Employment Law Newsletter – Prolonged Absence Equals Voluntary Abandonment of Service, Not Termination : July 2025
Introduction
On June 17, 2025, the Bombay High Court issued a landmark judgment that created a bright line for voluntary abandonment of employment versus retrenchment as defined by the Industrial Disputes Act, 1947 (“ID Act”). The Court aptly noted that an employee’s voluntary discontinuation of work/abandonment of employment does not constitute retrenchment and consequently does not trigger the protections under Section 25F of the ID Act.
Brief Facts:
This judgment provides valuable clarity to employers facing the dilemma of abandonment or unexplained leave, particularly in contexts with high attrition or higher expectations of ongoing engagement in an employment relationship.
The case arose out of a dispute between an employer and a workman who, after being absent from duty without notice for a considerable time, alleged illegal termination of services, and sought reinstatement along with retrenchment pay. The employer treated it as a voluntary abandonment of the relationship and took no formal steps of termination or dismissal2. The employee claimed his services were “terminated” without complying with Section 25F of the ID Act, which requires notice and pay, for valid retrenchment. The Labour Court made an order in favour of the workman directing reinstatement. The employer appealed the decision to the Bombay High Court.
The Court addressed the following issues:
a) Does voluntary abandonment of service, when an employee fails to report to duty, constitute retrenchment, under Section 2 of the ID Act?
b) Do the actions (or inactions) of the employer trigger compliance with Section 25F in these circumstances?
Employer’s Stand
The case arose out of a dispute between an employer and a workman who, after being absent from duty without notice for a considerable time, alleged illegal termination of services, and sought reinstatement along with retrenchment pay. The employer treated it as a voluntary abandonment of the relationship and took no formal steps of termination or dismissal2. The employee claimed his services were “terminated” without complying with Section 25F of the ID Act, which requires notice and pay, for valid retrenchment. The Labour Court made an order in favour of the workman directing reinstatement. The employer appealed the decision to the Bombay High Court.
The employer contended that: (1) The employee had intentionally been absent from work for an extended period of time without informing the management; (2) despite management’s attempts to contact the employee, the employee had not appeared at work; and (3) no affirmative act of termination had taken place on the part of the employer. This was not a case of retrenchment; it was a case of voluntarily abandonment of employment.
_____________________________________________________________________1 Punjab & Sind Bank v. Sakattar Singh, (2001)
2 Vijay S. Sathaye v. Indian Airlines Ltd., (2013)
Court’s Observations
a) Retrenchment – Section 2(oo) of the ID Act defines ‘retrenchment’ as the employer terminating the services of a workman by the employer for whatever reason, barring certain exceptions. Out of those exceptions, ‘voluntary abandonment’ does not apply in this case because than that to be the employer fails to act unilaterally.
b) Voluntary abandonment– The Court cited cases like Hindustan Tin Works and G.T. Lad and restated that there’s voluntary abandonment when an employee fails to report for duty and fails, after receiving several notices to report to work or offers to return to work, to respond to those notices and accepts that he has abandoned the service by doing so.
c) Employer Not Responsible to Provide Termination Notice; The Court stated that since the employer did not terminate the employment, Section 25F, which pertains to termination notice, termination reason, termination compensation, etc. did not apply since there could not be a termination notice.
d) Burden of Proof on Workman– It was also held, in this case and in any case involving similar facts, that the employee bears the burden of proof to show that he was willing and available to work, and that in fact the employer terminated the service in a way that engaged a statutory protection.
Key Takeaways
a) Voluntary abandonment of duties does not constitute retrenchment. Accordingly, the statutory requirements under Section 25F would not apply to this situation.
b) Employers are not required to formally terminate a worker who chooses not to report back, so long as the employer makes a clearly communicated attempt to give the employee an opportunity to return.
c) However, discretionarily, the employer can however choose to issue a formal trail of disciplinary communication followed by an official termination letter in such situations.
d) The Court also confirmed that the employee’s intent is key to determine the character of the employment separation.
e) Record keeping is very important, the employer should keep careful records of absenteeism, records of communication sent to the employee, formal records of the opportunity to return.
Conclusion
This decision is a significant victory for employers. It provides a binding legal precedence with respect to long-term absence (and related conduct) such that employers don’t have to worry about engaging in expensive, protracted litigation relating to claims of an unlawful termination.
Additionally, by drawing the distinction between employee-initiated cessation of work and employer-initiated termination of employment, the Bombay High Court has reinforced contract discipline in industrial relations emphasising that:
a) The necessity of having clear and well written employment contracts, and policies in relation to absenteeism
b) The importance of documenting communications with employees who are absent from work, and
c) Providing reasonable opportunity for an employee to return to work before inferring abandonment.
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