Regional
Manager, S.B.I. Vs. Rakesh Kumar Tewari [2006] Insc 7 (3 January 2006)
Ruma
Pal & Dr.Ar.Lakshmanan
J U D
G E M E N T (Arising out of Special Leave Petition (Civil) No.20653 of 2003)
WITH
C.A.Nos.8-9 of 2006 (Arising out of SLP (C) Nos.20003-20004 of 2004) RUMA PAL,
J.
Leave
granted.
The
respondent was employed as a messenger on a daily wage in a branch of the
appellant Bank.
No
appointment letter was issued to him but he worked for 87 days in that
capacity. The question in this appeal is whether the Labour Court had correctly found that the
termination of the respondent's service in 1982 was violative of Section 25G of
the Industrial Disputes Act, 1947 (referred to as the 'Act').
After
the respondent ceased to serve with the appellant on 5th October, 1982, the respondent raised a demand
under Section 33-C (2) of the Act before the Labour Court praying for an amount of Rs. 148.74 towards his wages for 8
days holidays (including Sundays) which occurred during the period of his
employment. The appellant accepted the demand and paid an amount of Rs. 155.23
to the respondent which was accepted by the respondent in full and final
satisfaction of his claim. About one year later, in 1984, the respondent raised
an industrial dispute claiming that his services had been wrongfully terminated
by the appellant. The Central Government referred the following disputes to the
Industrial Tribunal:
"Whether
the action of the management of State Bank of India, Region-III, Lucknow, in
relation to their Gonda Main Branch in terminating the services of Shri Rakesh
Kumar Tewari, subordinate staff with effect from 6.10.1982 and not considering
him for further employment under Section 25H of the Industrial Disputes Act is
justified? If not, to what relief is the concerned workman entitled?" The
respondent filed a statement before the Tribunal in which he claimed that he
had been appointed by the appellant as a whole time employee against a vacancy
in a permanent post. He said that after his discharge other employees were taken
in service against the same post, but he was not given a chance to continue. He
challenged the non-issue of appointment and termination letters as being in
violation of "service conditions provided in different bank awards as well
as bipartite settlement". It was alleged that the bank had violated the
provisions of Section 25H of the Act and also paragraph 497 of the Shastri
Award which was applicable to the Bank.
The
appellant filed a written statement opposing the claim of the respondent. A
preliminary objection raised was that after recording of full satisfaction of
his claim against the appellant, the respondent was barred by the principles of
res judicata from raising an industrial dispute. On the merits of the case it
was contended that the services of the respondent had been validly terminated
upon the payment of all his dues. It was denied that the respondent had been
appointed against any vacancy. It was stated that he was engaged against a
purely "temporary/ad hoc requirement of the said branch of the bank".
The Labour Court found that two employees, namely, Shri
Pawan Kumar and Rakesh Kumar Tewari had been appointed as temporary workmen,
the first between August, 1982 to December, 1982 and the second from January,
1983 to April, 1983.
It was
held that therefore the service of Pawan Kumar should have been dispensed with
and not the respondent's. Furthermore, according to the Tribunal, there was a
clear violation of Sections 25G and 25H of the Act. It was also held that the
respondent was not a casual but a temporary workman in terms of paragraph 207
of the bipartite settlement. It was held that in terms of the settlement, the
bank should have maintained a register of all temporary employees and a service
book and should have issued an appointment and termination letter to the
respondent. According to the Tribunal 14 days notice of retrenchment was also
required to be given which had not been complied with. Section 25G of the Act
and Rule 78 of the Industrial Disputes Act Central Rules was held to have been
violated. Circulars issued by the Management being circulars Nos. 168/76 and
69/81 which prohibited the employment of temporary employees beyond 90 days and
the termination of service of temporary employees after 89 or 90 days was held
to be unfair labour practice. In conclusion it was held that the termination of
the services of the respondent was illegal and inoperative and that the
respondent was entitled to be reinstated with full back wages.
The
appellant challenged the award under Article 226 of the Constitution before the
High Court. The High Court upheld the view expressed by the Labour Court and
said that the Labour Court was right and that the appellant's appointment
amounted to unfair labour practice and was against the mandate of Section 25H
of the Act.
