Court : Chennai High Court
Brief : Under Section 41(1) of the Act, the services of a person like the first respondent who has been employed continuously for over a period of six months can be dispensed with for a reasonable cause after giving the person at least a month's notice or wages in lieu of such notice or on a charge of misconduct supported by satisfactory evidence recorded at an enquiry held for the purpose, in which case notice would not be necessary. From the order of the company dispensing with the services of the 1st respondent, the only reason appearing is the non-requirement of his services.This Court has been taking the consistent view that the employer is bound to disclose the reasons for termination in the order of termination itself and failure to do so would render the order of termination void and non-est.Therefore, the view of the Appellate Authority, 1st respondent exercising powers under Section 41(2) of the Act, that the order of termination issued by the writ petitioner to the 2nd respondent does
not contain reasonable cause and that therefore, the same is liable to be set aside, does not call for any interference by this Court. The writ petition is, therefore, liable to be dismissed and accordingly,the same is dismissed.
Citation : Air France vs Dy. Commr. Of Labour And Ors.
on 16/9/1992
ORDER
A.R. Lakshman, J.
1. The petitioner above named has filed the present writ petition for
the following relief. To issue a writ of certioriari or any other writ,
order of direction, calling for the records of the 1st respondent
culminating in the order date November 20, 1987 in T.S.E.A. No. 27 of
1987 and quash the same.
2. In brief, the relevant facts of the case are as follows: Air France
has an office at Madras and the 2nd respondent was the District
Manager, along with five other employees. The petitioner management
decided to close its Madras office for economic reasons. In compliance
with the requirements of Section 25FFA, under which a statutory notice
of sixty days to various authorities of the State and the affected
parties has to be given. By letter dated January 8, 1987, the notice
intimating the management's intention to close its Madras office with
effect from March 31, 1987 was sent to all the authorities prescribed
under the Act as well as to the affected parties. The services of the
workmen were terminated in accordance with law and they were offered
their full terminal compensation.
3. The conditions of service of the supervisory and managerial staff
are governed by regulations and conditions of service agreed by the
parties. In terms of Clause 8.1 of the said regulations, by letter
dated February 27, 1987, the services of the 2nd respondent were
terminated with effect from March 31, 1987. But, as the 2nd respondent
has averred that the said letter reached him only on March 6, 1987, the
petitioner management paid him his salary for April, 1987 also, in
effect, his services stand terminated from May 1, 1987. The 2nd
respondent was admittedly the District Manager of the Madras office of
the petitioner and therefore, Section 4(1)(a) of the Tamil Nadu Shops
and Establishments Act, 1947 (hereinafter referred to as the Act)
excludes its applicability to the 2nd respondent. The above Section has
been included in the Act by the competent Legislative Assembly of the
State of Tamil Nadu. The power to legislate for State vests in the
State Legislative Assembly, and the State Legislative Assembly alone is
competent to amend, modify or repeal any substantive provision of the
Act. There is no change made in Section 4(1)(a) of the Act by the State
Legislature Assembly.
4. However, the 2nd respondent contended in his reply affidavit before
the 1st Respondent/Deputy Commissioner of Labour (Appeals) that by
G.O.Ms.No.4074, Industries, Labour and Housing (Labour), dated October
5, 1966, all the provisions of the Act have been made applicable to
class of persons mentioned in Clause (a) of Sub-section (i) of Section
4 of the Act. The aforesaid G.O., was issued by the Governor of Tamil
Nadu in exercise of the powers conferred by Section 5 of the Act.
According to the petitioner, Section 5 of the Act has delegated powers
to the State to apply the provisions to any class of persons by
notification, but the power does not go and cannot go to the extent of
allowing the delegate (in this case, the State) to amend or change a
substantive provision of the Act itself. This is a function which can
be done only by the State Legislative Assembly. That apart, Section
4(1)(a) of the Act deliberately excludes the applicability of the Act
to persons employed in any establishment in a position of management.
