Breach u/s 25-G & 25-H of the Industrial Disputes Act 1947 would not arise if worker has voluntarily abandoned the service

Breach u/s 25-G & 25-H of the Industrial Disputes Act 1947 would not arise if worker has voluntarily abandoned the service

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All India Institute of Medical Sciences v. Jitender Kumar

Name of the Case: All India Institute of Medical Sciences v. Jitender Kumar (LPA no. 496 of 2013)

Judge & Court:

Honorable Mr. Justice Pradeep Nandrajog

Honorable Ms. Justice Pratibha Rani

in the High Court of Delhi

Date of reservation: 4th March 2015

Date of judgment: 17th March 2015

Name of the Parties:

All India Institute of Medical Sciences (Appellant)

Jitender Kumar (Respondent)

Prior history of the case in a lower court:

Labor Court

Single-Judge Bench of the High Court

Laws, Statues & Articles applied:

Industrial Disputes Act, 1947 Section 2(j), Section 2(oo), Section 10(1) Section 25 – G, Section 25 – H.

Facts of the Case:

  • The respondent worked as a Khalasi (a South Asian term for a manual worker usually working on daily wages) at a monthly remuneration of Rs. 1,800/- at the appellant’s institute, namely the All India Institute of Medical Sciences (AIIMS).
  • According to the appellant, the respondent worked for 165 days in the year 1994 and for 97 days from 23rd January to 22nd July, 1995. The respondent stopped reporting for work on July 22nd, 1995.
  • According to the respondent he worked with the institute from 1994 and that his services were illegally terminated when a Junior Engineer asked him orally to stop reporting for work on 2nd June, 1995 and therefore he raised an Industrial Dispute regarding the same.
  • On 16th May, 2009 the learned Labor Court held that the appellant was not an industry and in view of the evidence, the respondent had abandoned the job. Therefore the abovementioned sections of the Industrial Disputes Act, 1947 could not be invoked.
  • However, the respondent filed a challenge to the award in the High Court (W.P. (C) No.7315/2010) wherein he cited that he had been injured in the course of his work at the institute on 2nd March 1995 and had contracted Tetanus. This was quite a contradiction in the case of the respondent wherein he had filed an affidavit regarding illegal termination of employment in the labor court and then subsequently challenged the award by the same in the High Court citing medical reasons for failure to report to work.
  • The Appellant failed to bring it to the notice of the single judge bench of the High Court the changing stance of the respondent. The Appellant also failed to bring to the notice of the court that counter to the claim of medical absence on 2nd March, 1995, the respondent had worked till 22nd July 1995 and according to the respondent himself, he was asked to leave from service only on 2nd June 1995. Therefore, the Single Bench judge of the High Court in light of the new medical evidence presented invoked Section 25 – G and 25 – H of the Industrial Disputes Act, 1947 and held that it was not abandonment of service and that the appellant indeed would qualify as industry. The appellant was ordered to reinstate the respondent into service. The same was challenged in the High Court of Delhi by the appellant.

The Judgment:

