[GAIL Service Rules] Provision On Notice Period Only Applicable In Case Of Employees, Not Probationers: Delhi High Court

The Delhi High Court recently observed that once the employer has a right to terminate the probationer without issuing any notice and without granting any salary in lieu of notice, the same has to be made applicable to the probationer - when he wants to leave the job.

The court made the observation in an judgement allowing an appeal of a probationer. In the decision, the court referred to the GAIL (General Terms and Conditions of Service Rules) that are applicable to the Gas Authority of India Limited employees.

Differentiating between a regular employee and probationer, the division bench comprising of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad said that the requirement of three months prior notice in case of resignation or equivalent pay would not apply to a probationer in this case.

A single bench had earlier dismissed the plea filed by the probationer seeking a refund of three months' pay paid by him to GAIL in lieu of three months' notice while resigning.

The plea was filed by one Paras Khuttan, who joined GIAL as Manager (Law) in 2019. He was appointed on probation for an initial period of one year and after successful completion, he was entitled to be confirmed. However, he resigned before completion of the probation.

GAIL directed him to serve three months' notice or three months' pay instead of the notice. It was Khuttan's case that since he remained in the probation period, the issue of giving prior notice or paying in lieu did not arise. He contended that the employers directed him to submit a total of Rs. 1,74,253 in lieu of the notice period.

Khuttan paid the sum under protest and submitted a representation for a refund. However, his representations were rejected which resulted in moving the High Court. His plea was dismissed by the single judge.

In appeal, Khuttan argued that the single judge kept the probationary and regular employees in one class erroneously and arrived at a conclusion that he was liable to pay three months' salary in lieu of three months' notice.

Setting aside the impugned order, the Court said:

"Once the employer is having a right to terminate the probationer without issuing any notice or without granting any salary in lieu of notice, the same has to be made applicable in case the probationer wants to leave the job and, therefore, to that extent, the learned Single Judge has erred in law and on facts in treating the probationer and regular employee at par in the matter of resignation."

Advocate Anuj Agarwal appearing for Khuttan, relied on the case of Medha Moitra v. Union of India (2019), whereby the Calcutta High Court had accepted a plea arising out of similar circumstances.

On the other hand, Advocate Purnima Maheshwari, counsel for GAIL, argued that being an employee, Khuttan either had to give three months' notice or equivalent pay in lieu as per statutory rules. 

It was also argued that the said condition was mandatory and could not be waived off, as probationers were not placed in a different category. It was further contended that the definition of an employee includes probationers also in the matter of resignation.

The court noted that Manager (LAW) is an E-3 Grade post and perused Khuttan's appointment letter which said the services during the period of termination can be terminated at any point of time without any notice.

It said that GAIL (General Terms and Conditions of Service Rules) make it very clear that there is a distinction between the regular, temporary, daily rated, probationary, apprentice and employees on deputation. 

"It is true that the Rules are applicable to all employees of the Company, however, employees and probationers are also defined under the Rules under the definition Clause," said the court.

Referring to Rule 8.2, which was made basis for payment of three months salary in lieu of notice, the court said it provides that an employee of level E-O and above has to give three months notice of three months salary in lieu of notice.

The court said by no stretch of imagine can Rule 8.2 be made applicable in case of a probationer in the matter of termination. Rule 8.2 starts with 'in case of employees', it noted.

"The present case is an open and shut case of a probationer whose services could have been terminated at any point of time and the probationer was well within the right to resign at any point of time as he was not an employee and he was not covered under ... the Regulations governing the field," added the court.

It said the petitioner is entitled for refund of the amount deposited by him in lieu of notice period and ordered same to be done within a period of three months.

Case Title: Paras Khuttan v. GAIL India Ltd. & Anr

Citation: 2022 LiveLaw (Del) 920

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