Supreme Court of India
MANAGEMENT OF KARNATAKA STATE ROAD TRANSPORT CORPORATION, BANGALORE & ORSversusM. BORAIAH & ORS.
- Citation
- 1983 INSC 170
- Decided
- 1 November 1983
- Disposal
- Dismissed
- Bench
- AMARENDRA NATH SEN
Holding
Termination of a probationer for unsatisfactory service amounts to retrenchment under Section 2(oo) of the Industrial Disputes Act, 1947, and therefore requires compliance with Section 25F; failure to do so renders the dismissal void.
Summary
The Karnataka State Road Transport Corporation terminated several probationary employees for unsatisfactory service, both during the initial and extended probation periods. The employees challenged the dismissals, arguing that the terminations did not constitute retrenchment and therefore were not subject to the procedural safeguards of Section 25F of the Industrial Disputes Act, 1947. The Labour Court held the dismissals invalid, a view affirmed by the High Court, which ruled that termination of probationers is retrenchment under Section 2(oo) and that the corporation had failed to comply with Section 25F. On appeal, the Supreme Court examined the scope of "retrenchment" and held that the definition in Section 2(oo) covers any termination by the employer for any reason other than the expressly excluded categories, including termination of probationers. Consequently, the corporation’s dismissals were deemed retrenchment and void for non‑compliance with Section 25F. The Court dismissed the corporation’s appeal, upholding the High Court’s award in favour of the employees.
Issues considered
- The meaning of 'retrenchment' under Section 2(oo) of the Industrial Disputes Act, 1947, especially with respect to termination of probationary employees.
- Whether termination of service of a probationer for unsatisfactory performance falls within the ambit of retrenchment and thus attracts the provisions of Section 25F.
- Whether the employer complied with the procedural requirements of Section 25F in the dismissals.
Legislation cited
- Industrial Disputes Act, 1947s. 25F, s. 25FF, s. 25FFF, s. 2(oo)
- Transport Corporation Act, 1950
Subjects
retrenchmentprobationary employeeIndustrial Disputes ActSection 25Ftermination of servicelabour lawKarnataka State Road Transport Corporationunfair dismissal
Judgment
783
MANAGEMENT OF KARNATAKA STATE
ROAD TRANSPORT CORPORAT!ON, BANGALORE & ORS. .A
v..
M. BORAIAH & ORS.
B
.,.
November l! 1983 ..
(AMARENDRA NATH SEN AND RANGANATH MISRA, JJ,j
'
lnduslrfr~l -Disputes Act 1947, Ss. 2 (oo) & 25F :'Retrenchment"-·r.vhat
is-Term(nalio~ ofserviC'!s of employee during Probation-Whe._th'er "retrench- .C
ment'', ·
The j>Pc;llant-Co~poration· ·tef1ninated tp.e · eniploymen~ of Some- of its
cmpl"oyee~respondents who· were probationers on tbe ground ,of. unsatisfactory
service, some .during the period of their probation and others during the .
. exte~ded period p~ p~Obation.
D
The Labour Court, to. which the dispute was·referred, held that s. 25F
·cf thC Industrial ·Disputes Act had no apPliccitiOn, and that for this. reason "the
·f discharge·was invalid. ·
Dismissing the cm_ployer's writ petition a Single Judge held that· the
ord.Crs of discharge amounted tO retrenchqient as d~finCd in S. 2 ·(oo) of the Act E
• and ·were bad for ~on·c6mpliance of s. 25F. A Division Bench; of the High
'
.\ <;;;._outl upheld this decisi6n? . .
In the appeal to thi_s coun if was contended on behalf of. the appellant
that th~ services of. the respoode1;1ts had been termii:iated on the groun·d of their
'UDSUitability and it W~S not a Case Of disbanding. Surplus labour force and, F
therefore, _such termination did not_ amount to reterenchmeni.
,Qisn1issing the appeal,
. .
. .
