_______________________________________ UNFAIR DISMISSAL OF WORKMEN IN INDIA1 _______________________________________

INTRODUCTION
Dismissal is termination of services by the way of punishments for some misconduct or for unauthorized or prolonged absence from duty.2 An employer is free to select anyone according to his requirements but he does not have the liberty to fire his workman3 at his will. This has become more difficult after introduction of Industrial Disputes Act, 1947(hereinafter referred to as IDA).4 According to S. 2A5 of IDA, dispute arising out of dismissal of a workman shall be deemed to be an industrial dispute notwithstanding that any other workman nor any union is a party to dispute. Dismissal is different from discharge as the later is termination of contract by notice or payment of wages in lieu of notice, whereas dismissal implies not merely termination without notice or payment but essentially indicates a measure of punishment.6 Discharge is necessary incidence of the right of an employer to terminate
1 2

Gaurav Garwa, Student, B.A. LL.B. (Hons.), NALSAR, UNIVERSITY OF LAW, HYDERABAD Z.M.Sahid Siddiqi, M. Afzal Wani, Labour Adjudication in India, ed. 2001, p.166 3 Section 2(s) of Industrial Disputes Act, 1947 defines workman according to which it includes any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person - (i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. 4 Ibid at p.165 5 inserted by amendment act of 1965. 6 Ibid at p.166.

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the services of an employee under the terms and conditions of employment. In the case of termination of employment or discharge, the employee would be entitled to his full provident fund, gratuity and other benefits. Dismissal on the other hand, is a result of some misconduct, which might deprive him of a number of benefits.7 The immediate dismissal of an employee is a strong measure, and can only be done in exceptional circumstances that an employer is acting properly in summarily dismissing an employee on his committing a single act of negligence. The test to be applied varies with the nature of the business and the position held by employee, and decisions in other cases are of little value.8 For eg. In case of the business of life insurance a mistake in accepting a risk may lead to a considerable loss, and repetition of such mistake may lead to disaster. If a person in charge of the life insurance department subject to the supervision of superior officers shows by his conduct or negligence that he can no longer command their confidence, and if when an explanation is called for he refuses apology or amendment, his immediate dismissal is justifiable.9 But in the statute there is no provision for summary dismissal and the workman has to be given opportunity to explain his conduct and to show cause why he should not be dismissed. During this procedure there should not be any violation of principles of natural justice.10 Industrial Tribunal/ Labour Courts have been given power to see whether the termination of services of workman is justified or not and to give appropriate relief.

ROLE OF STATUTORY BODIES

Power is given to Labour Courts, tribunals and national tribunals to give appropriate relief in case of discharge or dismissal of workmen under s. 11 A of IDA. In the case of dismissal for misconduct, the labour court/tribunal does not act as a court of appeal and substitute its own judgment for that of management.11
7 8 9 10 11

D.B.R. Mills v. Workmen, 1952 LAC 540 K.D.Shrivastav, The Industrial Disputes Act, 1947, 6th ed., 1985, p.180 Jupiter General Insurance Company v. Ardeshir Bomanji Shroff, AIR 1937 PC 223. Supra n.1 at 166. Indian Iron and Steel Co. Ltd v. Their Workmen (1958) 1 LLJ 260.

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It will interfere:(1) If there is want of good faith. (2)When there is victimization or unfair labour practice. (3)Management has been guilty of a basic error or violation of the principles of Natural Justice. (4)When on the material finding is baseless or perverse. 12

WHEN DISMISSAL IS UNLAWFUL

Termination of employment is unlawful if it is for reasons related to trade union membership or activity; filing complaints concerning the employer; race, colour, sex, marital status, pregnancy, religion, political opinion or social origin. In addition, termination of employment in violation of fair labour practices as defined by legislation or case law will not be valid. The IDA lists some practices which will be considered to be Unfair Labour Practices in its fifth schedule. These include dismissal on account of trade union activity or membership; dismissal by way of victimization; dismissal not in good faith but in the colourable exercise of the employers rights; dismissal by falsely implicating a worker in a criminal case or on false or trumped-up allegations of absence without leave, dismissal without due regard to natural justice or for minor misconduct leading to disproportionate punishment. The list is not exhaustive.13

PROCEDURE TO BE FOLLOWED FOR INITIATING DISCIPLINARY ACTION

There is no specific procedure prescribed for disciplinary action either in industrial disputes act or in the rules made there under, which should be compiled with, before punishing the industrial workers but the following things need to be considered by the employer while dismissing an employee.

