Misconduct – Held, certain behavioural attitude of an employee on some occasion cannot be construed as a grave misconduct, because their always remain a possibility of further discussion or correct such behaviour by way of dialogues.


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Mahindra Holidays and Resorts India Ltd. v. Appellate Authority, (Madras) : Law Finder Doc Id # 1709451

2020(1) LLJ 523

MADRAS HIGH COURTBefore:- S.M. Subramaniam, J.

W.P. No. 16398 of 2017 and W.M.P. No. 17726 of 2017. D/d. 4.11.2019.

Mahindra Holidays & Resorts India Ltd., Rep., by its Vice President – Human Resources, No.17/18, Mahindra Towers, 2nd Floor, Patullos Road, Chennai-600 020. – Petitioner

Versus

Appellate Authority under Tamilnadu Shops and Establishments Act-1947, Special Deputy Commissioner of Labour, DMS Compound, Teynampet, Chennai-600 006 – Respondents

For the Petitioners :- Mr. Sanjay Mohan and M/s. Ramasubramaniam & Associates.

For the Respondents No. 1 :- Mr. J. Ramesh Additional Government Pleader.

For the Respondents No. 2 :- Ms. Bindu Jacob (Party in person).

IMPORTANT

Misconduct – Held, certain behavioural attitude of an employee on some occasion cannot be construed as a grave misconduct, because their always remain a possibility of further discussion or correct such behaviour by way of dialogues.

Services and Labour Laws – Termination – Allegation relating to incompatibility and indiscipline to some extent – Held, in such cases, a charge sheet must be issued and a domestic enquiry must be conducted and the matter would have to be promptly dealt with by following the procedures contemplated.

[Para 32]

ORDER
S.M. Subramaniam, J. – The order passed by the Appellate Authority under the Tamil Nadu Shops and Establishments Act, 1947 (hereinafter referred to as “the Act”) in proceedings dated 19.04.2017, is sought to be quashed in the present writ petition.

2. The petitioner is Mahindra Holidays & Resorts India Limited. The petitioner states that their company is a public limited company engaged in the business of providing vacation ownership to its members and their families at its numerous holiday resorts across the country and above. The petitioner company’s resort operations are headed by the Chief Resort Officer. The operations are then divided on regional basis with Kerala, Tamil Nadu and Karnataka, East and North India and West India being the principal divisions.

3. The 2nd respondent, viz. Smt. Bindu Jacob was appointed in the petitioner company as Corporate Manager – Business Strategy in February 2007. Her role as a Corporate Manager – Business Strategy was to identify and assess business requirements, recommend business priorities and advise the business stakeholders on options, risks and costs. The 2nd respondent was also accountable for the delivery and validation of projects, establish project governance and produce a well-defined project plan identifying the key milestones and assigning responsibilities/resources.

4. The petitioner states that the 2nd respondent was assigned the core function of building strong business relationships with external and internal departments with minimum conflicts. As a part of her role, the 2nd respondent had to interact with external business communities and had to act as a point of contact on behalf of the petitioner company.

5. Learned counsel for the writ petitioner states that the 2nd respondent was re-designated as the Corporate Manager – SPA operations and was to report directly to the Chief Resort Officer, who heads the resort operations of the petitioner company. On account of certain conflicts between the Management Officials and the 2nd respondent, a letter of termination was issued to the 2nd respondent on 23.04.2012, discharging her from service invoking the terms and conditions of employment covered by appointment order dated 21.02.2007 by giving her three months basic salary in lieu of notice, which was paid later by letter dated 26.05.2012. It is an admitted fact that the said three months basic salary was not paid along with the order of termination. The order of appointment dated 21.02.2007, stipulates certain terms and conditions of appointment.

6. Learned counsel for the petitioner contended that the Management had invoked Clause 5 of the terms and conditions and terminated the services of the 2nd respondent.

7. Condition No. 5 stipulates that “if at any future date, on assessment of your performance, it is found that your continuance in employment is not beneficial to the company or you are found unfit or unsuitable for service in the company, your services can be terminated by giving you three months notice or payment of three months basic salary in lieu thereof. Similarly, you will also have the option of leaving the services of the company after confirmation by giving three months notice period in writing to the company or payment of three months basic salary in lieu thereof”.

