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1996 Supreme(P&H) 1108
PUNJAB & HARYANA HIGH COURT
G.S.Singhvi and M.L.Singhal JJ.
Hans Raj
Versus
Presiding Officer Labour Court And Ors.
Civil Writ Petition No. 4676 of 1996,
Decided On : JULY 30, 1996
The termination of service of a workman in accordance with the terms and conditions of contract of employment amounts to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act, 1947, and is subject to the provisions of the Act. The Punjab Printing and Stationery Department Service Rules, 1964 and the Punjab Civil Services (Punishment and Appeal) Rules, 1970 do not override the provisions of the Act and cannot be used to deprive an employee of the rights conferred by the Act, including the right to seek reinstatement in cases of unlawful termination of service.
Headnote:
INDUSTRIAL DISPUTES ACT, 1947 - SECTION 2(OO) - RETRENCHMENT - DEFINITION - SCOPE - TERMINATION OF SERVICE OF A WORKMAN IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF CONTRACT OF EMPLOYMENT - WHETHER AMOUNTS TO RETRENCHMENT - PUNJAB PRINTING AND STATIONERY DEPARTMENT SERVICE RULES, 1964 AND PUNJAB CIVIL SERVICES (PUNISHMENT AND APPEAL) RULES, 1970 - WHETHER OVER-RIDE THE PROVISIONS OF THE ACT - TERMINATION OF SERVICE OF A PROBATIONER ON THE BASIS OF ALLEGATIONS OF MISCONDUCT - WHETHER CAN BE JUSTIFIED SIMPLY ON THE BASIS OF TERMS CONTAINED IN THE LETTER OF APPOINTMENT.
Fact of the Case:
Petitioner, a clerk in the Printing and Stationary Department, Punjab, was terminated during his probation period. He challenged the termination, arguing that it violated Section 25-F of the Industrial Disputes Act, 1947 (the Act). The Labour Court upheld the termination, holding that the Punjab Printing and Stationery Department Service Rules, 1964 (1964 Rules) and the Punjab Civil Services (Punishment and Appeal) Rules, 1970 (1970 Rules) overrode the provisions of the Act.
Finding of the Court:
The Court held that the termination of the petitioner's service amounted to retrenchment within the meaning of Section 2(oo) of the Act, as interpreted by the Supreme Court in State Bank of India v. N. Sundara Money and Punjab Land Development and Reclamation Corporation Ltd. v. Presiding Officer, Labour Court, Chandigarh. The Court further held that the 1964 Rules and 1970 Rules did not override the provisions of the Act and could not be used to deprive an employee of the rights flowing from the Act, including the right to seek reinstatement. The Court also held that the termination of the petitioner's service on the basis of allegations of misconduct without holding an inquiry consistent with the principles of natural justice was illegal.
Issues: 1. Whether termination of service of a workman in accordance with the terms and conditions of contract of employment can be treated as retrenchment for the purposes of the Act? 2. Whether the provisions of the Punjab Printing and Stationery Department Services Rules, 1964 and the Punjab Civil Services (Punishment and Appeal) Rules, 1970 over-ride the provisions of the Act and a person who is workman within the meaning of Section 2(s) of the Act is not entitled to the relief of re-instatement despite the fact that his service is terminated in violation of Section 25-F of The Act? 3. Whether service of a probationer can be terminated on the basis of allegations of misconduct without holding an enquiry in accordance with principles of natural justice and such termination can be justified simply on the basis of terms contained in the letter of appointment ?
