The Special Officer,Omalur v. 1. The Presiding Officer, Labour Court, Salem

In the High Court of Judicature at MadrasDate : 07.03.2007Coram :The Hon'ble Mr. Justice S.J. MUKHOPADHAYAandThe Hon'ble Mr. Justice R. SUDHAKARWrit Appeal No: 2848 of 2002andW.A.M.P.No.639 of 2006The Special Officer,Omalur Taluk Co-operative Land Development Bank Ltd.K.K. 187, Mettur Main Road,Omalur – 626 455,Salem District.... Petitioner-vs-1. The Presiding Officer, Labour Court, Salem. 2. K. Varadarajan, 23, Siviyar Street, Omalur, Salem District. ... Respondents Writ appeal under Clause 15 of Letters Patent against the order ofthis Court dated 07.03.2002 made in W.P. No: 1776 of 1997. WP.No.1776/1997: Petition filed under Article 226 of Constitution of India,to issue a Writ of Certiorari, call for the records from the file of theFirst respondent herein and quash the award passed in ID.No.541 of 1992,dated 5.1.1996.For appellant : Mr. M.R. RaghavanFor 2nd respondent : Mrs. S. Girija https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T(Judgment of the Court was delivered by R. SUDHAKAR,J.) The writ appeal has been filed by the Special Officer, Omalur TalukCo-operative Society, against the order of the learned single Judge dated7.3.2002 in W.P. No: 1776 of 1997 dismissing the writ petition challengingthe award passed in I.D.No.541 of 1992 dated 5.1.1996. The secondrespondent is the employee in question. 2. The brief facts required for the purpose of disposal of the writappeal are as follows :- The second respondent was appointed as a typiston 22.11.1990 and was terminated from service abruptly on 31st October1991 without assigning any reasons. The 2nd respondent having put in 240days of service in twelve continuous calendar months filed a petitionunder Section 2(A)(2) of the Industrial Disputes Act, 1947, hereinafterreferred to as the I.D. Act, in I.D. No: 353 of 1992 before the LabourCourt, Coimbatore, for reinstatement in service with full backwages,continuity of service and for other reliefs. The said I.D. wastransferred to the Labour Court, Salem, and renumbered as I.D. No: 541 of1992. The main contention raised on behalf of the second respondentemployee is that his termination is in violation of Section 25 F of theI.D. Act and that the termination order did not state the nature ofirregularity in the appointment.3. The appellant management disputed the claim of the employeestating that the second respondent was employed on daily wage basis on22.11.1990. He was not employed through employment exchange.Subsequently, his appointment was made on temporary basis on 6.2.1991.The name of the employee was notified through employment exchange on4.3.1991 and he was called for interview once again on 2.5.1991. Theselection was made on 16.5.1991 and put on probation for a period of oneyear on consolidated salary. On 9.7.1991 at the request of the secondrespondent, he was appointed on regular scale of pay at Rs.1,106/- byproceeding dated 10.7.1991. The said appointment was found to beirregular and therefore, he was terminated by the Special Officer byproceedings dated 31.10.1991, which is the subject matter of thechallenge by way of present appeal. The conciliation having failed, thesecond respondent employee approached the Labour Court which culminated inthe passing of the award, which was challenged in the writ petition. Oneof the contentions on behalf of the appellant before the Labour Court wasthat at the time when the second respondent was appointed, he had alreadycrossed the age of 30 years and therefore, in terms of Clause IV ofSpecial Bye-laws of the Bank and also under Rule 149(4) of the Tamil NaduCo-operative Societies Rules 1988, the second respondent could not havebeen appointed. https://hcservices.ecourts.gov.in/hcservices/

4. The Labour Court, Salem, considering the rival contentions, heldthat the order of termination was bad on the ground of non-compliance ofSection 25 F of the I.D. Act, even if the initial appointment wasirregular as alleged. On merits as observed by the learned single Judge,the Labour Court came to the conclusion that, irrespective of the natureof employment, the employee in question has been in continuous employmentfor more than 240 days in 12 continuous calendar months. The Labour Courtalso considered the proceedings dated 10.7.1991, Management Exhibit No.8wherein the second respondent was granted regular scale of pay. Thesecond respondent was not terminated for indiscipline or on account of anyfault in his service. Therefore, the Labour Court held that employershould have complied with the provisions of Section 25 F of the I.D. Act.The Labour Court ordered that second respondent