HELD': 1. ·OD.c~ the conclusihn-is.reach.ed.that retrenchment as defiried
. in s. 2. (oo) ·or. the Indu'.strial Disputes Act covers every case of termination· of G
service except those whic~ have· bfen embodied in· the c;IefiniLion, discharge frorl-i
employment or terniination of service of a,.probationer would also amo·unt .to
r~tr~nchment. [794 E]
In the instant case the requirements ·of s. 25F had not been cO~pHed
with. [794 FJ " H
• '
_184 SUPREME COURT i\EPORTS [1984) 1 S.C.R'
, 2. The stage has come wben the views indicated in State Bank of India
'A v. N; Sundara Money [1976] 3SCR160 has been ''absorbed into the coosensu•"
and there is no scope for putting the clock back or fOr an .anti-clockwise
·operation. [794 DJ ·
Harlprasad Shivshanker.· Shukla v, A.D. Dlvikar, j957 S,C.R. 121;
Hindustan Steel Ltd.. v. 'l'he Presiding Officer, Labour Court, Orissa & Ors. [1977]
. I S.C.R. 586; Santosh Gupta v. State Bank of Patio/a, [l980] 3 S.C.R. 884; Indian
B Hume Pipe co. Ltd. v. The. Workmen, [19~0] 2 S.C.R. 32; Mohan Lalv.. ·Manage-
ment of M/s. Bharat E(ectronlcs' Ltd. [19~1] 3 S.C.R. 518;· Surendra Kumar
· Ver'!la etc. v. The Central Governn.ienf lndu~trial Tribu'nal-cum-Labour .Court,
New Delhi & Anr. [1981] 1 S.C.R. 789; L. ·Robert D' Souza v. The Exeoutive
Enllfneer,'Southern Railway & Ani;. [1982] 3 S.C.R.'.251 referred to. \
C C1v1L ArPELLATE Ju11.ISn1cTioN : Civil ·Appeal Nos, 3085 of
1981 and 3628-3649 of 19~2.
From the judgment and Order dated the 6th July,•1981 and.
5th August, 1982 of the High Colirt of K'.arnataka at Bangalore in
·Writ Appeal Nos. 724/81 and 1324/80, 1470, 1788, 1894/81, 55,
D 94, 368/82, 475/81, 1133/82, H310/80, 22158, 21822/80, 10531, •
10612/82, 1086; 1778/80, 12332, 12890/78; 19sso;19, 11089/82, t
l122i! & 19410/82.
r
. N. K. Sharma, Ms. Depika Saxena and Vineet Kumar for the ''
E appellants. · \II
;.
R. K. Garg, D. K. Garg, P. R. Ramasesh and Ms. R. Bagai for v.
"
the respondents.
. \ ~
The Judgment of the Court was· delivered by
F •
RANGANATH M1SRA, J. The employer-Karnataka State Road
Transport Corporation-created. under a .State Act entitled the
Transport Corporation· Act of 1950 ('Corporation Act' for short) ·
is in. appeal by 'special leave and the common decision of a Division
Bench of the High Court which held that termination of employees
while on probation on ground of unsuitability amounted to retren-
chment and for non-compliance :fi ith the provisions of s. 25F of the
·Industrial Disputes Act, 1947 ('Disputes Act' for short), .the termi-
nation is bad, is challenged,
H · As per Rule 7 made under s. 45 of the. Corporatjon Act,
direct recruits .are to be on probation (or two years and such pro-
bation call be extended. , The empl_oyer .terminated the employment
•
_li!.S.R._T. CORPN: v. M. BORAIAH (Ranganath Misra, J.). 785
of some of the employees during ihe iiiitial period· of probation and
of, some others. during the extended period O!J: the ground of· un·
) satisfact~ry service. Thereu.pon an industrial dispute was .raised
> questioning the legality of their termination and the _State Govern·
ment referred the dispute to the Labour Court for adjudication
under s. 10 of the Disputes Act. The Labour Court held, overruling
the stand of the employer that s. 25F of the Disputes Act had no B
application, to the effect that the discharge was invalid. The
...• employer Corporation came before the High ·court challengi'ng the
·'Award. A learned single Judge dismissed the writ petition holding·
that the order of discharge_ amounted to retrenchment as defined in
s. 2(oo) of the Dispqtes Act and ·those orders were bad for non·
compliance of s. 25F. The employer Corporation challenged the c
decisio·n of the single Judge before a Division Beneh and the Division
Bench. by the impugned judgment upheld the decision of the learned
single Judge.
