Case Note & Summary
The present batch of civil appeals arises from a common judgment of the Bombay High Court (Nagpur Bench) which dismissed the writ petitions filed by the Maharashtra State Road Transport Corporation (MSRTC) challenging the awards of the Industrial Court and Labour Court that directed reinstatement of the respondent employees with full back wages. The respondents were employed as daily wage or contractual employees by the MSRTC and were retrenched without following the procedure under Section 25-F of the Industrial Disputes Act, 1947. The Industrial Court and Labour Court found that the retrenchment was illegal and ordered reinstatement with full back wages. The MSRTC challenged these orders before the High Court, which upheld the awards. The Supreme Court, after hearing the parties, dismissed the appeals, holding that the retrenchment without compliance with Section 25-F is void ab initio and that the employees are entitled to reinstatement with full back wages. The court also held that the burden of proof regarding completion of 240 days of continuous service lies on the employer, and in the absence of such proof, the employee is deemed to have completed 240 days. The court further held that reinstatement with full back wages is the normal rule for illegal retrenchment and no exceptional circumstances were shown to deviate from this rule.
Headnote
A) Industrial Law - Retrenchment - Section 25-F of Industrial Disputes Act, 1947 - Retrenchment without compliance with Section 25-F is void ab initio - The court held that the retrenchment of the respondent employees without payment of compensation and without notice or pay in lieu of notice as required under Section 25-F is illegal and the employees are entitled to reinstatement with full back wages (Paras 1-26). B) Industrial Law - Continuous Service - Section 25-B of Industrial Disputes Act, 1947 - Completion of 240 days of continuous service - The court held that the burden of proof lies on the employer to show that the employee has not completed 240 days of continuous service; in the absence of such proof, the employee is deemed to have completed 240 days (Paras 1-26). C) Industrial Law - Reinstatement - Back Wages - Normal rule for illegal retrenchment - The court held that reinstatement with full back wages is the normal rule when retrenchment is found to be illegal due to non-compliance with Section 25-F, and no exceptional circumstances were shown to deny full back wages (Paras 1-26).
Issue of Consideration
Whether the retrenchment of the respondent employees by the Maharashtra State Road Transport Corporation without complying with Section 25-F of the Industrial Disputes Act, 1947 was illegal and whether they are entitled to reinstatement with full back wages.
Final Decision
The Supreme Court dismissed all the appeals, upholding the judgment of the Bombay High Court and the awards of the Industrial Court and Labour Court. The court held that the retrenchment of the respondent employees without compliance with Section 25-F of the Industrial Disputes Act, 1947 was illegal and void ab initio, and the employees are entitled to reinstatement with full back wages.
Law Points
- Retrenchment without compliance with Section 25-F of Industrial Disputes Act
- 1947 is void ab initio
- Reinstatement with full back wages is the normal rule for illegal retrenchment
- Contractual employees are entitled to protection under Section 25-F if they have completed 240 days of continuous service
- Burden of proof on employer to show non-completion of 240 days
- Section 25-B defines continuous service
- Section 2(oo) defines retrenchment
- Section 25-G principle of last come first go
- Section 25-H preference to retrenched workmen.
