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2025 Supreme(Mad) 2634
IN THE HIGH COURT OF JUDICATURE AT MADRAS
A.D. MARIA CLETE, J.
The Management of M/s. Nipro India Corporation Pvt. Ltd. - Appellant
Versus
S.Shankar - Respondent
W.P.No. 9528 of 2020 and W.M.P.Nos.11629 of 2020, 35779 of 2024
Decided on : 02-04-2025
For the Appellant :M/s.Janani Shankar, Shruti Raina and Samudra Sarangi, Advocates
For the Respondent:M/s.R.Arumugam, A.S.Thambusamy, B.Anand, U.Padmanabhan and Jebamary, AdvocatesA
An employer must conduct a proper enquiry before terminating an employee for misconduct; failure to do so renders the termination void.
Headnote:
(A) Tamil Nadu Shops and Establishments Act, 1947 - Sections 2(12), 4(1)(b), and 41(1) - Writ petition challenging termination of employee - Appellate Authority set aside termination order for lack of reasonable cause and failure to conduct an enquiry - Management's arguments regarding poor performance and loss of confidence rejected - Employee reinstated with back wages. (Paras 2, 9, 10, 29)
(B) Employment Law - Termination of service - An employer must conduct a proper enquiry before terminating an employee for misconduct - Failure to do so renders the termination void. (Paras 9, 10)
(C) Burden of Proof - In cases of wrongful termination, the employer must prove that the employee was gainfully employed elsewhere to avoid full back wages. (Paras 23, 24)
Facts of the case:
The Respondent was terminated after over 450 days of service, citing insubordination and poor performance. The Appellate Authority found the termination void due to lack of enquiry and reinstated the Respondent with back wages. (Paras 5, 9)
Findings of Court:
The Appellate Authority's order was detailed and reasoned, addressing all objections raised by the Petitioner, and concluded that the termination was unjustified. (Paras 10, 29)
Issues: The main issues included whether the termination was justified and if the Appellate Authority had the power to reinstate the employee. (Paras 9, 10)
Ratio Decidendi: The court held that the management's failure to conduct an enquiry before termination violated statutory provisions, and reinstatement was warranted as the termination was deemed void. (Paras 9, 10)
Result: Writ petition dismissed; Respondent reinstated with back wages.
JUDGMENT :
Heard.
2. The writ petition has been filed by the Management challenging the order dated 14.10.2019 passed by the Appellate Authority under the Tamil Nadu Shops and Establishments Act, 1947 (Special Joint Commissioner of Labour, Chennai) in TNSC-1/7 of 2014. By the impugned order, the Appellate Authority allowed the appeal preferred by the Respondent, set aside the order of termination dated 27.08.2012 (marked as Ex.P3), and directed the Petitioner-Management to reinstate the Respondent with back wages and other attendant benefits.
3. On 24.07.2020, when the writ petition was taken up for admission, notice was ordered. Subsequently, on 05.08.2024, this Court recorded the following:
“In fact, the respondent is offering a settlement either for reinstatement or payment of backwages. The management is also gracious enough to offer the backwages provided the worker could produce the income tax returns in order to show that he was not gainfully employed elsewhere during the interregnum. Since the expectation of the management is also found to be reasonable, the worker can accommodate the said request and see that the dispute is resolved.”
4. Pursuant to the direction of this Court, the Respondent filed a typed set of documents, including copies of his Income Tax Returns, hospital discharge summary, and other relevant records. He also filed W.M.P. No. 35779 of 2024, seeking a direction to the Petitioner to pay the last drawn wages on a monthly basis from the date of the impugned order, i.e., 14.10.2019, until the disposal of the writ petition, as contemplated under Section 41-A of the Tamil Nadu Shops and Establishments Act, 1947. No orders have been passed on the said petition thus far. The Respondent filed a counter affidavit dated 28.06.2024, supporting and justifying the impugned order.
5. The facts leading to the filing of the present writ petition are as follows: The Respondent was appointed as a District Sales Officer and had served the Petitioner-Company for over 450 days. The appointment order dated 01.06.2011 was filed and marked as Ex.P1. His last drawn salary was Rs.78,226/-. However, his services were terminated by an email dated 27.08.2012, which was filed as Ex.P3. The contents of the said termination order addressed to the Respondent read as follows:
August 27 2012
“Mr.S.Sankar,
You were appointed as Regional Manager NDI – South, vide appointment letter from Nipro India Corporation Pvt. st Ltd dated 1 June, 2011
This is with reference to you insubordination and non- discipline working leading to the lack of business to the company and unwillingness to work as per the instructed company business manager.
Your performance has been consistently been observed for last 6 months by your business managers and was currently reviewed by the company management with the Sales reporting and target; found that your performance is inconsistent and monthly lowering of Sale affecting the business of company by your managers. It has been observed that your performance rating are below average and you do not meet the minimum benchmark requirement to clear minimum standards that is impacting the business of Nipro in Southern Region for NDI Division. You are not suitable for job for which your services were requisitioned.
Further, the communication delays by you to your Business mangers also have confirmed in the series of email and st telephonic communication from March 31st 2012 till August 25th 2012; and further to company management, where it has been established as a fact that your actions towards the growth of company’s business are not as per the company requirement and repeated ignoring guidelines of the management is observed and highlighted by your business managers to you. However, no address of the of the improvement is been seen by your managers and division from your end business development in the region.
Considering the gravity of misconduct the company management has taken the decision to hereby terminate your services. It
