Court’s Decision
The Delhi High Court quashed the termination order passed by the employer against a Medical Representative, holding that the dismissal was illegal as it was done without conducting a proper domestic enquiry. The Court allowed the writ petition, set aside the Labour Court’s award which had upheld the dismissal, and directed reinstatement of the petitioner with 50% back wages from the date of termination till reinstatement. The Court observed:
“The requirement of conducting an inquiry is not a mere formality but a fundamental protection… especially when dismissal or removal has civil consequences.”
Facts
The petitioner was a Medical Representative employed in a pharmaceutical company. He was dismissed from service in 1985 on the allegation that he was continuously absent from work without authorization. The petitioner claimed that he had not abandoned his employment and had even reported back to duty, but the employer refused to take him back. No domestic enquiry was conducted by the employer prior to his dismissal. The petitioner raised an industrial dispute, which was referred to the Labour Court for adjudication. The Labour Court held that the dismissal was justified and declined to grant relief to the petitioner.
The petitioner then challenged the award of the Labour Court before the Delhi High Court under Article 226 of the Constitution.
Issues
- Whether the employer was justified in terminating the petitioner without holding a domestic enquiry.
- Whether the Labour Court had erred in upholding the termination despite the absence of any inquiry.
- Whether the reinstatement of the petitioner with back wages was warranted in law.
Petitioner’s Arguments
The petitioner contended that the dismissal order was illegal and in violation of the principles of natural justice since no domestic enquiry was conducted by the employer prior to taking action. He submitted that he had never abandoned his employment and had even offered to join duty, but was wrongfully denied. The petitioner argued that he had not received any show-cause notice or opportunity to defend himself. It was submitted that since the termination had civil consequences, the employer was obligated under law to conduct a fair inquiry.
It was also argued that the Labour Court erred in concluding that the petitioner had abandoned his job, despite lack of evidence or an enquiry. The petitioner prayed for reinstatement with full back wages and continuity of service.
Respondent’s Arguments
The employer contended that the petitioner had remained absent without authorisation for a considerable period and that his conduct amounted to abandonment of service. It was argued that since the petitioner had not reported back for duty despite reminders, his services were rightly terminated. The employer justified the termination by invoking the doctrine of abandonment and further claimed that a formal inquiry was not required in such cases.
It was further contended that the Labour Court had rightly appreciated the evidence and found that the petitioner had no genuine intention to rejoin work.
Analysis of the Law
The Court analysed the legal requirement of a domestic enquiry prior to dismissal under the Industrial Disputes Act, 1947. It referred to the settled principle that termination for misconduct must be preceded by a fair and reasonable opportunity to the workman to explain his position, which is only possible through a domestic enquiry. The Court held that even if the charge is of unauthorised absence, the employer is not exempt from conducting an enquiry.
Further, the Court emphasised that allegations of abandonment of service must be proven and cannot be presumed merely from absence. The burden is on the employer to establish such a fact, particularly when it leads to the harsh consequence of loss of employment.
Precedent Analysis
The Court referred to the following judgments:
- Shambhu Nath Goyal v. Bank of Baroda, (1983) 4 SCC 491: It was held that an employer must seek permission to lead evidence justifying termination when no domestic enquiry has been held, and failure to do so is fatal.
- D.K. Yadav v. J.M.A. Industries Ltd., (1993) 3 SCC 259: The Supreme Court held that the principle of audi alteram partem is part of Article 21 and must be followed in all matters involving civil consequences, including termination of employment.
- Ved Prakash Gupta v. Delton Cable India (P) Ltd., (1984) 4 SCC 487: The Court reiterated that domestic enquiry is an essential condition for valid termination.
These precedents were applied to conclude that the employer had violated the mandatory requirement of holding an enquiry, thereby rendering the termination illegal.
Court’s Reasoning
The High Court found that the Labour Court erred in proceeding on the basis that the petitioner had abandoned his job. It observed that no inquiry or evidence was led by the employer before the Labour Court to prove the allegations. The Court held that when there is no enquiry and no justification established, the only conclusion is that the dismissal was void and unsustainable in law.
The Court reasoned that even if a workman is absent without leave, a domestic enquiry is the only method by which such an allegation can be fairly adjudicated. The employer’s failure to conduct an inquiry and its subsequent inaction before the Labour Court was fatal to the defence.
The Court further stated:
“Even if the Labour Court permitted the employer to prove misconduct before it, the burden lay on the employer to lead evidence to prove misconduct, which has not been done in the present case.”
Conclusion
The Delhi High Court quashed the award of the Labour Court and held the termination of the petitioner to be illegal. The Court directed reinstatement with 50% back wages and continuity of service, citing that dismissal without enquiry amounts to violation of natural justice and constitutional rights.
Implications
This judgment reinforces the principle that employers cannot terminate workers, even for unauthorised absence, without holding a proper domestic enquiry. The ruling upholds the right to fair process as a non-negotiable requirement under industrial law. It sends a strong signal that abandonment cannot be presumed and that every allegation of misconduct must be proved through a formal inquiry. It also reminds adjudicatory bodies to not uphold dismissals that are unsupported by due process.
Cited Cases and Their Role
- Shambhu Nath Goyal v. Bank of Baroda: Clarified that employers must justify termination with evidence if no enquiry was held.
- D.K. Yadav v. J.M.A. Industries Ltd.: Affirmed natural justice as a constitutional mandate in employment termination.
- Ved Prakash Gupta v. Delton Cable India (P) Ltd.: Emphasised that a domestic enquiry is indispensable in disciplinary actions.
FAQs
Q1. Can an employee be terminated without a domestic enquiry?
No. The Court held that even in cases of unauthorised absence or misconduct, a domestic enquiry is mandatory before termination.
Q2. What if the employer fails to hold an enquiry but proves misconduct before the Labour Court?
The employer must seek permission to justify the action before the Labour Court and lead evidence. If no such step is taken, the termination is vitiated.
Q3. Is abandonment of service presumed from unauthorised absence?
No. Abandonment must be proven with evidence. Mere absence is insufficient to draw such an inference.