22 Jun 2010

Inquiry necessary before termination of service: High Court

Deciding against a prominent newspaper and in favour of the employee whose services had been terminated without service of notice and conduct of inquiry for alleged misconduct, the Delhi High Court in a recent decision stated that conduct of inquiry was essential before an employee's services could be terminated on grounds of misconduct. The case of the employee in this case had been that he was on leave for family reasons and could not attend the work thereafter in view of medical reasons and even before he could join after recovery his services had been terminated. The High Court ruled in his favour directing the employer to reinstate the employee with back-wages and dismissed its petition with costs. 

The High Court inter alia observed as under;

10. I find the Division Bench of this Court in Shakuntala’s Export House (P) Ltd Vs. Secretary (Labour) MANU/DE/0541/2005 to have held that abandonment amounts to misconduct which requires proper inquiry. The judgment of the Single Judge of this Court upheld by the Division Bench is reported as 117 (2005) DLT 479. To the same effect is another judgment of this Court in MCD Vs. Begh Raj 117(2005) DLT 438 laying down that if the workman had abandoned employment, that would be a ground for holding an enquiry and passing an appropriate order and that having not been done, the action of MCD could not have been sustained. The Supreme Court also in D.K. Yadav Vs J.M.A. Industries Ltd (1993) 3 SCC 259 has held that even where the standing orders of the employer provide for dismissing the workman from service for unexplained absence, the same has to be read with the principles of natural justice and without conducting domestic inquiry and without giving an opportunity of being heard, termination of service on the said ground cannot be effected. The same view was reiterated in Lakshmi Precision Screws Ltd. Vs. Ram Bahagat AIR 2002 SC 2914 (in this judgment Sakattar Singh mentioned below was distinguished). Recently, in V.C. Banaras Hindu University Vs. Shrikant AIR 2006 SC 2304 it was held that although laying down a provision providing for deemed abandonment from service may be permissible in law, it is not disputed that that an action taken thereunder must be fair and reasonable so as to satisfy the requirements of Article 14 of Constitution of India; if the action is found to be illogical in nature, the same cannot be sustained. I may however notice that in Punjab & Sind Bank Vs. Sakattar Singh MANU/SC/0733/2000 it was held that no inquiry may be conducted where the standing orders of the Bank provided a procedure for treating such absentee employee to have deemed to have voluntarily retired after a particular period of unauthorized absence. To the same effect is the recent dicta in The Regional Manager, Central Bank of India Vs. Vijay Krishna Neema AIR 2009 SC 2200. However, the Standing Orders of the Banks/ Bipartite Agreement between the Banks and their employees provide for a procedure for deeming an absenting employee to have voluntarily retired and which procedure inter alia entails issuance of notice and giving opportunity to show cause to the absenting employee and hence comply with the requirement of natural justice. The Standing Orders relied on by the petitioner neither provide for any such procedure nor has any such procedure been complied with. 
14. It would thus be clear that the counsel for the petitioner has not been able to make any dent on the legal position aforesaid qua abandonment. Clause 9 (3) of the Model Standing Orders relied by the petitioner and as set out in the writ petition is as under:
“If the workman remains absent beyond the period of leave originally granted or subsequently extended, he shall loose his lien on his appointment unless he (a) returns within 8 days of the expiry of the leave and (b) and explains to the satisfaction of the [employer or the officer specified in this behalf by the employer] his inability to return before the expiry of his leave.”
I find that the Division Bench of the Bombay High Court in Rambhuwal Thakar Prasad Vs. Phoenix Mills MANU/MH/0059/1974 has interpreted standing order in identical term as requiring that before effect is given to the inference of relinquishment of service, an opportunity is to be given to the employee to offer an explanation and only if the said explanation is not found satisfactory by the management, is the employee to be deemed to have terminated his contract of service. Another Single Judge of the Bombay High Court in Infomedia India Ltd. Vs. Suhas Shripad Gadre MANU/MH/0480/2006 has on review of case law and in relation to newspaper establishment held that the contention of automatic loss of lien upon the failure of the employee to report for work within a period of eight days of expiry of leave cannot be accepted and that before the employer seeks to take action for asserting that consequence, there has to be due compliance of principles of natural justice, not necessarily a full fledged departmental enquiry but an opportunity to enable an employee to furnish any explanation he may have explaining his absence without leave. No such opportunity has been given in the present case.
15. The award thus insofar as holding that the respondent no.1 had not abandoned his employment and / or that the termination of service by the petitioner on the ground of abandonment without conducting any enquiry is bad does not call for any interference.

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