·Admittedly the employees were probationers at the tim.. of D.
discharge from service. There is no dispute .that as a condition
precedent to discharge the requirements of s. 25f' of the Disputes
Act had not been complied with. If the discharge of the employees
would amount to retrenchment, appellant's counsel does not dispute
that the order of discharge would be bad ·for, non'compliance of
s. 25F _of the Disputes Act. The only question for· consideration· 1n E
ihese appeals, therefore, is whether the discharge of the· employees
from service amounted to retrenchment.
It is the sta.nd of the employer Corporation that the employees
were probationers and the order of discharge in every case was on F
account of unsatisfactory service~ Since the order of discharge has
been grounded upon unsaiisfactory service during the. period of
probation, it has been argued that such termination of service is. not
• retren_chmen(. ·
• Section 2(oo) of the Disputes Act define~ retrenchment to G
'. mean .: " 'J:etrenchment' 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 includc-(a) voluntary retirement of the ·workman; or (~)
retirement of the workman on re&ching the age of superannuation H
•
786 SUPREME COURT RBPoRTS (1984) 1 S.C.R.
if tho contract ofemp!Qylnent between the employer and the work•
A man concerned contains a stipulation in that behalf; or (c) teI'Iili· ..
nation of the service of a workman on the ground of continued
. ill-health." •
•
A Constit1,1tion Bench ofthis'Court in llariprasad Shivshaitker
B · Shukla v. A.. D. Divikar,( 1) ex.,mined the true meaning of the expres~
sion . 'retrenchment' and posed the following 'question : ·
. "':
."The question however, before us is•does this defini-
.· tlon merely give effect .to the ordinary, accepted notion
of retrenchment . in an existing or .running industry by
c embodying the notion in apt and readily intelligible word.s
or does it go so. far beyond the accepted notion· of retre-
nchment ·as to include the ·termination of services of all
workmen in . an industry when . the. industry itself ceases
to exist on a bona fide closure or. discontinuance of his
business by the employer."
D
. 'It. went on to say
. .:
"There is no doubt that when the Act itself' provides
a dictionary for the words used we must look into that
E . dictionary first fo~ an interpretation for the words used
. in the· statute. · We are ngt concerned with any presumed·
· Intention of the legislature; . our task is to get. at the
intention .as .expressed in the stattite. Therefore, we pro-
.pose first to examine the language of the definition and
see if the ordinary, accepted notion. of retrenchment fits
F
.... in, squarely
'.
and fairly, . with· the. language used. What.
.. ' '
.is·1he onlinary,. accepted notion . of retrenchment in an
industry! . : ......
Let us 'oQw see ·h<)W 'far that meaning.fits in with the·
language used. We have referred earlier to the four
G essential requirements of the definition; and the ·question
is, does the ordinary meaning of retrenchment fulfii
those .. requirements ! . In our o.pinion it does. When a
portioµ of the staff or labour force is discharged as sur·
.plusage in a continuing business, there are (a) termination·
iI of the :'.service of a workman; (b) by the employer; (c) for
. (I) '[19S7]SCR 121, '
..
•·
787 .
. .,
any reason·
. .
- whatsoever;
. and (d) otherwise
. than as a_· puni·
'
. shment
.. inflicted by way of disciplinary
. . action.''.' /.
.· .
..-•' ., '
,'• .·
The C<institution Bench: further said :
.. (
• -• . ! • ._
.·. : ·,, -
.. '
.. ·."The legislature. is using. the ·expression: 'fo~ : any
...:"reason" whatsoever' says in effect": :'It does not.matter why
r· . : •. you are discharging the surplus; if the other requirements." . '.B
II ·. of the definition ·are fulfilled, then it is ret(enchment."
Id the. absence-of any coOlpelling · words to indicate . that.·
: . . . . the intention' was evei1 io indude a: bo~a fide closure of
the. whole busin"ess, it would, we thiuk, be divorcing the ..
.· •·
expression altogether .from its context to give it such a: c· ..
• . wide• ine~ning.as is contended f~r by learned ··counsel for· ._.•.
·•·the·. respondents. · \Vhat ·_is' being "defined· is retrenchment: ... ·
.: ·.and- that" is- the-: CCnfiexf of the :.<leJinition-~ -·:It ·i~ \,r:ue :_ ihb.t -
. an ·. a~tificial. definition may.· include a m~ariirig-different
• - . . from .or. fa excess of the ordinary" ac~epiation of the word' .
which is the subject of definition; 'but.there must the"!) be: ...
compeJling Word:; to show thaf~uch a·meailitig diff6reni · : -.
from "or in excess\ .c)f the ordina;,.. meaning fs intended; . ·....