  • The learned counsels Mr.Rajat Katyal, Mr.Rishab Kaushik and Mr.Suvarna Kashyap appearing on behalf of the appellant highlighted the misuse of the Industrial Disputes Act, 1947.
  • Section 25 – G and Section 25 – H deal with the criterion for retrenchment of workers by the employer when there is not any written agreement between the two in existence.
    • Section 25 – G: “Where any workman in an industrial establishment who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.”
    • Section 25 – H: “Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity [to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen] who offer themselves for re-employment shall have preference over other persons.”
  • For an institution to be held accountable under the abovementioned sections it should first qualify as an industry according to the definition of Section 2(j) of the same Act and the definition of retrenchment and its exceptions by the same institution should be derived from Section 2(oo) of the same Act.
  • In the Labor Court, AIIMS could not qualify as an industry according to the learned judge and it wasn’t case of retrenchment under the Act as the respondent had stopped showing up for work on his own accord. Therefore the AIIMS was awarded the dispute resulting in the respondent claiming fresh medical evidence in the higher Court of appeal.
  • The learned single judge in the appeal premised his decision based on the medical evidence provided by the respondent wherein he claimed that he had contracted Tetanus while working for the appellant and was admitted to the LNJP hospital in Delhi. He provided a certificate from the hospital dated 5th July 1995. In this court the learned counsel appearing on his behalf, Mr. Varun Prasad pleaded that his services were illegally terminated on 6th June 1996 contrary to the 2nd June 1995 date which had been presented in front of the Labor Court.
  • Under Section 2(oo) of the Industrial Disputes Act, 1947 one of the exceptions wherein the employee cannot be retrenched is medical reasons or ‘ill-health’ as provided for in sub-clause (c). Therefore in light of the new evidence, the learned single Judge held that Section 25 – G had been breached when it came to dismissing the respondent and Section 25 – H would be invoked in his re-employment as he had a relative seniority as compared to his colleagues in the same work category.
  • The learned Honorable Mr. Justice Pradeep Nandrajog and Honorable Ms. Justice Pratibha Rani highlighted the contradictory case of the respondent wherein a completely different case and evidence was presented to the labor court and a different case and evidence was presented to the higher court and therefore the change in nature of the judgment.
  • Also, in this instance, the respondent did not raise that the appellant was an industry. The Court held that the appellant was consistent when it came to the dates of employment and leave presented before all the courts and also the cause for termination of service. The respondent claimed in the labor court that his services were terminated on 2nd June 1995 and in the higher court that his services were terminated on 6th June 1996. Also in the labor court he claimed that he had been illegally retrenched while in the higher court he claimed that his leave was due medical reasons.
  • Therefore the court in its rightful wisdom held that if an employee stops reporting for work, the employer would be justified in taking action and therefore the relevant Sections of the Industrial Disputes, Act 1947 could not be invoked by the respondent.

Commentary on the Impact of the Decision:

      • Failure of the employees and the employers to sort out their differences bilaterally leads to the emergence of Industrial Disputes. The Industrial Disputes Act, 1947 provides legalistic machinery for settlement of such disputes by involving the interference of a third party i.e. the judiciary.
      • The Act was brought into force to aid the rapid industrialization of the country immediately after independence from the British. Trade unionization and increased privatization have highlighted the necessity for a robust dispute resolution mechanism.
      • Chapter V-B, introduced by an amendment in 1976, requires firms employing 300 or more workers to obtain government permission for layoffs, retrenchments and closures.
      • A further amendment in 1982 (which took effect in 1984) expanded its ambit by reducing the threshold to 100 workers. This was the pre – liberalization era.
      • Therefore after 1990, industries have been held hostage many a times when it came to laying off workers or restructuring. Misuse of the Act by both industries and trade unions or workers has been rampant.
      • In this instance the court prevented a grave misuse of the Act in more than one ways.
      • First, by the previous court including AIIMS in the definition of an industry as provided for in the Act, the ambiguity of the definition was widened. When future institutions would look back retrospectively there would have crept in a fear in their management because then the scope for being dragged into an Industrial Dispute was much larger than the present time. This would hamper their efficiency and functioning.
      • Next, it was abundantly clear that despite not being economically well-off, the respondent derived a sadistic thrill by taking AIIMS to court despite being fully aware that it was he who was to be faulted for termination of service. In a similar manner the court set a strict precedent for workers in industries who would invoke false protection under the Industrial Disputes Act, 1947 and claim compensation for the same.
      • A layman who would be unaware of the statutory provisions of the Industrial Disputes Act, 1947 would have sympathized with the respondent owing to the reputed nature and prestige of the appellant and the financial background of the respondent. But the Court in its rightful wisdom held up the principles of justice and set a strong and noble precedent regarding the same.

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