MANAGEMENT OF THE BARARA COOPERATIVE MARKETING-CUM-PROCESSING SOCIETY LTD. versus WORKMAN PRATAP SINGH on 2 January 2019

MANAGEMENT OF THE BARARA COOPERATIVEMARKETING-CUM-PROCESSING SOCIETY LTD.

v.

WORKMAN PRATAP SINGH

(Civil Appeal No. 7 of 2019)

JANUARY 02, 2019

[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]

Industrial Disputes Act, 1947 – s.25(H) – Applicability of –Held: s.25(H) applies to the cases where employer has proposed totake into their employment any persons to fill up the vacancies – Itis at that time, the employer is required to give an opportunity to the“retrenched workman” and offer him re-employment and if suchretrenched workman offers himself for re-employment, he shall havepreference over other persons, who have applied for employmentagainst the vacancy advertised – Industrial Disputes (Central)Rules, 1957 – r.78.

Industrial Disputes Act, 1947 – s.25(H) – Termination fromservice – Respondent working as peon in the appellant-society –Terminated from services in 1985 – Labour court held thetermination as bad in law and awarded lump sum compensation ofRs.12500 to the respondent in lieu of reinstatement in service – Writpetitions by both the parties were dismissed by High Court –Thereafter, respondent accepted the compensation which wasawarded by labour court – In 1993, respondent prayed for re-employment in the appellant’s services in terms of s.25(H) in viewof regularization of services of two peons in that year – Entitlementof respondent to claim re-employment – Held: There was no casemade out by the respondent (workman) seeking re-employment inthe appellant’s services on the basis of s.25(H) – Respondent havingaccepted the compensation awarded to him in lieu of his right ofreinstatement in service, the said issue finally came to an end –Moreover, s.25 (H) had no application to the case at hand – Inorder to attract the provisions of s.25(H), the workman has to provethat he was the “retrenched employee” and that his ex-employerhas decided to fill up the vacancies in their set up and, therefore,he is entitled to claim preference over those persons, who have

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Aapplied against such vacancies for a job while seeking re-employment in the services – This was, therefore, not a case of aretrenchment of the respondent from service as contemplated unders.25(H) of the ID Act.

Industrial Disputes Act, 1947 – s.25(H) – Regularization andBemployment – Distinction between – Held: The expression‘employment’ signifies a fresh employment to fill the vacancieswhereas the expression ‘regularization of the service’ signifies thatservices of the employee, who is already in service are regularizedas per service regulations.

CAllowing the appeal, the Court

HELD: 1. The object behind enacting Section 25(H) of theID Act is to give preference to retrenched employee over otherpersons by offering them re-employment in the services whenthe employer takes a decision to fill up the new vacancies. SectionD25(H) of the ID Act is required to be implemented as per theprocedure prescribed in Rule 78 of the Industrial Disputes(Central) Rules, 1957 which, in clear terms, provides that Section25(H) of the ID Act is applicable only when the employer decidesto fill up the vacancies in their set up by recruiting persons. Itprovides for issuance of notice to retrenched employee prescribedEtherein in that behalf. In order to attract the provisions of Section25(H) of the ID Act, it must be proved by the workman thatfirstly, he was the “retrenched employee” and secondly, his ex-employer has decided to fill up the vacancies in their set up and,therefore, he is entitled to claim preference over those persons,Fwho have applied against such vacancies for a job while seekingre-employment in the services. [Paras 17, 18, 19][5-F-H; 6-A-B]

2. The case at hand is a case where the respondent’stermination was held illegal and, in consequence thereof, he wasawarded lump sum compensation of Rs.12,500/- in full and finalGsatisfaction. It is not in dispute that the respondent also acceptedthe compensation. This was, therefore, not a case of aretrenchment of the respondent from service as contemplatedunder Section 25(H) of the ID Act. That apart and moreimportantly, the respondent was not entitled to invoke theprovisions of Section 25 (H) of the ID Act and seek re-employment H

by citing the case of another employee (Peon) who was already inemployment and whose services were only regularized by theappellant on the basis of his service record in terms of the Rules.[Paras 20, 21][6-B-D]

