IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 21.07.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.No.15462 of 2009, W.P.No.24913 of 2008, M.P.No.1 of 2008 and M.P.No.1 of 2009 The Management of Kutty Flush Doors and Furniture Co.P. Ltd., No.1167, Poonamallee High Road, Koyambedu, Chennai 600 107 Rep. By D.Siveraj Vice President (Finance and Administration) ...Petitioner in both WPs Vs. 1.The Presiding Officer, Principal Labour Court, Chennai. ...1st respondent in both respondents 2.S.Devanandam 3.P.A.Kamalesan 4.S.Sanjeevi 5.J.Visu 6.K.Ranjith Kumar ...Respondents 2 to 6 in W.P.No.15462/2009 7.V.Varadhan 8.N.Baskaran 9.P.Arumugam 10.R.Elumalai ...Respondents 2 to 5 in W.P.No.24913/2008 W.P.No.15462 of 2009 preferred under Article 226 of the Constitution of India praying for the issue of a writ of Certiorari, calling for the records of the 1st respondent in I.D.Nos 263, 265, 266, 267 and 268 of 2002 and quash is Common Award dated 30-04-2008. W.P.No.24913 of 2008 preferred under Article 226 of the Constitution of India praying for the issue of a writ of Certiorari, calling for the records of the 1st respondent in I.D.Nos.261,262,264 and 269 of 2002 and quash its common award dated 30.4.2008. For Petitioner : Mr.S.Ravindran for M/s.T.S.Gopalan and Co., (in both WPs) https://hcservices.ecourts.gov.in/hcservices/ For Respondents : Mr.K.M.Ramesh for R2 to R4 and R6 in W.P.No.15462/2009 R2 to R5 - NA in WP.24913/08 C O M M O N O R D E R Both the writ petitions were filed by the Management. In the first writ petition (W.P.No.15462 of 2009), the challenge is to the common Award passed by the first respondent Labour Court in I.D.Nos.263, 265, 266, 267 and 268 of 2002 dated 30.04.2008. 2. By the impugned Award, the Labour Court held that the non-employment of the contesting respondents was not justified; but on the other hand, it found that termination was due to labour unrest and since more than 7 years have lapsed, the Labour Court felt that compensation in lieu of reinstatement will serve the ends of justice. The Labour Court also found that most of the workmen were working as contract workers and all of them were inducted as probationers and their salary was ranging from Rs.2265/- to Rs.2380/-. Therefore, in the overall circumstances of the case, the Labour Court granted a sum of Rs.75,000/- towards compensation in lieu of reinstatement in respect of each of the contesting respondents. Challenging the common Award, the writ petition came to be filed. The writ petition was admitted on 05.08.2009. Pending the writ petition, this Court granted an interim stay. 3. Likewise in W.P.No.24913 of 2008, the challenge is to the common Award passed by the first respondent Labour Court in I.D.Nos.261, 262, 264 and 269 of 2002 dated 30.04.2008. In this Award also, the facts are similar to the one which is under challenge in the first writ petition viz., W.P.No.15462 of 2009. Hence, it is unnecessary to repeat the facts in this writ petition. The second writ petition was admitted on 17.10.2008. Pending the writ petition, this Court granted an interim stay. 4. After notice, the contesting respondents are represented through counsel. Heard the arguments of Mr.S.Ravindran of M/s.T.S.Gopalan and Co., learned counsel for the Management and Mr.K.M.Ramesh, learned counsel appearing for the contesting respondents R2 to R4 and R6 in W.P.No.15462 of 2009. 5. The facts leading to the non-employment of the contesting respondents were as follows:- The contesting respondents were admittedly under employment through Contractors. Subsequently, the Management took them under regular employment and prescribed a probation of one year. Even before the probation could come to an end, on 04.09.2001, the employees led by their trade union went on work stoppage and the contesting respondents also did not report for work. Therefore, taking exception to their absence from work and also their alleged irregularity in attendance, the Management terminated their services with effect from 30.09.2001. It was also stated they were https://hcservices.ecourts.gov.in/hcservices/ entitled to approach the Management for settling their dues. Before termination order was issued, the workmen were also given a memo dated 08.09.2001 recording their absence and calling upon them to report for work and also to give an undertaking to the effect that they would give normal production and conform to the discipline of the establishment. It was also cautioned that if they failed to report for duty, the Management would have no option except to terminate the probation of the contesting respondents. Subsequently, on 18.09.2001, a notice was put up in the notice Board informing all the probationers, including the contesting respondents that if they continued their work stoppage, the management will have no option except to terminate their service. 6. The workmen raised industrial disputes before the Conciliation Officer. On the strength of the failure reports given by him, they filed individual claims statements before the Labour Court. The Labour Court took up the disputes and assigned various ID numbers and issued notices to the petitioner Management. The petitioner Management field identical counter statement dated 29.11.2003. In the counter statement, it was stated that it was due to the work stoppage, they were forced to take a decision to dispense with their services. In the normal course, their probation would have come to an end on 30.09.2001. Therefore, the contesting respondents have no right to claim any relief against the Management. 