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UNFAIR DISMISSAL OF WORKMEN IN INDIA1

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INTRODUCTION
Dismissal is termination of services by the way of punishments for some
misconduct or for unauthorized or prolonged absence from duty.2
An employer is free to select anyone according to his requirements but he does
not have the liberty to fire his workman3 at his will. This has become more difficult after
introduction of Industrial Disputes Act, 1947(hereinafter referred to as IDA).4
According to S. 2A5 of IDA, dispute arising out of dismissal of a workman shall
be deemed to be an “industrial dispute” notwithstanding that any other workman nor any
union is a party to dispute.
Dismissal is different from discharge as the later is termination of contract by
notice or payment of wages in lieu of notice, whereas dismissal implies not merely
termination without notice or payment but essentially indicates a measure of
punishment.6 Discharge is necessary incidence of the right of an employer to terminate

1
Gaurav Garwa, Student, B.A. LL.B. (Hons.), NALSAR, UNIVERSITY OF LAW, HYDERABAD
2
Z.M.Sahid Siddiqi, M. Afzal Wani, “Labour Adjudication in India”, ed. 2001, p.166
3
Section 2(s) of Industrial Disputes Act, 1947 defines “workman” according to which it includes
“any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be
express or implied, and for the purposes of any proceeding under this Act in relation to an industrial
dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or
as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but
does not include any such person - (i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army
Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six
hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by
reason of the powers vested in him, functions mainly of a managerial nature.”
4
Ibid at p.165
5
inserted by amendment act of 1965.
6
Ibid at p.166.

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the services of an employee under the terms and conditions of employment. In the case of
termination of employment or discharge, the employee would be entitled to his full
provident fund, gratuity and other benefits. Dismissal on the other hand, is a result of
some misconduct, which might deprive him of a number of benefits.7
The immediate dismissal of an employee is a strong measure, and can only be
done in exceptional circumstances that an employer is acting properly in summarily
dismissing an employee on his committing a single act of negligence. The test to be
applied varies with the nature of the business and the position held by employee, and
decisions in other cases are of little value.8 For eg. In case of the business of life
insurance a mistake in accepting a risk may lead to a considerable loss, and repetition of
such mistake may lead to disaster. If a person in charge of the life insurance department
subject to the supervision of superior officers shows by his conduct or negligence that he
can no longer command their confidence, and if when an explanation is called for he
refuses apology or amendment, his immediate dismissal is justifiable.9
But in the statute there is no provision for summary dismissal and the workman
has to be given opportunity to explain his conduct and to show cause why he should not
be dismissed. During this procedure there should not be any violation of principles of
natural justice.10
Industrial Tribunal/ Labour Courts have been given power to see whether the
termination of services of workman is justified or not and to give appropriate relief.

ROLE OF STATUTORY BODIES

Power is given to Labour Courts, tribunals and national tribunals to give
appropriate relief in case of discharge or dismissal of workmen under s. 11 A of IDA. In
the case of dismissal for misconduct, the labour court/tribunal does not act as a court of
appeal and substitute its own judgment for that of management.11

7
D.B.R. Mills v. Workmen, 1952 LAC 540
8
K.D.Shrivastav, “The Industrial Disputes Act, 1947”, 6th ed., 1985, p.180
9
Jupiter General Insurance Company v. Ardeshir Bomanji Shroff, AIR 1937 PC 223.
10
Supra n.1 at 166.
11
Indian Iron and Steel Co. Ltd v. Their Workmen (1958) 1 LLJ 260.

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It will interfere:-
(1) If there is want of good faith.
(2)When there is victimization or unfair labour practice.
(3)Management has been guilty of a basic error or violation of the principles of
Natural Justice.
(4)When on the material finding is baseless or perverse. 12

WHEN DISMISSAL IS UNLAWFUL

Termination of employment is unlawful if it is for reasons related to trade union
membership or activity; filing complaints concerning the employer; race, colour, sex,
marital status, pregnancy, religion, political opinion or social origin. In addition,
termination of employment in violation of fair labour practices as defined by legislation
or case law will not be valid. The IDA lists some practices which will be considered to be
“Unfair Labour Practices” in its fifth schedule. These include dismissal on account of
trade union activity or membership; dismissal by way of victimization; dismissal not in
good faith but in “the colourable exercise of the employer’s rights”; dismissal by falsely
implicating a worker in a criminal case or on false or trumped-up allegations of absence
without leave, dismissal without due regard to natural justice or for minor misconduct
leading to disproportionate punishment. The list is not exhaustive.13

PROCEDURE TO BE FOLLOWED FOR INITIATING DISCIPLINARY ACTION

There is no specific procedure prescribed for disciplinary action either in

industrial disputes act or in the rules made there under, which should be compiled with,
before punishing the industrial workers but the following things need to be considered by
the employer while dismissing an employee.

