaving machinery or device, standardisation or improvement of plan or technique and the like.1 It is the conjunction with such reasons that the words, 'any reason whatsoever' must be read and construed. Thus, even without resorting to the dictionary meaning of 'retrenchment', the same meaning can be extracted from Section 2(oo) itself. This shows that the words 'for any reason whatsoever' are not so very wide as to include termination of service on the ground, say, of insubordination or inefficiency or loss of confidence. The expression 'for any reason whatsoever' must necessarily be read in conjunction with reasons like, economy, rationalisation in industry, installation of a new labour-saving machinery, etc. Following the Kerala and Delhi High Courts, it was held that the criterion for retrenchment is superfluity or surplusage of labour or staff in a running business, caused by any reason whatsoever, such as economy, rationalisation in industry, installation of new labour-saving machinery or devices, standardisation or improvement of plant or technique and the like. Surplusage or superfluity is the fulcrum round which the concept of retrenchment must turn. In a line, if there is no superfluity, there can be no retrenchment. The decision of the Bombay High Court in Kamlesh Kumar's case (supra) was not followed in subsequent cases. In one case, the question posed by the court was, whether the sine qua non for retrenchment is the presence of surplus labour. It was held that this concept has been exploded l ong ago "and the Act itself has been amended in 1953 so as to define 'retrenchment' as meaning the termination by the employer of the services of a workman for any reason whatsoever. Therefore, the reason for termination of the services does not enter _______________ 1. Kamlesh Kumar Rajnikant Mehta v. The P.O. Central Govt. I.T. No. 1, 1979 (39) FLR 329.
the judicial verdict in considering whether the workman is entitled to any benefit under Section 25F of the Act. In short, it was held that the sine qua non for retrenchment is not the presence of surplus labour.1 A similar view unlike the one taken in the above case by the Madras High Court has been taken in another case by Patna High Court. In general parlance, retrenchment means the discharge of surplus labour or staff by the employer, otherwise than as a punishment. But, while defining the word 'retrenchment' the Act says that it will include termination by the employer 'for any reason whatsoever'. This has been interpreted to mean that the word 'retrenchment' used in the Act includes within its compass all types of terminations by the employer and the reasons leading to such terminations are irrelevant for all practical purposes.2 The word 'termination' in context with the word 'retrenchment' was interpreted to mean that the service of the employee concerned should have come to an end by any means whatsoever. This must be in contradiction to coming to an end in the natural course of events like superannuation .3 Again, the same question arose for consideration in another case where an attempt was made to question the correctness of the ratio of the aforesaid judgment of the Supreme Court by counsel concerned saying, that the interpretation given to the word 'retrenchment' was in conflict to the interpretation given by the Supreme Court in its earlier judgments, specially in the case of Hart Prasad Shivshanker Shukla v. A.D. Divelkar.4 Their Lordships, after referring to the earlier judgment, expressed the view that there was no conflict and it was observed that in the case of State Bank of India v. Sundaramony5, the scope of the word 'retrenchment' has been rightly interpreted. It may be mentioned that in the case of Harivrasad Shivshanker Shukla (supra), it had been pointed out that the words 'for any reason whatsoever' used while defining 'retrenchment' would be against ______________ 1. Raghavachari v. Madras Printers and Lithographers Association, 1980 (4) FLR 76. 2. Mahabir v. D.K. Mittal, 1980 Lab IC 119. 3. State Bank of India v. N. Sundaramony, 197:
AIR 1976 SC 1111: 1976 (32) FLR
MANU/SC/0315/1976 : (1976) 1 SCC 822.
4. AIR 1957 SC 121: 5.
MANU/SC/0315/1976 :
MANU/SC/0069/1956 : 1957 SCR 121: 1957 SCA 57.
MANU/SC/0315/1976 : AIR 1976 SC 1111: MANU/SC/0315/1976 : (1976) 1 SCC 822.
the entire scheme of the Act.1 Again in the under noted case, 2 it was held that striking off the names of the workmen from the rolls, will amount to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act, 1947. In all these cases, it was also held that whenever the employer purports to terminate the service of an employee, which amounts to retrenchment within the meaning of the Act, it has to be in conformity with the requirements of Section 25F, and once there is a noncompliance, order of termination shall be vitiated. Retrenchment, transfer and closure involves a change or stoppage of service of workers; imperative condition for retrenchment is that the employer should fulfil the requirement of Clauses (a) and (b) of Section 25 of the Industrial Disputes Act, 1947. 3 A retrenched workman is entitled to re-employment in preference to others when the employer proposes to take into his employment any other person, as per the provisions contained in Section 25H of the Act. This shows that the termination of service of the workman should have been from a post to which he could have been continued, if the post is such that its continuance in not possible, then the termination of service of the workman from that post cannot amount to retrenchment as defined under the Industrial Disputes Act, 1947.4
In order to remove the cobwebs about the definition of retrenchment, finally, in the eleven appeals before the Supreme Court the question arose as to whether the definition of 'retrenchment' means termination by the employer of the service of a workman as surplus labour for any reason whatsoever, or it means 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, and those expressly excluded by the definition. Also whether the word 'retrenchment' in the definition has to be understood in its narrow, natural and contextual meaning or in its wider literal meaning. The Full Bench ______________ 1. AIR 1957 SC 121. 2. Delhi Cloth and General Mills Co. Ltd. v. Shambhu Nath Mukherjee,
MANU/SC/0225/1977 : AIR 1978 SC 8:
1978 (36) FLR 216: (1977) 4 SCC 415. 3. Hinduja Casuals v. A. Vittal Rao, 1991 (63) FLR 21 (Sum). 4. Koodaranji Service Co-operative Bank (Ltd.) v. M.M. Lissy, 1993 (6) FLR 1039.
of the Supreme Court held that 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section.1 This view has been confirmed by a subsequent Constitution Bench while upholding the validity of Section 25N of the Industrial Disputes Act, 1947 providing prior retrenchment in an industrial establishment where 100 or more than 100 workmen were employed during preceding 12 months.2 Section 2(oo) of the Act defines 'retrenchment' as the termination by the employer of the services of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of "disciplinary action". Only three specific categories have been excluded from the definition of "retrenchment", namely, (1) the voluntary retirement of the employee; (2) superannuation retirement, if the contract of employment contains a provision for such retirement; and (3) termination of services on grounds of continued ill-health of the employee. After the 1957 Supreme Court decision in the case of Hariprasad Shivshankar Shukla v. AD Divelkar (supra), Parliament had added Sections 25F and 25FFF to provide compensation for workmen also in the case of transfer and closure of undertakings. The court could not ignore the manifest object of all these provisions to compensate the workman for loss of employment, so as to provide him the wherewithal to subsist till he finds fresh employment. Thus due weight must be given to the words "for any reason whatsoever". If these words are understood to mean what they plainly say then it is difficult to escape the conclusion that the expression "retrenchment" could not be limited to only those cases where workers are declared surplus but to include every termination of service of a workman by an act of the employer. Applying these principles it was held that it is difficult to make any distinction between termination of service for one reason and termination of service for another. This interpretation necessarily followed from the wide language of the definition of 'retrenchment' in the Act. Thus, the discharge of an employee from an establishment even on the ground that the employee failed to pass the test which would have confirmed him in service is retrenchment under the Act and hence such discharge _____________ 1. Punjab Land Development and Reclamation Corporation v. The Presiding Officer, Labour Court, Chandigarh, 1990 LLR 410 (SC): (1990) 2 Lab LJ 70. 2. Workmen of Meenakshi Mills v. Meenakshi Mills Ltd., 1992 LLR 481 (SC).
would be set aside if the employer failed to give one month's notice to the employee or
wages in lieu thereof as well as retrenchment compensation.1 Relying upon the recent pronouncement of the Supreme Court in Santosh Gupta v. State Bank of Patiala,2 that the expression 'retrenchment' must include every termination of the service of a workman by an act of employer irrespective of the nature of the reason for such termination, it has been further held that the termination of service by the Corporation would constitute 'retrenchment' notwithstanding the fact that the employees were appointed temporarily for a specified period of 89 days only under Rule 9(a)(i) of the Kerala State and Subordinate Service Rules.3 Termination of service of a workman having less than one year's continuous service during probationary period would also amount to retrenchment. 4 Termination before reaching the age of superannuation prescribed in the rules would fall within the definition of the word, 'retrenchment'.5 But termination of services as punishment though without holding a departmental enquiry would not fall within the definition. 6However, once the object of Sections 25F, 25FF and 25FFF of the Act, which is to compensate the workmen for loss of employment is understood and the true nature of the compensation which these provisions provide is realised, it is difficult to make any distinction between termination of service for one reason and termination of service for another reason.7 In one case it has also to be kept in view that whether the action of the petitioner in striking off the name of the respondent-workman from the muster-roll was penal in nature or not is a mixed question of law and facts. Such a contention having not ________________ 1. Santosh Gupta v. State Bank of Patiala, 1980 (40) FLR 373 (SC). 2. 1980 LLR 73: 1980 (40) FLR 373. 3. P. Prabhakaran v. G.M. Kerala State Road Transport Corporation, 1981 (42) FLR 113: 1981 LLR 14. 4. Mohanlal v. Bharat Electricals Ltd, 1981 LLR 44 (SC). 5. P.S. Desikechari v. The Mall, 1961 (2) LLJ 771. 6. Nezv India Assurance Co. Ltd., Bhopal v. Balbtr Singh Kera, 1981 LLR 27: 1981 Lab IC (NOC) 19. 7. Santosh Gupta v. State Bank of Patiala, 1980 (40) FLR 373.
been invited on the matter, cannot, therefore, be permitted to be raised for the first time before us.1 However, in one case, the Supreme Court has put at rest all controversies in holding that unauthorized absence from duty amounted to termination of service and absence from duty for 8 consecutive days amounts to misconduct and termination of service on such grounds without complying with minimum principles of natural justice would not be justified. It is settled law that certified Standing Orders have statutory force which do not expressly exclude the application of the principles of natural justice. It is a cardinal point that has to be borne in mind, in every case, as to whether the person concerned should have a reasonable opportunity of presenting his case and the authority should act fairly, justly, reasonably and impartially. It is not so much to act judicially as to act fairly, namely, the procedure adopted must be just, fair and reasonable in the particular circumstances of the case. In other words, application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority to act arbitrarily effecting the rights of the concerned person. An order involving civil consequences must be made consistently with the rules of natural justice. Principles of natural justice must be read as under Standing Order No. 13(2)(iv). Otherwise it would become arbitrary, unjust and unfair, violating Article 14 of the Constitution of India, when so read, the impugned action is violative of the
principles of natural justice.2 In the above case the Supreme Court observed that Section 2(oo) of the Act defines 'retrenchment' to mean 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 ________________ 1. Bharat Heavy Ekctricals Ltd. v. R.V.K. Rao, 1990 (1) LLJ 87. 2.
D.K.
1995:
Yadav
v.
M/s.
J.M.A.
Industries
Ltd.,
1993
LLR
584
(SC):
1993
AIR
SCW
MANU/SC/0529/1993 : (1993) 3 SCC 259. (bb) termination of the service of the workman as a result of the non -removal 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 illhealth.
Section 25F prescribes mandatory procedure to be followed before the retrenchment becomes valid and legal and violation thereof visits with invalidation of the action with consequential results. In Punjab Land Development and Reclamation Corporation Ltd., Chandigarh v. Presiding Officer, Labour Court, Chandigarh, JT 1990 (2) SC 489: (1990) 3 SCC 682, the Constitution Bench considered the scope of the word 'retrenchment' defined by Section 2(oo) and held: Analysing the definition of retrenchment in Section 2(oo) we find that termination by the employer of the service of a workman would not otherwise have covered the cases excluded in clauses (a) and (b) namely, voluntary retirement and retirement on reaching the stipulated age of retirement or on the grounds of continued ill-health. There would be no volitional element of the employer. Their express exclusion implies that these would otherwise have been included. It was further held: Right of the employer and the contract of employment has been effected by introducing Section 2(oo). The contention of the management to terminate the service of an employee under the certified Standing Orders and under the contracts of employment was negative holding that the right of the management has been affected by introduction of Section 2(oo) and Section 25F of the Act. The second view was that the right as such has not been affected or taken away, but only an additional social obligation has been imposed on the employer to abide by the mandate of Section 25F of the Industrial Dispute Act, 1947 to tide over the financial difficulty which sub-serves the social policy. The court relied on the maxim--Stat proratione valuntaspopuli; the will of the people stands in place of a reason. The court concluded that the definition in Section 2(oo) of the Act of retrenchment
means "the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section". section" .1 Same view was taken by three Benches of three Judges of the Supreme Court in State Bank of India v. Sri N. Sundara Money; (supra); Delhi Cloth & General Mills Ltd. v. Shambhu Nath Mukherjee (supra); and Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, (1977) 1 SCR 586: AIR 1977 SC 31 and two Benches of two Judges in L. Robert D'Souza v. Executive Engineer, Southern Railway, MANU/SC/0152/1982 : (1982) 1 SCC 645 and H.D. Singh v. Reserve Bank of India, India ,MANU/SC/0217/1985 : (1985) 4 SCC 201: AIR 1986 SC 132: 1985 Lab IC 1733 took the t he same view. The Allahabad High Court has held that the admitted question in this case is that the workman's name was struck off from the muster roll. This was done by the management on account of his alleged continued absence from duty though he was served with notice also to resume duty and despite the notice he, according to the management did not join duty. The Labour Court has taken it as the case of 'abandonment' and rejected his claim. It was proven that he did not abandon the service nor did he remain absent willfully. He was said to have fallen ill, which prevented him from attending his duties and on getting well he was said to have joined his duties but his name was already struck off from the muster-rolls. He was prevented from resuming his work. The management's case did not fall within the exceptions mentioned in the definition of 'retrenchment'. 'retrenchment' .2In another case, the name of the petitioner-workman was struck off from the attendance register only on the ground that he remained absent without any intimation. Such abandonment of job by the workman amounts to termination and consequently retrenchment within the meaning of Section 2(oo) of the Act. Act .3 The Madhya Pradesh High Court has also held that striking off the name of a workman from the rolls by the management was held to be termination within the meaning of the term 'retrenchment' as occurring in Section 2(oo) of the Act. The ______________ 1. Punjab State Land Development & Reclamation Corporation Ltd., v. The Presiding Officer, Labour Court, 1990 LLR 410. 2. Arun Kumar Mathur v. Labour Court, Allahabad, 1993 LLR 139. 3. Hari Singh v. The Presiding Officer, Industrial Tribunal-cum-Labour Court, Rohtak, 1993 LLR 385.
termination of service for whatsoever reason amounts to retrenchment and where it is not followed by the procedure under law, it is illegal. illegal.1 2. Notice of retrenchment If any employer desires to retrench any workman employed in his industrial establishment who has been in continuous service for not less than one year under him (hereinafter referred to as 'workman' in this rule and in Rules 77 and 78), he shall give notice of such retrenchment as in Form P to the Central Government the Regional Labour Commissioner (Central) and Assistant Labour Commissioner (Central) and the Employment Exchange concerned and such notice shall be served on that Government, the Regional Labour Commissioner (Central), the Assistant Labour Commissioner (Central), and the Employment Exchange concerned by registered post in the following manner:-(a) Where notice is given to the workman, notice of retrenchment shall be sent within three days from the date on which notice i s given to the workman; (b) where no notice is given to the workman and he is paid one month's wages in lieu thereof, notice of retrenchment shall be sent within three days from the
date on which such wages are paid; and (c) where retrenchment is carried out under an agreement which specifies a date for the termination of service, notice of retrenchment shall be sent so as to reach the Central Government, the Regional Labour Commissioner (Central), the Assistant Labour Commissioner (Central), and the Employment Exchange concerned, at least one month before such date: Provided that if the date of termination of service agreed upon is within 30 days of the agreement, the notice of retrenchment shall be sent to the Central Government, the Regional labour Commissioner (Central), the Assistant Labour Commissioner (Central), and the Employment Exchange concerned, within 3 days of the agreement. ______________ 1. Government Nehru Degree College, Sabalgarh District Morena v. Ashok Kumar Verma, 1994 LLR 857.
