Gujarat High Court
Jamnagar Municipal Corporation vs Narshibhai Nagjibhai Parmar on 30 June, 2017
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/9677/2010 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9677 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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JAMNAGAR MUNICIPAL CORPORATION....Petitioner(s)
Versus
NARSHIBHAI NAGJIBHAI PARMAR....Respondent(s)
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Appearance:
MR JAYANT P BHATT, ADVOCATE for the Petitioner(s) No. 1
MR TEJAS D SHUKLA, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 30/06/2017
ORAL JUDGMENT
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1. Heard Mr. Bhatt, learned advocate for petitioner Corporation and Mr. Shukla, learned advocate for respondent.
2. The petitioner Corporation is aggrieved by vide award dated 16.1.2010 in Reference No.31/94 whereby the learned Labour Court has directed the petitioner Corporation to reinstate the claimant with 20% backwages.
3. So far as factual background is concerned, it has emerged from the record and from submission by learned advocates for the petitioner Corporation and the respondent Corporation that the claimant raised industrial dispute with the allegations that the Corporation illegally terminated his service. With the said allegations the claimant demanded reinstatement with backwages and other benefits.
3.1 Appropriate Government referred the dispute Page 2 of 36 HC-NIC Page 2 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT for adjudication to learned Labour Court. The dispute was registered as Reference No. 31/94. 3.2 In the statement of claim, the claimant alleged that he was employed by the petitioner Corporation as Safai Kamdar and he was working with the Corporation since more than 5 years and despite such facts, the Corporation illegally terminated his service by oral instruction on 15.8.1993. The claimant alleged that at the time when the Corporation terminated his service on oral instruction, Corporation did not serve any notice and his service came to be terminated without granting opportunity of hearing and without payment of compensation and without following any procedure prescribed by law. The claimant also alleged that during tenure of his service he worked continuously, regularly and diligently and that during each year, he had worked for more than 240 days, however, the Corporation terminated his service without following principle of Seniority and after his Page 3 of 36 HC-NIC Page 3 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT service came to be terminated the Corporation engaged other persons for same work, however, the Corporation did not offer work to the petitioner and thereby committed breach of statutory obligation. With such allegations the claimant demanded that the Corporation should be directed to reinstated with consequential benefits. 3.3 The Corporation opposed the Reference. In its written statement the Corporation contended that the Reference is not maintainable because the claimant raised disputed after 1 year and that the claimant was engaged on adhoc and daily wage basis for temporary period and that the claimant was not engaged regularly or continuously and during preceding 12 months, the claimant had not worked for 240 days. The Corporation also denied the allegations that junior persons were continued in service and that other persons were engaged by the Corporation. The Corporation contended that since the claimant was engaged casually and on adhoc basis the demand of reinstatement and/ or backwages may not Page 4 of 36 HC-NIC Page 4 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT be granted. The Corporation also contended that the claimant was not engaged on any permanent vacancy on sanctioned setup.
3.4 After the parties completed the pleadings, learned Labour Court recorded evidence and upon conclusion of recording of evidence, learned Labour Court heard rival submissions and upon taking into consideration the evidence available on record, learned Labour Court reached to the conclusion that the Corporation committed breach of Section 25G and Section 25H. Having reached to such conclusion, learned Labour Court passed impugned award with above mentioned direction.
4. Mr. Bhatt, learned advocate vehemently assailed the award and submitted that learned Labour Court failed to appreciate that claimant had not worked for 240 days during preceding 12 months and that, therefore, the allegations about breach of Section 25F is unjust and incorrect. He submitted that since the claimant had not worked Page 5 of 36 HC-NIC Page 5 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT for 240 days the termination would not amount retrenchment and consequently, the conclusion by learned Labour Court that the retrenchment of the claimant is illegal and in breach of statutory provision, is erroneous and deserves to be set aside. He also submitted that since the claimant was engaged on adhoc basis, the direction to reinstate the claimant is unjustified.
