Back
1996 Supreme(Mad) 114
High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. K.A. SWAMI AND THE HONOURABLE MR. JUSTICE KANAKARAJ
Management of Air France
Versus
Deputy Commissioner of Labour (Appeals), Madras (Appellate Authority Under The Tamil Nadu Shops and Establishments Act, 1948) and Others
W.A.No.47 of 1993
Decided On : 29-01-1996
The provisions of Section 41(1) of the Tamil Nadu Shops and Establishments Act, 1947 require an employer to assign a reasonable cause for termination of employment of a person who has put in continuous service for more than six months, and the absence of a reasonable cause for termination in the notice of termination renders the termination invalid.
Headnote:
TAMIL NADU SHOPS AND ESTABLISHMENTS ACT, 1947 - SECTION 41(1) - TERMINATION OF EMPLOYMENT - REASONABLE CAUSE - NOTICE - VALIDITY OF TERMINATION NOTICE - INTERPRETATION OF SECTION 41(1) - POWER OF STATE GOVERNMENT TO APPLY PROVISIONS TO EXEMPTED PERSONS OR ESTABLISHMENTS - SECTION 5 - VALIDITY OF NOTIFICATION ISSUED BY STATE GOVERNMENT - SECTION 5 - MANAGERIAL CADRE - EXEMPTION FROM PROVISIONS OF ACT - SECTION 4(1)(A) - VALIDITY OF ORDER OF TERMINATION - SECTION 8 OF REGULATIONS - REASONABLE CAUSE FOR TERMINATION - CONDITION PRECEDENT - NON-COMPLIANCE - INVALIDITY OF TERMINATION.
Fact of the Case:
The appellant, Air France, terminated the services of the deceased 2nd respondent, who was employed as a District Manager in Madras, with effect from April 1, 1987, by an order dated February 27, 1987, issued under Clause 8 of the appellant's Regulations. The deceased 2nd respondent appealed to the 1st respondent, who allowed the appeal and set aside the order of termination. The appellant challenged the order of the 1st respondent in a writ petition, contending that the provisions of Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Act) were not attracted as the deceased 2nd respondent was working in the managerial cadre and was exempted from the provisions of the Act under Section 4(1)(a) of the Act. The appellant also challenged the validity of the notification issued by the Governor of Madras under Section 5 of the Act, which applied the provisions of the Act to the deceased 2nd respondent.
Finding of the Court:
The court held that the notification issued by the State Government under Section 5 of the Act was valid and that the provisions of Section 41 of the Act were attracted. The court further held that the order of termination was invalid as it did not contain any reason or reasonable cause for termination, as required by Section 41(1) of the Act. The court also held that the absence of a reasonable cause for termination in the notice of termination rendered the termination invalid.
Issues: 1. Whether the provisions of Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 were attracted in the case of the deceased 2nd respondent, who was working in the managerial cadre? 2. Whether the notification issued by the Governor of Madras under Section 5 of the Act, which applied the provisions of the Act to the deceased 2nd respondent, was valid? 3. Whether the order of termination was valid in the absence of a reasonable cause for termination, as required by Section 41(1) of the Act?
Ratio Decidendi: 1. The court held that the provisions of Section 41(2) of the Act were attracted in the case of the deceased 2nd respondent, as the State Government had validly issued a notification under Section 5 of the Act, applying the provisions of the Act to the deceased 2nd respondent, despite the exemption granted to managerial cadre employees under Section 4(1)(a) of the Act. 2. The court held that the notification issued by the Governor of Madras under Section 5 of the Act was valid, as the State Government was empowered to apply the provisions of the Act to exempted persons or establishments under Section 5 of the Act, and the notification was not beyond the legislative power of the State Legislature. 3. The court held that the order of termination was invalid as it did not contain any reason or reasonable cause for termination, as required by Section 41(1) of the Act. The court held that the absence of a reasonable cause for termination in the notice of termination rendered the termination invalid.
