(Prayer: This Writ petition is filed Under Articles 226 & 227 of the Constitution of India, praying to call for records leading to the passing of the award dated 30.11.2019 passed by the First Additional District and Sessions Judge, Bengaluru Rural District, Bengaluru in I.A.Nos.14/2017 to 30/2017, 32/2017 to 65/2017 and 67/2017 to 72/2017 (Annexure-Y) and etc.)
1. The petitioner has assailed the award dated 30.1.2019 passed by the Learned District and Sessions Judge, Bengaluru Rural District, Bengaluru (Labour Court) in I.D.Nos.14/2017 to 30/2017: 32/2017 to 65/2017 and 67/2017 to 72/2017 whereby the Labour Court has allowed the Industrial Disputes raised by the respondent-workmen directing the petitioner/ Management to reinstate all the workmen to their original posts with continuity of service along with backwages from the date of their termination till the date of reinstatement with all other consequential benefits.
2. The petitioner claims to be a private limited company registered under the Companies Act, 1956 and is engaged in the activity of manufacture of pharmaceutical medicines. The respondents/workmen were working in the establishment of the petitioner- management and they individually filed claim petitions under Section 10 (4-A) of the Industrial Disputes Act, 1947, read with Amendment Act, 1988 (Karnataka) contending that they were terminated from service without any valid reasons and sought for reinstatement with backwages and consequential benefits. Labour Court after analyzing the material evidence allowed the claim petitions as aforesaid. Being aggrieved, the Management is before this Court.
3. Learned Senior Counsel Sri S.S.Naganand, representing the petitioner submitted that the Labour Court failed to appreciate the vital aspect in as much as the relationship of employer and employee between the petitioner and trainees-respondents vis--vis the definition of 'workman' under the provisions of the Industrial Disputes Act, 1947 (for short 'the Act'). Learned Senior Counsel submitted that the finding of the Labour Court regarding the 'trainees' is not in consonance with Section 2(s) of the Act more particularly in the context of the certified standing orders of the company contemplating the appointment of trainees for a specific period. It was submitted that before issuing an appointment order, an offer was made to the respondents for a fixed term of 36 months as trainee - production. Thereafter appointment orders were issued appointing them as trainee-production for a period of 36 months on a basic stipend. Clause 18 of the appointment order pertains to the period of training, Clause 20 pertains to the notice period. The respondent- trainees have accepted the same and given an undertaking to abide by the rules and regulations. There is no bar to extend additional benefits to the trainees, merely for the reason that the respondents- workmen were engaged for more than 36 months and the additional benefits extended if any, would not create a status of regular workman. The Labour Court proceeded to accept the arguments of the respondents inasmuch as the action of the Management terminating the respondents as unfair labour practice and victimization. The direction issued by the Labour Court to reinstate the respondents-trainees with backwages and continuity of service is not justifiable in the facts and circumstances of the case.
4. Sri T.C.Anantharam, learned counsel appearing for the respondents workmen submitted that the certified standing orders of the petitioner-company is not in conformity with the model standing orders. The certified standing order has to be strictly in conformity with the model standing orders, since the "trainee" is not included in the model standing orders, the inclusion of 'trainee' in the categories of workman defined in the certified standing order is illegal. Indeed, the trainees had earlier worked with the petitioner on contract basis for several years and thereafter they were engaged as trainees on a fixed term. As such, they come within the ambit of "workman" as defined under the provisions of the Act. The trainees being treated on par with the regular employees regarding the pay slips issued and certain benefits extended like wage increase, over time benefits and bonus etc., termination of the respondents amounts to 'retrenchment' attracting the compliance of Section 25 (F) of the Act. The Management had given an assurance of providing permanent job to the respondents; Surprisingly after extracting the regular work from the respondents, has turned down the assurances made as far as regularization of their services. Labour Court considering these aspects has rightly allowed the claim petitions directing the petitioner to reinstate the workmen with continuity of service along with backwages and consequential benefits which deserves to be confirmed by this court.