8. Citing the above condition, learned counsel for the petitioner states that the attitude of the 2nd respondent with the other officials of the company was not satisfactory and the same prompted the Management to initiate action to discharge her services. Frequently she used to pick up quarrels with the staff of the company and her sudden emotional outburst used to create some issues in the development of the business of the company, which made the company to take a decision to discharge her services.

9. Learned counsel for the petitioner during the course of arguments contended that the petitioner company is ready and willing to pay compensation in lieu of re-instatement, as the provisions of the Tamil Nadu Shops and Establishments Act, 1947 was amended. As per the amended Section 2-B of the Act, “the appellate authority, may, after giving notice in the prescribed manner to the employer and the person employed, dismiss the appeal or direct re-instatement of the person employed, with or without wages for the period he was kept out of employment or direct payment of compensation without re-instatement or grant such other relief as it deems fit in the circumstances of the case”.

10. Relying on the amended provision, learned counsel for the petitioner is of an opinion that when the attitude and the sudden emotional outburst of the 2nd respondent, who was placed in a higher level, is identified as a reason for discharging her services, the authority competent ought to have considered the amended provision so as to award compensation in lieu of re-instatement. In other words, it is contended that the option as well as the submissions made in this regard, are not considered by the authority under the Act and therefore, the case is to be remanded back to the authority so as to consider these aspects for the purpose of granting compensation, as the Management is ready and willing to pay compensation in lieu of re-instatement.

11. It is contended that re-instatement may cause further inconvenience to the Management in view of the higher position which the 2nd respondent was placed and therefore, the company, even now, is willing to pay compensation in lieu of re-instatement.

12. When the learned counsel for the petitioner made such a suggestion, this Court also made an option open to the 2nd respondent to consider the same. The 2nd respondent, in clear terms, said that she is ready to accept full back wages in the event of any such settlement or she is willing to re-instate in service and ready to work along with the company in full devotion to her duty and she made further submission that those persons, who had worked along with her, are now not in the services of the writ petitioner company and there are lot of changes in the Management and accordingly, she is willing to work with the Management, if the order of re-instatement passed by the authority is confirmed by this Court.

13. Learned counsel appearing for the writ petitioner Management further solicited the attention of this Court that the authority competent miserably failed to consider the alternate submissions made by the Management and expressed their willingness to settle the matter by paying compensation, when the amended provision stipulates that “direct payment of compensation without re-instatement as an option, then the authority ought to have considered and adjudicated the issue by affording opportunity to both the parties concerned”. Contrarily, an order of re-instatement is passed and therefore, the matter is to be remanded back for re-consideration.

14. In respect of the merits, learned counsel for the petitioner has stated that three months salary along with a notice was sent subsequently, after passing of the termination order and it was not enclosed along with the order of termination. Thus, this Court is of an opinion that the requirement of the provision has not been complied with. However, learned counsel for the petitioner is of an opinion that it would be very difficult for the Management to re-instate the 2nd respondent, as the same may cause not only inconvenience, but may affect the business activities of the writ petitioner company and therefore, the matter is to be sent back for re-consideration for the purpose of considering alternative relief of grant of compensation in lieu of re-instatement and such an adjudication is done by the original authority with reference to the amended provision, more specifically, Section 2-B of the Act.

15. The 2nd respondent, who appeared in person could able to articulate her case by stating that she had not committed any misconduct or otherwise. She has got a meritorious record of service and was able to establish that at no point of time, she was an under-performer and she performed to the satisfaction of her superiors all along and therefore, there is no reason to terminate her without any valid reason.

16. The 2nd respondent, in person emphatically contended that the decision was taken by the company emotionally without considering the best record of performance of the 2nd respondent that was established. Thus, such an emotional decision taken by the company authority, without considering her services, cannot be accepted at all. There is no valid reason whatsoever to discharge her from services. The only point is that she questioned the other Secretary regarding her late arrival to the office, which prompted the officials to initiate action.

17. The 2nd respondent informed the Court that at the first instance, she was forced to resign her job, but she refused to do so, which resulted in issuance of discharge order and termination without even complying with the provisions of law. Thus, the order was rightly set aside by the authority competent under the provisions of the Act.

