Supreme Court of India
Punjab Land Development and Reclamation Corporation Ltd. v. Presiding Officer, Labour Court, Chandigarh
Whether 'retrenchment' means only the discharge of surplus staff, or every termination of service other than those the definition excludes.
Decided under an earlier law
The Court decided this case under the Industrial Disputes Act, 1947. Section 104 of the Industrial Relations Code, 2020 repeals the Industrial Disputes Act, 1947. The Court's words are shown below beside the Code provision this library compares them with. This library does not say whether the decision holds good under the Code: compare the two texts.
What the Court decided
Each point is this library's summary, followed by the Court's own words, checked word for word against the Supreme Court's typed copy of the judgment (JUDIS file 7506). The pinpoint gives the page of the Supreme Court Reports and the margin letter (A to H) printed beside the line where the words begin.
'Retrenchment' means the termination by the employer of a workman's service for any reason whatsoever, except the cases the definition expressly excludes; it is not limited to discharging surplus staff.
we hold that "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section.
[1990] 3 S.C.R. 111, at 156 B · open the report at p. 156 Hariprasad Shivshankar Shukla, decided on a closure of the business, did not decide that retrenchment is confined to surplus staff.
Thus, the Court was neither called upon to decide nor did it decide whether in a continuing business, retrenchment was confined only to discharge of surplus staff
[1990] 3 S.C.R. 111, at 142 D · open the report at p. 142 What was decided was that if there was no continuing industry the provision could not apply.
[1990] 3 S.C.R. 111, at 142 E · open the report at p. 142 Sundara Money and the decisions that followed it were not given in ignorance of a binding precedent.
The Judgments in Sundara Money (supra) and the subsequent decisions in the line could not be held to be per incuriam
[1990] 3 S.C.R. 111, at 143 A · open the report at p. 143 On a genuine transfer or closure of an undertaking, the workmen are entitled only to the notice and compensation due on retrenchment, not to a right of re-employment.
in a case where there is a genuine transfer of an undertaking or genuine closure of an undertaking as contemplated in the aforesaid sections, it would be inconsistent to read into the provisions a right given to workman … a right to claim re-employment as provided in section 25-H.
[1990] 3 S.C.R. 111, at 153 B · open the report at p. 153 In such cases, as specifically provided in the relevant sections the workmen concerned would only be entitled to notice and compensation in accordance with section 25-F.
[1990] 3 S.C.R. 111, at 153 C · open the report at p. 153
The earlier provision and the Code
Industrial Disputes Act, 1947, section 2(oo)
As quoted in the judgment: [1990] 3 S.C.R. 111, at 121 E · open the report at p. 121
’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 not include-- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill health.
The judgment quotes the definition as the amending Act of 1953 inserted it. It notes that clause (bb), on the non-renewal of a contract of employment, was added by the amending Act of 1984.
Industrial Relations Code, section 2(zh)
Definitions In force
(zh) "retrenchment" means the termination by the employer of the service of a worker for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—
(i) voluntary retirement of the worker; or
(ii) retirement of the worker on reaching the age of superannuation; or
(iii) termination of the service of the worker as a result of the non-renewal of the contract of employment between the employer and the worker concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(iv) termination of service of the worker as a result of completion of tenure of fixed term employment; or
(v) termination of the service of a worker on the ground of continued ill-health;
Wording in common: 69% of the words, in the same order.
Wording differs; the decision may not carry over. The Code provision is not worded like the provision the Court interpreted.