SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2023 Supreme(P&H) 2565

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
G.S. SANDHAWALIA, HARPREET KAUR JEEWAN, JJ.
Palwal Cooperative Sugar Mills Ltd. – Appellant
Versus
Phool Singh & Ors. – Respondents
LPA-1893 of 2017 (O&M)
Decided On : 09-02-2023

Advocates Appeared:
Mr. R.N. Lohan, Advocate; For the Appellant
Mr. S.K. Panwar, Advocate for Respondent No.1.

Headnote:(A) Industrial Disputes Act, 1947 - Section 2(oo)(bb) - Appeal against the order awarding compensation of Rs. 5 lakhs for one year of service - Termination of service was in accordance with probation terms, with no liability under retrenchment provisions - Compensation awarded was deemed excessive, and thus set aside. (Paras 1, 5, 6)

(B) Employment Law - The principles for awarding compensation for short service - Courts have consistently awarded lower sums for shorter durations of employment. To wit, compensation for one year generally observed in previous judgments ranges from Rs. 25,000/- to Rs. 50,000/-. (Paras 4, 5)

(C) Management Rights - The employer's right to terminate employment during probation without reasons is upheld, affirming that such actions do not fall under retrenchment protections. (Paras 5, 6)

Facts of the case:
The workman was hired for probation on 24.07.1990 and terminated on 09.07.1991 without cause, also noting the subsequent hiring of another worker for the same position. The learned Single Judge had awarded Rs. 5 lakhs for one year's service despite established principles suggesting much lower compensation in similar cases.

Findings of Court:
The award of Rs. 5 lakhs was determined to be exorbitant for a year of service based on established compensation precedents. The learned Single Judge did not adequately consider the duration of service.

Issues: The primary issues included the appropriateness of the compensation awarded considering the duration of service and whether termination during probation could be classified as retrenchment under statutory provisions.

Ratio Decidendi: The court reasoned that employment during probation does not afford statutory protection against retrenchment, in line with prior case law, and thus justified setting aside the high compensation awarded.

Result: The appeal is allowed, the order of the learned Single Judge is set aside, and the writ petition is dismissed.

Table of Content
1. legal context of worker's termination and compensation. (Para 1 , 2 , 3)
2. compensation must reflect service duration. (Para 4)
3. court finds awarded compensation excessive. (Para 5)
4. termination during probation may not equate to retrenchment. (Para 6)
5. appeal allowed; single judge's order set aside. (Para 7)

JUDGMENT

G.S. Sandhawalia, J. (Oral) - Challenge in the present Letters Patent Appeal is to the order of the learned Single Judge dated 15.09.2017 passed in CWP-2059-1998 ' Phool Singh v. The Presiding Officer, Industrial Tribunal-cum- Labour Court-II, Faridabad and another', wherein the learned Single Judge awarded compensation of Rs. 5 lakhs to the claimant-workman for the service of only one year.

2. The workman was appointed on 24.07.1990 and his services were dispensed with on 09.07.1991. The learned Single Judge came to the conclusion that the services had been dispensed with reference to the unsatisfactory work and the fact that the Management had employed another person on daily wage against the post of the Dispenser. It is not disputed that as per the appointment letter dated 24.07.1990 which has also been placed on record as (Annexure P-1), the appointment as such on the said post of Dispenser (Seasonal) was on probation for two crushing seasons. As per Clause 2 (b) during the probation period the Management had the right to terminate the services without assigning any reason by giving a week's notice. The needful was done vide order dated 09.07.1991 (Annexure P-2) and salary for one week was paid to the extent of Rs. 385/- by way of a cheque by way of giving benefit of the monetary aspect for the said period.

3. It was in such circumstances, the learned Labour Court while noticing that a letter had been sent to recall the claimant, who had joined on 01.11.1990 after the close of the production season of the mill, who had been paid off and as per the report his work was not satisfactory. He had then been issued cheque for Rs. 385/- and the claimant came in the office of the Management and mis-behaved with the Superintendent. The matter was taken upto the Managing Director and to the Sub-Divisional Magistrate and the Deputy Commissioner. Resultantly, keeping in view the fact that dispensing of the service was in terms of the appointment order, the issue whether the termination was legal and justified was held against him and the reference was declined on 19.04.1996 (Annexure P-4).

4. The learned Single Judge has failed to keep into consideration the period of service while granting a huge compensation of Rs. 5 lakhs. It is not disputed that a sum of Rs. 1 lakh has already been paid vide the interim orders and stands deposited with the Labour Court. The consistent view of the Apex Court is to grant compensation for short service, as has been noticed in Haryana Urban Development Authority v. Om Pal , (2007) 5 SCC 742 , wherein Rs.25,000/- was granted for the service of one year whereas in Uttaranchal Forest Development Corporation v. M.C. Joshi , (2007) 9 SCC 353 , for a period of 2 years, a sum of Rs.75,000/- was granted. Similarly, in Asst. Engineer, Rajasthan Development Corporation & another v. Gitam Singh , 2013 (1) SCR 679 , the said view was followed while noticing that the service was of 8 months and thus, compensation of Rs.50,000/- was granted. Similarly, in Management, Hindustan Machine Tools Ltd. v. Ghanshyam Sharma , 2018 (18) SCC 80 , for a period of one year, compensation of Rs.50,000/- had been granted. In K.V.Anil Mithra & another v. Sree Sankaracharya University of Sanskrit & another , 2021 (4) SCT 415 , for a period of little over 4 years, amount awarded was Rs.2,50,000/- in lieu of the reinstatement and backwages of 50% which was granted and accordingly, modified.

5. Reliance can also be placed upon the Full Bench judgment passed in Municipal Council, Dina Nagar, Tehsil & District, Gurdaspur v. Presiding Officer, Labour Court, Gurdaspur and another, 2015 (1) PLR 465, wherei

    Click Here to Read the rest of this document
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    11
    SupremeToday Portrait Ad
    supreme today icon
    logo-black

    An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

    Please visit our Training & Support
    Center or Contact Us for assistance

    qr

    Scan Me!

    India’s Legal research and Law Firm App, Download now!

    For Daily Legal Updates, Join us on :

    whatsapp-icon Back to top