12 13

Ibid at 166. http://www.ilo.org/public/english/dialogue/ifpdial/info/termination/countries/india.htm

PRESENCE OF MISCONDUCT The definition of misconduct is not provided either in IDA or Industrial Employment (Standing Orders) Act, 1946.14 Although illustrative list(& not exhaustive) is provided in S. 14(3) of Model Standing orders under Industrial Employment(Standing Orders) central Rules 1946 framed under Indian Employment (Standing Orders) Act 1946 by the Central Government and various cases such as J J Mody v. State of Bombay15 and Sharda Prasad Onkar Prasad Tiwari v. Central Railway16. Also, the employer may frame their own standing orders suited to the peculiar exigencies of their industries or establishment.17 The foremost duty of employee is to obey the order which the employer is justified in giving under the terms of employment either express or implied. All orders concerning the work which the employee is required to do and the time, the manner and the place of performing it are presumable and in the absence of any special circumstances, are within the control of employer. So, doing some act which an employee should not do, or not doing something which he is required to do amounts to misconduct. Certain cases suggest that non observance of duty, negligence of duty18, absence without leave & good cause19, illegal strikes20, go slow21, theft22, acts subversive of

14 15

E.M.Rao(ed.) O.P. Malhotra, The Law of industrial Disputes, 6th ed., 2004, p.1120 AIR 1962 Guj 197, 202(DB) 16 1960 1 LLJ 167, 170 (Bom.) DB. 17 Supra n. 13 at p.1121. 18 A single instance of such acts or omissions unless attended by serious consequences would not constitute the misconduct of habitual negligence but when such acts committed habitually can justify the penalty of dismissal. (Navinchandra Shakerchand Shah v. Ahmedabad Cooperative Department Stores Ltd. (1979) 1 LLJ 60, 63 (Guj) DB.) 19 The defence open for employee is that his absence without leave was on account of circumstances beyond his control. [Rabindranath Sen v. First Industrial Tribunal, West Bengal (1963) 1 LLJ 567 (Cal)] 20 With regard to quantum of punishment for misconduct of engaging in illegal strike, Sinha J. explained in the case of India General Navigation and Rly Co. Ltd v. Their Workmen (1960) 1 LLJ 13 that clear distinction has to be made between workmen taking part in obstructing the loyal workmen from carrying on their work, or taking part in violent demonstrations, or acting in defiance of law and order and those workmen who were more or less silent participators. 21 SU Motors Private Ltd. v. Their Workmen (1990) 2 LLJ 39 (SC) 22 The punishment of dismissal for minor and trifling acts of theft are unwarranted and unsustainable. [P Orr Sons Pvt. Ltd. v. Presiding Officer, Labour Court (1974) 1 LLJ 517 (Mad)]

discipline23, riotous behavior24, damage to property and reputation25, corruption and dishonesty & fraud26 amounts to misconduct. Mere irregularities have been held not to constitute misconduct.27 CHARGE SHEET A charge sheet is an allegation of misconduct, misbehavior, indiscipline, lack of interest in work, negligence etc. on the part of employee. It is a memorandum of charges which consists of facts and allegations which the person issuing wants to establish against an employee.28 The charge sheet must be in writing29 and should be very clear so that it can give the concerned employee a fair idea of charges which he has to face.30 Under clause 14 in schedule 1 of the Industrial Employment (standing orders) Rules, 1946, dealing with disciplinary action for misconduct, sub clause (4) lays down that no order of dismissal shall be made unless the workman concerned is informed of, in writing, of the alleged misconduct and is given an opportunity to explain the circumstances alleged against him.31 DOMESTIC ENQUIRY There is no provision either in the IDA or industrial employment (standing orders) act which states that an order of dismissal is illegal if is not preceded by a proper and valid domestic enquiry. So, the only obligation of a person conducting the enquiry is that he will have to comply with the rules of natural justice. In Associated Cement Co. v. Workmen,32 the court said that domestic enquiry should be conducted by those who are not likely to import their personal knowledge into

