No automatic termination even if employee overstays leave -- SC

No automatic termination even if employee overstays leave -- SC
PRESS TRUST OF INDIA

New Delhi, Nov 22: In a major relief to millions of employees, the Supreme Court has ruled that an employee cannot be dismissed automatically even if he overstays the leave period violating a standing order and added that he has to be given a chance to explain the reasons for his overstay.

"A standing order which provides for automatic termination of service of a permanent employee would be bad if it did not purport to provide an opportunity of hearing to the employee whose services are treated to have come to an end automatically," a bench comprising Justice S Rajendra Babu and Justice S N Variava said in a judgement yesterday.

Scooters India Ltd had a standing order that "Any workman who remains absent from duty without leave in excess of the period of leave originally sanctioned or subsequently extended for more than 10 consecutive days, he shall be deemed to have left the service of the company of his own accord, without notice, thereby terminating his contract of service with the company and his name will be struck off the rolls."

On the basis of this standing order, the company dismissed a semi-skilled workman from service on the ground that he overstayed the period of his leave and did not join duty despite being afforded an opportunity.

The employee contended before a labour court at Lucknow that he was not given an opportunity to join the service. The court held this as retrenchment and directed reinstatement with continuity of service and full back wages.

Scooters India appealed against the order of the labour court in the Allahabad High Court but the same was dismissed. Hence, the appeal before the Supreme Court.

Justice Variava, writing the judgement for the Bench, citing a previous judgement of the apex court in Uptron India Vs. Shammi Bhan, said it was held that principles of natural ustice had to be read into such a clause and the principles of natural justice had to be complied with.

"It was held that the employee had to be informed of the grounds for which action proposed to take against him for overstaying the leave," the judge said adding "Therefore, it is clear that there could not be any automatic termination of employees on the basis of the standing order."

Going into the evidence appreciated by the labour court, Justice Variava said "this showed that the workman had reported for work as against the Scooters India Ltd's stand that he had not reported for duty."

He said it was on this basis that the labour court came to a conclusion that there was retrenchment without following the provisions of law. "As the workman was not allowed to join duty, standing order could not have been used for terminating his services."