3. There lies a distinction between the expression‘employment’ and ‘regularization of the service”. The expression‘employment’ signifies a fresh employment to fill the vacancieswhereas the expression ‘regularization of the service’ signifiesthat the employee, who is already in service, his services areregularized as per service regulations. The Labour Court was,therefore, justified in answering the reference in appellant’sfavour and against the respondent by rightly holding that Section25(H) of the ID Act had no application to the facts of this casewhereas the High Court was not right in allowing the respondent’sprayer by directing the appellant to give him re-employment onthe post of Peon. [Paras 23, 24][6-F-H]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7 of2019.

From the Judgment and Order dated 21.02.2014 of the HighCourt of Punjab and Haryana at Chandigarh in LPA No. 317 of 2010 inW.P. (C) No. 15066 of 2006.

Ajay Kumar, Sandeep Garalisa, Vipin Kumar Jai, Advs. for theAppellant.

Shish Pal Laler, Sonit Sinhmar, Devesh Kumar Tripathi, Advs. forthe Respondent.

ABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. This appeal is directed against the final judgment and orderdated 21.02.2014 passed by the High Court of Punjab & Haryana atChandigarh in L.P.A. No. 317 of 2010 whereby the Division Bench ofthe High Court dismissed the appeal filed by the appellant herein andaffirmed the judgment dated 26.11.2009 passed by the Single Judge ofthe High Court in CWP No.15066 of 2006 by which the respondentherein was ordered to be reinstated into service with back wages.

3. Few relevant facts need mention hereinbelow to appreciatethe short controversy involved in this appeal.

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A4. The appellant is the Co-operative Marketing Society. Therespondent was working with the appellant as a Peon from 01.07.1973.The appellant terminated the services of the respondent on 01.07.1985.The respondent, therefore, got the reference made through the State tothe Labour Court to decide the legality and correctness of his terminationorder.B

5. By award dated 03.02.1988, the Labour Court held therespondent’s termination as bad in law and accordingly awarded lumpsum compensation of Rs.12,500/- to the respondent in lieu of reinstatementin service.

6. The appellant and respondent both were aggrieved by the awardand filed writ petitions before the High Court to challenge the legalityand correctness of the award passed by the Labour Court. The HighCourt, however, dismissed both the writ petitions. The respondent thenaccepted the compensation, which was awarded by the Labour Court.

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D7. In the year 1993, the respondent filed a representation to theappellant praying therein that since the appellant has recently regularizedthe services of two peons on 01.01.1992 vide their resolution dated02.08.1993, therefore, he has become entitled to claim re-employmentin the appellant’s services in terms of Section 25 (H) of the IndustrialDisputes Act, 1947 (hereinafter referred to as “the ID Act”). TheEappellant, however, did not accept the prayer made by the respondent.

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8. This led to making of an industrial reference to the LabourCourt by the State at the instance of the respondent for deciding thequestion as to whether the respondent is entitled to claim re-employmentin the appellant’s services in terms of Section 25 (H) of the ID Act.

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9. The Labour Court answered the reference against therespondent and in appellant’s favour. In other words, the Labour Courtheld that the respondent was not entitled to claim any benefit of Section25 (H) of the ID Act to claim re-employment in the appellant’s serviceson the facts stated by the respondent in his statement of claim.

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10. The respondent felt aggrieved and filed writ petition in theHigh Court. The Single Judge by order dated 26.11.2009 allowed thewrit petition and set aside the award of the Labour Court. The HighCourt directed re-employment of the respondent on the post of Peon inthe appellant’s services. The appellant-employer felt aggrieved and filedHappeal before the Division Bench.

MGMT. OF THE BARARA CO-OP MKTG-CUM-PROCESSINGSOC. LTD. v. PRATAP SINGH [ABHAY MANOHAR SAPRE, J.]

11. By impugned order, the Division Bench dismissed the appealand upheld the order of the Single Judge, which has given rise to filing ofthe present appeal by way of special leave in this Court by the employer-the appellant.

