The employer's power to terminate employment under a contract is subject to judicial review. Industrial tribunals can inquire whether the termination was bona fide and not mala fide, victimisation, or an unfair labour practice.

Judgment

GAJENDRAGADKAR, J. : This appeal by special leave arises from an industrial dispute between the appellant, Assam Oil Company Ltd., and the respondent, its workmen. The dispute was in regard to the termination of services of Miss P. Scott, one of the employees of the appellant. The respondent alleged that the said termination of Miss Scott s services was illegal and that was one of the points referred to the Industrial Tribunal, New Delhi, for its adjudication. The other point of dispute between the parties was in regard to the quantum and conditions of the payment of bonus for the year 1955-56 to the appellant s workmen. The industrial tribunal has directed the appellant to reinstate Miss Scott and to pay her all the back wages from the date of her dismissal until the date of her reinstatement. It has also ordered that Miss Scott should be paid bonus for the two years in question as specified in the award. The direction for the payment of bonus is not challenged by the appellant; but the validity of the order asking the appellant to reinstate Miss Scott and to pay her the whole of the back wages during the relevant period is questioned before us, and so the main point which calls for our decision is whether the appellant was justified in terminating the services of Miss Scott, and if not, whether in the circumstances of this case it would be appropriate to direct an order of reinstatement?

2. The appellant company is chiefly engaged in searching for and refining crude oil and it has a refinery at Digboi in Assam. At New Delhi it has a small office with 3 or 4 employees. Miss Scott was originally in the employment of M/s. Burmah-Shell, New Delhi, as a lady secretary. Her services were lent to the Delhi representative of the appellant company sometime in January 1954. In September, 1954, the appellant set up its own office at New Delhi and then offered Miss Scott direct employment on the same terms and conditions that governed her employment with M/s. Burmah-Shell. Miss Scott then resigned her service from M/s. Burmah-Shell and joined the appellant as a regular employee in October, 1954. Her appointment was subsequently confirmed on September 1, 1955, on terms and conditions which were communicated to her and which she accepted. One of the terms was that the appointment in question may be terminated on one month s notice on either side.

3. During the course of her employment Miss Scott did not give satisfaction to the appellant and on many occasions she was verbally warned to improve her work and not to repeat her lapses. On February 26, 1957. Mr. Gowan, the Delhi representative of the appellant warned Miss Scott in writing about her lapses and added that he did not consider her work satisfactory. He told her to strive to improve her work and mend matters failing which he would have to consider whether she was suitable to continue in the appellant s employment. On February 28, 1957, the services of Miss Scott were terminated by Mr. Gowan and she was told that the faults pointed out to her had not been corrected and that her performance during her service had not matched up to the standard required. Miss Scott was given one month s pay in lieu of notice and she accepted it. At the time when her services were terminated Miss Scott used to receive the total remuneration of Rs. 535 per month.

4. On March 13, 1957, Miss Scott made a representation to the Conciliation Officer, New Delhi, against the termination of her services, and it is out of the proceedings taken by the Conciliation Officer on this representation that the present dispute ultimately came to be referred to the industrial tribunal for adjudication. The union of the appellant s workmen which sponsored her case alleged before the tribunal that the termination of Miss Scott s services was wrongful and illegal and she was entitled to reinstatement. It was urged on her behalf that no enquiry was held by the appellant before terminating Miss Scott s services and that m