3. Notice of, and application for, retrenchment of an industrial establishment under Chapter VB Notice or, as the case may be, the application under sub-section (1) of Section 25N for retrenchment shall be served in Form PA and served on the Central Government or such authority as may be specified by the Government under the said clause either personally or by registered post acknowledgement due and where the notice is served by registered post, the date on which the same is delivered to the Central Government or the authority shall be deemed to be date of service of the notice for the purposes of sub-section (4) of the said section. The notice or, as the case may be, the application, shall be made in triplicate and copies of such notice or, as the case may be, the application, shall be served by the employer on the workmen concerned and a proof to that effect shall also be submitted by the employer along with the notice or, as the case may be, the appli cation. The employer concerned shall furnish to the Central Government or the authority to whom the notice for retrenchment has been given or the application for permission for retrenchment has been made, under sub-section (1) of Section 25N, such further information as the Central Government or, as the case may be, the authority considers necessary for arriving at a decision on the notice or, as the case may be, the application, as and when called for by such authority so as to enable the Central Government or he authority to communicate its permission or refusal to grant permission within the period specified in sub-section (4) of Section 25N of the Industrial Disputes Act. 4. Object of Chapter VB of the Industrial Disputes Act The very purpose of Chapter VB is to make special provisions in relation to certain categories of industrial establishments where not less than 300 workmen were employed continuously all around that year. The matter of retrenchment of those workmen employed in such industrial establishments is governed by the provisions of Chapter VB which is a special Code relating to such large industrial establishments. Section 25F occurring in Chapter VA, which is a general section occurring in a general chapter, has no application to these establishments to the extent that they are specially governed by Chapter VB. The argument of the Company, therefore, that its action of retrenchment is justifiable under Section 25F cannot be accepted. Under Section 25F a workman is entitled only to one month's notice whereas under Section 25-N he is entitled to three months' notice. These differences in the quantum of protection to which a workman is entitled would clearly show that the parliament intended that where Section 25N applies the application of Section 25F shall be
excluded. excluded.1 It is to be seen is whether the manufacturing unit of CONFED at Faridabad employing 16 persons which is a factory is distinct from the retail outlets owned by it throughout the State of Haryana and outside. If so, then obviously the retail outlets cannot be clubbed with the factory and would not be termed as 'industrial establishments' as defined in Chapter VB of the Act and the said Chapter would not apply. As would be clear from the definition of 'Factory' as reproduced above, it means ay premises including the precincts thereof whereupon 10 or more workers are working or 20 or more workers and in any part thereof manufacturing process is being carried on with or without the aid of power. If these two conditions are satisfied, the entire premises including the precincts constitute a factory though the manufacturing process is carried on in only a part of the premises. The premises constituting a factory may be a building or open one and/or both and inside the same boundary wall, three may be two or more premises i.e., premises used in connection with manufacturing process may constitute factory and other premises within the same compound wall may be used for purposes unconnected with any manufacturing process and may form no part of the factory. This being the situation in law the site of manufacturing unit at Faridabad is obviously distinct from the site or premises where retail outlets function and are distinct from each other. The unit of Faridabad is certainly a factory but since no manufacturing process is being carried on at any of the retail outlets which are distinct from the premises of the factory, such outlets cannot be considered to be a factory and, therefore, they are not 'industrial establishments' within the meaning of Chapter VB of the Act. Even the number of persons employed at each outlet does not exceed three. For this reason as well none of the outlets can be taken to be a factory. The _____________ 1. T. Gattiah v. Commissioner of labour, 1981 (43) FLR 203: 1981 (58) FJR 327: 1981 (2) LLJ 54.
fact that the manufacturing unit at Faridabad and the outlets are owned by CONFED does not furnish any ground to club them together for determining the applicability of Chapter VB. VB.1 The Petitioner Company is challenging the legality of the order dated August 6, 1983 passed by Minister of State for Law and Judiciary, Labour and Finance, Government of Maharashtra, Maharashtra, rejecting the application appli cation filed by the petitioner-Company under Clause (c) of sub-section (1) of Section 25N of the Industrial Disputes Act, 1947. In accordance with the provisions of Section 25N(2), the petitioner company made an application dated May 7, 1973 addressed to the Secretary to the Government of Maharashtra Maharashtra in the prescribed form i.e., form XXXVI read with Rule 80A(1) and Section 25N(1)(c) of the Act requesting for permission to retrench 83 workmen. The Minister of State thereafter passed the impugned order on August 6, 1983 refusing permission to retrench the workmen. Minister of State who passed the impugned order had no authority or jurisdiction to do so because the Mi nister of State could not have exercised the powers of the Government and was not an authority appointed under Section 25N of the Act. In view of this conclusion, the impugned order was required to be quashed. Minister of State did not take into consideration the various facts of the matter and proceeded to pass the order refusing permission on considerations which were irrelevant. Even if I would have come to the conclusion that the Minister of State had jurisdiction, still the impugned order was required to t o be quashed for non-application of mind. In this view of the matter the petitioners must succeed and the order of the Minister of State is required to b e quashed. quashed.2 The provisions of Section 25N(6) (Proviso) of the Act requiring the Tribunal to pass award within a period of thirty days from the date of the reference are directory and not mandatory and, therefore, the Tribunal has not become functus officio as contended by the Union of Workers.
Hence, the Industrial Tribunal was right in holding that Section 25N(6) of the Act, which requires the Tribunal to pass an award within a period of thirty days from the date of reference, is _____________ 1. Parmanand S/o Sh. Mam Chand v. State of Haryana, 1993 LLR 564 (P&H HC). 2. Multiweld Wire Co. Pvt. Ltd. v. State of Maharashtra, 1985 (50) FLR 39.
directory and not mandatory and therefore, on the expiry of the said time limit the reference will not lapse but will survive for adjudication. The Tribunal was wholly right in coming to the conclusion that the said provision is directory and the Tribunal does not become functus officio, nor will the reference lapse, only because the period of thirty days is over.1 The provisions of Section 25N are arbitrary and unconstitutional but Clause (a) of Section 25N was not struck down which means that it is still operative. On compliance of this clause, retrenchment is effective. Since the procedure prescribed was not followed, retrenchment is irregular and stands vi tiated.2 Since Haryana Land Reclamation and Development Corporation Ltd., is having no particular premises or precincts, hence Section 25N would not apply to it .3 5. When retrenchment contrary to provisions of Section 25N of the Act The object of Chapter VB is to make special provisions in relation to certain categories of Industrial establishments where not less than 300 workmen were employed continuously all round the year. The matter of retrenchment of those workmen employed in such industrial establishments is governed by the provision of Chapter VB which is a special Code relating to such large industrial establishments. Section 25F occurring in Chapter VA, which is a general section occurring in a general chapter, has no application to these establishments to the extent that they are specially governed by Chapter VB. The argument of the Company, therefore, that its action of retrenchment is justifiable under Section 25F cannot be accepted. Under Section 25F a workman is entitled only to one month's notice whereas under Section 25N he is entitled to three month's notice. These differences in the quantum of protection to which a workman is entitled would clearly show that the Parliament intended that where Section 25N applies the application of Section 25F should be excluded.4 ___________ 1. Association of Engineering Workers v. Indian Hume Pipe Co. Ltd., 1985 (51) FLR 237. 2. B.L. Sharma v. Presiding Officer, Labour Court, 1991 (62) FLR 373, 375 (P&H HC). 3. Haryana Land Reclamation and Development Corporation Ltd. v. Pawan Kumar, 1994 (69) FLR 561: 1994 (2) LLJ 1198 (P&H HC). 4. T. Gattaiah v. Commissioner of Labour, 1981 (43) FLR 203.
Retrenchment means not termination of service as surplus labour. Factors envisaged by sub-section 7 for grant or refusal of permission not a factor required to be taken into consideration in exercise of power under Section 25(2).1 Where not more than 16 persons was employed at manufacturing unit and order retrenching the petitioner passed by CONFED without complying provisions of Section 25N which was held valid.2Where permission for retrenchment petition rejected, held that writ need not be issued.3 Provisions of retrenchment does not distinguish between permanent and temporary workman.4 The power to grant or refuse permission for retrenchment of workmen that has been
conferred under sub-section (2) has to be exercised on an objective consideration of the relevant facts after affording an opportunity to the parties having an interest in the matter and reasons have to be recorded in the order that is passed. Keeping in view the facts that power to specify the authority which can exercise the power conferred under sub-section (2) of Section 25N has been conferred on the appropriate Government to specify the authority does not render the provisions of Section 25N as arbitrary on unreasonable.5 The facts of one case revealed that as a result of sharp decline in demand of the goods, a large number of workmen in the petitioner's factory became surplus and therefore applied before State Government under Section 25N of the Act for permission to retrench 214 workmen. The State Government by an order giving reasons refused permission. It has been held that the sub-section (2) of Section 25N of the Act enjoins the appropriate Government to grant or refuse permission and to record in writing the reasons. What should be the reasons for granting or not granting the permission is not _________________ 1. Workmen, Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., 1995 Lab IC 1 (SC):
MANU/SC/0512/1992 :
AIR
1994 SC 2696. 2. Gujarat S.R.T.C. v. Kochraji B. Motiji Parmar, 1994 (68) FLR (Sum) 3 (Guj HC). 3. New Standard Engg. Co. Ltd. v. Union of India, 1994 (2) LLJ 341: 1994 (2) LLN 838 (Bom HC). 4. Pratap Kumar Patnaik v. Managing Director, Orissa State Road Transport Corporation, 1991 (1) Lab IC 954 (Ori HC). 5. Workmen of Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., 1992 (65) FLR 1: 1992 (2) LLJ 294: 1992 LLR 481 (SC).
expressly provided in sub-section (2) of Section 25N of the Act. But the order must be for reasons and the reasons must have objective nexus both with the objects and scheme of the Act are to facilitate industrial harmony by helping conciliation and avoiding industrial disputes. Anything which helps conciliation, facilitates and furthers industrial adjudication and thereby restores industrial harmony could be harmony within the objects and purposes of the industrial Disputes Act. Therefore, the reasons for grant or non-grant of permission under sub-section (2) of Section 25N of the Act must be relevant and germane to the objects of the Act, the authorities concerned have fairly and bona fide arrived at a decision, such a decision cannot be interfered with by the Court even tough the High Court may be inclined to take a different decision on the facts. If on the consideration and in view of the impact of the retrenchment for industrial disputes at large, the State Government has refused permission, it is not possible to say that such refusal has been collateral grounds not germane to the section. The managerial discretion has been largely fettered on the grounds of industrial harmony and powers have been given to the authorities under the Act to question and control the managerial discretions in many fields .1 The Supreme Court has held that the object of Section 25N is meant to prevent avoidable hardship to employees and to i ncrease production and to preserve peace and harmony. Restrictions imposed was held in the interest of general public.2 Sub-section 4 of Section 25N The legal fiction embodied in sub-section (4) of Section 25N has to operate itself. As already noticed, admittedly the Labour Commissioner did not communicate his order granting or refusing to grant permission to the employer's application seeking permission to retrench 270 workmen within the period of 60 days from the date on which the said application was received, i.e., by December 30, 2001. This being the
factual position, as an inevitable corollary it follows that the Labour Commissioner granted permission to the employer for retrenchment of 270 workmen mentioned in its application. For the reasons aforesaid, the impugned order dated January 30, 2002 (Annexure-5) _____________ 1. Electrosteel Castings Limited v. State of West Bengal, 1978 (37) FLR 255. 2. Workmen, Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., 1995 Lab IC 1 (SC):
MANU/SC/0512/1992 :
AIR
1994 SC 2696.
communicated by the Labour Commissioner beyond the statutory period of 60 days cannot be sustained in law and the same is hereby quashed.1 6. Defect in application seeking permission for retrenchment-- Effect of In order, therefore, to retrench workmen on valid reasons, the permission should have been sought for and obtained prior to such retrenchment and at the time of retrenchment either the workmen should be paid wage for three months in lieu of notice or the retrenchment should take effect after a period of three months and also at the time of retrenchment, the retrenchment compensation will have to be paid. In this case, as already stated, even though the management sent a notice on 7 the March, 1978 under Section 25N (1)(c) it did not wait for either the permission or deemed permission but retrenched the workmen on 11th March, 1978 itself. This is clearly contrary to the provisions of Section 25N(1)(c). Accordingly, that retrenchment is illegal. Under Section 25N(3), if the permission sought for was not refused within the period of three months of the date of service of notice under Clause (c) of sub-section (1), the competent authority shall be deemed to have granted permission for such retrenchment. It is not the mere sending of communication to the second respondent that he wants to retrench some workmen that is enough. Unless the necessary particulars are given and necessary court-fee paid under law, there is no proper application for the authority to consider the same. Till the application is in proper form, the Commissioner could not consider the application on merits and as such, the period will have to be considered only after the application had been complied with in full. If that is so, in this case, the application was represented on 12th April, 1978 and it was disposed on 3rd July, 1978, within the period of limitation prescribed hereunder. Hence no illegality was committed.2 Where permission to retrench employees was declined by respondent Minister, in the meantime the company was declared as a sick industry and a scheme drawn up by B.I.F.R. In such subsequent developments relief of seeking permission to retrench, ____________________ 1. O.C.L. India Ltd. v. State of Orissa, 2003 (96) FLR 814: 2003 (1) LLJ 250 (Ori HC). 2. Sree Meenakshi Mills Ltd. v. Madurai Textiles Workers Union (CITil), 1979 (38) FLR 213.