18. It is contended that the 2nd respondent was working as Senior Level Officer and was fully dedicated to her duties and responsibilities. This apart, there is no allegation of misconduct or otherwise and even, the witnesses, who have deposed before the authority concerned, had not stated anything about her adversely. Thus, the order of termination is bad in law.

19. The 2nd respondent states that she is an employee under Section 2(12) of the Act. She has got good academic record and she had passed B.Com., with first class and passed MBA from the Institute of Business Management, Loyola College, Chennai. She was awarded best out going student and had worked in ITC Hotels as Assistant Manager (Sales & Marketing) for four years and thereafter, worked for some time in Standard Chartered Bank as Branch Manager, in 3 locations viz., Chennai, Bangalore and Hyderabad for six years. Thereafter, she was appointed as senior official in the writ petitioner Management. Regarding the intemperate attitude of the 2nd respondent, she made a submission that the reasons are flimsy and in fact, on account of certain petty incident, the Management has taken an action against her. Otherwise all along, she was performing her duties and responsibilities to the satisfaction of her superiors and she contributed for the development of the organisation and she was granted performance bonus continuously and strong performer appraisal for more than five years. When the writ petitioner themselves granted performance bonus and further granted appraisal certificate and increments, they cannot now say that the 2nd respondent had underperformed and therefore, they have discharged her from services. The suitability or otherwise of the 2nd respondent in the past had already been recognised by the writ petitioner Management and therefore, the subsequent reasons stated are only to defend their case before the authority and there is no iota of truth in the statement made by the writ petitioner company either before the authority concerned or before this Court.

20. Learned counsel for the writ petitioner, in reply, at this juncture pointed out the statement made by the 2nd respondent in her counter more specifically in paragraph 13, wherein the 2nd respondent has stated that “Mr.Peter Martin, in-charge of Head of Operations of the petitioner organisation was unfortunately her Boss. He did not enjoy much of a reputation”. Citing the statement, learned counsel for the petitioner emphasised that this being the conduct of the 2nd respondent, her temperament is also to be considered and that is the reason why the company has come to the conclusion that they can provide compensation in lieu of re-instatement.

21. The 2nd respondent, in this regard, has stated that Mr.Peter Martin is also not working with the writ petitioner company and many other senior officials had already left the company and now, the company is administered by many number of new officials and therefore, it may not be a problem for her to continue with the services in the event of re-instatement.

22. As far as the impugned order is concerned, the appellate authority under the Act considered the facts placed before it and made a finding that no enquiry was conducted prior to the issuance of the termination order. In the absence of conducting any enquiry, an employee cannot be terminated from services. Thus, the order of termination is in violation of the principles of the natural justice.

23. The authority found that as per the provisions of Clause 5 of the terms and conditions of appointment, an employee can be terminated by giving three months notice or payment of three months basic salary in lieu thereof. However, the payment was made after the issuance of termination order and therefore, such payment is in violation of Section 41 of the Act. In other words, the conditions stipulated in the statute has not been complied with and therefore, the impugned order of termination is untenable.

24. The order impugned states that “regarding the issue of incompatible behaviour and attitude, the petitioner has marked e-mails sent by Mr.Peter Martin to Mohit Bhatia alleging complaints on the 2nd respondent and one Ms.Rochelle (Ex.R2 to Ex.R8). However, the person namely, Peter Martin has not let in any evidence before the authority, nor the persons mentioned in the complaints viz., Latha and Moorul Hussain were produced before the Court for enquiry. The employees, whom the 2nd respondent alleged to have ill treated, that is, the Chief Resort Officer’s Secretary, was not produced before that forum for enquiry. However, the writ petitioner company had not produced any compliant received by the Complaint Committee from any employee against the 2nd respondent, nor the Complaint Committee conducted any enquiry in this regard. Two management witnesses viz., (i) Prashant Khullar and (ii) Mary Angelina have in general deposed about the attitude and behaviour of the 2nd respondent without quoting any specific incident or producing any substantial evidence. Moreover, the witness Mr.Prashant Khullar, in the cross examination, had mentioned that the 2nd respondent was terminated on account of certain indiscipline, late attendance, prolonged lunch breaks and bad mouth with superiors. The authority came to a conclusion that such general submissions cannot be a ground to terminate the employee from services and such allegations regarding misconduct have to be established by conducting a proper enquiry and admittedly, no such domestic enquiry was conducted, nor the 2nd respondent was provided with an opportunity to defend her case in respect of such allegations. In the absence of any such allegations to the delinquent employee, the Management cannot plead about the misconducts.