It is settled law that conditions of service of management employees
are governed by the conditions of service entered into by the parties
under the common law of master and servant. In the circumstances it is
submitted by the petitioner/ management that even if it is assumed that
Section 4(1)(a) of the Act has lost its force by virtue of the above
mentioned notification of the State Government, the said notification
will be hit by Article 251 of the Constitution of India and be void to
the extent of its repugnancy in its application to managerial or
supervisory officers whose conditions of service are governed by
agreements entered into by the employees and employers 1 under the
Contract Act, which is a Central Act.
5. According to the petitioner/management, the termination of service
of the 2nd respondent is in full conformity with Rule 8.1 of the
Regulations and Conditions of Service entered into by the parties,
which is extracted hereunder:
"8. Termination of employment.
8.1 Designation - Discharge
After the expiry of the probationary period, an employee who resigns
must give one month's notice, otherwise the Company; shall be
entitled to deduct one month's salary in lieu from his last salary.
Conversely, the Company may not discharge any employee, except in
case of misconduct, without giving one month's notice, or paying one
month's; salary."
6. Thus, according to the petitioner/management, it is obvious that the
clause recognises the rights of either party to terminate the service
by giving one month's notice or in lieu of notice, on paying a month's
salary in the case of the employer, and in the case of the employee, to
surrender one month's salary. The word 'except' in case of misconduct,
refers to Clause 13 of the terms and conditions of service under which
the employer can dismiss an employee without notice in a case of
misconduct. It is further submitted that Clause 8.2 of the conditions
of service only lays down the age on which the employer normally
terminates. It does not confer any right on any employee to work till
the age of 60. In any event, it is submitted that Section 41(2) of the
Act only requires that the termination will be bad in case where there
is no notice and no reasonable cause for termination and it is admitted
that notice was given in this case before termination of the services
of the 2nd respondent.
7. The 1st respondent, who heard the appeal (T.S.E.No. 27 of 1987), by
his judgment dated November 20, 1987, allowed the appeal and set aside
the order of termination dated February 27, 1987 of the service of the
2nd respondent. The said judgment and the reasons for rejection of the
contentions raised on behalf of the management are void and without
jurisdiction. Therefore, the said judgment is liable to be quashed. The
petitioner management has, therefore, filed the above writ petition for
the relief asked for therein.
8. The petitioner has also filed two W.M.Ps., during the pendency of
the writ petition viz., W.M.P. Nos. 25907 and 25908 of 1991 to im-plead
the State of Tamil Nadu represented by the Secretary, Labour
Department, as 3rd respondent in the above writ petition and also to
permit the petitioner/management to raise additional grounds in the
writ petition that Section 5 of the Act is invalid and void and has to
be struck down as ultra vires. The following are the additional grounds
raised in W.M.P. No. 25908 of 1991:
"5. That the petitioner desires to raise an additional ground that
Section 5 of the Tamil Nadu Shops and Establishment Act. 1947,
hereinafter called the Act, itself is invalid and void as it suffers
from the vise of excessive delegation.
6. That as the validity of the provision of Section 5 of the Act is
being challenged, it is necessary to implead the State of Tamil Nadu
also as a party in the said writ petition."
9. The 2nd respondent has filed his counter affidavit dated April 11
1988. According to the 2nd respondent, the petitioner, without any
justification and in blatant violation of the mandatory requirement of
Section 41 of the Act, terminated the services with effect from March
31, 1987, purporting to be under Clause 8 of the Staff Regulation,
under a communication dated February 27, 1987. Aggrieved by the same,
he filed an appeal under Section 41(2) of the Act before the 1st
respondent. The petitioner/ management filed a counter and contested
the said appeal. The 1st respondent found that by virtue of G.O, Ms. No
4074, Industries, Labour and Housing (Labour) dated October 5, 1966,
the provisions of the Act have been made applicable to class of persons
mentioned in Section 4(1)(a) of the Act and, therefore, the appeal
field by the 2nd respondent was maintainable in law. It was further
held by the 1st respondent that the con-tract between the employer and
the person employed cannot over ride the express statutory provisions.
