Judgment:
S.T. Kharche, J.
1. This writ petition takes an exception to the order dated 31-1-1991 passed by the Industrial Court, Nagpur, in Revision (ULPA) No. 96 of 1990 whereby the revision was allowed and the order dated 1-2-1990 passed by the Labour Court in Complaint (ULPA) No. 384 of 1986 was modified and it was declared that by terminating the services of the complainant, the respondents have engaged in unfair labour practice under Item No. 1 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for short the Act) and directing the respondents to reinstate the complainant/respondent No. 1 in service with continuity of service and pay full back wages from 15-5-1986 till the date of reinstatement.
2. Relevant facts are as under :
Respondent No. 1/complainant was appointed as Waterman with effect from 4-12-1984 and he joined his duty from 5-12-1984. He was in continuous employment of the petitioner since then till 15-5-1986 when his services were terminated without compliance of Section 25-F of the Industrial Disputes Act, 1947 (for short I.D. Act). One Harichandra was appointed in lieu of the respondent No. 1 and since the termination of the complainant was stated to be illegal, he filed a complaint (ULPA) No. 384 of 1986 before the Labour Court. The Labour Court framed the issues, parties adduced evidence and then on considering the evidence the Labour Court held that the complainant was not selected for the post of Waterman from amongst the 400 candidates after written test and oral interview, though he was in continuous employment of the petitioner from 4-12-1984 till 15-5-1986. The Labour Court also held that the complainant was appointed only for 29 days in each month during the aforesaid period and, therefore, declared that the petitioners engaged in unfair labour practice and directed the petitioners to pay compensation for the retrenchment equal to the wages for six months at the rate lastly drawn by the complainant, but refused to reinstate him. Being aggrieved by this order, the respondent No. 1 carried Revision before the Industrial Court and the Industrial Court by the order dated 31-1-1991 modified the order passed by the Labour Court and directed reinstatement of respondent No. 1 with continuity in service with full back wages from 15-5-1986. This order is under challenge in this petition.
3. Mrs. Patil, learned counsel for the petitioners, contended that the provisions of Section 25-F of the I.D. Act are applicable in this case and the termination of respondent No. 1 does not amount to retrenchment. She pointed out that as per Section 2(oo) read with Section 25-F of I.D. Act, the respondent No. 1 was appointed on contract and as a result of non renewal of the contract of employment between the employer and the workman, on its expiry of such contract being terminated under stipulation, does not come within the meaning of retrenchment. She contended that respondent No. 1 was appointed for 29 days only at each time and on expiry of 29 days the contract was not renewed after 15-5-1986. Thus, there was no retrenchment and consequently the provisions of I.D. Act do not apply and this aspect of the matter has been totally ignored by the Industrial Court. She further contended that the Labour Court has correctly held that the respondent No. 1 was not a permanent employee duly selected in the written test and oral interview and, as such, his services were liable to be terminated automatically on expiry of the aforesaid period. She further contended that the Labour Court correctly granted compensation holding that the respondent No. 1 was not entitled to the relief of reinstatement or any other relief. She further contended that the impugned order passed by the Industrial Court, in these circumstances, is not sustainable in law and deserves to be quashed and set aside and that of the Labour Court to be restored.
4. Mrs. Patil, learned counsel, further contended that since the appointment of respondent No. 1 was for a fixed period and there is no finding that the power under Clause (bb) of Section 2(oo) was misused or vitiated by its mala fide exercise, it cannot be said that the termination is illegal. She contended that the respondent No. 1 did not establish that the power to terminate his services was misused by the management or the appointment for a fixed period was a colourable exercise of power and, therefore, such termination is excluded from the ambit of retrenchment. In support of these submissions, she relied on the decision of the Supreme Court in State of Rajasthan and Ors. v. Rameshwar Lal Gahlot, : (1996)ILLJ888SC and also on the Division Bench decision of Rajasthan High Court in Rajasthan State Road Transport Corporation v. Ramavtar Sharma 1997 LLJ 973.
5. The learned counsel for respondent No. 1 contended that the petitioner/management did not adduce any evidence before the trial Court to show that new persons were appointed by adopting the selection procedure nor this was pleaded. He contended that the management did not comply with Section 25-F of the I.D. Act and, therefore, the Industrial Court rightly held that they indulged in unfair labour practice. He contended that once it is found that there is violation of Section 25-F, the order of termination becomes non est with the result that declaration has to be given that respondent No. 1 was continued in service. In support of these submissions, he relied on the Single Bench decision of Punjab and Haryana High Court in Santokh Singh v. State of Punjab 1989 2 CLR 319.
