Labour Laws Q/A

Transfer of an Employee is the Prerogative of an Employer

Is transfer of an employee from one place to another the prerogative of the employer?

In one case, the Karnataka High Court has dealt this subject with great ability in clarifying that the concept of employment being primarily a creature of contract, its terms are modified only to the extent they are superseded by law, contract or award. The rights and obligations of the employer and the employees in matters of transfer would, therefore, be governed by this position that unless proved to the contrary and unless the transfer changes the identity of employment or breaches employment conditions, an employer has always a right to transfer his employee. Transfer of an employee is considered to be a managerial right which, however, is subject to contract to the contrary. However, if the transfer is effected as punishment or as a consequence of victimisation or made not observing the relevant conditions in relation to transfer of Union office-bearers or protected employees, such transfers can be questioned. Subject to these limitations, the employers have a right to distribute work as they think fit and transfer is an incident of service. The management is the best judge to distribute manpower and decide as to whether a transfer can be avoided or not.

A transfer can be successfully challenged on the following grounds:

(i) If it is in violation of the rules or Standing Orders or contract;
(ii) If it is actuated by mala fides as a result of unfair labour practice or some other ulterior motive not connected with the business of the establishment;
(iii) If it effects a change in the conditions of service in subjecting the employee to more onerous work.

The existence of a power to transfer and its scope or exercise thereof are entirely different questions. A catena of decisions are cited on either side to support their respective stands and an analysis of the said decisions would not lead to any conclusion other than what has been stated above. To sum up, the position is that normally the right to transfer an employee is a prerogative of the management subject to some limitations. An employer has no inherent right to transfer a workman from one place to another if he starts a new business subsequent to the date of employment of the workman unless, either it is an express or an implied condition of service at the time of employment. If, however, such transfer is permissible, an order thereto cannot be called in question unless it is mala fide or made under other circumstances adverted to above.1 The Supreme Court has modified the judgment of the Madhya Pradesh High Court in holding that the directions of the High Court that an employee working in Jabalpur should be posted somewhere in Madhya Pradesh instead of Jammu & Kashmir will not be sustainable since there was no mala fide in his transfer order.2 Transfer is an incident of service and employer has the prerogative to decide where the employee should work.3 Transfer of employee is Management’s prerogative, Courts not to interfere unless mala fide.4 It is entirely up to the Competent Authority to decide as to when, where and at what point of time an employee is to be transferred from his present posting.5

Transfer of an employee is purely incidental to employment itself and he can be transferred from one unit/post to another, from one department to another.6

Transfer of an employee from Delhi to Bangalore, when stipulated in the contract of employment, cannot be vitiated by the Labour Court or the High Court when it is in accordance with the terms and conditions as stipulated in the contract of employment.7

Source: H L Kumar, Labour Problems & Remedies


References:
1. K.V. Cheluvalah v. Management, Bharat Heavy Electricals Ltd., 1993 (66) FLR 579: 1993 LLR 160 (Kant HC).
2. Kendriya Vidyalaya Sangathan v. Damodar Prasad Pandey, 2004 LLR 1103 (SC): AIR 2004 SC 4850: 2004 AIR SCW 5563.
3. Shyam Sunder Aggarwal v. M/s. Globe Detective Agency (P) Ltd., 2007 LLR 390 (Del HC).
4. Balram v. M.C.D., 2007 LLR 775 (Del HC).
5. K. Shringi (Dr.) v. Nuclear Power Corporation of India Ltd., 2007 LLR 1090 (Raj HC).
6. P. Nani, Hyderabad v. Certifying Officer-cum-Deputy-Commissioner of Labour (Twin Cities), Hyderabad, 2010 LLR 175 (AP HC).
7. Rajni Manchanda v. P.O. Labour Court-I, 2013 LLR 1122 (Del HC).

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