It was the further finding of the 1st respondent that the
petitioner/management is obliged to mention the reasonable cause in the
order of termination for enabling him to apply his mind to determine
the reasonableness of the reason for termination. It is untenable to
contend that the District Manager like the 2nd respondent has no
jurisdiction to entertain an appeal. Persons in the position of
management are specifically brought within the purview of the Act in
exercise of the statutory powers. Section 5 of the Act is an
over-riding provision as could be seen from the opening lines of the
said section. G.O.Ms. No. 4074, Industries, Labour arid Housing
(Labour), dated October 5, 1966 is not in conflict with the unwritten
law of master and servant. The provisions of the Act themselves make an
inroad into the ordinary law of master and servant. The effect of an
order made by the Appellate Authority setting aside an order of
termination is that the order of termination is non-est and never
existed and that the employee who was removed from service continues in
employment without any interruption or break. For the reasons
aforementioned, the 2nd respondent has prayed that the writ petition
may be dismissed.
10. The petitioner/management filed a reply affidavit. As the 2nd
respondent was occupying a managerial post, the Act did not apply in
his case and his appeal under Section 41 of the Act was misconceived
and not maintainable in law. Section 5 of the Act only delegates
certain powers to the State and the State, as delegate, cannot efface a
substantive provision of the Act by a notification under Section 5 of
the Act. Even assuming for arguments sake that the language of Section
5 of the Act is so wide as to include the powers to change Section 4 of
the Act itself, Section 5 of the Act itself will be invalid in law as
it will be hit by the vice of excessive delegation. The Constitution
has granted the power to the State legislature to legislate on the
topic. Excessive delegation of power is not possible in law and the
Legislative body has to exercise some control over delegated
legislation. In any event, the law of master and servant is a Central
Law and conditions of service between employers and employees occupying
managerial post are governed by the Central Law and, therefore, any
State provision of law in conflict with the Central Law, will be void
to the extent of the conflict.
11. I have heard the elaborate arguments of Mr. S. Govind Swaminathan,
learned Senior Advocate on behalf of M/s. N.S. Sivam and K. Madhavan,
for the petitioner and Mr. A.L. Somayaji of M/s. Aiyar and Dolia,
learned counsel for the 2nd respondent.
12. W.M.P. No. 25908 of 1991 has been filed by the petitioner during
the pendency of the writ petition seeking permission to raise the
additional ground that Section 5 of the Act is invalid and void and has
to be struck down as ultra vires, and the said petition was ordered by
S. Ramalingam, J., on December 10, 1991. In the affidavit filed in
support of the above W.M.P., it is stated that Section 5 of the Act is
invalid and void because it suffers from the vice of excessive
delegation.
13. Mr. S. Govind Swaminathan, learned Senior Advocate for the
petitioner, has raised the contention that power to withdraw the
exemption granted under Section 4 of the Act could be exercised only by
the Legislature itself and the said power to withdraw the exemption
cannot be delegated. In other words, it is the contention of Mr. S.
Govind Swaminathan, that the delegation of the power under Section 5 of
the Act is an unconstitutional delegation of Legislative power.
14. Per contra, Mr. A.L. Somayaji, learned counsel for the 2nd
respondent, would submit that the delegation of the power under Section
5 of the Act to remove the exemption granted is in accordance with the
accepted legislative practice and is not unconstitutional.
15. In support of his contention, Mr. S. Govind Swaminathan would
invite my attention to the following decisions; reported in In re
Article 143, Constitution of India, etc. (AIR 1951 S.C., 332) paragraph
74 at page 355, Hari-shankar Bagla v. The State of Madhya Pradesh
, Hamdard Dawak-hanav. The Union of India
, Makhan Singh Tarsik-kar v. The State of Punjab
. and Harakchand Ratanchand Bantta v. Union of India
.
16. Mr. A.L. Somayaji, learned counsel for the 2nd respondent, would
invite my attention to the following decisions in support of his
contention that Section 5 of the Act is valid and constitutional. They
are reported in Pandit Banarsi Das Bhant v. The State of Madhya Pradesh
The Tatalron and Steel Co. Ltd. (1950 LLJ 1043), The
Management of Blue Star & Co. Ltd. v. The Asst. Commissioner, Madras-6
(1989-I-LU-233), which in turn followed 1950-11-LLJ-1043), Mohmed-alli
v. Union of India 1963-1-LLJ-5 36 State Bank of Travancore v. Deputy
Commissioner of Labour Coimbatore (1981-I-LU-393); Basant Kumar Sarkar
v. The Eagle Rolling Mills Ltd. 1964-I-LLJ-105 M/s. Jalan Trading Co.
