Madhya Pradesh HC Upholds Workman's Retrenchment By Krishi Upaj Mandi Samiti Noting Compliance Of Section 25F Industrial Disputes Act

The Gwalior bench of Madhya Pradesh High Court, in a case regarding labour laws, set aside a Labour Court order which had directed the reinstatement of a workman with 50% back wages, after noting that the retrenchment of the workman by the concerned organisation was done following the due process of law.

In doing so the court observed that the petitioner–Krishi Upaj Mandi Samiti (Pichhore), had followed the mandate of Section 25F of the Industrial Disputes Act–which lists the various conditions precedent for retrenchment of workmen–which retrenching the respondent workman. 

A single judge bench of Justice Anand Pathak in its order observed, "Cumulatively, it appears that the compliance of Section 25F of the (Industrial Disputes) Act was made and the labour Court earlier vide award dated 26-07-2010 given liberty to the petitioners for retrenchment and therefore, petitioners retrenched the workman by following due process of law. Even otherwise employee was working in a private school (since 1994-95) during that period and after almost 15 years rose from the slumber and started proceedings in year 2009. Therefore, it suffers from inordinate delay and laches without any explanation". 

With respect to language of Section 25F the high court said that there are two possibilities in case of a retrenchment and both these are distinguished by incorporating the term “OR”.

It said, “Section 25F(a) of the Act contemplates two contingencies. One is that workman has to be given one month's notice in writing indicating reason for retrenchment and then workman shall be retrenched after expiry of one month's notice period. Another contingency is that if workman has been paid wages for the period of the notice in lieu of such notice then also he can be retrenched. Both these contingencies are distinguished by incorporating the word 'OR'”.

The court stated that if wages for the period of one month notice is given and retrenchment compensation is also provided then there is no requirement to give notice to the government under Section 25F(c).

“In other words if employer gives one month's wages then he can dispense sending of one month's notice in writing. Since dispensation of notice is discretion of employer and if he pays wages for the period of notice and as per Section 25F(b) of the Act if he pays retrenchment compensation also at the time of retrenchment then requirement of notice to the appropriate Government as per Section 25F(c) of the Act would not exist," it underscored.

The bench also observed that it would be contrary to the legislative intent of the word 'OR' is omitted during interpretation. It said:

“Once employer decided to pay one month's wages and compensation as per Section 25F(a) and (c) of the Act, then requirement of notice under Section 25F(c) of the Act is not attracted. Any contrary interpretation would impliedly obliterate or omit the word “OR” from the statute book as figured in Section 25F(a) of the Act. That would be contrary to the legislative intent”

The court was hearing the Samiti's plea against a labour court order which reversed the respondent workman's retrenchment by the Samiti. The respondent Mukesh Kumar Bhatt was retrenched in 1994 by the Krishi Upaj Mandi Samiti after which he initiated conciliation proceedings in 2009, 15 years after his termination. When the proceedings failed, he filed a claim before the labour court. The Labour Court in 2018 ordered in favour of the respondent and ordered his reinstatement with partial back wages. The labour court found that the employer did not fully comply with procedural requirements of retrenchment under Section 25F, regarding the notice and compensation.

The High court questioned the respondent's delay in initiating legal action without any explanation and thus ruled in favour of the employer that due process was followed.

“Cumulatively, it appears that the compliance of Section 25F of the Act was made and the labour Court earlier vide award dated 26-07- 2010 given liberty to the petitioners for retrenchment and therefore, petitioners retrenched the workman by following due process of law. Even otherwise employee was working in a private school (since 1994-95) during that period and after almost 15 years rose from the slumber and started proceedings in year 2009. Therefore, it suffers from inordinate delay and laches without any explanation," it said. 

Allowing the petition, the high court set aside the labour court's order. 

Case title: Krishi Upaj Mandi Samiti Pichhore & Ors. Vs. Mukesh Kumar Bhatt

Case No: MISC. PETITION NO. 2923 of 2018

 Citation: 2024 LiveLaw (MP) 293

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