5. Both the Learned counsels have referred to catena of judgments which shall be discussed infra.
6. Having heard the learned counsel for the parties and perusing the material on record, the core questions that arise for consideration of this Court are:
"1. Whether the respondents appointed as trainees by the petitioner-Management come within the ambit of 'workman' as contemplated under the provisions of the Act?"
2. Whether the termination of the respondents from service without following the procedure contemplated under Section 25(F) of the Act is illegal?
It is apt to refer to the relevant provisions of the Act and the same are quoted hereunder for ready reference.
7. Section 2 (s) of the Act defines 'workman' as under:
"Workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand six hundred rupees per mensem or exercises, either by the nature of duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature"
8. Section 2 (oo) of the Act reads thus:
" 2(oo) "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 on-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;"
9. Section 25(F) of the Act reads as under:
" 25F. Conditions precedent to retrenchment of workmen - 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 2 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.
It is thus clear that to attract Sections 2(oo) and 25(F) of the Act, the definition of 'workman' under Section 2(s) has to be satisfied. It is not in dispute that the order of appointment issued by the Management indicates the term of employment for a period of 36 months with effect from the workman joining the position of "trainee - production" and the same was accepted.
10. Before further discussing on the factual aspects, it is better to collate the legal position with respect to the trainee-workman as discussed in various judgments referred to by the learned counsel for the parties.
11. In TUNGABHADRA SUGAR WORKS (P) LIMITED VS. LABOUR COURT, MANGALORE AND ANOTHER (1982 1 LLJ 465 (Kar HC)) the Division Bench of this court while considering the claim of an apprentice to the status of a workman observed thus:
"It is clear from the definition of the word "workman" that any person including an apprentice can be regarded as a workman if he is employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward. In other words, the existence of relationship of an employer and an employee is of the essence of the matter. The employment has necessarily to be in respect of an industry. Any person, whether he is an apprentice or not, can be regarded as a workman only if he is employed in an industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied. It is, therefore, clear that it is not enough to establish that the person claiming such a status is an apprentice. Whether the person claiming status of a workman is an apprentice or any other person, it has to be established that he is employed in an industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward whether the terms of employment be expressed or implied. The view which we are inclined to take in this behalf receives support from the observations of the Supreme Court in Dhrangadhara Chemical Works Ltd. v. State of Saurashtra [1957-I LLJ 4477], wherein the Supreme Court has observed as follows:
"The essential condition of a person being a workman within the terms of this definition (in S.2(s)) is that he should be employed to do the work in that industry, that there should be, in other words, an employment of his by the employer and that there should be the relationship between the employer and him as between employer and employee or master and servant. Unless a person is thus employed there can be no question of his being a workman within the definition of the term as contained in the Act."
12. In HMT Limited Vs. Aaron Jaisingh (2006 LLR 28) the Cognate Bench of this Court has observed thus:
" The letter of appointment and the agreement entered into between the parties is very clear. The respondent has no right to continue as a trainee after the expiry of the period of two years. The agreement provides in the event of the petitioner wanting the respondent's service he is bound to serve the petitioner, otherwise he has to pay compensation. Similarly, no corresponding right is conferred under the agreement on the respondent to insist that he should be taken on duty. Therefore, the Labour Court committed serious error in reading that agreement as conferring the right on the respondent on being continued in service after the expiry of the training period.
In fact, even as wrongly construed, the respondent is held to be a workman, the amended definition sub-clause (bb) of clause (oo) of section 2 makes it clear that the termination of services of the workman after the expiry of the period agreed upon, or of such appointment being terminated under a stipulation in that behalf contained therein, would not amount to retrenchment. In the circumstances seen from any angle, the termination of the respondent from service in terms of the order dated:6.8.1986 which is marked in the case as exhibit M5 cannot be said to be illegal, contrary to law and requires to be interfered with. The Labour court committed serious error in misconstruing the letter dated 6.8.1986 and embarking upon an enquiry which is totally unwarranted and also misconstrued the terms of the appointment order and the agreement entered into between the parties and in passing the impugned award. Therefore, the impugned order cannot be sustained."