6. He contended that the petitioners had given the break of one or two days in each month during the period 5-12-1984 to 15-5-1986 and this was an artificial break. He contended that giving of artificial break amounts to unfair labour practice and, as such, is violative of Articles 14 and 16 of the Constitution of India. In support of this submission he relied on the Single Bench decision of Gujarat High Court in Dineshkumar Himatlal Nimavat v. State of Gujarat, 1988 1 CLR 348. He contended that the termination order is void ab initio and this illegal act of the petitioners would amount to unfair labour practice within the meaning of Item I of Schedule IV of the Act and the impugned order passed by the Industrial Court is perfectly legal and valid.
7. Mr. Kothari, learned A.G.P., for respondent No. 2 supports the contentions of Mrs. Patil, learned counsel, for the petitioners and contends that the respondent No. 1 was appointed as a Waterman for a fixed period of 29 days with the Medical Superintendent, Rural Hospital, Parseoni, on a fixed pay of Rs. 170/- per month and his services were rightly terminated at the end of the said period of service contract and the Labour Court was perfectly justified in granting compensation only to respondent No. 1 without the relief of reinstatement and back wages.
8. I have given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. It is not in dispute that respondent No. 1 was appointed for 29 days only in each month with effect from 5-12-1984 till 15-5-1984. The last appointment order vide Annexure-A reads as under:
'OFFICE ORDER
Shri Moreshwar Vithobaji Mendhekar a local candidate is hereby appointed for 29 days with effect from 2-7-1985 to 30-8-1985 (BDI) as a Waterman in the pay scale of pay of Rs. 170/- plus usual allowance that there are admissible from time to time against the vacant post.
After expiry of the above period his services are automatically stands terminated without any notice.
Sd/-
Medical Superintendent,
Rural Hospital, Parseoni,
Distt. Nagpur
9. It is not disputed that such appointment orders have been issued in each month by respondent No. 2. Therefore, the position that emerges is that there was a break of one day in each month in which the days of month were 30 and for two days where the days of the month were 31. It is also not in dispute that the services of respondent No. 1, by virtue of the last appointment order dated 1-7-1986, had come to an end automatically on 15-5-1986 without any notice. In this factual background, let us examine the legal position. Section 2(oo) of the ID. Act contemplates as under :
'retrenchment' 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;
Bare reading of the aforesaid provision of law would reveal that if the termination of service of a workman is result of non-renewal of the contract of employment on the expiry of the contract then the termination would be called retrenchment and the worker would be entitled to receive compensation.
10. It is necessary to reproduce Section 25-B of I.D. Act. It reads as under : 'For the purposes of this Chapter,--
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman; (2) where a workman is not in continuous service within the meaning of Clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer --
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -
(i) ninety-five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case.
Explanation.-- For the purposes of Clause (2) the number of days on which a workman has actually worked under an employer shall include the days on which --
(i) he has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the industrial establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so however, that the total period of such maternity leave does not exceed twelve weeks.'
11. Section 25-F lays down that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until --
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay [for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette].
12. On reading of the aforesaid provision of law, it would reveal that if the employee has put in continuous service within the meaning of Sub-section (2) of Section 25-B, then his termination would be held illegal and the employee would be entitled to reinstatement in view of the provisions of Section 25-F.
13. In State of Rajasthan, : (1996)ILLJ888SC , cited supra, the Supreme Court observed in para 4 as under :
'The controversy now stands concluded by a judgment of this Court reported in M. Venugopal v. Divisional Manager, LIC, : (1994)ILLJ597SC . Therein this Court had held that once an appointment is for a fixed period, Section 25-F does not apply as it is covered by Clause (bb) of Section 2(oo) of the Act. It is contended for the respondent that since the order of the learned Single Judge was not challenged, the termination became final. Consequently, the appellant would be liable to pay back wages on reinstatement. In our considered view, the opinion expressed by the learned Single Judge as well Division Bench are incorrect in law. When the appointment is for a fixed period, unless there is finding that power under Clause (bb) of Section 2(oo) was misused or vitiated by its mala fide exercise, it cannot be held that the termination is illegal. In its absence, the employer could terminate the services in terms of the letter of appointment unless it is a colourable exercise of power. It must be established in each case that the power was misused by the management or the appointment for a fixed period was a colourable exercise of power. Unfortunately, neither the learned Single Judge nor the Division Bench recorded any finding in this behalf. Therefore, where the termination is in terms of letter of appointment saved by Clause (bb), neither reinstatement nor fresh appointment could be made. Since the appellant had not filed any appeal against the order of the learned single Judge and respondent came to be appointed afresh on June 27, 1992, he would continue in service till the regular incumbent assumes office as originally ordered.'
