Section 25F ID Act Will Apply To Employee's Retrenchment Even If Appointment Was Irregular : Supreme Court

The Supreme Court has held that the requirements specified under Section 25F of the Industrial Disputes Act 1947 for the retrenchment of an employee will apply even if the appointment was irregular.

A bench comprising Justices Ajay Rastogi and Abhay S Oka disagreed with the view expressed by the Kerala High Court that Section 25F of the ID Act will not apply if the appointment was irregular and reversed the High Court's judgment.

"The nature of employment and the manner in which the workman has been employed is not significant for consideration while invoking the mandatory compliance of Section 25F of the Act 1947",  the Supreme Court observed in the judgment.

The Court said that the above conclusion can be noticed from the term 'retrenchment' as defined under Section 2(oo) which in unequivocal terms clearly postulates that termination of the service of a workman for any reason whatsoever.

The Court was considering the case K.V Anil Mithra and Another v. Sree Sankaracharya University of Sanskrit and another, in  which a group of non-teaching staff in the respondent-University were challenging an order passed in 1997 which de-regularized their services. In the first round of litigation, the HC upheld the University's action but left open the issue regarding non-adherence of procedure under Section 25F ID Act to be determined by the Labour Court.

Later, the Labour Court held the termination of the employees to be in violation of Section 25F of the ID Act, and ordered their reinstatement with 50% backwages. This order was reversed by the High Court (first by a single bench, later upheld by a division bench) on the reasoning that Section 25F was no applicable to irregular appointments.

Challenging the High Court's judgment, the workmen approached the Supreme Court.

Section 25F applies if retrenchment is for "any reason whatsoever"

The Supreme Court laid special emphasis on the fact that Section 25F uses the words "for any reason whatsoever" with respect to its application to retrenchment.

The Court noted that condition precedent for the application of the conditions under Section 25F of the Act 1947 is that workman employed in any industry who has been in continuous service for not less than one year.  The scheme of the Act 1947 contemplates that the workman employed even as a daily wager or in any capacity, if has worked for more than 240 days in the preceding 12 months from the alleged date of termination and if the employer wants to terminate the services of such a workman, his services could be terminated after due compliance of the twin clauses (a) and (b) of Section 25F of the Act 1947

The Court observed :

"It leaves no manner of doubt that the nature of every termination of a kind, by the service of a workman, for any reason whatsoever, which the Legislature in its wisdom made a clarification in its intention to be known to the employer that such of the workman whose services, if to be terminated, will amount to retrenchment under Section 2(oo) of the Act except those expressly excluded in the section.

It is not open for us to examine the nature of employment offered to the workman and the manner he had served the employer.."

The judgment authored by Justice Rastogi stated that the High Court's view was unsustainable in law.

"...the finding which has been recorded by the learned Single Judge and confirmed by the Division Bench of the High Court in the impugned judgment that if the appointment has not been properly made after going through the process of selection as provided under the statutory rules/Ordinance, as the case may be, if such irregular appointments are being terminated, Section 25F will not apply to a case of termination of such appointed employees. The view expressed by the High Court in the impugned judgment, in our considered view, is unsustainable in law and is not in conformity with the scheme of the Act 1947 and deserves to be set aside".

Though the Supreme Court upheld the finding that the termination of the services of the employees were in violation of Section 25F, it declined to order reinstatement, having regard to the long passage of time.

The Court considered it just and reasonable to award a lumpsum monetary compensation of Rs.2,50,000/- (Rupees two lakh fifty thousand) to each of the appellants-workmen in full and final satisfaction of the dispute in lieu of right to claim reinstatement with 50% back wages as awarded by the Tribunal.

Case Details

Case Title :  K.V Anil Mithra and Another v. Sree Sankaracharya University of Sanskrit and another

Citation : LL 2021 SC 624

Appearances : Advocate MT George for appellants; Senior Advocate R Basant for respondents

Click here to read/download the judgment