Back Wages beyond period of closure of a company

Labour Law Citation: Supreme Court: 2016-I-LLJ-257(SC) LNIND 2016 SC 8: MANAGEMENT OF NARENDRA AND COMPANY PRIVATE LTD vs. WORKMEN OF NARENDRA AND COMPANY

Workmen were retrenched by management. This turned into an industrial dispute. Labour Court directed reinstatement with 50% back wages to be payed to workmen.

In Writ Petition filed by management, Single Judge declined to interfere with award on reinstatement. Since industry was closed, Single Judge held that back wages was limited till date of closure.

In appeal, Division Bench extended benefit of 50% back wages to workmen along with other benefits beyond date of closure of industry.

The Company approached Supreme Court challenging Division Bench order asking the Court whether workmen are entitled to receive back wages beyond date of closure.

Supreme Court’s observations and order:

Once, Single Judge, on considering records concludes that appellant industry was not functioning after specified period, no justification in entering a different finding without any further material before Division Bench. Appellant Court can issue finding of fact only when findings of Single Judge are perverse. Appellant Court shall not interfere merely because another view is possible.

SC further said that, Affidavit filed by Management clearly states that industry was not functioning after specified period. Nothing found in counter affidavit of workmen to establish that Appellant industry was functioning thereafter. Order of payment of back wages beyond period of closure vacated. Workmen entitled to benefits. On default, workmen entitled to 10% interest.

WHAT WE LEARN:

• Back wages cannot be paid to workmen beyond the date of closure of industry.
•  Appellate Court cannot arrive at a different finding from the decision of the lower court, unless the latter decision is perverse.
• Merely because another view is possible, Appellant Court cannot interfere with the decision of the lower court.

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