Financial Constraints Or Pandemic Not Grounds For State Agencies To Sack Employees : Delhi High Court In Air India Pilots Case

"State or its Agencies under Article 12 of the Constitution cannot claim financial constraints or impact of the Pandemic as a ground for dispensing the services of its employees" observed the Delhi High Court in its judgment quashing Air India's decision terminating pilots by directing their reinstatement with back wages.

A single judge bench comprising of Justice Jyoti Singh held thus:

"State or its Agencies under Article 12 of the Constitution cannot claim financial constraints or impact of the Pandemic as a ground for dispensing the services of its employees, in the manner adopted in the present case. State has a fiduciary duty to perform towards the citizens under Article 19(1)(g) and Article 21 of the Constitution and thus it becomes the bounden duty of a welfare State to secure the rights of livelihood of the citizens. In view of the above findings and circumstances, it is held that financial crunch cannot be a relevant consideration in deciding the issue of acceptance of resignations."

Furthermore, the Court was of the view that it was futile for Air India to base its decision on the alleged losses it has been suffering and continues to suffer on the account of covid 19 pandemic.

The decision came in a bunch of petitions filed in pursuance orders passed by Air India wherein resignations tendered by the pilots were accepted after the same were withdrawn by them before their acceptance. Therefore, directions were sought to reinstate the pilots who were serving as permanent employees, with all consequential benefits of continuity of service, seniority, back wages etc.

Issues Frame by the Court

A. Whether the Petitioners were entitled to withdraw their resignations prior to their acceptance by the Respondent (Air India)?

B. Whether it was open to the Respondent (Air India) to accept resignations which stood withdrawn by the Petitioners prior to their acceptance, if the answer to the above question is in the affirmative?

C. Whether financial crisis/distress/crunch of the Respondent (Air India) can be a relevant consideration for accepting resignations of the Petitioners in view of the provisions of CAR?

D. Whether the Petitioners whose terms and conditions of service were governed by Fixed Term Contracts can enforce their contracts of employment and/or seek extension/renewal of the FTCs by invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India?

Court's Observations

The Court while dealing with the submissions made on behalf of the parties observed that the scheme of resignation under the Air India Employees‟ Service Regulations is that a 6 months period notice is mandatory for tendering resignation and that Air India is required to issue an NOC to the pilot.

Observing that the petitioner pilots had had tendered their resignations giving a six months‟ notice to Air India, the Court further opined that Air India did not accept the resignation until the passing of the impugned orders, which was well beyond the six months‟ notice period.

"Petitioners had withdrawn the respective resignations well before the same were accepted. It is apparent that the initial letters of resignations were only prospective or potential resignations and as they indicated a future date from which the resignation was to take effect, such resignations can only be termed as inert, inoperative and ineffective and cannot be said to have caused any jural effect. Consequently, it can be legitimately held that there was no cessation of jural relationship of employer-employee between the Respondent and the Petitioners upto the last day of expiry of six months‟ notice period as it is an admitted case that prior to the said day, resignations were not accepted."

Furthermore, observing that the sole ground for accepting the resignations tendered by the Petitioners was financial distress/crunch, the Court held that State or its Agencies under Article 12 of the Constitution cannot claim financial constraints or impact of the Pandemic as a ground for dispensing the services of its employees.

"With regret I note that in the garb and guise of accepting resignations, quite clearly Respondent has found an easy path to dispense with the services of the Petitioners, without following any procedure known to law and without having to bear the monetary consequences and liabilities thereto." The Court observed at the outset.

The Court also held that the Petitioners who are permanent employees deserve to be reinstated.

"Those employed under the FTCs, where the initial tenure of 5 years is yet to expire would also be entitled to reinstatement till the expiry of the FTCs. For the third category of Petitioners appointed under the FTCs, but whose initial 5 years contracts expired during the pendency of the litigation cannot be reinstated and would only be entitled to consideration for extension of the FTCs." The Court held.

In view of the aforesaid observations, the Court directed Air India to reinstate the Petitioners who are Permanent Employees with continuity of service from the date of expiry of the six months notice period. It is made clear that the intervening period from the date of passing the impugned order till reinstatement shall not be treated as break in service for any purpose.

"Petitioners are entitled to back wages commencing from the date of expiry of their respective notice periods of six months and upto the date of reinstatement. Since it is an admitted case between the parties that on account of Pandemic Covid-19, an order has been issued by the Ministry of Civil Aviation on 15.07.2020, reducing certain allowances etc. and the Pilots in service are being paid accordingly, the Petitioners shall be paid the back wages in accordance with the order dated 15.07.2020 and/or any other Guidelines of the DGCA and the Ministry of Civil Aviation in this respect and at par with their counterparts in service." The Court directed further.

Title: ARJUN AHLUWALIA v. AIR INDIA LIMITED

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