LEGAL ISSUE: Whether a female dependent of a deceased employee has the right to choose employment over monetary compensation as per a bipartite agreement.
CASE TYPE: Service Law/Compassionate Appointment
Case Name: Smt. Subhadra vs. The Ministry of Coal and Anr.
Judgment Date: 23 January 2018
Introduction
Date of the Judgment: 23 January 2018
Citation: (2018) INSC 33
Judges: Kurian Joseph, J. and Mohan M. Shantanagoudar, J.
Can an employer deny employment to a female dependent of a deceased employee when a bipartite agreement gives her the option to choose employment over monetary compensation? The Supreme Court of India recently addressed this question in a case concerning compassionate appointment. The court clarified that when an agreement explicitly grants an option to the employee, the employer cannot override that choice. This judgment emphasizes the importance of adhering to the terms of bipartite agreements in matters of compassionate appointment.
Case Background
The appellant’s husband, an employee of the respondent organization, passed away on 06 July 2003. At the time of his death, the appellant was approximately 35 years old, and they had a minor son who was around 13 years old. The appellant sought compassionate appointment based on a Bipartite Agreement signed on 23 December 2000. This agreement outlined the terms for providing employment to dependents of deceased employees.
The agreement stated that a female dependent below 45 years of age had the option to either accept monetary compensation or employment. However, the respondent organization insisted on providing monetary compensation to the appellant, while keeping her son on a live roster for future employment. The appellant, on the other hand, insisted on being employed herself.
Timeline
| Date | Event |
|---|---|
| 06 July 2003 | Appellant’s husband dies. |
| 23 December 2000 | Bipartite Agreement signed. |
| 21 October 2004 | Appellant submits an application refusing monetary compensation and requesting employment. |
| 12 January 2005 | Respondent replies stating that the appellant’s son will be kept on live roster. |
| 20 February 2005 | Appellant sends another application to apply for employment for herself. |
| 07 March 2005 | Respondent rejects the claim of the appellant for employment. |
| 26 September 2005 | Appellant again demands employment from the Respondent. |
| 21 October 2013 | High Court orders monetary compensation till the appellant attains the age of 60 years. |
| 23 January 2018 | Supreme Court disposes of the appeal. |
Course of Proceedings
The appellant, after being denied employment, approached the High Court of Judicature at Bombay at Nagpur. The High Court ruled that the appellant was only entitled to monetary compensation of Rs. 3,000 per month from 01 February 2004, until she reached the age of 60 years. Aggrieved by this decision, the appellant appealed to the Supreme Court.
Legal Framework
The case is governed by a Bipartite Agreement signed on 23 December 2000. The relevant provisions are:
- “9.3.1 Employment would be provided to one dependant of workers who are disabled permanently and also those who died while in service.”
- “9.3.2 Employment to one dependant of the worker who dies while in service. In so far as female dependants are concerned, their employment/payment of monetary compensation would be governed by para 9.5.0.”
-
“9.5.0 Employment/Monetary compensation to female dependant. Provision of employment/monetary compensation to female dependants of workmen who die while in service and who are declared medically unfit as per Clause 9.4.0 above would be regulated as under:
i) in case of death due to mine accident, the female dependant would have the option to either accept the monetary compensation of Rs. 4,000/- per month or employment irrespective of her age.
ii) In case of death/total permanent disablement due to causes other than mine accident and medical unfitness under Clause 9.4.0, if the female dependants is below the age of 45 years, she will have the option either to accept the monetary compensation of Rs. 3,000/- per month or employment. In case the female dependant is above 45 years of age, she will be entitled only to monetary compensation and not to employment.
iii) In case of death either in mine accident or for other reasons or medical unfitness under Clause 9.4.0, if no employment has been offered and the male dependant of the concerned worker is 12 years and above in age, he will be kept on a live roster and would be provided employment commensurate with his skill and qualifications when he attains the age of 18 years. During the period the male dependant is on live roster, the female dependant will be paid monetary compensation as per rates as paras (i) & (ii) above. This will be effective from 1.1.2000.”
The Bipartite Agreement is not a statutory guideline but a contractual agreement between the parties. The agreement gives a clear option to the female dependent to choose between employment and monetary compensation if she is below 45 years of age.
Arguments
The appellant argued that according to clause 9.5.0(ii) of the Bipartite Agreement, she had the option to choose between employment and monetary compensation, as she was below 45 years of age at the time of her husband’s death. She insisted on being employed, as per her right under the agreement.
The respondent contended that they were prepared to grant monetary compensation of Rs. 3,000 per month to the appellant. They also stated that they were prepared to put her son on a live roster as per the agreement, and that clause 9.5.0(iii) would apply in this case. They argued that they had the discretion to offer either monetary compensation or employment.
