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Fired Unfairly? The Supreme Court Says You Have Rights: The DK Yadav vs. JMA Industries Case

DK Yadav v. JMA Industries Ltd.
Citation: 1993 SCR (3) 930.
Judgement's Year: 1993.
Appellant: DK Yadav v/s Respondent: JMA Industries Ltd

Bench of Judges:
Justice Mr. K. Ramaswamy, Justice Kuldip Singh, Justice V. Ramaswami

Acts Involved:
  • The Industrial Disputes Act, 1947
  • The Industrial Employment (Standing Orders) Act, 1947
On May 7, 1993, the Supreme Court of India judged that in all cases with civil consequences, rules for the protection of natural justice are mandatory. The court held that Article 21 (the right to life and personal liberty) is not limited to human existence but includes the right to earn a livelihood. Thus, not presenting them an opportunity to be heard when dismissing them without giving a fair reason is seen as unjust, wrongful, and illegal. In this case, the bench members included Justice K. Ramaswamy, Kuldip Singh, and V. Ramaswami.[1] The decision provided a context for the broad interpretation of such principles in matters related to quasi-judicial/administrative acts and those concerning industrial disputes and labor operations.[2]

Facts Of The Case
The respondent company terminated the appellant's employment because, as contended by the respondent, he had intentionally neglected his responsibilities for over five days without providing advance notice, prior authorization from management, or prior information. In support, the company cited clause 13(2) (iv) of the particular Certified Standing Order. According to Clause 13(2)(iv) of the CSO, an employer may remove an employee's name from the muster registers if they have not returned within eight official days after the conclusion of the leave that was initially granted or thereby extended, as applicable.

If an employee fails to explain satisfactorily to management regarding their absence or inability to return by the designated leave expiration date, in that case, they will be considered to have automatically ceased their employment and forfeited their lien on their appointment. However, the appellant argued that he was not permitted to report for duty without explaining, even though he consistently reported for duty thereafter.

The labour court affirmed the management's decision by Standing Order Clause 13(2)(iv). It was determined that the employee had abandoned his employment automatically.

Issues To Be Addressed By The Court:
There were two main issues in this case. The main question was whether the decision infringed upon the principles of natural justice. Another problem was whether the withdrawal could be defined as retrenchment under the Industrial Disputes Act of 1947.[3]

What Is Certificate Standing Order?
The Industrial Employment (Standing Orders) Act of 1946 founded the guidelines for employment conditions in industrial establishments and submitted to the Certifying Authority for certification Draft Standing Orders. It results in applying these Rules objectively to every industrial undertaking which may employ one hundred or more workers [by the Central Government, it is lessened to fifty in the case of those undertakings for which the Central Government is competent to consider as Apt Government]. It attempts to achieve certainty of services by the employer as he should stipulate the terms of the employment as the Standing Orders.

Analysis Of The Case Judgement
According to the ruling the court handed down, the respondent was required to rehire the worker and pay him up to fifty percent of his back earnings within three months, beginning from the day the court order was handed down. The court overturned the verdict that the employment tribunal passed. Following an investigation, the court concluded that the appellant's termination from his position violated the principles of procedural natural justice procedures.

By the regulations outlined in Article 13 (2) (iv) of the CSO, an employee who fails to acquire prior authorization or approval for an absence over eight days will be subject to termination. On the other hand, the court concluded that the simple passing of eight days does not automatically result in the termination of work or the abandonment of employment.[4]

The management did not participate in any internal investigation, nor did they allow the appellant to present their side of the story under any conditions. It was determined that the principle of natural justice ought to be incorporated into the particular SO as an outcome of the discussion.

Without doing so, it would be considered arbitrary, unjust, and unfair[5], constituting a violation of Article 14, a fundamental human right. A further emphasized point was that the responsibility to provide a fair opportunity for a hearing ought to be derived from the intrinsic nature of the authority entitled to take actions against punitive or damaging acts.

This was the most crucial argument that the court made, and it was that the Legislative Force of the Disposition Orders for Repossession does not directly disregard the application of the values of Natural Justice. To accomplish this, they made use of it. If we are discussing the observance of the principles of natural justice, it is not conceivable to differentiate between the responsibilities of quasi-judicial bodies and those of administrative functions.

The document indicates that an act of the statement of a statute's standards or the law having a statutory nature can be excluded from applying natural justice by using the express exclusion or the required inference. Except for exceptional and justifiable circumstances that the employer can provide for the exclusion, the principles of natural justice would apply.

