Case Note & Summary
The Supreme Court heard an appeal by special leave filed by Air India Corporation against an award of the Central Government Labour Court, Bombay, which had held that the termination of V. A. Rebellow's services was in breach of Section 33 of the Industrial Disputes Act, 1947. Rebellow, employed as an Assistant Station Superintendent, was terminated with immediate effect and one month's salary in lieu of notice by an order dated June 19, 1965. At the time, an industrial dispute was pending before the National Industrial Tribunal, Delhi. Rebellow filed a complaint under Section 33A alleging that the termination was illegal because the employer did not obtain approval as required under Section 33. The Labour Court decided preliminary issues in Rebellow's favour, holding he was a workman concerned in the pending dispute and that the discharge was not a simpliciter termination but a breach of Section 33. The Supreme Court examined the scope of Section 33(1)(b) and 33(2)(b) and held that the statutory ban applies only to discharge or punishment for misconduct, whether connected or unconnected with a pending dispute. The termination order did not on its face mention misconduct, and the employer had invoked Regulation 48 of Air India Employees' Service Regulations, which allowed termination without assigning any reason. The Court held that action under Regulation 48 could be taken at the employer's discretion, and the employer was not bound to disclose reasons unless the termination was challenged as malafide. The Court found that the reason given by the appellant in its written statement—loss of confidence due to grave suspicions about Rebellow's conduct with air hostesses—was bona fide and not malafide. Bona fide loss of confidence does not amount to misconduct and is immune from challenge in industrial adjudication. The Court also observed that the question whether the reason stated in the written statement filed without prejudice could be taken into account was left open. Consequently, the Supreme Court held that the termination was not hit by Section 33 and was permissible. The appeal was allowed, and the Labour Court's award was set aside, resulting in the dismissal of Rebellow's complaint under Section 33A.
Headnote
A) Industrial Disputes - Section 33 Approval for Misconduct - Sections 33(1)(b) and 33(2)(b) of Industrial Disputes Act, 1947 - Scope of statutory ban - The ban under Section 33(1)(b) and 33(2)(b) applies only to discharge or punishment for misconduct connected with a pending dispute, requiring prior permission or approval, but does not restrict termination not based on misconduct. Held that an employer is free to take action against workmen other than protected workmen if not based on misconduct. (Paras 1-2) B) Industrial Disputes - Termination Simpliciter under Service Regulation - Regulation 48 of Air India Employees' Service Regulations - No misconduct inferred from termination order - The termination order which simply states services are terminated with immediate effect and one month's pay in lieu of notice does not on its face show discharge or punishment for misconduct; prima facie it is not an order discharging or punishing for misconduct. Held that such termination is not hit by Section 33. (Paras 3-4) C) Industrial Disputes - Employer's Right to Terminate without Reason - Regulation 48 of Air India Employees' Service Regulations - Employer's discretion not reviewable unless malafide - Action under Regulation 48 can be validly taken at employer's sweet-will without assigning any reason and employer is not bound to disclose why he does not want to continue a particular employee; however, the form of order is not decisive and attending circumstances may be examined to test bona fides, but motive if not malafide is not open to question. Held that termination is valid unless malafide. (Paras 5-6) D) Industrial Disputes - Loss of Confidence as Ground for Termination - Not Misconduct - Bona fide loss of confidence in employee's suitability for job is not misconduct and termination on that ground is immune from challenge, even if opinion erroneous if bona fide; employer's loss of confidence cannot be considered malafide when employee had to deal with air hostesses and employer was not fully satisfied beyond suspicion about his conduct. Held that termination based on bona fide loss of confidence is permissible and immune from challenge. (Paras 7-8) E) Industrial Disputes - Procedural Issue - Consideration of Pleadings - The court left open the question whether the reason stated in the appellant's written statement filed without prejudice and pursuant to the direction of the Labour Court could be taken into account for determining misconduct. Held that the issue need not be decided. (Paras 9-10)
Issue of Consideration
Whether termination of services under Regulation 48 of Air India Employees' Service Regulations without assigning any reason and with one month's salary in lieu of notice, while an industrial dispute was pending, amounted to discharge or punishment for misconduct requiring approval under Section 33 of Industrial Disputes Act, 1947; and whether the respondent was a workman concerned in the pending industrial dispute.
Final Decision
The Supreme Court held that termination of services under Regulation 48 without assigning any reason and with one month's pay in lieu of notice was not a discharge or punishment for misconduct and therefore did not attract Section 33 of the Industrial Disputes Act, 1947. The loss of confidence stated by the employer was bona fide and not malafide, and such bona fide loss of confidence was not misconduct; the termination was permissible and immune from challenge. The appeal was allowed, the Labour Court's award was set aside, and the respondent's complaint under Section 33A was dismissed.
Law Points
- Section 33(1)(b) and 33(2)(b) of Industrial Disputes Act
- 1947 ban discharge or punishment for misconduct connected or unconnected with pending dispute
- termination under Regulation 48 of Air India Employees' Service Regulations without assigning reason is not for misconduct
- employer not bound to disclose reason for termination
- bona fide loss of confidence is not misconduct and is immune from challenge
- form of termination order not decisive but attending circumstances open to test bona fides
