2008 (10) TMI 731 - SC - Indian Laws

Summary

Issues Involved:
The validity of an award directing reinstatement with full back wages, financial position of a cooperative society, compliance with interim order, application of Section 25F of the Industrial Disputes Act, burden of proof regarding gainful employment, discretionary jurisdiction of Industrial Courts.

Validity of Award for Reinstatement with Full Back Wages:
The appellant, a cooperative society, terminated the respondent's services in 1990 due to suffering losses. Despite an award in 1995 directing reinstatement, the respondent's services were terminated again in 1997. The Industrial Tribunal directed reinstatement with full back wages in 2002, which was upheld by the High Court. The appellant argued against the award, citing financial difficulties and short periods of employment by the respondent.

Compliance with Interim Order and Financial Position:
The High Court had issued an interim order staying execution of the award, which the appellant complied with. The appellant contended that due to financial distress and the respondent's short employment periods, reinstatement with full back wages was unjustified.

Application of Section 25F of Industrial Disputes Act:
The appellant argued that even if there was a technical violation of Section 25F of the Industrial Disputes Act, the Industrial Tribunal and High Court should not have directed reinstatement with full back wages considering the financial condition of the cooperative society.

Burden of Proof Regarding Gainful Employment:
The Industrial Court and High Court failed to consider relevant factors such as the nature of employment, duration of work, and financial status of the appellant. The burden of proof regarding gainful employment was incorrectly placed on the management, contrary to established legal principles.

Discretionary Jurisdiction of Industrial Courts:
In light of the respondent's short employment periods and the appellant's financial constraints, the Supreme Court directed the payment of compensation instead of reinstatement with full back wages. The Court emphasized the need for a balanced approach by Industrial Courts, considering the industry's financial health and the equities between the parties.