Reinstatement following a penalty does not automatically grant entitlement to back wages or continuity of service, particularly when misconduct is acknowledged.

JUDGMENT :

(Prasanna B. Varale, C.J.)

The appeal in W.A.No.404/2022 is by the Management and the companion Appeal in W.A.No.425/2022 is by the workman. These two appeals seek to lay a challenge to a learned Single Judge's order dated 07.03.2022 in workman's W.P.No.36902/2011 (L-TER) wherein Labour Court Award dated 01.12.2010 was impugned. The operative portion of the order reads as under:

a) For the unauthorised absence, the petitioner is imposed with penalty of withholding 3 annual increments.

b) The respondent shall reinstate the petitioner within four weeks from the date of receipt of a copy of this order, with continuity of service and 40% of backwages from the date of his termination till the date of his reinstatement."

2. Shorn off the thickness of the appeal books, the matter lies in a narrow compass: The award of the Labour Court made presumably under Section 11 -A of the Industrial Disputes Act, 1947 is modified by the Writ Court, as already indicated above, under Articles 226 & 227 of the Constitution of India. In such a circumstance, Court is not recording a finding to give a clean chit to the workman. Apparently, the penalty is reduced to the imposition of 3 annual increments and the workman is directed to be reinstated. If that be so, we fail to understand how the direction for payment of back wages could be issued. This view gains support from a catena of rulings in the realm of Industrial Law.

3. The Apex Court in more or less a similar fact matrix in Om Pal Singh v. Disciplinary Authority , (2020) 3 SCC 103 at paragraphs 11 and 12 has observed as under:

"11. In J.K. Synthetics Ltd. v. K.P. Agrawal & Anr., (2007) 2 SCC 433, this Court dealt with the issue regarding the entitlement of a delinquent to claim continuity of service and consequential benefits in all cases of reinstatement as follows:

"17. There is also a misconception that whenever reinstatement is directed, 'continuity of service' and 'consequential benefits' should follow, as a matter of course. The disastrous effect of granting several promotions as a 'consequential benefit' to a person who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualized while granting consequential benefits automatically. Whenever courts or Tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether 'continuity of service' and/or 'consequential benefits' should also be directed. We may in this behalf refer to the decisions of this Court in A.P.S.R.T.C. v. S. Narasa Goud [2003 (2) SCC 212], A.P.S.R.T.C. v. Abdul Kareem [2005 (6) SCC 36] and R.S.R.T.C. v. Shyam Bihari Lal Gupta [2005 (7) SCC 406]."

12. It was further held in the said judgment that if reinstatement is a consequence of imposition of a lesser punishment, neither back-wages nor continuity of service nor consequential benefits follow as a natural or necessary consequence of such reinstatement. This Court went on to hold that where the misconduct was held to be proved, reinstatement by itself is a consequential benefit arising from imposition of a lesser punishment. However, this Court was of the opinion that award of back wages for the period when the employee has not worked may amount to rewarding the delinquent employee and punishing the employer for taking action against the misconduct committed by the employee, which should be avoided."

4. There is yet another reason why we are inclined to grant indulgence in the appeal of the Management and decline interference in that of the Workman: the learned counsel appearing for the Management with appreciable fairness submits t