1999 Supreme(All) 1307

IN THE HIGH COURT OF ALLAHABAD
Yatindra Singh, J.
BHARAT HEAVY ELECTRICALS LTD., RANIPUR, HARDWAR - Appellant
Versus
LABOUR COURT, U.P.AT MEERUT - Respondents
C. M. W. P. 3912 Of 1984
Decided On : 08/31/1999

A standing order providing for automatic termination of employment in case of absence without leave for 8 consecutive days is valid and does not violate the principles of natural justice, provided that it provides for an opportunity for the employee to offer an explanation for his absence.

Headnote:

RETIREMENT - ABANDONMENT - STANDING ORDER - LEGALITY - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 2(OO) - EMPLOYEES STATE INSURANCE ACT, 1948 - SECTION 73(1) - CONTRACT ACT, 1872 - SECTION 23 - CONSTITUTION OF INDIA - ARTICLES 14 AND 16 - NATURAL JUSTICE - PRINCIPLES OF - FAIRNESS - THEORY OF EVERYTHING (TOE) - MISCONDUCT - EXPLANATION - DISCRETION - OBJECTIVE OR SUBJECTIVE - RELIEF.

Fact of the Case:

The contesting respondent, an employee of the petitioner, was absent from duty without sanctioned leave for 8 days. The petitioner, relying on a standing order, struck off his name from the rolls of the company, deeming him to have left the employment. The contesting respondent challenged this action by raising an industrial dispute, and the Labour Court held that the termination of his services was illegal and ordered his reinstatement with full back wages.

Finding of the Court:

The Court held that the standing order in question was valid and did not violate the principles of natural justice. It further held that the striking off of the contesting respondent's name did not amount to retrenchment and was covered by the exception provided under Section 2(oo) of the Industrial Disputes Act, 1947. However, the Court also held that the contesting respondent should have first approached the petitioner's management to explain his absence before raising the industrial dispute. Since he had not done so, the Court quashed the Labour Court's award of back wages to the contesting respondent, but upheld the order of reinstatement.

Issues: 1. Whether the standing order providing for automatic termination of employment in case of absence without leave for 8 consecutive days is valid and does not violate the principles of natural justice? 2. Whether the striking off of the contesting respondent's name from the rolls of the company amounted to retrenchment? 3. Whether the contesting respondent was required to first approach the petitioner's management to explain his absence before raising the industrial dispute?

Ratio Decidendi: 1. The Court held that the standing order in question was valid and did not violate the principles of natural justice. It relied on the Supreme Court's decision in Buckingham and Carnatic Co. Ltd. v. Venkatiah, where it was held that such a standing order is a valid method of terminating an employee's contract of service and does not require any positive action from the employer. The Court also noted that the standing order in question provided for an opportunity for the employee to offer an explanation for his absence, which satisfied the requirements of natural justice. 2. The Court held that the striking off of the contesting respondent's name from the rolls of the company did not amount to retrenchment. It relied on the Supreme Court's decision in D. K. Yadav v. J. M. A. Industries Ltd., where it was held that retrenchment requires some positive action on behalf of the employer, such as a notice of termination or a layoff. In the present case, the Court found that there was no such positive action and that the contesting respondent's absence without leave for 8 consecutive days was deemed to be a voluntary retirement under Section 2(oo) of the Industrial Disputes Act, 1947. 3. The Court held that the contesting respondent was required to first approach the petitioner's management to explain his absence before raising the industrial dispute. It relied on the Supreme Court's decision in Delhi Cloth and G. M. L. v. Shambhu Nath Muker/ee, where it was held that an employee cannot raise an industrial dispute without first exhausting the grievance redressal mechanism provided by the standing orders.

Final Decision: The Court partly allowed the writ petition. It quashed the Labour Court's award of back wages to the contesting respondent, but upheld the order of reinstatement. The contesting respondent was entitled to his wages and consequential benefits from the date of the award, namely, 31. 10. 1983, after adjusting the amount already paid to him in pursuance of the interim orders passed in the writ petition.