Case Note & Summary
The appellant, Laxman, was appointed as a motor driver in the Milk Scheme at Nagpur by the Regional Dairy Development Officer on December 10, 1959. His services were terminated by the Dairy Development Commissioner, Bombay (Respondent No.5) on February 29, 1962, after he had completed a six-month probation period and continued to serve for more than two years. Standing orders that came into force on September 30, 1961 provided that an employee on probation becomes permanent after one year of probationary service. On March 20, 1962, the appellant filed an application under Section 16 of the C.P. and Berar Industrial Disputes Settlement Act, 1947 before the Assistant Labour Commissioner, Nagpur, seeking reinstatement with back wages and continuity of employment. He contended that if the termination was a dismissal, it was void for want of inquiry, and if retrenchment, it was illegal for lack of notice of change under Section 31, and that the termination was made by an authority who had not appointed him. The Assistant Labour Commissioner set aside the termination and directed respondents 3 to 5 to reinstate the appellant with back wages and continuity, holding that the appellant had become a permanent employee after completing the one-year probationary period. Respondents 3 to 5 filed a revision before the State Industrial Court under Section 16(5) of the Act. That court set aside the order and remanded for fresh decision on whether the appellant was a permanent employee and whether he was illegally retrenched. After remand, the Deputy Commissioner of Labour, Nagpur, found that the appellant was not a permanent employee under the Standing Orders, but held that as he was in continuous service, his retrenchment was illegal for non-compliance with Section 25F of the Industrial Disputes Act, 1947, and directed reinstatement with back wages and continuity. Respondents 3 to 5 filed a further revision before the State Industrial Court, which set aside the reinstatement order, held that the appellant was entitled only to retrenchment compensation, and remanded for determination of that compensation. Against this order, respondents 3 to 5 filed a writ petition under Articles 226 and 227 of the Constitution, and the appellant filed a writ petition under Article 226 seeking modification of the State Industrial Court's order and reinstatement with back wages. The Bombay High Court (Nagpur Bench) heard both petitions together and by a common judgment allowed the respondents' petition, holding that the appellant was not an employee within the meaning of Section 2(10) because his dismissal, discharge or removal was not on account of an industrial dispute, and dismissed the appellant's petition. The appellant then appealed to the Supreme Court with certificate. The core legal issue was whether a dismissed, discharged or retrenched employee could invoke the jurisdiction of the authority under the State Act to obtain redress, and whether an application for reinstatement and compensation by a dismissed employee was maintainable under Section 16. The appellant argued that he was a permanent employee and that the termination was illegal; the respondents contended that the appellant was not an employee at the time of the application and was entitled only to compensation. The Supreme Court analysed the definitions in Sections 2(10), 2(12), and 2(13) and the remedial provision of Section 16. It noted that before the 1966 amendment, the definition of employee included an employee discharged on account of any dispute relating to a change under Section 31 or 32; the amendment enlarged it to include an employee dismissed, discharged or removed on account of any industrial dispute. A combined reading shows that persons who had ceased to be in service were also included within the definition of employee. Under Section 16(2), any employee working in an industry to which a notification under sub-section (1) applies may within six months of dismissal, discharge, removal or suspension apply to the Labour Commissioner for reinstatement and payment of compensation for loss of wages. An employee dismissed, discharged or removed on account of any industrial dispute is certainly an employee under Section 2(10), and industrial dispute under Section 2(12) includes any dispute connected with an industrial matter, which under Section 2(13) includes matters relating to dismissal or non-employment. Since the question of reinstatement is itself an industrial dispute, the appellant was an employee within Section 2(10) for the purpose of availing the right under Section 16(2). The Court referred to Central Provinces Transport Services Ltd. v. Raghunath Gopal Patwardhan, Western India Automobile Association v. Industrial Tribunal, and Bennett Coleman & Co. v. Punya Priya Das Gupta. Accordingly, the Supreme Court allowed the appeals, set aside the High Court's judgment, and held that the appellant's application under Section 16 was maintainable.
Headnote
A) Labour Law - Definition of Employee - Dismissed, discharged or removed employees included in definition if cessation is on account of industrial dispute - C.P. and Berar Industrial Disputes Settlement Act, 1947, Sections 2(10), 2(12), 2(13) - The High Court held that a dismissed or retrenched employee was not an employee under Section 2(10) unless termination arose from a pre-existing industrial dispute. The Supreme Court held that a combined reading of Sections 2(10), 2(12) and 2(13) shows that persons who have ceased to be in service due to dismissal, discharge or removal on account of an industrial dispute remain within the definition. Held that since the question of reinstatement itself is an industrial dispute, the appellant qualified as an employee for invoking Section 16. (Paras 1-8) B) Labour Law - Maintainability of Reinstatement Application - Remedy under Section 16(2) for dismissed employee within six months - C.P. and Berar Industrial Disputes Settlement Act, 1947, Section 16 - The appellant filed an application under Section 16 within six months of termination seeking reinstatement and compensation. The High Court ruled the application not maintainable as the appellant was not an employee; the Supreme Court reversed, holding that an employee dismissed, discharged or removed on account of any industrial dispute is an employee under Section 2(10) and can apply to the Labour Commissioner for reinstatement and payment of compensation under Section 16(2). Held that the appeal succeeds and the High Court's decision is set aside. (Paras 1-8)
Issue of Consideration
Whether a dismissed, discharged or retrenched employee is an 'employee' within the meaning of Section 2(10) of the C.P. and Berar Industrial Disputes Settlement Act, 1947 and can invoke the jurisdiction of the authority under the State Act for obtaining redress, particularly whether an application for reinstatement and compensation by a dismissed employee is maintainable under Section 16 of the Act.
Final Decision
Appeal allowed; High Court judgment set aside; held that appellant is an 'employee' within the meaning of Section 2(10) of the C.P. and Berar Industrial Disputes Settlement Act, 1947 and his application under Section 16 is maintainable for reinstatement and compensation.
Law Points
- Dismissed
- discharged or retrenched employees are included in definition of employee under Section 2(10) if cessation is on account of industrial dispute
- question of reinstatement itself constitutes industrial dispute under Section 2(12)
- Section 16(2) provides remedy for dismissed employee within six months
- combined reading of Sections 2(10)
- 2(12) and 2(13) covers ex-employees
- industrial matter includes dismissal or non-employment
- Section 25F Industrial Disputes Act requires compliance for retrenchment
