Loss of Confidence Must Be Objectively Proven to Deny Reinstatement: Kerala High Court Reinstates Workman After Flawed Domestic Enquiry

Kerala High Court affirming the reinstatement of a workman dismissed for alleged misconduct. Justice K. Babu, presiding over the case, upheld the Labour Court, Kozhikode’s decision that the dismissal was vitiated by violations of natural justice during the domestic enquiry process, ruling that the employer had failed to prove a loss of confidence in the workman.
The dispute arose between KVR Motor Cars Pvt. Ltd. (the "Management") and Sasikumar K. (the "Workman"), who had been employed as a Maintenance cum Driver since 2015. On August 24, 2016, the workman was assigned certain tasks, which he allegedly failed to perform. This led to disciplinary action, culminating in his dismissal following a domestic enquiry. The Labour Court set aside the dismissal, holding that the enquiry violated principles of natural justice. Dissatisfied, the Management filed a writ petition in the Kerala High Court, seeking to quash the Labour Court's award.
The core issue revolved around whether the domestic enquiry conducted by the Management complied with the principles of natural justice. The Labour Court had earlier ruled that the domestic enquiry was vitiated due to procedural lapses, particularly the failure to provide the workman with copies of relevant documents necessary for his defense. Upon reviewing the enquiry records, Justice Babu agreed with the Labour Court’s findings, observing that:
"The Enquiry Officer failed to ensure that the workman was furnished with the necessary documents, which is a clear violation of natural justice. The endorsement that the workman refused to accept the documents appears questionable and aimed at benefiting the Management." [Paras 17-18]
This finding was critical in nullifying the validity of the disciplinary process that led to the workman’s dismissal.
The court reiterated that judicial review of Labour Court decisions under writ jurisdiction is limited. Interference is permissible only in cases of gross miscarriage of justice or when findings are perverse or lack evidentiary support. Justice Babu stated:
"In exercising writ jurisdiction, the High Court cannot act as an appellate court. Unless there is a glaring error in law or a violation of natural justice, findings of fact reached by the Labour Court must be respected." [Paras 31-35]
The court found no such error or perversity in the Labour Court's judgment and, therefore, refused to interfere.
The Management also contended that it had lost confidence in the workman, making reinstatement impossible. The High Court, however, emphasized that loss of confidence must be objectively proven and not merely asserted. Referring to precedent, the court held:
"Loss of confidence cannot be based on subjective opinions. It must be demonstrated through evidence that the workman’s actions had objectively forfeited trust and that his continued employment would be detrimental to the establishment." [Paras 36-37]
The Management’s failure to substantiate its claim of lost confidence resulted in the dismissal of this argument.
The High Court extensively reviewed the charges of misconduct brought against the workman, which ranged from refusal to perform tasks to alleged interference with internal affairs of the company. On each count, the court found that either the Management failed to prove the allegations or that the workman had offered satisfactory explanations, such as his inability to perform tasks due to his child’s medical condition or lack of technical expertise in certain areas.
In particular, the court found that many of the charges were not proven by the Management. For instance, one charge alleged that the workman refused to bring a Fiat Liniya car to a customer at Malappuram on August 24, 2016. The workman, however, demonstrated that no such instruction was given, and the Labour Court found his explanation credible. On another occasion, the workman was accused of refusing to purchase a bicycle for a company display, but the court accepted his plea that he was attending to his child’s medical emergency on that day.
The High Court concluded that there was no evidence to support a loss of trust or confidence, and thus, the reinstatement of the workman, as ordered by the Labour Court, was justified.
The Kerala High Court upheld the Labour Court’s award reinstating the workman, ruling that the domestic enquiry was conducted in violation of natural justice and that the Management had failed to prove the alleged misconduct or loss of confidence. The writ petition was dismissed, reaffirming the protections afforded to workers under the Industrial Disputes Act, 1947.
Date of Decision: October 17, 2024