1. Daily-wage employee's termination — Complaint under Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 — Alleged violation of Section 25-F, Industrial Disputes Act, 1947. (Para 3 )
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2019 Supreme(SC) 946
SUPREME COURT OF INDIA
R. BANUMATHI, A.S. BOPANNA, JJ.
Dharamraj Nivrutti Kasture – Appellant
Versus
Chief Executive Officer and Anr. – Respondents
Civil Appeal No(s). 5978 of 2019 (Arising out of SLP(C) No(s).11267 of 2016)
Decided on : 31-07-2019
Important Points
Reinstatement may be denied if the initial appointment violated rules or if the employee has been out of service for a prolonged period. In such instances, the court may award or enhance monetary compensation in lieu of reinstatement to provide relief.
Subject
Labour Law - Termination and Reinstatement
Act Referred
Headnote
Labour Dispute - Reinstatement - Compensation in lieu of reinstatement
Fact of the Case:
The appellant, a peon in Zilla Parishad, had his services terminated in violation of labor laws. The Labour Court ordered reinstatement with continuity of service, but without back wages. The High Court set aside the reinstatement order and awarded compensation of Rs.50,000 in lieu of reinstatement.
Finding of the Court:
The court declined to interfere with the High Court's decision, considering the appellant's long period of unemployment. The compensation awarded was enhanced to Rs.1,50,000, with the respondent-Zilla Parishad directed to pay the balance amount of Rs.1,00,000 within eight weeks.
Issues: Violation of labor laws, reinstatement, compensation in lieu of reinstatement
Ratio Decidendi: The court considered the appellant's long period of unemployment and declined to interfere with the High Court's decision to set aside the reinstatement order. The compensation awarded was enhanced to Rs.1,50,000.
Final Decision: The impugned order was modified to enhance the compensation awarded, and the appeal was partly allowed with no order as to costs.
Legal Category Hierarchy
Advocates Appeared:
For the Petitioner(s): Mr. Sanjay Kharde,Adv. Mr. Samrat Shinde,Adv. Mr. Sant Dharamveer Chotiwala,Adv. Mr. Ravindra Keshavrao Adsure, AOR
For the Respondent(s): Mr. Sagar N. Pahune Patil,Adv. Mr. Sunil Kumar Verma, AOR
For the Petitioner(s): Mr. Sanjay Kharde,Adv. Mr. Samrat Shinde,Adv. Mr. Sant Dharamveer Chotiwala,Adv. Mr. Ravindra Keshavrao Adsure, AOR
For the Respondent(s): Mr. Sagar N. Pahune Patil,Adv. Mr. Sunil Kumar Verma, AOR
Table of Contents
2. Appellant sought reinstatement with back wages — Respondent contested reinstatement citing irregular appointment and prolonged unemployment. (Para 3 , 4 )
3. Reinstatement is untenable when the employee has been out of service for over three decades and the initial appointment violated recruitment rules. (Para 4 , 6 , 7 )
4. Prolonged unemployment over several decades and irregular initial appointment justify denying reinstatement in favor of monetary compensation. (Para 4 , 7 )
5. Appeal partly allowed — Reinstatement denied — Compensation enhanced. (Para 7 , 8 )
6. Does a prolonged period of unemployment affect the right to reinstatement?
Yes, when an employee has been out of employment for several decades, the court may decline reinstatement and instead award monetary compensation in lieu of service. (Para 4 , 7 )
7. Can reinstatement be denied if the initial appointment was irregular?
Yes, if the entry into service violated rules and lacked public participation, the court may determine that reinstatement on a permanent basis is not permissible. (Para 4 )
8. Does receiving interim wages preclude the award of back wages?
Yes, if an employee has been paid a substantial portion of their last drawn wages for a significant period without working, they may be denied back wages. (Para 4 , 6 )
JUDGMENT :
BANUMATHI, J.
Leave granted.
2. This appeal arises out of judgment and order of the High Court of Judicature at Bombay in Writ Petition No.3353 of 2002 dated 07.01.2016 in and by which the High Court has set aside the order of the Labour Court and the Industrial Tribunal of reinstatement of the appellant. However, the High Court has directed the respondent-Zilla Parishad to pay compensation of Rs.50,000/-in lieu of reinstatement of the appellant and in full quit of all claims.
3. The appellant was appointed as peon in Zilla Parishad on 23.03.1983 on daily-wage basis for a period of two months and his services were discontinued from 31.12.1987 by Order dated 07.01.1988. The appellant filed a complaint under Sections 28 read with clause 1(a), (b), (d), (e) and (f) of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971. The appellant has alleged that he has completed 240 days in each year and his services were terminated by the respondent-Zilla Parishad in violation of Section 25-F of the Industrial Disputes Act, 1947 and thus the appellant has prayed for reinstatement with back wages in the service and with continuity of service.
4. The Labour Court in its judgment dated 23.10.2000 set aside the order of termination and directed reinstatement of the appellant with continuity of service. The Labour Court, however, refused the back wages to the appellant on the ground that by an interim order dated 09.02.1988, the respondent-Zilla Parishad was directed to pay 75% of the last drawn wages to the appellant for about 12 years without work and, therefore, the Labout Court held that the appellant would not be entitled to the back wages. The Revision Application (ULP) NO.56 of 2001 filed by the respondent-Zilla Parishad before the Industrial Tribunal came to be dismissed by order dated 22.01.2002. Being aggrieved the respondent-Zilla Parishad preferred writ petition before the High Court. The High Court vide impugned order allowed the writ petition and set aside the order of award passed by the Labour Court as affirmed by the Industrial Tribunal by holding that there cannot be any direction for reinstatement on permanent basis when the entry to the service itself was in violation of the rules and without any public participation. The High Court has also held that the Labour Court has not recorded any findings as to the unfair labour practice nor any finding that the appellant herein was kept temporary for years with an object of depriving him permanency. Pointing out that the appellant has worked till dated 31.12.1987 and that there has been stay to his reinstatement since 2002 and that the appellant was out of employment for more than thirty years. The High Court has further held that the appellant would not be entitled to reinstatement. However, the High Court has awarded the compensation of Rs.50,000/-in lieu of reinstatement and in full quit of all claims.
5. We have heard Mr. Sagar N. Pahune Patil, learned counsel appearing for the appellant. We have also heard Mr. Sanjay Kharde, learned counsel appearing for the respondent-Zilla Parishad and also perused the impugned judgment and the materials on record.
6. As pointed out by Mr. Sanjay Kharde, learned counsel appearing for the respondent-Zilla Parishad, that the appellant was out of service for more than 32 years, it is also seen from the order of the Labour Court dated 23.10.2000 that the appellant has been paid 75% of the last drawn wages for about 12 years without work.
7. Considering the facts and circumstances of the case and the fact that the appellant has been out of employment for more than three decades, we are not inclined to interfere with the order of the High Court declining reinstatement. However, the compensation of Rs.50,000/-awarded to the appellant is enhanced to Rs.1,50,000/-(Rupees One Lakh Fifty Thousand). At this stage learned counsel for the respondent-Zilla Parishad has submitted that an amount of
