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1999 Supreme(Mad) 39
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE P. SATHASIVAM
Hari Raj H. - Appellant
Versus
Shaw Wallace Co. Ltd. & Others - Respondents
W.P. No. 407/1996
Decided On : 13 January 1999
The provisions of the Tamil Nadu Shops and Establishments Act, 1947 are applicable to persons employed in shops and establishments, including those whose work involves travelling, and an employer cannot terminate the services of such a person without a reasonable cause and without providing one month's notice or wages in lieu thereof.
Headnote:
TAMIL NADU SHOPS AND ESTABLISHMENTS ACT - SECTION 41 - TERMINATION OF EMPLOYMENT - REASONABLE CAUSE - AGREEMENT BETWEEN EMPLOYER AND EMPLOYEE - APPLICABILITY OF ACT - DISCLOSURE OF REASON IN TERMINATION ORDER - VALIDITY OF TERMINATION.
Fact of the Case:
Petitioner, a Sales Executive, was terminated from employment by the respondent company. The termination order cited a Memorandum of Agreement between the parties, which allowed either party to terminate the agreement with one month's notice or salary in lieu thereof. The petitioner challenged the termination, arguing that it was not for a reasonable cause and did not comply with the requirements of Section 41(1) of the Tamil Nadu Shops and Establishments Act, 1947.
Finding of the Court:
The court held that the provisions of the Tamil Nadu Shops and Establishments Act were applicable to the petitioner's case, and that the employer was required to comply with the conditions prescribed in Section 41(1) before terminating the petitioner's services. The court found that the termination order did not disclose any reasonable cause for the termination, and that the employer had failed to comply with the requirement of providing one month's notice or wages in lieu thereof. The court also held that the agreement between the parties could not override the provisions of the Act.
Issues: 1. Whether the provisions of the Tamil Nadu Shops and Establishments Act, 1947 were applicable to the petitioner's case. 2. Whether the employer had complied with the conditions prescribed in Section 41(1) of the Act before terminating the petitioner's services. 3. Whether the agreement between the parties could override the provisions of the Act.
Ratio Decidendi: 1. The court held that the provisions of the Tamil Nadu Shops and Establishments Act were applicable to the petitioner's case because he was a "person employed" as defined in Section 2(12) of the Act, and because the Government had issued a Notification under Section 5 of the Act, applying the provisions of the Act to persons whose work involves travelling. 2. The court held that the employer had not complied with the conditions prescribed in Section 41(1) of the Act because the termination order did not disclose any reasonable cause for the termination, and because the employer had failed to provide one month's notice or wages in lieu thereof. 3. The court held that the agreement between the parties could not override the provisions of the Act because the Act was a special law governing the employment of persons in shops and establishments.
Final Decision: The court allowed the writ petition and quashed the termination order.
SATHASIVAM, J.
Aggrieved by the order of the Appellate Authority under Tamil Nadu Shops and Establishment Act, 1947, in T.S.E. No. 27/94, the petitioner has filed the above Writ Petition. 2. The brief facts are as follows : He joined M/s. Shaw Wallace and Company Limited at Madras, first respondent herein as Sales Representative during 1984 and subsequently he was promoted as Sales Executive with effect from February 1, 1991. While so, he received an order dated January 25, 1994 terminating his services with immediate effect from the close of Office hours on January 25, 1994. It was also referred in the order that the determination of services has been done as per Memorandum of Agreement dated April 28, 1991. Aggrieved by the said order, he issued Lawyer's noticed dated February 10, 1994 and requested for reinstatement of service with all attendant benefits. The first respondent sent a reply dated March 10, 1994 confirming the order of termination of services. Against the said order of termination, he preferred appeal before the third respondent under Section41 of the Shops and Establishments Act and prayed for setting aside the order of termination and to order reinstatement with all attendant benefits. The said appeal was dismissed by the third respondent by Order dated September 25, 1995 and the same was served on him only on December 20, 1995. Since he has no other alternative remedy, he has filed the present Writ Petition as stated above. 3. On behalf of respondents 1 and 2, General Manager (Finance) of Shaw Wallace and Company Limited has filed counter affidavit disputing various averments made by the petitioner. It runs as follows : The petitioner joined the respondent-Company on August 9, 1984 as a Sales Representative and was promoted as a Sales Executive from February 1, 1991. At that point of time, the petitioner entered into an agreement with the respondent on the terms and conditions of his service, which also provided for bringing an end to the petitioner's service, by way of one month's notice or payment of one month's salary in lieu thereof, by either party. It is not true that the petitioner was discharging his duties to the satisfaction of his superiors. The petitioner's service was brought to an end invoking the terms of the agreement referred to above. Aggrieved by this, the petitioner raised a dispute before the authority under the Tamil Nadu Shops and Establishments Act. The authority, after considering both the rival claims, dismissed the petition filed by the petitioner on the grounds that the termination of the petitioner as per Clause-11 of the agreement dated April 28, 1991 is for reasonable cause only. This clause provides for termination or resignation of the petitioner, on either side giving notice or one month's salary in lieu of notice. It is only in confirmation with this agreement, the services of the petitioner were terminated. The agreement entered into by the petitioner with the respondent is perfectly valid and the petitioner after enjoying the benefits that accrued to him under the agreement, while in service, cannot now question the validity of the agreement and that too after a lapse of so many years. Clause 11 of the agreement stipulates giving one month's notice or a month's wages in lieu of such notice, it is not repugnant to the provision of Section41(1) of the Tamil Nadu Shops and Establishments Act, 1947, which compels one month notice in writing or wages in lieu of such notice. Besides under the Contract Act also unless an agreement is a fraud etc., the same is valid. In this case also, it is not the case of the petitioner that the agreement by which his services were terminated, was obtained by fraud. An agreement between employer and his employee regarding the terms of employment is not forbidden by law. Since the Appellate Authority, third respondent is justified in dismissing the appeal, there is no merit in the Writ Petition; accordingly prayed for dismissal of th
