Tasmac code that allowed action against staff sans inquiry quashed

CHENNAI: In a significant ruling, the Madras High Court has struck down a code devised by the Tamil Nadu State Marketing Corporation (Tasmac) that provided for taking punitive action against the employees for wrongdoings without holding any inquiry before initiating such action. The court imposed a cost of Rs 1 lakh on Tasmac and directed it to pay the amount to the petitioner union.

The ruling was given by Justice A D Maria Clete on the petitions filed by Tamil Nadu Tasmac workers union seeking the court to quash the “Code of Prevention and Detection of Fraudulent Acts in Tasmac-2014” brought into force by the TN government’s liquor business entity, stating it was in violation of the Tamil Nadu Model Standing Orders and provided for punishments which are not prescribed in the model standing orders.

Justice Maria Clete, in the recent judgment, held that fundamentally Tasmac cannot implement a new code without securing certification of standing orders in accordance with law.

“The justification sought to be advanced for the 2014 code based on the Tamil Nadu Prohibition Act, 1937, is wholly misplaced, as that enactment has no bearing on the disciplinary action to be taken against workmen for alleged misconduct. The Prohibition Act does not confer any authority upon Tasmac to frame rules or regulations governing service conditions,” she said.

The judge also noted that the 2014 code “clearly constitutes a transgression” of the prohibition imposed under section 9A of the Industrial Disputes Act, 1947, that mandates issuance of a prior notice to the workers.

Expressing concern about the Tasmac – having 4,820 retail liquor outlets and a workforce of about 24,000 – not complying with the orders of the high court categorically directing it to adhere to the model standing orders for taking disciplinary action, the judge noted that it has persistently disregarded its legal obligations.

Apart from striking down the 2014 code, the judge also quashed the communication sent to the union by the Joint Commissioner of Labour (JCL), Chennai, who had endorsed the code stating it is in consonance with the model standing orders.