This judgment was rendered in the context of the earlier order of the Industrial Tribunal holding that the services of the workman terminated before the expiry of two years on the ground of misconduct of theft being not held to be justifiable, thus making it clear that he would be entitled to be continued as a trainee for the balance period had become final in view of the proceedings reaching the Apex court and confirmed by the Hon'ble Apex Court. The material discloses that the workman was treated only as a trainee. There being no relationship of employer and employee, the workman was terminated immediately after the training period.
13. The Hon'ble Delhi High Court in the case of R.KARTIK RAMACHANDRAN VS. PRESIDING OFFICER, LABOUR COURT AND ANOTHER (2006 LLR 223) while considering the status of Trainee in the context of termination of training arrangement on completion of the training has held thus:
"When the terms and conditions of training categorically provided that there will be no guarantee in absorbing the trainee after completion of his training as a regular employee, such a trainee cannot seek employment after termination of the training arrangement. While terminating the training arrangement as per the conditions providing that there will be no guarantee for regular employment after completion of the training and as duly having accepted the same by the trainee, the termination of the trainee that too after completion of training period will not be illegal particularly when such a workman under the Industrial Disputes Act and also the trainee cannot agitate the same in alleging that compliance of Section 25F of the Industrial Disputes Act has not been made.
It is recorded by the Hon'ble court in paragraphs 16 and 17 of the said judgment as under:
"16. Perusal of the record shows that the petitioner did not at all lead any evidence in order to support of the contention that he was covered under the definition of Section 2(s) of the Industrial Disputes Act, 1947. I also notice that a specific objection had been taken by the respondent in its written statement in this regard to the following effect:
2. That the appropriate Government has before making the reference in question, failed to appreciate that there did not exist or apprehended to exist any industrial dispute within the purview of the Industrial Disputes Act, 1948 as relationship of an employee/workman and the employer/ management is a sine qua non for the existence of such a dispute. As Shri Kartik Ramachandran was only a trainee and not an employee/workman qua the respondent, he could not raise an "industrial dispute" with the respondent. The appropriate Government ought to have appreciated this contention of the respondent. But the said Government seems to have not applied its mind to that and made reference to this Hon'ble Court which is neither legal nor proper. The same is liable to be rejected and answered accordingly.
17. The petitioner has proceeded in the matter on the presumption that he is not required to establish the maintainability of his claim or the nature of his employment. I find that petitioner has not led any evidence on the aspect of the nature of his duties in affidavit, dated September 6, 1995 filed before the Labour Court. On the contrary in the affidavit filed, the petitioner has accepted that he completed the training period of six months on October 19, 1990."
Though the Hon'ble Delhi High Court accepted that the designation of an employee is not of importance and it is the real nature of duties being performed by the employee which would decide as to whether an employee is a workman under Section 2(s) of the Act, in the absence of the pleadings and supporting evidence led in by the employee, ruling was given against the workman.
14. The Hon'ble Apex Court in the case of KALYANI SHARP INDIA LTD., VS. LABOUR COURT, NO.1, GWALIOR AND ANOTHER (AIR 2002 SC 300) while dealing with the termination before expiry of probationary period without issuance of prior notice has held thus:
"The order of employment itself clearly sets out the terms thereafter which makes it clear that the facility of providing training to him could be put to an end to at any time without assigning any reason whatsoever and his services could be regularised only on satisfactory completion of his training. If these clauses are read together it is clear he was under probation during the relevant time and if his services are not satisfactory, the same could be put an end to. It is clear that the respondent had been appointed as a Trainee Service Technician and for a period he had to undergo the training to the satisfactory during that period the facility could be withdrawn at any time and he would be regularised only on completion of his training. Thus the respondent's services were terminated before expiry of the probation period. In such a case question of issue of notice before terminating the services as claimed by the respondent does not arise.
