INTRODUCTION
Social security is a basic right that has gained immense importance in the last century. The legislations on social security ensure health protection and provide income security to the people. The Indian legislature has enacted various statutes for protecting the rights of the workers, the Industrial Relations Code being the most recent of them. But as it is popularly said that “Power tends to corrupt, and absolute power corrupts absolutely”, certain individuals have attempted to take unwarranted benefit of the provisions of the statutes to exploit their employers. Manju Saxena v. Union of India & anr., (2019) exhibits one such instance where the employee endeavoured to extract unreasonable sums from her employer under the garb of the law.
FACTUAL MATRIX
Manju Saxena (Hereinafter, referred to as “appellant”) worked for HSBC Bank (Hereinafter, referred to as “the Bank”) as a Senior Confidential Secretary to the Senior Manager (North India). Her role was made redundant in May 2005 when the officer who held the post of Senior Manager (North India) departed the Bank. The appellant was provided with four different job offers with the same salary grade, however, she turned down all of these positions. As a result, the Bank sent her a letter terminating her employment. A compensation of Rs 8,17,071 was granted to her in lieu of it. The appellant filed a suit under the Industrial Disputes Act, 1947 (Hereinafter, referred to as “the Act”), requesting a severance compensation increase. The case went on, and it was established that the appellant had been paid a total of Rs 1,07,73,736. It was determined by the Delhi High Court that the appellant had abandoned her job and hence she was ordered to repay any funds in excess of Rs 8,17,071 minus legal costs and the amount received under Section 17-B of the Act. The appellant was not satisfied by this order and hence she filed a Special Leave Petition before the Supreme Court (Hereinafter, referred to as “SC”).
The SC ordered that the amount that has already been received by the appellant and shall be considered as the final settlement of all claims as it was observed that the refusal on the part of the appellant to accept various job alternatives amounts to “abandonment of service”.
ISSUES
- Whether the Bank complied with the statutory requirements mentioned under Section 25-F?
- Whether refusal to accept the alternate job positions amounts to “abandonment of job”?
CRITICAL ANALYSIS
- ISSUE 1
Provisional Analysis
Section 25-F lays down the three basic conditions which are necessary to be complied with in the situation of retrenchment of an employee. The conditions specified under the provision are here as under:
- Written Notice or Payment in lieu of Notice
The employer must give one month’s notice in writing. The notice shall entail the reasons for retrenchment. Where the employer fails to give such notice, the workman must be paid in lieu of such notice.
- Mandatory Compensation
The employer must pay the workman an amount as compensation. The compensation is calculated as “15 days’ salary for every completed year of service”.
- Notice to government
The government or the appropriate authority as prescribed is served with the notice intimating them regarding the retrenchment.
In the present case it is interesting to note that the Bank has complied with the first two of the three aforementioned requirements. The records suggest that the Bank paid 6 months’ compensation in lieu of notice. The period of 6 months was taken into effect as it was in accordance with the terms of the contract of employment. This infers that the first pre-requisite u/s 25-F is satisfied.
Furthermore, as per the records, the appellant was paid the mandatory compensation which amounted to Rs. 8,17,071. The second pre-requisite u/s 25-F is also satisfied.
However, it was contended by the appellant that the Bank has failed to comply with the third requirement i.e., notice to government. The Apex court in this respect observed that the third requirement u/s 25-F is merely directory and not mandatory in nature. It is significant to note that in the case of Gurmail Singh v. State of Punjab, the SC treated S. 25-F(c) as directory. The requirement of adhering to it was further waived off in Pramod Jha v. State of Bihar as well.
Precedential Analysis
In Hathising Manufacturing Co. Ltd. v. Union of India, a constitution bench of the SC emphasized on the necessity to comply to the conditions mentioned u/s 25-F. It was expressed by the court in clear words that “By Section 25-F, a prohibition against, retrenchment until the conditions prescribed by that section are fulfilled is imposed”.
It is interesting to note that in Raj Kumar v. Director of Education, the SC noted that there is nothing to indicate that Section 25-F(c) of the Industrial Disputes Act, 1947 was intended to be directory while the other two sub-sections of the same section were mandatory in nature. Section 25-F(c) is a condition that comes after the retrenchment order, but it is still a requirement that employers must meet before the retrenchment order is issued.
There appears to be a conflicting situation in the view of the SC on the nature of Section 25-F(c). Although the court did not consider the Raj Kumar case in the present matter, the fact that the judgment in the present matter has come afterwards and both the cases were adjudged by a division bench, the view taken by the court in the present matter will prevail.
- ISSUE 2
The important question that has arisen in the present matter is whether the refusal of the appellant to accept the alternate job options amounts to “Abandonment” of job. In order to ascertain the answer for this issue, it is integral to look at the existing jurisprudence on the issue of abandonment of service.
