Arbitration Can Be Initiated Over Termination Of Employee Contract With Both Dispute Resolution & Termination Clause : Calcutta High Court
The Calcutta Excessive Court docket Bench of Justice Shampa Sarkar whereas permitting an software for appointment of arbitrator has noticed that the place an worker has been terminated by way of an employment contract which comprises each Dispute Decision clause and Termination clause, if it isn’t a case of termination simpliciter, then the dispute shall be referred to arbitration by way of the dispute decision clause.
Information
The current software was for appointment of an Arbitrator on the idea of the dispute decision clause (Clause 16) of the phrases and circumstances of the employment set out in Annexure ‘A’ of the appointment letter of the Petitioner dated February 27, 2023.
The Petitioner was appointed as a Senior Supervisor in Audit at Grant Thornton. The phrases and circumstances below Annexure ‘A’ had been forwarded to the Petitioner together with the appointment letter and the Petitioner was required to signal the identical and submit the Annexure to the Employer. Accordingly, the phrases and circumstances below Annexure ‘A’ grew to become a binding contract between the employer and the worker. The phrases and circumstances supplied for decision of disputes by arbitration. The seat had been chosen as Kolkata and the language was ‘English’.
It’s the Petitioner’s case that on June 28, 2024, a present trigger discover was issued on the idea of sure allegations levelled by one other feminine worker. The Petitioner filed a reply. Upon enquiry, a report was submitted on October 22, 2024. The discover of termination was issued on November 22, 2024 and the bottom for termination was “enterprise causes”.
The Petitioner’s particular case is that though the allegation of sexual harassment had not been established, the Petitioner had cause to imagine that the termination was the end result of the criticism lodged by one other worker and never a simpliciter termination. The Petitioner known as upon the employer by a discover dated January 02, 2025, to refer the dispute to arbitration. The Petitioner additionally nominated a discovered Senior Advocate as an arbitrator.
Contentions
The Counsel for the Petitioner submitted that though the phrases and circumstances supplied that an worker could also be terminated with none discover and with out assigning any causes upon fee of 60 days gross wage, the termination on this case was a response or a counter-blast to the proceedings initiated by a co-employee. The termination had adversely affected the repute of the Petitioner and was wrongful. Thus, the Petitioner had a proper to get such dispute adjudicated by a discussion board agreed to by the events, below Clause 16 of the phrases and circumstances of employment. The phrases and circumstances are within the nature of a contract between the employer and worker.
The Counsel for the Respondent submitted that the Petitioner’s employment was not statutorily protected. Neither Article 311 of the Structure of India nor some other statute lined the employment. This was a case of personal employment. The employer retained the precise to terminate the Petitioner with or with out discover and the phrases of employment had been
adopted. The regulation is well-settled that, the petitioner didn’t have some other declare in direction of the employer and as lengthy because the 60 days gross wage was paid to the petitioner in lieu of the discover, the termination was legitimate.
Reliance was positioned on a plethora of judgments together with Emaar India Ltd. v. Tarun Aggarwal Initiatives LLP and Ors. AIR 2022 SC 4678, in assist of the contentions that courts had refused to award damages for damage emotions and anxiousness to a wrongfully dismissed worker and confirmed that damages for anguish and vexations brought on by breach of contract couldn’t be awarded in an strange industrial contract.
The Counsel for the Respondent additional submitted that if the contract of employment expressly gives a termination clause and the stated clause had been adopted by the employer, the worker is not entitled to some other reduction, other than what the phrases and circumstances in the termination clause present. Rules of administrative regulation or public regulation relevant to public employment don’t apply to instances or personal employment. The Counsel referred to the discover invoking arbitration in assist of the competition that the declare for reinstatement and different consequential advantages usually are not out there to the Petitioner as he was not ruled by any statues which shield workmen or public servants.
Lastly, the Counsel submitted that any order referring such non arbitrable dispute to arbitration could be forcing a contract of private wages which isn’t permissible in regulation. Dragging the Respondent to an pointless extended litigation which can in the end outcome within the dismissal can’t be the ethos of Part 11, ACA. The referral courtroom is not a mere put up workplace however could make a preliminary enquiry to fulfill itself that the disputes are ex facie arbitrable.
Observations
The Court docket noticed that after contemplating the rival contentions of the events, the Court docket was of the prima facie opinion that the case is to be ruled by the phrases and circumstances of employment which contained a Dispute Decision Clause. The events had certain themselves by the stated clause. Thus, the adjudication of the dispute shall be accomplished by the Arbitrator. The Petitioner had made it clear that the termination was a fall out of the enquiry in respect of a criticism of sexual harassment. The advice of the enquiry committee additionally steered that the employer was given the choice to take steps.
The Court docket noticed that the bottom confirmed for termination was different “enterprise causes”. This within the view of the Court docket was not termination simpliciter as urged by the Counsel for the Respondent. The letter of termination contained lots of compliances to be maintained by the Petitioner for a substantial interval, even after termination.
The Court docket additional held that it’s a settled place of regulation that an arbitrator can rule on his personal jurisdiction, which incorporates arbitrability of the declare made by the Petitioner. For the referral Court docket, the prima facie existence of the arbitration clause is ample to nominate an arbitrator and on this case the dispute is alive.
The Court docket concluded that in view of the existence of an arbitration clause, and this case not being a case of termination simpliciter which might be lined by the termination clause of the contract, the dispute ought to be referred to a sole arbitrator. The Court docket left it open to the Respondent to problem the jurisdiction of the arbitrator and arbitrability of the dispute at acceptable stage within the arbitration proceedings.
Accordingly, the Court docket appointed Mr. Aritra Basu, discovered Advocate as the only real arbitrator to arbitrate upon the dispute between the events.
Case Title – Sreepad Bhiwaniwala v. Grant Thornton US Data and Functionality Middle India Pvt. Ltd.
Case No. – AP No. 62 of 2025
Look-
For Petitioner – Mr. Satadeep Bhattacharyya, Adv.; Ms. Sriparna Mitra, Adv.; Mr. Sayan Banerjee, Adv.; Ms. Sayani Gupta, Adv.
For Respondent – Mr. Suhail Sehgal, Adv.
Date – 30.06.2025