The
appellant challenged the decision of the High Court by way of a Special Leave
Petition under Article 136 of the Constitution. While issuing notice on 17th November, 2003, this Court stayed the operation of
the High Court's order. In the meantime and during the pendency of the
proceedings before the High Court the appellant has paid the respondent a sum
of approximately Rs. 3.80 lakhs under Section 17-B of the Act.
Mr. V.A.Bobde,
learned counsel appearing on behalf of the appellant, has contended that there
was no unfair labour practice indulged in by the appellant as defined in
Section 2(ra) read with the 5th Schedule item 10 of the Act. It was also
contended that the case for violation under Section 25G had never been pleaded
by the respondent in his statement of claim nor was any such alleged violation
referred to the Industrial Tribunal for adjudication. It was submitted that
Section 25G did not in any event apply as the procedure for retrenchment as
defined in section 2(oo) of the Act did not apply to persons on a daily-wage.
Reliance has been placed on the decision of Regional (2004) 8 SCC 164, and Himanshu
Kumar (1997) 4 SCC 391. It was contended that Section 25H which requires an
employer to give re- employment to a retrenched workman in preference over
other persons did not for that reason apply. In any event it had been complied
with. Three advertisements had been issued by the appellant calling upon
retrenched employee to offer themselves for reemployment but the respondent did
not apply.
Mr Nagendra
Rao appearing in SLP (C) Nos. Kanhaiya Lal Sahu has also supported the
submissions of Mr. Bobde and has adopted his submissions. In his case however,
the period of service was 98 days between July,1980 to March, 1981 on daily wages.
In that case also the Labour
Court had held that
the termination of the workman's services was not justified and directed the
reinstatement of the workman with full back wages. The application filed by the
appellant before the High Court under Article 226 was dismissed on the ground
that in compliance with an interim order passed by the High Court the appellant
had reinstated the workman and the workman had been continuing in service for
the last 16 years. The High Court however allowed the writ petition to the
extent that the Labour
Court had directed
the payment of back wages. It needs to be mentioned here that until the order
was passed by the High Court disposing of the writ petition, the respondent had
been paid approximately Rs.200902/-on account of salary. The appellant filed a
review application stating that the respondent had in fact not been reinstated
but had been paid idle wages without taking any work from him in terms of the
liberty granted to the appellant by an interim order of the High Court.
However, the review petition was dismissed by merely recording that there was
no ground for review. Apart from this factual error, Mr. Rao has emphasized
that Section 25H could not be said to have been violated. It was further argued
that the employees who would be affected by the award of the Labour Court had not been made parties in
violation of Rule 3 of the Industrial Dispute (Central) Rules 1957.
Learned
counsel appearing on behalf of the respondents in both the appeals has
submitted that the definition of retrenchment had undergone an amendment in
1984, whereas both the terminations in question had taken place prior thereto.
In terms of the unamended definition, daily wage employees whose services were
terminated were also retrenched. Reliance has been placed on the & Ors.
(1996) 5 SCC 419 ; Workmen of Subong Subong Tea Estate & Anr. (1964) 5 SCR
602;
Punjab Land Devl. & Reclamation Corpn. Ltd. Engineer, Southern
Railway & Anr. (1982) 3 District Manager, Karnataka, (2003) 4 SCC 27, to
contend that in the circumstances of the case the finding of the Tribunal that
the services of the workmen had been illegally retrenched and that they were
entitled to reinstatement and backwages was correct.
Both
civil appeals arising out SLP(Civil) No.20653 of 2003 and SLP(Civil)
Nos.20003-20004 of 2004 which are referred to respectively as the first and
second appeal, are disposed of by this judgment.
Section
25G provides for the procedure for retrenchment of a workman. The respondents
have correctly submitted that the provisions of Sections 25G and 25H of the Act
do not require that the workman should have been in continuous employment
within the meaning of Section 25B before he could said to have been retrenched.
The decision in Central Bank of India v. S. Satyam (1996) 5 SCC 419 is clear authority
on the issue.
We see
no reason to take a contrary view.
Section
25G requires the employer to "ordinarily retrench the workman who was the
last person to be employed in a particular category of workman unless for reasons
to be recorded the employer retrenches any other workman". This "last
come first go", rule predicates.
