The employer must justify the action of discharge simplicitor for loss of confidence before the adjudicating authority and prove and justify the loss of confidence in the employee.

Headnote:
Labour Court Judgment - Unfair Labour Practice - M.R.T.U. & P.U.L.P. Act - Section 25(F) of the Industrial Disputes Act, 1947 - [M.R.T.U. & P.U.L.P. Act, Section IV] - The court discussed the unfair labour practice under Item I (b, f and g) of Schedule IV of the Act, violation of section 25(F) of the Industrial Disputes Act, 1947, and the requirement of a domestic enquiry before passing an order of discharge simplicitor for loss of confidence. The court emphasized the need for the employer to justify the action of discharge simplicitor before the adjudicating authority and the importance of proving and justifying the loss of confidence in the employee.
Fact of the Case:

The petitioner, a five star hotel, terminated the services of an employee without holding a domestic enquiry, citing loss of confidence due to an incident involving the employee carrying a large amount of money during his shift. The employee filed a complaint of unfair labour practice, claiming that the termination was mala fide and violated section 25(F) of the Industrial Disputes Act, 1947.
Finding of the Court:

The Labour Court found unfair labour practice against the petitioner and directed compensation and reinstatement with back wages for the employee.
Issues: The issues included the validity of the termination without a domestic enquiry, the employee's explanation for carrying the money, and the compliance with section 25(F) of the Industrial Disputes Act, 1947.
Ratio Decidendi: The court held that the employer must justify the action of discharge simplicitor for loss of confidence before the adjudicating authority and emphasized the need for a domestic enquiry or justification of the loss of confidence in the employee.
Final Decision: The court quashed and set aside the Labour Court's judgment and order, ruling in favor of the petitioner. The petitioner was directed to refund the seized amount to the employee and pay gratuity for the employee's total service.

JUDGMENT- R.J. KOCHAR, J.:---The petitioner, a five star hotel, is aggrieved by the judgment and order dated 24th July, 1997 passed by the Presiding Officer, Labour Court, Mumbai in Complaint U.L.P. No. 226 of 1993 filed by the respondent employee under Item I (A, B, D, E, F G) of Schedule IV of M.R.T.U. P.U.L.P. Act against the order of termination passed by the petitioner terminating the services of the employee with effect from 20th June, 1992 on the ground of loss of confidence on account of an incident which appears to have taken place on 21-12-1991 when the said employee Shri Vincent was working in his third shift from 11.00 p.m. (on 20th December, 1991) to 7.00 a.m. on 21st December, 1991. The petitioner passed the impugned order without holding a domestic enquiry before terminating the said employee from employment. In the order of termination it is mentioned that the Security Supervisor Mr. Suleman Shaikh on his round at 4.00 a.m. on 21st December, 1991 found the said employee moving in a very suspicious manner on 6th floor of the hotel and he saw the employee entering in room No. 66 after knocking the door at the odd hour. The Supervisor further reported to have heard a talk between the employee and the occupant in respect of exchange of U.S $ into Indian Currency. In these circumstances, the said employee was brought down in the lobby when he started running away but on alarm raised by the Supervisor he was caught and was taken to the security cabin. On search an amount of Rs. 16,350/- was found on his body. It is also mentioned in the order of termination that by letter dated 21-12-1991, the employee had admitted his guilt. In the aforesaid circumstances, as reported by the Security Supervisor, the employee was terminated from employment on the ground of loss of confidence. The order was by way of discharge simplicitor, narrating the incident and the ground on which the management of the petitioner appears to have lost confidence in the employee.

2. A complaint of unfair labour practice was filed on behalf of the said employee by his union viz. Bhartiya Kamgar Karmachari Mahasangh. From the averments in the complaint, it appears that the explanation of the employee was that he had carried the amount of Rs. 16,350/- with him which was to be paid to his brother who was residing nearby the hotel at Juhu, as the employee had taken loan for purchase of a residential flat for himself and he was 15 to 20 minutes late in attending his duty at 11.00 p.m. in the third shift. He could not declare in the security department at the time of search that he was carrying the said amount with him. According to him, that was the money belonging to him and that he had not committed any act of theft or any misconduct. It was also pleaded that the order of discharge simplicitor was a punitive order which ought to have preceded a domestic enquiry and since no such enquiry was held and since he was not given an opportunity of hearing, the action of discharge simplicitor was not a bona fixe action but the same was mala fide and amounted to colourable exercise of powers and therefore, unfair labour practice within the meaning of Item I of Schedule IV of the Act. It was also pleaded that there was violation of section 25(F) of the Industrial Disputes Act, 1947, as according to the employee the order of discharge simplicitor without holding an enquiry amounted to retrenchment as defined under the Industrial Disputes Act and since section 25(F) of the said Act was not complied with, the order of discharge simplicitor suffer from the vice of undue haste.

3. The petitioner company contested the complaint of the union by filing its written statement and the necessary documents. Both the parties adduced their oral and documentary evidence. Since the petitioner company had not held a domestic enquiry before passing the impugned order of discharge simplicitor, it adduced evidence before the Labour Court to justify its action of termination of t

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Judicial Analysis