2006 JTR(SC) 976
2007 49 AIC 447 ; 2007 1 AIR(Jhar)(R) 630 ; 2007 1 AIR(Kar)(R) 32 ; 2006 AIR(SCW) 5630 ; 2007 1 BBCJ(SC) 184 ; 2006 111 FLR 895 ; 2007 1 GLR 133 ; 2007 1 JCR(SC) 57 ; 2007 1 LLJ 225 ; 2007 1 LLN 83 ; 2007 1 MhLJ(SC) 873 ; 2007 3 RSJ 443 ; 2006 10 Scale 452 ; 2006 8 SCC 544 ; 2006 SCC(L&S) 2037 ; 2006 Supp7 SCR 541 ; 2007 3 SCT 165 ; 2007 5 SLR 257 ; 2006 KHC 1794 ; 2006 8 Supreme 135
2006(8) Supreme 135
SUPREME COURT OF INDIA
(From Gujarat High Court)
S.B. Sinha and Dalveer Bhandari, JJ.
Union of India & Ors.—Appellants
versus
Jummasha Diwan—Respondent
Civil Appeal No. 4552 of 2006
(Arising out of SLP (Civil) No. 7337 of 2006)
Decided on 19-10-2006
Counsel for the Parties :
For the Appellants : R. Mohan, A.S.G., S. Wasim A. Qadri, B. Krishna Prasad and D.S. Mahra, Advocates.
For the Respondent : S.C. Patel, Advocate.
IMPORTANT POINT
When the project in which workman was employed comes to a close, requirement of Section 25-N of the Act were not required to be complied with.
Act Referred :INDUSTRIAL DISPUTES ACT : S.25(n), S.25(f)
(A) The case revolves around the applicability of Section 25-F and Section 25-N of the Industrial Disputes Act, 1947, in the context of project-based employment. The primary legal contention was whether the termination of a daily wager, upon the completion of a specific railway electrification project, required compliance with the stringent conditional prior permission requirements under Section 25-N, or if the payment of retrenchment compensation and notice pay under Section 25-F was sufficient. The court analyzed whether the nature of the employmentspecifically the movement between different administrative establishments of a large organizationconstituted continuous service that would trigger higher seniority protections or the more rigorous procedural safeguards of Section 25-N.
(B) The court established that employment in different establishments with different administrative setups and projects, even under the same overall employer, does not constitute continuous service. Furthermore, the closure of a specific project does not necessarily mandate compliance with Section 25-N if the statutory requirements of Section 25-F have been met.
Facts of the case:
A daily wager employed in a railway electrification project was retrenched after the project came to an end. The employer paid retrenchment compensation and notice pay as per Section 25-F of the Industrial Disputes Act. The employee challenged the termination, claiming that based on 1060 days of service, he should have been higher in seniority under the 'last come first go' principle and that the termination violated Section 25-N of the Act. While the Tribunal dismissed the application, the High Court set aside the termination and ordered reinstatement based on Section 25-N.
Findings of Court:
The court found that the employee was paid notice pay and retrenchment compensation in compliance with Section 25-F. It observed that since the employee had worked across different establishments with different administrative setups, the concept of continuous service could not be applied. Recruitment into a specific project establishment constituted fresh employment, meaning the employee was not entitled to seniority across different projects. Consequently, since the project had closed, the requirements of Section 25-N were not applicable.
Issues:
1. Whether the movement of a casual employee between different administrative establishments of the same employer constitutes continuous service for the purpose of seniority.
2. Whether the termination of a project employee upon project completion requires compliance with Section 25-N of the Industrial Disputes Act.
Ratio Decidendi:
Continuous service cannot be claimed when a worker is employed in different establishments with different administrative setups and projects, as each such recruitment constitutes fresh employment. Where Section 25-F is complied with and a project comes to a close, the more stringent requirements of Section 25-N are not mandatory.
Result:
The appeal was allowed, and the judgment of the High Court directing reinstatement was set aside.
(A) The case revolves around the applicability of Section 25-F and Section 25-N of the Industrial Disputes Act, 1947, in the context of project-based employment. The primary legal contention was whether the termination of a daily wager, upon the completion of a specific railway electrification project, required compliance with the stringent conditional prior permission requirements under Section 25-N, or if the payment of retrenchment compensation and notice pay under Section 25-F was sufficient. The court analyzed whether the nature of the employmentspecifically the movement between different administrative establishments of a large organizationconstituted continuous service that would trigger higher seniority protections or the more rigorous procedural safeguards of Section 25-N.
(B) The court established that employment in different establishments with different administrative setups and projects, even under the same overall employer, does not constitute continuous service. Furthermore, the closure of a specific project does not necessarily mandate compliance with Section 25-N if the statutory requirements of Section 25-F have been met.
Facts of the case:
A daily wager employed in a railway electrification project was retrenched after the project came to an end. The employer paid retrenchment compensation and notice pay as per Section 25-F of the Industrial Disputes Act. The employee challenged the termination, claiming that based on 1060 days of service, he should have been higher in seniority under the 'last come first go' principle and that the termination violated Section 25-N of the Act. While the Tribunal dismissed the application, the High Court set aside the termination and ordered reinstatement based on Section 25-N.