5. Mr. Shukla, learned advocate for respondent opposed the submission by learned advocate for petitioner. He submitted that the claimant had worked for more than 240 days in each year and that his service was terminated without following procedure prescribed by law. He submitted that even if the claim of the petitioner is believed that claimant failed to prove that he had worked for 240 days and that, therefore, the contention about breach of Section 25F should not be accepted, then also from the fact that the Corporation had not followed the principle of seniority and subsequently other persons were Page 6 of 36 HC-NIC Page 6 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT employed, breach of Section 25G and 25F is established and that, therefore, the award is just and proper and may not be disturbed.
6. In support of his submission that the direction by learned Labour Court may not be disturbed, Mr. Shukla, learned advocate relied on the order dated 15.10.2010 whereby the Corporation reinstated present respondent (i.e. original claimant) along with other 3 claimants, who also prosecuted the reference case Nos. 39/94, 13/94 and 21/94 along with present respondentclaimant. He submitted that since 2010, the respondent is in service with the Corporation and, therefore, award may not be disturbed. Learned advocate for respondent also relied on the order dated 8.10.2015 whereby the Corporation has regularized service of several daily wage employees including the employees working on post of helper, peon etc. On strength of the said Order dated 8.10.2015, learned advocate for the respondent submitted that there Page 7 of 36 HC-NIC Page 7 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT is no justification for giving any different or other treatment to the claimant.
7. I have considered rival submission by learned advocates for the petitioner Corporation and the respondentoriginal claimant, I have also considered impugned award and material available on record.
8. The learned advocate for petitioner Corporation is justified in his contention that in present case the respondent failed to prove that he had worked for 240 days in preceding 12 months. The learned advocate for petitioner Corporation is also justified in his contention that since the claimant had not worked for more than 240 days in preceding 12 months, the allegations about breach of Section 25F should be rejected and it cannot be said that the Corporation committed breach of Section 25H.
9. However, the learned advocate for petitioner Page 8 of 36 HC-NIC Page 8 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT Corporation could not refute the conclusion by learned Labour Court that the Corporation committed breach of Section 25G and Rule 81 of the Rules.
10. It is pertinent to note at this stage and in this context tha the Corporation failed to place any evidence before learned Labour Court and the learned advocate for petitioner also failed to show, during hearing of this petition, any material from record to establish that the Corporation maintained and displayed seniority list in accordance with Rule 81 of the Industrial Disputes (Gujarat Rules), 1966 and that the Corporation had followed the principle of seniority i.e. "last come, first go" at the time when the Corporation terminated service of the claimant.
11. Even at the time of hearing, learned advocate for petitioner could not show any evidence from record that all employees junior to the Page 9 of 36 HC-NIC Page 9 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT respondent were relieved and principle of seniority was diligently followed and requirement and displaying seniority list in accordance with Rule 81 was complied.
12. In this view of the matter, the conclusion by learned Labour Court with regard to breach of Section 25G cannot be faulted and the said conclusion does not warrant any interference.
13. So far as the contention by learned advocate for petitioner with reference to Section 25F is concerned, even learned Labour Court has rejected the claimant's allegations about breach of Section 25F. Learned Labour Court has held that the claimant failed to prove breach of Section 25F.
14. The learned Labour Court has, on the basis of evidence available on record, reached to the conclusion that after the service of the claimant was terminated, other persons were engaged by the Page 10 of 36 HC-NIC Page 10 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT Corporation, however, Corporation failed to offer work to the claimant. From the award it emerges that the Corporation failed to place any material on record to establish that the persons who were subsequently employed, were not employed in the same category/ on the same post. At the time of hearing of the petition, learned advocate for petitioner could not show any document from the record which would convince this Court and which would establish that the persons who came to be subsequently employed in different category/ on different post and, therefore, Section 25H would not be attracted.
15. In absence of such material, the findings of fact recorded by the learned Labour Court cannot be disturbed by this Court.
16. Therefore, the finding of fact recorded by the learned Labour Court with regard to breach of Section 25H does not warrant interference.
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17. Even otherwise, when breach of Section 25G is already established, the conclusion by the learned Labour Court that the termination of claimant's service was illegal and in breach of statutory provisions, is fortified and the said position justifies the order directing the Corporation to reinstate the claimant.