no longer survives, not necessary to exercise powers under writ jurisdiction .1 (a) When Retrenchment of a Workman is Held to he Illegal (i) When retrenchment retrenchment
compensation
not
paid
at
the
time
of
By the use of the words, no workman shall be retrenched until......Section 25F of the Industrial Disputes Act, 1947, indicates that there can be no retrenchment until conditions precedent mentioned therein are satisfied. This means that even if the workmen have received a sum paid to them 'in full and final settlement' of their accounts, they
would still be entitled to challenge the order of retrenchment for noncompliance of statutory requirements, in case full compensation has not been paid since there cannot be estoppel against the law, particularly when non-compliance with the statute goes to the root of the matter.2 Section 25F postulates following three conditions to be fulfilled by an employer white effecting retrenchment of workmen:-(1) One month's notice in writing indicating the reasons for retrenchment or wages in lieu of notice. (2) Payment of compensation equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and (3) Notice of the appropriate Government in the manner prescribed in the rules. It would, thus, be seen that two conditions are to be satisfied before a workman can be retrenched under Section 25F of the Act. If either of these two conditions are not fulfilled then the retrenchment or termination of service of a workman by the employer is invalid and void. Hardly there is any issue of any reporter/journal reporting the labour cases decided by the Supreme Court and High Courts when one or more judgments are not given about legality of _______________ 1. New Standard Engineering Co. Ltd. v. Union of India, 1993 (67) FLR 564: 1993 (2) CLR 556 (Bom HC). 2. Workmen of Sublong Tea Estate v. Outgoing Management of Subong Tea Estate,
MANU/SC/0173/1963 :
AIR 1967 SC 420: 8 FLR 229; Umesh Chandra v. State of Uttar Pradesh, 1991 LLR 638.
retrenchment more particularly when compensation is either not pai d or delayed when a workman has worked for 240 days or that the procedure prescribed under Section 25G of the Act has not been followed. Hereinbelow some important cases are given as to when retrenchments are held to be illegal for non-payment of compensation simultaneously at the time of retrenchment. 1. State of Bombay v. Hospital Mazdoor Sabha, MANU/SC/0200/1960 : AIR 1960 SC 610: 1960 SCJ 679. 2. Bombay Union of Journalists v. State of Bombay, MANU/SC/0135/1963 : AIR 1964 SC 1617: 1964 (6) SCR 22. 3. State of Rajasthan v. Labour Court, Kota, 1996 LLR 82. 4. Gamon India Ltd. v. Niranjan Dass, (1984) 1 SCC 501. 5. Santosh Gupta v. State of Patiala, AIR 1976 SC 822: AIR 1980 SC 1219: (1980) 3 SCC 340. 6. Surender Kumar Varma v. Central Government Industrial Tribunal and Labour Court, Nezv Delhi (1980) 4 SCC 433. 7. Municipal Committee Amloh v. Labour Court, Patiala, 1992 LLR 657. 8. J.N. Bhardwaj v. Hindustan Insecticides Ltd., 1995 LLR 998. 9. Alexander Yasudas Maikel v. Perfect Oil Seals & IRP, 1995 LLR 777. 10. U.P. State Electricity Board, Lucknow v. P.O. Industrial Tribunal (I)
Allahabad, 1996 (2) CLR 858. 11. Cuttack Municipal Council v. Presiding Officer, Labour Court, 1988 (57) FLR 157. 12. Narotam Chopra v. Presiding Officer, Labour Court, 1988 (57) FLR 218 (SC). 13. Krishna Kumar Dubey v. U.P. State Food and Essential Commodities, 1989 (58) FLR 100(SC). (ii) For non-compliance of Section 25F of the Industrial Disputes Act reinstatement with back-wages is no longer a normal rule In Jagbir Singh v. Uaryana State Agriculture Marketing Board.)1 the Supreme Court has held that reinstatement will not always be granted to a workman whose termination is violative of Section 25F of the Industrial Disputes Act providing for retrenchment compensation and one month notice pay, more particularly to a daily wager who has worked for less than a year. In Uttar Pradesh State Brassware Corporation Ltd. v. Uday Narain Pandey,2 the question for consideration before the Supreme Court was whether direction to pay back-wages consequent upon a declaration that a workman has been retrenched in violation of the provisions of the Section 6N of the U.P. Industrial Disputes ___________ 1. 2009 LLR 966 (SC). 2. JT 2005 (10) SC 344: 2005 LLR 214 (SC): (2006) 1 SCC 479.
Act, 1947 (equivalent to Section 25F of the Act, 1947) as a rule was proper exercise of discretion. The Court considered a large number of cases and observed thus: "41. The Industrial Courts while adjudicating on disputes between the management and the workmen, therefore, must take such decisions which would be in consonance with the purpose the law seeks to achieve. When justice is the buzz word in the matter of adjudication under the Industrial Disputes Act, it would be wholly improper on the part of the superior courts to make them apply the cold letter of the statutes to act mechanically. Rendition of justice would bring within its purview giving a person what is due to him and not what can be given to him in law. 42. A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance. 43. The changes brought about by the subsequent decisions of this Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalisation, privatisation and outsourcing, is evident. 44............ 45. The Court, therefore, emphasised that while granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back-wages, therefore, cannot be the natural
consequence." In Uttaranchal Forest Development Corpn. v. M.C. Joshi ,1 it has been held that the relief of reinstatement with full back-wages was not being granted automatically only because it would be lawful to do so and several factors have to be considered, few of them being as to whether appointment of the workman had been made in terms of statute/rules and the delay in raising the industrial dispute. The Court granted compensation instead of reinstatement although there was violation of Section 6N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F) of the Act, 1947. This i s what this court said:- ___________ 1.
MANU/SC/7166/2007 : (2007) 9 SCC 353. "9. Although according to the learned counsel appearing on behalf of the appellant the Labour Court and the High Court committed an error in arriving at a finding that in terminating the services of the respondent, the provisions of Section 6N of the U.P. Industrial Disputes Act were contravened, we will proceed on the basis that the said finding is correct. The question, however, would be as to whether in a situation of this nature, relief of reinstatement in services should have been granted. It is now well-settled by reason of a catena of decisions of this Court that the relief of reinstatement with full back-wages would not be granted automatically only because it would be lawful to do so. For the said purpose, several factors are required to be taken into consideration, one of them being as to whether such an appointment had been made in terms of the statutory rules. Delay in raising an industrial dispute is also a relevant fact." In Mahboob Deepak v. Nagar Panchayat, Gajraula,1 it was observed:-"6. Such termination of service, having regard to the fact that he had completed 240 days of work during a period of 12 months preceding the said date, required compliance with the provisions of Section 6N of the U.P. Industrial Disputes Act. An order of retrenchment passed in violation of the said provision although can be set aside but as has been noticed by this Court in a large number of decisions, an award of reinstatement should not, however, be automatically passed.
7. The factors which are relevant for determining the same, inter alia, are (i) Whether in making the appointment the statutory rules, if any had been complied with; (ii) the period he had worked; (iii) whether there existed any vacancy; and (iv) Whether he obtained some other employment on the date of termination or passing of the award. ________________ 1. JT 2008 (1) SC 150: 2008 LLR 117 (SC)
8. The respondent is a local authority. The terms and conditions of employment of the employees are governed by a statute and statutory rules. No appointment can be made by a local authority without following the provisions of the recruitment rules. Any appointment made in violation of the said rules as also the constitutional scheme of equality as contained in
Articles 14 and 16 of the Constitution of India would be a nullity. 9. Due to some exigency of work, although recruitment on daily wages or on an ad hoc basis was permissible, but by reason thereof an employee cannot claim any right to be permanently absorbed in service or made permanent in absence of any statute or statutory rules. Merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same would not mean that his services were liable to be regularised. 10. Applying the legal principles, as noticed hereinbefore, the relief granted in favour of the appellant by the Labour Court is wholly unsustainable. The same also appears to be somewhat unintelligible. 11. The High Court, on the other hand, did not consider the effect of non-compliance with the provisions of Section 6N of the U.P Industrial Disputes Act, 1947. The appellant was entitled to compensation, notice and notice pay. 12. It is now well-settled by a catena of decisions of this Court that in a situation of this nature instead and in place of directing reinstatement with full back-wages, the workmen should be granted adequate monetary compensation. (See M.P. Admn. v. Tribhuban, MANU/SC/1950/2007 : (2007) 9 SCC 748). 13. In this view of the matter, we are of the opinion that as the appellant had worked only for a short period, the interest of justice will be sub-served if the High Court's judgment is modified by directing payment of a sum of Rs. 50,000 (Rupees fifty thousand only) by way of damages to the appellant by the respondent. Such payment should be made within eight weeks from this date, failing which the same will carry interest at the rate of 9% per annum." In Munshi Singh v. Nagar Panchayat, Goura ,1 the Full Bench of M.P. High Court had an opportunity to decide as to what relief a workman will be entitled to in case there is violation of Section 25F in not paying retrenchment compensation. While relying on various cases, the court concluded, it is clear that the normal rule is that once it is found that the termination order is violative of Section 25F of Industrial Disputes Act, then the said order is ab initio void and the employee is entitled to reinstatement with full backwages. However, in a particular case, the Court can refuse to grant relief of reinstatement for a particular reason which will depend on the facts and circumstances of each case. Thus, there is no hard and fast rule that the Court should grant the relief of reinstatement with full backwages in each and every case. The same relief shall depend on the facts and circumstances of each case. (iii) When retrenchment compensation was not paid to the workman on the plea that three months' notice was given In this case the employer did not pay compensation when the workman was retrenched on 30th July, 1982 but give three months' notice. The plea of the employer was that the workman was paid more than the amount payable. It has been held in view of the facts that the mandatory provision of Section 25F of the Act had not been complied with and the order of termination was set aside.2 Also some payment made to a workman on his termination cannot be construed as retrenchment compensation.3 (iv) When retrenchment compensation and notice pay was prepared but not paid Retrenchment of the workman was made effective from 15-11-1992 and a bank draft was prepared on 13.11.1992 but was offered to the workman on 16-11-1992. The delay was fatal and retrenchment was held to be in violation of Section 25F of the Industrial Disputes Act. 1947.4
_______________ 1. 2009 IV MPLJ 57 (MP HC). 2. Lakshmi Pandit v. Industrial Tribunal, Faridabad, 1992 LLR 291. 3. ANZ Grindlays Bank v. General Secretary, Grindlays Bank Employees' Union, 2001 LLR 428 (Bom HC). 4. Radha Kishan Meena v. State of Rajasthan, 1994 LLR 276.
(v) When retrenchment compensation was not paid due to weak financial position In view of the statutory provisions for payment of compensation at the time of retrenchment of a workman even though on probation but having worked for not less than 240 days will render the termination null and void. The plea of the employer for non-payment of compensation for weak financial position will not be sustainable.1 (vi) When an employer has drawn a presumption of abandonment due to continuous absence of an employee In this case the workman was engaged in March 1982 and worked till April 1984 without interruption. The employer pleaded that the workman had abandoned the job but neither an enquiry was held nor retrenchment compensation was paid, hence this amounted to violation of Section 25F of the Industrial Disputes Act, 1947.2 (vii) When a presumption was drawn that the worker has abandoned the job The employer struck off the name of worker on the ground that he has absented himself and did not report for duty whereas the worker submitted that he had fallen ill which prevented him to resume duties and on getting well he was prevented from resumption of duties on the plea that his name was struck off from the rolls. It amounted to retrenchment and termination without compensation was held to be invalid.3 (viii) When services of the workman were terminated without assigning any reason even though the offer was made to collect dues from the cashier It has been held by the Bombay High Court in one case that there is hardly any compliance of the mandatory requirement for payment of legal dues which is a condition precedent. It is possible to hold that there is substantial compliance with the obligation arising under the section, if the employer, at least, indicates in the letter of retrenchment the amount to which the _____________ 1. Gram Panchayat, Damnagar v. Sharadkumar D. Acharya, 1994 LLR 470. 2. The Executive Engineer, Irrigation Division-1, Jaipur v. Nar Narain, 1994 LLR 538. 3. Arun Kumar Mathur v. Labour Court, Allahabad, 1993 LLR 139.
workman is entitled and offers it unconditionally. The unconditional offer must be contemporaneous with the retrenchment, if not precedent. 1 (ix) When mere readiness on the part of the employer to send notice of retrenchment and compensation not sufficient Retrenchment of the workman became effective from 1-8-1988. Order of retrenchment offered on 2-8-1988 and the workman refused to accept and the
same was sent by registered post at her village address. The delay in making payment and remitting the compensation amounted to breach of Section 25F of the Industrial Disputes Act, 1947.2 (x) When an employee has completed 240 days The workman had rendered 240 days' service and at the time of termination no retrenchment compensation was paid, hence it amounted to violation of Section 25F of the Industrial Disputes Act, 1947.3 In another case, the workman was engaged against leave vacancy but he had worked for 240 days at the time of his termination.4 (xi) When initial appointment was for 30 days but the employee continued for 2 years By an appointment letter dated 29-12-1984 the respondent was appointed as a typist on a vacant post for a period of 30 days from 26-12-1984 but continued to work till 29-4-1987, but no compensation was paid at the time of termination, hence Section 25F of the Industrial Disputes Act, 1947 was violated.5 (xii) When a workman was initially appointed for a fixed-term and reappointed with gaps Where a workman had been employed each time for a period of 89 days and during the calendar year he had worked for 265 days, his termination amounted to violation of Sections 25B and ________________ 1. R.D. Pillay v. Indian Dyestuff Industries Ltd., 1992 LLR 636. 2. State of Rajasthan v. Miss Usha Lokwani, 1994 LLR 369. 3. Government Nehru Degree College, Sabalgarh District Morena v. Ashok Kumar Verma, 1994 LLR 857. 4. Municipal Committee, Amloh v. Labour Court Patiala, 1992 LLR 657. 5. Kukadi Irrigation Project v. Woman, 1994 LLR 788.