_. . ·Where,:within the framework of the ordinary acceptation
· ··. of th~. word, ·every· single· requirement.of the· definition · · · -. ;...- '
. clause is' fuifilled, it" would be wrong :to t<,1ke ihe'definition .. · .E c. ,.· .
·. aS <lOsti-oying
.
the essential meaning of the word . defined." .. •..•
- ·- . ... ·. ; -. - ..
' ...
. After referring t~ certain decision~· the Coristltutiori Bench c~u"cluded
by saying: · · ·. · ·.c. ' ' ·< > '"
...
.. •· ' ' -; ,_ ._,_ ,- .
. '. ' ... . \"'. . . - . . . . ~ ...
'
. .. "For _the reasons · given·· above; we hold, contrary io
· . the . view: expresse<l by· the· Bombay'· High ·Court, · thae ..
··retrenchment as 'defined in r:.·· 2(oo) and as used ins; 25F:
has no wid.er meaning than t!ie orainary; aecepted connQc '.
.. talion of .the word; it meads . the 'discharg~ C>r surplds
·labour "or siaff by ihe emp!dyerfor'a~y reason\vhatsiiev~r;' .... '{ ,, .
otherwise.· than as a· punishment' iilflicted by. way ··or .. '. . •. -~ '.
..,' ..
_,... di~ip.U~a~!., aetj?n,.~-~·..-; ;_:.;~· .. ;· --;:.·.. . :-, ·-~· -:,:",:·,- .··~-:~-:~~- '~ ·' ~ .
. . ".
·The,·ratio 'of.this decisl~n has been pressed into· service by ·the.·
appellant Corporation for its stand. that" in-.the instani. case· the-" . .H
' ... services· have been terminated oil. the ground of.Unsuitability and it .·.·
, was not a case of disbanding surpluilabour ·.force and, tneref(i'rc, di<I ··
- .. . - .. ' .... -.. ·.,' ' . . ·
.·
.. '
7s8 · h984) i S.C.R.
not ·amount to retrenchment. On the other hand, counsel for the
A ·.employees have contended that the consensus of judicial opinion ill
later· decisions of this Court is against the appellant's stand. The
first decision is the. case of State -Bank of India v. N. Sundara
Money.(') A Bench of three leanied Judg~s of this· Court referred° to
the definition in section 2(oo) of the Disputes Act and observed :
. '
B · "To protept the weak against the strong this policy of
·comprehensive definition has been effectuated. Termi-
nlt!6n embraces no! merely the a9t of termination
by the employer, but the fact of termination howsoever
produced."
. Then c~me the decision in Hindustan Steel Ltd. v. The Presiding
Officer, Labour. Court, Orissa & Ors.,(') when a three Jutlge Bench
of
of this Court again examined the true.· meaning the. definition of .
the expression 'retrenchment'; On this occasion reference was made
to the Constitution Bench decision and as would appear from page
589 of the Repori, counsel had submitted that the three Judge
decision of this Cpurt in Sundara Money's case (supra) was in
apparent conflict with the Constitution· Bench. decis_ion and required
• reconsideration. This submission of counsel was considered and
facts of the Constitution Bench c~se were analysed and Gupta, J .
. who spoke for the .Court, stated :
E
"On the facts of the case before us, giving full effect
to the words 'for any reason whatsoever' would be consis-
tent with the sc.ope and -purpose of section 25F of the
Industrial Disputes Act, and n~t contrary to the scheme
F of the Act .. We do not find anything in Hariprasad's case
'Yhich is inconsistent with what has been held in State
Bank of India v. N. Sundara Money (supra)."
The same question came up for consideration before a two
Judge .. Bench of this Court in Santosh Gupta v. State Bank of
G Patiala.(8) The· facts of the case were more or 'Jess the same as in
·the present dispute. Employment there had. been terminated upon
· failure of the workman to pass the test _which would have_ enabled
her to be confirmed in service and it was contended on behalf of the
(!)- (1976] 3 SCR 160.
(2) ,(1977) I SCR 586,
(3) (1980) 3 SCR 884.
