PROBATIONER IN THE EYES OF LAW

E. M. RAO
Senior Manager – Corporate Industrial Relations
IDL Chemicals Ltd., Hyderabad

INTRODUCTION

Probation is a period of time during which a person is put to test or trial, for a final assessment of his fitness or otherwise for the post to which he/she is appointed. As per the traditional view, it conferred an inalienable right on the employer to dispense with the services of a probationer at any time during the period of probation without assigning any reason and without notice or compensation in lieu of notice. This right of the employer was considered absolute throughout the period of probation and there was no relief for the probationers in the event of termination before the expiry of he period of probation.

This traditional understanding prompted the employers to frame the Standing Orders and the individual contracts of employment in this regard. This customary view, however, no longer holds good.

STATUS OF THE PROBATIONER

Before the expiry of Probation
The Supreme Court in the famous case of Express Newspapers Lid. v. Labour Court,2 held that without anything more an appointment on probation for six months gives the employer no right to terminate the services of an employee before six months had expired except on the ground of misconduct or other sufficient reasons in which case even the services of a permanent workman could be terminated. At the end of six-month period, the employer can either confirm him or terminate his services, because his service is found unsatisfactory.

The Supreme Court held in Utkal Machinery Ltd. v. Santi Patnaik,2 that if the validity of such a premature termination of a probationer is challenged in industrial adjudication, it should be competent for the Industrial Tribunal to find out whether the order of termination is a bonafide exercise of power conferred by the contract of employment. In such a case, like the case of permanent employee, it would be open to the Tribunal to consider whether the order of termination is malafide or whether it amounts to victimisation or unfair labour practice or is so capricious or unreasonable as would lead to the inference that it had been passed with an ulterior motive and not in bonafide exercise of the power, arising out of the contract, and to afford proper relief to the probationer employee. The Supreme Court further held in Management of Brooke Bond (India) Lid v. Y.K. Gautam,3 that the Tribunal has jurisdiction to interfere with the order of premature termination of a probationer even when the contract of employment provides for such pre-mature termination.

After the expiry of probation

A study of the Standing Orders of private and public sector organisations as also the classification, control and appeal rules of some government/quasi-government bodies reveals that there is a wide disparity on matters relating to the initial and extended period of probation, termination and confirmation of a probationer and the minimum and maximum periods of probation. More importantly, the period of probation acquired special significance in the context of the relative rights and obligations of the employer and probationer.

(i) Where no maximum period is prescribed: The view held by the Supreme Court in Express Newspapers case (supra) was further fortified in State of Punjab v. Dharam Singh,4 in that the Court observed that if after the period of probation, the appointee is allowed to continue in the post without an order of confirmation, the only possible view to take is that, by implication, the period of probation has been extended. Such a continuance cannot lead to the conclusion that he should be deemed to have been confirmed. An express order of confirmation is necessary to give the employee a substantive right to the post.

On the issue whether the probationer can be deemed to have been terminated if no order of confirmation is issued at the end of the probation period, if was ruled by the Kerala and Gujarat High Courts that there is no automatic termination of service, as soon as the probation expires, because that can be done only by a specific order to that effect.5,6

(ii) Where maximum period is prescribed: Where the service rules fix a definite time beyond which the probationary period cannot be extended and the probationer is allowed to continue in the post after the completion of the said period without an express order of confirmation, he cannot be deemed to continue in that post as a probationer by implication. In such a case, the implication is negatived by the service rules forbidding the extension of probation beyond the maximum period fixed by it and it is permissible to draw an inference that the employee has been confirmed in the post by implication. See State of Punjab v. Dharam Singh (supra). If the order of appointment itself states that at the end of' the period of probation, the appointee should stand confirmed, in the absence of any order to the contrary, the appointee shall acquire substantive right to the post, even though no order of confirmation, which otherwise is necessary to give him such right, has been made.7

INCONSISTENCY IN THE STANDING ORDERS AND CONTRACT OF EMPLOYMENT

Where the letter of appointment provided for termination of the services of a probationer at any time during probation without notice and without assigning any reason, and the standing orders provided for termination of any employee (including a probationer) only on certain grounds, such as, misconduct, the Supreme Court held that the provisions in the letter of appointment with respect to termination must he read to mean that the appointment was subject to the management's power of termination as provided in the standing orders.8 Where the letter of appointment stipulates six months' probation and the standing orders define 'Probationer' as a workman who was "provisionally employed to fill a permanent vacancy and has not completed two months' service", the Supreme Court held that the letter of appointment is inconsistent with the standing orders in respect of probationary period and, hence, was invalid. The court further observed that the terms of employment specified in the standing orders would prevail upon the corresponding terms in the contract of service in existence on the enforcement of the standing orders.9 The court, while delivering this judgment, relied upon Avery India Ltd. v. Second I.T.,10 Agra Electric Supply Co's case (supra) and overruled the decision given in J.K. Cotton Manufacturers Ltd. v. Tiwari.11

In an earlier judgment of late 1950s, it was held that while the employer has the right to discharge a probationer after the expiry of probationary period, an employer cannot be Permitted to keep a probationer for a protracted period in a state of uncertainly as to his position and, after the expiry of a considerable period, the Court may properly consider whether having regard to all the facts, the inference should be drawn that the probationer has been confirmed.12

TERMINATION - WHETHER AMOUNTS TO PUNISHMENT?