Private Ltd. v. Mill Mazdoor Sabha 1966-11-LLJ-546 The Edward Mills Co.
Ltd., Beawar v. The State of Ajmer 1954-II-LLJ-686 Bhikusa Yamasa
Kshatriya (P) Ltd. v. Union of India 1963-I-LLJ-270 and Syed Mohamed &
Co. v. State of Madras .
17. In order to appreciate the respective contentions of the parties,
it is necessary to extract the provisions of Sections 4 and 5 of the
Act.
"4. Exemptions. (1) Nothing contained in this Act shall apply to-
(a) persons employed in any establishment in a position of
management;
(b) persons whose work involves traveling and persons employed as
canvassers and caretakers;
(c) establishments under the Central and State Government, local
authorities, the Reserve Bank of India, a railway administration
operating any railway as defined in clause (20) of Article 366 of
the Constitution and cantonment authorities;
(d) establishments in mines and oil fields;
(e) establishments in bazarrs, in places where fairs or festivals
are held temporarily for a period not exceeding fifteen days at a
time;
(f) establishments which, not being factories within the meaning of
the Factories Act, 1948, are in respect of matters dealt with in
this Act, governed by a separate law for the time being in force in
the State.
2. Nothing contained in Section 7 or Section 13, as the case may be,
shall apply to
(a) hospitals and other institutions for the treatment or care of
the sick, the infirm, the destitute or the mentally unfit;
(b) such chemists' or druggists' shops as the State Government may,
by general or special order, specify;
(c) clubs and residential hotels, hostels attached to schools or
colleges, and establishments maintained in boarding schools in
connection with the boarding and lodging of pupils and resident
masters.
(d) stalls and refreshment rooms at railway stations, docks, wharves
or ports.
5. Power of Government to apply Act to exempted persons or
establishments. Notwithstanding anything contained in Section 4, the
State Government may, by notification , apply all or any of the
provisions of this Act to any class of persons or establishments
mentioned in that Section, other than those mentioned in Clauses (c)
and (f) of Sub-section (1), and modify or cancel any such
notification."
18. Under Section 4 of the Act, exemption has been granted in respect
of certain persons employed in establishments. But for the exemption,
the category of 'persons employed' and 'establishment' would be
governed by the provisions of the Act. Section 5 of the Act has been
given over riding effect as it opens with non-obstante clause.
Therefore, the provision of Section 4 of the Act is subject to the
provisions of Section 5 excepting in regard to establishments mentioned
in Clauses (c) and (f) of Sub-section (1) of Section 4 of the Act. The
State Government has been further empowered to modify or cancel any
notification made under Section 5 of the Act. A reading of the various
provisions of the Act makes it clear that the enactment not only
provides for regulation of conditions of work in shops and commercial
establishments but also provides the grounds of termination of services
of persons employed. The expression "persons employed" and
"establishment" has been defined in Sub-clauses 12 and 6 of Section 2
respectively.
19. The Legislative policy is very clear that the exemption granted in
respect of persons and establishments, except in regard to
establishments enumerated in Clauses (c) and (f) of Sub-section (1) of
Section 4 of the Act, is subject to the provisions of Section 5 of the
Act. Section 5 of the Act does not run counter to the essential
features of the Act or policy of the enactment. By withdrawing the
exemption granted under Section 4 of the Act, the essential features
and policy of the enactment are not in any way changed. On the other
hand, the coverage of this Act, in my opinion, is widened.
20. The contention raised by Mr.S. Govind Swaminathan, learned Senior
Counsel for the petitioner was that under Section 5 of the Act, there
is an unconstitutional delegation of legislative power. The Apex Court
had occasion to consider a similar question in the case reported in
Pandit Banarsi Das Bhant v. The State of Madhya Pradesh (supra). That
case arose under the Central Provinces and Berar Sales Tax Act, 1947.
