2010 (4) TMI 965 - SC - Indian Laws

Whether relief of reinstatement and back wages granted to respondent nos. 1 to 14 (for short, the workmen ) is justified? Held that - Appeal allowed. Considering the fact that the workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice. The compensation of Rs. 40,000/- to each of the workmen (respondent nos. 1 to 14) shall meet the ends of justice. Such payment shall be made within 6 weeks from today failing which the same shall carry interest at the rate of 9 per cent p.a.

Summary

Issues:
1. Justification of relief of reinstatement and back wages granted to workmen.
2. Whether the termination of workmen's services was legal.
3. Applicability of reinstatement and back wages in the case.

Analysis:
Issue 1: The main question in this case was the justification of the relief of reinstatement and back wages granted to the workmen. The workmen were engaged as casual laborers and their services were discontinued, leading to an industrial dispute. The Tribunal found that the workmen had completed the required days of work and their services were retrenched without following the mandatory provisions of the Industrial Disputes Act, 1947. The Tribunal directed reinstatement and back wages, which was upheld by the High Court.

Issue 2: The appellant argued that the services of the workmen were not terminated but they were redeployed, and the workmen abandoned their service. However, the Tribunal and the High Court did not find merit in this submission based on the evidence presented. The appellant's plea regarding the termination was not accepted, and the finding of the Tribunal was upheld.

Issue 3: The Supreme Court referred to previous judgments and legal precedents regarding reinstatement with back wages. It was noted that relief by way of reinstatement with back wages is not automatic, especially in cases where the termination is found to be illegal. The Court emphasized that monetary compensation could be appropriate in such situations. Considering the circumstances of the case, the Court held that reinstatement and back wages were not justified. Instead, it ordered monetary compensation of Rs. 40,000 to each of the workmen, stating that it would meet the ends of justice. The Court directed the payment to be made within a specified period, failing which interest would be applicable.

In conclusion, the Supreme Court allowed the appeal to the extent of granting monetary compensation to the workmen, emphasizing the shift in legal position towards considering compensation instead of automatic reinstatement with back wages in cases of illegal termination.