A very significant judgment on the law of termination or a probationer was pronounced by the Constitution Bench of Supreme Court in Shamsheer Singh v. State of Punjab.13 The Court held that termination of the services of a probationer in the government will not, ordinarily and by itself, be a punishment because the government servant so appointed has no right to continue to hold such a post any more than a servant employed on probation by a private employer is entitled to do so. Such a termination cannot be described as dismissal, removal or reduction in rank by way, of punishment. On the other hand, if the termination is sought to be founded on misconduct, negligence, inefficiency or other disqualifications, then it is punishment.

The Authority may, in some cases, be of the view that the conduct of the probationer may result in dismissal or removal on an enquiry. But in such cases, the authority may not hold an enquiry and may simply discharge the probationer with a view to giving him a chance to make good in his walk of life without a stigma at the time of termination of his service. Such a discharge of a probationer, without casting any aspersions on his honesty and competence, would not have the effect of punishment, the Court observed.

It was further held that where the Probationer is faced with an enquiry on charges of misconduct and if his services are terminated without following the provisions of Article 311(2) of the Constitution, then he can claim protection. Even the fact of holding an enquiry is not always conclusive. What is decisive is whether the order is really by way of punishment. In other words, the substance of the order, and not the form, would be decisive. Thus, the order terminating the services of a probationer under the rules of employment and without anything more will not attract Article 311.

However while dealing with this case, the Court has neither taken note of, nor has made any reference to, the cases of termination of the services of probationers in industrial employment, particularly, Utkal Machinery and Brooke Bond cases.

TERMINATION - WHETHER AMOUNTS TO RETRENCHMENT?

The concept of retrenchment too has undergone a radical change since the days of the famous Barsi Light Railway Company's case,14 in so far as 'Retrenchment' no longer connotes discharge of surplus labour or staff. On the contrary, the current position, as pronounced in Mohan Lal v. Management of Bharat Electronics Limited,15 is that termination by the employer of the service of a workman for any reason, whatsoever, would constitute retrenchment except in cases excepted in the section itself. In this case, the Court, without commenting as to whether the termination of the services of a probationer was retrenchment, held that since the employee concerned was a workman and worked for 240 days in 12-calendar month period, it would be retrenchment.

Discussing this aspect more specifically in relation to a probationer, the Supreme Court held in Karnataka State Road Transport Corporation v. Sk. Abdul Khader & others,16 that "once the conclusion is reached that retrenchment as defined in section 2(oo) of the Industrial Disputes Act, covers every case of termination of service, except those which have been embodied in the definition, discharge from employment or termination of service of a probationer would also amount to retrenchment. Admittedly, the requirements of section 25-F have not been complied with in these cases. Very appropriately, there was no dispute that the necessary consequence of non-compliance of section 25-F of the Industrial Disputes Act, in a case where it applied, made the order of termination void".

PROBATIONER ON PROMOTION TO A HIGHER GRADE POST

The earliest case law pronounced on this question was that of the Labour Appellate Tribunal in B.1.C. Limited v. Workmen.17 In the instant case, a permanent salesman was promoted as sales representative and was kept on probation. Under the contract of employment, he was liable to be terminated during the period of probation if found unsatisfactory. The Tribunal held that if his work has not been satisfactory, the promotion should be withdrawn but there is no reason to deprive him of his original post i.e., salesman. Hence, ordered reinstatement in his permanent post as salesman without break in continuity or services.

Dealing with this issue, the Supreme Court, in a recent case held that an office superintendent promoted as Commercial Officer and put on probation cannot be continued as a probationer for more than two years as per the service regulations. It would follow that, after the expiry of the maximum period of two years provided in the service regulations, the probationer stands confirmed by implication. Accordingly, the appellant acquired the status of a confirmed employee on the post of Commercial Officer and the appointing authority could not legally revert him to the lower post of Superintendent.18 This judgment is, in effect, a reiteration of the principles laid down by the Supreme Court in Dharam Singh's case (supra) though in a different, but related context.