Sub-section 1 of Section 6 of the said Act provided that no tax shall
be payable under this Act on the sale of goods specified in the second
column of Schedule II, and Sub-section (2) of the said Section provided
that the State Government may, after giving notice by notification,
amend the Schedule and thereupon such Schedule shall be deemed to be
amended accordingly. The contention raised in that case was, that the
power conferred on the Sate Government by Section 6(2) of the said Act
to amend the sche- dule relating to exemption was unconstitutional
because it amounts to delegation of legislative power and that it is
impermissible in law. This contention was repelled by the Apex Court in
the following terms:
"We are, therefore, of the opinion that the power conferred on the
State Government by Section 6(2) to amend the schedule relating to
exemption is in consonance with the accepted legislative practice
relating to the topic, and is not unconstitutional."
21. While taking the above view, the Apex Court had referred to with
approval the judgment of our High Court reported in Syed Mohmed & Co,
v. State of Madras . In that case, the Madras High
Court has held that the delegation of authority under Section 5(vi) of
the Madras General Sales Tax Act to the rule making authority to
deter-mine at which single point in the series of sales by successive
dealers, the tax should be levied, was within the permissible
constitutional limits in the decision reported in The Edward Mills Co.
Ltd. Beawar v.The State of Ajmer (supra) the Supreme Court upheld the
power given to the State Government under the Minimum Wages Act, 1948,
to add to the list of employment mentioned in the Schedule and extend
the Act to that employment.
22. In the decision reported in Mohmedalli v. Union of India (supra),
the Supreme Court upheld the provisions of Section 1(3) of the
Employees' Provident Funds Act, 1952, authorising the Central
Government to bring within the purview of that Act such establishment
as it, might specify under Sub-clauses (a) and (b) of Sub-section (3)
of Section 1 of the said act, applying to factories and establishments
specified therein in which 20 or more persons are employed. Hence,
Section 1(3) of the Employees' Provident Funds Act, 1952, authorising
the Central Government to bring within the purview of that Act such
establishment as it might specify under Sub-clauses (a) and (b) of
Sub-section (3) of Section 1 of the said Act, applying to factories and
establishments specified therein in which 20 or more persons are
employed. Hence, Section 1(3)(A) and (B) of the said Act excludes from
its purview factories and establishments in which less than 20 persons
are employed. But, under the Proviso to Section 1(3), the Central
Government is given the power to apply the provisions of the Act, by
notification, to any establishment employing less than 20 persons. The
above provision has been upheld by the Supreme Court and it has been
observed as follows (1963-I-LLJ-536 at 539-540):
"It has been contended (1) that Section 1(3)(b) under which the
notification including restaurants and hotels were brought under the
operation of the Act, is invalid because it confers uncontrolled and
uncanalised power on the Government. (2) that the Act was intended
to apply to mere wage-earners and not to salaried people and that,
therefore, the two notifications as a result of which the
petitioners' employees have been brought within the purview of the
Act are bad inasmuch as they are salaried employees and not mere
wage-earners, and (3) that the scheme is bad under Article 14 of the
Constitution because it is discriminatory.....By Section 4, the
Central Government has been authorised to add to the schedule any
other industry in respect of the employees whereof it is of opinion
that a provident fund scheme should be framed under the Act, and
when such a notification is issued, the industry so added shall be
deemed to be an industry specified in the Schedule. The general rule
as to the application of the Act has been laid down in that
sub-section. By way of exception to that general rule, the
Appropriate Government has been authorised by Section 17 to exempt
from the operation of all or any of the provisions of any scheme
framed under the Act. The scheme is to be framed by the Central
Government, under Section 5, for the establishment of provident fund
under the Act for employees or any class of employees, in pursuance
of the provisions of the Act."
23. In the case of the Supreme Court upheld Section 60 of the Madras
Co-op. Societies Act, 1932, which gave power to the State Government to
grant exemption to any society from any of the provisions of the Act,
as well as the power to apply the provisions of the Act to any specific
society, and it has been observed as follows:-
"The policy of the Act is there and so are the guidelines. Why the
legislation? 'To facilitate the formation and working of Co-
operation societies'. Co-operative Societies for what purpose? 'For
the promotion of thrift, self-help and mutual aid'. Amongst Whom?
'Among agriculturists and other persons with common economic needs'.