should be reinstated withbackwages and continuity of service. As against the same, the writpetition has been filed and the learned single Judge of this Courtconsidered the provisions of law and the various decisions of the Courtsand came to the conclusion that the termination of the employee inquestion is bad and thereby upheld the award and held as follows :-" 22. From the discussions of the judgementsreferred to above, it is seen that non-compliance ofprinciples of natural justice may render an order oftermination invalid. However, when the services of anemployee, who is governed by the provisions ofIndustrial Disputes Act are sought to be terminated,it should be made in a manner known and covered underthe provisions of I.D. Act. Except exclusion coveredunder Section 2(oo) of I.D. Act, all other terminationwould amount to retrenchment. When such order oftermination, which amount to retrenchment is made, themanagement cannot escape from following Section 25-Fof I.D. Act. It is beyond acceptance how the questionof illegal and invalid appointment could be importedin a dispute made under the Industrial Disputes Act.The idea of illegal or invalid appointments is quiteforeign to the scheme of I.D. Act. The termination ofemployment of a workman on the ground that his initialappointment was not legal and valid itself qualifiesas retrenchment within the meaning of Section 2(oo) ofI.D. Act, as termination on the ground of illegal andinvalid appointment has not been made an exception tothe definition of retrenchment.23. In the case on hand, it is not in disputethat before the impugned order of termination waspassed, the writ petitioner did not comply with theprovisions of Section 25-F of I.D. Act and thereforeonly, the first respondent / Labour Court had rightlycome to the conclusion that the order of terminationof the second respondent from service would amount to https://hcservices.ecourts.gov.in/hcservices/ retrenchment and consequently non-compliance ofsection 25-F of I.D. Act would render the order oftermination invalid. I do not find any error in theaward passed by the Labour Court as the same is inconformity with the law laid down by the SupremeCourt."The present appeal has been filed challenging the said order of thelearned single Judge. 5. The main contention raised by the learned counsel on behalf ofthe appellant is that the original appointment being irregular, thequestion of following the provisions of Section 25 F of the I.D. Act willnot arise and the Labour Court has no jurisdiction to entertain such anapplication on behalf of the employee in question. According to thelearned counsel for the appellant, the provisions of the I.D. Act will notbe applicable in the case of an irregular or illegal appointment. Learnedcounsel relied upon the decision of the Division Bench of this Courtreported in Justin L. and another vs. The Registrar of Co-operativeSocieties, Chennai, reported in 2003 (1) L.L.J. 284. The learned counselsubmitted that the appeal filed against the aforesaid decision wasdismissed by the Supreme Court. It was therefore, contended that in viewof the ratio laid down by the Division Bench, the proceedings underIndustrial Dispute Act is not maintainable and the order of the learnedsingle Judge should be set aside and the I.D. Award as well. 6. The Division Bench judgment reported in 2003-I LLJ 284 (JustineL. - vs. - Registrar of Co-operative Societies) was a case of claim forregularisation of illegal appointment in several Co-operative Societiesacross the State of Tamil Nadu. Most of the writ petitioners contendedthat their appointments should be regularised on the basis of the TamilNadu Industrial Establishments (Conferment of Permanent Status to Workmen)Act, 1981. In most of the cases it appears that there was no vacancy forthe purpose of appointment and it was therefore held by the Court thatillegal appointees were not entitled to statutory protection ofregularisation and permanent status by virtue of the aforesaid Act, 1981.In the above judgment (2003-I LLJ 284), the Division Bench of this Courtheld in paragraph 16 as follows:-"16. Coming to the application of Permanency Actof 1981 or the Industrial Disputes Act, 1947, de horsG.O.Ms.No.86, the said enactments are not applicableto the appointments made in an illegal manner. Thereis a lot of difference between irregularity andillegality. The appointments here are not irregularbut illegal. Irregular is something which is done inan authorised manner but while doing so, there is someprocedural irregularity. Illegality is altogetherdifferent. An action is illegal if it is contrary tolaw. The law in the instant case is so clear that theappointments