12. Heard Mr. Ajay Kumar, learned counsel for the appellant andMr. Shish Pal Laler, learned counsel for the respondent.

13. Having heard the learned counsel for the parties and on perusalof the record of the case, we are inclined to allow the appeal and whilesetting aside the orders of the High Court (Single Judge and the DivisionBench) restore the award of the Labour Court.

14. In our considered opinion, there was no case made out by therespondent (workman) seeking re-employment in the appellant’s serviceson the basis of Section 25 (H) of the ID Act.

15. In the first place, the respondent having accepted thecompensation awarded to him in lieu of his right of reinstatement inservice, the said issue had finally come to an end; and Second, Section25 (H) of the ID Act had no application to the case at hand.

16. Section 25(H) of the ID Act applies to the cases whereemployer has proposed to take into their employment any persons to fillup the vacancies. It is at that time, the employer is required to give anopportunity to the “retrenched workman” and offer him re-employmentand if such retrenched workman offers himself for re-employment, heshall have preference over other persons, who have applied foremployment against the vacancy advertised.

17. The object behind enacting Section 25(H) of the ID Act is togive preference to retrenched employee over other persons by offeringthem re-employment in the services when the employer takes a decisionto fill up the new vacancies.

18. Section 25(H) of the ID Act is required to be implemented asper the procedure prescribed in Rule 78 of the Industrial Disputes(Central) Rules, 1957 (hereinafter referred to as “the ID Rules”) which,in clear terms, provides that Section 25(H) of the ID Act is applicableonly when the employer decides to fill up the vacancies in their set up byrecruiting persons. It provides for issuance of notice to retrenchedemployee prescribed therein in that behalf.

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A19. So, in order to attract the provisions of Section 25(H) of theID Act, it must be proved by the workman that firstly, he was the“retrenched employee” and secondly, his ex-employer has decided to fillup the vacancies in their set up and, therefore, he is entitled to claimpreference over those persons, who have applied against such vacanciesfor a job while seeking re-employment in the services.B

20. The case at hand is a case where the respondent’s terminationwas held illegal and, in consequence thereof, he was awarded lump sumcompensation of Rs.12,500/- in full and final satisfaction. It is not indispute that the respondent also accepted the compensation. This was,therefore, not a case of a retrenchment of the respondent from serviceCas contemplated under Section 25(H) of the ID Act.

21. That apart and more importantly, the respondent was not entitledto invoke the provisions of Section 25 (H) of the ID Act and seek re-employment by citing the case of another employee (Peon) who wasalready in employment and whose services were only regularized by theDappellant on the basis of his service record in terms of the Rules.

22. In our view, the regularization of an employee already in servicedoes not give any right to retrenched employee so as to enable him toinvoke Section 25 (H) of the ID Act for claiming re-employment in theservices. The reason is that by such act the employer do not offer anyEfresh employment to any person to fill any vacancy in their set up butthey simply regularize the services of an employee already in service.Such act does not amount to filling any vacancy.

23. In our view, there lies a distinction between the expression‘employment’ and ‘regularization of the service”. The expressionF‘employment’ signifies a fresh employment to fill the vacancies whereasthe expression ‘regularization of the service’ signifies that the employee,who is already in service, his services are regularized as per serviceregulations.

24. In our view, the Labour Court was, therefore, justified inGanswering the reference in appellant’s favour and against the respondentby rightly holding that Section 25(H) of the ID Act had no application tothe facts of this case whereas the High Court (Single Judge and DivisionBench) was not right in allowing the respondent’s prayer by directingthe appellant to give him re-employment on the post of Peon.

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MGMT. OF THE BARARA CO-OP MKTG-CUM-PROCESSINGSOC. LTD. v. PRATAP SINGH [ABHAY MANOHAR SAPRE, J.]

25. In view of the foregoing discussion, the appeal succeeds andis accordingly allowed. Impugned order is set aside and the award of theLabour Court is restored.

Devika Gujral

Appeal allowed.

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