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Judgment
Ramanujulu Naidu, J.
1 These two writ Petitions arise out of one and the same award made by the Labour Court at Hyderabad in Industrial Dispute No. 160 of 1977 on Its file. Hyderabad Construction Company Limited, the petitioner in Writ Petition No. 6090 of 1978, hereinafter referred to as the Company, embarked upon setting up Acetic Acid Plant at Hyderabad. For want of sufficient funds, the Plant, though installed, could not be commissioned into production. At the request of the Company, the Plant was taken on lease for a period of ten years commencing from 17-4-68 by the Andhra Pradesh Industrial Development Corporation, hereinafter referred to as the A.P. 1 D.C. For the purpose of tuning the Plant, several persons were recruited and employed to various categories of posts Smt. P. Kanaka Durga, the petitioner in Writ Petition No. 1917 of 1979, was one of such employee., She was first appointed as a casual sweeper for a period of two months from 1-6 1975 on payment of daily wages of Rs. 5/-. It was specifically stated in the order of her appointment that her services were liable to be terminated at any time during the period. She was, however, continued in service from time to time on the some terms and conditions. From 1-5-1976 she was being paid a consolidated salary of Rs. 200/- per month. On 4 9-1976 the General Secretary of the Workers'' Union of the Plant addressed a letter to the General Manager of the Plant stating that her conduct and character were not satisfactory and that her continued absence in the premises of the Plant might lead to undesirable consequents. On receipt of the letter, her services were terminated on 20-9-1976 without giving one month''s notice to her and without paying one month''s salary to her in lieu of notice. She was also not paid retrenchment compensation. She made repeated requests to the Management of the Plant, both orally and in writing, for reinstatement, but in vain. She unsuccessfully moved the Conciliation Officer for redress. Ultimately, by G.O. Ms. No. 1173, Labour Employment and Technical Education (Labour-1) Department dated 6-12-1967, the dispute between her and the Management was referred by the Government of Andhra Pradesh to the Labour Court at Hyderabad for adjudication. Before the Labour Court she prayed for reinstatement with full back wages. The Company was not a party to the dispute and the A.P.I.D.C., represented by its General Manager of the Plant, was the only party to the dispute. It was contended on behalf of the Management that she was a casual sweeper appointed initially for a period of two months on payment of daily wages, that her services, were extended from time to time on the same terms and conditions, that she was never in continuous service, that without casting any slur on her character and conduct, she was discharged from service and that she was not entitled to any of the reliefs asked for. After enquiry into the dispute, the Labour Court found that she was not a confirmed employee of the Plant, that after her initial appointment as casual sweeper for a period of two months, her services were continued from time to time giving her each time a tenure of two months, that on her representation she was appointed temporarily as a sweeper on a consolidated salary of Rs. 200/- from 1-5-1976, that she was, therefore, neigther entitled to one month''s notice or one month''s salary in lieu of notice, nor to retrenchment compensation. The Labour Court, however, found that her discharge from service by the Management was not termination simplicite or, but termination by way of punishment. It that view though she was denied back wages and other attendant benefits'' the Management was directed to reinstate her in service. An award was accordingly passed by the Labour Court on 13-10-1978. On the expiry of the lease between the Company and the A.P.I.D.C., the plant was handed over to the Company and a tripartite agreement between the Company, the A.P.I.D.C., and the Government of Andhra Pradesh was entered into on 17-4-1978 setting out the terms and conditions governing the rights and liabilities of the parties to the agreement. Pursuant to Clause 9 of the agreement, the Company absorbed in service of the plant all the employees who were actually working in the plant on the date of the agreement. As Smt. P Kanaka Durga was not in actual service of the plant, she was not absorbed in service. The Company, however, recieved G.O. Ms. No. 1390, Labour. Employment and Technical Education (Labour-I) Department dated 14-11-1978 from the Department of Labour, Employment and Technical Education Department, enclosing a copy of the award passed by the Labour Court, Hyderabad directing reinstatment of the petitioner in writ Petition No. 1917 of 1979 in service.
Aggrieved by the award, writ Petition No. 6090 of 1978 was filed by the Company praying for a writ of certiorari to quash the award while Smt. P. Kanaka Durga filed Writ Petition No. 1917 of 1979 seeking relief of payment of full book wages and other attendant benefits. To both the Writ petitions, the A.P.I.D.C., was cot impleaded as a Party. When the Writ Petition came up for hearing we felt that for effective adjudication of the questions raised in both the Writ Petitions came up for hearing we felt that for effective adjudication of the questions raised in both the Writ Petition, the A.P.I.D.C. should be impleaded as the 3rd respondent to both the Writ Petitions. Notice was accordingly issued to the A.P.I.D.C. and on receipt of the notice the A.P.I.D.C., represented by its counsel filed counter affidavit in both the Writ Petitions challenging the award passed by the Labour Court and disputing the claim of the petitioner in Writ Petition No. 1917 of 1979 for payment of full back wages and for grant of other attendant benefits.
