Back
SUPREME COURT OF INDIA
Y.V. CHANDRACHUD, P.K. GOSWAMI AND A.C. GUPTA, JJ.
M/s. Hindustan Steel Ltd, Appellant
Versus
The Presiding Officer, Labour Court, Orissa and others, Respondents.
Civil Appeal No. 1580 of 1970,
D/- 15-9-1976.
Advocates appeared
Mr. L. N. Sinha, Sol. Gen of India, (M/s. Santosh Chatterjee. G. S. Chatterjee and D. P. Mukherjee, Advocates with him), for Appellant Mr. P. S. Khera, Advocate, (for No. 4); Mr. Gobind Das, Sr. Advocate, (Mrs. S. Bhandare, M/s. M. S. Narasimhan, A. K. Mathur and A. K. Sharma, Advocates with him), (for No. 5) and M/s. B. P. Singh and Mr. A. K. Srivastava, Advocates, (for No. 6), for Respondents.
Industrial Disputes Act - Section 25F - Termination from services – Employment and service - Whether termination of services of the three respondents was justified and if not to what relief they were entitled was referred by Government for adjudication to Lab our Court - Whether three respondents had been retrenched by their employer as found by Lab our Court - Whether definition of retrenchment in Section 2 (oo) goes so far beyond accepted notion of retrenchment as to include termination of services of all workman in an industry when industry itself ceases to exist on a bona fide closure or discontinuance of his business by employer - Appellant challenged award by filing a writ petition in High Court - It was contended before High court that services of these employees had come to an end by efflux of time that management had not terminated their services and as such these were not cases of retrenchment - Another submission made on behalf of management was that employees not having proved that they had made efforts to minimize their losses during period of unemployment award for payment of full back wages was erroneous - High Court overruled both contentions and dismissed writ petition - In this appeal by special leave appellant questions correctness of decision of High Court - Main question in this appeal is whether three respondents had been retrenched by their employer as found by Lab our Court - If these were cases of retrenchment order of reinstatement made by Lab our Court was obviously a valid order as admittedly condition precedent to retrenchment of workmen laid down is Section 25F of Industrial Disputes Act had not been satisfied - Contention raised on behalf of appellant both here and in High Court was that services of three respondents came to an end by efflux of time and that such termination of service did not fall within definition of retrenchment in Section 2 (oo) of Industrial Disputes Act – Held, Solicitor General referred one of question that arose for decision was whether definition of retrenchment in Section 2 (oo) goes so far beyond accepted notion of retrenchment as to include termination of services of all workman in an industry when industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer - Question was answered in negative on authority of an even earlier case - Which held that retrenchment connotes in its ordinary acceptation that business itself is being continued but that a portion of the staff or labor force is discharged as surplus age and termination of services of all workmen as a result of closure of business cannot therefore be properly described as retrenchment – Following it was held that words for any reason whatsoever used in definition would not include a bona fide closure of whole business because - It would be against entire scheme of Act to give definition clause relating to retrenchment such a meaning as would include within definition termination of service of all workmen by employer when business itself ceases to exist - On facts of case before us giving full effect to words for any reason whatsoever would be consistent with scope and purpose of Section 25F of Industrial Disputes Act and not contrary to scheme of Act - Court do not find anything in case which is inconsistent with what has been held in State Bank - Lab our Court has found that it had not been proved that respondents had any alternative employment - In writ petition filed by the appellant in High Court finding that respondents had no alternative employment was not challenged. From judgment of High Court it appears that submission on propriety of awarding full back wages to respondents was confined to ground that respondents had not proved that they had tried to mitigate their losses during period of unemployment - In special leave petition also what has been urged is that High Court should have held that respondents were not entitled to full back wages unless they succeeded in proving that they tried to secure alternative employment but failed - Lab our Court awarded full back wages to respondents on the finding that they had been illegally retrenched - It does not appear that question of mitigation of loss for deprivation of employment had at all been raised before Lab our Court - High Court therefore refrained from exercising its discretionary jurisdiction in favor of employer and proposed not to deprive the workmen of benefit they had been found entitled to by Presiding Officer - That respondents were unemployed cannot now be disputed - In these circumstances High Court was justified in court opinion in refusing to interfere on this point - Appeal dismissed
Judgment
GUPTA, J.:- Respondents Nos. 3, 4 and 5 had been employed as Head Time Keepers in the Rourkela Unit of Hindustan Steel Limited, appellant herein, The third and the fourth respondents were appointed on September 24, 1959 and September 14, 1959 respectively, each for a period of three years. The fifth respondent was also appointed for a period of three years from July 15, 1957 but as Time Keeper, not Head Time Keeper. In his case the period was extended after the expiry of three years from time to time till October 15, 1962. In the meantime he had been promoted from Time Keeper to Head Time Keeper with effect from 3-11-1960. Pursuant to an alleged policy to "streamline the organisation and to effect economies wherever possible", the appellant chose not to renew the contracts of service of the Head Time keepers who were eight in number including these three respondents. There was no order terminating their services; according to the appellant the termination was automatic on the expirty of the contractual period of service. The aforesaid three respondents raised an industrial dispute through their union, respondent No 6, Rourkela Mazdoor Sabha. the dispute whether the termination of the services of the three respondents was justified and, if not, to what relief they were entitled,was referred by the Government of Orissa for adjudication to the Labour Court of Orissa, Bhubaneswar. The Presiding Officer of the Labour Court by his award dated 12-12-1964 vacated the orders of termination passed against these three respondents and held that they were entitled to "reinstatement with continuity of service" and also to "full wages for the period between the date of their release from service and the date of their reinstatement." The award in based on the following findings:
(i) the three respondents had been retrenched from employment, and the requirements of Sec. 25F of the Industrial Disputes Act not having been satisfied, the retrenchment was contrary to law:
(ii) in terminating the services of these employees the management had adopted unfair labour practice and the action of the employer was not bona fide; and that
(iii) it had not been proved that they had any alternative employment after they were released from service.
The appellant challenged the award by filing a writ petition in the Orissa High Court. It was contended before the High court that the services of these employees had come to an end by efflux of time, that the management had not terminated their services and as such these were not cases of retrenchment. Another submission made on behalf of the management was that the employees not having proved that they had made efforts to minimize their losses during the period of unemployment, the award for payment of full back wages was erroneous. The High Court overruled both the contentions and dismissed the writ petition. In this appeal by special leave the appellant questions the correctness of the decision of the High Court.
2. The main question in this appeal is whether the three respondents had been retrenched by their employer as found by the Labour Court. If these were cases of retrenchment, the order of reinstatement made by the Labour Court was obviously a valid order as, admittedly, the condition precedent to the retrenchment of workmen laid down is Section 25F of the Industrial Disputes Act had not been satisfied. The contention raised on behalf of the appellant both here and in the High Court was that the services of the three respondents came to an end by efflux of time and that such termination of service did not fall within the definition of retenchement in Section 2 (oo) of the Industrial Disputes Act. The Solicitor General appearing for the appellant frankly conceded that this appeal was covered by a recent decision of this Court, State Bank of India v. N. Sundara Money, AIR 1976 SC 1111 and the decision was against the contention of the appellant. He however submitted that this decision which was rendered
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