25. Misconduct, undoubtedly, is a stigma against an employee and in the event of attaching any such stigma, then a proper enquiry is mandatory and, in the event of not conducting such an enquiry, the entire actions are in violation of the principles of natural justice. Regarding the incompatibility or otherwise or behaviour of the employees, it may depend upon the likes and dislikes of the person concerned. However, mere statement in this regard, is insufficient to terminate an employee. A behaviour of one person may not be compatible to another person and may be compatible to a third person. It all depends upon the way in which persons react with each other and in case of indiscipline, then the employer is bound to frame charges with specific allegation and conduct an enquiry and thereafter, initiate action by following the procedures contemplated.

26. Mere statement or mere opinion formed by the Management is insufficient in this regard. Undoubtedly, if an employee is in probation period and if the superior authority has found that such misbehaviour is affecting the business development of the company, then they can invoke the terms and conditions of the appointment and discharge the services, as the employee was in probation. However, the 2nd respondent was a permanent employee of the writ petitioner company and she has served for a considerable length of time and she could able to establish that she performed her duties and responsibilities with may appraisals and she was granted with performance bonus and appraisal certificate, increments etc., and under these circumstances, the statement made is not only unacceptable, but false and incorrect.

27. The 2nd respondent articulated by stating that she was victimised on the basis of certain personal likes and dislikes. Thus, the order passed by the authority competent is to be confirmed by this Court.

28. In respect of the submission made by the learned counsel for the writ petitioner that the matter is to be remanded, this Court is of an opinion that such a course would cause great injustice to the employee concerned. In the event of remanding the matter back, it may take long years for re-adjudication and this apart, the amended provision may not have much application, as far as the present facts and circumstances are concerned. The order of termination, admittedly, was issued without following the procedures contemplated under the statute. Beyond that, even the competent authority under the Act gone into the evidences, and the evidences as well as the deposition of the witnesses also reveal that the allegations against the 2nd respondent are baseless and the writ petitioner Management could not able to produce any document to establish that she had committed grave misconduct or otherwise warranting major penalty of terminating from service. Undoubtedly, the same requires proof for such grave misconduct.

29. Assuming without admitting certain behavioural attitude of an employee on some occasion cannot be construed as a grave misconduct. There is a possibility of further discussion or correct such behaviour by way of dialogues. Contrarily, if the employer is permitted to terminate an employee on these grounds without even conducting enquiry, this Court is of an opinion that the entire purpose and objects of the service prudence to protect the services of the employee is defeated and under these circumstances, there is no perversity or otherwise in respect of the findings of the competent authority under the Act.

30. This apart, the reason for seeking remand of the matter by the learned counsel for the petitioner Management is to consider for grant of compensation in lieu of re-instatement. However, a suggestion is made before this Court by the petitioner to the 2nd respondent employee, but the 2nd respondent made it very clear and said that she is prepared to accept the compensation, if the back wages as ordered by the competent authority is paid in full. When the writ petitioner is not agreed for the payment of full back wages as ordered by the authority under the Act, then there is no point in remanding the matter back to the authority concerned, as the authority in clear terms found that the order of termination is illegal and in violation of the principles of natural justice. When the alternate suggestion made by the learned counsel for the petitioner has been adjudicated before this Court and the proposal is negatived by the 2nd respondent employee, there is no reason to send back the matter to the original authority for re-adjudication and the same would cause not only time delay, but result in denial of justice within a reasonable period to the aggrieved person, the 2nd respondent.

