Compassionate Appointment Is Not A Right, Can Be Denied If Family Of Deceased Employee Has Sufficient Means: Bombay High Court
The Bombay High Court held that the mere death or medical incapacitation of an employee does not automatically confer the right to compassionate appointment upon their dependent ward and that the same is not a right. The Court held that compassionate appointment can be denied if the employer finds that the family of the employee has sufficient means to look after themselves.
The Court partly allowed a Petition filed by Air India Ltd (AIL) against the judgment and award of the Central Government Industrial Tribunal-II (Tribunal) wherein permanency status was granted to certain workmen with back wages and benefits.
The Court emphasised that compassionate appointment, assisting families in financial distress after losing a breadwinner, is not automatic and can be denied if the employer deems sufficient means for the family.
“Thus mere death/medical incapacitation of an employee does not result in automatic creation of right of compassionate appointment for his/her dependent ward”, the Bench of Justice Sandeep V. Marne observed.
Senior Advocate Sudhir Talsania appeared for the Petitioner and Advocate Haresh Shivdasani appeared for the Respondent.
Air India Ltd (AIL) challenged the Award passed by the Central Government Industrial Tribunal-II (Tribunal) wherein the Tribunal granted permanency status to certain workmen with back wages and benefits. AIL, a result of the amalgamation of Air India Ltd. and Indian Airlines Ltd., faced financial crises, leading to the demerger of departments. The petitioner asserted a government ban on recruitment from June 23, 1997.
In response to the ban, AIL's subsidiary, AICL, offered temporary appointments to the wards of deceased or incapacitated employees, later transferred to AIATSL. The Tribunal, on March 6, 2018, granted permanency to Respondents 1-45. Dissatisfied, AIL filed the petition before the High Court.
On 24 January 2024, the High Court framed the issue “Whether Respondent Nos. 1 to 45 could be deemed to have been appointed on compassionate grounds in the services of Air India Limited (AIL)" .
The Court observed that the initial appointments of Respondent Nos. 1 to 45 were purportedly made by either Air India Charters Ltd. (AICL) or Air India Air Transport Services Ltd. (AIASL) on a temporary basis. Despite being officially designated under AICL or AIASL, the Tribunal concluded that these appointments were, in reality, made by Air India Limited (AIL) on compassionate grounds. The Court acknowledged the Tribunal's opinion that Respondent Nos. 1 to 45 were entitled to permanency from the dates of their initial appointments, as specified in Annexure-A to the Statement of Claim.
The central issue highlighted by the Court was whether the initial engagement of Respondent Nos. 1 to 45 should be considered as having been made by AIL. The Court pointed out that the Respondents, in their demand made on June 2, 2006, collectively sought permanency without specifying the exact company. The demand letter vaguely requested permanency in the services of Air India, subsidiaries, sister concerns, showing a willingness to accept permanency in the subsidiary companies of AICL or AIASL.
The Court noted that compassionate appointments are subject to the employer's formulated scheme, and AIL had such a scheme established through a 'Record Note' in 1992. The Tribunal's focus on supervision and control was criticized, as the Court emphasized that the legitimacy of appointments should be assessed based on the employer's compassionate appointment scheme.
"Compassionate appointment is not a matter of right. Compassionate appointment is to be granted with a view to provide immediate succor to the family which has been suddenly put in indigent condition on account of loss of bread earning member. In a given case, where the employer finds that there are sufficient means for the family of the deceased employee to look after itself, compassionate appointment can be denied", the Bench noted.
Regarding a freeze on recruitment imposed by a Memorandum dated June 23, 1997, the Court affirmed that the freeze applied to AIL, dismissing the Tribunal's finding as perverse. The Court questioned the legitimacy of later demands for relief based on cases entertained during the freeze period.
The Court emphasized that control decisions for AIASL's employees rested with the receiving airline, not AIL. The Court dismissed the need for an inquiry into supervision and control for determining compassionate appointments by AIL, as appointments, salaries, and disciplinary actions were under AICL or AIASL.
The Court noted that the Tribunal erred in granting permanency to Respondent Nos. 1 to 45 in AIL's services, citing errors such as the belated demand in 2006 and the directive for AIL to pay full back wages from the initial engagement dates. The Court found the order problematic due to employees already receiving wages from AICL or AIASL, rendering the question of the limitation in awarding back wages academic.
The Court observed AIASL's shift in stance, supporting the employees' claims despite previous opposition. The Court questioned AIASL's role in serving multiple airlines but avoided delving into emerging claims between AIL and AIASL. With AIL's privatization, the Court remanded the reference to the Tribunal, clarifying that setting aside the award did not automatically grant relief. The Tribunal would consider AIASL's defence that the appointment was contractual, with no entitlement to permanency benefits.
Accordingly, the Court partly allowed the Petition and set aside the judgment and award of the Tribunal.
Cause Title: Air India Ltd. v Hemangi Prabhu and Ors (2024:BHC-OS:1515)
