1. Termination of service — Award of lump sum compensation in lieu of reinstatement — Claim for re-employment under Section 25(H), Industrial Disputes Act, 1947. (Para 4 , 5 , 6 , 7 , 8 )
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2019 Supreme(SC) 1
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, INDU MALHOTRA, JJ.
Management of the Barara Cooperative Marketing-cumProcessing Society Ltd. – Appellant
Versus
Workman Pratap Singh – Respondent
CIVIL APPEAL No. 7 OF 2019 [Arising out of SLP (C) No. 17975 of 2014]
Decided On : 02-01-2019
Important Points
IMPORTANT POINTS
Workman accepting lump sum compensation in lieu of reinstatement is not a retrenched employee. Cannot invoke section 25(H).
Section 25(H) cannot be invoked on basis of regularization of service of persons already in employment.
There is distinction between employment and regularization.
Workman accepting lump sum compensation in lieu of reinstatement is not a retrenched employee. Cannot invoke section 25(H).
Section 25(H) cannot be invoked on basis of regularization of service of persons already in employment.
There is distinction between employment and regularization.
Subject
Employment - Re-employment
Act Referred
Headnote
(a) Industrial Disputes Act, 1947 – Section 25(H) r/w Rule 78 of the Industrial Disputes (Central) Rules, 1957 – Reemployment – Workman accepting lump sum compensation in lieu of reinstatement – Matter finally ended there – Held, workman not being a retrenched employee, section 25(H) not attracted. (Para 20)
(b) Industrial Disputes Act, 1947 – Section 25(H) – Section 25(H) cannot be invoked on basis of regularization of service of persons already in employment. (Para 220
(c) Labour law – Regularisation and employment – Distinction. (Para 23)
Facts of the case:
The respondent was working with the appellant as a Peon. The appellant terminated the services of the respondent.
The Labour Court held the respondent's termination as bad in law and accordingly awarded lump sum compensation of Rs.12,500/- to the respondent in lieu of reinstatement in service.
The respondent accepted the compensation, which was awarded by the Labour Court.
After 20 years, in the year 1993, the respondent filed a representation to the appellant praying therein that since the appellant has recently regularized the services of two peons on 01.01.1992 vide their resolution dated 02.08.1993, therefore, he has become entitled to claim re-employment in the appellant's services in terms of Section 25 (H) of the Industrial Disputes Act, 1947. The appellant, however, did not accept the prayer made by the respondent.
The Labour Court held that the respondent was not entitled to claim any benefit of Section 25 (H) of the ID Act to claim re-employment in the appellant's services on the facts stated by the respondent in his statement of claim.
The High Court directed re-employment of the respondent on the post of Peon in the appellant's services.
The Division Bench dismissed the appeal.
Finding of the Court:
Impugned judgment is not sustainable.
Result: Appeal allowed.
Legal Category Hierarchy
Advocates Appeared:
For Petitioner(s): Mr. Vipin Kumar Jai, AOR
For Respondent(s): Mr. Shish Pal laler, Adv. Mr. Sonit Sinhmar, Adv. Mr. Sanjay Maurya, Adv. Mr. Devesh Kumar Tripathi, AOR
For Petitioner(s): Mr. Vipin Kumar Jai, AOR
For Respondent(s): Mr. Shish Pal laler, Adv. Mr. Sonit Sinhmar, Adv. Mr. Sanjay Maurya, Adv. Mr. Devesh Kumar Tripathi, AOR
Table of Contents
2. Whether a workman is entitled to re-employment under Section 25(H) of the Industrial Disputes Act upon the regularization of existing employees. (Para 7 , 8 )
3. Regularization of existing employees does not constitute filling a vacancy or fresh employment, thus not triggering the preference for retrenched workmen under Section 25(H). (Para 14 , 15 , 16 , 17 , 18 , 19 , 21 , 22 , 23 )
4. Section 25(H) of the Industrial Disputes Act applies only to fresh recruitment to fill vacancies, not to the regularization of employees already in service. (Para 22 , 23 )
