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A Daily worker on termination of his service not entitled for re-employment as of right as the termination is not amounts to retrenchment of an employee = whether termination of services of the respondent on the expiry of the contract period would amount to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act, 1948 (for short “the ID Act”). = Section 2(bb) says that if the termination of the service of workman is as a result of non-renewal of the contract between the employer and the workman on its expiry of such contract being terminated under a stipulation in that behalf contained therein, the same would not constitute retrenchment.= Facts would clearly indicate that the respondent’s service was terminated on the expiry of the fixed periods mentioned in the office orders and that he had worked only for 54 days. The mere fact that the appointment orders used the expression “daily wages” does not make the appointment “Casual” because it is the substance that matters, not the form. The contract of appointment consciously entered into by the employer and the employee would, over and above the specific terms of the written agreement, indicates that the employment is short-lived and the same is liable to termination, on the fixed period mentioned in the contract of appointment.= “25G. Procedure for retrenchment.- Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman. 25H. Re- employment of retrenched workmen.- Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity 2[ to the retrenched workmen who are citizens of India to offer themselves for re- employment and such retrenched workman] who offer themselves for re- employment shall have preference over other persons.”= Section 25H will apply only if the respondent establishes that there had been retrenchment. Facts will clearly indicate that there was no retrenchment under Section 2(oo) read with Section 2(bb) of the ID Act. Consequently, Section 25H would not apply to the facts of the case. Similar is the factual and legal situation in the civil appeal arising out of SLP(C) No.5387 of 2012 as well. We are sorry to note that the Labour Court, learned Single Judge and the Division Bench have not properly appreciated the factual and legal position in this case. When rights of parties are being adjudicated, needless to say, serious thoughts have to be bestowed by the Labour Court as well as the High Court. For the above-mentioned reasons we allow both the appeals, set aside the award passed by the Labour Court and confirmed by the High Court. However, there will be no order as to costs.

 published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40563

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPEALLATE JURISDICTION

CIVIL APPEAL NO. 5498 OF 2013
(Arising out of SLP(C) No.5387 of 2012)
Bhavnagar Municipal Corporation Appellant

Versus

Salimbhai Umarbhai Mansuri Respondent

with

CIVIL APPEAL NO. 5510 OF 2013
(Arising out of SLP(C) No.5390 of 2012)
J U D G M E N T
K.S. Radhakrishnan, J.
Leave granted.

1. We are concerned in this case with the question whether termination
of services of the respondent on the expiry of the contract period would
amount to retrenchment within the meaning of Section 2(oo) of the
Industrial Disputes Act, 1948 (for short “the ID Act”). We may refer to
the facts in Civil Appeal arising out of SLP(C) No.5390 of 2012 for
disposal of both the appeals, since the question of law involved in both
the appeals is the same.

2. The respondent in Civil Appeal @ SLP(C) No.5390 of 2012 was appointed
on daily wages as a helper in the Water Works Department in the appellant
Corporation for two fixed periods from 02.05.1988 to 30.06.1988 and
04.07.1988 to 15.07.1988, under two separate office orders dated 19.05.1988
and 01.07.1988. The service of the respondent stood terminated on
15.07.1988 after serving a total period of 54 days. The respondent raised
an industrial dispute on 07.12.1989 and the same was referred to Labour
Court for adjudication which was registered as Reference (LCB) No.606 of
1989.

3. The Labour Court on 18.10.2003 passed an award holding that the
Corporation had violated Section 25G and H of the ID Act by not calling the
respondent for work before appointing new workmen. The Labour Court then
directed the Corporation to reinstate the respondent with continuity in
service. Aggrieved by above-mentioned order the Corporation preferred Writ
Petition SCA No.3290 of 2004 before the Gujarat High Court. The High Court
vide its judgment dated 12.08.2010 set aside the award of the Labour Court
and remanded the matter to the Labour Court for fresh consideration. The
Labour Court on 15.11.2010 held that the Corporation had violated the
provisions of Sections 25G and H of the ID Act and directed the Corporation
to reinstate the respondent with continuity in service with consequential
benefits. The Corporation then preferred Writ Petition SCA No.7918 of
2011, which was dismissed by the learned Single Judge vide judgment dated
29.06.2011 against which Corporation preferred LPA No.1275 of 2011 which
was also dismissed. Aggrieved by the same the Corporation has preferred
this appeal.

4. Shri Jatin Zaveri, learned counsel appearing for the Corporation
submitted that the Labour Court as well as the High Court has failed to
appreciate the various terms and conditions of appointment and committed a
grave error in holding that the Corporation had violated the provisions of
Section 25G and H of the ID Act. Learned counsel submitted that going by
the terms and conditions of the appointment order would clearly indicate
that the provisions of Section 2(oo) and (bb) would apply to the facts of
the case, consequently, the respondent cannot be said to have been
retrenched and hence the provisions of Section 25G and H of the ID Act
would not be attracted.

5. Mr. O.P. Bhadani, learned counsel appearing for the respondent, on
the other hand, pointed out that there has been a clear violation of the
provisions of Section 25G and H of the ID Act by not reinstating the
respondent in service. Learned counsel submitted that the Labour Court has
elaborately considered the rival contentions of the parties and rendered a
reasoned award which has been affirmed by the learned Single Judge as well
as the Division Bench of the High Court and, therefore, calls for no
interference by this Court under Article 136 of the Constitution of India.