· k.s.il..T. "collPi.. v. M. llORAIAH (Ranganath Mi.Ira, I.) 789
managcinent that termination of service was not due to discharge
of surplus labour force and, therefore, it did not amount to retren- A
chment.. The Division Bench referred to the Constitution Bench
decision and observed :
"If the definition of '~trenchment' is looked .at
unaided and unhampered by precedent, one is at once B
... struck. by the remarkably wide language employed and
' particularly by the use of the w,ords "termination ......
for any reason whatsoever''.. · The definition expressly
excludes termination of service as a 'punishment inflicted
by way of disi;iplinary action'. The definition does not
include, so it expre.ssiy says,· voluntary retrenchment of c
the workman or retrenchment of the workillan oiueach-
ing the age of superannuation or termination of the
service of the workman on the ground of continuous
ill·health. Voluntary retrenchment of a workman or
retrenchment of the workman on reaching the _age of
superannuation can hardly bp described as termination,
D
by the. employer, of the service ofa workman. ·Yet, the
Legislature took special care to mention that they.were
not included within the meaning of 'termination by the
employer of the service of a workman for any reason
whatsoever'. This, in our opinion, emphasizes the broad . E
interpretation to be given to the expression 'retrenchment'.
In our view if. dm1 weight is given to the words .'the
termination .by the 'employer of the service ofoa workman.
'for any-reas,on whatsoever' are understood to mean what
they plainly say, it is difficulfto escape the conclusion
that the expression 'retrenchment' must include every F
termination of the service of a workman by an act of the
employer.. The und.erlying assumption, of ·course, is that
the uudertakiilg is running as . an undertaking and the
· . employer continues as an empfoyer but where .either on
account of transfer of the undertaking or on account of G
the closure of the undertaking the basic assumption
disappears; there can be no question .of 'retrenchment,
within the meaning of the definition contained ins. 2(00).
This came to be realised as a result of the decision of
this Court in Hariprasad Shivshanker Shukla v. A. D. H
. Divikar (supra). The Parliament then· stepped in and ·
introduced 25F aQd 25FFF by providing that compen;
satioli. shall be payable to workmen in case of transfer of
790 SUPREME COURT REPORTS [1984) i S.C.R.
undertaking or closure of und,ertaking as if the wor.kinen
A ·had been retrerich~d. We. rriay rightly say that the termi-
nation of the service of a workman o.n the transfer· or
closure of an undertaking was treated by Parliament as
'deemed retrenchment'. The effect was that every case
of :termination of service .by act of employer· even if such·
termination involved was a· consequence of transfer· or
B
closure of the undertaking· was to be treated as 'retren- ·
chmenC for the· purposes of notice, compensation etc. · ·
Whatever doubts might· Ii~ve · existed before Parliament
· enacted 25FF and 25FFF about the width <>f 25F there
cannot ndw be any doubt that the expression 'ternii- ·
nation' of service for auy.· reason wh'it&oever now covers
every killd of termination of service except those not
expressly included.in s. 25F or not expressly provided for
bi other provisions of the Act such as ss. · 25FF
and 25FFF." . .
D The .learned Judges drew support from what had been observed in
.Indian Hume Pipe Co: Ltd. v~ TM Workmen,(') "the object ot
·retrenchment. compensati~n is to give protection to the retrenched
employee and his family to enable them to tide over the hard period
· of unemployment," and . observed :
E
'..'Once th~ object of 25F, 25FF and 25FFF is
understood and the true nature of the· compensation
which th!lse provisions. provide is realised, it is difficult
to make any distinction between termination bf service
for one reason and terminati.on of service for another."
F
Chinilappa Reddy, J. thereafter referred to the Constitution Bench ·
decision ·and said : ·
"It is tiue that there are some observations which, if
. not'properly understood wiih reference. to the que.stion
at issue, seemingly support the submission of Dr. Anand
Prakasli that "termination of ·service for any reason
· · whatsoe~er" means no rriore and no less than discharge
-of a labour fprce. which is a surplusage. The mis under-
.standing of the observations and the resulting confusion
H stem, from not appreciating (I) the lead question which
•
(I) [1960) 2 S.C.R. 32.