-
that the workman
retrenched belongs to a particular category;
-
that there was
no agreement to the contrary;
-
that the
employer had not recorded any reasons for not following the principle. These
are all questions of fact in respect of which evidence would have to be led,
the onus to prove the first requirement being on the workman and the second and
third requirements on the employer. Necessarily a fair opportunity of leading
such evidence must be available to both parties.
This
would in turn entail laying of a foundation for the case in the pleadings. If
the plea is not put forward such an opportunity is denied, quite apart from the
principle that no amount of evidence can be looked into unless such a plea is
raised. [See Siddik Mahomed Shah vs. Mt.
Saran AIR 1930 PC 57 Ors. (2003) 4 SCC
161].
In J.K.Iron
and Steel Company Ltd. vs. The Iron and Steel Mazdoor Union Kanpur (1955) 2 SCR
1315, the court noted that even though industrial tribunals are not bound by
all technicalities of civil courts:
".they
must nevertheless follow the same general pattern. Now the only point of
requiring pleadings and issues is to ascertain the real dispute between the parties,
to narrow the area of conflict and to see just where the two sides differ. It
is not open to the Tribunals to fly off at a tangent and disregarding the
pleadings, to reach any conclusions that they think are just and proper".
In the
first appeal, the respondent had raised no allegation of violation of Section
25G in his statement of claim before the Industrial Tribunal.
His
only case was that Section 25H of the Act had been violated. Section 25H unlike
Section 25G deals with a situation where the retrenchment is assumed to have
been validly made. In the circumstances, if the employer wishes to re employ
any employee, he must offer to employ retrenched workman first and give them
preference over others. The two sections viz 25G and 25H therefore operate in
different fields and deal with two contradictory fact situations. The Tribunal
ignored the fact that there was no pleading by the respondent in support of an
alleged violation of Section 25G. Indeed the order of reference by the Central
Government did not also refer to Section 25G but only to Section 25H. In the
circumstances it was not open to the Tribunal to "go off on a
tangent" and conclude that the termination of service of the respondent
was invalid because of any violation of Section 25G by the appellant.
Besides
the Tribunal in both appeals did not consider the plea of the appellant that
there was no vacancy against which the respondent had been appointed and that
it was merely an ad hoc arrangement. In taking into consideration the names of
the two employees who were appointed temporarily after the termination of
services of the respondent, the Tribunal did not also consider in what capacity
these persons had been appointed namely whether they were actually appointed as
messenger in place of the respondent.
The
respondent's case in the first appeal of violation of paragraph 497 of the Shastri
Award was also wholly misconceived. That paragraph deals with the rights of
apprentices and has no application to temporary employees like the respondent.
Assuming that there was a violation of the Shastri Award by the appellant in
both cases either in not issuing appointment letters or not maintaining a
seniority list, service book in respect of temporary employees etc., this would
not mean that therefore the respondents had been properly appointed and their
services wrongly terminated. Admittedly no procedure whether in law or under
any award or settlement was followed in appointing either of the respondents in
both appeals. No condition of services were agreed to and no letter of
appointment was given. The nature of the respondents' employment was entirely
ad hoc. They had been appointed without considering any rule. It would be
ironical if the person who have benefited by the flouting of the rules of appointment
can rely upon those rules when their services are dispensed with.
The
Tribunal also failed to deal with the issue raised by the appellant in the
first appeal that no grievance had been made nor any demand raised by the
respondent either in his application under Section 33 C (2) or otherwise that
his services had been illegally terminated. It may be that the principles of res
judicata may not disqualify the respondent from contending that his termination
was invalid, nevertheless non raising of the issue earlier was a factor which
the Tribunal should have taken into consideration in weighing the evidence.
Significantly
the High Court upheld the decision of the Tribunal as if the Tribunal had proceeded
under Section 25H. As we have said Section 25H proceeds on the assumption that
the retrenchment has been validly made. Therefore, the High Court's view that
the termination was invalid under Section 25H cannot in any event be sustained.
Section
25H says:
"25H.
Re-employment of retrenched workmen.- Where any workmen are retrenched, and the
employer proposes to take into his employ any persons, he shall, in such manner
as may be prescribed, give an opportunity to the retrenched workmen who are
citizens of India to offer themselves for re-employment, and such retrenched
workmen who offer themselves for re- employment shall have preference over
other persons".