15. In the case of ESCORTS LIMITED VS. PRESIDING OFFICER AND ANOTHER ((1997) 11 SCC 521) the Hon'ble Apex Court placing reliance on appointment letters held as under:
"The termination of services of the workman does not constitute retrenchment in view of clause (bb) in Section 2(oo) of the Act. Clause (bb) excludes from the ambit of the expression "retrenchment" as defined in the main part of Section 2(oo) "termination of the services 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". The said provision has been considered by this Court in M. Venugopal V. Divisional Manager, LIC1. The appellant in that case had been appointed on probation for a period of one year from 23-5-1984 to 22-5-1985 and the said period of probation was extended for further period of one year from 23-5-1985 to 22-5-1986. Before the expiry of the said period of probation, his services were terminated on 9-5-1986. It was held that since the termination was in accordance with the terms of the contract though before the expiry of the period of probation it fell within the ambit of Section 2(oo) (bb) of the Act and did not constitute retrenchment. Here also the services of the workman were terminated on 13-2-1987, as per the terms of the contract of employment contained in the appointment letter dated 9-1-1987 which enabled the appellant to terminate the services of the workman at any stage without assigning any reason. Since the services of the workman were terminated as per the terms of the contract of employment, it does not amount to retrenchment under Section 2 (oo) of the Act and the Labour Court was in error in holding that it constituted retrenchment and was protected by Sections 25-F and 25-G of the Act."
16. In the said case, the workman had worked on daily-wage basis during the period from 05.02.1986 to 29.04.1986, 14.07.1986 to 31.12.1986 and 09.01.1987 to 12.02.1987 and he was terminated from service on 13.02.1987. the appointment letter dated 09.01.1987 reveals that the workman was given temporary appointment for a period of two months.
In W.P.Nos.34892/2009 c/w W.P.No. 18612/2010 (L-TER) Bharath Earth Movers Ltd., Vs. H.L.Dhanapal, the Hon'ble Court has returned a finding that the material on record with reference to the evidence led in and the exhibits clearly indicate that the workman was a Trainee; That he was not appointed to a permanent post; In view of the substantive evidence available on record to prove that the relationship of employer and employee established by the trainee, the Hon'ble Court has arrived at a decision that the said trainee is not a workman as per Section 2(s) of the Act.
17. The Division bench of this Court in K.RAVIKUMAR Vs. THE DIVISIONAL CONTROLLER NEKRTC BELLARY DIVISION (W.A.No.160591/2015 (D.D.09.09.2019))has observed that the appellant therein admittedly being a trainee conductor, the Regulations do not apply to his case. Indeed, in the absence of an order of appointment to the vacant post of conductor, workman did not fall within the definition of the term 'corporation servant' under the KSRTC Servants (C & R) Regulations, 1971 as held in W.A.No.100383/2014 and further confirmed by the Hon'ble Apex Court in SLP No.11117/2015.
The Hon'ble Apex Court in DHAMPUR SUGAR MILLS LTD., VS. BHOLA SINGH (AIR 2005 SC 1790) has held:
"In terms of the provisions of the Apprentices Act, 1961, a trainee or an apprentice has no right to be absorbed in services. It is trite that if the provisions of the Apprentices Act applies, the provisions of the labour laws would have no application.
When a workman is appointed in terms of a scheme on daily wages, he does not derive any legal right to be regularized in his service. It is now well known that completion of 240 days of continuous service in a year may not by itself be a ground for directing regularization particularly in a case when the workman had not been appointed in accordance with the extent rules.
It is now well-settled that even in a case where the services of a workman have been terminated without complying with the provisions of Section 6N of the Industrial Disputes Act, a direction for reinstatement shall not ordinarily be issued, in the event, the termination of services becomes coterminus with the scheme."
