The ruling was handed down by a Division Bench comprising Justices S Saghir Ahmad and MJ Rao, while dismissing a Special Leave Petition (SLP) by a public sector undertaking, Uptron India Ltd, challenging a judgment of the Allahabad High Court. By the impugned judgment dated October 28, 1997, the HC upheld an award of the Industrial Tribunal directing reinstatement with 50 per cent back wages of an operator, termination of whose services by the company was found illegal.

The respondent, Shammi Bhan, was appointed as an operator (trainee) in the petitioner's establishment on June 13, 1980. On completion of training, she was absorbed with effect from July 13, 1981 and was confirmed on July 13, 1982 thus acquiring the status of a permanent employee.

With effect from November 7, 1984, Shammi proceeded on maternity leave and remainedon leave till January 29, 1985. Thereafter, she allegedly remained absent with effect from January 30, 1985 to April 12, 1985 without any application for leave, and consequently, by an order dated April 12, 1985, the petitioner informed her that her services stood automatically terminated in terms of clause 17(g) of the certified standing orders of the company.

In a dispute raised by Shammi, the State Government referred the same to the Industrial Tribunal. The Tribunal, by its award dated July 21, 1992, held that the termination of the services of the respondent amounted to ``retrenchment'' within the meaning of Section 2(00) of the Industrial Disputes Act and since all other legal requirements had not been followed, the termination was bad and consequently she was entitled to reinstatement with 50 per cent back wages from the date of termination till the reinstatement.

The award of the Tribunal was challenged by the petitioner through a writ petition in the HC, which dismissed the writ petitionupholding the findings of the Tribunal that the termination of services of the respondent was ``retrenchment.'' The HC further held that while invoking the provisions of Clause 17 (g) of the certified standing orders, the petitioner ought to have given an opportunity of hearing to the respondent. Hence, the SLP before the Apex Court.

Justice Ahmad, who wrote the judgment for the Bench, noted that the Tribunal, as also the HC, had recorded that the respondent was a permanent employee in the petitioner's establishment.

The judge said that conferment of a ``permanent'' status on an employee guaranteed security of tenure. ``It is now well settled that the services of a permanent employee, whether employed by the Government, a Government company, a Government instrumentality, a statutory corporation or any other ``authority'' within the meaning of Article 12 of the Constitution, cannot be terminated abruptly and arbitrarily, either by giving him a month's or three months' notice or pay in lieu thereof or evenwithout notice, notwithstanding that there may be a stipulation to that effect either in the contract of service or in the certified standing orders,'' the judge added.

``The employee against whom action on the basis of this provision is proposed to be taken must be given an opportunity of hearing. The principles of natural justice, which have to be read into the offending clause, must be complied with and the employee must be informed of the grounds on which action was proposed to be taken against her for overstaying on leave,'' Justice Ahmad observed.