5. Appeal allowed — Orders of the High Court set aside — Award of the Labour Court restored. (Para 13 , 24 , 25 )
6. When does Section 25(H) of the Industrial Disputes Act apply?
It applies when an employer proposes to fill vacancies by recruiting persons, requiring them to give preference to retrenched workmen who offer themselves for re-employment, as per the procedure prescribed in Rule 78 of the Industrial Disputes (Central) Rules, 1957. (Para 16 , 17 , 18 , 19 )
7. Does the regularization of an existing employee trigger the right to re-employment under Section 25(H)?
No. Regularization of an employee already in service is not the same as filling a vacancy through fresh employment and does not entitle a retrenched employee to claim preference under Section 25(H). (Para 21 , 22 , 23 )
8. Does accepting lump sum compensation in lieu of reinstatement preclude a claim for re-employment under Section 25(H)?
Yes, if the compensation was awarded and accepted in full and final satisfaction in lieu of the right of reinstatement, the issue is considered finally concluded and not a case of retrenchment as contemplated under Section 25(H). (Para 15 , 20 )
JUDGMENT
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is directed against the final judgment and order dated 21.02.2014 passed by the High Court of Punjab & Haryana at Chandigarh in L.P.A. No. 317 of 2010 whereby the Division Bench of the High Court dismissed the appeal filed by the appellant herein and affirmed the judgment dated 26.11.2009 passed by the Single Judge of the High Court in CWP No.15066 of 2006 by which the respondent herein was ordered to be reinstated into service with back wages.
3. Few relevant facts need mention hereinbelow to appreciate the short controversy involved in this appeal.
4. The appellant is the Co-operative Marketing Society. The respondent was working with the appellant as a Peon from 01.07.1973. The appellant terminated the services of the respondent on 01.07.1985. The respondent, therefore, got the reference made through the State to the Labour Court to decide the legality and correctness of his termination order.
5. By award dated 03.02.1988, the Labour Court held the respondent's termination as bad in law and accordingly awarded lump sum compensation of Rs.12,500/- to the respondent in lieu of reinstatement in service.
6. The appellant and respondent both were aggrieved by the award and filed writ petitions before the High Court to challenge the legality and correctness of the award passed by the Labour Court. The High Court, however, dismissed both the writ petitions. The respondent then accepted the compensation, which was awarded by the Labour Court.
7. In the year 1993, the respondent filed a representation to the appellant praying therein that since the appellant has recently regularized the services of two peons on 01.01.1992 vide their resolution dated 02.08.1993, therefore, he has become entitled to claim re-employment in the appellant's services in terms of Section 25 (H) of the Industrial Disputes Act, 1947 (hereinafter referred to as “the ID Act”). The appellant, however, did not accept the prayer made by the respondent.
8. This led to making of an industrial reference to the Labour Court by the State at the instance of the respondent for deciding the question as to whether the respondent is entitled to claim re-employment in the appellant's services in terms of Section 25 (H) of the ID Act.
9. The Labour Court answered the reference against the respondent and in appellant's favour. In other words, the Labour Court held that the respondent was not entitled to claim any benefit of Section 25 (H) of the ID Act to claim re-employment in the appellant's services on the facts stated by the respondent in his statement of claim.
10. The respondent felt aggrieved and filed writ petition in the High Court. The Single Judge by order dated 26.11.2009 allowed the writ petition and set aside the award of the Labour Court. The High Court directed re-employment of the respondent on the post of Peon in the appellant's services. The appellant-employer felt aggrieved and filed appeal before the Division Bench.
11. By impugned order, the Division Bench dismissed the appeal and upheld the order of the Single Judge, which has given rise to filing of the present appeal by way of special leave in this Court by the employer-the appellant.
12. Heard Mr. Ajay Kumar, learned counsel for the appellant and Mr. Shish Pal Laler, learned counsel for the respondent.
13. Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeal and while setting aside the orders of the High Court (Single Judge and the Division Bench) restore the award of the Labour Court.
14. In our considered opinion, there was no case made out by the respondent (workman) seeking re-employment in the appellant's services on the basis of Section 25 (H) of the ID Act.
15. In the first place, the respondent having accepted the compensation awarded to him in lieu of his right of reinstatement in service, the said issue had finally come to an end; and Second, Section 25
