Oral Termination Of Workman Violates S.25F Of Industrial Disputes Act: Gujarat High Court Orders Lumpsum Compensation

The Gujarat High Court has recently granted relief to a workman who was terminated from his services via an oral communication, in violation of mandatory provisions pertaining to retrenchment under Sections 25F and 25G of the Industrial Disputes Act, 1947.

Justice Vipul Pancholi ordered that the aggrieved workman be paid Rs.2,50,000/- towards lump-sum compensation to Respondent No.1-Workman, in lieu of reinstatement with continuity of service and 20% back-wages.

The Petitioner, a Cooperative society, was challenging the order of Labour Court granting reinstatement with continuity of service form the date of termination as well as 20% backwages to the Respondent-workman.

The Respondent-workman herein was appointed as a clerk in the Petitioner-Cooperative Society in 1999 and was earning a salary of INR 2,300 per month. Subsequently, he was terminated orally by the society without following the provisions of Sections 25F and 25G of the Industrial Disputes Act. Thereafter, the workman had raised an industrial dispute before the competent authority seeking. The same was granted by the Labour Court vide an order of January 2018.

Section 25F provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice.

Section 25G contemplates the procedure for retrenchment where the workman to be retrenched belongs to a particular category of workmen.

The Petitioner-Society contested that Respondent No.1-workman was not appointed after following the due procedure and the recruitment procedure, instead, it was nothing but a back-door entry. Further, they had endured huge financial loss and due to heavy expenditure, the Respondent -Workman was asked not to attend work. Therefore, the mandatory provisions of Sections 25F and 25G of the Industrial Disputes Act were not breached.