Case: MANGT.OF SRI RAMNARAYAN MILLS LTD Vs. SEC.COIMBATORE DIST.TEXT.WORK.UNION AND ORS

2. Facts of the case lie in a narrow compass. They, however, need mention in brief infra to appreciate the short controversy.The appellant is a limited company having its mill in Coimbatore. The appellant being an employer applied to the Joint Commissioner of Labour (Respondent No.3) praying in their application that they be allowed to add one more new ground namely ?break in service? in Clause 16 of the Chapter of Punishment in Certified Standing Orders in addition to the existing grounds specified therein.In other words, the appellants prayer was that if any employee commits ?break in service? in any year, then it should be regarded as one of the ground for punishment enabling the employer (appellant) to take action against such employee under their certified standing order. They, therefore, prayed that they may be allowed to add this new ground in Clause 16 of the Chapter of Punishment in Certified Standing Orders.On 02.04.1992 the third respondent (Joint Commissioner of Labour) allowed the said application of appellant and permitted them to amend their certified standing orders by adding ?brake in service? as one new ground in Clause 16 of the Chapter of Punishment in Certified Standing Orders.6. The Workers? Union (Respondent No.1) felt aggrieved by the order dated 02.04.1992 filed appeal in the Labour Court. By order dated 06.02.1995, the Labour Court allowing the appeal and setting aside the order dated 02.04.1992 held that if the proposed amendment is allowed, it would cause immense prejudice to the rights of the workmen and further the employer would likely to misuse this new ground of punishment mostly for their benefit. It was also held that apart from these two reasons, it would also defeat the object of the Payment of Gratuity Act while calculating the employee?s continuous service as defined under the Payment of Gratuity Act which provides for different modes of calculation.The appellant felt aggrieved of the order of the Labour Court and filed the writ petition in the High Court at Madras questioning therein the legality and correctness of the order of the Labour Court. By order dated 19.07.2002, the learned Single Judge dismissed the appellants writ petition which gave rise to filing of the intra court appeal by the appellant (employer) before the Division Bench of the High Court.By impugned order, the Division Bench dismissed the appeal and affirmed the order of the Labour Court and Single Judge. It is against this order; the appellant (employer) has felt aggrieved and filed the present special leave to appeal in this Court.

Court's reasoning:
12. The Division Bench, in our considered opinion, rightly concluded that a ?break in service? cannot be allowed as a ground by way of punishment in Clause 16 of the Chapter of Punishment in Certified Standing Orders for the following reasons:Firstly, the existing grounds enumerated in Clause 16 by way of punishment are sufficient to take care of any misconduct committed by any employee and there appears no reason to introduce one more new ground in the existing grounds specified in Clause 16 for imposing a new punishment.Secondly, the proposed ground, if allowed, would likely to be misused by the employer against its employees for their own benefit and detrimental to the employees? interest.Thirdly, it would enable the employer to take action against its employees even in a situation where an employee is found absent even for a day and such absence will be treated as ?break in service? under the Certified Standing Orders and also under the Payment of Gratuity Act. It will, therefore, be in conflict with the definition of the expression ?continuous service? defined under the Payment of Gratuity Act which gives different modes of calculation for determining the continuous service for payment of gratuity amount.Fourthly, such ground will, therefore, defeat the very object of the Payment of Gratuity Act which is a beneficial legislation enacted for the benefit of the employees and lastly, it is neither bona fide nor reasonable and nor required and hence it cannot be allowed.In our opinion, we find no good ground to differ with the reasoning assigned by the Division Bench mentioned above for rejecting the application made by the appellant (employer) for adding, ?break in service? as a new ground for punishment in the Certified Standing Orders. The reasons given by the Division Bench, in our view, deserve to be upheld.