2018 (11) TMI 37 - SC - Indian Laws

Whether the Division Bench was justified in allowing the respondent s appeal and was, therefore, justified in restoring the award of the Labour Court? Held that - In a case of this nature, and having regard to the fact that many decades had passed in between with no evidence adduced by the respondent that whether he was gainfully employed from 1977 onwards or not, the Labour Court should have awarded lump sum money compensation to the respondent in lieu of the relief of reinstatement along with payment of back wages and continuity of service by taking recourse to the powers under Section 11A of the Act, rather than to direct his reinstatement with all consequential benefits. Having regard to the peculiar nature of the respondent s appointment and rendering of services by him for a very short duration (just 240 days only) and with no evidence as to whether he worked for gains or not after his services came to an end in 1977, this was a fit case where the Labour Court should have awarded lump sum compensation to the respondent instead of directing his reinstatement in service with consequential benefits. The Labour Court was empowered to pass such order by taking recourse to the powers under Section 11A of the Act. This has also been the view of this Court in such type of cases. While modifying the impugned order and the award of the Labour Court, we direct the appellant to pay a sum of ₹ 50,000/in lump sum to the respondent (employee) by way of compensation in lieu of respondent s right to claim reinstatement in service - appeal allowed in part.

Summary

Issues:
1. Termination of employment dispute between a government company and a workman.
2. Validity of the Labour Court's award reinstating the workman.
3. Justification of directing reinstatement with consequential benefits.

Analysis:
The case involved a dispute between a government company, the appellant, and a workman, the respondent, regarding the termination of the workman's employment. The workman claimed that his services were terminated orally by the appellant, leading to an industrial dispute. The State referred the dispute to the Labour Court for adjudication. The Labour Court, through an award, held the termination illegal and ordered the workman's reinstatement with continuity in service. The appellant challenged this decision by filing a writ petition in the High Court, where the Single Judge set aside the Labour Court's award. However, the Division Bench allowed the workman's appeal, reinstating the Labour Court's award, prompting the appellant to file a special leave to appeal in the Supreme Court.

Upon hearing the case, the Supreme Court considered whether the Division Bench was justified in restoring the Labour Court's award. The Court noted that the workman was a casual worker who had worked for a short duration, with no evidence of gainful employment post-termination in 1977. Given these circumstances, the Court opined that instead of reinstatement, the Labour Court should have awarded lump sum compensation under Section 11A of the Industrial Disputes Act. Citing precedents, the Court emphasized the appropriateness of such compensation in cases like these. Consequently, the Supreme Court partially allowed the appeal, modifying the Labour Court's award to direct the appellant to pay a lump sum of ?50,000 to the workman as compensation in lieu of reinstatement.

In justifying the compensation amount, the Court considered various factors, including the payment made to the workman during the legal proceedings. The Court deemed ?50,000 as a reasonable compensation under the circumstances and ordered the appellant to pay the amount to the workman within three months. The Court disposed of any pending applications in the matter, concluding the judgment.