Findings of Court:
The court found that the employee was paid notice pay and retrenchment compensation in compliance with Section 25-F. It observed that since the employee had worked across different establishments with different administrative setups, the concept of continuous service could not be applied. Recruitment into a specific project establishment constituted fresh employment, meaning the employee was not entitled to seniority across different projects. Consequently, since the project had closed, the requirements of Section 25-N were not applicable.
Issues:
1. Whether the movement of a casual employee between different administrative establishments of the same employer constitutes continuous service for the purpose of seniority.
2. Whether the termination of a project employee upon project completion requires compliance with Section 25-N of the Industrial Disputes Act.
Ratio Decidendi:
Continuous service cannot be claimed when a worker is employed in different establishments with different administrative setups and projects, as each such recruitment constitutes fresh employment. Where Section 25-F is complied with and a project comes to a close, the more stringent requirements of Section 25-N are not mandatory.
Result:
The appeal was allowed, and the judgment of the High Court directing reinstatement was set aside.
JUDGMENT
S.B. Sinha, J.—Leave granted.
2. Respondent was appointed as a daily wager in the Railway Electrification Project at Vadodara Ratlam section. He was granted a temporary status. He is said to have joined the Railway Electrification Project as a skilled worker under the Divisional Electrical Engineer, Western Railway (Overhead Equipment) Railway Electrification Railway Yard, Pratapnagar, Baroda, Appellant No. 3 herein. He was retrenched purportedly on the premise that railway electrification works at Vadodara Ratlam section came to an end. He was paid retrenchment compensation in terms of Section 25-F of the Industrial Disputes Act, 1947 (for short "the Act").
3. He filed an original application before the Central Administrative Tribunal (Tribunal) questioning the purported retrenchment on the ground that he having put in 1060 days of continuous service should have been placed much higher in the seniority list and, thus, could not have been retrenched having regard to the principle of "last come first go". It was also contended that while passing an order of retrenchment, the provisions of Section 25-N of the Act was not complied with.
4. The Tribunal dismissed the said original application. A writ petition came to be filed wherein the same pleas were raised by Respondent herein. Invoking Section 25-N of the Act, the impugned judgment has been passed setting aside the order of termination and directing reinstatement of Respondent.
5. Mr. R. Mohan, learned Additional Solicitor General appearing on behalf of Appellants inter alia submitted that the provisions of Section 25-N of the Act will have no application to the facts and circumstances of the case.
6. Mr. S.C. Patel, learned counsel appearing on behalf of Respondent, on the other hand, submitted that Respondent having put in 1060 days of continuous service, the order of retrenchment was vitiated in law. It had been pointed out that different benches of the Central Administrative Tribunal on almost identical issues had taken different views and in that view of the matter, the impugned judgment should not be interfered with.
7. Respondent indisputably had started working under Appellant No. 3 1986. His services had been terminated inter alia on the premise that the electrification project had come to a close. If the services of a project employee is terminated, it is trite that statutory requirements of Section 25-F of the Act are required to be complied with, but, indisputably, Respondent was given one months notice pay as also the retrenchment compensation in compliance thereof.
8. His name might not have appeared in the seniority list of the casual labourers which was being maintained but the question, as to whether he had been in continuous service in all the departments he had served, was a disputed one. There are several establishments of the Railway Administration. If a workman voluntarily gives up his job in one of the establishments and joins another, the same would not amount to his being in continuous service. When a casual employee is employed in different establishments, maybe under the same employer, e.g., the Railway Administration of India as a whole, having different administrative set up, different requirements and different projects, the concept of continuous service cannot be applied and it cannot be said that even in such a situation he would be entitled to a higher status being in continuous service. It is not in dispute that the establishment of Appellant No. 3 herein had started a project. His recruitment in the said establishment would, therefore, constitute a fresh employment. In a case of this nature, Respondent would not be entitled to his seniority. If the project came to a close, the requirements of Section 25-N of the Act were not required to be complied with.
9. Lal Mohammad and Others v. Indian Railway Construction Co. Ltd. and Another [(1999) 1 SCC 596], whereupon reliance has been placed by the High Court, cannot have any application in the instant case. The Tribunal in its order categorically opined that his employment was not in an industrial establishment which would come inter alia within the purview of the definition of a factory as contained in clause (m) of section 2 of the Factories Act.
10. Our attention has been drawn to a decision of this Court in Oswal Agro Furane Ltd. and Another v. Oswal Agro Furane Workers Union and Others [(2005) 3 SCC 224]. In the said decision, this Court was concerned with closure of an industrial establishment engaging more than 1000 people. In the aforementioned fact situation obtaining therein, this Court held that the consent of State Government before effecting closure of such establishment was mandatory.
11. For the reasons aforementioned, we are of the opinion that the impugned judgment cannot be sustained which is set aside accordingly. This appeal is allowed. No costs.
Appeal allowed.
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