Pooja Soya Industries (P) Ltd. vs Pramod Shah

Prakash Shrivastava, J.—This writ petition under Article 227 of the Constitution of India is at the instance of employer challenging the award dated 18/9/2012 passed by the Labour Court Ratlam directing reinstatement with back-wages and all consequential benefits and alternatively compensation to the tune of Rs. 4 lakhs in lieu of the reinstatement. In brief, services of the respondent who was working as Store In-charge in the employment of the petitioner were terminated and the respondent had filed an application under Section 10 of Industrial Disputes Act and since the reconciliation had failed therefore, a reference was made to the Labour Court under the provisions of Industrial Disputes Act and after recording the evidence, the Labour Court has passed the impugned award.

Learned counsel for the petitioner submits that the respondent has worked only for a period of 5 months therefore, the relief of compensation to the tune of Rs. 4 lakhs in lieu of reinstatement is on the higher side. He has further submitted that the Labour Court has committed an error in granting the backwages and that the petitioner had not completed 240 days of working, therefore, he was not entitled for any relief.

Learned counsel for the respondent has opposed the writ petition and has submitted that the services of the respondent were terminated without assigning any reason, without issuing any charge-sheet and without conducting any inquiry. He has also submitted that termination of services by an oral order was contrary to Section 11(d) of M.P. Industrial Employment Standing Orders.

I have heard the learned counsel for the parties and have perused the record.

In the present case, the case of the respondent-workman before the Labour Court was that he was selected for the permanent post of Store In-charge and by a written order, appointed on 12.11.2007 on the monthly pay of Rs. 6,500/- and had worked from 12.11.2007 to 1.5.2008 continuously and without assigning any reason, without conducting any enquiry and without passing any written order, the petitioner had stopped taking work from him.

The Labour Court after appreciating the evidence on record, has found that the respondent was appointed on the post of Store In-charge on the monthly pay of Rs. 6,500/-. The petitioners had failed to prove the plea that the appointment was on probation. They also failed to prove the plea that the respondent had tendered resignation. It has been found that the petitioners had terminated the services of the respondent on 2.5.2008 because they did not want to keep him in service. It has further been found that no reason has been disclosed by the petitioner for terminating the services, nor any enquiry was conducted before termination. Since the respondent had not completed 240 days of service, therefore, his plea relating to the non-payment of retrenchment compensation has been rejected. The labour court has further found that MP. Industrial Employment (Standing Order) Act, 1961 is applicable in the petitioner''s establishment and in terms of the Standing Order 11(b), the petitioner was required to record the reason of termination and communicate the same to the employee. Relying upon the judgment in the matter of Ramendra Singh v. M.R. State Road Transport Corporation reported in 1997 MPLSR 239, it is found that the termination of service of even a temporary employee without assigning any reason, is illegal. It has further been found that even before the Labour Court the petitioner had not disclosed the reason for terminating the respondent''s services and since there was non compliance of the above Standing Order, therefore, the termination has been found to be bad and the respondent has been found to be fit for reinstatement in service along with full backwages from the date of termination and all consequential benefits. In lieu of the reinstatement, the petitioners have been given option to pay the compensation of Rs. 4 lacs in addition to the backwages.

So far as the issue of illegality of the termination and the finding recorded by the Labour Court are concerned, no arguments have been advanced by the counsel for the petitioner except for raising the plea that the respondent had not completed the 240 days of service. The judgment in the matter of Ramendra Singh (supra) relied upon by the Labour Court, itself is based upon the Division Bench judgment of this Court in the matter of Nathuram Namdeo Vs. State Industrial Court, Indore and others , wherein the Division Bench of this Court has expressed that Standing Order 11 is not restricted to permanent employees and that the Labour Court should allow employer to disclose reasons and if valid reasons are disclosed, the termination can be held valid but in the present case even before the Labour Court, the petitioner had not disclosed any reason for termination. In view of this, the finding of the Labour Court that the termination was contrary to the Standing Order and was illegal, does not suffer from any error.

Counsel for the petitioner has placed reliance upon the judgment of the Supreme Court in the matter of Manager, R.B.I., Bangalore Vs. S. Mani and Others, , but that is a case relating to the reinstatement for non compliance of Section 25F of the Industrial Disputes Act and in respect of the extent of pleading and proof required for proving 240 days of service, but in the present case the respondent''s plea based upon Section 25F has already been rejected by the Labour Court. Similar is the position in respect of the order dated 24.1.2013 in the matter of General Manager, Reddy Virana Construction Pvt. Ltd. v. Mohammad Siddique Khan passed in W.P. No. 1397/2011, on which the petitioner has placed reliance.

The next issue is about the full back-wages as well as the amount which has been awarded by the Labour Court in lieu of the reinstatement.

The Supreme Court in the matter of Jagbir Singh Vs. Haryana State Agriculture Marketing Board and Another, has held that reinstatement with full backwages in case of illegal retrenchment of a daily wager, is not proper, instead compensation should be awarded. The Supreme Court after taking note of the earlier judgment on the point, has noted the factors which are required to be taken for consideration while passing the order of reinstatement, i.e. (i) whether in making the appointment, the statutory rules, if any, had been complied with; (ii) the period he had worked; (iii) whether there existed any vacancy; and (iv) whether he obtained some other employment on the date of termination or passing of the award. In that case the Supreme Court keeping in view the fact that the employee concerned was a daily wager, had awarded compensation of Rs. 50,000/- since he had worked only for about 11 months. Counsel for the petitioner has further placed reliance upon the judgment of the Supreme Court in the matter of Senior Superintendent Telegraph (Traffic) Bhopal Vs. Santosh Kumar Seal and Others, , wherein the Supreme Court has held that a daily wager who has worked only for 2-3 years, may not be granted the relief of reinstatement and backwages and only monetary compensation should be awarded, and in that case the compensation of Rs. 40,000/- was granted.

In the present case, as per the finding recorded by the Labour Court, the appointment of the respondent was not as daily wager but he was appointed on the post of Store In-charge on the monthly pay of Rs. 6,500/- after due selection. The respondent had worked for about 6 months before the illegal termination of his services. The Labour Court has considered the statement of the respondent that after termination of services, he had remained unemployed and could not find any other employment inspite of efforts. Considering the circumstances of the case and limited period for which the respondent had worked, it is found that the Labour Court has committed an error in directing reinstatement with full backwages. I am of the opinion that in the facts of the present case, interest of justice will be serviced in directing the reinstatement of the respondent with 20% backwages and further directing that in case the petitioners are not inclined to reinstate the respondent, they would pay Rs. 50,000/- in lieu of reinstatement in addition to the backwages awarded by this Court. The writ petition filed by the petitioner is allowed and the award passed by the Labour Court is modified to the extent indicated above.