14. In Rajasthan State Road Transport Corporation, 1997 LLJ 973, cited supra, the Division Bench of Rajasthan High Court held and observed in para 18 that 'the present case is also covered by Clause (bb) as stated earlier. Respondent's termination was as per the Standing Orders and under a stipulation in that behalf contained in the contract of appointment. Hence, it did not amount to retrenchment and could not be invalidated for non-compliance of the requirement of Section 25-F of the Act.'
15. In the present case, it is not in dispute that the respondent No. 1 was appointed on 4-12-1984. He joined the service on 5-12-1984 and worked upto 15-5-1986 as a waterman but with a break of one or two days in each month depending upon the total number of days of the month and it appears that the petitioner and respondent No. 2 must have issued at least 18 appointment orders in order to give break of one or two days in service. Therefore, in these circumstances, this Court is of the considered view that the appointment of the respondent No. 1 cannot be considered to be for a fixed period so as to make Clauses (bb) and (oo) applicable. In such circumstances, the aforesaid decisions of the Supreme Court as well as Rajasthan High Court relied on by the learned counsel for the petitioner have no bearing on the facts and circumstances of the present case.
16. The Industrial Court clearly observed in the judgment that the Labour Court having held that the respondents have violated the provisions of Section 25-F of I.D. Act, the respondent No. 1 in the normal course was entitled to the relief of reinstatement and continuity in service. Section 25-F of I.D. Act deals with the conditions precedent to retrenchment of workmen. In the instant case, there is no dispute that respondent No. 1 was neither given one month's notice nor he has been paid wages in lieu of the notice. So also, he has not been paid compensation at the time of retrenchment. The petitioner having failed to comply with the provisions of Section 25-F of I.D. Act, the respondent No. 1 is deemed to have been continued in service and the termination of his service would be illegal void ab initio.
17. The learned counsel for respondent No. 1 relied on the decisions of Punjab and Haryana High Court in Santokh Singh 1989 2 CLR 319 and of Gujarat High Court in Bharat Heavy Electricals Ltd. 1989 2 CLR 112, cited supra. Both these decisions have been referred by the Industrial Court in the order. What is relevant to note is that in the case of Bharat Heavy Electricals Ltd., the Division Bench of the Gujarat High Court took the view that once the action of the management is held to be violative of Section 25-F of the Act, the action must be treated to be void with the result that the workman has to be held to be continued in service. In other words, once Section 25-F is found to have been violated, the whole action becomes non est, with the result that the declaration has to be given that the workman concerned has continued in service of the employer, void termination order is hit by Section 25-F notwithstanding.
18. The learned counsel for respondent No. 1 also relied on the decision of Single Bench of Gujarat High Court in Dineshkumar Himmatlal Nimavat 1988 (1) CLR 348, cited supra. It has been held that, 'this is one of the several cases which have come before this Court, and in which this Court has unequivocally held that the practice adopted by the State as an employer to resort to the practice of engaging the persons as work charge employees over a period of years with artificial breaks, is illegal, unfair, unjust and oppressive. There are several such cases where the practice by the State of employing persons for 28 or 29 days every month by a separate order is held to be without authority of law and an unfair practice. Yet we come across cases where it becomes clear that the State as an employer persists in such unfair practice. It is hoped that the State will give anxious thought to this question and give appropriate directions to its departments not to resort to such illegal, unjust, unfair and oppressive practice in future.'
19. The facts in Dineshkumar's case, cited supra, are somewhat identical with the facts and circumstances of the present case. In that case also, the employment was given for 28/29 days every month for a period of about four years with the artificial break of one or two days between the periods of 28/29 days. Similar is the case here, wherein artificial break has been given of one or two days in each month and, therefore, this Court is of the considered opinion that such artificial break would amount to unfair labour practice and violative of Articles 14 and 16 of the Constitution of India because the artificial break is totally illegal, unfair, unjust and oppressive.
