The Bombay High Court has affirmed that an oral termination of a workman without adherence to the mandatory procedural safeguards under the Industrial Disputes Act, 1947, constitutes illegal retrenchment, regardless of the absence of written documentation. The judgment reinforces the principle that statutory protections for workmen are not contingent on formalities alone but on the substance of employment cessation.
Background & Facts
The Dispute
The petitioner, Shabnoor Ayub Pathan, was employed by the respondent, J.M.D. Engineer Perforations and Automobile Filter, an establishment registered under the Factories Act, 1948, with over 58 workmen. He joined in 2012 and was orally designated as an Assistant Supervisor. No appointment letter was issued. He earned a monthly wage of Rs. 16,500 and claims to have worked continuously for eight years, thereby acquiring the status of a permanent workman under law.
Key Facts
- The petitioner had no technical qualifications in engineering or business management.
- The employer failed to issue salary slips, maintain muster rolls, or pay overtime wages as required by law.
- During the COVID-19 pandemic, the establishment temporarily suspended operations.
- Upon resumption of operations in May 2020, all other workmen were permitted to return, but the petitioner was denied entry.
- The petitioner had persistently demanded payment of statutory overtime wages and compliance with labour laws, which allegedly provoked management displeasure.
- On 17 May 2020, the petitioner was orally terminated by Mr. Shyamsingh Kohli, the Production Manager.
- No written termination order, notice, notice pay, or retrenchment compensation was issued.
- The petitioner sent a legal notice dated 9 July 2020 demanding reinstatement with back wages.
- The respondent did not respond to the notice.
Procedural History
- 17 May 2020: Alleged oral termination of the petitioner.
- 9 July 2020: Legal notice issued by petitioner’s advocate demanding reinstatement and back wages.
- 25 August 2020: Industrial dispute filed by petitioner before Deputy Labour Commissioner, Pune.
- 7 September 2020: Demand letter submitted along with complaint.
- 12 October 2020: Respondent filed its reply before Conciliation Officer, acknowledging petitioner’s demand for a "termination letter".
- 10 November 2020: Conciliation Officer submitted failure report under Section 10(6) of the Industrial Disputes Act, 1947.
- 24 November 2020: Industrial dispute referred to Labour Court as Reference (IDA) No. 453 of 2020.
- 2020 - 2022: Respondent failed to file Written Statement for 22 months; order of "No Written Statement" passed.
- 2022: Respondent permitted to file Written Statement upon payment of costs.
- 1 October 2024: Labour Court delivered Award dismissing petitioner’s claim, holding that the establishment was closed for four months during lockdown and that petitioner had abandoned service.
- 8 May 2025: Writ Petition No. 6541 of 2025 filed before Bombay High Court.
Relief Sought
The petitioner sought quashing of the Labour Court’s Award, reinstatement with continuity of service, full back wages for the period from 17 May 2020 to reinstatement, and all consequential benefits.
The Legal Issue
The central question was whether an oral termination of a workman, without compliance with Section 25F of the Industrial Disputes Act, 1947, constitutes illegal retrenchment, and whether a subsequent plea of abandonment of service can be sustained in the absence of a domestic enquiry or documentary proof.
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the oral termination on 17 May 2020 was consistent across all stages - from the legal notice to the affidavit before the Labour Court. The respondent never denied termination at the conciliation stage; instead, it referenced the petitioner’s demand for a "termination letter", which amounted to an implied admission. No written order, notice pay, or retrenchment compensation was produced. The plea of abandonment was raised for the first time in the Written Statement, after a 22-month delay, and was unsupported by any domestic enquiry, charge-sheet, or opportunity of hearing. The Labour Court’s finding that the establishment was closed for four months was based on a misreading of the petitioner’s testimony, which had explicitly denied continuous closure.
For the Respondent
The respondent’s counsel contended that the petitioner had abandoned service after the lockdown, as he failed to report for duty despite the establishment reopening. The legal notice dated 9 July 2020 was not duly proved and could not be relied upon. The Labour Court correctly held that Sections 2(oo) and 25F were not attracted due to the four-month closure. Reliance was placed on Vilas Ganpati Patil v. Suyog Backwell Vasantdada Audyogik Vasahat to support the finding of abandonment.
The Court's Analysis
The Court emphasized that the consistency of the petitioner’s version - from the initial notice to the affidavit and cross-examination - lends credibility to the claim of oral termination. The respondent’s failure to deny termination at the earliest opportunity, and its reference to the petitioner’s demand for a "termination letter", created an adverse inference. The Court held that in industrial law, the burden shifts to the employer to prove lawful termination once cessation of service is established.
"The employer is expected to produce the best evidence available with it because the relevant records remain under its possession."
The Court found that the absence of any written order, notice, payment of retrenchment compensation, or attendance records rendered the termination illegal under Section 25F. The mandatory nature of these provisions was underscored as a safeguard against arbitrary deprivation of livelihood.
Regarding abandonment, the Court held that mere absence does not equate to abandonment. Intention to relinquish employment must be proven through cogent evidence, including a domestic enquiry. The respondent’s failure to conduct any such proceeding, issue a charge-sheet, or afford a hearing rendered the abandonment plea legally unsustainable.
The Court further criticized the Labour Court for piecemeal appreciation of evidence. The petitioner had admitted only a temporary closure in March 2020, not four months of continuous closure. The Labour Court’s reliance on this misread testimony to exclude application of Section 25F was erroneous.
The Court distinguished Vilas Ganpati Patil on facts: there, the workman never offered to resume work; here, the petitioner immediately initiated legal proceedings and consistently expressed willingness to return.
The Verdict
The petitioner succeeded in part. The Court quashed the Labour Court’s Award dated 1 October 2024 to the extent it denied reinstatement. The termination of the petitioner’s services on 17 May 2020 was declared illegal. The respondent is directed to reinstate the petitioner within eight weeks from the date of uploading of this judgment, with continuity of service for all legal and service purposes, including seniority and retiral benefits. However, the petitioner is not entitled to back wages for the intervening period, as the claim of unemployment was not substantiated by sworn testimony.
What This Means For Similar Cases
Oral Termination Is Not a Legal Loophole
- Employers cannot evade statutory obligations under Section 25F by terminating services orally.
- Consistent assertions by a workman across multiple forums, even without written documentation, can establish termination.
- The burden of proving lawful termination rests squarely on the employer.
Abandonment Requires More Than Absence
- A plea of abandonment must be supported by a domestic enquiry, charge-sheet, and opportunity of hearing.
- Delayed raising of abandonment as a defence, especially after prolonged silence, is treated as an improvement and not a valid defence.
- Mere non-reporting during or after a pandemic does not constitute abandonment without proof of intention.
Evidence Must Be Appreciated Holistically
- Courts must read witness testimony in its entirety; partial reliance leads to perverse findings.
- Legal notices alone cannot prove unemployment or other factual claims unless affirmed under oath.
- Writ jurisdiction under Articles 226 and 227 can be invoked where Labour Courts misread evidence or ignore statutory mandates.