Ratio Decidendi: 1. The definition of "retrenchment" in Section 2(oo) of the Act includes termination of service of a workman for any reason whatsoever, with certain exceptions. The termination of the petitioner's service in accordance with the terms of his appointment letter fell within the definition of "retrenchment" and was therefore subject to the provisions of the Act. 2. The 1964 Rules and 1970 Rules were framed under the proviso to Article 309 of the Constitution of India, which empowers the Governor of a State to make rules regulating the recruitment and conditions of service of persons appointed to public posts. However, such rules cannot override the provisions of an Act of the appropriate legislature, such as the Act. The Act provides a complete machinery for the settlement and adjudication of industrial disputes, including the right to seek reinstatement in cases of unlawful termination of service. The 1964 Rules and 1970 Rules do not contain any such machinery and cannot be used to deprive an employee of the rights conferred by the Act. 3. The termination of the petitioner's service on the basis of allegations of misconduct without holding an inquiry consistent with the principles of natural justice was illegal. A probationer can be removed from service in accordance with the terms of the contract of employment on the ground of unsatisfactory performance or failure to give satisfaction during the period of probation. However, if the termination is based on allegations of misconduct, it is punitive and the employer cannot rely on the terms of the contract of employment. In such cases, the court will examine whether an inquiry consistent with the rules of natural justice was held before the termination of service.
Final Decision: The Court allowed the writ petition, quashed the Labour Court's award, and reinstated the petitioner with continuity of service. The Court left it open to the petitioner to seek back wages under Section 33-C(2) of the Act, subject to the respondents' right to plead and prove that the petitioner was gainfully employed during the intervening period.
, J.
1. Feeling aggrieved by the award dated 21.9.92 passed by the Labour Court upholding the termination of his service, the petitioner has approached this Court by filing writ petition under Article 226 of the Constitution with the prayer to quash the impugned award.
2. Petitioner joined service as clerk on 11.2.1982 under the Controller, Printing and Stationary Department, Punjab, Chandigarh. His service was terminated on 15.7.1983 during the period of probation. Industrial dispute raised by the petitioner was referred to the Labour Court, Patiala for adjudication. After hearing the parties and considering their respective cases the Labour Court held that termination of service of the workman (petitioner) was in accordance with the terms of contract of employment. The Labour Court also held that the provisions contained in the Punjab Printing and Stationery Department Service Rules, 1964 and the Punjab Civil Services (Punishment and Appeal) Rules, 1970 are special provisions and they would prevail over the provisions of the Industrial Disputes Act, 1947 (for short, the Act) and, therefore, he was not entitled to relief of reinstatement.
3. Three questions which arise for determination by this Court are:
(i) Whether termination of service of a workman in accordance with the terms and conditions of contract of employment can be treated as retrenchment for the purposes of the Act;
(ii) Whether the provisions of the Punjab Printing and Stationery Department Services Rules, 1964 (for short, 1964 Rules) and the Punjab Civil Services (Punishment and Appeal) Rules, 1970 (for short, 1970 Rules) over-ride the provisions of the Act and a person who is workman within the meaning of Section 2(s) of the Act is not entitled to the relief of re-instatement despite the fact that his service is terminated in violation of Section 25-F of The Act; and
(iii) Whether service of a probationer can be terminated on the basis of allegations of misconduct without holding an enquiry in accordance with principles of natural justice and such termination can be justified simply on the basis of terms contained in the letter of appointment ?
Re: Question No. (i) The term "retrenchment" has been defined in Section 2(oo) of the Act. It will be useful to reproduce definition of "retrenchment" as it stood on 15.9.1983 i.e. the date of termination of service of the petitioner. The same reads as under :-
"2 (oo) "retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include - (a) voluntary retirement of a workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(c) termination of the service of a workman on the ground of continued ill health."
Clause (bb), which came to be inserted in Section 2(oo) by the Industrial Disputes (Amendment) Act No. 49 of 1984, reads as under:-
"(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of the such contract being terminated under a stipulation in that behalf contained therein."
4. The amendment made in the definition of "retrenchment" was brought into force w.e.f. 18.8.1984 and, therefore, no help can be derived from clause (bb) to exclude the termination of service of the petitioner from the definition of "retrenchment and if it is held that termination of service of the petitioner amounts to retrenchment within the meaning of the term as it stood up to 15.9.1983 and the same is held to be void on account of violation of the provisions of Section 25-F or other provisions contained in Chapter V-A of the Act, then the clause (bb) cannot be made use of to justify the retrenchment. The Amending Act No. 49 of the 1984 cannot be