PROBATIONER AND SECTION 33

Having conceded that a probationer is a 'workman' within the meaning of S. 2(s) of the Industrial Disputes Act,19 it naturally follows that he is entitled to the protection afforded by S. 33-A of the Act, if it can be shown that the employer had contravened the provisions of S. 33.

CONCLUSIONS

A seemingly innocent and simple concept of probation has acquired grotesque proportions over a period of thirty years at the hands of our courts, throwing the employers into total disarray. To cope with the changing demands, the Personnel and Industrial Relations Managers are required to exhibit greater degree of professionalism in terms of their attitude towards probationers as well as the documentation support. A few corrective actions are suggested hereunder:

(i) Evaluation and monitoring of Performance

An employer is under a specific obligation to monitor the performance of a probationer with regard to his suitability or otherwise for the post. The probationer should be given every opportunity, during the period of probation, to enable him to measure up to the demands of the job. It is advisable to evaluate the performance of the probationer at regular intervals and to inform him, in writing, the areas where he is lagging behind, preferably, with a piece of advice to improve his performance in those areas.

(ii) Avoid termination during probationary period

It is not advisable to invoke termination simpliciter before the expiry of the initial or extended period of probation. If, however, the probationer commits a grave act of misconduct, initiate necessary disciplinary action as provided in the Standing Orders, like any other permanent workman and dismiss him for proved misconduct instead of proceeding with an innocent letter of termination before the expiry of the probationary period. As such a termination is liable to be set aside on the ground or colourable exercise of powers.

According to Mr. O.P. Malhotra,20 the principles governing the termination of the services of a probationer, as laid down by the Supreme Court in Shamseer Singh's case (supra), will apply to the probationer in Industrial employment as well. The only difference is that in the case or government employees, the requirements of Article 311 of the Constitution have to be complied with whereas in the case of industrial employers, the rules of natural justice have to be complied with, when the termination of service is for misconduct.

(iii) Take timely action

Where the Standing Orders or service regulations prescribe maximum period of probation beyond which the probation cannot, by necessary implication, be extended, the employer should take appropriate action either confirming or terminating the services of probationer exactly on the day of such expiry by an express order, failing which the probationer will, thereafter, acquire substantive right to the post and is deemed to have been confirmed in the post, by implication.

(iv) Avoid long period of probation

The only difference between a probationer whose term has not expired and the one, who is continuing in service after the expiry of the probationary period without an order of confirmation having been passed, is that the former had a guaranteed period of trial before the expiry of which his services cannot be terminated whereas the latter can be terminated at any time.21 Nevertheless, it would not be in the interests of the employer to allow a probationer to continue as such, for a protracted period after the expiry of the period of probation. For that matter, continuance of a probationer as such, for even a shorter period, after the expiry of the initial probationary period should be avoided as far possible. In both the cases, sufficient care should be taken to see that the period of probation initial or extended - whether by an express order of extension or without an express order of extension - does not come into conflict with chapters V-A and V-B of the Industrial Disputes Act. In the event of such a conflict, the risk involved for an employer may be out of proportions.

(v) Follow the procedure under Sec. 33

If the probationer is sought to be dismissed for a misconduct, during the pendency of a conciliation or arbitration or adjudication proceeding, the procedure laid down under S.33 (1) or 33 (2), as the case may be, requires to be followed like the case of any other permanent workman, with a view to avoiding an unfavourable decision under S. 33-A.

(vi) A probationer on promotion should not be discharged

An employer should not terminate the services of a workman who has been promoted to a higher grade post and kept on probation in that post for unsatisfactory performance. Such a Probationer can only be reverted to his original grade and post on the expiry of the probationary period.

(vii) Probationary period to be realistic

Similarly, if the contract of employment or standing orders prescribe longer periods of probation, say, 18 months or 2 years, it would be safer to amend the same and reduce the period to manageable limits, so that the employer can be protected against the onslaught of chapters V-A and V-B of the Industrial Disputes Act. In any case, it is not desirable to keep a probationer, as such, for more than 11 months from the date of employment having regard to the current legal position. In other words, the employer should take a decision within a period of 11 months either confirming or terminating the services of a probationer. Necessary amendments to the standing orders and recasting of the individual contracts of employment on these lines would go a Iong way in avoiding unwarranted controversy and costs in this regard.

(viii) Contract of employment should be realistic

If the conventional contract of employment still provides for termination of a probationer at any time during the period of probation, necessary corrective action should be taken at once to amend the contract to make it more meaningful and realistic, as such a clause providing for termination of the services of a probationer before the expiry of probationary period is neither valid nor enforceable any longer.

