“An Award of the Labour Court without any fundamental flaws, does not invite a High Court’s interference”; Gujarat HC dismisses petitions by employees of Indian Petrochemicals Corporation regarding the company’s Voluntary Retirement Schemes

Gujarat High Court

Gujarat High Court: The instant petitions came up before the Court challenging the Award of the Labour Court, Vadodara, whereby which it was held that since the workmen had applied for withdrawal from their company’s Voluntary Retirement Scheme after having enjoyed the benefits of the scheme and without refunding the same, therefore they cannot challenge their termination. The Bench of Biren Vaishnav, J., while deciding upon the petition, observed that once the Labour Court has exercised its jurisdiction judiciously, the High Court can interfere with the Award, only if it is satisfied that the same is vitiated by any fundamental flaws.

Two Sides of The Story: Indian Petrochemicals Corporation Ltd. (originally owned and managed by the Central Government) in the course of implementing the policy of disinvestment, diverted its share capital to Reliance Industries Ltd., which became a major stakeholder of the Company. The Company then promoted two schemes via Circular dated 06-03-2007 – the Voluntary Separation Scheme (VSS) and Special Separation Scheme (SSS), in order to downsize its staff. Under the scheme, regular employees of the Vadodara Complex were eligible to apply and the same was operative from 06-03-2007 to 20-03-2007.

The Petitioners stated that about 2400 employees applied under the scheme; however, the Scheme did not mention any period vis-a-vis providing an opportunity to an employee to withdraw themselves from the scheme. Under the threat of being transferred to Jamnagar, the petitioners were compelled to apply under the scheme, which they did on the last date i.e. 20.03.2007.

Having so applied, in the late evening of 20.03.2007, they orally requested for withdrawal of their Voluntary Retirement Applications. Their request was refused by the Officer of the Company on the grounds that the data was already locked in their computer and reconsideration / withdrawal was not possible.

The petitioners further stated that on 21-03-2007 they requested for the withdrawal of their applications, however, an endorsement was made that the competent authority shall take a decision. According to the petitioners, the letters dated 20.03.2007 were posted on 26.03.2007 informing the petitioners of the acceptance of their applications. The petitioners claimed that this “acceptance of letters” was a deception put on by the Company to show that the offer of the employees was accepted and that there was concluded contract and, therefore, no withdrawal can be permitted. The case of the petitioners was that despite letters in June and August 2007, no decision was taken and, therefore, the action of the Company in accepting their applications was illegal and that the petitioners must be reinstated in service.

The Company stated that the VSS / SSS Scheme was open up to 20-03-2007 and 19 employees who made applications for withdrawal on or before 20.03.2007 were considered by the Company and such employees were allowed to withdraw their applications. They stated that the present petitioners did not withdraw their applications before acceptance. Moreover, they accepted all the benefits flowing from the scheme and after receiving the benefits, they raised an industrial dispute. The Company’s stand was that once having accepted the amounts under the Scheme, it was not open for them to turn around and claim benefits of reinstatement.

Award of the Labour Court: The dispute came up before the Labour Court, Vadodara, who, upon perusal of the facts and contentions, held that the workmen (petitioners herein) were unable to establish that they were threatened to be transferred to Jamnagar if they did not take VRS. The Labour Court also held that the employees had applied for withdrawal after having enjoyed the benefits of the scheme and after being silent for a period of three months, have objected to the VSS/SSS without refunding the benefits; therefore, they have no right to challenge their termination now.

Observations by the High Court: After a detailed perusal of the proceedings before the Labour Court, facts and evidence presented, the Court noted that the VSS/SSS scheme was open from 06-03-2007 to 20-03-2007 and there is nothing on record to show that even oral request for withdrawal was made even before the scheme closed. The withdrawal was made only on 21-03-2007, by which time an acceptance was issued.

The Court further stated that the Labour Court, considering the evidence of workmen and other relevant documentary evidence, concluded that it was only three months after the employee was relieved and had accepted the benefits available under the VRS, that he objected to the scheme. The Court also pointed out that the employee, after five months, lodged his protest to say that he had accepted the amounts subject to his objection. This clearly was an afterthought.

With the afore-stated observations, the Court held that the Labour Court had judiciously exercised its jurisdiction while deciding the instant matter, therefore the High Court does not need to interfere with the Award. The instant petitions were thus dismissed.

[Gohil Rameshbhai Amarsinh v. Indian Petrochemicals Corporation Ltd., 2022 SCC OnLine Guj 1304, decided on 15-09-2022]

Advocates who appeared in this case:

P.R. Thakkar, Advocate, for the Petitioner(s) No. 1;

J. P. Thakkar, Advocate, for the Petitioner(s) No. 1;

K. S. Nanavati, Sr. Counsel assisted by Pratik Bhatia for Nanavati Associates, Advocate, for the Respondent(s) No. 1.

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