6. We are of the view that the Labour Court as well as the High Court
have completely misunderstood the scope of Section 2(oo), (bb), as well as
Section 25G and H of the ID Act. The contract of employment and the terms
and conditions contained therein are crucial in the application of the
above-mentioned provisions. Facts would clearly indicate that the
respondent had worked only for 54 days in two fixed periods and on expiry
of the second term his service stood automatically terminated on the basis
of the contract of appointment. A reference to the contract would be
useful to understand the nature of appointment of the respondent. Clause
1, 2 and 7 to 10 of the office order dated 19.05.1988 are relevant, which
are extracted herein below for ready reference:
“1. With reference to your application dated _____, a meeting was
held with us/the Commissioner and subject to the following conditions
arrived at with mutual consent you are being appointed as a Daily
Wager Helper in the Water Works Department from 1.5.88 to 30.6.88 at a
daily minimum wages of Rs.12/13 and dearness allowance, daily special
allowance of Rs.10/20 aggregating to Rs.22/33 in accordance with the
Approval No.Commi O/CPO/M.No.204 dated 16.5.88 and upon completion of
last duty on 30.6.88, your service shall stand automatically
terminated.
2. Since a definite date of termination of your service has been
specified, the Municipal Corporation shall not be liable and you shall
not be entitled to any notice, wages in lieu of notice, retrenchment
compensation etc.
3. x x x x
4. x x x x
5. x x x x
6. x x x x
7. If you are transferred as provided in Clause 6 above and if you
fail to perform you duty at the appointed time then it would
tantamount to that you are not willing to work and this contract of
service shall automatically come to an end and as such your services
shall stand terminated.
8. As per the aforesaid para no.1 of the Office Order you are being
appointed as a daily wager from 2.5.88 to 30.6.66 subject to the
condition that you have to come for work as and when required by the
Municipal Corporation, that is, if the Municipal Corporation does not
require your service during the aforesaid period, then the Municipal
Corporation is not bound to give you the work and you shall not be
entitled to demand work for that day, of which you may take a special
note.
9. Upon termination of your contract on the date specified above,
you are not entitled to claim any right of seniority for the period
for which you work nor are you entitled to be reinstated or make such
a claim on account of the new appointment of daily wagers.
10. the Corporation shall be entitled to relieve you before the
prescribed period if it no longer requires your services.”

7. The above order was signed by the respondent and, therefore, bound by
the terms and conditions of the office order. The question is, termination
of the service of the respondent on the expiry of the periods mentioned
above would amount to retrenchment? Facts in this case clearly show, so
found by the Labour Court itself that the respondent had not worked
continuously for 240 days in an year to claim the benefit of Section 25F, G
and H of the ID Act. Therefore, the only question to be considered is
whether termination of service of the respondent on the basis of the
contract of appointment would amount to retrenchment within the meaning of
Section 25H of the ID Act so as to claim reinstatement.

8. A reference to Section 2(oo) and (bb) of the Act would be apposite.
“2 Definitions:-
(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-
xxx xxx xxx
xxx xxx xxx
(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 such contract being terminated under a
stipulation in that behalf contained therein.”
9. Section 2(bb) says that if the termination of the service of workman
is as a result of non-renewal of the contract between the employer and the
workman on its expiry of such contract being terminated under a stipulation
in that behalf contained therein, the same would not constitute
retrenchment.

10. Facts would clearly indicate that the respondent’s service was
terminated on the expiry of the fixed periods mentioned in the office
orders and that he had worked only for 54 days. The mere fact that the
appointment orders used the expression “daily wages” does not make the
appointment “Casual” because it is the substance that matters, not the
form. The contract of appointment consciously entered into by the employer
and the employee would, over and above the specific terms of the written
agreement, indicates that the employment is short-lived and the same is
liable to termination, on the fixed period mentioned in the contract of
appointment.

11. Learned counsel appearing for the respondent submitted that the
respondent is entitled to the benefit of Section 25G & H, the same are
extracted herein below:
“25G. Procedure for retrenchment.- Where any workman in an industrial
establishment, who is a citizen of India, is to be retrenched and he
belongs to a particular category of workmen in that establishment, in
the absence of any agreement between the employer and the workman in
this behalf, the employer shall ordinarily retrench the workman who was
the last person to be employed in that category, unless for reasons to
be recorded the employer retrenches any other workman.
25H. Re- employment of retrenched workmen.- Where any workmen are
retrenched, and the employer proposes to take into his employ any
persons, he shall, in such manner as may be prescribed, give an
opportunity 2[ to the retrenched workmen who are citizens of India to
offer themselves for re- employment and such retrenched workman] who
offer themselves for re- employment shall have preference over other
persons.”
12. Section 25H will apply only if the respondent establishes that there
had been retrenchment. Facts will clearly indicate that there was no
retrenchment under Section 2(oo) read with Section 2(bb) of the ID Act.
Consequently, Section 25H would not apply to the facts of the case.
Similar is the factual and legal situation in the civil appeal arising out
of SLP(C) No.5387 of 2012 as well.
13. We are sorry to note that the Labour Court, learned Single Judge and
the Division Bench have not properly appreciated the factual and legal
position in this case. When rights of parties are being adjudicated,
needless to say, serious thoughts have to be bestowed by the Labour Court
as well as the High Court. For the above-mentioned reasons we allow both
the appeals, set aside the award passed by the Labour Court and confirmed
by the High Court. However, there will be no order as to costs.

 
….…….…….……………J.
(K.S. Radhakrishnan)

 

 
………..………………….J.
(Pinaki Chandra Ghose)

New Delhi,
July 16, 2013

 

 

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