Final Decision: The court dismissed the appeal and upheld the order of the learned single Judge, which affirmed the order of the Appellate Authority in T.S.E. No. 27 of 1987 dated November 20, 1987. The court also directed the appellant to pay the legal representatives of the deceased 2nd respondent the amounts due to him under Section 33-C of the Industrial Disputes Act, after adjusting any amounts already paid by the appellant pursuant to the directions issued by the court.
K. A. SWAMI, C.J.
This appeal is preferred against the order dated September 14, 1992 passed by the learned single Judge in W.P. No. 3388 of 1988, dismissing the writ petition.
2. In the writ petition, the petitioner/appellant sought for quashing the order dated November, 20, 1987 in T.S.E. No. 27 of 1987. The second respondent in the writ petition, who has also been arrayed as second respondent in this appeal, died during the pendency of the appeal and therefore, his legal representatives have been brought on record as respondents 4, 5, & 6 out of them, respondents 5 and 6 are minors and they are represented by the 4th respondent.
3. Though the matter relates to the termination of services of the 2nd respondent, the legal representatives of the deceased have been brought on records, as they would be entitled to the benefits which the deceased would have got, had his (deceased 2nd respondent) services were not terminated.
4. The deceased 2nd respondent was appointed as Sales Officer in the year 1967 initially, and he became District Manager at Madras in the year 1967 and he continued in that position till his services were terminated with effect from April 1, 1987, by the order of termination bearing No. DEL.DA. 0411/CC.AC. dated February 27, 1987 issued by the General Manager of the appellant. The entire order has been extracted in the body of the order of the learned single Judge. The services of the 2nd respondent came to be terminated in exercise of the power of the appellant under clause 8 of the Regulations of the appellant, which reads thus :
8. Termination of employment :
8. 1 Resignation-Discharge :
After the expiry of the probationary period, an employee, who resigned must give one months notice, otherwise the company shall be entitled to deduct one months salary in lieu from the last salary. Conversely, the Company may not discharge any employee, except in case of misconduct, without giving one months notice, or paying one months salary.It is in exercise of that power, the order of termination came to be passed in following terms :
AIR FRANCE General Management - India and Nepal 50-B Chanakyapuri, New Delhi - 110021. Phone : 604775 - Grams : Airfrans Telex : 2480 Del. DA. 0411/CC.AC Mr. K. R. Gopalan, 68, Abhiramapuram IV Street, Madras - 600018. Re : Notice of termination of services. Registered A/D, New Delhi February 27, 1987. Sir, In terms of our agreement clause 8 we hereby terminate your services in Air France with effect from March 31, 1987. Sd/-
P.J.L.E. BORGNE, General Manager.
5. Aggrieved by the aforesaid order, the deceased 2nd respondents preferred an appeal to the 1st respondent, who by the order dated November 20, 1987 allowed the appeal and set aside the order of termination, passed by the appellant-management.
6. There cannot be any dispute that the result of the order of the 1st respondent is only to demolish the order of termination but also to reinstate him (2nd respondent) into service, because the hiatus that was created by the order of termination of services of the 2nd respondent disappeared. Consequently, he (2nd respondent) should be deemed to have been in continuous service. In such circumstances, the appellants/Management approached this Court in W.P. No. 3388 of 1988.
7. Before the appellate authority as well as in the writ petition, the following contentions were raised :
1) Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 was not attracted in view of the fact that the deceased 2nd respondent was working in the managerial cadre of the appellant and the sub-clause (a) of Clause (1) of Section 4 of the Tamil Nadu Shops and Establishments Act, 1947, hereinafter referred to as the Act, did not apply to persons employed in any establishments in a position of management. They also challenged the validity of the notification issued by the Governor of Madras in exercise of the power conferred by Section 5 of the Act, under G.O.Ms. No. 4074, Industries, Labour an