20. The learned counsel for respondent No. 1 has also relied on the decision of Single Bench of this Court in the case of Chief Officer, Sangli Municipal Council v. Dharamsing Hiralal Nagarkar 1991 M.L.J. 81 wherein it was observed that the workman who was given appointment order every month by Municipal Council with effect from 1-6-1979 discontinued after working for fifteen months on the contention that the workman could not be made permanent as the Municipal Council could only appoint person recommended by the State Selection Board. The submission of the Municipal Council was not accepted as the Selection Board was a source for appointing fresh candidates and in the matter of persons already appointed the Council had not to consult the Selection Board for the purpose of making workman permanent and, therefore, the act of the Municipal Council amounted to unfair labour practice covered by Item 6 of Schedule IV of the Act.
21. I may usefully refer the decision of Division Bench of the Apex Court in the case of S.M. Nilajkar and Ors. v. Telecome District Manager, Kerala, : (2003)IILLJ359SC wherein Their Lordships have held in paras 11, 12 and 14 of the judgment that 'It is common knowledge that the Government as a welfare State floats several schemes and projects generating employment opportunities, though they are short-lived. The objective is to meet the need of the moment. The benefit of such schemes and projects is that for the duration they exist, they provide employment and livelihood to such persons as would not have been able to secure the same but for such schemes or projects. If the workmen employed for fulfilling the need of such passing-phase projects or schemes were to become a liability on the employer State by too liberally interpreting the labour laws in favour of the workmen, then the same may well act as a disincentive to the State for floating such schemes and the State may opt to keep away from initiating such schemes and projects even in times of dire need, because it may feel that by opening the gates of welfare it would be letting in onerous obligations entailed upon it by extended application of the labour laws. Sub-clauses (bb) in the definition of retrenchment was introduced to take care of such like situations by the Industrial Disputes (Amendment) Act, 1984 with effect from 18-8-1984. 'Retrenchment' in its ordinary connotation is discharge of labour as surplus though the business or work itself is continued. It is well settled by a catena of decisions that labour laws being beneficial pieces of legislation are to be interpreted in favour of the beneficiaries in case of doubt or where it is possible to take two view of a provision. It is also well settled that Parliament has employed the expression 'the termination by the employer of the service, of a workman for any reason whatsoever' while defining the term 'retrenchment', which is suggestive of the legislative intent to assign the term 'retrenchment' a meaning wider than what it is understood to have in common parlance. There are four exceptions carved out of the artificially extended meaning of the term 'retrenchment', and therefore, termination of service of a workman so long as it is attributed to the act of the employer would fall within the meaning of 'retrenchment' de hors the reason for termination. To be excepted from within the meaning of 'retrenchment' the termination of service must fall within one of the four excepted categories. A termination of service which does not fall within categories (a), (b), (bb) and (c) would fall within the meaning of 'retrenchment.' The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a scheme or project which was to last only for a particular length of time or up to the occurrence of some event, and therefore, the workman ought to know that his employment was short-lived. The contract of employment consciously entered into by the workman with the employer would result in a notice to the workman on the date of the commencement of the employment itself that his employment was short-lived and as per the terms of the contract the same was liable to termination on the expiry of the contract and the scheme or prefect coming to an end. The workman may not therefore complain that by the act of the employer his employment was coming to an abrupt termination. To exclude the termination of a scheme or project employee from the definition of retrenchment it is for the employer to prove the abovesaid ingredients so as to attract the applicability of Sub-clause (bb) abovesaid. In the case at hand, the respondent employer has failed in alleging and proving the ingredients of sub- Clause (bb), as stated hereinabove. All that has been proved is that the appellants were engaged as casual workers or daily-wagers in a project. For want of proof attracting applicability of Sub-clause (bb), it has to be held that the termination of the services of the appellants amounted to retrenchment.'
22. In the present case, though it is contended that a new person has been duly selected by adopting the selection procedure after the termination of the service of respondent No. 1, it is a fact that the termination of the service of respondent No. 1 was void ab initio and the termination being illegal the act of the petitioner in discontinuing the respondent No. 1 without one month's notice or retrenchment compensation is perfectly covered under the provisions of Section 25-F of the I.D. Act. In that view of the matter, it is obvious that no fault could be found with the impugned order passed by the Industrial Court and consequently the impugned order appears to be perfectly just, legal and correct. No error or illegality is found in the said order which deserves to be confirmed. Consequently, there is no merit in this petition which stands dismissed. Rule is discharged. However, this Court, is not inclined to grant, backwages to respondent No. 1 and, in the circumstances, directs the petitioner to reinstate him within a period of one month and to that extent the order of the Industrial Court is set aside.