18. In the decision in case of Surendranagar District Panchayat and Another v. Parsottam Manji (2016 3 GLR 1981), this Court has held that Section 25G and 25H are independent of 25h and breach of compliance of Section 25F is not necessary condition for invoking Section 25G to challenge illegal termination. In the said decision, the Court has observed that "14. In this view of the matter, even if the petitioner's contention that the breach of Section 25F is not established, is, for testing the other contention is entertained, then also,the learned Labour Court's conclusion that the petitioner committed breach of Section 25G cannot be faulted.
Section 25G operates independently and is not dependent on Section 25F and for applicability and operation of Section 25G, it is not necessary to establish breach of Section 25F.
The petitioners' contention against the learned Labour Court's conclusion about breach of Section 25G is based on erroneous reading and construction of Section 25G. When the learned counsel for the Page 12 of 36 HC-NIC Page 12 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT petitioners claims that despite the fact that the workman had not worked for 240 days, breach of Section 25F was not established and consequently, the action would not amount to breach of Section 25G, the petitioner ignores the effect, scope, purport and requirements of Section 25G of the Act, the learned Labour Court committed error in holding that the action of relieving the respondent is in breach of Section 25G. According to the petitioner said conclusion is recorded disregarding the fact that the workman had not worked for 240 days and consequently, the petitioner had not violated Section 25F of the Act. At first blush and on initial reading of Section 25G it strikes that the said provision is part of the same family namely, Chapter VA which comprises Section 25A to Section 25J and that the said Section 25G is intertwined with and closely attached to Section 25F and Section 25H. However, on closure examination of the scheme of Chapter VA and definition of the term "retrenchment" under Section 2(oo) of the Act, it emerges that said Section 25G operates independently and its operation or applicability is not dependent on compliance or breach of Section 25F. It also emerges that for attracting the applicability and operation of Section 25G, it is not necessary to establish breach of Section 25F. It is true that Section 25F, Section 25G and Section 25H collectively provide against arbitrary retrenchment of workman and also provide a safety valve against employer's "pickandchoose" action and against employer's action of "hire and fire at will". It also provides protection to the workman against employer's action of selectively and arbitrarily driving out a workman with a view to making room for and accommodating another person in his place. In many cases, it may so happen that the workman or the post / position may not have become redundant and need for the particular work or operation and the need for the person to perform the said work may continue, but the employer may, for ulterior reasons, want to replace the person manning the post by appointing some other person. The reason for such substitution or replacement may not be necessarily associated with any fault or mistake in performance of duties by the concerned person, but still the employer may want to relieve such person for undisclosed reasons. Section 25G and Section 25H provide protection against such whims and fancy of the employer.
Actually, ingrained in Section 25G, and so also in Section 25H, are the principles of Article 14 of the Constitution of India, namely equality and fairness. Section 25G despises motivated Page 13 of 36 HC-NIC Page 13 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT retrenchment and aims at nipping in the bud the tendency of harassing or victimizing one employee by bestowing favour to other person.
When Section 25G is examined in light of this objective and in light of entire scheme of the Act and particularly Chapter VA, then, it comes out, clearly, that it operates independently and it is not dependent on breach and/or compliance of Section 25F of the Act. Section 25G of the Act does not require compliance of the condition necessary for attracting Section 25F viz. Work / service of minimum 240 days in 12 months preceeding the date of retrenchment. The only requirement for attracting Section 25G is to establish that at the time when the service of the claimant workman came to be terminated, some person(s) junior to him was/were retained in service and the principle of "last come, first go" was not followed.
If the said fact is established, then, breach of Section 25G would stand established and that would render the action of termination of the workman contrary to and in violation of statutory provision.
The expression "retrenched" used in Section 25G does not refer to the workman retrenched under and as per Section 25F of the Act. The expression "retrenched" employed in section 25G is related to the term "retrenchment" defined under Section 2(oo) of the Act and the retrenchment contemplated under Section 25F cannot and does not circumvent or curtail or restrict either the meaning or the ambit of Section 25G or of the expression "retrenched" in Section 25G of the Act.
