Monetary compensation, not reinstatement, is appropriate for daily wage workers upon finding illegal terminations; reinstatement is not automatic even when procedural violations are confirmed.

Headnote:(A) Industrial Disputes Act, 1947 - Section 25F - Termination of daily wager - Court confirmed the enhancement of lump-sum compensation from Rs.30,000/- to Rs.5,00,000/- due to breach of procedural norms in termination, while reiterating principles around reinstatement and compensation in labor disputes. (Paras 7-8, 9)

(B) Reinstatement of employees - Not automatic even upon finding illegality in termination, especially for daily wage workers, who may only be entitled to monetary compensation based on the circumstances of the case. (Paras 7.1-7.3)

(C) Breach of law due to lack of retrenchment compensation and computation of service duration being factored into determination of just compensation. (Paras 7.6, 7.7)

Facts of the case:
The respondent, a daily wage workman, challenged the Labor Court's compensation award following termination after 14 years of service. The learned Single Judge modified the award to a higher amount, prompting the appeal.

Findings of Court:
The court found the enhancement of compensation to be justified, confirming Rs.5,00,000/- as appropriate for the circumstances.

Issues: The court addressed whether reinstatement is an automatic remedy despite the breach of Section 25F of the Act and acknowledged the workman's impending retirement.

Ratio Decidendi: The court reasoned that reinstatement is not an automatic provision for daily wage workers; instead, monetary compensation is often deemed sufficient based on individual case factors.

Result: Letters Patent Appeal dismissed.

Table of Content
1. filing of appeal against a compensatory order (Para 1 , 2 , 3 , 4)
2. arguments on delay in petition (Para 6)
3. analysis of reinstatement versus compensation (Para 7)
4. final judgment and dismissal of appeal (Para 8 , 9 , 10)

ORDER :

(Pranav Trivedi, J.)

1. The present Letters Patent Appeal under Clause 15 of the Letters Patent is filed by the appellant – original respondent No.1 assailing the correctness of the judgment and order dated 16.03.2023 passed by the learned Single Judge in Special Civil Application No.7321 of 2009.

2. The prayers made in the writ petition before the learned Single Judge was to given directions declaring the decision of the Labour Court in awarding Rs.30,000/- as lumpsum compensation instead of granted the relief of reinstatement as arbitrary and illegal.

3. Learned Single Judge after considering the submissions made by both the parties, partly allowed the writ petition and modified the award to the extent of granting lumpsum compensation of Rs.5,00,000/- instead of Rs.30,000/-. The State Government, being aggrieved by such order, has preferred the present Letters Patent Appeal.

4. The factual matrix which has led to the filing of the present Appeal is that the respondent – workman was working as Class-IV employee from 01.12.1991 with the appellant. It was the case of the workman that his services came to be terminated illegally with effect from 08.11.1995 almost after a period of 14 years of service. Such termination culminated in an industrial dispute. The Assistant Labour Commissioner made a reference under Section 10 (1)(c) of the Industrial Disputes Act (hereinafter referred as to “the Act”) to the Labour Court, Ahmedabad being Reference (LCA) No.763 of 1996. The parties led the evidence. The Labour Court, by the award dated 29.01.2007, granted lumpsum compensation of Rs.30,000/-. The workman aggrieved by such award, preferred the writ petition. The Learned Single Judge enhanced the lump-sum compensation to Rs.5,00,000/-. This order passed by the learned Single Judge is assailed in the present Letters Patent Appeal.

5. We have heard Mr. Sanjay Udhwani, learned Assistant Government Pleader appearing for the appellant. Though served, nobody appears for the respondents.

6. Mr. Udhwani, learned Assistant Government Pleader appearing for the appellant has submitted that the workman had preferred a writ petition in the year 2009, which was after two years of passing of award. Therefore, the petition suffers from the aspect of delay and latches, which is not considered by the learned Single Judge. It is further submitted that the compensation awarded by the Labour Court was just and proper and Rs.5,00,000/- would be a huge amount to be paid to the respondent daily wager. In wake of such submission, Mr. Udhwani, learned Assistant Government Pleader for the appellant has requested to consider the payers as made in the present Letters Patent Appeal.

7. Having heard learned Assistant Government Pleader and having perused the material on record, the small point of consideration before us in the facts of the present case is as to whether in the scenario of clear cut violation of Section 25F of the Act, reinstatement would be automatic or lump-sum compensation would meet the end of justice. If we peruse the facts of the present case, it is not in dispute that there is a breach of Section 25F of the Act. It is also not in dispute that the appellant workman would be on the verge of superannuation in a short span of time.

7.1 In shift of paradigm, this Court has consistently taken a view that relief by way of reinstatement with back-wages would not be automatic and may be wholly inappropriate in a given situation, even though the termination of an employee is in contravention of the prescribed procedure. Furthermore, in given circumstances, it would always be open to the management to terminate the service of the employee by paying him retrenchment compensation since the workman was working on daily wag