R:.s.!l.T. cOSPN. v. i.i. BORAIAH (Ranganath Misra,!.) 791
was "posed and answered by \he learned judges and (Z)
· that the reference to 'discharge on. account of surplusage' A
was illustrative and ·not e~haustive ·and by way of contrast
.with discharge o~ account of transfer or closure of
business .. '
It was further .observed :
B
"The ratio of Shukla's case in fact has· rtlready been·
explained, in Hindustan ·Steel Ltd. v. The Presiding
Officer, Labour Court Orissa & Ors. The decisjons iu
Hindustan Steel Ltd. v. The Presiding Officer, Labour:
Court, Orissa & Ors. and State Bank o/ India v.
N. Su11dara Money have, in our view, properly explained
c
Shukla's case and have laid "down the cc>rrect law."
. . .
·. The same question aro~e for cons.ideration before ~nother two
Judge Bench in Mohan Lal· v. Mmiagement of M/;. Bharat Electronics
l..td . <1) Desai, i. spoke for the Court thus: · D
·"NicetieS and sfn1aniicS ap~rt, termination by the ..
em.ployer of the· service of a workman for any reason
' ' ..
whatsoever would constjtute retrenchment except in·cases
.~ .. · excepted in the section. itself. The.excepted or .excluded
cases are where termination is by way of punishme.nt
E
inflicted by way of disciplinary action, voluntary retire-
ment of. the workman, retirement of the workman on .•
reaching the age of· superannuation if the contract of
.. empl~ymcnt between -the employer and the. workman
. concei;ned contains a stipulation in that .behalf; al)d termi- F
nation of the s.ervice of a workman on the ground of
continued ill-health. It is not the case of the respondent
that tcrinina(ion in .the .instant case ·was a punishment
inflicted by way of disciplinary action. If such a position
.were adopted," the termi_nation. would be ab initio void for
.. violation of principle of natural justiCe or
for not follow-
ing the procedure prescribed for imposing punishment.
G
Jt is not even suggested that this was a case of. voluntary
retirement or retirement o)) reaching the age of supe~annu
ation or absence on account of continued ill-health ... The ·
case does not fall under any ofthe excepted categories.
H
(I) [1981f 3 S.C.R. 518.
792 SUPitEMB COURT RBPORTS • {i984l 1's.c.11..
There is thus termination of service for a reason other
A than. the excepted category. It would fodisputably be
retrenchment within the meaning of,the word as defined
· in the Act: It is not necessary to dilate on the point nor
to refer to the. earlier decisions of this Court fa view of
. the later two pronouncements of this .Court to both o! ·
B which one of us was a party. A passing reference to the
earliest judgment which. was the sheet anchor till tlie later
pronouncements may not be out of place. In Hariprasad
Shivshanker Shuk(a v. A. D: Divikar, after referring to
Pipraich Sugar Mi/ls Ltd. · v. Pipraich Sugar Mi/ls
Mazdoor Union, a . Constitution Bench of this Court
c · quoted with approval the following passage from the
aforementioned ·case :
'But retrenchment connotes in its ordinary accept·
ation that the business .itself is being continued but that a
D. portion of the staff. or the labour force is discharged as
surplusage and the termination of, services of all the
• workmen as a result of the closure of ~he business cannot
therefore be properly described as retrenchment.'
E "This observation was made in the context of the
closure of an undertaking and being con;cious of this
position, the question of the correct interpretation of the
definition of the expression 'retrenchment' in s. 2(oo) of
the Act was left open. Reverting to that ·question, the
vi~w was re-affirmed but let it be remembered that the
F . two appeals which were heard together in ShuklJ'S case
. " .
were ' cases of closure, ......
· In the majority judgment in Surendra Kum.ar Verma etc. v.
The Central Government Industrial TribunaJ..cum-Labour Court, New
G. Delhi & Anr.,(1) the ratio of the latter case has been followed. A ••
Bench of two learned Judges in the case of L. Robert D'Souza v.
The Executive Engineer, Southern Railway & Anr.,(2 ) re-examined the
entire position." Desai, J.. who again spoke for the Court indicated:
H (1) [1981) 1 S.C.R. 789.