As observed by Hon'ble Apex Court in para 9 of the decision in the case of Central Bank of India v. S. Satyam & Ors. [(1996) 5 SCC 419], the Section 25G borrows and applies the concept of "last come, first go" but the term "retrenchment" is not and cannot be restricted only to the cases covered by Section 25F. In the said decision, Apex Court has observed, inter alia, that: "9. The plain language of Section 25H speaks only of re employment of 'retrenched workmen'. The ordinary meaning of the expression 'retrenched workmen must relate to the wide meaning of 'retrenchment' given in Section 2(oo). Section 25F also uses the word 'retrenchment' but qualifies it by use of the further words 'workman' who has been in continuous service for not less than one year'. Thus, Section 25F does not restrict the meaning of retrenchment but qualifies the category of retrenched workmen covered therein by use of the further words workman. Who has Page 14 of 36 HC-NIC Page 14 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT been in continuous service for not less than one year. It is clear that Section 25F applies to the retrenched workman who has been in continuous service for not less: one year and not to any workman who has bean in continuous service for less than one year; and it does not restrict or curtail the meaning of retrenchment merely because the provision therein is made only for the retrenchment of a workman who has been in continuous service for not less the one year. Chapter VA deals with all retrenchments while Section 25F is confined only to the mode of retrenchment of workmen in continuous service for not less than one year. Section 25 G prescribes the principle for retrenchment and applies ordinarily the principle of 'last come first so' which is not confined only to workmen who have been in continuous service for not less than one year, covered by Section 25F." Under the circumstances, in present case, when breach of Section 25G is established, it translates into factsituation, and leads the Court to the conclusion that the petitioner's action viz. terminating the respondent's service while retaining juniors to him, is illegal and in violation of statutory provision.
The termination of respondent's service in violation of statutory condition/provision would invite and justify the direction to reinstate the respondent. Therefore, the direction by the learned Labour Court requiring the petitioner to reinstate the respondent cannot be faulted and the petitioner's contention against said direction is not sustainable and does not deserve to be entertained. The said contention fails and that therefore, it is, accordingly, rejected. By the impugned award, the learned Labour Court has not granted benefit of backwages and the order is restricted to the direction to reinstate the respondent without backwages. The learned Labour Court has not committed any error on that count. Therefore, the petition filed by the panchayat, i.e. Special Civil Application No.25413 of 2006, fails and it is hereby rejected."
19. In this view of the matter, the said conclusion by learned Labour Court cannot be faulted.
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20. When the breach of Section 25G is
established, it means that the termination of claimant's service was effected in breach of statutory provision. This would entail natural and normal consequence namely reinstatement in service.
21. This is one reason in light of which the order by learned Labour Court directing the Corporation to reinstated the claimant does not warrant interference.
22. In present case, there is additional reason which convinced the Court that the said direction does not warrant interference. The Court is informed that after the learned Labour Court passed impugned award, the Corporation issued order dated 15.10.2010 and reinstated the claimant. Since then i.e. for last 7 years the claimant is already in service with the Corporation. In this view of the matter, this Page 16 of 36 HC-NIC Page 16 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT Court would, even otherwise, not interfere with the order directing the Corporation to reinstate the workman. The said direction is already complied.
23. Above discussion takes the Court to the petitioner's objection against direction to pay 20% backwages.
24. In this context reference may be had to the observations by the Apex Court (a) in case of Reetu Marbles vs. Prabhakant Shukla [(2010) 2 SCC 70] wherein Hon'ble Apex Court observed, inter alia, that:
"11. The only limited issue to be determined by us, in this appeal, is whether the High court was justified in granting full back wages to the respondent in spite of the denial thereof by the Labour Court. In our opinion the High Court erred in law in not examining the factual situation. The High Court merely stated that it was not the case of the employer that the workman had been gainfully employed elsewhere. Although it noticed the principle that the payment of back wages having a discretionary element involved in it, has to be dealt with in the circumstances of each case and no strait jacket formula can be evolved, yet the award of the Labour Court was modified without any factual Page 17 of 36 HC-NIC Page 17 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT basis.
