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Judgment
P. Sathasivam, J.—The writ appeal has been filed by the management against the order of the learned single Judge, dated July 5, 1996, and
made in W.P. No. 7130 of 1987, wherein the learned Judge directed the management to reinstate the workman in service with consequential
benefits.
For the convenience, we shall refer the parties as arrayed in the writ petition. The writ-petitioner was employed in the first respondent-society.
He was assigned with clerical works like maintaining Tapal Register, Books, Forms, Stocks Register, Telephone Register etc. According to him,
due to ill- health, he was on medical leave from July 5, 1982 to August 5, 1982. At that time, the union served charter of demand to the first
respondent demanding revision of wages, filling up of existing vacancies of salesman. Since there was some misunderstanding between the
petitioner and the Vice-President and another co-worker, N. Chandrasekar, they were called by the Vice-President and one of the Board of
Directors and asked to resign from the union. The petitioner and the co-worker refused to do so. Thereafter, according to the petitioner, the Vice-
President and the Director did not allow the petitioner to work and sent out him (petitioner) and the co-worker out of society. On August 25,
1982 the petitioner sent a letter to the first respondent for reinstatement in service. On August 26, 1982 he was not allowed to work. The
petitioner was retrenched from service with effect from August 25, 1982. Hence he moved the Labour Court. The Labour Court, after having held
that the retrenchment was not valid, has directed the first respondent to pay Rs. 7,752 as compensation in lieu of reinstatement. Against the order
of the Labour Court, the petitioner filed W.P. No.7130 of 1987 before this Court.
The society has filed a counter-affidavit wherein it is stated that the petitioner was sent for co-operative training in the year 1978. It is also
admitted that the petitioner was doing other work in addition to the duties of salesman. The society was one of the successful societies mainly due
to quality of the sarees and shirting, which were the main products of the society. Due to various technical factors, there was steady decline in the
marketability in the overseas. All these adverse factors reflected in the working results of the society. There was decrease of profit and some times
the society incurred loss also. Therefore, considering all these aspects, decision was taken by the Board of Directors on August 20, 1982 to
retrench the petitioner from service, he being the junior most clerical employee of the society. There was no mala fide intention. There are only two
employees in the society and only 20 looms are working. The Board of Directors decided in the meeting held on August 20, 1982 and accordingly
he was served with an order of retrenchment. The petitioner refused to receive the same and it was sent by registered post on the same day. The
notice pay and other dues were also sent by money order on the very same day. After considering the various aspects, the Labour Court ordered
payment of additional compensation. Therefore, there is no justification for interference by this Court.
The learned Judge, after considering the rival claims as well as the finding of the Labour Court, accepted the finding of the Labour Court that the
retrenchment is not bona fide and ultimately quashed the order of the Labour Court awarding compensation in lieu of reinstatement and directed
the society to reinstate the petitioner in service with consequential benefits, against which the writ appeal has been preferred by the society.
Heard the learned counsel for the appellant/society as well as the 1st respondent-workman.
The points for consideration in this appeal are:
(i) Whether the retrenchment of the petitioner from the services of the society is warranted and bona fide or not? and
(ii) Whether the learned Judge is right in quashing the order of the Labour Court and ordering reinstatement with consequential benefits?
There is no dispute that the petitioner joined the services of the society as an office boy on July 19, 1968 and then he was promoted as
Assistant Salesman. He worked in that capacity, namely, Assistant Salesman from June 1, 1977, to August 25, 1982. It is the case of the
petitioner that since he refused to accept additional work load, in order to victimise, he was retrenched from service and there was no
bonafideness in it. On the other hand, it is the case of the society that the petitioner was retrenched for valid and proper reason, namely, there was
a steady decline in the demand and there has been steady fall in the production and sales of cloth by the society; hence the Board of Directors
decided to retrench the petitioner from service, he being the junior most of the clerical employee and there is no mala fide intention on the part of
the management in deciding the termination of the petitioner. After analyzing oral and documentary evidence, the Labour Court came to a factual
finding that the Board of Directors had passed a resolution to retrench the petitioner only after he refused to accept the additional work and after
the union served a charter of demands. No doubt, the society has produced statements of accounts, which were marked as Exhibits M10 to M18,
to show that the society had incurred loss in some years and even the profit made in some years was only meagre and thus the financial position of
the society was deteriorating year by year. However as rightly observed by the Labour Court, the manager of the society, who was examined as
M.W.I, has admitted that after the petitioner was retrenched, salary increase was given to other members of the staff. In his evidence, he also
admitted that after the petitioner was retrenched, some persons were employed temporarily for short periods. As rightly contended, if the
retrenchment of the petitioner was made to reduce the expenditure of the society, the salary of other members of staff would not have been
increased soon after his retrenchment. Likewise, even though it is stated that temporary staff were employed for short periods in order to reduce
the accumulation of work, the petitioner could have been employed. M. W.I has also admitted that he did not utilize the services of the petitioner
for the said work. In such a circumstance, the Labour Court is fully justified in arriving at a conclusion that the retrenchment was effected not out of
necessity, but only to get rid of the petitioner from the society. In other words, the retrenchment is not bona fide and it is a case of wrongful
termination in the guise of retrenchment and hence the retrenchment is not valid.