Again in YOGESH MAHAJAN VS. PROF. R.C.DEKA DIRECTOR, ALL INDIA INSTITUTE OF MEDICAL SCIENCES (2018 LLR 366) the Hon'ble Apex Court has observed thus:
"It is settled law that no contract employee has a right to have his or her contract renewed from time to time. That being so, we are in agreement with the Central Administrative Tribunal and the High Court that the petitioner was unable to show any statutory or other right to have his contract extended beyond 30th June, 2010. At best, the petitioner could claim that the concerned authorities should consider extending his contract. We find that in fact due consideration was given to this and in spite of a favourable recommendation having been made, the All India Institute of Medical Sciences did not find it appropriate or necessary to continue with his services on a contractual basis. We do not find any arbitrariness in the view taken by the concerned authorities and therefore reject this contention of the petitioner.
We are also in agreement with the view expressed by the Central Administrative Tribunal and the High Court that the petitioner is not entitled to the benefit of the decision of this Court in Uma Devi. There is nothing on record to indicate that the appointment of the petitioner on a contractual basis or on an ad hoc basis was made in accordance with any regular procedure or by following the necessary rules. That being so, no right accrues in favour of the petitioner for regularisation of his services. The decision in Uma Devi does not advance the case of the petitioner."
18. In COLOUR CHEM LTD., VS. A.L.ALASPURKAR AND OTHERS ((1998) 3 SCC 192), the Hon'ble Apex Court while considering the term 'victimization" has observed that it is neither defined in the ID Act nor in the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971. Therefore, applying the general dictionary meaning it was held that if a person is made to suffer by some exceptional treatment, it would amount to victimization. The term 'victimization' is of comprehensive import. It may be victimization in fact or in law. Factual victimization may consist of diverse acts of employers who are out to drive out and punish an employee for no real reason and for extraneous reasons. Inflicting of disproportionate punishment would be unfair labour practice by itself being an instance of victimization in law or legal victimization independent of factual victimization, if any.
19. In K.C.P. EMPLOYEES' ASSOCIATION, MADRAS VS. THE MANAGEMENT OF K.C.P. LTD., MADRAS AND OTHERS ((1978) 2 SCC 42), the Hon'ble Apex Court has held that in Industrial Law, interpreted and applied in the perspective of part IV of the Constitution, the benefit of reasonable doubt on law and facts, if there be such doubt, much go to the weaker section, labour.
20. In the context of Section 2 (oo), 2 (s) and 25- F, the Hon'ble Apex Court in DEVINDER SINGH VS. MUNICIPAL COUNCIL, SANAUR (2011 III LLJ-1 (SC)), the ratio laid down by the Constitutional Bench in PUNJAB LAND DEVELOPMENT AND RECLAIMATION CORPORATION LTD., CHANDIGARH VS. PRESIDING OFFICER, LABOUR COURT, CHANDIGARH (1990 II LLJ 70) has been referred to. It has been held that whenever an employer challenges the maintainability of inter-se dispute on the ground that the employee is not a workman within the meaning of Section 2(s) of the Act, what the Labour Court/Industrial Tribunal is required to consider is whether the person is employed in an industry for hire or reward for doing manual, unskilled, skilled, operational, technical or clerical work in an industry; Once the test of employment for hire or reward for doing the specified type of work is satisfied, the employee would fall within the definition of 'workman'. The plea of the Management - Municipal Council that the action taken by it was covered by Section 2 (oo) (bb) was observed to be misconceived because no material was produced by the Management to show that the engagement of the workman was discontinued by relying upon the terms and conditions of the employment. It is held that failure of the local self government to convey his approval to the resolution of the respondent could not be made a ground for bringing an end to the engagement of the workman and that too without complying the mandate of Section 25 (F) (a) and
(b). Thus, the finding of the Hon'ble Court is as under:
"13. The source of employment, the method of recruitment, the terms and conditions of employment/contract of service, the quantum of wages/pay and the mode of payment are not at all relevant for deciding whether or not a person is a workman within the meaning of Section 2(s) of the Act."