cannot be beyond the permissible cadre https://hcservices.ecourts.gov.in/hcservices/ strength. The rule mandates the fixation of the cadrestrength. In fact, amendment of Rule 149 byG.O.Ms.No.212 was only made with that objectobligating the societies to fix the cadre strength perforce. Government has felt that the general criteriafor fixation of the educational qualifications or theexecutive instructions fixing the cadre strength withexpenditure not exceeding 2 to 3% of the workingcapital, need to be emphasised in a more clear andeffective manner. For that reason, the Governmentbrought forth amendment to Rule 149, particularly sub-Rule (1) thereof, by which, every society shall,taking into account its nature of business, volume oftransaction and financial position, adopt, with theapproval of the Registrar of Co-operative Societies, aspecial bye-law covering the service conditions of itsemployees and also enumerated the same, which are asstated below:"(i) Cadre strength and classificationof various categories of posts and thequalifications required thereof for each suchpost.(ii) The method of recruitment for eachsuch post.(iii) The scale of pay and allowancesfor each such post.(iv) Conditions of probation for eachsuch post.(v) Duties and responsibilities for eachsuch post.(vi) Leave of various kinds admissibleand, the conditions thereto for each suchpost.(vii) The penalties that may be imposedupon, the procedure for taking disciplinaryaction and inflicting various kinds ofpunishments on an employee holding each suchpost and the authority competent to entertainand dispose of appeal made against an orderof punishment imposed by the competentauthority on a disciplinary proceedings.(viii) Conditions relating to https://hcservices.ecourts.gov.in/hcservices/ acquisition and disposal of movable andimmovable property:Provided that a minimum period of three yearsof satisfactory service shall be prescribedfor eligibility for promotion from onecategory to the immediate next highercategory of post;Provided further that the Co-operativeTraining at the appropriate level may beprescribed as a necessary qualification forspecific categories of non-technical posts."Most of the Societies have not followed the mandateof this Rule. The arguments of the learned counselfor the appellants/petitioners are to the effect thatthe fault lies with the co-operative societies, whichdid not adopt the special bye-laws and for thatreason, they should not be punished. We are unable toaccept this contention for the reason that theillegal appointees cannot have more rights than theco-operative societies themselves. The co-operativesocieties were totally prevented from, making anyappointments until the compliance of the mandate ofthe above Rule adopting a bye-law containing theparticulars specified. Even thereafter, theappointments were to be only strictly as per theapproved special bye-laws and not otherwise.Compassion cannot displace the essential legalrequirements and as already stated above, essentiallegal requirements are the cadre strength and thequalifications and these cannot be bye-passed and anyinfraction in observance of the said essentialrequirement, makes the action of the AppointingAuthority illegal. Neither the Permanency Act of 1981nor the Industrial Disputes Act, 1947, imply thatregardless of the illegal nature of appointments evenat the entry stage, statutory protection is affordedunder the above Acts after the completion of the man-days, be it 480 or 240 prescribed under the abovestatutes. The above two enactments have to be readand understood in the context that if only theappointments are authorised and the employeescontinued even in temporary positions beyond therespective man-days prescribed, the workmen get rightto continue further on the legal presumption that thetemporary posts are allowed to be treated aspermanent. But if the appointment itself is illegal,then the Permanency Act of 1981 or the Industrial https://hcservices.ecourts.gov.in/hcservices/ Disputes Act, 1947 cannot be invoked at all."The various decisions, which were considered and negatived by the DivisionBench was on the contention of the writ petitioners plea with regard toregularisation of the employment, which were stated to be illegal by thedepartment and affirmed by the Court. It was a case of large scaleemployment from time to time without following the rules, the vacancyposition and the procedures prescribed. The Court also considered thedecision of the Apex Court with regard to illegal appointment andirregular appointment. In the present case even as per the counter-statement filed by the employer, the case of the employer is