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1986 Supreme(Mad) 235

1989 ILLJ 233 Mad
P Shanmugam
The Management Of Blue Star & Co. Ltd
Versus
The Asst. Commissioner Of Labour, Madras-6
Decided On : 19/6/1986
.

The employer is required to disclose the reasons for termination in the order of termination and that the absence of such disclosure renders the order illegal.

Headnote:

TAMIL NADU SHOPS AND ESTABLISHMENTS ACT, 1947 - SECTION 41(2) - ORDER OF TERMINATION - REASONS FOR TERMINATION - DISCLOSURE - NECESSITY - REINSTATEMENT - JUSTIFICATION.

Fact of the Case:

The management of a company terminated the services of an employee, the 2nd respondent, without disclosing the reasons for termination in the order of termination. The 2nd respondent challenged the termination before the Additional Commissioner for Workmen's Compensation under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Act). The Additional Commissioner set aside the order of termination on the ground that it did not disclose the reasons for termination. The management filed a writ petition challenging the order of the Additional Commissioner.

Finding of the Court:

The High Court held that the order of termination was illegal as it did not disclose the reasons for termination. The court relied on its earlier decisions in State Bank of Travancore v. Deputy Commissioner of Labour, Coimbatore and another and Tata Iron and Steel Co. Ltd. v. G. Ramakrishna Aiyer, which held that the employer is required to disclose the reasons for termination in the order of termination and that the absence of such disclosure renders the order illegal.

Issues: 1. Whether the order of termination was illegal due to the absence of reasons for termination? 2. Whether the management had a reasonable cause to terminate the services of the 2nd respondent?

Ratio Decidendi: 1. The court held that the order of termination was illegal as it did not disclose the reasons for termination. The court relied on the provisions of Section 41(2) of the Act, which requires the employer to disclose the reasons for termination in the order of termination. The court also relied on its earlier decisions in State Bank of Travancore v. Deputy Commissioner of Labour, Coimbatore and another and Tata Iron and Steel Co. Ltd. v. G. Ramakrishna Aiyer, which held that the employer is required to disclose the reasons for termination in the order of termination and that the absence of such disclosure renders the order illegal. 2. The court held that the management did not have a reasonable cause to terminate the services of the 2nd respondent. The court found that the management had not produced any evidence to substantiate their charge that the 2nd respondent was performing his duties not efficiently. The court also found that the management had not issued any memos to the 2nd respondent regarding his alleged inefficiency.

Final Decision: The High Court dismissed the writ petition and upheld the order of the Additional Commissioner setting aside the order of termination.

ORDER

1. This writ petition coming on for hearing on Wednesday 1st June 1986 and on this day, upon perusing the petition and the affidavit filed in support thereof, the order of the High Court, dated 7th October 1983, and made herein, and the counter and reply-affidavits filed herein and the records relating to the order in T.S.E. Case No. 5/80 dated 19th August 1983 on the file of the 1st Respondent comprised in the return of the respondents to the writ made by the High Court, and upon hearing the arguments of Mr. M. R. Narayanasami, for M/s. S. Jayaraman and M. R. Raghavan, Advocates for the petitioner, and of Mr. C. Selvaraj, Government Advocate (Writs) on behalf of the 1st Respondent and of Mr. S. Venkataraman, for M/s. Aiyer and Dolia, Advocates for the 2nd respondent, the Court made the following order :-

2. The management is aggrieved against the order passed by the 1st respondent in T.S.E. No. 5 of 1980 under Section 41(2) of the Tamil Nadu Shops and Establishments Act, hereinafter referred to as the Act, whereby the 1st respondent set aside the order of termination of the 2nd respondent made by the management. Hence, this proceeding by the management under Article 226 of the Constitution of India.

3. The 2nd respondent was working as Executive Grade III in the capacity of a Manager of the Testing Machine Department on a monthly basic salary of Rs. 1,890/- apart from other allowances and other perks. The service was terminated on 3rd January 1980 by the management's letter dated 3rd January 1980 which was later enclosed along with the management's letter dated 14th January 1980. The 2nd respondent therefore approached the Additional Commissioner for Workmen's Compensation under Section 41(2) of the Act. The petitioner's defence is that as the 2nd respondent was not favoured with the promotion as he sought for, i.e., from Grade III to Grade V, he became disgruntled and therefore, did not attend to his duties properly. It is useful to quote from the answer statement of the petitioner filed in T.S.E. No. 5 of 1980 and it is as follows :-

"The appellant was not, however, satisfied with this and started behaving as a disgruntled employee. He continued to do so despite being advised against it and counselling that it would be against his own interests and that continuance of such behaviour would be incompatible with his employment. The appellant did not show any improvement and continued to show indifference and irresponsible attitude in the execution of his duties."

4. It is the specific case of the petitioner that it is at the request of the 2nd respondent, the petitioner did not disclose the reasons for 2nd respondent's termination of service in the order of termination dated 3rd January 1980. The 1st respondent following the decision in State Bank of Travancore Deputy Commissioner of Labour, Coimbatore and another (1981-I-LLJ - 393) held that as the order of termination did not disclose the reasons for termination of service, the order is bad in law and consequently directed reinstatement. In other words, the 1st respondent set aside the order of termination dated 3rd January 1980 on the preliminary ground and therefore, it had no necessity to go into the merits. It is this order that is assailed in this writ proceeding.

5. Learned counsel for the petitioner would submit that the reason for termination was not disclosed only at the specific request of the 2nd respondent when the management had discussion with the 2nd respondent on 3rd January 1980 and therefore, the petitioner is estopped from contending that the order is bad for absence of the reasons for termination of service. The factual contention as urged by the management can hardly be accepted on the facts in this case. There is intrinsic evidence in the letter of the management itself dated 14th January 1980 to repel the above contention of the management. The management's letter dated 14th January 1980 was according to the management necessitated, because the 2nd res

















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