Chandigarh PWD Directed To Pay Compensation Of 4 Lakh To Daily Wager For Violation Of Sections 25-G & 25-H, ID Act ; Punjab And Haryana High Court

Section 25-G of the Industrial Disputes Act, of 1947 mandates that before an employer can proceed with retrenching any worker, they must provide written notice to both the appropriate authority and the affected employees. This notice must detail the reasons for the proposed retrenchment, specify the number of workers to be retrenched, and include other pertinent information. Additionally, the employer is obligated to provide compensation to the retrenched workers, with the amount determined based on factors such as the length of the worker's service and other criteria outlined in the Act.

Section 25-H of the Industrial Disputes Act, of 1947 mandates that employers must obtain prior permission from the appropriate authority before implementing any layoff or retrenchment measures. Furthermore, specific conditions must be met for both layoff and retrenchment scenarios. For instance, conditions for layoff include circumstances such as a shortage of raw materials, power, or machinery breakdown, while conditions for retrenchment encompass scenarios like business closure, technological advancements, or financial constraints.

Brief Facts:

The Workman was appointed as a Mason and began his employment with the Public Works Department (PWD) in Chandigarh, on a daily wage basis starting from February 15, 1995. In October 1995, the muster roll recorded a change in his name from Mohan Singh to Sardara Singh.

Workman brought a case before the Labour Court, claiming he was unjustly terminated from service on December 1, 1995. He argued that his termination was executed without any prior notice, notice pay, or retrenchment compensation, which constituted a violation of Section 25-F of the Industrial Disputes Act, 1947. He also contended that the termination was unfair as employees junior to him were retained, thereby breaching Sections 25-G and 25-H.

The Management argued that he was engaged on a daily wage basis from February 1, 1995, not February 15. It claimed the workman was employed for short periods based on muster roll assignments at a wage of Rs. 73 per day. It further alleged that the workman was repeatedly engaged and re-engaged until he eventually absented himself for the entire month of July 1995 and ceased working altogether on October 17, 1995.

The Labour Court held that the workman completed 240 working days with the Management. Therefore, his oral termination without notice of pay or retrenchment compensation amounted to an illegal termination under Section 25-F of the Industrial Disputes Act.

The court also found that junior workers were retained while the workman was terminated, and new hires were engaged post-termination, which violated Sections 25-G and 25-H. Moreover, the court rejected the Management's claim of abandonment, noting that the workman promptly issued a demand notice disputing his termination and seeking redress.

Observations by the High Court:

The High Court noted that despite the junior employees diligently fulfilling their duties within the Management's office, there was a conspicuous absence of any offer of reinstatement extended by the Management throughout the proceedings before the Labour Court. Such a lack of proactive engagement on the part of the Management suggests a flagrant disregard for the legal provisions enacted to safeguard the rights of workers.

Furthermore, the High Court took cognizance of the fact that in a related writ petition filed by the Management, the operation of the contested award was temporarily stayed by the Division Bench of the High Court. It noted that during the judicial proceedings, the affected worker was receiving back wages up until October 2018, but subsequent to that date, no further remuneration was forthcoming. Upon consultation with the workman, the High Court noted that he reached the age of 70.

Therefore, the High Court held that the grievances of the workman could be satisfactorily addressed by directing the Management to provide a one-time, comprehensive lump-sum compensation payment to the affected individual. Taking into account the length of service rendered by the worker—spanning from February 15, 1995, to December 1, 1995—and the considerable passage of time since the initiation of the dispute, the High Court directed the Management to pay a lump-sum compensation of Rs. 4,00,000.

Case Title: The Secretary To Govt. Of Punjab, Pwd (B& R), Punjab Civil Secretariat, Chandigarh And Ors Vs Mohan Singh And Anr

Case Number: CWP-19981-2002(O&M)

2024 LiveLaw (PH) 173

Advocate for the Petitioner: Mr. Amit Chaudhary, DAG, Punjab

Advocate for the Respondent: Mr. R.K. Gautam, Advocate, and Mr. Vishal Gautam, Advocate

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