Corporate Updates 5 July 2014

CASE LAW: 

Whether workman is entitled to reinstatement with back wages and other consequential benefits as if his services were never terminated in case of termination under Industrial Dispute Act, 1947 ??????

The Hon’ble Supreme Court of India in the matter of Bhuvnesh Kumar Dwivedi vs Hindalco Industries Limited has decided the issue relating to whether termination of a workman would amount to retrenchment who has been in continuous service for not less than one year under an employer in any industry.

FACTS OF THE CASE

1.  Mr. Bhuvnesh Kumar Dwivedi (appellant workman) was appointed as Labour Supervisor in M/s. Hindalco Industries Limited (employer’s/respondent) and he worked continuously in terms of Section 25B of the Industrial Disputes Act, 1947 wherein if a worker works for a period of 240 days, it will be deemed as if he has works for the full one calendar year. The appellant workman works on the said post till 28-07-1998- the day on which his services were terminated.

2.   The appellant workman worked for six calendar years from the date of his appointment till the termination of his service and he has rendered more than 240 days of continuous service in every calendar year before his termination. The respondent employer terminated the services of appellant workman on 27-07-1998 as per practice with the reason “sanction expired”.

3.   The respondent employer neither paid retrenchment compensation nor issued any notice or paid wages in lieu of the same to the appellant workman as mandated under Section 6N of the U.P. Industrial Disputes Act (“the Act”).

4. The appellant workman falls within the definition of workman under section 2(s) of the Act and has been rendering service since the day of his appointment on 30.12.1992. Therefore, termination of his contract is a clear case of retrenchment as opposed to the provision in Section 6N of the Act.

5.   The workman raised an industrial dispute and the Labour Court held that he was retrenched and awarded a compensation of Rs.1,00,000/- which was set aside by the High Court in the appeal preferred by the employer. The workman had challenged the judgement of the High court before the Supreme Court.

JUDGEMENT

The Supreme Court held that no workman employed in any industry who has been in continuous service for not less than one year under an employer can be retrenched by that employer until the conditions enumerated in Clauses (a) and (b) of Section 25F of the Act are satisfied. The Court has held that Section 25F (a) and (b) of the Act is mandatory and non-compliance thereof renders the retrenchment of an employee nullity.

The Supreme Court hold that appellant is a worker of the respondent Company providing continuous service for 6 years except for the artificial breaks imposed upon him with an oblique motive by the respondent Company.

The appellant is entitled to reinstatement with all back wages and other consequential reliefs and awarding Rs. 1,00,000/- towards damages and other consequential benefits. The appellant is gainfully employed post termination of his service on the respondent company. The claim of the respondent company that the appellant company is gainfully employed somewhere is vague and cannot be considered and accepted.

CONCLUSION

Termination of a workman would amount to retrenchment who has been in continuous service for not less than one year under an employer in any industry and on his termination the employer has to comply with the provisions of Section 25F of the Industrial dispute Act, 1947.