Date of Judgement:
28 November 2017
Bench:
Justice Abhay Manohar Sapre
Parties:
Appellant – District Development Officer & Anr.
Respondent – Satish Kantilal Amrelia
Subject
The following judgement puts an end to the debate regarding reinstatement of workmen if they are found to be terminated illegally from their services. Also, the relief and compensation that is to be granted to them.
Overview
- The Appellant is a District Development Officer in the Panchayat Department of State of Gujarat at Bhavnagar. The Respondent (Satish Kantilal Amrelia) was working in its Revenue Department as a peon cum driver on daily wages. In the year 1992, after 2 years into the service, his tenure was discontinued and he was terminated. He felt that his termination was unjust.
- The Respondent took two separate actions. First, he filed a civil suit in the Civil Court at Bhavnagar. While the suit was pending, he simultaneously approached the Labour Court for them to decide the legitimacy and correctness of his termination and to reinstate him to his service.
- The Civil Court in 1994 set aside the termination order passed by the Appellant and directed them to reinstate the Respondent to his service and to provide him with the necessary benefits. The Appellant approached the Appellate Court, which in 2003, set aside the judgment of the Civil Court and dismissed the Respondent’s civil suit. Basically, it upheld the termination order.
- The Labour Court had a contrary opinion. It said that it is a case of illegal retrenchment. It also held that there was a violation of Section 25-G of the Industrial Disputes Act,1947. Hence, it ordered the Appellant to reinstate the Respondent back to his service along with payment of 40% back wages.
- To challenge the award of the Labour Court, the Appellant filed a writ petition in the High Court of Gujarat but it was dismissed. They also filed Letters Patent Appeal before the Division Bench but it suffered the same fate. Hence, aggrieved by this the Appellant approached the Supreme Court under Article 136.
Issues
- Whether the termination of the Respondent from his service was justified or not?
- If the termination is found to be illegal, do employees have the right to be reinstated with full back pay or to any compensation?
Legal Provisions
- Section 25G of the Industrial Disputes Act 1947 – Procedure for the retrenchment of the workmen by his employer.
- Section 25F of the Industrial Disputes Act 1947 – Conditions that are to be fulfilled for retrenchment of workmen.
- Article 136 of the Constitution of India – Special Leave to Appeal
Judgement
- The Supreme Court after a comprehensive perusal of the case, allowed the appeals in part. It set aside the order of the Division Bench of the High Court that upheld the termination order, and made some modifications to the order passed by the Labour Court. While doing this, it also made a reference to the case of Bharat Sanchar Nigam Limited vs. Bhurumal (2014).
- In the aforementioned case, it was held that “when termination of a daily wage worker is found to be illegal because of a procedural effect i.e, violation of Section 25F of the Industrial Disputes Act, then the reinstatement with back wages is not automatic. Also, in such cases, monetary compensation must be provided to the workman, to the extent that it ensures justice.”
- In this case, the Supreme Court opined that the current case does not fall under the definition of ‘exceptional cases’ as observed in the Bharat Sanchar Nigam Ltd. case because the Appellant did not resort to any kind of unfair practice while terminating the services of the Respondent. Hence, the relief of reinstatement was not granted to the Respondent.
- Keeping in mind the above points and after listening to both the parties, the Apex Court in the interest of fair play and natural justice awarded a lump sum monetary compensation of Rs. 2,50,000/- to the Respondent in lieu of his right to claim reinstatement and back wages in full and final satisfaction of this dispute.
- The Court also added that the amount is payable to the Respondent within 3 months from the date of the judgement. If the Appellant fails to pay within the specified time, then the amount shall carry interest at the rate of 9% per annum. Subsequently, the case was disposed of.
Conclusion
Thus, in this judgement, a basic principle of labour law was established that if a workman is illegally terminated from his service, then the court must not mechanically apply reinstatement with full back wages. Instead, he shall be awarded an appropriate amount of monetary compensation which will depend upon the facts and circumstances of the case.
The main reason the law does not provide the relief of reinstatement is because, even if the workman is reinstated, the management (employer) shall always have the option to pay him the retrenchment compensation and then terminate him.
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