21. It is fairly well settled principle that for an order of termination of the services of a workman to be held illegal on account of non-payment of retrenchment compensation, it is essential for the workman to establish that he was in continuous service of the employer within the meaning of Section 25 (b) of the Act; he was in continuous service for 240 days.
22. In JAGBIR SINGH Vs. HARYANA STATE AGRICULTURE MARKETING BOARD (2009 - IV LLJ 336), the Hon'ble Apex Court observed that a distinction has to be made between daily wagers and a permanent employee while awarding compensation, the host of factors, inter-alia, manner and method of appointment, nature of employment and length of service are relevant for determining the compensation, of course, each case will depend upon the own facts and circumstances. It has been held that the award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper and instead compensation has been awarded.
23. The Hon'ble Apex Court in Trambak Rubber Industries Limited Vs. Nashik Workers Union and others ((2003)6 SCC 416) has observed thus:-
8. We are of the view that the High Court has not transgressed the limitations inherent in the grant of the writ of certiorari. The High Court had rightly perceived of patent illegality in the impugned award warranting interference in exercise of its writ jurisdiction. The High Court is right in pointing out that the material evidence especially the admissions of the witness examined on behalf of the Management were not considered at all. Moreover, the conclusions reached are wholly perverse and do not reasonably follow from the evidence on record. For instance, the fact that no appointment letters were issued or filed does not possibly lead to the conclusion that the Management's version must be true. Similarly, if the workers' unions had taken the stand that ante-dated appointment letters were issued describing the employees as trainees after the dispute had arisen, it is difficult to comprehend how that would demolish the case of the Union that the concerned persons were really employed as workmen (helpers) but not as trainees. The Industrial Court makes a bald observation that there was no satisfactory evidence on record to suggest that these persons were employed by the respondents as 'regular' employees at any point of time. This bald conclusion/observation, as rightly pointed out by the High Court, ignores the material evidence on record. In fact, the evidence has not been adverted to at all while discussing the issues. There was total non-application of mind on the part of the Tribunal to the crucial evidence. The Management's witness categorically stated that the concerned workers were engaged in production of goods and that no other workmen were employed for production of goods. In fact, one of the allegations of the Management was that they adopted go-slow tactics and did not turn out sufficient work. According to the Industrial Court, the fact that the 'trainees' were employed for performing the regular nature of work would not by itself make them workmen. The question then is, would it lead to an inference that they were trainees? The answer must be clearly in the negative. No evidence whatsoever was adduced on behalf of the Management to show that for more than one and half years those persons remained as 'trainees' in the true sense of the term. It is pertinent to note the statement of the Management's witness that in June-July, 1989, the Company did not have any permanent workmen and all the persons employed were trainees. It would be impossible to believe that the entire production activity was being carried on with none other than the so-called trainees. If there were trainees, there should have been trainers too. The Management evidently came forward with a false plea dubbing the employees/workmen as trainees so as to resort to summary termination and deny the legitimate benefits. On the facts and evidence brought on record, the conclusion was inescapable that the appellant-employer resorted to unfair labour practice. There would have been travesty of justice if the High Court declined to interfere with the findings arbitrarily and without reasonable basis reached by the Industrial Court."
24. It is beneficial to quote the findings recorded by the Hon'ble Apex Court in the case of Balmer Lowrie & Company Limited and others Vs. Partha Sarathi Sen Roy & others ((2013)8 SCC 345), the relevant paragraphs are quoted hereunder:
"39. Clause 11(a) of the letter of appointment reads as under:
"The Company shall have the right, at its sole discretion, to terminate your services by giving you three calendar months notice in writing and without assigning any reason. The Company also reserves the right to pay you in lieu of notice, a sum by way of compensation equal to three months' emoluments consisting of basic salary, dearness allowance, house rent assistance and bonus entitlements, if any, after declaration of bonus.