irregularappointment. Nevertheless, the Labour Court considering the documentsfiled came to the conclusion based on Management Ex.8 dated 10.7.1991that the second respondent was employed on a regular scale of pay. Italso came to the conclusion that the employee, the second respondentherein had completed the prescribed period. The learned single Judgewhile not agreeing with the period of employment agreed with the findingof the Labour Court on the finding that the employer had not complied withthe provisions of Section 25F of the Industrial Disputes Act, relying onthe decision of the Apex Court in 1990-II LLJ 70 (Punjab Land Development& Reclamation Corporation Ltd., Chandigarh etc. and several others – vs. -Presiding Officer, Labour Court, Chandigarh etc., and several others) andthe Division Bench Judgment of this Court in 1996-II LLJ 22 (The PresidentSrirangam Co-operative Union Bank Ltd., - vs. - The Presiding Officer,Labour Court, Madurai and another). 7. This Court is not inclined to go into the merits of the rivalclaims and the factual aspect of the case. Suffice it to state that onceit is accepted that the employee in question has been put on regular scaleof pay and the provisions of Section 2(oo) of the Industrial Disputes Act,1947 is attracted, then the employer is bound to follow Section 25F of theAct. The Decision of this Court in 1996-II LLJ 22/216 (cited supra) willbe relevant while considering the issues in the present case. Paragraphs4 and 5 read thus:-"4. We find it very difficult to accept thesecontentions. Firstly, the bank, which had appointedthe petitioner, had taken his services, and paid wagesduring the period he worked, cannot now be permitted tosay that the appointment was bad in law, therefore, itwas entitled to terminate the services withoutfollowing the procedure prescribed under the I.D. Act.The bye-law referred to above, does not require thatthe appointment to be approved by the Registrar of Co-operative Societies. Further, the petitioner was notappointed as regular employee. He was appointed onlyon daily wage basis. The services contemplated underthe bye-laws are the regular appointments and not theappointments on daily wage basis, therefore, thecontentions based upon the special bye-law and thecircular of the Registrar, which cannot be applied to https://hcservices.ecourts.gov.in/hcservices/ the present case, as it is a pure and simple case ofappointment on daily wage basis, cannot be accepted.When once the workman is appointed on daily wage basisand if he works for 240 days in a year, he must be saidto be in continuous service as per Section 25B of theAct, as such, he is entitled to be made permanent.However, we do not propose to enter into this aspect ofthe matter and record any finding on this because it isnot one of the points raised in the dispute referred tothe Labour Court. The dispute referred to the LabourCourt was only with regard to the non-employment of thepetitioner and the computation of relief in term ofmoney if it is held that the petitioner is entitled toreinstatement with back wages. For the purpose of thiscase it is sufficient to point out that the writpetitioner worked for over two years. Thus, he was incontinuous service for more than one year, as such, hewas entitled to the benefit of Section 25F of the Act.The expression 'retrenchment' as per Section 2(oo) ofthe I.D. Act means the termination by the employer ofservice of a workman for any reason whatsoeverotherwise than as a punishment inflicted by way ofdisciplinary action as long as such termination doesnot fall within the category of the voluntaryretrenchment of a workmen or retirement of the workmanon reaching the age of superannuation if the contractof employment between the employer and the workmanconcerned contains a stipulation in that behalf. Thus,Section 2(oo) does not make any difference betweenregular appointment or temporary appointment orappointment on daily wage basis or appointment of aperson non possessing requisite qualification. Clause(bb) in Section 2(oo) came to be inserted only witheffect from August 18, 1984, therefore the saidprovision is not applicable to the present case. Thepresent case also does not fall under Clause (c)because the services of the petitioner have not beenterminated on the ground of continued ill-health.Similarly, Section 25F of the Act specifically providesthat no workman employed in any industry who has beenin continuous service for not less than one year underan employer shall be retrenched by that employer until(a) the workman has been given one month's notice inwriting indicating the reasons for retrenchment andthe period of notice has expired, or the