A
statutory obligation is thus cast on the employer to give an opportunity to the
retrenched workman to offer himself for re-employment.
In
fact pursuant to settlements entered into between the appellant and the
employees' union, several advertisements had been issued by the appellant
offering re-employment to retrenched workers. It may be that these facts were
not raised by the appellant either before the Tribunal or the High Court, but
as was said in Regional Manager SBI vs. Raja Ram (2004) 8 SCC 164 at p. 168:
"However
the respondent's counsel is incorrect in his submission that the benefit of the
Scheme could not have been availed of by the respondent because no offer was
made to the respondent by the appellant. The settlements were advertised and it
was for the respondent to have taken advantage of the Scheme.
Although
the settlements are, strictly speaking, not relevant to the question of the
correctness of award, nevertheless their terms are necessary to be considered
for the purpose of deciding whether, assuming everything in favour of the
respondent and against the appellant, the respondent should be reinstated as a
casual employee since the Scheme had been propounded by the employer with
workmen with a view to granting benefit to persons whose services had been
terminated as casual employees".
Neither
of the respondents in the appeals had offered themselves for re-employment.
The
conclusion of the Tribunal in both appeals that the circulars endorsed an
unfair labour practice being followed by the appellant or that the appellant
had indulged in unfair labour practice was also incorrect. Unfair labour
practice has been defined in Clause (ra) of Section 2 of the Act as a meaning
any of the practices specified in the Fifth Schedule. The Fifth Schedule to the
Act contains several items of unfair labour practices on the part of the
employer on the one hand and on the part of workmen on the other. The relevant
item is Item 10 which reads as follows:
"To
employ workmen as 'badlis', casuals or temporaries and to continue them as such
for years, with the object of depriving them of the status and privileges of
permanent workmen".
We
have already dealt with this issue in Raja Ram's case (supra) where we had
said:
"before
an action can be termed as an unfair labour practice it would be necessary for
the Labour Court to come to a conclusion that the badlis, casuals and temporary
workmen had been continued for years, as badlis, casuals or temporary workmen,
with the object of depriving them of the status and privileges of permanent
workmen. To this has been added the judicial gloss that artificial breaks in
the service of such workmen would not allow the employer to avoid a charge of
unfair labour practice. However, it is the continuity of service of workmen
over a period of years which is frowned upon. Besides, it needs to be
emphasized that for the practice to amount to unfair labour practice it must be
found that the workman had been retained on a casual or temporary basis with
the object of depriving the workman of the status and privileges of a permanent
workman. There is no such finding in this case. Therefore, Item 10 in List I of
the Fifth Schedule to the Act cannot be said to apply at all to the
respondent's case and the Labour Court erred in coming to the conclusion that
the respondent was in the circumstances, likely to acquire the status of a
permanent employee".
We see
no reason to take a contrary view particularly when the facts in Raja Ram's
case are materially indistinguishable from those in the appeals now before us.
In
directing reinstatement, neither the High Court nor the Tribunal had considered
that the order might affect the interest of those others who were employed
after the respondent. As was said in Central Bank of India vs. S. Satyam (supra):
"The
other persons employed in the industry during the intervening period of several
years have not been impleaded. Third party interests have arisen during the
interregnum. These third parties are also workmen employed in the industry
during the intervening period of several years. Grant of relief to the writ
petitioners (respondent herein) may result in displacement of those other
workmen who have not been impleaded in these proceedings, if the respondents
have any claim for re-employment".
Besides
in the second appeal admittedly several persons had been appointed prior to the
respondent on a temporary basis. They would have prior rights to reemployment
over the respondent on the basis of the principles contained in Sections 25G or
25H.
In the
circumstances, the award of the Tribunal and the decision of the High Court
holding that the respondent's services were wrongfully terminated were both
incorrect. They are accordingly set aside. There is as such no question of
payment of any back wages. Additionally the only other reason given by the High
Court for directing reinstatement of the respondent in the second appeal was
based on an equitable consideration of the respondent having allegedly been
reinstated. The factual basis for this conclusion was erroneous. Both appeals
are accordingly allowed. However the appellant has paid sums to the respondents
in both the cases which sums shall not be recoverable from the respondents by
reason of the allowing of these appeals. There will be no order as to costs.
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