31. Remanding of the matters by the High Courts are also to be done cautiously. It may be easy for the Court to remand the matter by giving one or other reasons. This Court is of a considered opinion that the same amounts to evasion of responsibility in deciding the issues on merits based on the facts and circumstances placed. The Courts must always take efforts to decide the matter on merits to avoid delay and provide justice to the litigant at the earliest possible. Remanding of the matters will cause prolongation of the litigation and the same will result in denial of speedy justice. The Court is expected to develop confidence in the mind of the people regarding the justice delivery system, in accord with the constitutional perspectives. Therefore, the Courts must try and dispose of the cases as early as possible. Remanding of the matter in certain circumstances may not yield any fruits and therefore, this Court is not inclined to accept the suggestion made by the learned counsel for the petitioner to remand the matter for the purpose of adjudicating the compensation. As far as the amended provision is concerned, the authority competent held that the order per se is illegal and in violation of the principles of natural justice. Thus, the question of compensation is subject to the acceptability of the employee concerned and even before this Court, the 2nd respondent in unambiguous terms expressed that she is prepared to accept the compensation in the event of paying the full back wages as ordered by the competent authority and not otherwise. Thus, no purpose would be served by remanding the matter back.

32. As far as merits of the case are concerned, admittedly, the 2nd respondent was an employee for more than five years. She was working as a permanent employee in a higher position. Her performance in the company was not disputed. She was awarded with performance bonus, appraisal certificates and other incentive increments for her better performances. When all these records are not disputed, the only complaint made against the 2nd respondent was her incompatibility and indiscipline to some extent. However, such complaints if at all have got some substance, then a charge sheet must be issued and a domestic enquiry must be conducted and the matter would have to be promptly dealt with by following the procedures contemplated. Contrarily, the employer, at their whims and fancies, cannot terminate an employee in such a manner and the Management always should not think that they cannot act as per their own way without following the rule of law.

33. Every citizen of this country is to be respected, and the rights of the employees should also be protected by the Courts. The labour laws are expressively dealing with such matters in order to protect the service conditions and the livelihood of the employees. In the event of allowing such dismissal, the same will affect the livelihood of the employees. The 2nd respondent is now aged about 50 years and she is in an unsecured position and termination at this point would certainly affect her future career and other aspects of the matter. This being the facts and circumstances, this Court has no hesitation in coming to the conclusion that the order passed by the competent authority under the Act is candid and convincing and there is no infirmity as such.

34. It is brought to the notice of this Court that at the time of admission of this writ petition, the Management was directed to deposit 25% of the back wages awarded, for grant of interim stay. Accordingly, the writ petitioner Management had deposited a sum of Rs. 21,66,600/-.

35. As far as the back wages are concerned, the competent authority awarded 100% back wages. However, this Court is inclined to consider the quantum of back wages, as the 2nd respondent was holding a senior position and was drawing a salary of more than 1.5 lakhs. In the event of awarding 100% back wages, the same may not be appropriate. The 2nd respondent was holding a senior position and she was not performing her duties and responsibilities or contributed for the development of the company for the past about six years, during the pendency of the litigation. However, this Court cannot brush aside the contention of the 2nd respondent, as she was unnecessarily terminated from service without any valid reason. She was deprived of her livelihood without conducting any enquiry. Therefore, this Court has to adopt a balancing approach in awarding back wages, as the mitigating factors are the 2nd respondent admittedly had not contributed to the development of the company for the past six years and the 2nd respondent was denied an opportunity to serve in the company and on account of that extent, she was deprived of her livelihood also.

36. Accordingly, the following orders are passed:-

    (i) The order passed by the 1st respondent in proceedings TNSE – 1/13/12, dated 19.04.2017 is confirmed with a modification by reducing the back wages from 100% to 50%;
    (ii) As far as the 25% of the deposited amount of back wages is concerned, the 2nd respondent is permitted to withdraw the said deposited amount from the 1st respondent appellate authority;
    (iii) The 1st respondent appellate authority is directed to pay the deposited amount of back wages with accrued interest to the 2nd respondent within a period of four weeks from the date of receipt of a copy of this order;
    (iv) In respect of the balance 25% of the back wages, the writ petitioner Management is directed to settle the same within a period of four weeks from the date of receipt of a copy of this order; and
    (v) With reference to re-instatement, the writ petitioner Management is directed to reinstate the 2nd respondent within a period of two weeks from the date of receipt of a copy of this order.

37. The writ petition stands dismissed, accordingly. Consequently, connected miscellaneous petition is closed.

Petition dismissed.

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