12. In the case of M/s. Hindustan Tin Works Pvt. Ltd. vs. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and Ors . AIR 1979 SC 75, it has been held as follows:
"9....Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full backs except to the extent he was gainfully employed during the enforced idleness. That is the normal rule."
13. These observations were subsequently considered in the case of Hindustan Motors Ltd. vs. Tapan Kumar 8 Bhattacharya and Anr . (2002) 6 SCC 41 and it was observed as follows:
"11. Under Section 11A as amended in 1971, the Industrial Tribunal is statutorily mandated, while setting aside the order of discharge or dismissal and directing reinstatement of the workman to consider the terms and conditions, subject to which the relief should be granted or to give such other relief to the workman including the award of any other punishment in lieu of the discharge or dismissal, as the circumstances of the case may require. The section is couched in wide and comprehensive terms. It vests a wide discretion in the Tribunal in the matter of awarding proper punishment and also in the matter of the terms and conditions on which reinstatement of the workman should be ordered. It necessarily follows that the Tribunal is duty bound to consider whether in the circumstances of the case, back wages have to be awarded and if so, Page 18 of 36 HC-NIC Page 18 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT to what extent.
12. From the award passed by the Industrial Tribunal which has been confirmed by the Division Bench of the High Court, it is clear that the order for payment of full back wages to the workman was passed without any discussion and without stating any reason. It appears that the Tribunal and the Division Bench had proceeded on the footing that since the order of dismissal passed by the management was set aside, the order of reinstatement with full back wages was to follow as a matter of course.
13. In Hindustan Tin Works (P) Ltd. v. Employees a three Judge Bench of this Court laid down: (SCC p.86, para 11) "11. In the very nature of things there cannot be a straitjacket formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the Page 19 of 36 HC-NIC Page 19 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular.
16. As already noted, there was no application of mind to the question of back wages by the Labour Court. There was no pleading or evidence whatsoever on t he aspect whether the respondent was employed elsewhere during this long interregnum."
14. The aforesaid judgment was subsequently considered in the case of UP State Brassware Corpn. Ltd. vs. Uday 10 Narain Pandey (2006) 1 SCC 479 it was observed as follows:
"17. Before adverting to the decisions relied upon by the learned counsel for the parties, we may observe that although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
22. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is Page 20 of 36 HC-NIC Page 20 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6N of the U.P. Industrial Disputes Act.
43. The changes brought about by the subsequent decisions of this court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident."
15. From the above observations it becomes apparent that payment of full back wages upon an order of termination being declared illegal cannot be granted mechanically. It does not automatically follow that reinstatement must be accompanied by payment of full back wages even for the period when the workman remained out of service and contributed little or nothing to the industry.
16. Again in the case of Haryana State Electricity Development Corporation Ltd. vs. Mamni (2006) 9 SCC 434 this court reiterated the principle. The principles laid down in UP State Brassware Corp. Ltd. (supra). Recently this Court again examined the issues with regard to payment of full back wages in the case of P.V.K. Distillery Ltd. vs. Mahendra Ram (2009) 5 SCC 705. After examining the relevant case law it has been held as follows:
"18. Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter Page 21 of 36 HC-NIC Page 21 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
19. In Haryana Urban Development Authority v. Om Pal it is stated that: (SCC p. 745, para 7) "7.... It is now also well settled that despite a wide discretionary power conferred upon the Industrial Courts under Section 11A 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."
20. In deciding the question, as to whether the employee should be recompensed with full back wages and other benefits until the date of reinstatement, the tribunals and the courts have to be realistic albeit the ordinary rule of full back wages on reinstatement. (Western India Match Co. Ltd. v. Industrial Tribunal )"
Applying the aforesaid ratio of law we have examined the factual situation in the present case. The services of the respondent were admittedly terminated on 11.6.87. The Labour Court gave its award on 27.9.02. Therefore, there Page 22 of 36 HC-NIC Page 22 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT is a gap of more than 15 years from the date of termination till the award of reinstatement in service. Labour Court upon examination of the entire issue concluded that the respondent would not be entitled to any back wages for the period he did not work. A perusal of the award also shows that the respondent did not place on the record of the Labour Court any material or evidence to show that he was not gainfully employed during the long spell of 15 years when he was out of service of the appellant.
