Important Point
Automatic termination of a permanent employee who remained absent from duty for more than seven days without permission from management under Clause 17(g) of the Certified Standing Orders without giving him an opportunity of hearing is bad and illegal and amounts to retrenchment as defined u/s. 2(oo) of the Industrial Disputes Act, 1947 and as such termination is not covered under the exceptions to Section 2(oo), the terminated employee would be entitled to reinstatement with back wages.

Judgment

S. Saghir Ahmad, J.-Respondent 1 was appointed as an Operator (Train­ee) on 13.5.1980 in the petitioner’s establishment. On completion of training, she was absorbed on that post with effect from 13.7.1981 and was confirmed on 13.7.1982. She thus acquired the status of a perma­nent employee.

2. With effect from 7th of November, 1984, respondent 1 proceeded, and remained till 29th January, 1985, on maternity leave. Thereafter, she allegedly remained absent with effect from 30.1.1985 to 12.4.1985 without any application for leave and consequently by order dated 12th April, 1985, the petitioner informed respondent 1 that her services stood automatically terminated in terms of Clause 17(g) of the Certi­fied Standing Orders. Respondent 1 raised an Industrial Dispute and made a prayer to the State Government in 1985 that her case may be referred to the Industrial Tribunal for adjudication. Her application, filed before the Deputy Labour Commissioner, Lucknow, was registered as C.B. Case No. 310-1985. The State Government, by its order dated 18.7.1990, referred the following question for adjudication to the Industrial Tribunal, Lucknow :

“Whether the termination of the services of female Smt. Shammi Bhan, Operator, daughter of C.N. Kaul, by the management by its letter dated 12.4.1985 is proper and legal. If not, the relief which the employee will be entitled to?” (Translated from Hindi)

3. The Tribunal, by its Award dated 21st July, 1992, held that the termination of services of respondent 1 amounted to “Retrenchment” within the meaning of Section 2(oo) of the Industrial Disputes Act and since all other legal requirements had not been followed, the termina­tion was bad and consequently she was entitled to reinstatement as also fifty per cent of back wages from the date of termination till reinstatement.

4. This Award was challenged by the petitioner through a Writ Petition in the Allahabad High Court (Lucknow Bench) and the High Court, by the impugned judgment dated 28.10.1997, dismissed the writ petition up­holding the findings of the Tribunal that termination of respondent’s services was “retrenchment”. The High Court further held that while invoking the provisions of Clause 17(g) of the Certified Standing Orders, the petitioner ought to have been given an opportunity of hearing to respondent.

5. Mr. Manoj Swarup, learned counsel appearing for the petitioner in this Special Leave Petition, has contended that since there was a specific provision contained in Para 17 (g) of the Certified Standing Orders that if the employee overstays the leave without permission for more than seven days his services would be liable to automatic termi­nation, the Industrial Tribunal as also the High Court were wrong in holding that the termination of her services was bad. He has also contended that the termination of respondent’s services on account of her continued absence would not amount to “retrenchment” as defined in Section 2(oo) of the Industrial Disputes Act (for short, `the Act’) and, therefore, there was no occasion for the High Court or the Indus­trial Tribunal to grant reinstatement or direct payment of back wages.

6. The Tribunal as also the High Court have recorded a categorical finding of fact that the respondent was a permanent employee in the petitioner’s establishment.

7. We have to see whether the services of the respondent, who had acquired the status of a permanent employee, could be terminated in the mode and manner adopted by the petitioner, who maintains that it was done in accordance with Clause 17(g) of the Certified Standing Orders and no grievance can, therefore, be raised by the respondent on that account.

8. Before examining Clause 17(g) of the Certified Standing Orders, we may point out that the concept of employment under Industrial law involves, like any other employment, three ingredients:

(i) management / industry / factory / employer, who employs or, to put it differently, engages t