IMPORTANT POINTS
1. While awarding compensation, the host of factors, inter-alia, manner and method of appointment, nature of employment and length of service are relevant
2. An order of retrenchment passed in violation of Section 25F although may be set aside but an award of reinstatement should not, however, be automatically passed.

JUDGMENT

R.M. Lodha, J.—

1. Leave granted.

2. The appellant was engaged as a daily wager by the Respondent No. 1, Haryana State Agriculture Marketing Board on September 1, 1995. He worked with the Respondent No. 1 upto July 18, 1996. Thereafter, his services came to an end. During his employment, the appellant was paid consolidated wages @ Rs. 1,498/- per month. The appellant raised the industrial dispute contending that his services were retrenched illegally in violation of Section 25F of Industrial Disputes Act, 1947 (for short, ‘the Act, 1947’). He claimed reinstatement with continuity of service and full back wages.

3. The Presiding Officer, Industrial Tribunal-cum-Labour Court, Panipat, after recording evidence and hearing the parties held that the appellant had worked for more than 240 days in the year preceding the date of termination and that the Respondent No. 1 violated the provisions of Section 25F of the Act 1947 by not giving him notice, pay in lieu of notice and retrenchment compensation before his termination. The Labour Court, accordingly, vide its award dated September 16, 2005 declared that the appellant was entitled to reinstatement with continuity of service and full back wages from the date of demand notice, i.e., January 27, 1997.

4. The present Respondent Nos. 1 and 2 challenged the award before the High Court for Punjab and Haryana. The High Court held that even if the appellant had completed 240 days of service in a calendar year, he was neither entitled to be reinstated nor could be granted back wages. The High Court set aside the award holding that it was not sustainable in law. It is this order of the High Court that has been challenged by the appellant in this appeal by special leave.

5. The question that falls for our consideration is whether the High Court, in a case such as this where termination of appellant was in contravention of Section 25F, was justified in upsetting the award of the Labour Court whereby the first respondent was directed to reinstate the appellant with continuity of service and full back wages.

6. The learned counsel for the appellant strenuously urged that once the termination of service of the appellant was held to be in violation of Section 25F of the Act 1947, the Labour Court rightly ordered reinstatement with continuity of service and full back wages and the High Court was not justified in interfering with the just award passed by the Labour Court. On the other hand, the learned counsel for the respondents supported the order of the High Court.

7. It is true that earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention to the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice.

8. In U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey1, (2006) 1 SCC 479, the question for consideration before this Court was whether direction to pay back wages consequent upon a declaration that a workman has been retrenched in violation of the provisions of the Section 6-N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F of ‘the Act, 1947’) as a rule was proper exercise of discretion. This Court considered a large number of cases and observed thus :

“41. The Industrial Courts while adjudicating on disputes between the management and the workmen, therefore, must take such decisions which would be in consonance with the purpose the law seeks to achieve. When justice is the buzzword in the matter of adjudication under the Industr