Finding of Illegal Termination Doesn't Mandate Automatic Relief After 36 Years: Delhi High Court - 2026-03-24

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Echoes of a Three-Decade Dispute: Delhi HC Rules on Reinstatement

In a significant verdict that addresses the limitations of judicial relief in aging labour disputes, the Delhi High Court has upheld a Labour Court ’s finding that the termination of several workmen was illegal. However, in a move prioritizing practical equity over mechanical relief, Justice Shail Jain ruled that the primary remedies of reinstatement and full back wages were no longer appropriate in a conflict spanning over 36 years.

The Backdrop: A Factory Gate Conflict

The dispute dates back to 1990, involving M/s Thermoking , a manufacturing firm, and a group of its former employees represented by the Rashtriya General Mazdoor Union . The core of the legal battle originated when workers alleged their services were terminated illegally after they demanded statutory benefits like minimum wages and bonus. Conversely, the management contended that the employees had voluntarily abandoned their posts following a factory-gate incident in November 1990.

The Labour Court , in its 2002 award, sided with the workers, holding that even if the management claimed abandonment, it constituted a form of misconduct requiring a formal domestic inquiry—a process that was never undertaken.

Legal Contentions

The management challenged the award in the High Court, arguing that there was no formal order of termination and that the employees had failed to rejoin work despite multiple opportunities and court-mandated settlements. They relied on precedents like Punjab and Sind Bank v. Sakattar Singh and Vijay S. Sathaye v. Indian Airlines Ltd. to argue that prolonged, unexplained absence allows for an inference of abandonment.

The workmen, through their counter-affidavits, maintained that they were consistently ready to work but were systematically denied entry by the management. They claimed the management’s internal notices were fabricated to build a narrative of abandonment.

The Court’s Reasoning

Justice Shail Jain underscored that the lack of a written termination order does not preclude a finding of "retrenchment" under the Industrial Disputes Act, 1947 . Citing the Supreme Court’s ruling in D.K. Yadav v. J.M.A. Industries Ltd. , the Court reaffirmed that the right to livelihood is protected, and any cessation of employment failing to adhere to the principles of natural justice—specifically the lack of a proper enquiry—is inherently unfair.

However, the Court shifted its focus to the "moulding of relief." Noting the reports of appointed Local Commissioners during the writ proceedings—which showed that some workers refused to rejoin or disputed wage rates—the Court concluded:

> "It may also be reasonably inferred that they might have been gainfully employed elsewhere, which could explain their non-appearance for rejoining duties. Accordingly, the relief of reinstatement would not be an appropriate relief to be granted at this stage."

Key Observations

• On the Need for Inquiry: "Abandonment is the specie of mis-conduct and for that management was duty bound to hold proper enquiry."
• On Right to Livelihood: "The right to livelihood is an integral part of the right to life under Article 21 of the Constitution of India and that, before taking any action putting an end to the tenure of an employee, fair play requires that a reasonable opportunity be afforded."
• On Back Wages: "Payment of full back wages, therefore, cannot be the natural consequence... relief is required to be moulded in the light of the facts of the case."

Final Decision: Balancing Equity

The Delhi High Court ultimately upheld the legality of the Labour Court 's finding regarding the termination. However, it set aside the directions for reinstatement and back wages. Acknowledging the passage of three decades and the fact that many workers had likely superannuated, the Court ruled that any payments previously disbursed—namely those made under Section 17-B of the Act during the pendency of the petition—would be treated as full and final compensation.

This judgment serves as a cautionary tale for both employers and workmen: the former must strictly adhere to the rigors of domestic inquiries, while the latter must pursue their right to work with active, consistent diligence to secure equitable relief from the courts.