THE HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WP No. 20314 of 1999 11—09-2009 Vankamamidi Suryanarayana ….Petitioner The Presiding Officer, Labour Court, Guntur and others. ….respondents THE HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WP No. 20314 of 1999 JUDGMENT: Heard Sri S.Ravindranath, learned counsel for the writ petitioner and Sri V.S.Somayajulu, learned counsel for the respondent No.5. This writ petition is directed against the award passed by the Labour Court, Guntur, in Industrial Dispute No. 161 of 1997 raised by the writ petitioner herein, invoking the provisions under Section 2(A)(2) of the Industrial Disputes Act for setting aside the order of termination passed by the respondent – Management. The writ petitioner was appointed as an Electrician through an order dated 16.8.1990 by the Management. He joined on 27.8.1990 and worked as such continuously. On 12.5.1997, while he was on duty at about 5.10 PM his right hand fingers got crushed accidentally in the generator fan. He has been rushed to a nearby private nursing home where he underwent treatment. Consequently, he was on sick leave from 13.5.1997 to 4.6.1997. Since the accident had taken place while he was on duty, the management paid him wages for the entire month of May, 1997 treating him to be on duty from 13.5.1997. After his recovery from the injury, the petitioner reported to duty on 5.6.1997. But, however, he has not been entertained to duty. Then, he represented the matter to the Deputy Commissioner of Labour and Assistant Commissioner of Labour on 6.6.1997. The management has issued an office order on 14.6.1997 making serious allegations against the petitioner stating that the petitioner has not been attending to duty from 13.5.1997 and hence the petitioner was called upon to explain as to why his services should not be terminated with effect from 1.6.1997. Importantly, it was stated therein as under: “If you are not prepared to resign on your own, you may treat this as a three months notice for the termination of your services or you can take 3 months salary and quit out premises.” The office order dated 14.6.1997 has been signed by the Production Manager. But, however, it is asserted that the said order has been issued by the orders of the Managing Director. Through an office order dated 12.7.1997, services of the petitioner came to be terminated with effect from 15.7.1997. A pay order drawn in a sum of Rs.9900/- drawn on State Bank of India, representing three months salary payable to the writ petitioner in lieu of three months notice has been attached thereto. This order of termination gave rise to the industrial dispute. It is the case of the petitioner that the order of termination is illegal inasmuch as it has been passed in violation of the provisions contained under Section 25(f) of the Industrial Disputes Act. The writ petitioner examined himself and got marked Exs.W1 to W11. On behalf of the management RW1 was examined and Exs.M1 to M13 have been got marked. The order of appointment dated 16.8.1990 has been marked as Ex.W1. The office order of termination has been got marked as Ex.M10. The fitness certificate issued by the private nursing home on 20.6.1997 was got marked as Ex.W5. The show- cause notice which has been issued on 14.6.1997 has been got marked as Ex.W3 as well as Ex.M9. The question that falls for consideration is whether the services of the writ petitioner – workman could have been terminated with three months notice or pay in lieu thereof. It is not in dispute that the writ petitioner – workman came to be appointed under an order of appointment dated 16.8.1990 signed by the Director – Admn of Srinivasa Agro Industries & Drugs (P) Limited. Since, it will have a bearing on the controversy in question, it will be appropriate to quote the said appointment order which reads as under: Appointment Order Sri Vankamamidi Suryanarayana, S/o V.Anjaneyulu is appointed as Electrician with effect from the date of joining on a monthly salary of Rs.1,650/- (Rupees One Thousand Six Hundred and fifty only) and an allowance of Rs.150/- (Rupees One Hundred and Fifty only). He will be provided free unfurnished residential accommodation in the factory premises. He should join immediately on receipt of the order. He has to serve the company for a minimum period of three years from the date of his joining. He will be eligible for provident fund, bonus, increments etc., as per the Company Rules. He should surrender his original certificates at the time of joining. The duplicate copy of this order may be returned duly signed in token of acceptance of the above terms and conditions. Director – Admn” Pursuant to this order, the petitioner joined as an Electrician on 27.8.1990. Nowhere, this order of appointment has indicated that the nature of appointment is a contractual appointment either for a specific period or for accomplishing any specified work or project. On the other hand, the important clause in the appointment order discloses that the writ petitioner is required to serve the company for a minimum period of three years from the date of his joining. It is therefore clear that the order of appointment issued on 16.8.1990 is not a contract of appointment for three years period. The choice to serve the company by the writ petitioner, beyond the three year minimum period which the writ petitioner is compulsorily required to serve, has been left to him . Rendering service for a minimum guaranteed period does not render the order of appointment as entering into a contract of service for three years, as contended by Sri