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INSTEAD OF RE-INSTATEMENT WITH BACK WAGES – COMPENSATION IS ADEQUATE RELIEF FOR WRONG FULL DISMISSAL.

JUSTICE R.M. Lodha, and JUSTICE Sudhansu Jyoti Mukhopadhaya of Supreme Court of India in the case of Asst.Engineer,Rajasthan ... vs Gitam Singh Decided on 31 January, 2013 by quoting following citations has observed that ‘In view of the legal position and the fact that the workmen were engaged as “daily wagers” and they had merely worked for more than 240 days, in our considered view, relief of reinstatement cannot be said to be justified and instead, monetary compensation would meet the ends of justice.’

QUOTED CITATIONS
Court in Assam Oil Company Limited, New Delhi v. Its Workmen AIR 1960 SC 1264 observed that the normal rule in cases of wrongful dismissal was reinstatement but there could be cases where it would not be expedient to follow this normal rule and to direct reinstatement. Having regard to the facts of that case, this Court set aside the order of reinstatement although dismissal of the employee was found to be wrongful and awarded compensation.
In M/s. Hindustan Steels Ltd., Rourkela v. A.K. Roy and Others , (1969) 3 SCC 513 Court noted that there have been cases where reinstatement has not been considered as either desirable or expedient.
In M/s. Ruby General Insurance Co. Ltd. v. Shri P.P. Chopra, (1969) 3 SCC 653 Court reiterated what was stated in Assam Oil Company Limited9. In paragraph 6 (pgs. 655-656) of the Report, this Court said : “6. The normal rule is that in cases of invalid orders of dismissal industrial adjudication would direct reinstatement of a dismissed employee. Nevertheless, there would be cases where it would not be expedient to adopt such a course. Where, for instance, the office of the employer was comparatively a small one and the dismissed employee held the position of the secretary, a position of confidence and trust, and the employer had lost confidence in the concerned employee, reinstatement was held to be not fair to either party……………”
Court in The Management of Panitole Tea Estate v. The Workmen, (1971) 1 SCC 742 while dealing with the judicial discretion of the Labour Court or the Tribunal under ID Act in directing appropriate relief on setting aside the wrongful dismissal of a workman, stated in paragraph 5 (pgs. 746- 747) as follows: “…. The question whether on setting aside the wrongful dismissal of a workman he should be reinstated or directed to be paid compensation is a matter within the judicial discretion of the Labour Court or the Tribunal, dealing with the industrial dispute, the general rule in the absence of any special circumstances being of reinstatement. In exercising this discretion, fairplay towards the employee on the one hand and interest of the employer, including considerations of discipline in the establishment, on the other, require to be duly safeguarded. This is necessary in the interest both of security of tenure of the employee and of smooth and harmonious working of the establishment. Legitimate interests of both of them have to be kept in view if the order is expected to promote the desired objective of industrial peace and maximum possible production. The past record of the employer, the nature of the alleged conduct for which action was taken against him, the grounds on which the order of the employer is set aside, the nature of the duties performed by the employee concerned and the nature of the industrial establishment are some of the broad relevant factors which require to be taken into consideration. The factors just stated are merely illustrative and it is not possible to exhaustively enumerate them. Each case has to be decided on its own facts and no hard and fast rule can be laid down to cover generally all conceivable contingencies……”
In M/s. Tulsidas Paul v.The Second Labour Court, W.B. and Others, (1972) 4 SCC 205 this Court relied upon M/s. Hindustan Steels Ltd.10 and held as under: “9. In Hindustan Steels Ltd. v. Roy [(1969) 3 SCC 513] we recently held, after considering the previous case-law, that though the normal rule, in cases where dismissal or removal from service is found to be unjustified, is reinstatement, Industrial Tribunals have the discretion to award compensation in unusual or exceptional circumstances where the tribunal considers, on consideration of the conflicting claims of the employer on the one hand and of the workmen on the other, reinstatement inexpedient or not desirable. We also held that no hard and fast rule as to which circumstances would constitute an exception to the general rule can be laid down as the tribunal in each case must, in a spirit of fairness and justice and in keeping with the objectives of industrial adjudication, decide whether it should, in the interest of justice, depart from the general rule.”