23

This term has wider impact and connotation as it covers all those acts which tend to destroy discipline at workplace. Whether an act is subversive of discipline constituting misconduct will depend upon the circumstances of each case. [WM Agnani v. Badri Das (1963) 1 LLJ 684, 689 (SC).] 24 Ramakant Sharma v. State of Uttar Pradesh 1982 Lab IC 1790 (SC). 25 Hindustan General Electrical Corpn Ltd v. Bishwanath Prasad (1971) 2 LLJ 340 (SC). 26 Vimla v. Delhi Administration AIR 1963 SC 1572. 27 Itticheria v. State of Kerala, (1958) 2 LLJ 724. 28 Supra n. 1 at 171. 29 Marwari Relief Society v. Bachha Misra, 1953 LAC 537. 30 Tezpur Zila Chah Mazdoor Sabha v. Kuttal Guri Tea Estate, 1954 LAC 324. 31 Supra n.6 at 183. 32 (1963) 2 LLJ 396 (SC)

the proceedings. In Frome United Breweries Co. Ltd. v. Bath Justices33, court said that the person dealing with the enquiry at any stage is in position of a judge, and the rules of natural justice demand that he should not be personally interested in the case. So the person to be appointed as enquiry officer can be an officer of the establishment or an outsider including a lawyer appointed by the management. But such a person appointed should not be disqualified from holding such enquiry on grounds such as bias, personal interest or being an eye witness or victim of the incident etc.34 PUNISHMENT The Punishment must be commensurate with the gravity of the act35. In order to find who can impose punishment what has to be seen is to who is the appointing authority for the particular post in question at the relevant time.36 It was said in the case of Indian Iron & Steel Company v. Workmen37 that once it is established that an employee has been guilty of misconduct, the discretion as to what punishment should be imposed on him is with the management, and the labour court has no power to interfere with the discretion exercised except under certain circumstances, such as (1)where there is want of good faith, (2) where there is victimization or unfair labour practice, (3) when the management has been guilty of basic error or violation of principle of natural justice and (4) when on the materials, the finding is completely baseless or perverse. With regard to punishment and its quantum, power is given to adjudicating authority to interfere with the quantum of punishment under s.11 A of industrial Disputes Act.38 The section provides Powers to Labour Courts, Tribunals and National Tribunals to give appropriate relief in cases of unfair dismissals. According to this section, when the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order

33 34 35 36 37 38

1926 AC 586 Supra n.1 at 173-174. Hind Construction and Engineering Co. Ltd. v. Their Workmen (1965) 1 LLJ 462, 465 (SC). Supra n. 13 at p.1291. AIR 1958 SC 130. Palghat BPL & PSP Thozhilai Union v. BPL India Ltd. (1996) 2 LLJ 335.

of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require: During such proceedings under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.39

REMEDY OF REINSTATEMENT
The normal relief when dismissal is found wrong is reinstatement. The term industrial dispute as defined in section 2(k)40 of the IDA includes a claim for reinstatement of an employee who has ceased to be a workman41 Further, S. 11 A of IDA empowers Labour Courts, Tribunals and National Tribunals to set aside the order of discharge or dismissal and direct reinstatement of the workman. This section applies for penal discharge and not to the discharge simplciter.42 Earlier, disputes to be dealt in accordance with the law laid down in the earlier decisions of Supreme Court in this subject. In the case of Workmen of Firestone Tyre & Rubber Co. of India Private Ltd v. Management, Supreme Court held that S. 11 A applies only to disputes which are referred to adjudication, after insertion of this section as it has the effect of altering the law laid down by the Supreme Court in this respect by abridging the right of the employer in as much as it gives power to the tribunal to differ both on a finding of misconduct arrived at by an employer as well as the punishment imposed by him. The Supreme Court in Tata Oil Mlls Co. Ltd. Workmen43 said that If the industrial
39

S. 11 A, Industrial Disputes Act, 1947, available at http://pblabour.gov.in/pdf/acts_rules/inustrial_disputes_act_1947.pdf (Date of last visit: February 27, 2009) 40 "industrial dispute" means any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person. 41 Santa Cruz Kalina & Malad Marve Bus Service v. Workmen, (1954) 2 LLJ 446. 42 Rajasthan State Road Transport Corporation v. Judge, Industrial Tribunal (1995) 1 LLJ, 360 (Raj.) (DB) 43 (1966) 2 LLJ 602 SC.

