[Yagya Sharma is a 4th year BA LLB (Hons.) student at the Institute of Law, Nirma University, Ahmedabad]
On 20 January 2021, the Supreme Court of India held in State of Uttarakhand v. Sureshwati that the dismissal of Smt. Sureshwati by her employer cannot be interfered with merely on the ground that it did not conduct a disciplinary enquiry before dismissing. However, the employer will have to justify its action by producing evidence before the Labour Court. As held in a catena of judgments, the Labour Court has the jurisdiction to satisfy itself on the evidence adduced by the parties on whether the dismissal was justified.
The facts of the present case are that Smt. Sureshwati was initially engaged as an Assistant Teacher in Jai Bharat Junior High School, Haridwar during the period between July 1993 and 21 May 1994. Subsequently, she worked as a Clerk from 1 July 1994. On 25 March 1996, the District Basic Education Officer approved the appointment of the Teachers, Clerk, and Peon in the School, including Smt. Sureshwati (with effect from 1 July 1994). During this period, the School was an unaided private institution. From 24 May 2005, the School started receiving grants-in-aid from the State and started being governed by the Uttaranchal School Education Act, 2006. The State contended that Smt. Sureshwati was dismissed by the management as she had abandoned her service as a clerk in the School since 1 July 1997, when she got married and moved to Dehradun. After a period of nine years, on 15 July 2006, Smt. Sureshwati filed a complaint with the School contending that she had worked continuously up to 7 March 2006. She alleged that on 8 March 2006 her services were illegally retrenched without granting her any hearing, or payment of retrenchment compensation.
Answering the reference, the Labour Court held that Smt. Sureshwati was not entitled to any relief as there was sufficient evidence adduced by the management to prove her continued absence from the School. Later, the High Court allowed the writ petition filed against Labour Court Award, on the ground that no enquiry was conducted regarding the abandonment of service by the employee. Hence, an appeal was filed before the Supreme Court against the judgment passed by the High Court. This post seeks to analyse the judgment on several fronts. First, it will discuss the issue of illegal retrenchment. Second, the post will delve into the need for a disciplinary enquiry before dismissing a workman by highlighting past judgments in this regard. Lastly, it will amplify the issue of the burden to prove that the workman was in actual and continuous service of the employer for the said period.
Retrenchment, as defined under Section 2(oo) of the Industrial Disputes Act means “the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill-health;”
In State Bank of India v. Sundara Money, the Supreme Court interpreted the expression “for any reason whatsoever” very broadly and admitted that it has no exceptions. This signifies that retrenchment means termination of a worker’s services for any reason whatsoever, other than those specified in section 2(oo).
In the present case, the State contended that Smt. Sureshwati had abandoned her services as a clerk when she got married and moved to Dehradun. Therefore, her dismissal due to this reason can fall under the wide ambit of “for any reason whatsoever”. However, this retrenchment cannot be termed as illegal as the Court accepted that Smt. Sureshwati abandoned her services relying on the evidence placed, such as the record of the School which revealed that she was not in employment of the School since July 1997. Further, she could not produce her salary slips as evidence of her continuous employment up to 8 March 2006. Moreover, she failed to prove that she had worked for 240 days during the year preceding her alleged termination on 8 March 2006.
Absence of Internal Enquiry
Further, the High Court allowed the appeal filed by Smt. Sureshwati against the Labour Court’s decision, solely on the ground that neither an enquiry was conducted nor disciplinary proceeding initiated regarding the abandonment of service by the employee. The Supreme Court has in past emphasized the importance of internal enquiry before dismissing an employee. In D.K. Yadav v. J.M.A. Industries, the Court highlighted the significance of a domestic enquiry before dismissing an employee by linking it with the right to livelihood, which is a part of the right to life enshrined under Article 21 of the Constitution. The Court, therefore, observed that in order to comply with the principles of natural justice, there is a requirement that a reasonable opportunity is provided to an employee before putting an end to his or her tenure.
However, it is also pertinent to note that where an employer has failed to make an enquiry before dismissing a workman, it can justify the action before the Labour Court by leading evidence before it. The same has been held in Workmen of Motipur Sugar Factory Private Ltd. v. Motipur Sugar Factory, wherein the Supreme Court observed that, in such a scenario, the employer would not have the benefit which it had in cases where domestic enquiries have been held. The entire matter would be open before the tribunal to decide whether the dismissal or discharge was justified, and it will have the jurisdiction to satisfy itself on the facts adduced before it by the employer.
Further, the Supreme Court in Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltdlaid down the broad principles regarding the holding of an enquiry. It held that even if no enquiry has been conducted by an employer or if the enquiry is found to be defective, the Tribunal will have to give an opportunity to the employer and employee to adduce evidence before it, in order to satisfy itself about the validity of the order. Further, if it is found that no domestic enquiry has been held, the Tribunal should never direct reinstatement of a dismissed or discharged employee straightaway.
In the present case, the Court noted that full opportunity was given to the parties to produce evidence before the Labour Court to substantiate their respective case. The High Court, without even adverting to the said evidence, has disposed of the writ petition on the sole ground that the School had not conducted a disciplinary enquiry before discharging Smt. Sureshwati from service. Therefore, the High Court engaged in an unwarranted interference in the dismissal of the employee.
Burden to Prove Continuous Service
To prove the illegality of dismissal of a workman on account of non-payment of retrenchment compensation, the employee needs to establish that he or she was in continuous service of the employer. According to section 25-B(2)(a)(ii) of the Industrial Disputes Act, the condition of continuous service of the employer is fulfilled when it is proved that, during a period of 12 calendar months preceding the date with reference to which calculation is to be made, the employee has actually worked under the employer for not less than 240 days. Further, the Supreme Court in Bhavnagar Municipal Corpn. v. Jadeja Govubha Chhanubha has unequivocally observed that “the burden to prove actual and continuous service of the employer lay squarely on the workman.”
However, in the present case, Smt. Sureshwati failed to prove that she had worked for 240 days during the year preceding her alleged termination on 8 March 2006. She could have called for the records of the School, i.e., the attendance register and the accounts, to prove her continuous employment. Also, she could have produced her salary slips as evidence of her continuous employment. However, she failed to produce any such evidence to substantiate her case.
The right to a hearing is a vital part of the principles of natural justice. This principle mandates that an employee who is affected by the decision made by the employer should be given a fair opportunity to defend. However, the Supreme Court through several judgments has created an exception for situations wherein an employer fails to conduct a disciplinary enquiry before dismissing an employee. In such a scenario, the employer can justify its actions before the Labour Court, which will have a much wider jurisdiction to satisfy itself on the facts adduced before it by the employer. In the present case, the Court has adopted the above approach and disagreed with the High Court’s view that the absence of disciplinary enquiry can be a sole reason for interfering with the award passed by the Labour Court.
In the author’s view, the Supreme Court in the present case has carried out its analysis by respecting the peculiarity of the facts of the case and refrained from following a universal principle. The Labour Court is enabled to examine the facts of a case. Therefore, reinstating a workman solely on the grounds of the lack of an internal enquiry or the existence of a defective enquiry can cause injustice to an employer.
– Yagya Sharma