The court then considered the constitutionality of the termination by clause 21 of the constitution, which says that "no citizen ought to be secluded from life and liberty except by due process of law." Finally, the inclusion of the right to subsistence from the right to life (Article 21)[6] was declared. The court held that DPSP could not be used in conjunction with the State to prove the ability of the state to act positively in terms of livelihoods. In this vein, it served as an instrument for individuals who lost their livelihoods without fair procedures to prove such deprivation by their fundamental right to livelihood as coming from Article 21.[7]

Consequently, the process of livelihood deprivation must be just, equitable, and fair. The end of employment for the employee or workers generates civil consequences that can lead not only to money loss by the employee but also to their dependents and affect the career path.

The appellant argued that the Industrial Dispute Act of 1947 defines retrenchment as any action the employers took to sever the worker's employment. This argument used neither the central premise nor the conclusion of the court's adjudication process. However, it still admitted that this contention's reasoning could not be rejected entirely. The court has agreed and implicitly acknowledged that if the dispute is brought before it again, it will be inclined to interpret the disputed term as favorably as possible. Such an interpretation can crucially strengthen the employees as they stand on the ground fighting the unfair treatment by the top management.

Cases Relied Upon:
In support of the Appellant:
  • SBI v Workmen of SBI And Anr[8], Kesavananda Bharti v. State of Kerala[9] In the interpretation, Standing Order No. The principles of natural justice set out in 13 (2)(iv) must be implemented. It would otherwise be the channel of gloomy injustice and unfairness, which is against Article 14.
  • Delhi Transport Corporation v. Mazdoor Congress, D. T.C., and Others [10] Acting in good faith produces a fair chance to tell one's side before employee or worker termination. This is the duty of an investigator that the principles of natural justice must carry out.
  • HD Singh v. RBI & Ors.[11]
    The Industrial Disputes Act of 1947 provides a detailed definition of retrenchment under section 2(oo), which essentially covers any managerial action that leads to the loss of an employee's job, either due to a reason provided or no reason.
In the support of the respondent:
  • Colonel JN Sinha v UOI & Anr[12]
    The Natural Justice Principle would exist until and unless and until the employer justifies the exclusion on unique grounds.
Final Repercussions Of The Judgement
This particular case at hand, due to the judges' deciding it and having a liberal outlook, aided in bringing about far-reaching consequences around labor laws vis-�-vis natural justice. The aim is to bring the principle above beyond administrative actions.

To prove the violation of natural justice, the victim, as per this ruling, may show the violation of Art. 14 of the Indian Constitution, resulting in civil consequences. Violation of Article 21 also acts as a case strengthener to bring relief. The principles of justice and good faith must be read and implemented in its most accurate and practical sense, therefore being upheld by the Courts of Justice.[13]

  1. (n.d.). D.K. Yadav vs J.M.A. Industries Ltd on 7 May, 1993. [online] Available at: [Accessed 20 Feb. 2024]
  2. Manisha More & Arun K. Thirunvengadam, D.K. Yadav v. J.M.A. Industries Ltd., (1993) 3 SCC 259, 6 Student Advoc. 139 (1994)
  3. International Labour Law Reports, E., INDIA IND. 3: Supreme Court of India DK Yadav v. JMA Industries Ltd. (Before Kuldip Singh, V. Ramaswamy, and K. Ramaswamy JJ.) In Civil Appeal No. 166 (NL) of 1983 International Labour Law Reports Online, 13(1), pp.249-257
  4. Robert D'Souza v. Executive Engineer, Southern Railway and Anr. [1982] 1 SCC 645
  5. State of Orissa vs Dr. (Miss) Binapani Dei & Ors, 1967 AIR 1269
  6. Article 21, Constitution of India
  7. Is Uttar Pradesh's Suspension of the Industrial Disputes Act Constitutional? Centre for Law & Policy Research
  8. [1991] 1 S.C.C. 13
  9. [1973] Suppl. S.C.R. 1
  10. [1991] Suppl. 1 S.C.C. 600
  11. [1985] 4 S.C.C.201
  12. [1971] 1 S.C.R. 791
  13. More, M. and Thiruvengadam, A. (1994). D.K. Yadav v. J.M.A.Industries Ltd, [online] 6(1), p.15. Available at: [Accessed 20 Feb. 2024]

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