12
Ibid at 166.
13
http://www.ilo.org/public/english/dialogue/ifpdial/info/termination/countries/india.htm
 PRESENCE OF MISCONDUCT
The definition of misconduct is not provided either in IDA or Industrial
Employment (Standing Orders) Act, 1946.14 Although illustrative list(& not exhaustive)
is provided in S. 14(3) of Model Standing orders under Industrial Employment(Standing
Orders) central Rules 1946 framed under Indian Employment (Standing Orders) Act
1946 by the Central Government and various cases such as J J Mody v. State of Bombay15
and Sharda Prasad Onkar Prasad Tiwari v. Central Railway16.
Also, the employer may frame their own standing orders suited to the peculiar
exigencies of their industries or establishment.17 The foremost duty of employee is to
obey the order which the employer is justified in giving under the terms of employment
either express or implied. All orders concerning the work which the employee is required
to do and the time, the manner and the place of performing it are presumable and in the
absence of any special circumstances, are within the control of employer. So, doing some
act which an employee should not do, or not doing something which he is required to do
amounts to misconduct.
Certain cases suggest that non observance of duty, negligence of duty18, absence
without leave & good cause19, illegal strikes20, go slow21, theft22, acts subversive of

14
E.M.Rao(ed.) O.P. Malhotra, “The Law of industrial Disputes”, 6th ed., 2004, p.1120
15
AIR 1962 Guj 197, 202(DB)
16
1960 1 LLJ 167, 170 (Bom.) DB.
17
Supra n. 13 at p.1121.
18
A single instance of such acts or omissions unless attended by serious consequences would not
constitute the misconduct of habitual negligence but when such acts committed habitually can justify the
penalty of dismissal. (Navinchandra Shakerchand Shah v. Ahmedabad Cooperative Department Stores Ltd.
(1979) 1 LLJ 60, 63 (Guj) DB.)
19
The defence open for employee is that his absence without leave was on account of circumstances
beyond his control. [Rabindranath Sen v. First Industrial Tribunal, West Bengal (1963) 1 LLJ 567 (Cal)]
20
With regard to quantum of punishment for misconduct of engaging in illegal strike, Sinha J.
explained in the case of India General Navigation and Rly Co. Ltd v. Their Workmen (1960) 1 LLJ 13 that
clear distinction has to be made between workmen taking part in obstructing the loyal workmen from
carrying on their work, or taking part in violent demonstrations, or acting in defiance of law and order and
those workmen who were more or less silent participators.
21
SU Motors Private Ltd. v. Their Workmen (1990) 2 LLJ 39 (SC)
22
The punishment of dismissal for minor and trifling acts of theft are unwarranted and
unsustainable.
[P Orr Sons Pvt. Ltd. v. Presiding Officer, Labour Court (1974) 1 LLJ 517 (Mad)]
discipline23, riotous behavior24, damage to property and reputation25, corruption and
dishonesty & fraud26 amounts to misconduct. Mere irregularities have been held not to
constitute misconduct.27

CHARGE SHEET
A charge sheet is an allegation of misconduct, misbehavior, indiscipline, lack of
interest in work, negligence etc. on the part of employee. It is a memorandum of charges
which consists of facts and allegations which the person issuing wants to establish against
an employee.28 The charge sheet must be in writing29 and should be very clear so that it
can give the concerned employee a fair idea of charges which he has to face.30
Under clause 14 in schedule 1 of the Industrial Employment (standing orders)
Rules, 1946, dealing with disciplinary action for misconduct, sub clause (4) lays down
that no order of dismissal shall be made unless the workman concerned is informed of, in
writing, of the alleged misconduct and is given an opportunity to explain the
circumstances alleged against him.31

DOMESTIC ENQUIRY
There is no provision either in the IDA or industrial employment (standing orders) act
which states that an order of dismissal is illegal if is not preceded by a proper and valid
domestic enquiry. So, the only obligation of a person conducting the enquiry is that he
will have to comply with the rules of natural justice.
In Associated Cement Co. v. Workmen,32 the court said that domestic enquiry
should be conducted by those who are not likely to import their personal knowledge into