To what end? 'To bring about better living, better methods of
production'. The objectives are clear, the guidelines are there.
There are numerous provisions of the Act dealing with registration
of societies, rights and liabilities of members, duties of
registered societies, privileges of registered societies, property
and funds of registered societies, inquiry and inspection,
supersession of committees of societies, dissolution of societies,
surcharge and attachment, arbitration etc. We refrain from referring
to the details of the provisions except to say that they are
generally designed to further the objectives set out in the
preamble. But, numerous as the provisions are, they are not capable
of meeting the extensive demands of the complex situations which may
arise in the course of the working of the Act and the formation and
the functioning of the societies. In fact the too rigorous
application of some of the provisions of the Act may itself
occasionally result in frustrating the very objects of the Act
instead of advancing them. It is to provide for such situations that
the Government is invested by Section 60 with a power to relax the
occasional rigour of the provisions of the Act and to advance the
objects of the Act. Section 60 empowers the State Government to
exempt a registered society from any of the provisions of the Act or
to direct that such provision shall apply to such society with
specified modification. The power given to the Government under
Section 60 of the Act is to be exercised so as to advance the policy
and objects of the Act, according to the guidelines as may be
gleaned from the preamble and other provisions which we have already
pointed out, are clear. We are therefore of the view that Section 60
is not void on the ground of excessive delegation of legislative
power. We so declare and otherwise dismiss the appeal."
24. Section 1(3) of the Employees' State: Insurance Act, 1948, was held
to be valid as an example of conditional legislation in the decision
reported in Basant Kumar Sarkar v. The Eagle Rolling Mills Ltd. (supra)
and the law has been stated in the following terms (1964-II-LLJ-105 at
107-108):
"Section 1(3) is not an illustration of delegated legislation; it is
what can be properly described as conditional legislation. Section
3(1) of the Act purports to authorise the Central Government to
establish a Corporation for the administration of the scheme of
Employees' State Insurance by a notification. In other words, when
the notification should be issued and in respect of what factories
it should be issued, has been left to the discretion of the Central
Government and that is precisely what is usually done by conditional
legislation. Assuming that there is an element of delegation, the
plea that the discretion conferred by Section 1(3) is not guided by
any legislative provision is unsustainable, because there is enough
guidance given by the relevant provisions of the Act and the very
scheme of the Act itself. In the very nature of things, it would
have been impossible for the legislature to decide in what areas and
in respect of which factories the Employees' State Insurance
Corporation should be established. It is obvious that a scheme of
this kind, though very beneficent, could not be introduced in the
whole of the country all at once. Such beneficial measures which
need careful experimentation have same times to be adopted by stages
and in different phases, and so, inevitably, the question of
extending the statutory benefits contemplated by the Act has to be
left to the discretion of the appropriate Government. The course
adopted by modern legislatures in dealing with welfare scheme has
uniformly conformed to the same pattern. The legislature evolves a
scheme of socio-economic welfare, makes elaborate provisions in
respect of it and leaves it to the Government concerned to decide
when, how and in what manner the scheme should be introduced. That
cannot amount to excessive delegation. Edward Mills
and Bhikuse Yamasa (1963-I-LLJ-370) rel. on.
I.L.R. 40 Patna, 193, affirmed.
Hence, I am of the view, that the provision of Section 5 of the Act is
valid and does not suffer from the vice of excessive delegation as
contended by the learned Senior Counsel for the petitioner.
25. The Act in question being a Welfare legislation, the Court should
lean in favour of wider delegation of legislative power as observed by
the Supreme Court in the case reported in Registrar of Co-operative
Societies, Trivandrwn v. K. Kunhambu (supra) which is as follows:-
"A good deal of latitude has been held to be permissible in the case
of taxing statutes and on the same principle a generous degree of
latitude must be permissible in the case of welfare legislation,
particularly those statutes which are designated to further the
Directive Principles of State Policy."
