1. Casual worker terminated by oral order — Industrial dispute referred under Section 10, Industrial Disputes Act — Labour Court ordered reinstatement and continuity of service. (Para 4 , 5 , 7 )
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2018 Supreme(SC) 1101
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, INDU MALHOTRA, JJ.
MANAGEMENT, HINDUSTAN MACHINE TOOLS LTD. – Appellant(s)
VERSUS
GHANSHYAM SHARMA – Respondent(s)
CIVIL APPEAL No.856 OF 2012
Decided On : 30-10-2018
Important Points
IMPORTANT POINT
Reinstatement is not the only relief which can be granted after quashing termination.
Courts should consider the duration of service, nature of employment and time elapsed since termination.
Reinstatement is not the only relief which can be granted after quashing termination.
Courts should consider the duration of service, nature of employment and time elapsed since termination.
Subject
Employment Law - Industrial Disputes
Act Referred
Headnote
Labour law – Casual labour working hardly for one year – No evidence of whether he was gainfully employed or not after termination – Termination long back, more than four decades – Labour court directing reinstatement with all consequential benefits – Not proper – Ought to grant lump sum compensation – Section 11A, Industrial Disputes Act, 1947. (Para 14)
(2010) 6 SCC 773; (2013) 5 SCC 136 – Relied upon
Facts of the case:
The respondent (workman) worked with the appellant Company as a casual helper in its manufacturing plant from 10.06.1976 to 30.07.1977. On 31.07.1977 his services were terminated.
The Labour court held that termination of the respondent was not legal and proper and, therefore, it was liable to be set aside. It was accordingly set aside. It was also held that the respondent be reinstated in service by the appellant and he be given continuity in service, also.
The Division Bench of the High Court restored the award of the Labour Court.
Finding of the Court:
Labour court ought not grant reinstatement
Result: Appeal partly allowed.
Legal Category Hierarchy
Table of Contents
2. Whether the Division Bench was justified in restoring the Labour Court's award directing reinstatement and continuity of service for a casual worker. (Para 11 )
3. Reinstatement is inappropriate for casual workers with short service durations where decades have passed without evidence of gainful employment; lump sum compensation is preferable. (Para 13 , 14 , 15 )
4. In cases of casual employment for short durations where significant time has elapsed, Labour Courts should award lump sum compensation under Section 11-A instead of reinstatement. (Para 14 , 15 )
5. Appeal partly allowed — Labour Court award modified — Lump sum compensation awarded in lieu of reinstatement in service. (Para 16 , 18 )
6. When is lump sum compensation preferable to reinstatement for a terminated employee?
Lump sum compensation is preferable when the employee was a casual worker with a very short duration of service and significant time has passed since termination without evidence of gainful employment. (Para 14 , 15 )
7. Under which section of the Industrial Disputes Act can a Labour Court award lump sum compensation instead of reinstatement?
The Labour Court is empowered to award lump sum compensation in lieu of reinstatement by taking recourse to the powers under Section 11-A of the Industrial Disputes Act. (Para 14 , 15 )
8. How does the duration of service and the time elapsed since termination affect the remedy of reinstatement?
Short service duration and the passage of several decades make reinstatement impractical, justifying the award of lump sum compensation instead of consequential benefits. (Para 14 , 15 )
JUDGMENT
Abhay Manohar Sapre, J.
1. This appeal is filed against the final judgment and order dated 18.12.2007 passed by the High Court of Judicature of Rajasthan in D.B. Civil Special Appeal (Writ) No.1417 of 1997 whereby the High Court allowed the appeal filed by the respondent.
2. Facts of the case lie in a narrow compass. They are stated infra.
3. The appellant is a Government company engaged in manufacture of certain items. It is now declared as a sick company.
4. The respondent (workman) claimed that he worked with the appellant Company as a casual helper in its manufacturing plant from 10.06.1976 to 30.07.1977. He complained that by an oral order; the appellant on 31.07.1977 terminated his services and, therefore, since 31.07.1977 he is no longer in the employment of the appellant.
5. The termination of the respondent, therefore, gave rise to the industrial dispute between the parties. The State, on the prayer made by the respondent (workman), referred the dispute under Section 10 of the Industrial Disputes Act (for short “the Act”) to the Labour Court, Jaipur on 03.11.1983, for its adjudication.
6. The parties contested the Reference on merits before the Labour Court. By award dated 21.09.1988, the Labour Court answered the Reference in respondent's favour.
7. It was held that termination of the respondent was not legal and proper and, therefore, it was liable to be set aside. It was accordingly set aside. It was also held that the respondent be reinstated in service by the appellant and he be given continuity in service, also.
8. The appellant (employer-company) felt aggrieved and filed writ petition in the High Court. By an order dated 17.09.1997, the High Court (Single Judge) allowed the writ petition and set aside the award of the Labour Court.
9. The respondent (employee) felt aggrieved and filed intra court appeal before the Division Bench. By impugned order, the Division Bench allowed the appeal, set aside the order of the learned Single Judge and restored the award of the Labour Court which has given rise to filing of this special leave to appeal by the Employer in this court.
10. Heard Shri Sushil Kumar Jain, learned senior counsel for the appellant. None appeared for the respondent though served.
11. So the short question, which arises for consideration in this appeal, is whether the Division Bench was justified in allowing the respondent's appeal and was, therefore, justified in restoring the award of the Labour Court.
12. Having heard the learned counsel for the appellant and on perusal of the record of the case, we are of the considered opinion that the appeal deserves to be partly allowed by modifying the award of the Labour Court to the extent indicated infra.
13. It is not in dispute that the respondent was a casual worker and hardly worked for one year (10.6.1976 to 30.7.1977). It is also not in dispute that his appointment was casual.
14. In a case of this nature, and having regard to the fact that many decades had passed in between with no evidence adduced by the respondent that whether he was gainfully employed from 1977 onwards or not, the Labour Court should have awarded lump sum money compensation to the respondent in lieu of the relief of reinstatement along with payment of back wages and continuity of service by taking recourse to the powers under Section 11-A of the Act, rather than to direct his reinstatement with all consequential benefits.
15. In other words, having regard to the peculiar nature of the respondent's appointment and rendering of services by him for a very short duration (just 240 days only) and with no evidence as to whether he worked for gains or not after his services came to an end in 1977, this was a fit case where the Labour Court should have awarded lump sum compensation to the respondent instead of directing his reinstatement in service with consequential benefits. The Labour Court was empowered to pass such order by taking recourse to the powers under Section 11A of th