10. In L. Robert D’Souza (1982) 1 SCC 645, Court in paragraph 27 (pg. 664) held as under : “27. ……….Therefore, assuming that he was a daily-rated worker, once he has rendered continuous uninterrupted service for a period of one year or more, within the meaning of Section 25-F of the Act and his service is terminated for any reason whatsoever and the case does not fall in any of the excepted categories, notwithstanding the fact that Rule 2505 would be attracted, it would have to be read subject to the provisions of the Act. Accordingly the termination of service in this case would constitute retrenchment and for not complying with pre- conditions to valid retrenchment, the order of termination would be illegal and invalid.”
In Manager, Reserve Bank of India, Bangalore v. S. Mani and Others, (2005) 5 SCC 100 this Court in paragraph 54 (pg. 120) of the Report held as under: “54. Mr. Phadke, as noticed hereinbefore, has referred to a large number of decisions for demonstrating that this Court had directed reinstatement even if the workmen concerned were daily- wagers or were employed intermittently. No proposition of law was laid down in the aforementioned judgments. The said judgments of this Court, moreover, do not lay down any principle having universal application so that the Tribunals, or for that matter the High Court, or this Court, may feel compelled to direct reinstatement with continuity of service and back wages. The Tribunal has some discretion in this matter. Grant of relief must depend on the fact situation obtaining in a particular case. The industrial adjudicator cannot be held to be bound to grant some relief only because it will be lawful to do so.”
In Nagar Mahapalika (Now Municipal Corpn.) v. State of U.P. and Others, (2006) 5 SCC 127 this Court, while dealing with the non-compliance with the provisions of Section 6-N (which is pari materia to Section 25-F) of U.P. Industrial Disputes Act held that the grant of relief of reinstatement with full back wages and continuity of service in favour of retrenched workmen would not automatically follow or as a matter of course. Instead, this Court modified the award of reinstatement with compensation of Rs. 30,000/- per workman.
In Municipal Council, Sujanpur v. Surinder Kumar, (2006) 5 SCC 173 Court after having accepted the finding that there was violation of Section 25-F of the ID Act, set aside the award of reinstatement with back wages and directed the workman to be paid monetary compensation in the sum of Rs. 50,000/-.
In Mamni, (2006) 9 SCC 434 Court modified the award of reinstatement passed by the Labour Court, though the termination of the workman was in violation of Section 25-F of the ID Act, by directing that the workman should be compensated by payment of a sum of Rs. 25,000/-.
In Regional Manager, SBI v. Mahatma Mishra, (2006) 13 SCC 727 this Court observed that it was one thing to say that services of a workman were terminated in violation of mandatory provisions of law but it was another thing to say that relief of reinstatement in service with full back wages would be granted automatically.
In Haryana Urban Development Authority v. Om Pal, (2007) 5 SCC 742 Court in paragraphs 7 and 8 (pg. 745) of the Report held as under : “7. Moreover, it is also now well settled that despite a wide discretionary power conferred upon the Industrial Courts under Section 11-A of the 1947 Act, the relief of reinstatement with full back wages should not be granted automatically only because it would be lawful to do so. Grant of relief would depend on the fact situation obtaining in each case. It will depend upon several factors, one of which would be as to whether the recruitment was effected in terms of the statutory provisions operating in the field, if any. 8. The respondent worked for a very short period. He only worked, as noticed hereinbefore, in 1994-95. The Industrial Tribunal-cum-Labour Court, therefore, in our opinion committed an illegality, while passing an award in the year 2003, directing the reinstatement of the respondent with full back wages. Although we are of the opinion that the respondent was not entitled to any relief, whatsoever, we direct the appellant to pay him a sum of Rs. 25,000.”
In Uttaranchal Forest Development Corporation v. M.C.Joshi, (2007) 9 SCC 353 the Court was concerned with a daily wager who had worked with Uttaranchal Forest Development Corporation from 01.08.1989 to 24.11.1991 and whose services were held to be terminated in violation of Section 6-N of the U.P. Industrial Disputes Act. The Labour Court had directed the reinstatement of the workman with 50 per cent back wages from the date the industrial dispute was raised. Setting aside the order of reinstatement and back wages, this Court awarded compensation in a sum of Rs. 75,000/- in favour of the workman keeping in view the nature and period of service rendered by the workman and the fact that industrial dispute was raised after six years.

