2006 (5) TMI 443 - SC - Indian Laws

Whether the appointment of the respondent being ad hoc in nature and furthermore on a contract basis as envisaged under Section 2(oo)(bb) of the Industrial Disputes Act, her services were liable to be terminated in terms thereof? Held that - There cannot be any dispute that provisions of Section 6-N of the U.P. Industrial Disputes Act have not been complied with. We are, however, of the opinion that instead and in place of issuing a direction for reinstatement of service, interests of justice shall be sub-served if compensation of Rs.30,000/- per person is directed to be paid. It goes without saying that the Respondents would be entitled to wages and other remunerations in terms of the interim order passed by the High Court so long they have actually worked. We, furthermore, hope and trust that in all future appointments, the Appellant shall strictly follow the provisions of the Adhiniyam and the Rules. Thus the impugned order modified by directing that the respondent shall be compensated by payment of a sum of Rs.25,000/- instead of the order for reinstatement with back wages.

Summary

Issues:
1. Interpretation of Section 2(oo)(bb) of the Industrial Disputes Act.
2. Regularization of services and compliance with Section 25-F of the Industrial Disputes Act.
3. Legality of termination and re-appointment practices.
4. Consideration of reinstatement with back wages versus compensation.
5. Application of legal principles for awarding back wages.

Interpretation of Section 2(oo)(bb) of the Industrial Disputes Act:
The respondent was appointed on an ad hoc basis with a fixed period of 89 days, and her services were terminated and re-appointed repeatedly. The court found that the management's actions were not bona fide and aimed to defeat the rights under Section 25-F of the Act. The High Court upheld the decision, stating that the repeated 89-day engagements constituted unfair labor practice, falling outside the scope of Section 2(oo)(bb) of the Act.

Regularization of services and compliance with Section 25-F of the Industrial Disputes Act:
The respondent's services were terminated and re-appointed regularly after 89-day intervals. Despite completing 240 days of work within twelve months, her services were terminated without compliance with Section 25-F. The Labour Court and High Court directed reinstatement with back wages, emphasizing non-compliance with statutory provisions.

Legality of termination and re-appointment practices:
The appellant's termination and re-appointment practices were deemed unfair labor practices by the court, as the respondent was repeatedly engaged for 89-day periods without a genuine break. The court found that the management's intention was to circumvent statutory rights, justifying the direction for reinstatement with back wages.

Consideration of reinstatement with back wages versus compensation:
In light of the peculiar circumstances, the court decided to award a lump sum compensation instead of reinstatement with back wages. Considering the respondent's absence from work since 1992 and the post being likely filled, a compensatory amount of Rs.25,000 was ordered to be paid in place of reinstatement.

Application of legal principles for awarding back wages:
The court emphasized that the relief of reinstatement with full back wages should not be automatic and must be considered based on individual merits. Citing various legal precedents, the court highlighted the importance of considering justice and appropriate relief under the Industrial Disputes Act, modifying the order to award compensation in this case.

This judgment underscores the significance of adhering to statutory provisions, fair labor practices, and individual circumstances in determining appropriate remedies for industrial disputes, balancing legal principles with considerations of justice and practicality.