Industrial Disputes Act | Employer’s Failure To Assign Work To Employee Deemed Retrenchment: Jammu & Kashmir High Court


The case revolved around the termination of services of Aga Syed Mustafa by JK Handicrafts. Mustafa, engaged as an Assistant Craftsman by the company in 1982, claimed that he had not voluntarily abandoned his services, as the company had alleged. Instead, he contended that he repeatedly made requests for further posting orders after being transferred to the head office, yet was not adjusted like his colleagues.

The dispute reached the Assistant Labour Commissioner, who observed that Mustafa’s termination lacked adherence to relevant provisions of the Industrial Disputes Act. Subsequently, a reference was made to the Industrial Tribunal for adjudication. The key issues before the Tribunal included whether the company’s termination of Mustafa’s services was justified and whether he was entitled to reinstatement and compensation.

The Tribunal’s initial award favored JK Handicrafts, but it was quashed by the High Court in a previous judgment. The matter was remitted back to the Tribunal for fresh consideration.

In the recently delivered judgment, the High Court found that Mustafa had not voluntarily abandoned his services but was prevented from working due to the company’s failure to provide posting orders. 

The court dismissed the company’s contention that the termination did not amount to “retrenchment,” as per the amended Section 2(oo) of the Industrial Disputes Act. It was established that the amendment did not apply to the case due to the timing of the events.

Justice Dhar, citing the State Bank of India vs. Shri N. Sundara Money case, emphasized that the term “retrenchment” covered any termination of service for any reason whatsoever, except for specific exemptions like voluntary retirement or superannuation.

The court concluded that the termination was indeed a case of retrenchment, as the company had not followed the necessary legal procedures outlined in Section 25F of the Act. Consequently, the Tribunal’s decision to direct Mustafa’s reinstatement was upheld.


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