Case Study: Burden of Proof on Employer in Illegal Termination Cases

Case:

Goverdhan v. Chief Municipal Officer
Misc. Petition No. 6329/2022

Court and Date:

High Court of Madhya Pradesh
Before: Hon’ble Mr. Justice Sanjay Dwivedi
Date: 17 October 2024

Relevant Law:

• Industrial Disputes Act, 1947
  • Section 25F – Conditions precedent to retrenchment of workmen.
  • Section 25B(2) – Definition of continuous service (240 days rule).

Background:

The petitioner, Goverdhan, had been working as a skilled labourer with the respondent from 01 October 2011 until his oral termination on 01 February 2019. His dismissal occurred without notice or retrenchment compensation, violating Section 25F of the Industrial Disputes Act.

He raised an industrial dispute before the Labour Court, which dismissed his claim, holding that he had failed to produce documentary proof of continuous service for 240 days in a calendar year. Dissatisfied, Goverdhan filed a writ petition under Article 227 of the Constitution, challenging the Labour Court’s award.

Legal Issue:

• Whether the Labour Court was justified in placing the burden of proof entirely on the workman to show continuous service of 240 days.
• Whether oral termination without compliance with Section 25F constitutes illegal retrenchment.

Key Legal Findings:

1. Burden of Proof:
   • Initially, the workman must show that he worked for 240 days in a year.
   • However, once the workman testifies or deposes that he completed 240 days of service, the burden shifts to the employer to rebut that claim by producing documentary evidence (attendance and wage records).
   • If the employer fails to do so, adverse inference can be drawn against them.
2. Employer’s Failure:
   • The management did not produce attendance or wage records, despite such records being under their control.
   • The Chief Executive Officer admitted ignorance about the petitioner’s continuous service and stated that records were “never called.”
3. Violation of Section 25F:
   • Oral termination without one month’s notice or retrenchment compensation violates Section 25F.
   • Such termination is therefore illegal and unjustified.
4. Supporting Precedents:
   • Director, Fisheries Terminal Department v. Bhikubhai Meghajibhai Chavda (AIR 2010 SC 1236) – Held that once a workman asserts 240 days’ service, the onus shifts to the employer.
   • Manager, RBI v. S. Mani (2005) 5 SCC 100 and Range Forest Officer v. S.T. Hadimani (2002) 3 SCC 25 – Clarified the evidentiary standard for proving continuous service.

Judgment:

The High Court found the Labour Court erred by wrongly placing the entire burden on the workman. Justice Sanjay Dwivedi ruled that the termination was in violation of Section 25F, and therefore:

• The impugned award dated 06-08-2022 was set aside.
• The respondent (employer) was directed to reinstate the petitioner with 50% back wages and all consequential benefits.
• The petition was allowed, with no order as to costsBurden of proof on company.

Conclusion:

This case reinforces the principle that employers cannot escape liability by withholding employment records. Once a workman provides credible oral evidence of continuous service, the employer must produce attendance and wage registers to counter the claim.
Failure to do so results in adverse inference and reinstatement orders under the Industrial Disputes Act.

Key Learning:

• Oral termination without notice or compensation violates Section 25F.
• The burden of proof shifts once the workman asserts 240 days of service.
• Employers must maintain and produce records of employment to avoid adverse findings.
• Reinstatement with back wages is the standard remedy for illegal termination.

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