Holding

The expiry of a fixed‑term engagement does not constitute retrenchment under clause (bb) of Section 2(oo) of the Industrial Disputes Act, 1947, and therefore Section 25‑F is inapplicable.

Summary

Kishore Chandra Samal was repeatedly appointed as a junior typist on a daily wage (N.M.R.) basis for specific fixed periods by the Orissa State Cashew Development Corporation. After the last fixed-term appointment expired on 3 May 1989, no further extension was given and his service automatically ceased. He claimed that this refusal of work amounted to retrenchment under Section 25-F of the Industrial Disputes Act, 1947, and sought reinstatement with back wages. The Labour Court held the termination illegal and ordered reinstatement, but the Orissa High Court set aside that award, reasoning that the engagements were for fixed periods and therefore did not constitute retrenchment under clause (bb) of Section 2(oo). The Supreme Court upheld the High Court, holding that expiry of a fixed‑term contract is not retrenchment and Section 25‑F does not apply, and dismissed the appeal.

Issues considered

Whether termination of a workman appointed for a fixed period, without renewal, amounts to "retrenchment" within the meaning of clause (bb) of Section 2(oo) of the Industrial Disputes Act, 1947.
Whether Section 25-F of the Industrial Disputes Act, 1947, is applicable to such termination.

Legislation cited

Industrial Disputes Act, 1947s. 25-F, s. 2(oo)(bb)

Subjects

retrenchmentfixed‑term contractIndustrial Disputes ActSection 25-Ftermination of servicelabour disputereinstatementback wages

Judgment

- KISHORE CHANDRA SAMAL
v.
A
THE DIVISIONAL MANAGER. ORISSA STATE CASHEW
DEVELOPMENT CORPORATION LTD. DHENKANAL

NOVEMBER 17, 2005
B
[ARIJITPASAYAT AND R.V. RAVEENDRAN, JJ.]

Industrial Disputes Act, 1947-Sections 2(oo)(bb) and 25-F-
Retrenchment-Termination of workman appointed for a ftxed period, after C
expiry of said period-Held: Does not amount to retrenchment.

Appellant was appointed for fixed ·f>erioos from time to time. When no
further extension was given, his service automatically ceased. Alleging that
refusal of work amounted to retrenchment, he raised Industrial dispute. Labour
Court held that-termination of·his'•service was illegal and directed his D
reinstatement~ Higl:tFCourt'fleld'that since'the engagements were for fixed
period, award of the Labour Court was to be set aside. Hence the present appeal

Dismissing the appeal, the Court -

HELD: The respondents cannot be said to have been retrenched in view E
of what is stated in clause (bb) of Section 2(oo) of'the Industrial Disputes Act,
1947. In the instant case in all the orders of engagement, specific periods
have been mentioned. Therefore, the High Court's order does not suffer from
any infirmity. [297-C]

S.M Nilaikar and Ors. v. Telecom District Manager, Karnataka [2003) F
4 sec 27, held inapplicable.

Morinda Coop. Sugar Mills Ltd v. Ram Kishan and Ors., (1995) 5 SCC
653; Anil Bapurao Kanase v. Krishna Sahakari Sakhar Karkhana Ltd. and
Anr., (1997] 10 SCC 599 and Batala Co-operative Sugar Mills Ltd v. Sowaran
Singh, (2005) 7 Supreme 165, relied on. 0
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5458 of2004.

From the Judgment and Order dated 22.1.2003 of the Orissa High Court
in O.J.C. No. 9152of1998.
293 H
294 SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A Ramesh Chandra Pandey for the Appellant.

Janaranjan Das and Swetaketu Mishra for the Respondent.

The Judgment of the Court was delivered by

B ARIJIT PASA YAT, J. Appellant calls in question legality of the judgment
rendered by a Division Bench of the Orissa High Court setting aside the
award of Labour Court, Bhubaneswar dated 29.10.1997 passed in l.D. Case
No.90 of 1994 which directed the appellant-Corporation to reinstate the present
appellant with full back wages.

C Factual background in a nutshell is as under:-

The case of the appellant was that he was appointed as Junior Typist
. on N .M.R. basis by the respondent~ with effect from 12. 7 .1982. He continued
in the said post for more than one year. All of .a sudden another order was
issued appointing him for 44 days with effect fr:om 1.10.1983. On its expiry on
D 15.11.1983 another appointment order was issued ,on. ..5.12.1983 for a fixed
period·giving effect from 16 ..1 l..!f.18~. Thereafter, he was allowed to continue
for about 8 months. Later.,be was appoinrep on ad hoc basis in the usual scale
of pay ofRs.255-5-285-EB-7-306-12-390/- with effect from 23.7.1985. Thereafter
without any rhyme or reason, he we¥.i again kept in N.M.R. on payment of
E Rs. I 0/- per day for a period of 90 days from 1.12.1985 to 28.2.1986. Thereafter
he was allowed to continue from 29.6.1986 to 25.9. I 986 and further from
27.9.1986 to 24.12.1986. Thereafter, he was allowed to continue without any
break till 11.8.1989. Alleging that refusal of work beyond 11.8.1989 amounting
· to retrenchment, he raised dispute giving rise to the above reference.

F The respondent's case before the Labour Court was that the appellant
was working on N.M.R. basis as a Typist with effect from 12.7.1982. He was
appointed for a specific period on daily wage basis. On consideration of the
representation for further enga~ement and having regard to the requirement,
he was engaged again and again on daily wage basis for specific period. The
last order of appointment on N.M.R. basis was issued. to him on 28.4.1989.
G Thereafter no further extension was given. Thereafter, his service automatically
ceased and it is not a case of retrenchment.

