Supreme Court Strikes Down Forced Voluntary Separation Scheme: Key Judgment Analysis
The case of General Manager, Electrical Rengali Hydro Electric Project, Orissa v. Sri Giridhari Sahu and Others presents a significant dispute regarding the legitimacy of a Voluntary Separation Scheme (VSS) enforced by the employer and its subsequent challenge by the affected workers. The Supreme Court ultimately ruled in favor of the employer, setting aside the judgments of the lower courts.
Background of the Case
The dispute originates from the implementation of a Voluntary Separation Scheme (VSS) by the Rengali Hydro Electric Project (RHEP) under the Orissa Hydro Power Corporation. The employees, referred to as NMR (Non-Muster Roll) workers, had been working for several years and claimed that their services should be regularized following the judgment of the High Court of Orissa in a prior case (OJC No. 2420 of 1989).
The workers alleged that the VSS was thrust upon them through misrepresentation, coercion, and fraud. They contended that their signatures were obtained under the false impression that they were being regularized, when in reality, they were being separated from service.
Decisions of the Labour Court and High Court
The Labour Court ruled in favor of the workers, holding that the VSS was not voluntary and had been imposed upon the applicants through misrepresentation. It directed reinstatement of the workers with 70% back wages. The High Court of Orissa upheld this decision, leading the employer to file an appeal before the Supreme Court.
Supreme Court’s Observations
The Supreme Court extensively examined the evidence presented and found that there was insufficient proof to support the allegations of fraud and coercion. It observed:
“No doubt, the case of the appellants is that the letter of first applicant dated 01.06.2000, was not received. The evidence has been given by only four workers. The applications have been given by 90 applicants. Therefore, it was not open to the applicants to lay store by the application referred to above.”
The Court further emphasized that voluntary separation schemes, if implemented transparently and in accordance with policy, cannot be overturned merely on the basis of subsequent claims of misunderstanding.
Key Findings of the Court
- The burden of proof regarding fraud and coercion lay on the workers, and they failed to substantiate their claims.
- The employer followed due process, including issuing notifications and discussing the VSS with the workers’ union.
- Payments under the scheme were made directly to the workers’ bank accounts, and they did not protest until much later.
- The Labour Court’s judgment was found to be based on weak evidence, making it susceptible to being overturned under certiorari jurisdiction.
Final Verdict
The Supreme Court ruled in favor of the employer, setting aside the judgments of the High Court and the Labour Court. It held that the workers had voluntarily accepted the VSS and could not later claim coercion or fraud. However, the Court directed the employer to return the amounts deposited by the 28 workers who had contested the VSS, along with 8% interest.
Key Takeaways:
- Workers must provide concrete evidence when alleging fraud in employment disputes.
- Certiorari jurisdiction allows higher courts to correct errors of law, especially when lower courts fail to consider substantial evidence.
- Voluntary separation schemes, if properly executed, are legally binding and cannot be easily overturned.
This judgment reinforces the importance of procedural fairness and evidentiary requirements in employment disputes, ensuring that legal principles are upheld while preventing baseless claims from disrupting legitimate employer policies.
Petitioner Name: General Manager, Electrical Rengali Hydro Electric Project, Orissa.Respondent Name: Sri Giridhari Sahu and Others.Judgment By: Justice Sanjay Kishan Kaul, Justice K.M. Joseph.Place Of Incident: Orissa.Judgment Date: 12-09-2019.
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