26. The State Government has not usurped the functions of the State
Legislature. Further, Section 5 of the Act does not contravene any
constitutional provision. It is not the case of the petitioner that
Section 5 of the Act contravenes any of their fundamental rights or
ultra vires the powers of the State. I have found already that Section
5 of the Act does not suffer from the vice of excessive delegation. As
already mentioned, the Legislature has enacted Sections 4 and 5 with
clarity. Section 5 over-rides the provisions of Section 4. Since the
exemption contained in Section 4 is subject to the provisions of
Section 5, the delegated authority, by issuing the notification
withdrawing the exemptions, is not altering the statute or acts
contrary to the statute. Section 5 limits the powers of the delegated
authority and the power of the State Government is defined clearly.
Delegated power under Section 5 of the Act cannot extend to the
withdrawal of exemption granted under Clauses (c) and (f) of
sub-section (1) of Section 4 and Sub-section (2) of Section 4 of the
Act.
27. Further, Section 5 of the Act has to be construed liberally, being
a social welfare legislation, and it is also a pre-Constitutional
enactment. In this connection, reference can be usefully made to the
decision of the Apex court reported in M/s. Harihar Polyfibres v.
Regional Director, E.S.L Corporation 1984-II-LLJ-475 wherein it has
been observed as follows: (p. 2 476):
"The Employees'State Insurance Act is a welfare legislation and the
definition of 'wages' is designedly wide. Any ambiguous expression
must receive beneficent construction. The E.S.I. Act being a social
welfare legislation must be given a liberal interpretation
beneficial to the interests of the employees so as to serve the
purpose and. objects of the Act."
28. In the above view of mine, there is no need to refer in detail the
judgments relied on by the learned Senior counsel for the petitioner,
for, there cannot be any demur to the proposition made by the learned
Senior Counsel for the petitioner that there cannot be a delegation of
legislative function.
29. Section 5 of the Act does not delegate essential legislative
function to the State Government. Exemption granted under Section 4 is
subject to withdrawal under Section 5 and the power to withdraw the
exemption does not suffer from the vice of excessive delegation.
Legislative policy is contained in Sections 4 and 5 of the Act.
Standards and guidelines are discernable from the various provisions,
and scheme and object of the Act. Therefore, I hold that Section 5 of
the Act is valid and legal.
30. This Court has been taking the consistent view that the employer is
bound to disclose the reasons for termination in the order of
termination itself and failure to do so would render the order of
termination void and non-est as could be seen from the following
decisions. In the decision reported in The Tata Iron and Steel Co. Ltd.
(supra) C.P.V. Rajamannar, C.J., and A.V. Viswanatha Sastri, J.), it
has been observed as follows (1950-LLJ-1043 at 1044):
"Under Section 41(1) of the Act, the services of a person like the
first respondent who has been employed continuously for over a
period of six months can be dispensed with for a reasonable cause
after giving the person at least a month's notice or wages in lieu
of such notice or on a charge of misconduct supported by
satisfactory evidence recorded at an enquiry held for the purpose,
in which case notice would not be necessary. From the order of the
company dispensing with the services of the 1st respondent, the only
reason appearing is the non-requirement of his services. The order
does not state anything else. The only question, therefore, for the
appellate authority was to determine whether that ground can be said
to be reasonable cause. The authority held that it could not be and
we agree with him.."
