Case: Management Of Karnataka State Road Transport Corporation,Ba Vs. M. Boraiah &amp; Ors

As per Rule 7 made under s. 45 of the Corporation Act, direct recruits are to be on probation for two years and such probation can be extended. The employer terminated the employment of some of the employees during the initial period of probation and of some others during the extended period on the ground of unsatisfactory service. Thereupon an industrial dispute was raised questioning the legality of their termination and the State Government 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 application, to the effect that the discharge was invalid. The employer Corp oration came before the High Court challenging 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 Disputes Act and those orders were bad for noncompliance of s. 25F. The employer Corporation challenged the decision of the single Judge before a Division Bench and the Division Bench by the impugned judgment upheld the decision of the learned singlethe employees were probationers at the time of 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, appellants 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 in these appeals, therefore, is whether the discharge of the employees from service amounted to retrenchment.It is the stand of the employer Corporation that the employees were probationers and the order of discharge in every case was on account of unsatisfactory service. Since the order of discharge h as been grounded upon unsatisfactory service during the period of probation, it has been argued that such termination of service is not retrenchment.Section 2(oo) of the Disputes Act defines retrenchment to mean:"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."

Reasoning:
The same question arose for consideration before another two Judge Bench in Mohan Lal v. Management of M/s. Bharat Electronics Ltd. Desai, J. spoke for the Courtand semantics apart, termination by the employer of the service of a workman for any reason whatsoever would constitute retrenchment except in cases excepted in the section itself. The excepted or excluded cases are where termination is by way of punishment inflicted by way of disciplinary action, voluntary retirement of the workman, 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, and termination of the service of a workman on the ground of continued ill-health. It is not the case of the respondent t hat termination in the instant case was a punishment inflicted by way of disciplinary action. If such a position were adopted, the termination would be ab initio void for violation of principle of natural justice o r for not following the procedure prescribed for imposing punishment. It is not even suggested that this was a case of voluntary retirement or retirement on reaching the age of superannuation or absence on account of continued ill-health. The case does not fall under any of the exceptedis thus termination of service for a reason other than the excepted category. It would indisputably 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 in view of the later two pronouncements of this Court to both of which one of us was a p arty. A passing reference to the earliest judgment which was the sheet anchor till the later pronouncements may not be out of place. In Hariprasad Shivshanker Shukla v. A. D. Divikar, after referring to Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, a Constitution Bench of this Court quoted with approval the following passage from the aforementionedretrenchment connotes in its ordinary acceptation that the business itself is being continued but that a 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 the business cannot therefore be properly described asthe majority judgment in Surendra Kumar Verma etc. v. The Central Government Industrial Tribunal-cum-Labour Court, New Delhi &Anr., the ratio of the latter case has been followed. A Bench of two learned Judges in the case of L. Robert DSouza v. The Executive Engineer, Southern Railway &Anr., re-examined the entire position. Desai, J. who again spoke for the Courtthe outset it must at once be pointed out that the construction put by the Full Bench of the Kerala 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 whatsoever is no more good law and in fact the decision of the full Bench of Kerala High Court in L. Robert DSouza v. Executive Engineer, Southern Railway &Anr., [(1970) 1 LLJ 2111] has been specifically overruled by this Court in Santosh Gupta v. State Bank of Patiala. 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 Nath Mukherjee, [(1971) 1 SCR 591] that the expression termination of service for any reason whatsoever now covers every kind of termination of service except those not expressly included in s. 25F or not expressly provided for by other provisions of the Act such as ss. 25FF and 25FFF. It was attempted to urge that in view of the decision of this Court in Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, the ratio of which was re-affirmed by a Constitution Bench of this Court in Hariprasad Shivshanker Shukla v. A. D. Divikar, all the later decisions run counter to the Constitution Bench and must be treated per in curium. This contention need not detain us because first in Hindustan Steel Ltd. case than in Santosh Guptas case, (supra) and lastly in Mohan Lal v. Bharat Electronics Ltd., it was in terms held that the decision in Sundara Moneys case was not at all inconsistent with the decision of the Constitution Bench in Hariprasad Shuklas case and not only required no reconsideration but the decision in Sundara Moneys case was approved in the aforementioned three cases. This position is further buttressed by the decision in Delhi Cloth &General Mills Ltd. case wherein striking off the name of a workman from the roll was held to bethe series of cases that have come later the Constitution Bench decision has been examined and the ratio indicated therein has 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, therefore, the law has been subsequently amended as already indicated. Lord Devlin onceam not one of those who believe that the only function of law is to preserve the status quo. Rather, I should say that law is the gate-keeper of the stat us quo. There is always a host of new ideas galloping around the outskirts of societys thought. All of them seek admission but each must first win its spurs; the law at first resists, but will submit to a conqueror and become his servant. In a changing society the law acts a valve. New policies must gather strength before they can force an entry; when they are admitted and absorbed into the consensus, the legal system should expand to hold them, as also it should contract to squeeze out old policies which have lost the consensus they onceare inclined to hold that the stage has come when the view indicated in Moneys case (supra) has been "absorbed into th e consensus" and there is no scope for putting the clock back or for an anti-clockwisethe conclusion is reached that retrenchment as defined in s.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 s. 25F 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 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 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.