(2) [1982] 3 S.C.R. 25L
El.s.R..'f. CORPN. v. M. noRAIAW(R4nganath Misra, J.) 193
"
"At the ourset it.must at once be pointed out . that
the construction put by the Full Bench of the Kerala A
High Court on the. expression 'retrenchment'. in s. 2(oo)
of the Act that it means. only the discharge of surplus
labour or staff by the employer for any reason whatso-
ever is no more good law and 'in fact the decision of the
full Bench of Kerala High Court in L. Robert D'. Souza B
v. E)fecutive· Engineer, Southern Railway & Anr., [(1970)
I LLJ 2111) has been specifically overruled by this Court
in Santosh Gupta v. State Bank of Patiilla. · This Court
.. has consistently held in State Bank of India v. N. Sundara
Money, Hindustan Steel Ltd. v. Presiding Officer, Labour
Court, and Delhi Cloth & General Mills Ltd. v. Shambhu c
Nath Mukherjee, [(1971) I SCR 591] that the expression
'termination of service for any rea30J1 whatsoever' flow.
covers every kind of termination of service except those
not expressly induded in s. 25F or not expressly provided
for by other provisions of the Act such as ss. 25FF an.d
D
25FfF. Itwas attempted to urge that in view of the
decision of this. Co.urt .in Pipraich Sugar Mills Ltd. v.
Pipraii:h Sugar Mills Mazdoor Union, the ratio of which
was re-affirmed by a Constitution Ben.ch of this Court
in Hariprasad S/zivshanker Shukla· v. A. D. Divikar, all
'
the later decisions run counter to the Constitution. Bench
and must he treated per in curium. This contention neetl
not detain ·us because first in Hindustan Stee!Ltd. case' ,
. than in, Santosh Gupta's case, (supra) and lastly in
Mohan Lal v. Bharat E/ei:tronics Ltd., it was in :terms
held .that the decision in Sundara Money's case was not
at all inconsistent witn the decision . of the ·Constitution
F
1
Bench In Hariprasad Shuk/a's'case and not only required
no recon.sidetation but the decision in Sundara Money's
case was ,approved ·.in the aforementioned thre~ cases.
'This position is further buttressed by the decision in
Delhi Cloth. & General Mills Ltd·. case wherein striking off. G
the name of a w_orkman from the roll was held to· be
retrenchment."
In the series of cases that h~\'.e come later the Constitution
Bench dedsion has been .examined and the raHo indicated therein has H
been confined to its own facts. The view indicated by this.Court in that·
. case obviously did not meet with the approval of Parliament and,
194 SUPitEMB COURT RBPORTs il984) i s.c,!l. •
'
therefore, the law has been subsequently · amended . as already . ·
A indicated. Lord Devlii;i once .observed·: ·
"I am not one of those who believe that· the .only
function ofla.w is to preserve the status quo. Rather, I
·should say that law is the gate-keeper of the ·status .quo,
B There is a.I ways a host of new ideas· galloping around· the
'outskirts of society's thought. All of them ·seek admis-
sion but ~ach must first wm ·its spurs; the. Jaw 'at first
resists, but will submit to. a conqu.eror and· become his·
servant. Tn a changing society the law acts a valve. ·Ne~i
c policies niust gather strength before .they can· force an
entry; when they are admitted and absorbed . into the
.
consensus, the'leg,al system should expand to. hold tliem,
as also it shoul'd ·.contract to squeeze out old policies
which have lost the con.sensus they once obtained."(')
D We are inclined to hold that the stage has come when the view
indicated· in Money'~ case (supra) has been .. "absorbed . into the
consensus" and there is no scope for p11tting the clock back or for .
an antf-clockwise ope,ration; ··
•
Once the conclusion' is reached that retrenchment as defined in
E .. s.2(oo) of the Disputes Act covers every ca;e of termination of servJce
... except those which have· been embodied in the d~finition, discharge
· from employment or termination of service of a probatibner -would
· also amo~nt to retrenchment. Admittedly the requirements of s. 25F
·orthe Disputes Act had not .been complied with in these cases.
Counsel for the appellant.did not very appropriately dispute before
F us that the necessary consequence of non-compliance of s. 25F of the
Disputes Act in a case. where it applied. made the order of
termination void; The. High Court, in our opinion, has, therefore,
rightly come to the contlusion. that . in t)lese cases the order of
retrenchment was bad and consequently it upheld tire Award of the
G . Labour· Court which set· aside those orders and gave appropriate
relief. These appeals are dismissed;· There would be one set Of costs.
Consolidated hearing fee is assessed at Rs;. 5,000.
N.V.K. Appeal dismissed•.
H
--(i).4ih Chorley Lectures delivered at the London School of Economics
OD 25.6.7$;
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "retrenchment"Sign in to search