Point of Law: Labour Law - Retrenchment - Meaning of - Definition of term retrenchment makes it clear that termination of service of workman as a result of non-renewal of contract of employment between the employer and workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein does not amount to retrenchment.

JUDGMENT :

A.M. BADAR, J.

1. Heard the learned counsel appearing for petitioners.

2. Learned counsel appearing for petitioners drew my attention to the contract for appointment at Ext.P2 dated 22.02.2014 entered into between the petitioner-employer and the 1st respondent-workman for the period from 22.02.2014 to 21.02.2015. Thereafter my attention is also drawn to the contract of employment at Ext.P5 dated 01.04.2015 for the period from 01.04.2015 to 30.03.2016. Learned counsel for petitioners accepted the fact that the 1st respondent was in employment with them from 22.02.2014 to 01.09.2016 with a break of only one day during that period. It is argued that according to the terms of contract, the 1st respondent was to be terminated at any time by the competent authority of the petitioner-Corporation if she is found guilty of any insubordination, misconduct etc. or if it is proved beyond doubt that the Corporation has incurred loss, damage etc. due to willful act of the 1st respondent so also if the 1st respondent is incapable of discharging the duties upto the desired level assigned to the post for which she bound to do according to the job demand.

3. Learned counsel for the petitioners has not disputed the fact that after the second contract, Ext.P5 which was for the period from 01.04.2015 to 30.03.2016, there was no formal contract entered into between the parties and the 1st respondent continued thereafter till she was terminated on 01.09.2016. With this, it is argued that, as termination of the 1st respondent was on expiry of the contract period and as the contract was not renewed, same cannot be termed as ‘retrenchment’ within the meaning of the said term. The contractual period is required to be exempted from the definition of the term retrenchment.

4. I have considered the submissions so advanced and also perused the materials placed before me including the Award passed by the learned Labour Court as well as contracts at Exts.P2 and P5 which are stated to be marked as Exts.M3 and M6 before the learned Labour Court. At this juncture, it is apposite to quote the observations of the learned Labour Court recorded in the Award after due appreciation of evidence of the parties. Paragraph 13 of the impugned Award needs reproduction and it reads thus:

“13. The evidence tendered by MWI, the Managing Director would show that though the dispensation of service of the work woman was prima-facie by way of non-renewal of contract of employment virtually the dispensation of service was for the reason that in her performance appraisal for the period ending with 31.08.2016 she did not secure the sufficient grade more than 60% as it is stated in Ext.M10 that the workman and others obtained below 60% scoring. It is significant to note that incorporation of such a condition and clause i.e. to secure a minimum score in the performance appraisal does not find a place in Ext.M2 appointment order dated 12.02.2014, Ext.M3 agreement dated 22.02.2014 and Ext.M6 agreement dated 01.04.2015. To bind a party to a condition in a contract/agreement the same should find a place in the contract/agreement executed between the parties. Had there been such a clause in the agreement to the effect that minimum score in the performance appraisal would be a pre-condition for the renewal of contract of employment definitely the workman would have been bound by the same. As stated above, no such contract/agreement incorporating such a condition are seen executed between the parties. The exemptions provided to S.2(00) of the Industrial Disputes Act 1947 will not cover the performance appraisal conducted by the management establishment. The fact that the workwoman did not secure a cut off grade or score is not itself is a reason for retrenchment. If that be so, it can safely be concluded that the dispensation of service of the workwoman was not in terms of contractual agreement entered into between the parties, nor saved by clause (bb) of S.2(00) of the I.D. Act. Therefo