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Abey Thomas v/s Special Deputy Commissioner of Labour, Chennai & Others

    W.P. No. 31798 of 2013

    Decided On, 28 July 2022

    At, High Court of Judicature at Madras


    For the Petitioner: Balan Haridas, Advocate. For the Respondents: R1, P. Ganesan, Government Advocate, R2 & R3, G. Balasubramanian, Advocate.

Judgment Text

(Prayer: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the concerned records from the 1st respondent, quash the order of the 1st respondent TNSE1/22/2011 dated 27.08.2013 as illegal, arbitrary and contrary to law and consequently direct the respondent No.2 and 3 to reinstate the petitioner in service with full back wages, continuity of service and all other attendant benefits, award costs and render justice.)

1. The brief facts of the case are as follows:

(i) The petitioner herein is a “person employed” under the second and third respondent “Establishment” as defined under the 'Tamil Nadu Shops and Establishments Act, 1947' (hereinafter referred to as 'the Act'). On 01.05.1982, the petitioner joined the Establishment as a Secretary cum Reservation / Ticketing Assistant. On 01.06.2001, he was transferred to Chennai and his last held designation was that of a Passenger Sales Officer-II. Owing to restructuring of the Establishment, the position of Passenger Sales Officer had become redundant and accordingly, the post / designation was abolished. Consequently, by an order dated 21.02.2008, the petitioner's service was terminated by the Establishment, stating that his service was no longer required, due to the restructuring / reorganization of the Establishment and that his service shall stand terminated as on 22.02.2008. Along with the termination order, all the statutory dues, including a sum of Rs.5,16,870/- was attached towards ex-gratia, by way of a cheque. The petitioner herein had encashed the cheque on 26.02.2008 and thereafter, had sent a letter dated 23.02.2008, stating that the receipt of monetary benefits was under protest.

(ii) In this background, he had preferred an appeal in TNSE- 1/22/2011 before the first respondent / authority under the Act on 17.03.2008, challenging the termination order. Through the impugned order dated 27.08.2013, the authority had rejected the petitioner's claim, predominantly on the ground that when the Establishment had made the payments including the ex-gratia payment, in accordance with Section 25- F of 'the Industrial Disputes Act, 1947' (hereinafter referred to as 'ID Act') as well as that since the post held by the petitioner was abolished, he was not entitled for reinstatement or rehabilitation. Challenging the said impugned order, the present Writ Petition has been filed.

2. The learned counsel for the petitioner placed reliance on a decision of this Court in the case of Unnikrishnan M. and another Vs. Deputy Commissioner of Labour and others reported in 2010 SCC OnLine Mad 6530 and submitted that when the petitioner herein was transferred to Chennai and the post came to be subsequently abolished, he ought to have been re-transferred to the office of the Establishment that were functioning in Mumbai and therefore, terminating the service of the petitioner on the ground that the post was no longer required, cannot be sustained.

3. The learned counsel for the petitioner also placed reliance on a few decisions of the Hon'ble Supreme Court for the proposition that the authority under the Act was not correct in holding that the petitioner was estopped from filing an appeal against the order of termination, after receiving the compensation amount, particularly, when such compensation was received under protest.

4. Per contra, the learned counsel for the respondents 2 and 3 / Establishment submitted that when the post, which the petitioner was holding, was no longer required, owing to the reorganization of the Establishment, there is no infirmity in terminating his services. In support of this submission, the learned counsel placed reliance on the decision of the Hon'ble Supreme Court in the case of SH. Maheshwari Senior Higher Secondary School and another Vs. Bhikha Ram Sharma and others passed in Civil Appeal No.3645 of 1996, dated 12.02.1996, as well as the decision of the Karnataka High Court in the case of Institute of Hotel Management Vs Smt. Hemalatha V. Reddy reported in 2005 Lab.I.C.1081.

5. The learned counsel also placed reliance on a decision of this Court in the case of A. Selvam and others Vs. Management of C.Abdul Rahman and Co. and another reported in 2002 (2) L.L.N. 739 for the proposition that non-payment of retrenchment compensation under 25-F of the ID Act cannot give a right for reinstatement.

6. The authority under the Act had rejected the petitioner's challenge to the termination order mainly on two grounds viz., that the petitioner, having received the retrenchment compensation, is estopped from challenging the termination order. Secondly, that since the post of Passenger Sales Officer-II was abolished, the Establishment was justified in terminating the petitioner's services.

7. Insofar as the ground that the petitioner had received the retrenchment compensation and therefore is estopped from challenging the termination order is concerned, the Hon'ble Supreme Court in the case of Chandra Textiles (Private) Ltd., Coimbatore Vs. N.Palaniswami and others reported in (1987) 1 MLJ 269, had held that when the employee protests the order of termination, even though he had received the monetary compensation, he would still be entitled to challenge the nonemployment. The petitioner herein had let in oral and documentary evidences to substantiate that the retrenchment compensation that accompanied by the order of termination was received by him under protest. The authority, though had made a reference to such a protest raised by the petitioner, had failed to address the effect of the letter of protest and had merely rendered its views that an employee is estopped from challenging the termination, after receipt of the compensation under Section 25-F of the ID Act. By applying the ratio laid down by the Hon'ble Supreme Court in the case of Chandra Textiles (supra), it can be said that such an employee, who had received the compensation under protest, would be entitled to approbate and reprobate. To this extent, I am not in agreement with the findings of the authority under the Act.