It is urged on behalf of the Company and the A.P.I.D.C. that Smt. P. Kanaka Durga was first appointed by the A.P.I.D.C., as a casual labourer for a period of two months from 1-6-1975 on payment of daily wages, that she was continued as such from time to time, that she was paid a consolidated salary of Rs. 200/- per month from 1-5-1976, that she was not a ''workman'' within the meaning of the Industrial Disputes Act, entitled to invoke the beneficial provisions thereof, that even otherwise, being casual labourer, she was validly discharged from service, that in any event, her services were not terminated by was of punishment, that the Labour Court acted without jurisdiction in directing her reinstatment into service and that there could be no question of her absorption into service from 17-4-1978 after the Plant was handed over to the Company by the A.P.I.D.C on the expiry of the period of lease.
The definition of ''workmen'' contained in Section 2 (a) of the Industrial Disputes Act, 1947, hereinafter referred to at the Act, is wide enough to include even a casual workman. Smt. Kanaka Durga was first appointed by the A.P.I.D.C. as a casual labourer initially for a period of two months from 6-4-1975 on payment of daily wages. But the was admittedly continued at such from time to time till she was discharged from service on 20-9-1976. There was no break or interruption in her service. In other words, she was in continuous service for a period of not less than one year. From 1-5-1976 she was paid a consolidated salary of Rs, 200/- per month. The fact that she was paid daily wages from 1-6-1975 to 1-5-1976 does not render her service any the less ''continuous service'' as defined in Section 25B of the Act. She is, therefore entitled to invoke to her aid the benificial provisions of the Act.
The finding of the Labour court that the termination of the services of Smt. Kanaka Durga was by way of punishment, it must be held is erroneous and unsustainable. No disciplinary action was initiated and no enquiry was held against her on receipt of the complaint from the General Secretary of the workers union of the plant on 4-9-1976. It might be that the complaint would have promoted or induced the Management to terminate her services. There was no slur on her work and conduct in the impugned order of termination. The termination, in our opinion, was discharge simplicior. No evidence was either let in by Smt. Kanaka Durga to sold that the order of discharge was either punitive or that it amounted to vicitimisation or unfair labour practice so as to direct her reinstatement on any of those grounds.
We, however, hold that the termination of the services of Smt. Kanaka Durga is illegal as being violative of the provisions of Section 25F of the Act. Section 25F of the Act enacts that no workman who has been in continuous service for not less than one year shall be retrenched until the workman has been given one month''s notice in writing or the workman has been paid milieu of such notice one month''s wages and has been paid, at the time of the retrenchment, compensation which snail be equivalent to between day''s average pay for every completed year of continuous service or any part thereof in excess of six months. As already held by us, Smt. Kanaka Durga was in continuous service of the plant under the management of the A.P.I.D.C. for not less than one year when she was discharged or retrenched from service. Admittedly, neither one month''s wages in lien of such notice was given to her nor one month''s wages in lien of such was paid to her before she was retrenched. No retrenchment compensation was either paid to her.
In State of Bombay vs. Hospital Mazdoor Sabha 1960 (1) LLJ 251 the scope of Section 25-F (b) of the Act providing for payment to the workman, at the time of the retrenchment, compensation equivalent to fifteen days'' average pay for every completed year of six months, was considered and their Lordships held:
On a plain reading of S. 25-F (b) it is clear that the retrenchment prescribed by it is a condition precedent for the requirement of the workman. The Section provides that no workman shall be retrenched until the condition in question has been satisfied. It is difficult to accede to the argument that when the sanction imposes in mandatory terms a condition precedent, noncompliance with the said condition would not render the impugned retrenchment invalid...Failure to comply with the said provision renders the impugned orders invalid and inoperative.
In Viney Kumar Majoo Vs. State and Others, construing the scope of Section 25-F (a) of the Act and the effect of non-compliance with the provisions thereof it was held.
One moth''s notice pay is required to be paid when an employer does not wish to serve the advance notice as required, but in lien thereof be chooses to pay one month''s wages. Now it may be open to an employer not to give a notice but in that event it will be incumbent on him to pay one month''s wages in lieu of notice, that is, for the Period of notice. This is to be done before the actual retrenchment. It is to precede the retrenchment and not to follow it. This has obviously not been done in the present case and, therefore, the condition precedent for the retrenchment envisaged by section 25F of the Act has not been fulfilled and this invalidates the order of retrenchment it self.