Somayajulu, the learned counsel for the respondent. It therefore emerges that the writ petitioner – workman has been appointed subject to the obligation of his having to serve the company for a minimum period of three years. In other words, beyond the initial period of three years, his service in the company will continue subject to his continued good conduct. Therefore, it shall not be construed to be a case of contract of appointment for a period of three years between the workman and the company. It is true that after the initial period of three years, by a written order, the salary of the writ petitioner has been fixed for the next three years commencing from 1.1.1994. It was noted therein that for the 1st year commencing from 1st January, 1994 to 31st December, 1994, his basic salary is fixed at Rs.2200/- and allowances at Rs.600/- making a total of Rs.2800/-. For the 2nd year commencing on 1.1.195 his salary would be raised to Rs.2350/- and allowances increased to Rs.650/- making a total of Rs.3,000/-. For the 3rd year commencing on 1.1.1996, the basic salary would further be increased to Rs.2500/- with allowances increased to Rs.7000/- thus making a total salary as Rs.3200/-. While fixing the salary as noticed supra, it has been indicated therein as under: “Three months notice on either side is necessary for either resignation or termination of his service.” That a three months notice is needed to be served on either side, if the petitioner wants to resign and if the management wants to terminate his services, has been made clear. That does not give any right to the management to bypass the requirements of law, to be observed prior to any such termination. When once the writ petitioner answers the description of a workman, and has been in continuous service for more than 240 days in 12 months period preceding his termination and his services cannot be terminated for whatever be the reason without complying with the requirements of Section 25(f) of the Industrial Disputes Act, for, termination of service of a workman for any reason whatsoever would amount to retrenchment. The exceptions drawn to the expression `retrenchment’ are defined under Section 2(oo) of the Industrial Disputes Act which include, inter alia non renewal of a contract of employment. Therefore, it is clear that until and unless the case of the workman falls within the exceptions carved out under Section 2(oo) of the Industrial Disputes Act, termination of services of any workman who is in continuous service would otherwise be liable to be treated and construed as a retrenchment. No retrenchment of a workman can be valid and effective without complying with the provisions contained under section 25(f) of the Industrial Disputes Act. This very question has been answered in the following words by the Supreme Court in State Bank of India v. N.Sundara Money[1], Santosh Gupta v. State Bank of Patiala[2] and in Mohan Lal VS. Management Of M/s Bharat Electronics Ltd. [3] State Bank of India v. N. Sundara Money – AIR 1976 SC 1111 – “( 8 ) WITHOUT further ado, we reach the conclusion that if the workman swims into the harbour of Sec. 25f, he cannot be retrenched withouut payment, at the time of retrenchment, compensation computed as prescribed therein read with Section 25b (2 ). But argues the appellant, all these obligations flow only out of retrenchment, not termination outside that species of snapping employment. What, then, is retrenchment ? The key to this vexed question is to be found in S. 2 (oo) which reads thus: "2 (oo) "retrenchment" 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 include - (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill-health;" For any reason whatsoever - very wide and almost admitting of no exception. Still, the employer urges that when the order of appointment carries an automatic cessation of service, the period of employment works itself out by efflux of time, not by act of employer. Such cases are outside the concept of 'retrenchment' and cannot entail the burdensome conditions of Section 25f. Of course, that a nine- days' employment, hedged in with an express condition of temporariness and automatic cessation, may look like being in a different street (if we may use a colloquialism) from telling a man off by retrenching him. To retrench is to cut down. You cannot retrench without trenching or cutting. But dictionaries are not dictators of statutory construction where the benignant mood of a law and, more emphatically, the definition clause furnish a different denotation. Section 2 (oo) is the master of the situation and the Court cannot truncate its amplitude. ( 9 ) A break down of Sec. 2 (oo) unmistakably expands the semantics of retrenchment. Termination. . . for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So the sole question is has the employees's service have been terminated ? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employmer, but the fact of termination have been produced….” Santosh Gupta v. State Bank of Patiala - 1980 Vol. II LLJ 72 : [1980] 3 SCR 340 – ( 6 ) IN interpreting these provisions i. e. Ss. 25f, 25ff and 25fff one must not ignore their object. The manifest object of these provisions is to so compensate the workmen for loss of employment as to provide him the wherewithal to subsist until he finds fresh employment. The non-inclusion of 'voluntary retirement of the workmen', 'retrenchment of workmen on reaching the age of superannuation', 'termination of the service of a workman on the ground of continued ill-health' in the definition of 'retrenchment' clearly indicate and emphasis what we have said about the true object of Sections 25f, 25ff and 25fff and the nature of the compensation provided by those provisions……. Mohan Lal VS. Management Of M/s Bharat Electronics Ltd. - AIR 1981 SC 1253 – ( 15 ) REVERTING to the facts of this case, admittedly the appellant was employed and was on duty from December 8, 197 3/10/1974 when his service was terminated. The relevant date will be the date of termination of service, i. e. 19/10/1974 Commencing from that date and counting backwards, admittedly he had rendered service for a period of 240 days within a period of 12 months and, indisputably, therefore, his case falls within Section 25b (2) (a) and he shall be deemed to be in continuous service for a period of one year for the purpose of Chapter VA. ( 16 ) APPELLANT has thus satisfied both the eligibility qualifications prescribed in Section 25f for claiming retrenchment compensation. He has satisfactorily established that his case is not covered by any of the excepted or excluded categories and he has rendered continuous service for one year. Therefore, termination of his service would constitute retrenchment. As precondition for a valid retrenchment has not been satisfied the termination of service is ab initio void, invalid and inoperative. He must, therefore, be deemed to be in continuous service. It was not disputed that right from 27.8.1990, the petitioner has been in continuous service. In the instant case, the order of termination passed on 12.7.1997 has not been passed in compliance with the provisions contained under Section 25(f) of the Industrial Disputes Act. Applying the aforesaid principles, the order of termination is liable to be declared as illegal and set aside. The order of termination though worded very innocuously and is sought to be suggestive as giving effect to a term of a contract between the parties, but, however, the showcause notice which was issued on 14.6.1997 that preceded the order of termination makes the issue very clear and renders the order of termination punitive but not an order of termination simplicitor. Management threatened the writ petitioner with disciplinary action for the alleged misconduct of absence from duty from 13.5.1997. It has also suggested to the writ petitioner to resign on his own. But, the assertion of the writ petitioner is that he met with an accident on 12.5.1997 while on duty when his right hand fingers got crushed in the generator fan and that he has been rushed to a private nursing home where he has received treatment for the industrial injury. Hence, he could not be on duty from 13.5.1997. In fact, the petitioner has asserted that the management was gracious enough to have paid him the salary for the entire month of May, 1997 treating him as if he were on duty, as the management is conscious of the fact that the industrial injury has sustained by him while on duty on 12.5.1997. This statement of fact was not contradicted, with reference to any relevant material. Therefore, the show- cause notice issued on 14.6.1997 is a way invented for getting rid off the service of the writ petitioner because of the injury sustained by him, which was perhaps perceived as a handicap by the management for effective performance of duties as Electrician by the writ petitioner. The contents of the show-cause notice dated 14.6.1997, being the immediate antecedent circumstances are bound to be taken into account and consideration while considering and construing the real reasons for the order of termination passed on 12.7.1997. If the order of termination has been passed as a punitive measure, the same could have been passed only after following the due procedure of conducting an enquiry and giving a fair and reasonable opportunity to the workmen to establish his innocence. Therefore, the Labour Court had committed a grave error in construing that the order of termination has been passed in accordance with the terms of the contract of employment, but not as a punitive measure. Hence, the award passed by the Labour Court, being contrary to the facts on record as well as legal principles, cannot be sustained and needs to be set aside. The writ petitioner has already attained the age of superannuation and consequently he was not entitled for reinstatement. At about the time when his services came to be terminated, he must be drawing around Rs.3,400/- per month as salary and allowances. Thus, he would have earned a sum of Rs.40,800/- per annum. Where reinstatement is not feasible, an adequate amount of compensation could be awarded. An amount of compensation representing three years of wages would be a fair measure of fixing the compensation. Since the amount is being paid in a lump sum, the workman would be entitled to deposit the same in an interest bearing deposit and thus earn the interest as well. I therefore consider it appropriate to award a sum of Rs.1,20,000/- (Rupees One lakh and twenty thousand only) as a reasonable amount of compensation which becomes payable to the writ petitioner, in lieu of ordering for his reinstatement. The writ petition is therefore allowed. The order of termination passed on 12.7.1997 against the writ petitioner is declared as illegal. But, however, instead of ordering for reinstatement, as the petitioner has already attained the age of superannuation, it would be appropriate to award a sum of Rs.1,20,000/- as compensation in lieu of such reinstatement. The writ petition stands allowed as indicated supra. No costs. -------------------- knk 11.09.2009 [1] AIR 1976 SC 1111 [2] 1980 Vol. II LLJ 72 : [1980] 3 SCR 340 [3] AIR 1981 SC 1253