8. Insofar as the order of termination, pursuant to abolition of post, is concerned, the learned counsel relied on the case of Unnikrishnan M. (supra), wherein, it was held that in cases where the portion of the establishment was closed and the other offices elsewhere were functioning, the employer ought to have re-transferred the employees affected by such closure, to their functional offices. The relevant portion of the order reads as follows:

“13. In the counter affidavit as well as the written submission filed by the Management, it was stated that closure compensation was paid to the Employee. The premises in which the Airlines office was operated at Chennai was surrendered to its landlord and the bank accounts were also closed and it was duly informed to the Reserve Bank. Other employees were also paid closure compensation. Several other employees who challenged their termination along with the employee were satisfied with the final order passed by the Appellate Authority. It was only the Employee who alone has come forward to challenge the said order.

14. All these issues are irrelevant in so far as the deciding the jurisdiction of the appellate authority was concerned. The Appellate Authority in the present case failed to see that the employee had come to Chennai on a transfer and so long as their Delhi Office is still working, nothing prevented the employee being retransferred to their Delhi office. The further allegation that his junior Renuka Mighlani was retained was also not denied. In such circumstances, a Division Bench of this Court in Management of Addison and Company Limited v. Presiding Officer, Labour Court Madras reported in 79(1) LLJ 465 held that if a person is transferred to another establishment and if that establishment is closed, then that employee cannot be sent out on account of the closure of the transferred establishment and he must be retransferred to his parent station.”

9. The aforesaid decision arises out of closure compensation being paid to the employees, where all the other employees affected by the closure, were either paid the compensation or had accepted the final order of the appellate authority. In this background, the functional office of the Management had offered to take the employee back into service, but had declined to pay the same salary as that of their staffs in the functional office, which necessitated the Court to apply the concept of “Equal Pay for Equal Work” and thereby directed for reinstatement. Such is not the factual position in the instant case.

10. Even otherwise, the Hon'ble Supreme Court in Maheshwari Senior Higher Secondary School's case (supra) had held that when a post of employment is abolished, the holder of the post ceases to continue employment from the date of such abolition. The relevant portion of the order reads as follows:

“This appeal by special leave arises from the order of the Rajasthan High Court made in D.B. Special Appeal (Writ) No. 492/95. The short question is: whether the respondent can be permitted to continue in a post that stands abolished? It is not in dispute that the respondent was appointed as Steno- Typist on ad hoc basis w.e.f. July 15,1992. While he was continuing, the Management had passed a Resolution on May 21, 1994 stating that there was no necessity to continue the ad hoc post of Steno-typist. Consequently, the post stood abolished. Thereafter, the impugned order was passed on May 31, 1994 terminating the service. When the appellants had proceeded to the Tribunal and then to the High Court, the High Court came to the conclusion that termination is not according to rules and directed to conduct an enquiry according to Rules and to take a decision. The approach adopted by the High Court is wholly erroneous. It is settled law that on abolition of the post, the existing holder of the post ceases to continue from the date of abolition of the post. Since the termination of the service of the respondent is only due to abolition of the post, the question of conducting the enquiry under Rules does not arise.”

11. Likewise in the Institute of Hotel Management's case (supra) the effect of the abolition of post resulting in termination was discussed in the following manner:

“14. The abolition of post may have the consequence of termination of service of a public servant. Such termination is not dismissal or removal. Therefore, the opportunity of showing cause against the proposed penalty of dismissal or removal does not arise in the case of abolition of post. The abolition of post is not a personal penalty against the public servant. The right to hold a post automatically comes to an end on the abolition of the said post which a public servant holds. In that view of the matter, the respondent cannot complain of violation of principles of natural justice on the part of the appellants in abolishing the post of Assistant Instructor in Canning and Food Preservation. It is well-settled that Article 311(2) of the Constitution has no application where the post is abolished. No opportunity of hearing need be given to holder of a post which is abolished. Therefore, it logically follows that even in non-Governmental public service, there is no obligation to follow the principles of natural justice before abolishing a post. This position is also well-settled by the judgment of the Madras High Court in B. Krishnamurthy v. Chairman, Madras Port Trust, 1996-II-LLJ-1254 (Mad.) and the judgment of the Bombay High Court in P.V.Naik V. State of Maharashtra 1967-II-LLJ-486 (Bom.), and the judgment of the Supreme Court in Sri Maheshwari Senio

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r Higher Secondary School v. Bhika Ram Sharma. Therefore, we answer Point No. (ii) also in the negative.” 12. The aforesaid decisions are self explanatory. Thus, when a particular post is abolished owing to restructuring / reorganization of the Establishment, there is no infirmity on the part of the Establishment to terminate the services of the employee holding such a post that has become redundant, in view of the ratio laid down in the aforesaid decisions. The authority had also placed reliance on the decision of the Institute of Hotel Management case (supra) for arriving at a conclusion that the termination of the petitioner was owing to the abolition of the post resulting from restructuring / reorganization of the establishment. In view of these decisions, the finding of the authority cannot be found fault with. 13. Thus, I am of the affirmed view that the respondents Establishment was justified in terminating the services of the petitioner, since the post has become redundant owing to the restructuring of the organization and the petitioner herein had also been suitably compensated in terms of Section 25-F of the ID Act. Thus, there are no infirmities in the impugned order of the first respondent herein. 14. Accordingly, this Writ Petition stands dismissed. No costs.