court is satisfied that the order of discharge is malafide or it amounts to victimization or unfair labour practice, it is competent to labour court to set aside the order and in a proper case direct reinstatement. In cases of exceptional circumstances, as in the case of Tulsidas Paul v. Second Labour Court44 where it was contended that the labour court in any event should not have granted the relief of reinstatement as it would not be conducive to industrial peace in view of the hostile attitude of the majority of the fellow workmen against the concerned workman. The court said that, in such exceptional circumstances the labour court should have considered the exceptional circumstances and instead of directing reinstatement should have compensated the wrongfully dismissed workmen with adequate monetary compensation. In Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha45, a majority of 3 judge bench held that an arbitrator under s. 10A is comprehended in the expression tribunal as used in S. 11 A. So the arbitrator has the same jurisdiction as a labour court, tribunal or national tribunal while adjudicating upon a dispute relating to disciplinary discharge, dismissal of a workman.

PROTECTION AGAINST UNJUSTIFIED DISMISSAL BY INTERNATIONAL INSTRUMENTS

In India, there is no proper statute providing procedure to be followed while dismissing an employee but International instruments are not silent on it. Termination of Employment Convention, 1982 (No. 158) gives clear provision with regard to the procedure to be followed, procedure of appeal against termination, severance allowance and other income protection, consultation of workers representatives etc.46 According to this, employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker. Several reasons are listed as grounds that shall not constitute valid reasons for termination, including
44 45 46

(1964) 1 LLJ 516 (Cal HC). (1980) 1 LLJ 137 (SC). Protection against Unjustified Dismissal, International Labour Conference, 82nd Session 1995.

union membership or participation in union activities outside working hours (or within working hours, with the consent of the employer); seeking office as, or acting or having acted in the capacity of, a workers' representative; the filing of a complaint or the participation in proceedings against an employer; race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; absence from work during maternity leave; and temporary absence from work because of illness or injury.47 Recommendation No. 166 of ILO makes provision for appropriate written warning before a worker's employment is terminated for misconduct as well as for appropriate instructions, written warning and a reasonable period of time for improvement before a worker's employment is terminated for unsatisfactory performance.48

CONCLUSION
Earlier individual dispute like dismissal could not become per se an industrial dispute but could become one if it was taken up by trade union or a substantial number of workmen of the establishment. This created a problem for individual workers who were discharged or dismissed and could not find support of union or a number of workers. But after insertion of S. 2A such an individual dispute is deemed to be an industrial dispute without any need of involving a trade union or a group of workers. Earlier disputes regarding dismissal had to be dealt with in accordance with the law laid down by earlier decisions of supreme court but after insertion of S. 11 A, the concerned adjudicator has to apply the provisions of this section and has the power to differ both on finding of misconduct arrived at by an employer as well as punishment imposed by him and can provide appropriate remedy according to facts and circumstances of each case.

47 48

Ibid. Supra n. 45, See Appendix.

There is no specific procedure prescribed for disciplinary action either in IDA or in the rules made there under. The ILO Convention No. 158 and Recommendation No. 166 gives the detailed provision regarding the procedure to be followed as explained above. So there is a need of insertion of proper procedures to guide employers as well as employee during proceedings of unfair dismissal. If such a procedure is inserted or a new act is formed regarding dismissal, burden on labour courts with regard to cases of dismissal and reinstatement will be reduced.

BIBLIOGRAPHY
E.M.Rao(ed.) O.P. Malhotra, The Law of industrial Disputes, 6th ed., 2004, Lexis Nexis Butterworths, New Delhi K.D.Shrivastav, The Industrial Disputes Act, 1947, 6th ed., 1985, Eastern Book Company, Luknow P.K. Padhi, Labour and Industrial Laws, 2007, Prentice Hall of India Private Ltd., New Delhi. Protection against Unjustified Dismissal, International Labour Conference, 82nd Session 1995, International Labour Organization. Z.M.Sahid Siddiqi, M. Afzal Wani, Labour Adjudication in India, ed. 2001, Indian Law Institute, New Delhi. http://pblabour.gov.in/pdf/acts_rules/inustrial_disputes_act_1947.pdf http://www.ilo.org/public/english/dialogue/ifpdial/info/termination/countries/india .htm

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