TERMINATION OF EMPLOYEE

Workmen—a term used in the Industrial Disputes Act, 1947 that defines those employees whose primary
role is not supervisory, managerial, or administrative.

Any Termination of workman is covered under Industrial Disputes Act and it falls under ‘Retrenchment’

Retrenchment means the termination by the employer the service of a workman for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action,.

Termination of a workman falls under retrenchment only when the workman has put in – Continuous
Service of one year with the employer. During the 12 preceding calendar months the workman worked for
240 days it will be continuous service.

1. Termination justified if 240 working days are not proved. [2013 LLR 184 Del HC]

1. Section 25F: Conditions for Termination1

- Section 25F is referred to in connection with continuous service. It specifies conditions related to
termination of service, and the discussion emphasizes that both conditions are fulfilled if the workman
has worked for 240 days during a 12-month period.

2.. Section 25B: Continuous Service

- Section 25B of the Industrial Disputes Act states that, for the purpose of Section 25F, a workman who
has actually worked for not less than 240 days in a period of 12 calendar months shall be deemed to have
completed one year of continuous service.

- Importantly, this provision considers service for 240 days in a period of 12 calendar months as
equivalent to service for one complete year.

Even if the service is interrupted, it is still deemed as continuous service.

1 MANU/SC/0235/1965 Employers in Relation to Digwadih Colliery vs. Their Workmen (22.03.1965 -

SC)
3. Interpretation of Continuous Service

- The interpretation provided in the text suggests that the fiction created by Section 25B converts
service of 240 days in a 12-month period into continuous service for one complete year.

- It clarifies that there is no need to incorporate the definition of continuous service in Section 2(eee)
into Section 25B because the 240 days worked within 12 calendar months is deemed as continuous
service, meeting the conditions specified in Section 25F.

4. Amendments Introduced in 1964

- The text notes that the amendments introduced by the Industrial Disputes (Amendment) Act, 1964,
into Sections 25B and 25F aimed to remove discordance and vagueness that existed previously in the
unamended sections.

- It emphasizes that neither before nor after the amendments is uninterrupted service necessary, as long
as the total service amounts to 240 days in a 12-month period.

In summary, Section 25B of the Industrial Disputes Act provides a specific criterion for deeming one year
of continuous service, and this is relevant for the conditions specified in Section 25F regarding
termination. The focus is on the actual number of days worked (240 days in a 12-month period)
rather than uninterrupted service.

In Suraj Pal Singh and Ors. vs. P.O. Labour Court No. 111 and Ors. (29.05.2002 - DELHC) : 2

period under Section 25B read with Section 25F of the Act cannot be restricted to immediately preceding
calender year and thus the petitioners cannot be denied the benefit on that ground. As long as an
employee has worked for 240 days in any calender year preceding his termination, the employee
would be entitled to the benefit.

If the aforesaid object is kept in mind Section 25B cannot be given a restrictive interpretation in so far as
the definition of continuous service is concerned. In fact the expression used is 12 calendar years. Period
of 12 calendar months preceding the date and the work "immediately" has not been used. There is force in
contention of learned counsel for the petitioners that if only immediate previous calendar months are
2 MANU/DE/0722/2002
taken into consideration, it will result in an anomalous situation where an employer will be given article
breaks in service for the immediate preceding calendar year and deny the workmen the benefits even
though the workman has worked for more than 240 days in preceding calendar years though it may not be
so in the immediate preceding calendar year. The object of Section 25B is only for purpose of
computation of continuous service and the substantive provision is 25F of the Act. The Division Bench of
the Karnataka High Court in Hutchiah's case has negatived the contention which is sought to be advanced
by learned counsel for respondent No. 2. The view of learned Single Judge of the Rajasthan High Court in
Chief Engineer(Irrigation)'s case is also to the same effect.

A clue can also be taken from the observation of the Supreme Court is State Bank of India's case though
the issue has not been directly decided. The Supreme Court while negating the claim of a workman
referred to the fact that the workman therein had not worked for more than 240 days continuously in "a
year" or "any calendar year". The occasion to use these expressions would not have arisen if the
requirement was the immediate preceding calendar year.

In Gurdial Singh Vs. HP State Electricity Board and Ors. 3

In this judgment Pathak J. agreed with this interpreted Section 25B(2).

Therefore, both on principle and on precedent it must be held that Section 25B(2) comprehends a
situation where a workman is not in employment for period of 12 calendar months but has
rendered service for a period of 240 days within the period of 12 calendar months commencing and
counting backwards from the relevant date, i.e. the date of retrenchment. If he has. he would be
deemed to be in continuous service for a period of one year for the purpose of Section 25B and
Chapter VA."

3 MANU/HP/0539/2015
. From the aforesaid exposition of law, the following legal position emerges:-

(i) Section 25B(1) and Section 25B(2) of the Act are separate and distinct and even requirements and
conditions to be satisfied to some extent are different.

(ii) While insofar as Section 25B(1) is concerned, the workman could be given benefit under this Section
if he had worked continuously or uninterruptedly for a period of 12 consecutive months any time during
the course of his employment and it was not necessary that a worker should have continuously or
uninterruptedly worked from January to December in a particular year. Therefore, continuous or
uninterrupted employment for a period of 12 consecutive months would satisfy the requirement of
Section 25B(1) of the Act.

(iii) The period of 240 days does not find mention in the provisions of Section 25B(1) and is only
referred in Section 25B(2) and therefore cannot be read into Section 25B(2) and the Court had no
power to legislate or incorporate the words "240 days" in Section 25B(1) of the Act.

(iv) Section 25B(2) of the Act only refers to a period of 12 months immediately preceding and counting
backwards from the relevant date and not to any other period of employment. If a workman had worked
for more than 240 days during this period of 12 months prior to his retrenchment, he would be deemed to
be in continuous service for a year. The words "preceding the date with reference to which calculation is
to be made" cannot be rendered redundant or otiose.

(v) The period of 12 months mentioned in Section 25B(2) of the Act is not therefore any period of 12
months but the immediately preceding 12 months with reference to which calculation is to be made.

Under the Karnataka Shops and Establishments Act, 1961 an employer cannot terminate an employee
who has been with the enterprise for more than six months, except on the grounds of “reasonable cause.”
In addition, an employer must provide one month notice. If misconduct is the cause for termination, no
notice or associated payoff is required and an Amendment to Section 6 of THE KARNATAKA SHOPS
AND COMMERCIAL ESTABLISHMENTS ACT, 1961entails the elimination of the stipulated
minimum period of 240 days or more of work as a prerequisite for employees to become eligible for leave
with wages.