workman hasbeen paid in lieu of such notice, wages for the periodof the notice (b) the workman has been paid at the timeof retrenchment, compensation which shall be equivalentto fifteen days average pay for every completed year ofcontinuous Service or any part thereof in excess of six https://hcservices.ecourts.gov.in/hcservices/ months. This is a case in which the petitioner was incontinuous service for more than one year under thebank irrespective of the fact whether the appointmentmade by the bank was valid one or not. It is not indispute that the petitioner was temporarily appointedby the Board of the Bank on August 1, 1980 as it isspecifically stated in the counter filed by the bankbefore the Labour Court, Madurai which reads thus:"The Board of respondent bank decided onJuly 25, 1980 to appoint the petitionertemporarily with effect from August 1, 1980on wages at Rs.5/- per day and to request theDeputy Registrar of Co-operative Societies toexempt the case of appointment of thepetitioner from the circular of the Registrardated September 17, 1977 as the appointmentwould be against that circular".It is also further stated in paragraph 13 of thecounter that the petitioner was to be confirmed on thedate of termination of the employment, but the bankcould not help terminating his employment instead ofconfirming him. (emphasis supplied)5. From the impugned order of termination of thepetitioner, it is clear that the same has been donepursuant to the direction issued by the Joint Registrarof Co-operative Societies, Tiruchy in the report madeby him in RC.No.14755/81-B5(i) dated April 9, 1982. Itmay be pointed out here that even though thetermination was made pursuant to the direction of theJoint Registrar, nevertheless such a termination wasrequired to be made in accordance with the provisionscontained in Section 25F of the Act inasmuch as thesaid section does not make any difference whether theappointment has been made in accordance with law ornot. The expression used in that section is, 'workmanemployed in any industry who has been in continuousservice for not less than one year under an employer',therefore the factum of employment is relevant and notthe legality or otherwise of it."The Division Bench in the above said case had extensively relied upon thedecision of the Apex Court and came to the conclusion that the provisionof Section 25F of the I.D. Act will have to be followed once it is foundthat the termination is illegal. The decision of the Division Bench ofthis Court in L.Justine's case (2003-I LLJ 284 cited supra) will not beapplicable to the facts of the present case. In the Justine's case (2003-I LLJ 284), the provision of Section 25 F of Industrial Disputes Act did https://hcservices.ecourts.gov.in/hcservices/ not fall for consideration. The only question decided in that case waswhether the illegally appointed employees could be regularised as claimedby them. In the present case, such an issue does not arise forconsideration. So far as the Division Bench decision of this Court inL.Justine's case (2003(1) LLJ 284) is concerned, the said case is relatedto regularisation of service of an employee whose initial appointment wasillegal. The Bench held that the illegal appointee cannot take recourseto the Industrial Disputes Act, 1947, for the purpose of regularisation ofhis services. In the present case, such issue is not involved, but thequestion is while terminating the service of a workman, even on the groundof irregular appointment, whether the provision of Section 25-F of theIndustrial Disputes Act, 1947 is to be followed. The aforesaid questionhas already been decided by a Division Bench of this Court in SrirangamCo-operative Urban Bank Ltd.'s case (1996(2) LLJ 22/216).8. In the instant case, the issue before this Court is whether theemployer is correct in terminating an alleged irregularly appointedemployee by not following the provisions of Section 25 F of the I.D. Act.In view of the clear decision of this Court in Srirangam Co-operativeUrban bank Ltd.'s case, (1996 (2) L.L.J. 22/216), and the pronouncement ofthe Apex Court cited therein, we are of the opinion that the award of theLabour Court is correct and no ground is made out to interfere with thereasoned order of the learned single Judge confirming the same.Accordingly, the writ appeal is dismissed. Consequently, connectedmiscellaneous petition is closed. There shall be no order as to the costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.gp/tsTo:The Presiding Officer, Labour Court,Salem. + 1 CC To M/s.Raghavan, Advocate SR NO. 14096+ 1 CC To M/s.S.Girija, Advocate SR NO.14079gk[co]gp/24.3. W.A. No: 2848 of 2002 07.03.2007