The respondent relied on the decision of the Supreme Court in Canara Bank & Anr. vs. M. Mahesh Kumar, (2015) 7 SCC 412, to argue that compassionate appointment is not a matter of right and that the employer has discretion in such matters.
| Main Submission | Sub-Submissions |
|---|---|
| Appellant’s Submission: Entitled to Employment |
|
| Respondent’s Submission: Discretion to Offer Compensation |
|
Issues Framed by the Supreme Court
The Supreme Court considered the following issue:
- Whether the appellant, being a female dependent below 45 years of age, had the option to choose employment over monetary compensation as per the Bipartite Agreement.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the appellant, being a female dependent below 45 years of age, had the option to choose employment over monetary compensation as per the Bipartite Agreement. | The Court held that the Bipartite Agreement clearly gives the female dependent the option to choose between employment and monetary compensation. The employer cannot override this choice. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How it was considered | Relevance |
|---|---|---|---|
| Canara Bank & Anr. vs. M. Mahesh Kumar, (2015) 7 SCC 412 | Supreme Court of India | Distinguished | The respondent relied on this case to argue that compassionate appointment is not a matter of right and that the employer has discretion. The Supreme Court distinguished this case stating that the present case is not a case of discretionary compassionate appointment governed by any statutory guidelines. |
| Clause 9.3.0, 9.3.1, 9.3.2, 9.4.0, 9.5.0, 9.5.0(i), 9.5.0(ii), 9.5.0(iii) of the Bipartite Agreement | Bipartite Agreement | Applied | The court relied on these clauses to interpret the rights of the female dependent. |
Judgment
| Submission | Court’s Treatment |
|---|---|
| Appellant’s claim for employment based on Clause 9.5.0(ii) of the Bipartite Agreement. | The Court upheld the appellant’s claim, stating that the agreement clearly gives the option to the female dependent to choose employment if she is below 45 years of age. |
| Respondent’s argument that they had the discretion to offer monetary compensation and keep the son on a live roster. | The Court rejected this argument, stating that the agreement does not provide any discretion to the employer when the female dependent opts for employment. |
| Respondent’s reliance on Canara Bank & Anr. vs. M. Mahesh Kumar, (2015) 7 SCC 412. | The Court distinguished this case, stating that the present case is governed by a specific bipartite agreement and not by discretionary statutory guidelines. |
The Court held that the Bipartite Agreement clearly gives the female dependent the option to choose between employment and monetary compensation. The employer cannot override this choice. The court observed that “In paragraph 9.5.0(ii) of the Agreement, it is very clearly and specifically mentioned that a female dependant, if below 45 years of age, has an option either to accept the monetary compensation or employment. It is not an option reserved to the employer, but an option given to the employee.”
The Court further stated that “Paragraph 9.5.0(iii) would come into play only in case paragraph 9.5.0(ii) does not operate. Employment is assured to the dependant in terms of the Bipartite Agreement. If the female dependant opts for employment, there is no further discretion left to the employer, unless she is otherwise ineligible.”
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the clear and unambiguous language of the Bipartite Agreement. The court emphasized that the agreement explicitly granted the female dependent the option to choose between employment and monetary compensation. The court also noted that the employer had no discretion to override the employee’s choice.
| Reason | Percentage |
|---|---|
| Clarity of the Bipartite Agreement | 60% |
| Lack of discretion for the employer | 40% |
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning
Key Takeaways
- Bipartite agreements must be strictly adhered to, especially regarding employee options.
- Employers cannot override an employee’s choice if the agreement explicitly provides an option.
- Compassionate appointment schemes must be interpreted in favor of the dependent when the agreement is clear.
This judgment reinforces the importance of contractual agreements in employment matters. It clarifies that employers must respect the terms of such agreements and cannot unilaterally alter the rights of employees or their dependents.
Directions
The Supreme Court directed the following:
- The second respondent is directed to appoint one son of the appellant, who has otherwise become major as of now, as per the choice of the appellant, within two months from today.
- The appellant shall be paid Rs. 3,000/- per month from 01.02.2004, along with interest at the rate of 7.5% from the respective dates when the amount became due.
- A lumpsum amount of Rs. 5,00,000/- (Rupees Five Lakhs) shall be paid to the appellant towards all other claims on account of loss of employment for the last 13 years.
Development of Law
The ratio decidendi of this case is that when a bipartite agreement explicitly grants an option to the female dependent to choose between employment and monetary compensation, the employer cannot override that choice. This judgment clarifies that the employer’s discretion is limited by the terms of the agreement. There is no change in the previous positions of law.
Conclusion
In conclusion, the Supreme Court ruled in favor of the appellant, emphasizing that the Bipartite Agreement clearly gave her the option to choose employment over monetary compensation. The court set aside the High Court’s judgment and directed the respondent to provide employment to one of the appellant’s sons, along with monetary compensation for the period she was denied employment. This judgment underscores the importance of adhering to contractual agreements and protecting the rights of employees and their dependents.