25F of the Industrial Disputes Act 1947 since he had completed 240 days and no retrenchment compensation was paid to him.1 (xiii) When the services of a probationer were discontinued after completion of 22 years and no retrenchment compensation was paid In this case the services of the workman were terminated since he had become surplus and lesser compensation than due was paid, it amounted to violation of Section 25F of the Industrial Disputes Act, 1947.2 (xiv) When termination of a workman was for not holding minimum qualifications The services of the workman were terminated since he did not possess the qualifications prescribed under Rule 3 of Maharashtra Welfare Officers (Duties, Qualifications and Conditions of Service) Rules, 1966 but no compensation was paid, hence there was violation of Section 25F of the Industrial Disputes Act, 1947.3 (xv) When terminated
new
service
conditions
were
imposed
and
services
were
In this case, the company which was owned and controlled by the State Government imposed new service conditions and terminated services of the workmen without complying with Section 25F of the Industrial Disputes Act, 1947 and as such the retrenchment was held to be i nvalid.4 (xvi) When repeated breaks were given As many as 5 notional breaks were given ranging from 2 to 10 days during the period of 11/2 years but despite the breaks, the workman had completed 240 days' service, hence his termination without retrenchment compensation was held to be illegal.5 _______________ 1. The Chief Administrator, Haryana Urban Development Authority, Chandigarh v. Presiding Officer, Industrial Tribunal-cum-Labour Court, Rohtak, 1995 LLR 54. 2. Gidderbaha Cooperative Marketing-cum-Processing Society Ltd. v. Presiding Officer, Labour Court, Bhatinda, 1995 LLR 510. 3. Rao Saheb Shripatrao Patit v. Balasaheb Desai Sahakari, 1995 LLR 980. 4. Pandha Mayurakshi Cotton Mills' Employees' Union Case, 1995 LLR 749. 5. The Kurukshetra Central Co-operative, Kurukshetra through its Managing Director v. State of Haryana through the Secretary, Labour and Employment Department, Government of Haryana, Chandigarh, 1993 LLR 67.
(xvii) When an ad-hoc/temporary worker has worked for 240 days When the worker was engaged on an ad-hoc/temporary basis but he worked for 240 days, his termination without compensation was held to be invalid.1 (xviii) When the worker worked on basis of daily wages and worked for 4 years The worker was engaged on a temporary basis but worked for over 4 years; yet he was not paid retrenchment compensation at the time of his termination; hence invalid.2 In another case, the worker was appointed on daily wages but continued in service without any break for 245 days and no notice or compensation under Section 25F of the Industrial Disputes Act, 1947 was paid .3 In one case it has been held by Madhya Pradesh High Court that the termination of a daily wager without retrenchment compensation, will be set aside. 4 (xix) When termination without compensation has been effected after three years of service The workman was appointed as a typist for 30 days on a project but continued in service from 26-12-1984 to 29-4-1987 when his services were terminated without payment of compensation, it has been held that there was violation of Section 25F of the Industrial Disputes Act, 1947.5 (xx) When services of the employee were discontinued The employer had discontinued the services of the employee without paying retrenchment compensation and as such it amounted to violation of Section 25F of the Industrial Disputes Act, 1947.6 _________________ 1. Umesh Saxena v. Presiding Officer, Labour Court, Agra, 1993 LLR 118.
2. Govind Singh v. Presiding Officer, labour Court, U.P., Agra, 1993 LLR 142. 3. Municipal Board, Marwar Mudwa v. Industrial Tribunal, 1989 (58) FLR 469. 4. Jawaharlal Nehru Krishi Vishwa Vidyalaya. v. Presiding Officer, Labour Court, M.P. Ram, 2001 LLR 576, (MP HC). 5. Kukadi Irrigation Project v. Waman, 1994 LLR 381. 6. Krishi Upaj Mandi Samiti Katghora v. Muzahid Hussain, 1995 LLR 1018.
(xxi) When compensation was not paid at the time of closure of the plant In this case the plant was closed but retrenchment compensation was not paid as per the provisions of the Act hence it amounted to violation of Section 25F of the Industrial Disputes Act, 1947.1 (xxii) When the services of a daily wager were terminated without paying retrenchment compensation A worker was engaged on daily wages and used to be paid for 26 days in a month. He had worked from 1-3-1992 to 11-11-1992 and as such worked for 240 days. His termination without payment of retrenchment compensation held to be illegal.2 (xxiii) When the notice of retrenchment has not been given to the worker In this case, the notice of retrenchment was not given to the concerned worker but was displayed on the notice board.3 (xxiv) When not even an offer to pay retrenchment compensation was made There was no evidence that an offer to pay compensation was made .4 (xxv) When a worker absented himself for 3 weeks and his name was struck off from the muster-rolls The termination of service of the peti tioner brought about w.e.f. 29-8-84 by way of striking off his name from the rolls of the company amounts to retrenchment under Section 2(oo) of the Industrial Disputes Act, 1947 and it is not a case covered by Section 2(oo) (bb) of the 1947 Act.5 _______________ 1. Petiad Bulakhidas Mills Co. Ltd., v. Ramabhai Bhikhabhai, 1995 LLR 1069. 2. Shri Ram Deen v. State, 1993 LLR 474. 3. Superintending Engineer, Urdhwa Painganga Project Circle v. Yavatmal Zilla Raste, 1993 LLR 455. 4. Ollur Regional Imitation Diamond Manufacturers Industrial (Workshop) Cooperative Society Ltd., v. Labour Court, 1993 LLR 553. 5. Nathu Ram Sami v. Hindustan Copper Ltd., 1993 LLR 599.
(xxvi) When the services of a workman engaged on temporary post were terminated The workman was appointed against temporary post on a project on probation for six months but continued in service for 8 years when his termination was effected due to completion of the project, it has been held that there was violation of Section 25F of the Industrial Disputes Act, 1947 .1 (xxvii) When the employer presumed that the workman had abandoned the
job and called him to collect his dues but did not make the payment In this case the employer did not make payment but simply called upon the workman to come and receive his dues and as such it amounted to violation of Section 25F of the Industrial Disputes Act, 1947.2 (xxviii) When the services of a workman appointed as a casual clerk having worked for more than 240 days were terminated The workman was engaged as a casual clerk with effect from 3rd April, 1985 to 2nd May, 1985 which had been extended from 3rd May, 1985 to 28th December, 1985 when his services were automatically terminated. Thus he had worked for more than 240 days.3 (xxix) When the retrenched employees were called upon next day of retrenchment to collect their dues If the employer sought to retrench an employee from a particular day, he was legally bound to make offer of payment on that very day, and with this in view he should have taken due precaution to fix the date of retrenchment and arrange for payment of the amount in question on that day. If, however, the employee declined the amount, it could have been sent to him by money order to prove the bona fides. It is not relevant whether the above dates were public holidays or not. Thus in all these matters it is clear that the provisions of Section 25F were not complied _______________ 1. Promod Kumar Tiwari v. Hindustan Fertilizers Ltd., 1994 LJR 465. 2. New Allenberry Works v. Industrial Tribunal-cum-Labour Court, Faridabad, 1995 LLR 739. 3. The Director, Health & Family Welfare, Chandigarh v. Balwinder Kaur, 1996 LLR 493.
with and, therefore, the retrenchment orders were bad. 1 The Supreme Court has held that merely asking a workman to collect his dues will not amount to compliance of Section 25F of the Industrial Disputes Act laying down conditions precedent for payment retrenchment compensation.2 The Patna High Court has held that it is nobody's case that any amount/remuneration in alternative of one month's noti ce was paid or offered to the workmen before retrenchment became effective. Moreover, there is no evidence that the workmen were paid or offered retrenchment compensation simultaneously with the termination of services. Merely requiring the workmen to collect retrenchment compensation without specifying the time when the retrenchment compensation is to be collected and from where, it cannot be said in compliance of Section 25F(b) of the Act.3 (xxx) When Retrenchment is for rationalisation-notice of change will be imperative A Notice of change as prescribed by Section 9A of the Industrial Disputes Act must precede when the retrenchment of the workman is affected due to rationalisation of industry when the concerned workmen rendered surplus .4 (xxxi) Effect of non-compliance with provisions of Section 25F or 25G Failure to comply with Section 25F would make the retrenchment invalid, so would the failure to comply with Section 25G where no reasons are described for departure from the rule prescribed under Section 25G. In the circumstances any retrenchment effected being invalid in law cannot be said to have
terminated the relationship of employer and employee. Such workmen will accordingly be entitled to reinstatement with ________________ 1. Surya Kant Baghunath v. The Divisional Railway Manager Central Railway, Bombay, 1988 (57) FLR 32. 2. Sain Steel Protucts v. Naipal Singh, 2001 LLR 566 (SC). 3. Muzaffarpur Regional Development Authority v. Jagarnath Jha, 2008 (119) FLR 457 (Pat HC). 4. Lokmat Navspapers Pvt. Ltd. v. Shanknraprasad, 1999 LLR 849 (SC):
MANU/SC/0405/1999 : AIR 1999 SC
2423: (1999) 6 SCC 275.
continuity of service and recover their full wages from the date of retrenchment to the date of reinstatement.1 Provisions of Sections 25F and 25G not complied. Pasting of notice on notice board is not sufficient compliance of Sections 25F and 25G. Retrenchment is illegal. Reinstatement with back-wages upto the date of decision of Labour Court ordered.2 It is necessary that payment of compensation within the meaning of Section 25F of the Act shall be made before and not after the workman is actually discharged. But if actual payment in cash at the very spot of retrenchment is insisted on it may lead to obvious difficulties. Care has to be taken that the management does not put off paying the workers which has to make its best endeavour to pay. In the instant case it was because the workman refused the offer of payment that the amount had to be sent to his address by money order. In such cases it cannot be contended that the money order should have reached the workman before the retrenchment took effect. The finding of the Labour Court that there was no payment to the workman within the meaning of Section 25F of the Industrial Disputes Act, 1947, is therefore, vitiated and should be quashed.3 The retrenchment becomes invalid where compensation is not paid at the time of retrenchment. It amounts to continuance of workman retrenched as if in service and such a workman is entitled to his arrears of salary and order of reinstatement from the Labour Court.4 In Ambalal Shivalal v. D.M. Vin 5, the Gujarat High Court observes that when an order of retrenchment does not comply with the conditions laid down in Section 25F, the order is not violable but void. That being so, the order of retrenchment is null _________________ 1. Workmen of Subong Tea Estate v. Management of Subong Tea Estate, 1964 (8) FLR 91: 1964 (1) LLJ 333: (196465) 26 FJR 18 (SC); Hindustan Steel Ltd. v. Presiding Officer, Labour Court, 1976 (33) FLR 257: AIR 1977 SC 31. 2. Superintending Engineer, Urdhwa Painganga Project Circle v. Yavatmat Zilla Raste, 1993 (1) LLJ 789 (Bom HC). 3. India Compressors Makers' Corporation v. Labour Court, Delhi, 1977 (34) FLR 180. 4. Udaipur Mineral Development Syndicate Pvt. Ltd, v. M.P. Dave, 1975 (2) LLJ 499. 5. 1964 (9) FLR 328: 1964 (2) LLJ 271: (1964-65) 26 FJR 297:
MANU/GJ/0024/1963 : AIR 1964 Guj 192.
and void. It follows that till compensation amount is paid by the employer, the relationship of master and servant between the employer and the employee continues and the only legal right which the employee has to receive his wages
on the basis that he continues to be i n service. However, the Industrial Tribunal holds in the case noted below ,1 that noncompliance of Section 25F(c) and with the Rule 76 is mere irregularity and not an illegality and, therefore, on this ground the retrenchment cannot be held to be without jurisdiction. In Workmen of Subong Tea Estate v. The Outgoing Management of Subong Tea Estate,2 it was similarly observed at page 613 of t he report: "In dealing with the question of retrenchment in the light of the relevant provisions to which we have just referred, it is, however, necessary to bear in mind that the management can retrench its employees only for proper reasons. It is undoubtedly true that it is for the management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work involved in the industrial undertaking of any employer must always be left to be determined by the management in its discretion, and so, occasions may arise when the number of employees may exceed the reasonable and legitimate needs of the undertaking. In such a case, if any workman become surplus, it would be open to the management to retrench them. Workmen may become surplus on the ground of rationalization or on the ground of economy reasonably and bona fide adopted by the management or of other industrial or trade reasons. In all these cases, the management would be justified in effecting retrenchment in its labour force. Thus, though the right of the management to effect retrenchment cannot normally be questioned, when a dispute arises before an Industrial Court in regard to the validity of any retrenchment, it would be necessary for industrial adjudicator to consider whether the impugned retrenchment was justified for proper reasons. It would not ______________ 1. Employers in relation to Religara Colliery, (P) Ltd. v. Their Workmen, 1963 (7) FLR 332 (IT). 2. 1964 (8) FLR 91 (SC).
be open to the management either capriciously or without any reason at all to say that it proposes to reduce its labour force for no rhyme or reason. This position cannot be seriously disputed." In view of the provisions of Section 25F and Section 2(oo) of the Act, as in such circumstances, if the services of the employees are terminated, question of loss of confidence in them, would not arise at all. In L Robert D'Souza v. The Executive Engineer, Southern Railway, MANU/SC/0152/1982 : AIR 1982 SC 854: (1982) 1 SCC 616: 1982 (2) SCJ 29 their Lordships of the Supreme Court have held that if termination of service of a workman is brought out for any reason whatsoever, it would be retrenchment within the meaning of Section 2(oo) of the Act.1 Non-payment of compensation at the time of retrenchment, held, retrenchment being in violation of full requirement of Section 25F has to be regarded as invalid in law.2 The case of the petitioner before the Tribunal was that the service of Hari Om Singh was terminated on giving him a month's pay in lieu of notice. The workman referred to Section 25F of the Industrial Disputes Act. What is necessary for applicability of this provision is that the workman should be 'in continuous service for not less than one year under an employer' Section
25B defines 'continuous service'. A look at the impugned award reveals that no finding is contained therein on the question whether the services had been terminated in terms of the contract of service, without any penal consequence, so that the relief of payment of the amount that may be due to Hari Om Singh under the industrial law would be the proper relief. The petitioner was not heard by the Labour Court. The question of relief of compensation, in lieu of the order of reinstatement, was probably not considered by Labour Court on this account. However, this aspect need not be pursued further as the award is liable to be quashed otherwise. 3 _________________ 1. Raj Kumar College Karmachari Union v. Principal, Raj Kumar College, Raipur, 1987 (55) FLR 93: 1987 (2) LLN 573 (MP HC). 2. Braj Kishore Pradhan v. Tribal Development Corporation of Orissa Ltd., 1993 LLR 15 (Ori HC). 3. U.P. State Road Transport Corporation v. State of Uttar Pradesh, 1986 (52) FLR 115.