23
This term has wider impact and connotation as it covers all those acts which tend to destroy
discipline at workplace. Whether an act is subversive of discipline constituting misconduct will depend
upon the circumstances of each case. [WM Agnani v. Badri Das (1963) 1 LLJ 684, 689 (SC).]
24
Ramakant Sharma v. State of Uttar Pradesh 1982 Lab IC 1790 (SC).
25
Hindustan General Electrical Corpn Ltd v. Bishwanath Prasad (1971) 2 LLJ 340 (SC).
26
Vimla v. Delhi Administration AIR 1963 SC 1572.
27
Itticheria v. State of Kerala, (1958) 2 LLJ 724.
28
Supra n. 1 at 171.
29
Marwari Relief Society v. Bachha Misra, 1953 LAC 537.
30
Tezpur Zila Chah Mazdoor Sabha v. Kuttal Guri Tea Estate, 1954 LAC 324.
31
Supra n.6 at 183.
32
(1963) 2 LLJ 396 (SC)
the proceedings. In Frome United Breweries Co. Ltd. v. Bath Justices33, court said that
the person dealing with the enquiry at any stage is in position of a judge, and the rules of
natural justice demand that he should not be personally interested in the case. So the
person to be appointed as enquiry officer can be an officer of the establishment or an
outsider including a lawyer appointed by the management. But such a person appointed
should not be disqualified from holding such enquiry on grounds such as bias, personal
interest or being an eye witness or victim of the incident etc.34

PUNISHMENT
The Punishment must be commensurate with the gravity of the act35. In order to
find who can impose punishment what has to be seen is to who is the appointing authority
for the particular post in question at the relevant time.36 It was said in the case of Indian
Iron & Steel Company v. Workmen37 that once it is established that an employee has been
guilty of misconduct, the discretion as to what punishment should be imposed on him is
with the management, and the labour court has no power to interfere with the discretion
exercised except under certain circumstances, such as (1)where there is want of good
faith, (2) where there is victimization or unfair labour practice, (3) when the management
has been guilty of basic error or violation of principle of natural justice and (4) when on
the materials, the finding is completely baseless or perverse.
With regard to punishment and its quantum, power is given to adjudicating
authority to interfere with the quantum of punishment under s.11 A of industrial Disputes
Act.38
The section provides Powers to Labour Courts, Tribunals and National Tribunals
to give appropriate relief in cases of unfair dismissals. According to this section, when
“the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the
order of discharge or dismissal was not justified, it may, by its award, set aside the order

33
1926 AC 586
34
Supra n.1 at 173-174.
35
Hind Construction and Engineering Co. Ltd. v. Their Workmen (1965) 1 LLJ 462, 465 (SC).
36
Supra n. 13 at p.1291.
37
AIR 1958 SC 130.
38
Palghat BPL & PSP Thozhilai Union v. BPL India Ltd. (1996) 2 LLJ 335.
of discharge or dismissal and direct reinstatement of the workman on such terms and
conditions, if any, as it thinks fit, or give such other relief to the workman including the
award of any lesser punishment in lieu of discharge or dismissal as the circumstances of
the case may require:” During such proceedings under this section the Labour Court,
Tribunal or National Tribunal, as the case may be, shall rely only on the materials on
record and shall not take any fresh evidence in relation to the matter.39

REMEDY OF REINSTATEMENT

The normal relief when dismissal is found wrong is reinstatement. The term
“industrial dispute” as defined in section 2(k)40 of the IDA includes a “claim for
reinstatement” of an employee who has ceased to be a “workman”41
Further, S. 11 A of IDA empowers Labour Courts, Tribunals and National Tribunals to
set aside the order of discharge or dismissal and direct reinstatement of the workman.
This section applies for penal discharge and not to the discharge simplciter.42
Earlier, disputes to be dealt in accordance with the law laid down in the earlier
decisions of Supreme Court in this subject. In the case of Workmen of Firestone Tyre &
Rubber Co. of India Private Ltd v. Management, Supreme Court held that S. 11 A applies
only to disputes which are referred to adjudication, after insertion of this section as it has
the effect of altering the law laid down by the Supreme Court in this respect by abridging
the right of the employer in as much as it gives power to the tribunal to differ both on a
finding of misconduct arrived at by an employer as well as the punishment imposed by
him. The Supreme Court in Tata Oil Mlls Co. Ltd. Workmen43 said that If the industrial

