1. Employment termination for absence without leave — delayed challenge to termination order — award of full back wages by Labour Court. (Para 3 )
Back
Next 
1994 Supreme(SC) 517
SUPREME COURT OF INDIA
A.M.Ahmadi : Yogeshwar Dayal
Steel Authority Of India Limited
Versus
Presiding Officer
Case No. : 4339 of 1994
Date of Decision : 5/5/94
Important Points
An employer cannot be compelled to pay full back wages if the employee has exhibited significant, unjustifiable lethargy in challenging a termination order, as the employer should not suffer for the employee's default in initiating timely legal action.
Subject
Labour Law - Industrial Disputes
Headnote
(A) Labour Law - Back wages - Termination of service - Delay in challenging termination order - Employee remained absent without leave to avoid police apprehension and services were terminated - Employee initiated conciliation proceedings after a decade - Labour Court directed reinstatement with full back wages - Even if the order of termination was void ab initio, there is no justification for waiting for over a decade to challenge the order - Employer cannot be asked to pay for the default of the employee in not taking action for over a decade - Award of full back wages is unjustified in view of such lethargy. (Paras 3, 4)
Facts of the case:
An employee was terminated from service after remaining absent without leave to avoid police apprehension. The employee did not challenge the termination order for over ten years, eventually initiating conciliation proceedings a decade later. The Labour Court ordered reinstatement with full back wages, a decision upheld by the High Court. The matter reached the Supreme Court specifically on the issue of back wages since the employee had already been reinstated.
Findings of Court:
The court found that the employee was to blame for the delay in initiating proceedings. While the reinstatement was not interfered with, the award of full back wages was deemed unfair given the employee's lethargy in challenging the termination order.
Issues: Whether an employee is entitled to full back wages when there is an unexplained delay of over a decade in challenging the termination order.
Ratio Decidendi: An employer cannot be penalized for the default or lethargy of an employee who fails to challenge a termination order for a prolonged period. Such delay justifies the reduction of back wages as the employer should not pay for the employee's failure to take timely action.
Result: Order directing payment of full back wages set aside and substituted by ordering 25 per cent back wages.
Facts of the case:
An employee was terminated from service after remaining absent without leave to avoid police apprehension. The employee did not challenge the termination order for over ten years, eventually initiating conciliation proceedings a decade later. The Labour Court ordered reinstatement with full back wages, a decision upheld by the High Court. The matter reached the Supreme Court specifically on the issue of back wages since the employee had already been reinstated.
Findings of Court:
The court found that the employee was to blame for the delay in initiating proceedings. While the reinstatement was not interfered with, the award of full back wages was deemed unfair given the employee's lethargy in challenging the termination order.
Issues: Whether an employee is entitled to full back wages when there is an unexplained delay of over a decade in challenging the termination order.
Ratio Decidendi: An employer cannot be penalized for the default or lethargy of an employee who fails to challenge a termination order for a prolonged period. Such delay justifies the reduction of back wages as the employer should not pay for the employee's failure to take timely action.
Result: Order directing payment of full back wages set aside and substituted by ordering 25 per cent back wages.
Legal Category Hierarchy
Table of Contents
2. Employer contends full back wages are unjustified due to employee's decade-long delay; employee argues termination was void ab initio for lack of opportunity. (Para 4 )
3. Even if termination is void ab initio, an employer cannot be penalized for an employee's unreasonable delay in challenging the order. (Para 4 )
4. Full back wages cannot be awarded where the employee's own lethargy and delay in initiating proceedings justify a reduction in the award. (Para 4 )
5. Order for full back wages set aside and substituted with an award of twenty-five per cent back wages. (Para 4 )
6. Does a void ab initio termination automatically entitle an employee to full back wages despite a long delay in challenging the order?
No. Even if a termination order is void ab initio, the employer cannot be asked to pay for the employee's default or lethargy in failing to challenge the order for an unreasonable period, such as over a decade. (Para 4 )
7. How does an employee's delay in initiating proceedings affect the award of back wages?
Unreasonable delay by the employee in challenging a termination order can lead the court to reduce the award of back wages, as the employer should not be made to pay for the employee's own lethargy. (Para 4 )
(1) SPECIAL leave granted.
(2) HEARD counsel on both sides.
(3) WE find that there is considerable force in the grievance of the appellant that the appellant has been made to pay for the lethargy of the respondent- employee. The facts reveal that to avoid being apprehended by the police the respondent left and then remained absent without leave whereupon his services were terminated by an order dated 23/8/1980. Thereafter, the respondent- employee did not do anything in the matter till he moved for conciliation on 5/2/199191 i.e. after a decade. Since the dispute could not be resolved in conciliation proceedings, a reference was made on 27/9/1991 for adjudication. The Labour Court came (sic) and directed reinstatement with full back wages. Against that order the appellant approached the High court. The appellants writ petition was dismissed in limine. Against the said order the present appeal came to be filed. At the preliminary hearing we issued notice limited to the question of back wages, since the employee had been reinstated in service.
(4) AS stated above the grievance of the appellant is that it was the employee who was to blame for not initiating proceedings till 5/2/1991, against the order of termination dated 23/8/1980 and, therefore, the Labour court was wrong in awarding full back wages. It is further stated that at best he could have been awarded wages from 5/2/1991-when he initiated the conciliation proceedings. On the other hand counsel for the employee contends that the services of the employee were terminated without giving him any opportunity whatsoever and, therefore, the termination was ab initio void. We need not go into this aspect of the matter for the simple reason that we have not interfered with the order of reinstatement in service. But the fact remains that even if the order of termination was ab initio void there was no justification for waiting for over a decade to challenge that order. The employer cannot be asked to pay for the default of the employee in not taking action for over a decade. Maybe the employer was harsh in awarding the maximum punishment. We, therefore, set aside the order directing payment of full back wages and substitute it by ordering 25 per cent back wages. The 25 per cent back wages to be paid within three months from today. The appeal will stand disposed of accordingly with no order as to costs.