The Labour Court has also considered whether the management has complied with Section 25-F of the Industrial Disputes Act which requires
that for retrenching a workman, he should be given one month''s notice in writing indicating the reasons for retrenchment or he should be paid in
lieu of such notice wages for the period of the notice and he should also be paid at the time of retrenchment, compensation equivalent to 15 days''
average pay for every completed year of service. The perusal of the order of retrenchment Exhibit MI shows that though details of calculation of
notice pay, retrenchment compensation and other dues due to the petitioner were mentioned, the fact remains that the said amounts have not been
paid to the petitioner on that day and along with the retrenchment order. It is further seen that the retrenchment order was sent by registered post
because, according to the society, the petitioner refused to receive the same. If that is so, as rightly observed by the Labour Court, the notice pay
and compensation amount also should have been sent by money order on the same day. However, the amount has been sent by money order only
on the next day. The explanation offered by the society that money orders would not be received after 1.30 P.M. cannot be accepted. We are in
agreement with the conclusion arrived at by the Labour Court, namely, the society has not complied with the mandatory provisions of Section 25-
F of the Industrial Disputes Act and for this reason also, the retrenchment of the petitioner is also not justified.
Having found that the retrenchment is not justified, the Labour Court, after holding a reinstatement of the petitioner will be an additional burden
to the society and it will affect the smooth functioning of the society, directed payment, of compensation of Rs. 7,752/- to the petitioner.
Questioning the said direction, the petitioner-workman alone has preferred the writ petition before this Court and admittedly, the society has not
challenged the findings or conclusion of the Labour Court by filing a separate writ petition before this Court. Though Sri N. Balasubramanian,
learned counsel for the society questioned the finding of the Labour Court that retrenchment is not bona fide, in the absence of any writ petition
challenging the same, we are of the view that the same cannot be considered. We have already referred to the decision of the Board of Directors
to retrench the writ-petitioner after the service of charter of demands by the union and the factual finding rendered by the Labour Court, namely,
that retrenchment is not bona fide. There is ample acceptable legal evidence to show that after retrenching the petitioner on the alleged ground of
steep decrease in the volume of business, admittedly increased the salary in respect of other persons and also employed a few persons for short
periods. All those material aspects have been admitted by M.W. I , manager of the society. It is settled law that when retrenchment was effected
not on bona fide grounds, but it was made under the guise of wrongful termination, the normal rule is to order reinstatement of the workman with
continuity of service and monetary benefits. When such is the position, the Labour Court having found that the retrenchment is not bona fide one
and the society has failed to comply with the provisions of Section 25-F of Industrial Disputes Act, committed an error in ordering compensation
of Rs. 7,752/- in lieu of reinstatement in service. The said order cannot be sustained. The case of the society that retrenchment was made on bona
fide grounds due to steady decline in the marketability, fair in the production and sale of cloth, incurring loss by the society etc. are all liable to be
rejected on the face of their own evidence and materials placed before the Labour Court. In the light of the factual finding rendered by the Labour
Court based on acceptable legal evidence, the learned Judge is fully justified in quashing the award of compensation and ordering reinstatement of
the petitioner in service with consequential benefits. We are in agreement with the conclusion arrived at by the learned Judge. Though the learned
counsel for the appellant-society has cited several decisions, in the light of the finding of the Labour Court and the conclusion of the learned Judge
which we agree in its entirety, it is unnecessary to refer those decisions. We do not find any merit in the appeal.
Net result, the appeal fails and the same is dismissed. No cost. C.M.P.No. 18431 of 1997 is also dismissed.