Case Note & Summary
The present Letters Patent Appeals were filed by both the Gujarat State Road Transport Corporation (GSRTC) and its employees against the judgment and order dated 07.02.2023 passed by the learned Single Judge in Special Civil Application No.20437 of 2022. The learned Single Judge had set aside the termination of the employees and directed their reinstatement with continuity of service and full back wages. The GSRTC challenged the order on the ground that the employees were engaged on contract basis and their services were terminated in accordance with the terms of the contract. The employees, on the other hand, sought enhancement of the relief granted by the learned Single Judge. The Division Bench of the High Court of Gujarat at Ahmedabad, comprising Honourable Mr. Justice Bhargav D. Karia and Honourable Mr. Justice L. S. Pirzada, heard the appeals. The court observed that the GSRTC is a 'State' under Article 12 of the Constitution and is bound to act fairly. The termination of the employees without holding any enquiry and without complying with the mandatory provisions of Section 25F of the Industrial Disputes Act, 1947, which requires payment of retrenchment compensation and notice pay, was held to be illegal and void ab initio. The court upheld the order of the learned Single Judge and dismissed the appeals filed by the GSRTC, while also dismissing the appeals filed by the employees seeking enhancement of relief. The court held that the employees are entitled to reinstatement with continuity of service and full back wages.
Headnote
A) Service Law - Termination of Service - Principles of Natural Justice - Section 25F of Industrial Disputes Act, 1947 - The termination of employees of a State Road Transport Corporation without holding any enquiry and without payment of retrenchment compensation and notice pay as required under Section 25F of the Industrial Disputes Act, 1947 is illegal and void ab initio. The court held that the employees are entitled to reinstatement with continuity of service and full back wages. (Paras 1-14) B) Constitutional Law - State under Article 12 - Gujarat State Road Transport Corporation (GSRTC) is a 'State' within the meaning of Article 12 of the Constitution of India and is bound to act fairly and in accordance with the principles of natural justice. The court held that the termination of employees without following due process is arbitrary and violative of Article 14. (Paras 1-14) C) Industrial Disputes Act, 1947 - Retrenchment - Section 25F - The mandatory conditions of Section 25F must be complied with before retrenching any workman. The court held that non-compliance renders the retrenchment invalid and the workman is entitled to reinstatement. (Paras 1-14)
Issue of Consideration
Whether the termination of services of the employees of Gujarat State Road Transport Corporation (GSRTC) without following the principles of natural justice and without complying with the mandatory provisions of Section 25F of the Industrial Disputes Act, 1947 is legal and valid?
Final Decision
The Division Bench dismissed both the Letters Patent Appeals, upholding the order of the learned Single Judge directing reinstatement of the employees with continuity of service and full back wages.
Law Points
- Principles of natural justice
- Termination of service without enquiry
- Section 25F of Industrial Disputes Act
- 1947
- Retrenchment compensation
- Notice pay
- Reinstatement with back wages
- State Road Transport Corporation as 'State' under Article 12
- Applicability of Industrial Disputes Act to public sector undertakings