The Labour Court on perusal of the evidence on record held that the·
appellant served continuously for many years covering the requisite period
H of continuous service in a calendar year. Although there is no evidence that
KJSHORECHANDRASAMAL ,._DIV. MAN.ORISSA STATE CASHEW DEV. CORPN. LTD. [PASAYAT.J.] 295
the post of Typist was a permanent one, he was engaged from time to time A
and at the time of termination as the provisions of Section 25-F of the
Industrial Disputes Act, 1947 (in short the 'Act') had not been complied with,
termination of his service is illegal and unjustified. On the basis of the said

- finding, the Labour Court directed the appellant to be reinstated in his former
post.

The High Court accepted the stand of the respondent-Corporation that
B

the appointment of the writ petitioner (appellant herein) was on N.M.R. basis
for a fixed period of time on the basis of payment at different rates. The
contractual period of engagement ended on 3 .5 .1989 and there was no renewal
thereafter. Since the engagement was for a fixed period, the High Court held C
that the award of the Labour Court was to be set aside.

In support of the appeal, learned counsel for the appellant submitted
that the High Court failed to notice that the j>eriod fixed was a camouflage
to avoid regularization. Reliance was placed on a decision of this Court in
S.M Nilaikar and Ors. v. Telecom District Manger, Karnataka, [2003] 4 SCC D
27 where it was held that mere mention about the engagement being temporary· ..
without indication of any period attracts Section 25-F of the Act if it is
proved that the concerned workman had worked continuously for more than
.240 days.

The position of law relating to fixed appointments and the scope and E
ambit of Section 2(oo)(bb) and Section 25-F were examined by this Court in
several cases. In Morinda Coop. Sugar Mills Ltd v. Ram Kishan and Ors.,
[1995] 5 sec 653 it was observed as follows:

"4. It would thus be clear that the respondents were not working
throughout the season. They worked during crushing seasons only. F
The respondents were taken into work for the season and consequent
to closure of the season, they ceased to work.

5. The question is whether such a cessation would amount to
retrenchment. Since it is only a seasonal work, the respondents
cannot be said to have been retrenched in view of what is stated in · G
clause (bb) of Section 2(oo) of the Act. Under these circumstances,
we are of the opinion that the view taken by the Labour Court and
the High Court is illegal. However, the appellant is directed to maintain
a register for all workmen engaged during the seasons enumerated
hereinbefore and when the new season starts the appellant should H
296 SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A make a publication in neighbouring places in which the respondents
normally live and if they would report for duty, the appellant would
engage them in accordance with seniority and exigency of work."

The position was re-iterated by a three-Judge Bench of th is Court Court
in Anil Bapurao Kanase v. Krishna Sahakari Sakhar Karkhana ltd. and
B Anr., (1997] I 0 sec 599. It was noted as follows:

"The learned counsel for the appellant contends that the judgment of
the High Court of Bombay relied on in the impugned order dated
28.3.1995 in Writ Petition No.488of1994 is perhaps not applicable.
Since the appellant has worked for more than 180 days, he is to be
c treated as retrenched employee and if the procedure contemplated
under Section 25-F of the Industrial Disputes Act, 1947 is applied, his
retrenchment is illegal. We find no force in this contention. In Marinda
Coop.Sugar Mills ltd v. Ram Kishan, in para 3, this Court has dealt
with engagement of the seasonal workman in sugarcane crushing; in
D. para 4 it is stated that it was not a case of retrenchment of the
workman, but of closure of the factory after the crushing season was
over. Accordingly, in para 5, it was held that it is not 'retrenchment'
within the meaning of Section 2(oo) of the Act. As a consequence the
appellant is not entitled to retrenchment as per clause (bb) of Section
2(oo) of the Act. Since the present work is seasonal business, the
E principles of the Act have no application. However, this Court has
directed that the respondent management should maintain a register
and engage the workmen when the season starts in the succeeding
years in the order of seniority. Until all the employees whose names
appear in the list are engaged in addition to the employees who are
already working, the management should not go in for fresh
F
engagement of new workmen. It would be incumbent upon the
respondent management to adopt such procedure as is enumerated
above."

Recently, the question was examined in Batala Co-operative Sugar
G Mills Ltd v. Sowaran Singh, (2005] 7 Supreme 165 !.

Section 2(oo) of the Act reads as follows:

"Section 2(oo) "retrenchment" means the termination by the employer
of the service of a workman for any reason whatsoever, otherwise
than as a punishment inflicted by way of disciplinary action, but does
H
KISHORE CHANDRA SAMAL v. DIV. MAN. ORIS'SA STATE CASHEW DEV. CORPN. LTD. (PASA VAT, J.) 297

(a) .... ..

(b) ..... .

(bb) termination of the service of the workman as a result of the non-
removal of the contract of employment between the employer and the B
workman concerned on its expiry or of such contract being terminated
under a stipulation in that behalf contained therein"

- The decision in S.M. Nilaikar 's case (supra) has no application because
in that case no period was indicated and only indication was the temporary
nature of engagement. In the instant case in all the orders of engagemeiit,
c
specific periods have been mentioned. Therefore, the High Court's order
does not suffer from any infirmity.

The High Court had noted that its order would not stand in the way
of Corporation considering the case of the workman for appointment. It. is D
submitted by learned counsel for the appellant that representation was made
in this regard which has been turned down. Learned counsel for the
respondent·Corporatlon submitted that the representation was for a permanent
absorption. Since there was no post vacant, the representation was rejected.
The dismissal of the present appeal shall not stand on the way of the
Corporation engaging appellant taking into account his experience and while E
considering the appellant's case the claims of others making similar claims
shall be considered in proper perspective.

Appeal is dismissed. Costs made easy.

D.G. Appeal dismissed. F