40. Undoubtedly, the High Court has not dealt with the issue on merits with respect to the termination of the services of the respondents herein. However, considering the fact that such termination took place several decades ago, and litigation in respect of the same remained pending not only before the High Court, but also before this Court, it is desirable that the dispute come to quietus. Therefore, we have dealt with the case on merits. In keeping with this, we cannot approve the "hire and fire" policy adopted by the appellant Company, and the terms and conditions incorporated in the Manual of Officers in 1976, cannot be held to be justifiable, and the same being arbitrary, cannot be enforced. In such a fact situation, Clause 11 of the appointment letter is held to be an unconscionable clause, and thus the Service Condition Rules are held to be violative of Article 14 of the Constitution to this extent. The contract of employment is also held to be void to such extent."
25. The relevant paragraphs of the judgments of Hon'ble High Court of Bombay rendered in Soudi Arabian Airlines Vs. Ashok Hargovind Panchal & another (2019-1 LLJ -116 (Bom)) reads thus:
"43. The Provisions of Section 2(oo)(bb) of the I.D. Act will therefore not apply to a situation of the present nature where, the material on record establishes that the very issuance of such appointments letters or contract of employment constituted unfair labour practices, since, the entire purpose of issuing such appointment letters or contracts of appointments was to exploit the employees, continue them for years on such basis with the object of depriving them the status and privileges of permanent employees.
47. There is also no necessity to go into the contention based upon the Standing Orders Act and the Rules made thereunder. This is because on facts, we are satisfied that the concurrent findings recorded by the Industrial Court and the learned Single Judge are sufficiently borne from the material on record. These findings established unfair labour practices on the part of the appellant. On this basis, there was no infirmity in the judgments and orders rendered by the Industrial Court and the learned Single Judge in the present case."
26. In the light of the aforesaid judgments, the analysis of material evidence made by the Labour Court is examined.
27. Matters being akin, involving similar issues, Labour Court has examined the evidence recorded in I.D.No.14/2017. Ex.W1 - offer of appointment letter dated 22.2.2014 along with Annexure-I indicates that the offer was for "fixed term employment" i.e., for a period of 36 months for position of "Trainee-production" and remuneration package details are as per Annexre-1. It is significant to note that under the caption salary components, it is mentioned as Basic, Dearness Allowance, House Rent Allowance, Canteen Allowance, Special Pay, Provident Fund, ESIC and fixed CTC amounting to Rs.8,750/- monthly. Further it is reflected that bonus/exgratia as applicable.
Ex.W2 is the appointment letter dated 1.3.2014, Ex.W11 is the termination intimation letter, Ex.W12 is the relieving letter. These documents necessarily discloses that the respondents had worked for 37 months and the full and final settlement statement indicates the entitlement of respondents towards leave encashment and bonus. It is not for the first time the respondents were employed on 1.3.2014 as trainees, it is the categorical admission made by MW1 that the training period of the respondents got ended on 28.02.2017 but the letter dated 6.3.2017 was issued informing that the period of engagement as trainees has come to an end on 28.02.2017 and they will be relieved from the training by end of March 2017. It has been admitted by MW1 that the respondents were working as contract labourers earlier for M/s Kemwell Bipharma Company and they were appointed as trainees by the M/s Relipharma Company - the petitioner herein, after taking over M/s Kemwell Bipharma Company. Ex.P9 - pay slip for the month of February 2017 and Ex.P10 - overtime pay slip extract shows that the respondents were working like regular employees and they were identified by their employment numbers. Decline in the orders received for the production by the petitioner company appears to be the cause of the termination of the respondents. No evidence is forthcoming to show that for more than 3 years, the respondents remained as trainees. Management cannot resort to dub the workmen as trainees to deny their legitimate benefits after extracting the regular work placing reliance on the appointment letters.
