ISSUE:
Whether the mass termination of 853 workmen was a bona fide exercise of managerial power under Standing Orders or a punitive discharge in the guise of termination simpliciter?
Whether the Arbitrator, in the absence of an explicit statutory mandate, had jurisdiction under Section 11A of the Industrial Disputes Act to reappraise the proportionality of the punishment?
Whether the High Court, in exercising its supervisory jurisdiction under Article 226/227, transgressed its limits by interfering with the Arbitrator’s award?
RULE:
Termination vs. Punitive Dismissal: The substance of the order, not its nomenclature, determines its true character. If the foundation of termination is misconduct, it ceases to be discharge simpliciter and attracts the procedural safeguards of punitive action. The employer’s right to terminate must be exercised in good faith and not as a device to circumvent due process. Where misconduct is the causa causans, the order must withstand judicial scrutiny, and the Court will lift the veil to discern its real nature.
Scope of Section 11A of the Industrial Disputes Act: Section 11A vests adjudicatory bodies with the authority to assess not only the legality but also the fairness of disciplinary action. The power to interfere arises when the punishment is shockingly disproportionate to the gravity of misconduct or imposed without a fair inquiry. The Tribunal is not bound by the employer’s discretion but must exercise its own judgment in determining whether the punishment meets the test of reasonableness.