Non-Renewal Of Contract During Probation Does Not Amount To 'Retrenchment' Under Industrial Disputes Act: Gujarat High Court

The Petitioner-Aga Khan Rural Support Programme (India) through its Chief Executive had challenged the award of the Labour Court. The Petitioner argued that the Trust was not an 'industry' within the meaning of Sec 2(j) of the ID Act and that they had put an end to the service of the workman during the course of probation. This did not amount to 'retrenchment.' To bolster this contention, reliance was placed on Gujarat Cancer and Research Institute v. Sanjay Chandrakant Vyas 2001(3) GLH 732.

Per contra, the Respondent submitted that the appointment order specifically stated that the Respondent may be continued in service for over two years. Termination prior to this period was violative of the conditions of the order.

Justice Vaishnav referred to Municipal Committee, Sirsa v. Munshi Ram reported in 2005(2) SCC 382, to reiterate: "…it is now a well settled principle of law that the appointment made on probation/ad hoc for a specific period of time and such appointment comes to an end by efflux of time and the person holding such post can have no right to continue in the post."

Further, in the case of Gujarat Cancer and Research Institute, as well, it was held in the context of probation:

"The restrictive provisions relating to retrenchment are not applicable in the facts of the present case as the termination of service of the respondent was squarely covered by the exception clause added to the definition of "retrenchment" in Section 2 (oo) (bb)of the I.D. Act. This is both a case of termination of service of a workman as a result of non-renewal of contract of employment and the contract being terminated under an express stipulation in that behalf contained in the contract. Therefore, the finding of the Labour Court to the effect that the provisions of Sections 25F, 25G and 25H of the I.D Act were violated is incorrect."

Keeping in view the aforesaid precedents, the High Court quashed the impugned order of the Labour Court.

Case No.: C/SCA/10361/2008

Case Title: CHIEF EXECUTIVE & 1 other(s) v/s VANJIBHAI LALJIBHAI CHAUDHARY

Citation: 2022 LiveLaw (Guj) 327

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