Conferment of permanency entitles workman to permanent salary scale despite company's defunct status.

(Judgment of the Court was made by G.R.Swaminathan J.)

This writ appeal is at the instance of a workman of Sri Ganapathi Mills Company Limited, Tirunelveli. The workman joined the said company way back in the year 1984. He was terminated from service in the year 1992. He raised an industrial dispute. The Labour Court set aside the order of termination and directed reinstatement. The management filed writ petition but the same was dismissed. The writ appeal filed by the management was also dismissed. Thus, the order passed by the Labour Court setting aside the appellant’s termination and ordering reinstatement became final.

2.After the writ proceedings attained finality in favour of the workman, the workman approached the Deputy Commissioner of Labour in the year 2002 and sought permanent status. Vide order dated 21.10.2002, the authority under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 declared that the employee should be treated as a permanent employee. However, the employee continued to receive the original pay which he was getting as a temporary workman. Hence, the employee filed CP No.26 of 2010 before the Labour Court, Tirunelveli under Section 33(C)(2) of the Industrial Disputes Act, 1947 for directing the management to pay him a sum of Rs.5,94,484/- (Rupees Five Lakhs Ninety Four Thousand Four Hundred and Eighty Four only). The contention of the management was that the Deputy Commissioner of Labour had only conferred permanency status on the workman and the order was silent with regard to the wages / salary payable to him. The Labour Court rejected the said contention and rightly held that when a workman had been declared to be a permanent employee, he would be entitled to the salary payable to a permanent workman. In that view of the matter, the claim petition filed by the workman was allowed vide order dated the 26.10.2012.

3.This was put to challenge by the management in W.P(MD)No.

16298 of 2012. The learned single Judge disposed of the writ petition in the following terms:

“5. The contention of the petitioner Management is that the second respondent was terminated from service because of his act of misconduct. The second respondent has filed Section 2A petition before the Labour Court and the said applications are ended up in futile, which are against the petitioner Management. The petitioner Management has deposited Rs.1,00,000/- during pendency of the proceedings before this Court and the same was withdrawn by the workman. Moreover, the second respondent was paid 17B wages based on his last drawn wages during the pendency of the proceedings. The contention of the petitioner Management is that based on the proceedings the second respondent was reinstated in service on 26.03.2011 as temporary worker. 6. On perusing the records it is seen that the Labour Court has not granted any backwages and therefore the claim of the petitioner ought to be adjudicated before any monetary benefits are conferred to the second respondent. Moreover, the petitioner Management has now become a defunct company.

7. Therefore, this Court is of the considered opinion that in order to meet the ends of justice the petitioner Management is directed to pay Rs.1,00,000/- to the second respondent as full and final settlement within a period of eight weeks from the date of receipt of a copy of this order. ”

4.The learned Single Judge has not assigned a single reason as to why the order passed by the Labour Court had to be set aside. Probably what weighed in the mind of the learned Single Judge was that the company had already become defunct and that, therefore, the workman should receive at least some benefit. However, we are of the view that the approach of the Labour Court is sustainab