In the case of State Bank of India v. N. Sundaramony, 1 in para 8 of the judgment the Supreme Court reached the conclusion that if the workman swims into the harbour of Section 25F, he cannot be retrenched without payment, at the time of retrenchment, of the amount of compensation computed as prescribed therein read with Section 25B(2). Thus, in view of the law laid down by the Supreme Court it is evident that the conditions prescribed in Clauses (a) and (b) of Section 25F of the Act are mandatory. Non-compliance of these conditions render the action as illegal and void. This is the view taken by the Division Bench of this High Court in the case of M.P. Ramanandi v. Gujarat State Warehousing Corporation.2 In view of this settled legal position the facts of the case be examined.3 Termination without complying with the provisions of the section by retaining juniors against terminated seniors is bad and invalid.4 It is well settled that the requirement of a work prescribed by Section 25F is a condition precedent for the retrenchment of a workman and the non-compliance with the said provision renders the retrenchment invalid and inoperative. (See State of Bombay v. Hospital Mazdoor Sabha 5) There is an important difference between Section 25F and Section 25FFF. By Section 25F a prohibition against retrenchment until the condition prescribed by that section are complied with is imposed, and by Section 25FFF termination of employment on closure without payment of compensation is not prohibited. Payment of compensation and payment of wages for the period of notice are not, therefore, conditions precedent to closure. In a case under Section 25FFF retrenchment is not invalid. Of course, the workman would be entitled to payment of compensation. But the retrenchment would not be invalid. But, as we have already held that the present case is one of retrenchment and not closure, _______________ 1. 1976 (32) FLR 197. 2. 1985 GLH 42. 3. Umakant C. Acharya v. Saurashtra Cement and Chemical Industries Ltd., 1993 (66) FLR 1080 (Guj HC). 4. Nathaniel Masih v. U.P. Scheduled Caste Finance and Development Corporation Ltd., 1989 (59) FLR 620 (All HC).
5. (1960) 17 FJR 423:
MANU/SC/0200/1960 : AIR 1960 SC 610: 1960 SCJ 679.
non-compliance with Section 25F of the Act would make it invalid and inoperative. It is not disputed that respondent workmen were also governed by the provisions of the Industrial Disputes Act. In that context, it is not understood how the workmen would be denied that relief under the Industrial Disputes Act. The Labour Court was thus competent to award reinstatement with back wages. The applicability of the Shops and Establishments Act only means that if the workman is covered by the said Shops Act he may seek relief also under the said Act but this cannot debar him from seeking relief under the Industrial Disputes Act, if he is entitled to the same. The object of the Shop Act is to give some minimum benefits and relief to the vast unorganized sector of the employees, it is not meant to take away the rights which an employee enjoys under the Industrial Disputes Act or other beneficial labour legislation. Moreover, there is nothing in the Shop Act which deals with the case of retrenchment or closure. Shop Act is not m eant to deny relief to workmen under the Industrial Disputes Act by the mere fact of stores being also registered under the Shop Act. The Shop Act is complimentary to Industrial Disputes Act. It does not exclude the applicability of any other Act. Rather, Industrial Disputes Act is a specific Act dealing with the rights and obligations of employer and employees under the Act. Once the workmen are covered by the Industrial Disputes Act, the provisions of the Industrial Disputes Act will prevail over the provisions of any other Act, in case of conflict. Here there is no conflict, they are only supplementing each other. The argument to deny the benefit of the Industrial Disputes Act, as to respondent workmen must, therefore, fill .1 Workmen served under Municipality for more than a year and his service was terminated but no retrenchment benefit or compensation was given. Provisions of Section 25F not complied with. Tribunal rightly directed reinstatement with full back wages.2 Where services terminated without compliance with Section 25F provisions, termination held illegal. Reinstatement _____________ 1. Delhi Consumers Cooperative Wholesale Stores Ltd. v. Secretary Labour, (1983) 63 FJR 14, 2. Cuttack Municipal Council v. Presiding Officer, Labour Court, 1988 (57) FLR 157 (Ori HC).
with full back-wages ordered.1 Workman received retrenchment compensation during conciliation proceedings. Non-compliance of three conditions will render the retrenchment invalid ab-initio. Initial invalidity cannot be cured by the subsequent offer of the employer. Receipt of any sum in final settlement of accounts will not disentitle the employee to challenge the order of retrenchment.2 The termination of the aforesaid 21 persons, becomes void ab initio and, therefore, if the remaining sub-sections of Section 25F of the Act are even now complied with, that does not help the respondent in regularizing the termination orders. On the other hand for non-compliance of Section 25F of the Act, as a whole, as a necessary consequence the aforesaid 21 persons are deemed to have been continued in employment and therefore they are entitled for full back-wages.3 The provision of Section 25F is mandatory in nature. If there is any noncompliance with the said provision, the order becomes illegal. If the order becomes illegal, then the position is as if there is no such order at all and in such a case such retrenchment cannot be given effect to at all in any manner whatsoever. If the retrenchment is in violation of the provisions of Section 25F
of the Act, the employee concerned remains an employee of the company and the question of awarding some compensation regarding his wages without granting reinstatement cannot arise.4 If the termination of services of a workman is brought to an end for any reason whatsoever, it would be retrenchment except if the case falls within any of the excepted categories i.e., (i) termination by way of punishment inflicted pursuant to the disciplinary action, (ii) voluntary retirement of workmen, (iii) retirement of workmen on reaching the age of superannuation if the contract of employment between the employer and workman concerned contains a stipulation in that behalf, and (iv) termination of service of a workman on the ground of ill-health and once the case _______________ 1. Narotam Chopra v. P.O., Labour Court, etc., 1988 (57) FLR 218 (SC). 2. Management of Oasis School v. Labour Court and V. Mukundan, 1992 (1) LLJ 210 (AP HC). 3. Raj Kumar College Karamchari Union v. Principal, Raj Kumar College, Raipur, 1987 (55) FLR 93: 1987 (2) LLN 573 (MP HC). 4. Ramani Mohan Industries Pvt. Ltd. v. Second Industrial Tribunal, 1981 (2) LLJ 363.
does not come in any of the categories, termination of service would be retrenchment within the meaning of the expression under Section 2(oo) of the Industrial Disputes Act. In the present case the petitioners were initially employed as casual labourers in the year 1977 and subsequently in the year 1978 they were appointed as monthly rated casual labourers in the grade of Rs. 196-232. Thus each of the petitioners have put in more than one year of continuous service. Section 25F of the Act provides that no workman employed in any industry who has been in continuous service for less than one year under that establishment shall be retrenched by the employer until the conditions set out therein are satisfied. Since the petitioners have rendered continuous service for a period of over one year and their termination do not fall within any excepted categories as noticed earlier, the termination of the services would constitute retrenchment. Since the pre-condition for valid retrenchment having not been complied with, the orders terminating the services of the petitioners are illegal.1 Non-compliance of the provisions of Section 25F, a discharge would be deemed an illegal retrenchment; or otherwise illegal termination of service.2 When principle of 'last come, first go' as stipulated by Section 25G of the Industrial Disputes Act is not followed, retrenchment will be il legal. 3 (xxxii) Service of notice to appropriate Government Clause (c) of Section 25F enacts as one of the conditions that no workman should be retrenched until "notice in the prescribed manner is served on the appropriate Government". The question of construction of Section 20F(c) came up before the Supreme Court recently in Bombay Union of journalists v. State of Bombay.4 It was contended in this case before the Supreme Court on behalf of the employee concerned that the three conditions specified in Clauses (a), (b) and (c) are mandatory and must be _________________
1. Prem Narain v. Asstt. Personnel Officer, 1985 (50) FLR 143. 2. Chandrama Singh v. M.D., U.P. Co-op. Union, 1991 (63) FLR 478. 3. Chandra Pal Singh v. State of litter Pradesh, 2009 LLR 553 (SN) (All HC). 4.
MANU/SC/0135/1963 :
AIR 1964 SC 1617: 1964 (6) SCR 22; Somu Kumar Chatterjee v. District Signal
Tele-Communication Engineer, 1970 (2) LLJ 179: 1964 (8) FLR 236
(SC): 1970 Lab IC 629: 1969 Pat LJR 444; National Iron and Steel Co. Ltd. v. State of West Bengal, 1967 (2) LLJ 23. first satisfied before retrenchment can be validly effected. The Supreme Court referred to the remarks made in cases noted below, 1decided by it as either being observations conceded by the parties or as being observations in the nature of obiter. Section 25F(a) requires that the workman has to be gi ven one month's notice in writing indicting the reasons for retrenchment, and the period of notice has to expire before the retrenchment takes place. It also provides that the workman can be paid in lieu of such notice wages for the said period. It is the latter provision of Clause (a) which requires a careful consideration in dealing with the character of the requirement prescribed by Section 25F(c). This latter provision allows the employer to retrench the workman on paying him his wages in lieu of notice for one month prescribed by the earlier part of Clause (2) and that means that if the employer decides to retrench a workman, he need not give one month's notice in writing and wait for the expiration of the said period before he retrenches him straightaway on paying him his wages in li eu of the said notice... Reading the latter part of Clause (a) and Clause (c) together it seems to follow that in cases falling under the latter part of Clause (a) the notice prescribed by Clause (c) has to be given not before retrenchment but after retrenchment, otherwise the option given to the employer to bring about immediate retrenchment of the workman paying him wages in lieu of notice would be nugatory. Therefore it seems that Clause (c) cannot be held to be a condition precedent even though it has been included under Section 25F along with Clauses (a) and (b) which prescribes conditions precedent. Sahkari Bhumi Vikas Bank is an 'industry' within Section 2(j) and also 'State' within the meaning of Article 12 amendable to writ jurisdiction of High Court under Article 226 of Constitution.2 (xxxiii) Defect in notice, if vitiates it Where the employee was paid one month's salary as well as retrenchment compensation at the rate of 15 days' salary for every ________________ 1. State of Bombay v. Hospital Mazdoor Sabha, (1960) 2 SCR 86: 1960 SCJ 679; Tea District Labour Association, Calcutta v. Ex-employees of Tea District Labour Association, (1960) 3 SCR 207:
MANU/SC/0226/1960 :
AIR
1960 SC 815: 1960 (3) SCR 207; Workmen of Subong Tea Estate v. Outgoing Management of Subong Tea Estate, 1964 (8) FLR 91: 1964 (1) LLJ 333: (1964-65) 26 FJR 18 (SC). 2. Prabhudayal Jat v. Alwar Sahkari Bhumi Vikas Bank Ltd., 1991 (2) LLJ 130: 1991 (1) Lab IC 944 (Raj HC).
year of service the defect in notice as regards mentioning of wrong date as the date of retrenchment would not vitiate the notice.1 When the workman on receipt of the retrenchment notice terminating his services from the day next of receipt of the notice and directing him to collect his dues did not present himself to the Accounts Officer of the Company to receive his retrenchment compensation etc., then it cannot be urged on his behalf that unless the amount was quantified the offer to settle his dues was not
valid.2 (xxxiv) When termination of service is not retrenchment In the absence of specific pleading or proof that any of the respondentsworkmen had completed 240 days of un-interrupted services in the preceding 12 months before the alleged termination will not amount to retrenchment and the workmen will not be entitled to relief .3The Supreme Court has held that the termination of the workers in a seasonal establishment will not amount to 'retrenchment'.4Termination of contract employment after two years will not amount to retrenchment.5 "Termination of a workman on completion of the project will not be retrenchment.6 Permission for retrenchment will be imperative for employees engaged in Railway Project.7 Termination of an employee appointed for a year will not amount top retrenchment .8 Termination of a workman on completion of a project will not be ______________ 1. Workmen of Shillong Hydro Electric v. State of Assam, AIR 1964 Assam 66. 2. Suresh Kumar v. Management of Band Box, 1981 (42) FLR 276. 3. S.H. Kelkar & Compoany Lid. v. Khashaba K. Jadhav, (1997) 77 FLR 619: 1997 II CLR 649 (Bom HC). 4.
Managing
Officer,
Director,
Haryana
MANU/SC/0801/1997 :
Seeds
Development
Corporation
Ltd.
v.
