Industrial Disputes Act | Employer's Failure To Assign Work To Employee Deemed Retrenchment: Jammu & Kashmir High Court

“..Retrenchment as it stood at the relevant time, termination of services of a workman for any reason whatsoever excepting on account of voluntary retirement of the workman, retirement of the workman on reaching the age of superannuation or termination of service of a workman on the ground of his ill health, every situation of cessation of service of a workman would come within the embrace of the definition of retrenchment.” 

The bench was hearing an appeal by the petitioner corporation against an award passed by the Industrial tribunal whereby the termination of services of the respondent employee had been quashed and the petitioner had been directed to reinstate the said respondent forthwith.

In 1982, the petitioner engaged the respondent as Assistant Craftsman for a fixed term. After being initially posted at Aalikadal and later transferred to Wathoora, the respondent was directed to report to the head office upon the centre's closure.

The petitioner claimed that the respondent abandoned his services, while the respondent contended he was not given further posting orders despite joining. After legal notices and unsuccessful attempts for adjustment, the respondent approached the Assistant Labour Commissioner, leading to a dispute referred to an Industrial Tribunal.

Initially, the Tribunal ruled in favour of the petitioner, but a subsequent writ petition challenged the decision. Consequently, the matter was remitted back to the Tribunal for reconsideration. In response to the remand, the Tribunal concluded that the respondent's termination was illegal, citing non-compliance with relevant provisions of the Industrial Disputes Act. It thus ruled in favour of the respondent, ordering his reinstatement with notional benefits.

Assailing the award, the petitioner corporation argued that the employee had voluntarily abandoned his position. The petitioner argued that as per Section 2(oo) of the Act, non-renewal of employment contracts, in cases where renewal isn't specified, does not necessitate compliance with Section 25F. 

Conversely, the employee contended that he had consistently made requests to be reinstated but was not given the opportunity. The core issue to be decided was whether the employee's termination constituted retrenchment under the Industrial Disputes Act.

Upon examining the available record Justice Dhar noted that while other colleagues were adjusted, the respondent was not, despite his several attempts and requests. The Court held that this situation could not be classified as voluntary abandonment. The finding of the Tribunal, therefore, did not deserve to be interfered with by the High Court.

Thus, it could safely be concluded that the respondent had not voluntarily abandoned his services but it was the action/omission of the petitioner Corporation of not issuing the orders of his adjustment that prevented him from discharging his functions.

Dealing with the contention of the appellants that since there were no specific renewal terms in the employee's contract, his services would naturally cease after the initial stipulated period, the Bench observed that the comprehensive nature of the definition of "retrenchment" under the unamended Section 2(oo) of the Act encompassed any termination of service, regardless of the reason.

Addressing the timeliness of the respondent's claim, the Court referred to several precedents emphasising that the Act did not operate under limitations of time and allowed for proceedings to be initiated even after a significant delay if the dispute persisted. The Court cited precedent cases where disputes were allowed to proceed after considerable delays, based on the ongoing nature of the dispute. 

Delving into the corporation's behaviour, particularly its decision to withhold work assignments from the employee while providing such opportunities to his colleagues, the bench ruled that this pattern of conduct amounted to retrenchment, even though there was no formal termination letter. The Court observed that the employee's services had, in essence, been terminated due to the corporation's actions or lack thereof, it added.

“In the instant case also, even though there is no specific order of termination issued by the petitioner Corporation but having regard to the conduct of the said Corporation in not allowing respondent No.1 to be posted at one of its centres as was done in respect of his other colleagues would certainly amount to retrenchment”, the court maintained.

Referring to State Bank of India vs. N. Sundara Money (AIR 1976 SC 1111) the Bench highlighted that the term "termination" extended beyond the active act of termination by an employer and also included the automatic cessation of employment upon contract expiry.

Thus, the Court held that the manner in which the respondent was not adjusted by the petitioner Corporation after the Centre at Wathoora was closed down amounted to his retrenchment and hence attracted not fulfilled the requirement of Section 25F of the Act while putting an end to the services of the respondent.

As such, the Court concluded that the respondent's claim of retrenchment was valid, and the Tribunal's award directing reinstatement was justifiable and fell within its jurisdiction. 

The petition was accordingly dismissed.

Case Title: MANAGING DIRECTOR JK HANDICRAFTS Vs AGA SYED MUSTAFA & ANR.

Citation: 2023 LiveLaw (JKL) 215

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