Amendment status not verified — confirm the current text below against the official source.
Subs. by Act 2 of 1975. This section deals with the notice of dismissal or discharge. It lays down the provisions when the notice is not required. The Act facilitates the employees to redress their grievances on ground of wrongful dismissal or discharge. The decision of the appellate authority in cases of dismissal or discharge shall be final and shall be binding on both the parties. Section 26 makes no distinction between various classes of employees. One has to be only an employee under section 2 (4) of the Act. Krishna Kumar Sharma v. State of Bihar, 1984 BRLJ 78 : 1984 PLJR 832. Accordingly this section will be very much available to muster-roll daily rated workmen, provided they have been continuously employed for a period of not less than six months. ibid. This section can be pressed in service only when the employer by positive act dismissed, discharged or otherwise terminated the employment of the employees. Termination of employment as a result of bonafide closure does not attract the provisions of this section. Rajeshwar Prasad Jaiswal v. Bikram Singh, 1977 BBCJ 711. There must be first an action on the part of the employer, like dispensing with the services of an employee, and if that action is absent, there is no question of an employee’s filing an appeal. Thus, where an employee sent his resignation letter, and requested the employer to relieve him on that date itself and the employer accepted the resignation and relieved the employee from his duties, it cannot be said that the employer has dispensed with the services of the employee and hence appeal by employee is not maintainable. G.R. Ramaswami v. M/s Needle Industries (I) Ltd., 1981 Lab. IC 765. The expression “employer shall dispense with the services of a person employed” does not comprehend the case of an employer relieving an employee on the basis of the letter of resignation submitted by him, if he subsequently contends that the letter of resignation was obtained from him under coercion or threat. ibid. The provisions of the Act are covered by items 23 and 24 of the concurrent list in the Constitution i.e. Social Security and Social Insurance, Employment and Unemployment, and Welfare of Labour including conditions of work, Provident funds, Employee’s liability, Workmen’s Compensation, Invalidity and Old age pension and Maternity benefits. In Jugal Kishore Bhandari v. Labour Commissioner, 1958 BLJR 223, it was held that section 26 (2) of the Act is ultravires as it infringes the right guaranteed under Art. 19 (1) (g) of the Constitution. The defect, however, stands now cured after the amendment of Section 26 (2) by Act 26 of 1959. Now the provisions of this section read with the rules do not infringe the right guaranteed under Art. 19 (1) (g) of the Constitution. Jagdish Vastralaya v. State of Bihar, 1964 BLJR 672 : AIR 1964 Pat. See also 1966 BLJR Lvi and 1966 BLJR 620. The scheme of section 26 and rule 24, particularly in cases of persons in continuous employment for not less than six months, contemplates bringing about disengagement only by a written order of termination. The words “receipt of the order of dismissal or discharge or termination” in section 26 (2) read alongwith the prefix of section 26 “Notice of the dismissal or discharge” exclude termination of the service of such persons by an oral order. If the termination of such an employee is brought about by an oral order, no memorandum of complaint challenging the grounds of the order of dismissal can possibly be made. Further, it would bring about uncertainty as to the date wherefrom the period of limitation is required to be reckoned. It is, therefore, manifest that the termination of service of a person Sec. 26 | Bihar Shops & Establishments Act, 1953 | 25 continuously working for not less than six months can only be effected by a written order, duly communicated. Krishna Kumar Sharma v. State of Bihar, 1984 BRLJ 78:1984 PLJR 832. While giving the above opinion the Court also looked into the difficulty of service of notice on muster-roll daily rated workman and suggested the posting or putting up of the notice or termination order on the notice board. ibid. The provisions of this Act are not repugnant to the provisions of I.D. Act, I.E. (Standing Order) Act and Payment of Wages Act. ibid. See also Indian Oil Corporation v. C.D. Singh, 1972 (2) LLJ 395. The proviso to sub-section(1) does not suffer from the vice of excessive delegation. Caltex (India) Ltd. v. Presiding Officer, 1967 BRLJ 65. The list of acts shown in rule 20 (1) for which no notice is necessary are major misconducts which justify termination of service. The last clause has been framed in a flexible manner in order to deal with any case which may justify an order of dismissal/ discharge but not provided for in other clauses. ibid. The requirement of one month’s notice shall not be necessary “where the service of an employee is dispensed with on a charge of such misconduct which may be prescribed by the State Government supported by satisfactory evidence recorded