The court clarified the conditions for granting back wages and reinstatement in cases of retrenchment under the Industrial Dispute Act, emphasizing the need for the employee to prove lack of gainful employment.

ORDER :

Javed Iqbal Wani, J.

In the instant petition challenge is thrown to the award passed by the Industrial Tribunal-cum Labour Court, J&K Srinagar (for brevity ‘Tribunal’) dated 13.06.2016 (for brevity ‘impugned award’) passed in case titled as Fayaz Ahmad and others vs. Management of Indian Tourism Development Corporation.

Brief Facts of the case:-

2. Respondents herein got appointed by the petitioner No. 1 (hereinafter referred to as ‘Petitioner-Corporation’), in the 12.031985, 02.09.1972, 04.09.1981, 24.07.1987 and 26.06.1973 as Sweeper, Usher, Chowkidar and Security Guard respectively. The said appointments of the respondents herein in the petitioner-Corporation had been made after subjecting the respondents to a process of interview. In all the respective appointment orders of the respondents herein inter alia a specific condition is incorporated that they shall be liable to transfer and post to any of the Unit of the petitioner-Corporation within India and aboard.

3. The respondents herein were retrenched by the petitioner-Corporation under Section 25-F of the Industrial Dispute Act, 1947 (for brevity ‘Act of 1947’) on 16.09.2002 and 01.11.2002 respectively, on the ground of closing of the establishment, they have been working in i.e., the Sound and Light Show, SEL Shalimar and Gulmarg SKI Project.

The respondents herein upon being retrenched raised an industrial dispute under Section 2-A of the Act of 1947, before the Conciliation Officer (Deputy Labour Commissioner), Kashmir, Division. The Conciliation Officer tried to bring the parties to an amicable settlement, however, the same failed and consequently, the Conciliation Officer submitted a report to the State Government under Section 12 (4) of the Act of 1947, which resulted into making of a reference by the Government under SRO 244 dated 26.07.2004 to the Tribunal. Following has been the reference made:-

“a) Whether the closure of Sound and Light Show Shalimar is illegal in the eyes of law?

b) Whether the termination of employees and their re-engagement on the contractual basis in the same concern is illegal?

c) If so, whether the retrenched workmen are entitled to reinstatement with full back wages and consequential benefits?

4. The Tribunal after entering upon the reference passed the impugned award, whereby the retrenched workmen/respondents herein were held entitled to reinstatement with full back wages on revision basis with other consequential benefits along with 9% interest on full back wages. The impugned award has been subsequently published/ notified in the Govt. Gazette in compliance to the directions of the Tribunal.

5. The impugned award is being questioned inter alia on the following grounds:-

(a) That the findings recorded by the Tribunal are not correct, in that, the respondents herein had accepted the retrenchment upon service of notice for closure under Section 25-FFF and retrenchment amount under Section 25-F of the Act of 1947, having accepted the retrenchment amount, the notice amount, gratuity and other terminal dues voluntarily and without any protest, as such, the respondents herein were not entitled to challenge the order of retrenchment on the ground that the notice amount and retrenchment compensation was paid after a lapse of four months;

(b) That the Tribunal held respondents herein entitled to reinstatement with full back wages and other consequential benefits and that such payment of full back wages could not be automatic or natural consequence of reinstatement and that for entitlement of a person to back wages, an employee has to show that he was not gainfully employed;

(c) That the respondents had neither pleaded nor placed any material on record to suggest that they were not gainfully employed and that the Tribunal without appreciating and assigning any reason held the respondents herein entitle to the full back wages with other consequential benefits and that the Tribunal had no power to award interest on full back wages;

(d) That the respon