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Staff cannot be fired by simple notice, rules SC

The Supreme Court has ruled that the services of a confirmed employee, in both private and government sectors, cannot be legally terminated by a simple notice.

The ruling was handed down by a division bench comprising Justice S Saghir Ahmad and Justice M J Rao while dismissing a special leave petition by a public sector undertaking, Uptron India Ltd, challenging a judgment of the Allahabad high court.

By the impugned judgment dated October 28, 1997, the high court upheld an award of the industrial tribunal, directing reinstatement with 50 per cent back wages of an operator, the termination of whose services by the company was found illegal.

Justice Saghir Ahmad held that clause 17 (g) of the certified standing orders did not give an absolute right to the petitioner company to terminate the services of the respondent.

''The employee against whom action on the basis of this provision is proposed to be taken must be given an opportunity of hearing. The principles of natural justice, which have to be read into the offending clause, must be complied with and the employee must be informed of the grounds on which action was proposed to be taken against her for overstaying on leave,'' Justice Saghir Ahmad observed.

The respondent, Shammi Bhan, was appointed as an operator (trainee) in the petitioner's establishment on June 13, 1980. On completion of training, she was absorbed in that post with effect from July 13, 1981 and was confirmed on July 13, 1982 -- thus acquiring the status of a permanent employee.

With effect from November 7, 1984, Shammi Bhan proceeded and remained till January 29, 1985 on maternity leave. Thereafter, she allegedly remained absent with effect from January 30, 1985 to April 12, 1985 without any application for leave and consequently, by an order dated April 12, 1985, the petitioner informed her that her services stood automatically terminated in terms of clause 17(g) of the certified standing orders of the company.

A dispute having been raised by Shammi Bhan, the state government referred the same to the industrial tribunal. The tribunal, by its award dated July 21, 1992, held that the termination of the services of the respondent amounted to 'retrenchment' within the meaning of the Industrial Disputes Act. And, since all other legal requirements had not been followed, the termination was bad and consequently she was entitled to reinstatement with 50 per cent back wages from the date of termination till the reinstatement.

Justice Saghir Ahmad was of the positive view that any clause in the certified standing orders providing for automatic termination of services of a permanent employee, not directly related to ''production'' in a factory or industrial establishment, would be bad if it did not purport to provide an opportunity of hearing to the employee whose services were treated to have come to an end automatically.

Considering the question whether the termination of services of the respondent amounted to ''retrenchment'' or not, the judge pointed out that what was contended before the tribunal as also before the high court was that the termination was covered by clause (bb) of section 2(00) and, therefore, it could not be treated as ''retrenchment'' with the result that other statutory provisions, specially those contained in section 23f of the act were not required to be complied with. "This argument, which was not accepted by the tribunal and the high court, has been stressed before us also and here also it must meet the same fate as it is without any substance or merit."

''This case does not fall in either of the two stipulations contemplated by clause (bb) of section 2(00) of the act. The 'rule of exception,' therefore, is not applicable in the instant case and consequently, the finding recorded by the tribunal on 'retenchment' cannot be distributed," Justice Saghir Ahmad observed while dismissing the petition.

He said that conferment of a ''permanent'' status on an employee guaranteed security of tenure. ''It is now well settled that the services of a permanent employee, whether employed by the government, a government company, a government instrumentality, a statutory corporation or any other ''authority'' within the meaning of Article 12 of the Constitution, cannot be terminated abruptly and arbitrarily, either by giving him a month's or three months' notice or pay in lieu thereof or even without notice, notwithstanding that there may be a stipulation to that effect either in the contract of service or in the certified standing orders,'' the judge added.

UNI

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