31. In the decision reported in State Bank of Travancore v. Deputy
Commissioner of Labour, Coimbatore, (1981-I-LLJ-393), Nainar Sundaram,
J., (as he then was), it has been observed as follows (p. 394):
"The first ground is that the proceedings under Section 41 of the
Act before the first respondent are incompetent because the
petitioner has passed the order of termination against the second
respondent under paragraph 522 (1) of the Sastri Award. His
submission is not tenable because it cannot be disputed that so far
as the employment in question is concerned, the provisions of the
Act are definitely attracted. The petitioner-employer and the second
respondent satisfied the definition of a person employed within the
meaning of the Act and any contract between the employer and the
person employed cannot override the express provision of the Act,
or, in particular, Section 41 thereof. The learned counsel for the
petitioner is not in a position to cite any direct authority that
wherever there is contract governing the relationship between the
employer and the person employed the provisions of the Act will have
to be ignored and there is no necessity to adhere to and satisfy the
formalities laid down under Section 41 of the Act. Hence, I am not
able to appreciate and accept the first contention of the learned
counsel for the petitioner. The second ground urged by the learned
counsel for the petitioner is that even otherwise the petitioner has
dispensed with the services of the second respondent for a
reasonable cause and there has been strict compliance with the first
limb of Sub-section (1) of Section 41 of the Act, in the sense the
second respondent has been paid more than a month's wages in lieu of
the notice contemplated. In the instant case a memo was issued to
the second respondent on May 11, 1976 and an explanation was
obtained on June 10, 1976. The order of termination dated March 17,
1977 does not disclose as to whether the explanation was accepted or
not and the factors which weighed with the petitioner to pass the
order of termination on the basis of reasonable cause. If the
termination is to be on the ground of reasonable cause, it is
incumbent on the part of the employer to disclose the reasonable
cause in the order of termination and in the absence of a disclosure
it is not possible for any authority, and in particular the
Appellate Authority under Section 41(2) of the Act, to determine as
to whether the grounds put forth by the employer can be stated to
constitute a reasonable cause and as to whether the order of
termination has been passed bona fide. The necessity to disclose the
reasonable cause in the order of termination has been stressed by a
Bench of this Court in Tata Iron and Steel Co. Ltd.
(1950-LLJ-1043)."
32. In the decision reported in the Management of Blue Star & Co. Ltd.,
v. The Asst. Commissioner of Labour Madras-6 (supra) Shanmukham, J.,
has held as follows:- (1989-I-LLJ-233 at 235):
"From the above evidence, it is clear it is the practice of the
management not to put down the reasons in writing in respect of
Managers, but to inform verbally and according to that practice,
reasons were verbally stated and not stated in the letter. Thus, not
only the documentary evidence emanated from the management but also
the evidence of the Management itself will give a direct lie to the
stand taken by the management that it is because of the specific
request made by the 2nd respondent, the reasons for termination were
not disclosed in the order of termination dated January 3, 1980. If
so much is established, it follows that the order has to be struck
down as illegal in view of the decision of this Court in State Bank
of Travancore v. Deputy Commissioner of Labour, Coimbatore and Anr.
(supra) which in turn followed the decision of this court in Tata
Iron and Steel Co. Ltd. (1950-LU-1043) and of Mr. Justice Nainar
Sundaram in State Bank of Travancore v. Deputy Commissioner of
Labour (1981-I-LLJ-393 at 395) (supra)."
It is also seen from the above decision, the learned Judge has followed
the decision of this Court in State Bank of Travancore v. Deputy
Commissioner of Labour (1981-I-LLJ-393), (supra) which in turn followed
the decision of this Court in Tata Iron andSteelCo. Ltd. (1950
LLJ-1043) (supra).
33. It is admitted by the learned Senior Coun-sel for the petitioner
that if Section 5 of the Act is held to be valid, the notification
viz., G.O. Ms. 4074, Industries, Labour and Housing (Labour) dated
October 5, 1966 would be valid and consequently, the 2nd respondent can
invoke the remedy under Section 41(2) of the Act, and since no reason
has been given in the order of termination, the order of termination,
in my View, is void and non-est. The order of termi-tion, which is
marked as Ex. A-1 before the Appellate Authority. 1st respondent, is
also reproduced hereunder:
"Air France
General Management- India and Nepal
50-B, Chanakyapuri, New Delhi-110 021-Phone 604775 Grams Air France-
Telex
2480.
DEL.DA. 0411/CC.AC. Mr. K.R. Gopalan
68, Abhiramapuram IV St.,
Madras 600 018.
Re: Notice of termination of Services.
Registered A/d.
New Delhi 27th February, 1987.
Sir,
In terms of our agreement clause 8 we hereby terminate your services
in Air France with effect from March 31, 1987.
Yours faithfully,
Air France
(Sd.) P.J. Se Borgne
General Manager."
34. Therefore, the view of the Appellate Authority, 1st respondent
exercising powers under Section 41(2) of the Act, that the order of
termination issued by the writ petitioner to the 2nd respondent does
not contain reasonable cause and that therefore, the same is liable to
be set aside, does not call for any interference by this Court. The
writ petition is, therefore, liable to be dismissed and accordingly,
the same is dismissed. However, there will be no order as to costs.