In Koteswara Rao And Others vs. The Government of A.P. and Another 1973 A.P. HCN 239 it was held that the provisions of Section 25F of the Act were mandatory and noncompliance with the same rendered the retrenchment invalid and inoperative and that acceptance of compensation by retrenched workman after the date of retrenchment would not create an estoppel against him.
The effect of a breach of the provisions of Section 25F of the Act came up for consideration before the Supreme Court in Workmen of Susong Tea Estate vs. Subong Tea Estate And Another 1963 (1) LLJ 338 and their Lordships of the Supreme Court while holding the retrenchment of the aggrieved workmen to be invalid in law, for breach of the provisions of Section 25F held:
That being so, we must hold that the retrenchment of the eight workman, being invalid in law, cannot be said to have terminated the relationship of employer and employee between the vendee, respondent 2 and the eight workmen concerned. They are accordingly entitled to reinstatement with continuity of service; they would also be entitled to recover their full wages for the period between the date of the retrenchment and the date of their reinstatement.
The principle was reaffirmed by their Lordships of the Supreme Court in U.M.D.S. Pvt. LTD., vs. M A. Dave 1975 (2) LLJ 499 wherein it was held that the legal effect of the invalid order of retrenchment was to continue the relationship of employer and employee between the parties and it was not permissible for an Industrial Court to terminate that relationship by a fiat of its own in breach of the mandate of Sec. 25F of the Act and its interpretation by the Supreme Court in Subong Tea Estate''s 1964 (1) LLJ 333 case, simply because it thought that it would not be proper to order reinstatement.
We, therefore, hold that the order of the A.P.I.D.C. date 20-9-1976 terminating the services of Smt. Kanaka Durga is invalid in law and that the order of termination did not put an end to the relationship of employer and employee between the parties. The result would be to direct her reinstatement with continuity of service and with full wages from the date of her retrenchment till the date of her reinstatement.
We, however, notice an insurmountable hurdle in directing her reinstatement in view of the provisions contained in Section 25EF of the Act. Section 25-EF may be usefully extracted:--
25 FF. Compensation to the workmen in case of Transfer of undertakings:--Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:
Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if--
(a) the service of the workman has not been interrupted by such transfer;
(b) that the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and
(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of the retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.
The section postulates that on a transfer of the ownership or management of an undertaking, the employment of workmen engaged comes to and, and it provides for the payment of compensation to the said employees because of the said termination of their services, provided, of course, they satisfied the test of length of service prescribed by the section. It further provides the manner it has to be paid. It is also enacted in the section that such workmen shall be entitled to notice and compensation in accordance with the provisions of Section 25F as if they had been retrenched The words "as it" bring out the legal distinction between, ''retrenchment'' defined by Section 2(00) of the Act and termination of services of workmen consequent upon transfer of the undertaking. In other words, the section provides that, though termination of services of the workmen on transfer of the undertaking may not be retrenchment, the affected workmen are entitled to compensation as if the said termination was retrenchment.
It may be recalled that Smt. Kanaka Durga joined service of the Plant under the management of the A.P.I.D.C. on 1-6-1975. The management of the Plant was transferred to the Company by the A.P.I.D.C. on 17-4-1978 on the expiry of the ten year period of lease. No direction for reinstatement of Smt. Kanaka Durga into service from 17-4-1978 can therefore be issued against the Company. She should only be entitled to full back-wages from 20-9 1976, the date of termination of her service to 17-4-1978, besides one month''s wages and compensation for retrenchment as provided u/s 25F of the Act.
The tripartite agreement entered into between the Company, the APIDC and the Government of Andhra Pradesh on 17-4-1978, when the plant was handed over to the Company, setting out the terms and conditions governing the rights and liabilities of the parties to the agreement cannot be pressed into service by Smt. Kanaka Durga in support of her claim for reinstatement, as Clause 9 thereof enjoined an obligation on the Company to absorb in service of the Plant all the personal that were actually then working in the Plant and were willing for such absorption. Though Smt. Kanaka Durga must be deemed to be in service of the Plant, as held by us, she was not in actual service of the Plant at the time when the management was transferred to the Company. She is not therefore, entitled to reinstatement even under the tripartite agreement. We accordingly quash the impugned award of the Labour Court dated 13-10-1978 directing reinstatements of Smt. Kanaka Durga into service. Writ Petition No. 6090 of 1973 is thus allowed. A direction shall however, issue to the APIDC for payment to Smt. Kanaka Durga Full wages, from 20-9-1976 to 17-4-1978 at also another one month''s wages and compensation as provided u/s 25F of the Act. Any amount paid by the APIDC to Smt. Kanaka Durga during the pendency of the Writ Petitions by virtue of the earlier order passed by us may be given credit to Writ Petition No. 1917 of 1979 is accordingly allowed. We make no order as to costs in both the Writ Petitions.