Begin typing your search above and press return to search.
News Updates

Employer's Business Shut, Terminated Employee Encashed Compensation & Other Terminal Benefits: Gujarat High Court Declines Challenge To Retrenchment

8 Jun 2022 1:00 PM GMT
Employers Business Shut, Terminated Employee Encashed Compensation & Other Terminal Benefits: Gujarat High Court Declines Challenge To Retrenchment

Concluding that the medical store where the Petitioner, a pharmacist, was employed had closed down and the Respondent Sangh did not own or exercise control over the store anymore, the Gujarat High Court has found the termination of the Petitioner to be in accordance with law and refused to interfere with his retrenchment.

Significantly, the Bench comprising Justice Aniruddha Mayee noted that the Petitioner had accepted certain amounts as legal dues and other terminal benefits without objection. Hence, the Bench refused to hold the Petitioner's termination as illegal.

The brief facts of the case were that the Petitioner was working with the Respondent Sangh for 11 years as a pharmacist on a monthly salary of INR 1,775. However, his services were terminated in March 1992. Aggrieved, the Petitioner raised a dispute before the Labour Commissioner where the Petitioner's complaint was dismissed. The Petitioner challenged the decision of the Labour Commissioner in the instant Special Civil Application.

The primary contention of the Petitioner was that he had rendered uninterrupted services to the Respondent for 11 years and yet his services were terminated on the ground that the pharmacy store was being closed. It was averred that the store was then rented to someone and therefore, his termination was not in accordance with law. He insisted that the Court ought to 'life the veil' and hold his termination as violative of law.

Per contra, the Respondent-Sangh contested that the store was closed since the business was in losses and all the employees were retrenched in accordance with law. Further, the medical store was run by the Sangh but subsequent to its closure, it became the property of another organisation. The Respondent Sangh did not have any control or administration over the premises. The decision of the Labour Court, was therefore, proper and legal. Attention was drawn to the sums paid down the Petitioner vide a cheque towards the retrenchment compensation and other terminal benefits which were duly encashed by the Petitioner.

Justice Aniruddha P. Mayee noted that there were five issues framed in the dispute before the Labour Court and all five were adjudicated basis the evidence on record. The medical store was clearly running into losses and following due procedure, the Sangh closed the medical store and sold the remaining stock and its furniture. The Bench noted that INR 13,410 and INR 49, 314 were accepted by the Petitioner as compensation. Further, after the Petitioner's retrenchment, no other person was appointed as a Pharmacist by the Respondent Sangh. The new premises were not within the control of the Sangh.

Accordingly, the Bench was not inclined to set aside the order of the Labour Court.

"The evidence and documents on record reveal that the business of the medical store has been closed down by the respondent Sangh. The petitioner has been retrenched in accordance with law after payment of all the retrenchment compensation and other terminal benefits which has been duly accepted by the petitioner," it observed.


Case No.: C/SCA/30903/2007

Citation: 2022 LiveLaw (Guj) 198

Click Here To Read/Download Judgment

Next Story