Presiding
(1997) 10 SCC 727: AIR 1997 SC 3086: (1997) 77 FLR 21: 1997 LLR 806
(SC). 5. Birla VXL Ltd. v. State of Punjab,
MANU/SC/1076/1998 :
(1998) 5 SCC 632: AIR 1999 SC 561: 1998 LLR
1167 (SC): 1999 Lab IC 236. 6. Engineering Projects (India) Ltd. v. Dandapani Maharana, 1999 LLR 35 (Pat HC). 7. Lal Mohammad v. Indian Railway Construction Company Ltd.,
MANU/SC/0766/1998 :
(1999) 1 SCC 596:
AIR 1999 SC 355: 1999 All LJ 387: (1999) 1 LLN 663: (1999) 1 LLJ 317: 1999 LLR 100 (SC). 8. Nagar Palika, Dehradun v. The State of Uttar Pradesh, 1999 LLR 705 (All HC).
retrenchment.1 Termination of a worker engaged intermittently will not amount to retrenchment.2 Termination of an employee though appointed for 89 days but having worked for years together, will amount to retrenchment .3 Termination of a trainee having put in more than 240 days' service will not be retrenchment.4 Termination by way of punishment will not be retrenchment.5 Termination of a lecturer due to his long absence from duty for further studies will not amount to retrenchment but it is the simplicitor and as such no enquiry will be called for.6 Termination of a contractual employee cannot be challenged on completion of tenure.7 Every retrenchment is termination but all terminations are not 8 retrenchments. Non-renewal of contractual appointment for a fixed period is not retrenchment hence no relief can be granted to the workman. Non renewal of contractual appointment for a fixed period will not amount to retrenchment hence the workman will not be entitled to any relief. Termination of a daily wager due to non renewal of contractual dated salary till completion of the project will neither be illegal nor it will amount to 'retrenchment' as defined by the Industrial Disputes Act.9 Termination of a workman, appointed on contractual basis for limited period, will not amount to retrenchment and/or illegal termination. Termination of a workman, appointed on contractual basis for limited period, will not amount to retrenchment and/or illegal termination, hence the provisions of Section 25F of the Industrial Disputes Act providing for
payment of retrenchment _________________ 1. Telecome District Manager v. A.A. Angali, 2000 LLR 1219 (Kant HC). 2. Yusuf Khan v. Madhya Pradesh Electricity Board, 2000 LLR 983 (MP HC). 3. Executive Engineer, Orissa Life Irrigation Division, Dhenkanal v. Presiding Officer, Labour Court, Bhubnaeswar, 2000 LLR 757 (Ori HC). 4. Kalyani Sharp India Ltd. v. Labour Court No. 1, Gwalior,
MANU/SC/0930/2001 :
(2002) 9 SCC 655: AIR
2002 SC 300: 2001 LLR 812 (SC). 5. Maria Thomas Gonsalves v. Concept Pharmaceuticals (Pvt.) Ltd., (2001) 92 FLR 412: 2001 LLR 755 (Bom HC). 6. Daksha Sankhia (Dr.) v. Jai Narain Vyas University, Jodhpur, 2001 LLR (Sum) 1071 (Raj HC). 7. Shankar Lal v. University of Rajasthan, 2002 LLR 586: 2002 Lab IC 932: 2002-III LLN 445 (Raj HC). 8. Poeroorkada Service Co-operative Bank v. Sheena, 2002 LLR 1104 (Ker HC). 9. Ravindra Kumar Mishra v. Union of India, 2005 LLR 93 (All HC).
compensation will not be attracted.1 Termination of a stenographer will not amount to retrenchment if he failed to pass the test of efficiency, a condition before appointment.2 Termination of an employee, incapacitated in an accident and receiving compensation and pensionary benefits, will not amount to retrenchment. The Industrial Court has rightly rejected the order of the Labour Court in holding that the retirement order of the workman who has been partially incapacitated disabled on account of electric shock and was not in a position to perform his duty, and as such his termination amounted to retrenchment hence, the High Court upheld the order of the Industrial Court by dismissing the petition filed by the workman more so when he was paid compensation under Workmen's Compensation Act, gratuity and other pensionary benefits .3Termination of a casual workman on daily wages for specific period and for specific work, will not be retrenchment. Termination of a workman, engaged on casual basis on daily wages for specific period for specific work, will not amount to retrenchment since such terminations are excluded by Section 2(oo)(bb) of the Industrial Disputes Act.4 Termination of a trainee, on expiry of the prescribed period of training, will not be retrenchment as excluded by Clause (bb) of Section 2(oo) of the I.D. Act hence no relief can be granted to him.5 Where engagement of workman was for specific period, as such his termination will be excluded from the provisions of Section 2(oo)(bb) of I.D. Act and no retrenchment compensation will be payable on his termination even when he was worked for 240 days. Where engagement of workman was for specific period, as such as per the provisions of Section 2(oo)(bb) of Industrial Disputes Act and hence no retrenchment compensation will be payable on his termination even when he has worked for more then 240 days in the preceding twelve calendar months.6 ______________ 1. Sewa Ram v. Municipal Board, 2005 LLR 704. 2. Orissa Forest Development Corporation Ltd. v. Presiding Officer, Labour Court, Bhubaneswar, 2005 LLR 763 (Ori HC).
3. Ramesh Gonekar v. Member Judge, State Industrial Court, 2005 LLR 854 (MP HC). 4. Batala Cooperative Sugar Mills Ltd. v. Sowaran Singh,
MANU/SC/2496/2005 :
AIR 2006 SC 56: (2005) 8
SCC 481: (2005) 6 SCR 413: (2005) 107 FLR 812: 2005 LLR 1211 (SC). 5. H.M.T. Limited v. Aaron Jaisingh, 2006 LLR 28 (Kant HC). 6. Punjab State Electiricity Board v. Barbara Singh,
MANU/SC/1755/2005 :
(2006) 1 SCC 121: AIR 2006 SC
3887: (2006) 1 LLN 111: 2006 1 CLR 36: (2006) LLR 68 (SC).
Termination of an employee, working as Arrival Record Clerk during paddy season for specified period will not amount to retrenchment. Termination of an employee, working as Arrival Record Clerk during paddy season, will neither amount to retrenchment nor it could be construed that the employer has indulged in unfair labour practices and, as such, the Labour Court has misdirected itself in setting aside termination whereas the High Court, learned Single Judge as well as the Division Bench have erred in rejecting the petition and appeal as filed by the marketing Board whereas the termination of service would not be illegal since the applicability of Chapter VA of the Industrial and, as such, the Award of the Labour Court and the Orders of the High Court are quashed.1 Termination of a workman, whose appointment was a short-li ved, will not be illegal since it will be covered by the definition of Clause (bb) of Section 2(oo) of the I.D. Act. Termination of a workman whose appointment was a short-lived with the Municipal Council will not amount to illegal since it will be covered by the definition of Clause (bb) of Section 2(oo) of the Industrial Disputes Act excluding termination of contractual appointment from the definition of retrenchment and as such the Labour Court erred in awarding reinstatement and the High Court also misdirected in upholding the Award of the Labour Court.2 Section 2(oo)(bb) of I.D. Act would not be attracted when intermittent breaks have been given. Where services of workman were terminated on a regular basis and she had been appointed for 89 days after a gap of one or two days and completed 240 days in the year, Section 2(oo)(bb) of Industrial Disputes Act excluding terminations of service from the purview of 'retrenchment' would not be attracted since such action will amount to unfair labour practice on the part of the appellant employer. 3When appointment of a workman has been made for specific period, his termination will not amount to retrenchment. When the appointment of a workman has been made for specific _______________ 1. Haryana State Agricultural Marketing Board v. Subhash Chand,
MANU/SC/8063/2006 : (2006) 2 SCC 794:
AIR 2006 SC 1263: (2006) 2 LLN 63: 2006 2 SLR 780: 2006 LLR 393 (SC). 2. Municipal Council. Samrala v. Raj Kumar, (2006) 3 SCC 81: (2006) 2 LLN 59: 2006 LLR 583 (SC). 3. Haryana State Electronics Dev. Corporation v. Mamni,
MANU/SC/8137/2006 : (2006) 9 SCC 434: AIR 2006
SC 2427: (2006) 3 LLN 802: (2006) 2 CLR 1047: 2006 LLR 667 (SC).
period, his termination will not amount to retrenchment and, as such, the reinstatement, as directed by the Labour Court is liable to be set aside.1 Contractual employment for a specific period would not entitle a worker to challenge his termination.2 Termination of an Engineer initially appointed for specified period will not be illegal. Termination of a Junior Engineer who was initially appointed for specified period of six months which period was extended further will not amount to illegal retrenchment. The Labour Court has misdirected itself in setting aside termination of the workman since his appointment, its extension and termination was squarely covered by Clause (bb) of Section 2(oo) of the I.D. act excluding terminations from retrenchment.3 Termination of a worker on
completion of specified period will not amount to retrenchment. When a worker has been appointed for a fixed period on contrat baiss and the same has been extended from time to time, his termination on completion of the specified period will not amount to retrenchment hence the Labour Court has erred in granting reinstatement besides that the learned Single Judge has also misdirected himself in rejecting the writ petition by the employer, hence the Division Bench restored the order of termination as passed by the Management.4 Termination due to non-renewal of the contract of employment is not 'retrenchment'. For applicability of Section 25F of the I.D. Act, the workman is bound to prove that he had been in continuous service of 240 days during twelve months preceding the order of termination.5 Termination of workman, engaged under training scheme for rehabilitating, will not be illegal retrenchment. Termination of respondent, who was engaged under a particular scheme for training and rehabilitating of weavers, will not be illegal retrenchment since such terminations are excluded from the purview of 'retrenchment' hence the Labour Court misdirected itself in granting reinstatement particularly when the respondent was aware that his appointment was purely contractual for a __________________ 1. State of Uttar Pradesh through Executive Engineer, Sant Kabir Nagar v. Sarvjeet, 2006 LLR 865 (SN) (All HC). 2. B.S.E.S. Yamuna Power Ltd. v. Rakesh Kumar, 2006 LLR 1144 (Del HC). 3. New Delhi Municipal v. Anil Kumar Gupta, 2006 LLR 1246 (Del HC). 4. Steel Authority of India Ltd. v. Workmen, Steel Authority of India Ltd., Bokaro Steel Plant, Steel City, 2007 LLR 38 (Jhar HC). 5. Bhogpur Co-operative Sugar Mills Ltd. v. Harmesh Kumar, 2007 LLR 183 (SC).
specific period.1 Where a workman was engaged under an agreement for a specific period, the disengagement will not be retrenchment. Where a workman was engaged under an agreement for a specific period and payment was made at fixed rate for work done, on disengagement of workman on termination of contract, provisions of Section 2(oo)(bb) of Industrial Disputes Act would be attracted.2 Non-renewal of contract of employment will not amount to retrenchment hence Labour Court's award cannot be interfered. Termination of a workman, having worked for more than three years on a project without payment of retrenchment compensation, will not be illegal when he was appointed on a project for a specific period and his employment may or may not be renewed hence such non-renewal of contract of employment did not amount to retrenchment and as such the High Court will not interfere in the Award of the Labour Court rejecting the dispute of the petitioner. The legislature has excluded termination of services of the employees from the purview of retrenchment when such employment was not last for a specified period.3 Termination from service of fixed period employees will not be retrenchment. When the peons in a bank have been engaged temporarily on fixed-term basis, their termination from service will not amount to retrenchment even if they have worked for more than 240 days in the last calendar year since such terminations are excluded by Clause (bb) of the definition of retrenchment under Section 2(oo) of the Industrial Disputes Act .4 A daily-wager workman has not right to employment since the employment comes to an end on the close of the same day hence he cannot raise an industrial dispute claiming that his termination amounted to illegal retrenchment i.e., being violative of Section 25F of the industrial Disputes Act. High Court will not interfere with the Award of the Labour Court holding that the workmen who were appointed for fixed period will
not be entitled to any relief after their termination even though they have worked for about ____________________ 1. Managing Director, Kamataka Handloom Devi Corporation Ltd. v. Shri Mahadeva Laxman Raval, 2007 LLR (SN) 317 (SC). 2. Punjab State Electricity Board v. Sudesh Kumar Puri, 2007 LLR 414 (SC). 3. Surjeet Kumar v. Presiding Officer, 2007 LLR 504 (Del HC). 4. Prakash Pandurang Sawant v. Punjab and Sind Bank, 2007 LLR 1077 (Bom HC).
one year after the expiry of initial period since there was no change in the terms and conditions of appointment. When termination of a workman is based on contract of employment, no notice or pay will be necessary . 1 Non-renewal of contract of employment, engaged for specified period, will not be a retrenchment.2 In case of dismissal of a workman for misconduct, the compliance of Section 25F of the Industrial Disputes Act will not be imperative.3 (b) Special Provision Relating to Retrenchment in an Establishment The Industrial Disputes Act, 1947 was amended by Act No. 46 of 1982 and by Act No. 49 of 1984. These amendments have brought about substantial changes in some provisions of the Act. Section 25K of Chapter 5B has been amended to the effect that the said chapter will now apply to industrial establishments employing one hundred workmen on average per working day for the preceding twelve months. Section 25N of the Industrial Disputes Act, 1947 as substituted by Act 49 of 1984 w.e.f. 18-8-1984, reads as under:-25N. Conditions precedent to retrenchment of workmen (1) No workman employed in any industrial establishment to which this Chapter applies, 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 three months' 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 (b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified _______________ 1. Nilesh M. Mahadeshwar v. Presiding Officer, Central Government Industrial Tiibunal No. 1, Mumbai, 2009 LLR 697 (Bom HC). 2. M/s. Hyderabad Industries Ltd., Deoghar v. State of Jharkahand, 2009 LLR 903 (Jhar HC). 3. Workmen, Represented by President of Bihar Engineering Kamgar Union v. Presiding Officer, Labour Court, Dhanbad, 2009 LLR 996 (Jhar HC).
