The Labour Court Must Give The Employer An Opportunity To Be Heard Before Concluding The Enquiry : Gujarat High Court

Brief Facts:

Letters Patent Appeal No. 414 of 2024 has been filed by the Rajkot Municipal Corporation contesting the order dated 20.3.2024 from Special Civil Application No.7556 of 2023. This order upheld the award of the Labour Court, Rajkot from 26.11.2019 in Reference (LCR) No.73 of 2013, which the Corporation had challenged. The Corporation's appeal was dismissed, leading to the execution of the award being granted to the respondent-workman. The Corporation, aggrieved by both rulings, has brought forth this appeal, primarily addressing Letters Patent Appeal No. 414 of 2024.

The Workman was employed as a "Sweeper" by the Rajkot Municipal Corporation. He was dismissed from service on 18.6.2011 under Section 56(2) of the Gujarat Provincial Municipal Corporation Act, 1949, stating repeated absences as grounds for dismissal. The Corporation defended the dismissal before the Labour Court, arguing that the workman's chronic absenteeism warranted the extreme penalty of dismissal. The Labour Court, however, ruled that the dismissal was a violation of natural justice and ordered reinstatement with 20% back wages. The decision was later upheld by a Single Judge bench of the Gujarat High Court (“High Court”). Feeling aggrieved, the Corporation filed a latent patent appeal.

The Corporation contended that the Labour Court's award and the Single Judge's order were erroneous. It argued that considering the workman's admission of misconduct, an inquiry was unnecessary, or if deemed necessary, the Labour Court erred in not addressing the validity of the domestic inquiry. Moreover, it highlighted the workman's admission of guilt in response to the show cause notice, indicating that even if no formal inquiry was conducted, the admission sufficed.

Observations by the High Court:

The High Court held that the essence of proportionality in imposing penalties must be balanced against the gravity of the misconduct and the employee's position within the organizational structure. However, it held that this cannot disregard the recurring nature of the misconduct, even if the absences were seemingly justified.

Reviewing the written statement submitted by the Corporation, the High Court held that it was evident that instances of past absences, stretching from 8.6.2003 to 18.6.2011, were documented. Despite the Workman's justification of the absences, such as family disputes or financial constraints, each instance was met with a show cause notice and assurances from the Workman that future absences would be avoided. Despite penalties such as fines or stoppage of increments being imposed, the High Court noted that these measures failed to deter the Workman from repeating the misconduct.

Upon examination of the written statement, the High Court noted that the employer explicitly raised the concern that if the Labour Court found the penalty imposition violated principles of natural justice and denied an opportunity for evidence presentation, this should be addressed. However, neither the Labour Court's award nor the learned Single Judge's order addressed this crucial issue.

Despite the Workman's argument that these concerns were not previously raised before the Single Judge, the High Court maintained that it has jurisdiction over such matters. Referring to the decision in Baddula Lakshmaiah and others Vs. Sri Anjaneya Swami Temple and others (1996) 3 SCC 52, the High Court held that it is empowered to examine whether the Labour Court and the Single Judge erred in denying the employer the opportunity to present evidence, especially when such a plea was explicitly made in the written statement.

The High Court referred to the decision of the Supreme Court in M.L.Singla Vs. Punjab National Bank and another reported in (2018) 18 SCC 21 and noted that if the Labour Court determines an inquiry as illegal or in violation of natural justice, it is obligated to allow an opportunity to rectify the issue before reaching a verdict. Therefore, it held that the failure to address the corporation's plea regarding procedural fairness constituted a significant oversight in the adjudication process.

Further, the High Court noted that a defective inquiry and no inquiry are equivalent. This principle was further elucidated in the case of Engineering Laghu Udyog Employees' Union Vs. Judge, Labour Court and Industrial Tribunal and another reported in (2003) 12 SCC 1, where it was held that even if no inquiry has been conducted or if the inquiry conducted by the employer is found defective, the Tribunal must provide an opportunity for both the employer and the employee to present evidence justifying their actions. Therefore, the High Court held that the Labour Court and the Single Judge erred in jurisdiction by not affording the Corporation the opportunity to present evidence before the Labour Court.

Consequently, the matter was remanded back to the Labour Court, with the Corporation granted liberty to lead evidence to substantiate the alleged misconduct committed by the Workman.

Case Title: Rajkot Municipal Corporation Versus Rajeshbhai Ramjibhai Purabiya

LL Citation: 2024 LiveLaw (Guj) 65

Case Number: R/LETTERS PATENT APPEAL NO. 414 of 2024 In R/SPECIAL CIVIL APPLICATION NO. 7556 of 2023 With CIVIL APPLICATION (FOR STAY) NO. 1 of 2024 In R/LETTERS PATENT APPEAL NO. 414 of 2024 With R/LETTERS PATENT APPEAL NO. 415 of 2024 In R/SPECIAL CIVIL APPLICATION NO. 2686 of 2023 With CIVIL APPLICATION (FOR STAY) NO. 1 of 2024 In R/LETTERS PATENT APPEAL NO. 415 of 2024 In R/SPECIAL CIVIL APPLICATION NO. 2686 of 2023

Advocate for the Petitioner: Nishant Lalakiya