39
S. 11 A, Industrial Disputes Act, 1947, available at
http://pblabour.gov.in/pdf/acts_rules/inustrial_disputes_act_1947.pdf (Date of last visit: February
27, 2009)
40
"industrial dispute" means any dispute or difference between employers and employers or
between employers and workmen, or between workmen and workmen, which is connected with the
employment or non-employment or the terms of employment or with the conditions of labour, of any
person.
41
Santa Cruz Kalina & Malad Marve Bus Service v. Workmen, (1954) 2 LLJ 446.
42
Rajasthan State Road Transport Corporation v. Judge, Industrial Tribunal (1995) 1 LLJ, 360
(Raj.) (DB)
43
(1966) 2 LLJ 602 SC.
court is satisfied that the order of discharge is malafide or it amounts to victimization or
unfair labour practice, it is competent to labour court to set aside the order and in a proper
case direct reinstatement.
In cases of exceptional circumstances, as in the case of Tulsidas Paul v. Second
Labour Court44 where it was contended that the labour court in any event should not have
granted the relief of reinstatement as it would not be conducive to industrial peace in
view of the hostile attitude of the majority of the fellow workmen against the concerned
workman. The court said that, in such exceptional circumstances the labour court should
have considered the exceptional circumstances and instead of directing reinstatement
should have compensated the wrongfully dismissed workmen with adequate monetary
compensation.
In Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha45, a majority
of 3 judge bench held that an arbitrator under s. 10A is comprehended in the expression
tribunal as used in S. 11 A. So the arbitrator has the same jurisdiction as a labour court,
tribunal or national tribunal while adjudicating upon a dispute relating to disciplinary
discharge, dismissal of a workman.

PROTECTION AGAINST UNJUSTIFIED DISMISSAL BY INTERNATIONAL

INSTRUMENTS
In India, there is no proper statute providing procedure to be followed while
dismissing an employee but International instruments are not silent on it. Termination of
Employment Convention, 1982 (No. 158) gives clear provision with regard to the
procedure to be followed, procedure of appeal against termination, severance allowance
and other income protection, consultation of worker’s representatives etc.46 According to
this, employment of a worker shall not be terminated unless there is a valid reason for
such termination connected with the capacity or conduct of the worker. Several reasons
are listed as grounds that shall not constitute valid reasons for termination, including

44
(1964) 1 LLJ 516 (Cal HC).
45
(1980) 1 LLJ 137 (SC).
46
“Protection against Unjustified Dismissal”, International Labour Conference, 82nd Session 1995.
union membership or participation in union activities outside working hours (or within
working hours, with the consent of the employer); seeking office as, or acting or having
acted in the capacity of, a workers' representative; the filing of a complaint or the
participation in proceedings against an employer; race, colour, sex, marital status, family
responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
absence from work during maternity leave; and temporary absence from work because of
illness or injury.47
Recommendation No. 166 of ILO makes provision for appropriate written
warning before a worker's employment is terminated for misconduct as well as for
appropriate instructions, written warning and a reasonable period of time for
improvement before a worker's employment is terminated for unsatisfactory
performance.48

CONCLUSION
Earlier individual dispute like dismissal could not become per se an industrial
dispute but could become one if it was taken up by trade union or a substantial number of
workmen of the establishment. This created a problem for individual workers who were
discharged or dismissed and could not find support of union or a number of workers. But
after insertion of S. 2A such an individual dispute is deemed to be an industrial dispute
without any need of involving a trade union or a group of workers.
Earlier disputes regarding dismissal had to be dealt with in accordance with the
law laid down by earlier decisions of supreme court but after insertion of S. 11 A, the
concerned adjudicator has to apply the provisions of this section and has the power to
differ both on finding of misconduct arrived at by an employer as well as punishment
imposed by him and can provide appropriate remedy according to facts and
circumstances of each case.

47
Ibid.
48
Supra n. 45, See Appendix.
 There is no specific procedure prescribed for disciplinary action either in IDA or
in the rules made there under. The ILO Convention No. 158 and Recommendation No.
166 gives the detailed provision regarding the procedure to be followed as explained
above. So there is a need of insertion of proper procedures to guide employers as well as
employee during proceedings of unfair dismissal. If such a procedure is inserted or a new
act is formed regarding dismissal, burden on labour courts with regard to cases of
dismissal and reinstatement will be reduced.
 BIBLIOGRAPHY

 E.M.Rao(ed.) O.P. Malhotra, “The Law of industrial Disputes”, 6th ed., 2004,
Lexis Nexis Butterworths, New Delhi

 K.D.Shrivastav, “The Industrial Disputes Act, 1947”, 6th ed., 1985, Eastern Book
Company, Luknow

 P.K. Padhi, Labour and Industrial Laws, 2007, Prentice Hall of India Private Ltd.,
New Delhi.

 Protection against Unjustified Dismissal”, International Labour Conference, 82nd

Session 1995, International Labour Organization.

 Z.M.Sahid Siddiqi, M. Afzal Wani, “Labour Adjudication in India”, ed. 2001,

Indian Law Institute, New Delhi.

 http://pblabour.gov.in/pdf/acts_rules/inustrial_disputes_act_1947.pdf

 http://www.ilo.org/public/english/dialogue/ifpdial/info/termination/countries/india
.htm

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