What is abandonment of job?
The common law iterates that it is difficult to draw an assumption that a worker has abandoned or resigned from service unless the duration of absenteeism as well as the extenuating factors can be properly inferred. The surrounding factors must clearly reflect that the employee wanted to abandon service.
“Abandonment or relinquishment of service is always a question of intention, and, normally, such an intention cannot be attributed to an employee without adequate evidence in that behalf.” The same has been enunciated by Hon’ble Mr. Justice P.B. Gajendragadakar in the landmark case of Buckingham & Carnatic Co. Ltd. v. Venkatiah.
It is true that the intention of the workman plays a pivotal role in determining whether their conduct can be considered as abandonment. In the present case, as noted by the apex court as well as high court in the respective proceeding before them, that the appellant’s decision to refuse to accept any alternative job positions represents that she intended to abandon the service. Moreover, in all proceedings before various forums, the appellant’s primary contention has been to increase the amount of severance payable by Bank to her. She was clearly not bothered by sudden termination of her service, rather she accepted the same with open hands.
Furthermore, it is important to note that the SC has clearly expressed in this judgment that as soon as it is established that there exists voluntary abandonment of service on the part of workman, she could not have been in “continuous service”.
Precedential Analysis
It was observed in Vijay S. Sathaye v. Indian Airlines Ltd. that“for the purpose of termination, there has to be positive action on the part of the employer while abandonment of service is a consequence of unilateral action on behalf of the employee and the employer has no role in it”.
The facts of the present matter clearly represent that the unilateral action of the appellant to refuse to accept the given job alternatives resulted in the termination of her job. Therefore, the case satisfies the criteria mentioned in the Vijay Sathaye case and hence it is reasonable to infer that there exists job abandonment on the part of the appellant.
In the case of State of Haryana v. Om Parkash, it was also noted that the misconduct on the part of the employee by being absent from duty is inferred as voluntary abandonment of service which results in termination of service.
CONCLUSION
The judgment passed by the SC in this matter contains many fallacies in my opinion. With all due respect to the Hon’ble court and purely from an academic point of view, it is contended that the court has failed to look at number of aspects in the matter.
The first fallacy that needs to be pointed out is that there lies ambiguity on the compliance of Section 25-F(c) of the Act. The SC has failed to take the note of the observation of this very court in Raj Kumar v. Director of Education. It is contended that the variance from what has been laid in the Raj Kumar case is against the doctrine of precedent. As laid down in Union of India v. Raghubir Singh, “The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law”. The decision of the SC in the present case is devoid of any discussion about the Raj Kumar case and furthermore, the stance taken by the SC is against what has been laid down in the said matter. The same has resulted in lack of clarity and non-consistency on the duty to adhere to clause (c) of S. 25-F.
Secondly, there was a clerical error on the part of the court when it noted that the appellant “could not have been in “continuous service” as defined under Section 2(oo) of the ID Act, 1947”. There exists a typographical error on their part as the definition for “continuous service” is provided under Section 25-B under the 1947 Act, whereas, Section 2(oo) defines “retrenchment”.
Thirdly, it is unsettling to note that the SC allowed an exorbitant amount of Rs. 1,07,73,736 to appellant as a final settlement despite observing that turning down the alternative job offers amounts to abandonment of service. The Single Judge bench of the Delhi HC in the initial order had directed the appellant to refund the sum of Rs. 1,07,73,736 except the sum of Rs. 8,17,071 which were received as compensation at the time of termination. The division bench of the Delhi HC in its order dated 14.07.2017 had upheld the order passed by single judge and modified it to the extent that the appellant was further not required to pay back the legal costs and the sum received by her under Section 17-B, which was equivalent to Rs. 54,56,360. Therefore, after the modification of order by the division bench the appellant would have still received at least Rs. 62,73,431 (Rs. 54,56,360 + Rs. 8,17,071). However, the SC in its decision, even though upheld that the appellant abandoned her service, it allowed the appellant to keep the amount of Rs. 1,07,73,736 as against the Rs. 62,73,431, and not return anything to the bank. It is contended that SC should have adhered to the order passed by the division bench and not allowed her to keep the amount over and above Rs. 62, 73,431.
The social security legislations have been formulated by the legislature to protect the bona fide interests of the workers and employees. It is the responsibility of the institution of the judiciary to ensure that the provisions of such legislations are given effect in a justifiable manner. The decisions of the courts must promote clarity and coherence. In this particular matter, although the honourable SC was accurate in holding that the appellant’s refusal to accept the alternative job offers amounts to abandonment of service, it came short of delivering justice in it complete sense as in my opinion the appellant has been unjustly enriched despite existence of guilt on her part.
Nipun Bhatia, Fourth Year Law Student at Symbiosis Law School, Pune.
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