28. It is significant to note that as per the standing orders of the petitioner company, the workmen are classified as (i) Permanent, (ii) Temporary, (iii) Probationer, (iv) Badli or substitute, (v) Casual, (vi) Apprentice and (vii) Trainee. Thus, the Trainee would be a workman as per the standing order. Under the head of Trainees, it is stated as under:
" The period of training shall be decided by the Management and the trainee is bound by the rules framed by the Management for that purpose". It is the categorical admission of MW1 that there was no training scheme. No evidence was made available before the Labour Court to substantiate any training imparted by the petitioner company to the respondents.
29. It is recorded by
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the Labour Court that Ex.M3, the application submitted by the respondent/workmen denotes the same as job applications for the position applied for. Standing orders of the petitioner do not support either the appointment of trainees by submitting any application in the prescribed form nor any such training scheme was advertised inviting the candidates for training programme. No evidence is forthcoming to show that there was a trainer for the respondents and period evaluation of so called training. On the contrary, the evidence let in by the parties would establish the relationship of employer and employee between the petitioner and the respondents. No material is available on record to establish any training imparted to the respondents under a training scheme. Hence, the finding of the Labour Court inasmuch as the respondents-workmen are 'workman' as defined under Section 2(s) of the Act and their services were illegally terminated with effect from 1.4.2017 by the petitioners in violation of section 25-F of the Act read with Rule 77 of the Industrial Disputes (Karnataka) Rules, 1957 requires to be confirmed. 30. It is well settled that designation of an employee is not of importance and it is the real nature of the duties being performed by the employee which would decide as to whether an employee is a workman under Section 2(s) of the Act. The determinative factor is the work/duties performed by the employee which depends upon the facts of the case. The nomenclature and the period of the appointment are immaterial. 31. Under the circumstances, section 2(oo)(bb) Act would not be attracted. The colourable exercise of the petitioner to terminate the services of the respondents-workmen labeling them as trainees depriving the privileges and benefits to which they are legally entitled to would be an unfair labour practice. 32. The Labour court has placed reliance on the judgment of DEEPALI GUNDU SURWASE VS. KRANTI JUNIOR ADHYAPAK (D.Ed) & OTHERS (2013 (10) SCC 324) to award back wages. The factual aspects indicate that the matters were referred to Lok Adalath for settlement on 14.7.2018. In the said proceedings, though the compensation was proposed towards one time settlement of Rs.1 lakh to the workman along with one month retrenchment compensation, the same was not accepted by the workmen. Indeed workmen were ready to give up the full back wages and they insisted for reinstatement to their earlier posts. However, the negotiations failed. In view of the aforesaid, it is apparent that the workmen were ready to forego the full backwages provided they were reinstated to their earlier posts. Plea of backwages was not seriously argued/pressed by the workmen as could be seen from the material on record. In the circumstances, it was suffice for the Labour Court to direct the Management to reinstate the workmen with continuity of service to their original posts denying backwages and consequential benefits. 33. It is well settled that the initial burden to show that the employee was not gainfully employed lies on him. Thereafter the employer can rebut the claim with positive evidence. In the instant case, the respondents have neither argued nor placed any material in this regard. On the other hand, they were ready to forego the backwages as recorded by the Labour Court. Payment of backwages cannot be the natural consequence while directing reinstatement for the breach of statutory provisions. The prevailing market economy also plays a major role in exercising the discretionary jurisdiction of the court in moulding the reliefs. 34. In the result, writ petition is allowed in part. (i) The common award dated 30.11.2019 passed by the Labour Court in I.D.Nos.14/2017 to 30/2017; 32/2017 to 65/2017 and 67/2017 to 72/2017 is modified. (ii) Relieving letters issued by the petitioner in the aforesaid cases are set aside. (iii) The petitioner shall reinstate the respondents-workmen to their respective original posts within a period of eight weeks from the date of receipt of certified copy of the order with continuity of service without backwages or other consequential benefits. No order as to costs.