authority) has been obtained on an application made in
this behalf. (2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner. (3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen. (4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of si xty days. (5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order. (6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication: Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference. (7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in-force as if no notice had been given to him. (8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if i t is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of subsection (1) shall not apply in relation to such establishment for
such period as may be specified in the order. (9) Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months. The validity of Section 25N was challenged before various High Courts and t here has been conflict of opinion amongst the High Courts; the matter came before the Constitutional Bench of the Supreme Court for consideration. In an unanimous decision, the Supreme Court has upheld the validity of Section 25N in holding that in order to validly retrench the workmen under Section 25N, apart from obtaining permission for such retrenchment under sub-section (2), an employer has also to fulfil other requirements, namely, to give three months' notice or pay wages in lieu of notice to the workmen proposed to be retrenched under Clause (a) of sub-section (1), pay retrenchment compensation to them under Clause (b) of sub-section (1) and to comply with the requirement of Section 25G, which is applicable to retrenchment under Section 25N in view of Section 25S. An industrial dispute may arise on account of failure on the part of the employer to comply with these conditions and the same can be referred for adjudication under Section 10. In addition, an industrial dispute could also be raised by the workmen in a case where retrenchment has been effected on the basis of permission deemed to have been granted under sub-section (3) of Section 25N on account of failure on the part of the employer to comply with these conditions and the same can be referred for adjudication under Section 10. In addition, an industrial dispute could also be raised by the workmen in a case where retrenchment has been effected on the basis of permission deemed to have been granted under sub-section (3) of Section 25N on account of failure on the part of the appropriate Government or authority to communicate the order granting or refusing the permission for retrenchment within a period of three months from the date of the service of notice under Clause (c) of subsection (1) because in such a case, there has been no consideration on merits, of the reasons for proposed retrenchment by the appropriate Government or authority and reference of the dispute for adjudication would not be precluded. Since there is no provision similar to that obtained in sub-section (7) of Section 25N attaching finality to an order passed under sub-section (2) it would be permissible for the workmen aggrieved by retrenchment effected in pursuance of an order granting permission for such retrenchment to raise an industrial dispute claiming that the retrenchment was not justified and it would be permissible for the appropriate Government to refer such dispute for adjudication though the likelihood of such a dispute being referred for adjudication would be extremely remote since the order granting permission for retrenchment would have been passed either by the appropriate Government or authority specified by the appropriate Government and reference under Section 10 of the Industrial Disputes Act, 1947 is also to be made by the appropriate Government. Since the expression 'industrial dispute' as defined in Section 2(k) of the Act covers a dispute connected with non-employment of any person and Section 10 of the Act empowers the appropriate Government to make a reference in a case where an industrial dispute is apprehended, an employer proposing retrenchment of workmen, who feels aggrieved by an order refusing permission for retrenchment under sub-section (2) of Section 25N can also move for reference of such a dispute relating to proposed retrenchment for adjudication under Section 10 of the Act though the possibility of such a reference would be
equally remote. The employer who feels aggrieved by an order granting permission for retrenchment thus stands on the same footing as the workmen feeling aggrieved by an order granting permission for retrenchment under subsection (2) of Section 25N in as much as it is permissible for both to raise an industrial dispute which may be referred for adjudication by the appropriate Government and it cannot be said that, as compared to the workmen, the employer suffers from a disadvantage in the matter of raising an industrial dispute and having it referred for adjudication.1 (c) Conditions Precedent for Valid Retrenchment Sub-section (1) of Section 25N of the Industrial Disputes Act, 1947 prohibits an employer from retrenching a workman who has been in 'continuous service' for one year or more in an 'industrial establishment' which employs hundred or more workmen until conditions precedent to retrenchment set out therein have been complied with. The opening part of sub-section (1) is the same as Section 25F with the exception that Section 25N applies only to those establishments to which Chapter VB applies. The employer is required, to give three months' notice in writing to the workman indicating the reasons for the retrenchment, or to pay him wages for the period of notice in lieu of the notice, by Clause (a) of this sub-section. This clause corresponds to Clause (a) of Section 25F with the exception that ______________ 1. Workman of Meenakshi Mills v. Meenakshi Mills Ltd., 1992 LLR 481 (SC).
this clause requires "three months", notice or wages in lieu of that period of notice to be paid to the workman while Clause (a) of Section 25F requires only one month's notice or wages in lieu thereof to be given to the workman. Then Clause (b) enjoins on the employer to make an application to the "appropriate Government" or the "specified Authority" to obtain its prior permission to retrench a workman. The requirement of prior permission to retrench workmen is the foremost pre-condition of valid retrenchment. The pre-conditions to retrenchment have been placed in the section in a rather jumbled manner. The Clauses (a) and (b) have to be read with sub-section (9). After deciding to retrench workmen, the first thing the employer is required by law to do is to make an application to obtain permission of the "appropriate Government" or the specified authority, as the case may be under this subsection or sub-section (3). Then he should wait till the permission is given or the period of sixty days from the date of making the application has expired when permission will be deemed to have been granted. Insofar as the requirement of giving notice to the workman is concerned, it is open to the employer to give such notice to the workmen, after taking the decision to retrench them, at any time, before or after obtaining the permission. He may even give such notice to the workmen before applying for the permission and wait for the permission. After the permission is granted, he may either retrench the workmen on the expiry of the period of three months from the date of notice or he may retrench them immediately on receipt of permission by paying them wages in lieu of unexpired period of three months from the date of service of the notice. Alternatively, the employer may give three months' notice of retrenchment to the workmen on obtaining permission to retrench and then retrench them on the expiry of the period of three months or retrench them forthwith on obtaining the permission by paying three months' wages in lieu of the notice. Apart from giving such a notice or paying wages in lieu of the notice, the employer is also required by sub-section (9) to pay compensation to the workmen proposed to be retrenched "at the time of retrenchment". Thus in a case where, after
obtaining permission to retrench, the employer chooses not to give notice but to pay wages in lieu of such notice, the payment of such wages, the payment of retrenchment compensation and the act of retrenchment should be simultaneous, as parts of the same transaction. These are the mandatory conditions precedent to a valid retrenchment. In other words, non -compliance of these requirements will render the retrenchment illegal and inoperative in law and the workmen shall be entitled to all the benefits which they are entitled to for the time being. (d) Application for Grant of Permission for Retrenchment Sub-section (2) of Section 25N of the Industrial Disputes Act, 1947 provides that an application under sub-section (1) has to be made in the prescribed manner. Rule 76A (1) prescribes that such application will be in Form PB. Subrule (2) provides that such application should be delivered to the Central Government or the specified authority either personally or by registered post acknowledgement due. The application will be deemed to have been made on the date on which it is delivered to the appropriate Government or the specified authority for the purposes of sub-section (4). Sub-section (4) of Section 25N provides that the appropriate Government or the specified authority is vested with the power to grant or refuse to grant the permission to the employer to retrench the workmen. But before granting or refusing to grant permission these authorities are required to: (1) make an enquiry into the question of retrenchment as it may think fit; (2) give a reasonable opportunity of being heard to-(i) the employer; (ii) the workmen concerned; and (iii) all the persons interested in such retrenchment; (3) consider (i) the genuineness and adequacy of reasons stated by the employer, (ii) the interest of the workmen, and (iii) other relevant factors; and (4) pass an order granting or refusing to grant the permission, (5) such order should (i) state reasons in writing for the decision; and (ii) be communicated to the employer as well as to the workmen. (e) Deemed Permission for Retrenchment An employer cannot retrench the workmen if the application for permission to effect retrenchment is refused. If permission is granted, he can proceed with the process of retrenchment. But if the Government or the specified authority fails to communicate its order granting or refusing to grant permission to retrench within a period of sixty days from the date of making the application, by the fiction introduced by sub-section (4), the permission applied for shall be deemed
to have been granted on the expiry of the period of sixty days. Then it will be open to the employer to proceed with the retrenchment process. The order of the appropriate Government or the specified authority granting or refusing to grant permission shall be final and binding on all the parties concerned and shall remain in force for one year from the date of such order. But the finality of the order is subject to the provisions of sub-section (6) which provides for review or reference of the order to adjudication. In other words, if the order is not reviewed or referred for adjudication under sub-section (6), it will be final and binding on the parties. FORMATS (i) Format of notice of retrenchment To .................................... .................................... Due to heavy recession in trade, fall in business and also for economy reasons, it has been decided to re-organise the working of the establishment. As one of the economy measures, it has been decided to reduce the strength of the staff and retrench some of the surplus employees. Since you are the junior-most employee in the............... Department having been recruited only on...............(date), you are hereby served with one month's statutory notice terminating your service with effect from...............The period, henceforth, will be treated as notice period. You are required to settle your accounts and collect your dues, including retrenchment compensation, on the last working day of the expiry of this notice. Dated............... Manager/Competent Authority Copy to the Labour Commissioner for information. The list of workers retrenched alongwith other relevant details are furnished in the Annexure for record of the office. Note:--In case the number of workers in an industrial establishment is more than 100 then permission for retrenchment is required from the appropriate Government. (ii) Format of notice of retrenchment when there is heavy recession in the trade To .................................... .................................... As you know that there had been heavy recession in the trade besides cut-throat and unhealthy competition of the products as marked/produced by our establishment. As a result thereto we have not been able to provide sufficient work to our employees. Also the losses have multiplied and despite best efforts, we have not been able to achieve the desired results. The survival of the establishment has also become difficult. In view of the above and also for economy reasons, we are constrained to take painful decision in effecting retrenchment and as such you being amongst the junior-most employees in your category as per the seniority list (displayed on the notice board), your services will not be required w.e.f................The effective date or retrenchment will be.............and you will be paid wages till then but can be relieved earlier when you settle your accounts by receiving the salary on or before...............failing which your legal dues will be remitted to you. It is also decided to give you one month's
salary in lieu of notice. You can collect your dues from the Accounts Department and necessary instructions have been given to this effect. We record our appreciations for your cooperation during the lean period. For and on behalf of Management CC to: Accounts Department. Or To .................................... .................................... You have been working as...............but there is no work to be provided and as such your services have become surplus. Also there is no other job matching your status which could be provided to you. Accordingly we regret to inform you that your services will not be required w.e.f...............You will be paid one month's salary in lieu of notice besides retrenchment compensation @ 15 days' wages for every completed year of service. The effective date of retrenchment will be...............but you can receive your legal dues by...............failing which the same will be remitted to you at your recorded address. For and on behalf of Management Important clarifications The term 'retrenchment' has been defined by Section 2(oo) of the Industrial Disputes Act, 1947 and the employer is required to give reasons while effecting retrenchment. In addition, Section 25F of the Industrial Disputes Act, 1947 provides that retrenchment compensation and one month's notice or salary in lieu of notice must be given to the concerned workman simultaneously at the time of retrenchment. In case the payment is delayed or falls short even for Re. 1 then the whole retrenchment becomes voidabinition and ultimately such a workman, as a retrenched employee, is reinstated in service with full back-wages. Most of the cases of the Supreme Court and the High Courts on the point of retrenchment have been decided against the employers because of the technical flaw i.e., non-payment of retrenchment compensation at the time of retrenchment. When the employer retrenches a workman and even makes an offer for payment of retrenchment compensation along with notice of retrenchment, it is generally refused by the workman. The employer sends the notice by post and even remits the compensation on the same or the following day which vitiates the whole retrenchment since payment of retrenchment compensation has not been made at the time of retrenchment, as stipulated by Section 25F of the Industrial Disputes Act, 1947. Accordingly, meticulous care has to be taken while retrenching a workman. The safest course will be that the effective date of retrenchment may have 4 to 6 days after the date of the notice with a note that the employee can receive compensation i.e., retrenchment compensation on the date of notice or the following day when he will be relieved of and in case the employee does not receive retrenchment compensation and other legal dues, then it should be remitted either by money order or even by cheque keeping in view that at least three days' time (only when the cheque is local) should be available to the concerned employee for encashment of cheque or remitted by money order.
The above clarifications are made under the presumption that the total number of employees employed in an industrial establishment is less than 100 since prior permission is not required from the Government before retrenching the employees. Procedure for calculation of retrenchment compensation While effecting retrenchment of the workmen, it is obligatory on the part of the employer to pay retrenchment compensation at the rate of 15 days' wages (for every completed year) to be calculated at the last drawn salary of an employee. The calculation of compensation is to be based from the date of appointment and in case an employee has completed 240 days, he will be entitled to 15 days' retrenchment compensation besides one month's notice or salary in lieu thereof as if he has worked for one year. 240 days includes Sundays or off days as well as festival or national holidays. In case an employee has worked for more than one year, the procedure is that in case the subsequent period of one year is less than six months then that period will not be counted, but in case it is more than six months then it will be counted as one year for calculation of compensation. While making calculations the period of notice is also to be taken into consideration. (iii) Format of notice for permission for retrenchment of workmen to be given by an employer under Clause (d) of sub-section (1) of Section 25N of the Industrial Disputes Act, 1947 (14 of 1947) FORM PA (In Triplicate) Date............... To .................................... .................................... (The Central Government/authority specified under Clause (c) of sub-section (1) of Section 25N) sir, Under clause (c) of sub section (1) of section 25N of the Industrial Disputes Act,1947(14 of 1947). I/We hereby inform you that I/We propose to retrench............workment with effect Category and designation workmen to be retrenched 1
of
(Employed)
Number of workmen (To be retrenched)
2
3
4. Permission is solicited for the proposed retrenchment under Clause (c) of sub-section (1) of Section 25N. 5. I/We hereby declare that the workmen permitted to be retrenched will be paid compensation due to them under Clause (b) of sub-section (1) of Section 25N of the Act. Yours faithfully,
(Signature) ANNEXURE (Please give replies against each item) Item No. 1. Name of the undertaking with complete postal address, including telegraphic addresses and telephone number. 2. Status of undertaking: (i) Whether Central public sector/State public sector/foreign majority company/joint sector, etc. (ii) If belongs to large industrial house, please indicate the controlling group; and if a foreign majority company, indicate the extent of foreign holdings. (iii) Whether the undertaking is licensed/registered and if so, licensing/registration authority and licence/registration certificate numbers.
name
of
3. Names and addresses of the workmen proposed to be retrenched and the nature of the duties, the units/sections/shops where they are working and the wages drawn by them. 4. Items of manufacture and scheduled industry/industries under which they fall. 5. Details relating to installed capacity, licensed capacity and the utilised capacity. 6.
(i) Annual production, item-wise for preceding three years. (ii) Production figures month-wise for preceding twelve month.