(ix) Uniformity in the Standing Orders and contract of employment

Inconsistency between the Standing Orders and the individual contracts of employment in general, and in respect of the period of probation in particular, should be removed. Though the Supreme Court held in Western India Match Co's case (supra) that the Standing Orders will prevail over the contract of employment, it cannot be ruled out that in a case where a particular term of the contract of employment is more favourable to the workman than the general stipulation contained in the Standing Orders, the Courts may hold that the specific term of the contract of employment will prevail over the Standing Orders. It is, therefore advisable to bring about some measure of uniformity between the general clauses of the Standing Orders and the specific terms of individual contract of employment. This, in turn, implies that sufficient care and foresight should go into the process of documentation, having regard to the changes taking place on the legal front.

Supervisory and managerial personnel

The distinction between a person, who answers to the definition of 'workman' contemplated under S.2(s) of the industrial Disputes Act and a person, who does not do so is fast fading away. In fact several inroads have already been made into the expressions such as 'Technical', ' Supervisory', 'Operational' and 'Administrative capacity' by the High Courts and Supreme Court with the result that the employers are in a state of confusion not knowing where exactly they stand in relation to the status of the supervisory, junior and middle-level management personnel in the eyes of law.

The Courts have repeatedly held that the designation or the nomenclature of a person is not conclusive, in deciding whether he is a workman or not within the meaning of the Industrial Disputes Act, and that the decisive test is the nature of functions and duties performed by the employee. From this standpoint and, having regard to the fact that in a large number of organisations there is practically negligible delegation and decentralisation of authority down-the-line, it is no longer safe for the employers to take these categories of personnel for granted. No wonder, the Courts may entertain the case of a supervisor or a junior or middle level manager, whose probation was terminated and grant appropriate relief under the Industrial Law. It is, therefore, imperative for the Personnel Managers to exercise utmost caution in clearly defining and spelling out the nature of duties, type of functions, the degree of authority that can be exercised, role clarity with special reference to the degree of decision-making authority and the conditions of service for different levels of these categories, having regard both to the principles and practice or management and the contemporary legal position lest they are overtaken by events.

I conclude this paper with the observation made by Lord Devlin, who has exercised a significant impact on the evolution of Industrial Law and the extension of its frontiers, more specifically, during the last one decade in our country.

"I am not one of those who believe that the only function of law is to preserve the status quo. Rather, I should say that law is the gate-keeper of the status quo. There is always a host of new ideas galloping around the outskirts of society's thought. All of them seek admission, but each must first win its spurs; the law at first resists, but will submit to a conqueror and become his servant. In a changing society, the law acts as a valve. New policies must gather strength before they can force an entry; when they are admitted and absorbed into the consensus, the legal system should expand to hold them as also it should contract to squeeze out old policies which have lost the consensus they once obtained". - 4th Chorley lectures, delivered at the London School of Economics on 25th June, 1975.

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REFERENCES

1. 1964 I LLJ 9 (11) (SC) 2. 1966 I LLJ 398 (SC) 3. 1973 II LLJ 454 (SC) 4. AIR 1968 SC 1210 (1212) 5. Premajam v. University of Kerala, [1965 I LLJ 77 (Ker.)]. 6. Gujarat Bank Workers Union v. Jamnagar Dist. Coop. Bank Ltd., [1979 I LLJ 82 (Guj.)]. 7. Accountant General,M.P., v. B.P. Bhatnagar, (CA 458/1962 - SC decided on 23.1.1962). 8. Agra Electrical Supply Co. Ltd. v. Alladin, [1969 II LLJ 540 (SC)]. 9. Western India Match Co. Lltd., v. Workmen, [1973 II LLJ 403 (SC)].
10. 1972 II LLJ 255 (SC).
11. AIR 1959 All. 639.
12. Gajamudi Estate v. Armunayagam, [1957 I LLJ 412 (415) (LAT)].
13. 1974 II LLJ 465 (479) (SC).
14. Barsi Light Railway Co. Ltd. v K.N. Joglekar, [1957 I LLJ 243 (247) (SC)].
15. Mohanlal v. Management of Bharat Electronics Ltd., [1981 Lab IC 806 (SC)].
16. 1984 I LLJ 110 (115) (SC).
17. 1957 I LLJ 292 (LAT).
18. O.P. Maurya v. U.P. Coop. S. S. F. Federation, [1986 I LLJ 145 (149) (SC)].
19. Hutchaiah v. Karnataka State Road Transport Corporation, [1983 I LLJ 30 (37) (Kant.)].
20. O.P. Malhotra, The Law of Industrial Disputes, IV edn., p. 225.
21. Giovanola Binny Ltd. v. Industrial Tribunal, [1970 I LLJ 450 (452) (Ker.)].

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