Employees Can't Withdraw From Voluntary Retirement Scheme After Stipulated Deadline Or Acceptance Of Benefits: Gujarat High Court

Background

The VRS came in the background of the disinvestment by the Central Government in the Indian Petrochemicals Corporation Limited. Reliance Industries Limited became a major stakeholder of the Company. Consequently, two schemes were launched – the Voluntary Separation Scheme and the Special Separation Scheme in order to downsize the staff.

The Petitioner-workmen submitted that about 2,400 employees had applied for the scheme, but no period was provided to the employee to withdraw himself from the scheme. It was alleged that under the threat of being transferred to other areas, the Petitioners were compelled to apply under the scheme.

The Company on the other hand averred that up to the designated date, 19 employees had made applications for withdrawal and they were allowed to do so. The present Petitioners had not withdrawn their applications before the acceptance. Moreover, they had accepted all benefits flowing from the scheme and thereafter initiated an industrial dispute.

Petitioners contended that the scheme remained in operation upto 20th March 2007 and thus, the occasion to decide the applications was available with the Company only from 21^st March onwards. They added that since the Petitioners had withdrawn their applications before despatch of letters of acceptance on 26^th March, thus there was no acceptance of the proposal under the Contract Act.

The Company opposed this submission on the ground that the acceptance was complete as under Sections 4 and 5 of the Contract Act. The Petitioners had accepted the benefits and were now estopped from challenging the same before the Labour Court.

Findings

Perusing these contentions, the High Court explained that once VRS applications were sent and not withdrawn before the deadline of 20^th March, the contention of the Petitioners vis-a-vis offer and acceptance of Contract cannot be countenanced. It noted that the entire process was digital, since the acceptance had been sent through an online system. The Labour Court had also rightly found that there was no request for oral withdrawal as was suggested by the Petitioners. Addressing the issue under the Contract Act, Justice Vaishnav clarified:

"…considering the question of the effective date, the Hon'ble Supreme Court held that non communication of acceptance does not make the resignation inoperative provided there is in fact an acceptance before withdrawal."

Relying on National Textile Corporation (MP) Ltd. v. M.R. Jadav, Justice Vaishnav averred:

"…the Hon'ble Supreme Court opined that if the contractual scheme gives the option to an employee to voluntarily retire in terms of the scheme and if there is no condition that it will be effective only on acceptance of the employer, the scheme gives an enforceable right to the employee to retire by exercising his option in such a situation a provision in the contractual scheme that the employee will not be entitled to withdraw the option once made will be valid and binding and consequently an employee will not be entitled to withdraw from the option exercise."

Keeping in view these settled principles of law, the High Court held that the Labour Court's award did not suffer from any flaws which would merit the High Court's interference.

Case No.: C/SCA/13747/2021

Case Title: GOHIL RAMESHBHAI AMARSINH v/s INDIAN PETROCHEMICALS CORPORATION LTD.

Citation: 2022 LiveLaw (Guj) 383