7. Work in progress--item-wise and value-wise. 8. Any arrangement regarding off-loading or sub-contracting of products or any components thereof. 9. Position of the order book-item-wise and value-wise for a period of six months and one year next following, and for the period after the expiry of the said one year. 10. Number of working days in a week with number of shifts per day and strength of workmen per each shift. 11. Balance sheet; profit and loss account and audit reports for the last three years. 12. Financial position of the company. 13. Names of the inter-connected companies or companies under the same management. 14. (i) The total number of workmen (category-wise), and the number of employees other than workmen as defined in the Industrial Disputes Act, 1947 (14 of 1947), employed in the undertaking. (ii) Percentage of wages of workmen to the total cost of p roduction. 15. Administrative, general and selling cost in absolute terms per year for the last three years and percentage thereof to the total costs. 16. Details of retrenchment resorted to in the last three years, including dates retrenchment, the number of workmen involved in each case, and the reasons therefore.
of
17. Has any of the retrenched workmen been given reemployment and if so, when? Give
details. 18. Are seniority lists maintained in respect of the categories of workmen proposed to be retrenched and if so, the details and the position of the workmen affected indicating their length of service including broken periods of service. 19. Anticipated savings due to the proposed retrenchment. 20. Any proposal for effecting savings on account of reduction in -(i) managerial remuneration, (ii) sales promotion cost, and (iii) general administration expenses. 21. Position of stocks on the last day of each of the month in the preceding twelve months. 22. Annual sales figures for the last three years and month-wise sales figures--for the preceding twelve months both item-wise and value-wise. 23. Reasons for the proposed retrenchment. 24. Any specific attempt made so far to avoid the proposed retrenchment. 25. Any other relevant factors with details thereof. (i) Notice of, and application for, retrenchment 1. Notice or, as the case may be, the application under sub-section (1) of Section 25N for retrenchment shall be served in Form PA and served on the Central Government or such authority as may be specified by the Government under the said clause either personally or by registered post acknowledgement due and where the notice is served by registered post, the date on which the same is delivered to the Central Government or the authority shall be deemed to be date of service of the notice for the purposes of sub-section (4) of the said section. 2. The notice or, as the case may be, the application, shall be made in triplicate and copies of such notice or, as the case may be, the application, shall be served by the employer on the workmen concerned and a proof to that effect shall also be submitted by the employer along with the notice or, as the case may be, the application. 3. The employer concerned shall furnish to the Central Government or the authority to whom the notice for retrenchment has been given or the application for permission for retrenchment has been made, under sub-section (1) of Section 25N, such further information as the Central Government or, as the case may be, the authority considers necessary for arriving at a decision on the notice or, as the case may be, the application, as and when called for by such authority so as to enable the Central Government or the authority to communicate its permission or refusal to grant permission within the period specified in sub-section (4) of Section 25N. (ii) Notice of retrenchment If any employer desires to retrench any workman employed in his industrial establishment who has been in continuous service for not less than one year under him (hereinafter referred to as 'workman' in this rule and in Rules 77 and 78 of the Industrial Disputes (Central) Rules, 1957, he shall give notice of such retrenchment as in Form P to the Central Government, the Regional Labour
Commissioner (Central) and Assistant Labour Commissioner (Central) and the Employment Exchange concerned and such notice shall be served on that Government, the Regional Labour Commissioner (Central), the Assistant Labour Commissioner (Central), and the Employment Exchange concerned by registered post in the following manner:-(a) where notice is given to the workman, notice of retrenchment shall be sent within three days from the date on which notice is given to the workmen; (b) where no notice is given to the workman and he is paid one month's wages in lieu thereof, notice of retrenchment shall be sent within three days from the date on which such wages are paid; and (c) where retrenchment is carried out under an agreement which specifies a date for the termination of service, notice of retrenchment shall be sent so as to reach the Central Government, the Regional Labour Commissioner (Central), the Assistant Labour Commissioner (Central), and the Employment Exchange concerned, at least one month before such date: Provided that if the date of termination of service agreed upon is within 30 days of the agreement, the notice of retrenchment shall be sent to the Central Government, the Regional Labour Commissioner (Central), the Assistant Commissioner (Central), and the Employment Exchange concerned, within 3 days of the agreement. Subject Index A Act & Rules Arms Act, 1959,
98
Bombay Industrial Employment (Standing Orders) Rules, 1948, Bords' Employers (Conduct) by laws, 1968,
31
16
Central Civil Services (Classification, Control and Appeal) Rules, 3957 Criminal Procedure Code, 1893,
41
General Clauses Act, 1897, 54,
56
Indian Evidence Act, 1872, 51, 52, Indian Penal Code, 1860,
109
53
97
Karnataka State Road Transport Corporation (Conduct & Discipline) Regulations, 1971, 17 Payment of Wages Act, 1936,
32
U.P. Industrial Dispute Act, 1947,
14
Appointment of Presenting Officer by employer, C
123
Charge-sheet competent authority for issuing, drafting of,
48
42
essential ingredients,
42
explanation of employee in response to, 94 object of, 40 Competent Authority's permission order of dismissal awarded but held in abeyance pending, 202 Conviction of Employee by Criminal Court cannot form basis for straightaway dismissal, 97 D Deemed Permission for Retrenchment, 259 calculation of compensation, 262 cl. (d) of sub-sec. (1) of sec. 25N of ID Act, 262 heavy recession in trade, 260 important clarifications, 261 notice of, and application for, 265 notice, 259, 266 Discharge causes of, 9 of an employee, 9 procedure, 9 Disciplinary Authority hold an enquiry if standing orders so provide, 106 Dismissal and Termination distinction between, 12 Dismissal of an Employee, 7 Dismissal/discharge Justified absence from duty habitual, 162 carrying on money-lending business within premises of establishment, 177 causing accident by driver, 168 coming late and assaulting superior, 176 committing fraud and dishonesty, 173 deliberate delay in complying with lawful orders, 168 dishonesty and fraud, 169 disobedience, 168, 169 disobedience to transfer order, 171
dissuading customers, 171 doing personal work, 178 driving vehicle rashly and negligently, 171 drunkenness while on duty, 172 failure to comply with transfer order, 182 falsification of accounts, 172 foul and filthy abuses towards female employees, 173 inciting workers to 'go slow', 174 insubordination, 168 insulting a superior, 169 insulting customers - not use services of employee privately, 175 intimidating superior, 182 irregularity in reporting to duty, 175 leaving office before time, 175 misappropriation of money, 176 molestation of female worker, 176 moral turpitude and deliberate act of dishonesty, 177 non-issuing of tickets and not accounting money to credit of corporation, 183 not achieving norms of production, 184 persistent refusal to perform duties, 179 refusal to work on duty, 168 resorting to 'go slow' tactics, 175 riotous behaviour at premises, 179 sexual harassment at work place, 184 sleeping by watchman, responsible for guarding vital installation, 179 subverting discipline, 180 suppressing past conviction while filling form of employment, 168 theft of company's property, 180 threatening superior, 166, 169, 182 using abusive language, 166 vulgarity in ladies' hostel, 184 Dismissal/Discharge Unjustified absence from duties without enquiry, 189 abusing the mistri, 190 assaulting a co-workman, 191 bigamy, 191 consumption of liquor by driver, 192
date of suspension, 199 drunkenness while on duty, 192 endangering safety of passengers and public, 192 failure on part of enquiry officer, 196 gambling/playing cards at work place, 193 gross negligence, 193 instigating others for illegal strike, 198 levying false allegations against employer, 193 loss of confidence when employee holding confidential or responsible post, 194 loss of temper when employee served for 30 years, 194 misconduct away from work place, 191 opportunity to workman to repel charges, 196 over-staying leave and leaving station, 195 passive participation in strike without holding of enquiry, 198 refusal to operate tail gas fan machine for want of t raining, 196 refusal to work beyond duty hours, 196 refusal to work in a sister concern, 196 resorting to 'go slow' tactics, 193 retrospective date, 197 shortage of Rupees due to defective locking system of bank, 197 theft of engine oil and air bag/ hammer, 199 want of proper charge-sheet, 192 Domestic Enquiry necessity of, 97 E Employee Admits his Guilt circumstances, 99 Employer-Employee Relationship an evolution, 1 Enquiry Officer appointment of, 99
findings/report of, 129 neither be a complainant nor a witness, 103 not be the prosecutor, 108 not to be appointed at time of framing the charges, 107 objections by workmen, 100 partner of firm, 106 said to be biased, 108 subordinate to witnesses, 105 Enquiry Report provided to concerned employee, 130 F Formats of Charge-sheets assaults and fights, 64 avails leave on false grounds, 67 causing damage to property of factory/mill, 77, 78 conduct of employee involves bad faith and di shonesty, 68 dishonesty, 66 disobedience, 65 does not attend to work properly, 82 drunk while on duty, 73 fails to comply with transfer order, 79 fails to perform duty during working hours, 72 habit of absenting, 63 habit of coming late, 64 holds meeting of union within the premises of establishment, 68 incites other workers to abstain from performing their duties, 67 indulging in riotous and disorderly behaviour, 74 insolent behaviour towards superior officer, 74 irregular attendance, 70 lack of punctuality, 70 misbehaves with superiors, 73 neglects duties, 69, 70 over-stays of sanctioned leave, 71 resorting to strike, insubordination and picketing, 75
resorts to illegal strike during subsistence/operation of settlement, 78 shouting slogans, 77 slows down work/production, 81 smoking at prohibited place, 77 stage violent demonstration, 67 stages demonstration and incites other workers to join him for agitation, 78 stays inside factory premises during strike, 79 takes unauthorised benefit of service with employer and works for competitor, 82 unlawful assembly, 77 wilful damage to property, 74 wilful insubordination, 65 G Good Employee an asset, 4 H Holding an Enquiry and Recording Evidence procedure for, 123 I Illegal Retrenchment, 225 absented for 3 weeks, 235 ad-hoc/temporary worker worked for 240 days, 234 compensation and notice pay was prepared but not paid, 230 compensation not paid, 225 compensation not paid at time of closure of pl ant, 235 compensation not paid due to weak financial position, 231 compensation not paid on plea that three months' notice was given, 230 daily wager worked for 4 years, 234 defect in notice, if vitiates it, 245 effect of non-compliance with provisions, 237 employee completed 240 days, 232 employer drawn presumption of abandonment due to continuous absence of an employee, 231 employer presumed that workman abandoned the job and called him to collect his dues but did not make the payment, 236 engaged on temporary post terminated, 236
initial appointment was for 30 days, continued for 2 vears, 232 initially appointed for fixed-term and re-appointed with gaps, 232 mere readiness on part of employer to send notice of retrenchment and compensation not sufficient, 232 name struck off from muster-rolls, 235 new service conditions imposed and services terminated, 233 non-compliance of sec. 25F of ID Act, 226 not offer to pay retrenchment compensation, 235 notice of retrenchment not given, 235 offer to collect dues, 231 presumption that worker abandoned job, 231 rationalisation-notice of change will be imperative, 237 reinstatement with back-wages, 226 repeated breaks were given, 233 retrenched employees called upon next day of retrenchment to collect dues, 236 service of notice to appropriate government, 244 services discontinued after completion of 22 years and no retrenchment compensation paid, 233 services of daily wager terminated without paying retrenchment compensation, 235 services of employee discontinued, 234 services of workman appointed as casual clerk having worked for more than 240 days were terminated, 236 services of workman terminated without assigning any reason, 231 termination for not holding minimum qualifications, 233 termination of service is not retrenchment, 246 termination without compensation after 3 years of service, 234 time of retrenchment, 225 M Maxim functus officio, 220, 221 mala fide, 5 magna carta, 3 mutatis mutandis, 113
nemo debet esse judex, 101 prima facia, 86, 153 pro pria causa, 101 sine qua non, 990, 210 state proratione voluntas populi, 215 Misconduct, 13 act or omission amounts to, 20 broad enumeration of acts and omissions, 30 employer and employee relationship, 27 exhaustive list of, 33 first step towards dismissal/discharge, 13 implied terms of contract, 27 not enumerated in certified standing orders, 22 variable concept, 26 wilful, 20 N No Hire and Fire at Will, 6 Notices pertaining to enquiry, 132 covering letter alongwith enquiry report to submit comments on findings of enquiry, 136 discharge to employee after enquiry is held, 199 enquiry officer for holding of enquiry, 132 enquiry report with proposed punishment and asking for explanation, 136 intimating about holding of enquiry when fails to send explanation, 135 intimating time, date and venue of enquiry, 132, 134 punishing authority does not agree with 'findings' of enquiry officer, 200 termination of service awarded but held in abeyance pending Competent Authority's permission, 201 O Objections by Workmen appointment of enquiry officer, 100 P Punishment consideration of past conduct, 152 implication of section 11A of ID Act, 154 principles to determine, 142 standings orders followed, 138 who can pass order, 161 R
Representation by Lawyer/Union Leader employee can be allowed a lawyer to represent, 116 employee has right to be represented, 112 in enquiry, 109 management represented by legally trained person, 112 matter pertains to exceptional circumstances, 111 no representation by co-employee is available, 116 trade union leader, 117 Retrenchment, 10 application for, 218 application for grant of permission, 258 conditions precedent for valid retrenchment, 256 contrary to provisions, 221 deemed permission, 259 defect in application seeking permission, 224 industrial establishment under Chapter VB, ID Act, 218 meaning of, 206 notice of, 217, 218 object of Chapter VB of ID Act, 218 special provision in establishment, 252 sub-section 4 of section 25N, 223 S Service of Charge-sheet compliance of Standing Orders/Service Rules, 57 personal service, 50 through postal authorities, 59 Standings orders Followed imposing punishment, 138 Suspension allowance, 87 allowance includes all compensatory allowances, 89 allowance under Standing Orders Act, 2946, 88 circumstances justifying exercise of right of employer to suspend, 85 criminal proceedings are pending against employee, 91 effect of non-payment of suspension/subsistence allowance, 90 employer has a right to suspend, 85 kinds of, 84 meaning of, 83
ordered carefully, 87 pendency of disciplinary proceedings, 92 T Termination for not holding minimum qualifications, 233 of service awarded but held, in abeyance pending competent authority's permission, 201 of sevice is not retrenchment, 246 without compensation after 3 years of service, 234 Termination of Confirmed Employee reasons recorded, 96 sans enquiry not valid, 96 V Validity of Standing Orders dispensing with enquiry, 98 © Universal law Publishing Co.