7. The Labour Court grouped the Industrial Disputes into two separate batches. In the first batch of cases, the Labour Court conducted a joint trial in respect of I.D.Nos.263, 265, 266, 267 and 268 of 2002. In that batch, on behalf of workmen, one K.Ranjith Kumar, the petitioner in I.D.No.268 of 2002 was examined as W.W.1. On the side of the Management, no oral evidence was let in. The workmen had filed 11 documents and wee marked as Exs.W1 to W11. On the side of the Management, 8 documents were filed and marked as Exs.M1 to M8. 8. In the second batch of cases, the Labour Court conducted a joint trial in respect of I.D.Nos.261,262,264 and 269 of 2002. In that batch, one V.Varadhan, the petitioner in I.D.No.261 of 2002 was examined as W.W.1 and no oral evidence was let in on the side of the Management. On behalf of the workmen, 32 documents were filed and marked as Exs.W1 to W32. On the side of the Management, the same 8 documents which were filed in the earlier batch were filed and were marked as Exs.M1 to M8. 9. In both common Awards, the Labour Court came to identical conclusions that the non-employment of the contesting respondents were not valid and in the peculiar circumstances of the case, it held that they were only entitled for compensation in lieu of reinstatement. 10. Assailing these two Awards, the writ petitions came to be filed. Mr.S.Ravindran, learned counsel for the petitioner Management contended that since the petitioner had terminated the https://hcservices.ecourts.gov.in/hcservices/ services of the workmen at the end of the probation period, there was no scope for the workmen to challenge the said order and even before their termination, the Management had sufficiently warned them about their work stoppage. Therefore, it cannot be said that there was no notice regarding their termination. Alternatively, the learned counsel contended that having worked for one year, it was unreasonable on the part of the Labour Court to award a compensation of Rs.75,000/- to each of the workmen. 11. Per contra, Mr.K.M.Ramesh, the learned counsel for the contesting respondents submitted that the termination of these workmen should be either for a misconduct or for a simple termination. If it is a case of minconduct, even in case of probationers, the Management should have conducted an enquiry in accordance with the principles of natural justice. If it is a case of simple termination, they ought to have complied with the conditions under Section 25-F of the Industrial Disputes Act, 1947 (for short I.D.Act). Since the mandatory condition precedents were not followed, the workmen are eligible even for reinstatement; but the Labour Court had only awarded only compensation. Hence, there is no case for interfering with the Awards passed by the Labour Court. 12. In the light of the above, it has to be seen whether the impugned Awards of the Labour Court requires any intervention by this Court. 13. It is an admitted case that before the workmen were taken on probation, they have put in several years of service as contract labourers. Though their service will not be counted for any purpose in the present Management, yet it is not as if the Management were unaware of the background of these workmen. Further, though the probation is for a period of one year, in the order of termination itself, it was indicated that the termination was due to their unauthorised absence and illegal work stoppage. A perusal of the impugned order of termination does not show that it was non-stigmatic. As rightly contended by the learned counsel for the workmen, the Management ought to have conducted an enquiry. Though it was claimed that the termination was preceded by several notices, that cannot be a substitute for not holding an enquiry. 14. In this context, it is necessary to refer to the judgment of the Supreme Court in Agra Electric Supply Co. Ltd. v. Alladdin reported in (1969) 2 SCC 598. The Supreme Court in the said judgment referred to a similar case of termination of a probationer with a stigmatic order and in that context, the Supreme Court in paragraph 15 held as follows:- "15. Now, it is a well-settled principle of industrial adjudication that even if an impugned order is worded in the language of a simple termination of service, Industrial Tribunals can look into the facts and circumstances of the case to ascertain if it was passed in colourable exercise of the power of the management to terminate the service https://hcservices.ecourts.gov.in/hcservices/ of an employee and find out whether it was in fact passed with a view to punish him. The letter of appointment clearly states that the workman, Shameem Khan, was appointed as a probationer for a period of 6 months with power to the resident engineer to extend the period of probation. Ordinarily, that would mean that at the end of the probation period the company would have to decide whether to confirm him to a permanent post or, if that is not possible, to terminate his service. Standard Order 2(c) provides that a probationer is an employee who is provisionally employed to fill a permanent vacancy in a post and who has not completed the period of probation thereunder. It also lays down that the normal period of probation shall be 6 months but the resident engineer has the discretion to extend that period, the maximum period of probation being 12 months in all. Ordinarily, this would mean that a probationer's service cannot be terminated except for some misconduct until the expiry of the probation period. The letter of appointment, no doubt contained a provision that the service of the workman was liable to termination even during the probationery period. That provision, however, must be read to mean that the appointment was subject to the management's power of termination as provided in the standing orders. Standard Order 14 provides for such a power and lays down that the service of “any employee” (which expression includes a probationer as is clear from the classification of employees in Standard Order 2) can be terminated on grounds (a) to (f) therein set out. It is quite clear that the termination of service of the concerned workman cannot be attributed to any one of these grounds. Therefore, that order cannot be said to have been passed in conformity with the power to terminate his service under the standing orders." In that judgment, after observing that the termination was invalid, the Award of the Labour court ordering reinstatement of the workmen was confirmed by the Supreme Court. 