on an enquiry held for the purpose.” This provision does not suffer from excessive delegation and is not unconstitutional. Caltex (India) Ltd. v. Presiding Officer, 1967 BRLJ 65. See also Calcutta Chemical Co. Ltd. v. D.K. Barman, 1969 BLJR 510 : AIR 1969 Pat. 371 : 1969 Lab. IC 1498. Before terminating the services of a workman it is necessary for the employer to give either one month’s notice or wages in lieu thereof. The failure to comply with this requirement makes the termination order invalid and the workman illegally terminated is liable to be paid back wages with compensation and reinstatement. However, where the employer has no work left and it is not possible to reinstate the workman, all that can be done is that instead of first reinstating him and then giving a month’s notice or a month’s salary in lieu, the employer can give one month’s notice pay with all back wages instead of reinstating him. Manager, Allahabad Bank v. Presiding Officer, 1980 BRLJ 223 : 1980 BBCJ 505: 1981 Lab. IC (NOC) 4. Where the termination of service is by virtue of a term in a contract, sub-section (1) of this section does not apply. AIR 1964 Pat. 180. It is always open to the employer to pass an order of dismissal on the ground of misconduct or an order of termination simpliciter and such order can only be challenged on the ground of malafide. S.C. Das. v. State of Bihar, 1984 BRLJ 238 : 1984 PLJR 997. There is no bar laid down under this Act on the employer and employee entering into a contract of service in which it is laid down that the service can be terminated without assigning any reason but with one month’s notice or pay in lieu thereof. ibid. In a contract, where the employee’s misconduct was noticed by the employer and he started an enquiry but did not charge the employee on the basis of the enquiry report and terminated the service of the employee on the basis of the contract of service, it was held that the termination order does not suffer from any vice and it was not open to the Labour Court to look into the propriety of such a termination. ibid. But see also West Bengal State Electricity Board v. Desh Bandhu Ghose, 1985 PLJR (SC) 9 where termination of service without assigning any reason but on payment of three month’s notice or pay has been held violative of Art. 14 and 16 of the Constitution of India. An order of discharge of a probationer on the ground of unsuitability in accordance 26| Bihar Shops & Establishments Act, 1953 | Sec. 26 Sec. 26 | Bihar Shops & Establishments Act, 1953 | 27 with the terms of appointment is not an order of punishment. No domestic enquiry before such discharge is necessary. Bank of Madura Ltd. v. Additional Commissioner, 1983 Lab. IC (NOC) 19. Termination of employment as a result of bonafide closure does not attract the provisions of this section. Rajeshwar Prasad Jaiswal v. Bikram Singh, 1977 BBCJ 711. Any termination of service in contravention of section 40 of the Act will be legal, unenforceable and invalid but not null and void and non est. National Insurance Co. Ltd. v. M. Vishwanath, 1979 (1) LLJ 16. The service of an employee cannot be dispensed with except for a reasonable cause or for misconduct. Mere payment of one months’s wages in lieu of notice or one month’s notice is not sufficient . N.M. Mehra v. Coromandal Fertilisers Ltd., 1977 (1) LLJ 151. See also S.S. Rly Co. v. Workers Union, AIR 1969 SC 513 : 1969 (1) LLJ 734. Where an employee underwent cataract operation and after the operation his services were terminated by the management on the basis of the Ophthalmologist’s certificate that the employee would have great difficulty in doing normal clerical work, it was held, that the certificate by itself without any corroborative evidence as to how the employee’s poor eyesight had adversely effected his working capacity to the detriment of management, did not constitute “reasonable cause” for the purpose of termination. The termination was held not sustainable. Secretary, M/s Spencer and Co. Ltd. v. Additional Commissioner, 1982 Lab. IC 1676. In case of discharge of an employee on ground of continued ill health, it is necessary to find out before discharge whether continued ill health has made the employee unfit to perform his duties for which he is employed. Iqbal Narain Saxena v. Presiding Officer, 1982 Lab. IC 79. There is no comparison between section 26 of this Act and Section 33A of the Industrial Disputes Act. The competent authority under section 2 does not have a limited jurisdiction as in the case of section 33A. The words “any misconduct” used in sub-section (2) show that sub-section (2) is not confined only to misconduct set out in Rule 20. Chairman, Brooke Bond India (P) Ltd. v. Chandra Nath Choudhary, 1969 PLJR 5A. The termination order passed without a proper enquiry cannot be upheld as an order made for a reasonable cause. M/s United Wire Ropes Ltd. v. Commissioner for Workmens Compensation, 1976 (1) LLJ 226. The personal enquiry conducted by the Hony. Secretary of the Co-operative Bank is not an enquiry in law. Sitamarhi Central Co-operative Bank Ltd. v. State of Bihar, 1973 (1) LLJ