The protection afforded to workmen under the Industrial Disputes Act, 1947 cannot be diluted by adopting artificial modes of employment. In a significant ruling, the Orissa High Court held that where a workman had completed 240 days of continuous service, even on a 44-day appointment basis including weekly offs, termination of his services without complying with the mandatory conditions prescribed under Section 25F of the Act is illegal and unjustified. The judgment reiterates that repeated short-term engagements cannot be used as a device to defeat statutory safeguards meant for workmen and reinforces the principle that substance must prevail over form in labour jurisprudence.
Citation:
30 Jan 2026 | [2025] 181 taxmann.com 784 (Orissa)
Facts of the Case
- The workman was engaged by the management on a 44-day appointment basis, which was periodically renewed.
- He continuously worked for more than 240 days, including weekly offs.
- The management terminated his services without:
- Giving one month’s notice or wages in lieu thereof, and
- Paying retrenchment compensation,
as mandated under Section 25F of the Industrial Disputes Act, 1947.
Issue Before the Court
Whether termination of a workman, who completed 240 days of continuous service on a 44-day contractual basis, without compliance of Section 25F, is legal?
Held (Decision)
The Orissa High Court held that:
- Weekly offs must be counted while computing 240 days of continuous service.
- Artificial breaks created by 44-day appointments cannot defeat statutory protection.
- Once a workman completes 240 days, termination amounts to retrenchment.
- Non-compliance with Section 25F renders termination illegal and unjustified.
Key Legal Principles Laid Down
- 🔹 Substance prevails over form — repeated short-term engagements cannot bypass labour welfare laws.
- 🔹 Completion of 240 days, even on a contractual/temporary basis, attracts Section 25F.
- 🔹 Termination without notice and retrenchment compensation is void ab initio.
Outcome
- Termination order was set aside.
- Workman held entitled to statutory protection under the Industrial Disputes Act.
Practical Significance
✅ Important precedent against contractual manipulation by employers
✅ Useful in cases involving:
- Daily wage workers
- Fixed-term / short-duration appointments
-
Artificial service breaks