Section 25F, Industrial Disputes Act; Actual Acceptance Of Compensation Not Required For Compliance: MP HC

Madhya Pradesh High Court: A single judge bench of justice Maninder Bhatti dismissed two writ petitions filed by daily wage workers (gardeners) challenging their termination. The workers argued that their employer had not followed the procedure mentioned under Section 25F of the Industrial Disputes Act, 1947, before terminating their services. However, the court held that providing retrenchment compensation and the termination order through registered post amounted to valid compliance with Section 25F, and actual acceptance of compensation is not required. Background Two writ petitions were filed by daily wage workers (Ramdas Sahu and Pramod Agarwal) who were engaged as a Malis (gardener). Despite multiple years in service, they were never classified as permanent employees. Seeking this classficiation, they approached the labour court under the Industrial Disputes Act, 1947 (hereinafter, ID Act). While these proceedings were pending, their employer issued terminating orders against both of them in 2008. The workers argued that the termination was illegal as it did not follow the process mentioned in Sections 25F and 33 of the ID Act. Section 25F provided that if an employee completed one year of continuous service, an employer must provide one month's notice (or equivalent wages) along with retrenchment compensation before terminating the services. Further, Section 33 prohibits an employer from changing the service conditions of a workman during the pendency of labour court proceedings, without obtaining the court's prior permission. The workmen filed writ petitions arguing that the termination orders violated these provisions. A single judge dismissed their petitions in 2012. However, this order was set aside in appeal by a Division Bench in 2013. The division bench held that there was no clear finding on whether the labour court's permission under section 33 was obtained. Consequently, the matter was remanded back to the single judge for fresh consideration. Arguments Before the single judge, the workers argued that the termination was illegal as it violated Sections 25F and 33 of the ID Act. They argued that no notice was served, no wages were given and no compensation was paid as required by Section 25F. Further, they argued that their claim for permanent employment was still pending before the Labour Court. Thus, they submitted that as per Section 33, the employer could not terminate their services without the court's prior permission. Relying on Pramod Jha v. State of Bihar (Appeal (civil) 4157 of 2000), they argued that these violations made their termination illegal. The employer argued that the permission from the labour court under Section 33 was indeed granted. They presented an interlocutory order dated 22 Nov 2001, which permitted the employer to terminate the two workmen, subject to compliance with legal procedure. On Section 25F, the employer argued that the termination order along with retrenchment compensation cheques were provided to the workmen in person; however, the workers refused to accept both. Thus, they explained that the same was sent through registered post. With this, they argued that they had complied with all requirements under Section 25F. Court's Reasoning On the issue of Section 33, the court found that the interlocutory order dated 22 Nov 2001 explicitly permitted the employer to terminate the two workmen. The court held that this satisfied the requirement of prior approval, as mentioned in Section 33. On Section 25F, the court noted that the employer had presented the copies of cheques, the termination order and a letter sent in 2008 (the year of termination). Thus, the court held that these documents were provided during the termination itself, and it was the employees who refused to accept them. Following this, the court also noted that the employer sent the termination order along with the retrenchment compensation via registered post. The court held that this was sufficient to comply with Section 25F, ID Act. Further, the court cited the Supreme Court's decision in Pramod Jha v. State of Bihar (Appeal (civil) 4157 of 2000). The court explained that the law only requires the compensation to be offered before the dismissal becomes effective, and it does not require it to be accepted forcefully. Thus, the court held that sending it through registered post was sufficient. Thus, the court held that all conditions under Sections 25F and 33 were fulfilled. Consequently, the court dismissed both the writ petitions. Decided on: 16 June 2025 Citation: 2025 LiveLaw (MP) 146 Counsel for the Petitioners: Shri Sanjay Verma (WP No. 10838/2008), Shri Mohan Lal Sharma (WP No. 11253/2008) Counsel for the State: Shri Varun Jain Counsel for Respondents 2 and 3: Shri Utkarsh SankarClick Here To Read/Download The Order

Section 25F, Industrial Disputes Act; Actual Acceptance Of Compensation Not Required For Compliance: MP HC

Pranav Kumar

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