15. In the present case, as can be seen from the records that the motive for terminating the probationers certainly arose out of the work stoppage indulged by the workmen. In this context, it is necessary to refer to the judgment of the Supreme Court in Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha reported in (1980) 2 SCC 593. The Supreme Court in that judgment held that even if an order of termination was innocuously worded, the Court can pierce veil of the order and find out the real motive of the employer. If the motive is one of misconduct, the Court can also interfere and grant appropriate relief. In that judgment, the Court having noted that the workmen were on strike, but yet awarded reinstatement with a portion of backwages after upsetting the https://hcservices.ecourts.gov.in/hcservices/ Award made by Arbitrator. With reference to the terminology used in the order of termination, in paragraph 53, it was observed as follows:- "53. Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover-ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed. The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is. If, thus scrutinised, the order has a punitive flavour in cause or consequence, it is dismissal. If it falls short of this test, it cannot be called a punishment. To put it slightly differently, a termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, is a dismissal, even if he had the right in law to terminate with an innocent order under the standing order or otherwise. Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature. Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to terminate. Given an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination, are given and non-injurious terminology is used." 16. Even assuming that if the termination is only to bring an end to the probation, in such circumstances, such a termination is held to be a termination coming within the definition of Section 2(oo) of the I.D.Act, and the employer will have to comply with the mandatory condition precedent to Section 25-F of the I.D.Act. 17. The Supreme Court in the judgment in Karnataka State Road Transport Corpn., Bangalore v. M.Boraiah reported in (1984) 1 SCC 244, in paragraph 13, it was observed as follows:- "13. Once the conclusion is reached that retrenchment as defined in Section 2(oo) of the Disputes Act covers every case of termination of service except those which have been embodied in the definition, discharge from employment or termination of service of a probationer would also amount to retrenchment. Admittedly the requirements of Section 25-F of the Disputes Act had not been complied with in these cases. Counsel for the appellant did not very appropriately dispute before us that the necessary consequence of non-compliance of Section https://hcservices.ecourts.gov.in/hcservices/ 25-F 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 conclusion that in these cases the order of retrenchment was bad and consequently it upheld the Award of the 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 5000. This amount shall be over and above the deposit made by the appellants to meet the costs of the respondents." 18. Looking from any angle, the termination issued by the petitioner Management cannot be held to be legal and proper. Therefore, the finding of the Labour Court that the termination was punitive and stigmatic cannot be interfered with. When once it is held that the termination was illegal, the normal course would be reinstatement with all appropriate backwages and other attendant benefits. But in the present case, the Labour court kept in mind the parameters under which probationer can be reinstated and instead of awarding the normal relief, it had computed the compensation in lieu of reinstatement. 19. Mr.S.Ravindran, learned counsel for the petitioner Management contended that terminating the service of a probationer would not amount to retrenchment as it will come within the meaning provided under Section 2(oo)(bb) of the I.D.Act. But in the present case, the order of termination as rightly found by the Labour Court was stigmatic. It shows the real motive for termination was misconduct and that is clearly reflected in the termination orders. Since the respondents workmen are not aggrieved by the Award, it is unnecessary to modify the relief granted in the Award passed by the Labour Court. It is suffice the Labour Court not only took note of the one year service but also kept in mind the earlier service rendered by them under the Contractors employed by them. Only after noting the same, it had awarded Rs.75,000/- as compensation and that does not call for any interference from this Court in the exercise of power under Article 226 of the Constitution. 20. In the light of the above, both the writ petitions will stand dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petitions are closed. svki Sd/- Asst. Registrar //True Copy// Sub Asst. Registrar https://hcservices.ecourts.gov.in/hcservices/ To The Presiding Officer, Principal Labour Court, Chennai. + 1 cc to Mr. K. M. Ramesh, Advocate SR No.43998 + 1 cc to M/s. T.S. Gopalan, Advocate SR No.43930 RJ(CO) SR/29.7.2011 W.P.Nos.15462 and 24913 of 2009 https://hcservices.ecourts.gov.in/hcservices/