In Madhya Pradesh Administration v. Tribhuban, (2007) 9 SCC 748 Court upheld the order of the Industrial Court passed in its jurisdiction under Section 11A of the ID Act awarding compensation and set aside the judgment of the Single Judge and the Division Bench that ordered the reinstatement of the workman with full back wages. The Court in paragraph 12 (pg. 755) of the Report held as under: “12. In this case, the Industrial Court exercised its discretionary jurisdiction under Section 11-A of the Industrial Disputes Act. It merely directed the amount of compensation to which the respondent was entitled had the provisions of Section 25-F been complied with should be sufficient to meet the ends of justice. We are not suggesting that the High Court could not interfere with the said order, but the discretionary jurisdiction exercised by the Industrial Court, in our opinion, should have been taken into consideration for determination of the question as to what relief should be granted in the peculiar facts and circumstances of this case. Each case is required to be dealt with in the fact situation obtaining therein.”

In Mahboob Deepak, (2008) 1 SCC 575 Court stated that an order of retrenchment passed in violation of Section 6-N of the U.P. Industrial Disputes Act may be set aside but an order of reinstatement should not however be automatically passed. The Court observed in paragraphs 11 and 12 (pg. 578) of the Report as follows:- “11. The High Court, on the other hand, did not consider the effect of non-compliance with the provisions of Section 6-N of the U.P. Industrial Disputes Act, 1947. The appellant was entitled to compensation, notice and notice pay. 12. It is now well settled by a catena of decisions of this Court that in a situation of this nature instead and in place of directing reinstatement with full back wages, the workmen should be granted adequate monetary compensation. (See M.P. Admn. v. Tribhuban (2007) 9 SCC 748).”
In Telecom District Manager and others v. Keshab Deb, (2008) 8 SCC 402 Court said that even if the provisions of Section 25-F of the I.D. Act had not been complied with, the workman was only entitled to just compensation.
In Talwara Co-operative Credit and Service Society Limited v. Sushil Kumar, (2008) 9 SCC 486 Court in paragraph 8 (pg. 489) of the Report held as under : “8. Grant of a relief of reinstatement, it is trite, is not automatic. Grant of back wages is also not automatic. The Industrial Courts while exercising their power under Section 11- A of the Industrial Disputes Act, 1947 are required to strike a balance in a situation of this nature. For the said purpose, certain relevant factors, as for example, nature of service, the mode and manner of recruitment viz. whether the appointment had been made in accordance with the statutory rules so far as a public sector undertaking is concerned, etc., should be taken into consideration.”
In Jagbir Singh, (2009) 15 SCC 327 Court, speaking through one of us (R.M. Lodha, J.) while dealing with the question of consequential relief arising from the facts quite similar to the present case, ordered compensation of Rs. 50,000/- to be paid by the employer to the workman instead of reinstatement. In paragraph 14 (pg.335) of the Report, this Court held as under : “14. It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee.”
In Uttar Pradesh State Electricity Board v. Laxmi Kant Gupta, (2009) 16 SCC 562 Court stated, “…. now there is no such principle that for an illegal termination of service the normal rule is reinstatement with back wages, and instead the Labour Court can award compensation”.
In Santosh Kumar Seal, (2010) 6 SCC 773 while dealing with a case of workmen who were engaged as daily wagers about 25 years back and had hardly worked for two or three years, this Court speaking through one of us (R.M. Lodha, J.) held that reinstatement with back wages could not be said to be justified and instead monetary compensation would subserve the ends of justice. It was held that compensation of Rs. 40,000/- to each of the workmen would meet the ends of justice.

Court in Bharat Sanchar Nigam Limited v. Man Singh (2012) 1 SCC 558 . That was a case where the workmen, who were daily wagers during the year 1984-85, were terminated without following Section 25-F. The industrial dispute was raised after five years and although the Labour Court had awarded reinstatement of the workmen which was not interfered by the High Court, this Court set aside the award of reinstatement and ordered payment of compensation.

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