Educational Institutions Not Obligated To Conduct Formal Disciplinary Proceedings Before Terminating Temporary Workmen: Madhya Pradesh High Court

The bench noted that the Worklady was not a permanent employee, therefore, formal disciplinary proceedings were not required before her termination. Further, the Management was an educational institute which is distinct from an Industrial Establishment. Therefore, the work conditions of the Worklady were subject to the Madhya Pradesh University Act and other circulars.

Brief Facts:

The Worklady raised an industrial dispute before the Labour Court Ujjain under Section 10 of the Industrial Disputes Act, seeking her reinstatement to her previous post as a preferential candidate. She also requested salary payment from the date of her removal, stating her unemployment due to the Management's alleged unlawful order. The Management contended that the termination of the Worklady's services was due to her passing information to others without proper authorization, which was gross and wrongful misconduct. Despite this, the Labour Court, through the award, directed the Worklady's reinstatement with 50% back-wages. Feeling aggrieved, the Management approached the Madhya Pradesh High Court (“High Court”) to challenge the award.

The Management argued that the Worklady, originally employed as a daily wager since 4th March 2013, had unsatisfactory performance and engaged in regular misconduct despite oral warnings. Consequently, her services were terminated on 10th August 2016, following proper notice and advance salary payment. However, the Labour Court allegedly overlooked these crucial aspects in its decision, making the award illegal, arbitrary, and unsustainable in the eyes of the law.

Observations by the High Court:

The High Court noted that the Management itself conceded in the petition that the Worklady was engaged as a daily wager from March 4, 2013, and continued her service until August 10, 2016. This admission, it held, unequivocally established that the Worklady was employed since 2013 and satisfactorily completed work for more than 240 days in a year.

A second contention raised by the Management pertained to the termination of the Worklady allegedly due to gross and wrongful misconduct. The Management claimed that an oral warning was issued to the Worklady, followed by termination upon due notice under circular No. 12(9) and the provision of one month's advance salary. The Management argued that under such circumstances, where relations have irreparably soured between the employer and employee, reinstatement cannot be compelled.

Upon reviewing the Labour Court's award, the High Court held that Worklady's services were terminated by the Management on grounds of unsatisfactory work performance and alleged gross misconduct. Notably, the High Court held that the Worklady was not a permanent employee, thereby there was no necessity for conducting formal disciplinary proceedings against her.

Furthermore, the High Court noted that the Management operated as an educational institution, which categorically distinguished it from an industrial establishment. Consequently, the service conditions of the Worklady were governed by pertinent statutes such as the MP University Act, Rules, and other relevant circulars.

The High Court referred to the decision of the Supreme Court in the case of Madhyamik Shiksha Parishad Vs. Anil Kumar Mishra (2005) 5 SCC 122 where the SC held that the completion of 240 days of work does not automatically confer the right to regularization under the Industrial Act. Instead, it imposes certain obligations on the employer, particularly at the time of termination of service.

Moreover, the High Court referred its decision in Sunil Kumar Vs. MP Road Transport Corporation Bairagarh, reported in 1980 JLJ 561 and held that the absence of a charge sheet, reference to misconduct, or casting of stigma on the Worklady indicated that the orders of termination were not founded on misconduct. Rather, it amounted to a discharge simpliciter under Standing Order 11(b), attributable to unsatisfactory work and loss of confidence.

Therefore, the High Court held that the Labour Court did not duly consider all relevant aspects of the case. The bench reiterated that the Worklady's work was found unsatisfactory, resulting in a loss of confidence in the employer. Consequently, the termination of the Worklady's services, following due notice under Circular No. 12(9), on August 9, 2016, was held just and proper.

As a result, the High Court held the impugned award passed by the Labour Court as legally flawed and set it aside. Accordingly, the petition was allowed, and the impugned award dated February 17, 2020, was hereby nullified.

Case Title: Maharishi Panini Sanskrit Evam Vedic University Vs Kumari Rajani Verma

Case Number: Misc. Petition No. 570 of 2021

Advocate for the Management: Yash Tiwari

Advocate for the Respondent: Mahesh Kumar Choudhary