18. In the writ petition the respondent was mainly concerned with receiving wages in accordance with the Minimum Wages Act and for inclusion of the period spent in Conciliation Proceedings for the calculation of financial benefits. The High Court without examining the factual situation, and placing reliance on the judgment in M/s. 14 Hindustan Tin Works Pvt. Ltd. vs. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and ors . held that the normal rule of full back wages ought to be followed in this case. We are of the considered opinion that such a conclusion could have been reached by the High Court only after recording cogent reasons in support thereof. Especially since the award of the Labour Court was being modified. The Labour Court exercising its discretionary jurisdiction concluded that it was not a fit case for the grant of back wages.
19. In the case of P.V.K. Distillery Ltd. (supra), it is observed as follows:
"15. The issue as raised in the matter of back wages has been dealt with by the Labour Court in the manner as above having regard to the facts and Page 23 of 36 HC-NIC Page 23 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT circumstances of the matter in the issue, upon exercise of its discretion and obviously in a manner which cannot but be judicious in nature. There exists an obligation on the part of the High court to record in the judgment, the reasoning before however denouncing a judgment of an inferior tribunal, in the absence of which, the judgment in our view cannot stand the scrutiny of otherwise being reasonable."
20. In our opinion the High Court was unjustified in awarding full back wages. We are also of the opinion that the Labour Court having found the termination to be illegal was unjustified in not granting any back wages at all. Keeping in view the facts and circumstances of this case we direct that the respondent shall be paid 50 per cent of the back wages from the date of termination of service till reinstatement."
b) In the decision in case of General Manager, Haryana Roadways vs. Rudhav Singh [(2005) 5 SCC 591] Hon'ble Apex Court observed that:
"6. The next question, which requires consideration is whether the respondent is entitled to any back wages. The Industrial TribunalcumLabour Court awarded 50% back wages on the ground that in Rohtak District of State of Haryana work of the nature, which was being done by the respondent, is available in plenty as a large work force comes from Eastern UP and Bihar for doing such kind of work. However, a general observation has been made that keeping in view the facts and circumstances of the case it will Page 24 of 36 HC-NIC Page 24 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT be proper to award 50% back wages. The High Court has also not given any reason for upholding this part of the award.
7. In our opinion certain factors, which are relevant for forming an opinion regarding award of back wages, have been completely ignored and, therefore, the award on this point is vitiated. The list of dates given in the Special Leave Petition, which have not been controverted, show that though according to the own case of the respondent his services had been terminated on 18.2.1989, yet he served a demand notice praying for reinstatement in service after two and half years on 24.8.1991. The State Government made reference to the Industrial TribunalcumLabour Court in the year 1997, which means eight years after the termination of service. Normally, a reference should not be made after lapse of a long period. A labour dispute should be resolved expeditiously and there is no justification for the State Government to sleep over the matter and make a reference after a long period of time at its sweet will. It causes prejudice both to the workman and also to the employer. It is not possible for an employer to retain all the documents for a long period and then to produce evidence, whether oral or documentary, after years as the officers, who may have dealt with the matter, might have left the establishment on account of superannuation or any other reason. The employer is not at fault if the reference is not made expeditiously by the State Government, but it is saddled with an award directing payment of back wages without having taken any work from the concerned workman. The plight of Page 25 of 36 HC-NIC Page 25 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT the workman who is thrown out of employment is equally bad as it is a question of survival for his family and he should not be left in a state of uncertainty for a long period.
8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period, i.e., from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A Page 26 of 36 HC-NIC Page 26 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendar year.
9. The written statement filed by the respondent shows that between 16.3.1988 to 31.10.1988 he had been given short term appointments as Helper, Wash Boy and Water Carrier with breaks of two days and seven days respectively on two occasions. After 31.10.1988 he was employed as Helper on 8.1.1989 after a gap of more than two months. This appointment was only up to 31.1.1989 and thereafter he was given fresh appointment on 7.2.1989, which came to an end on 28.2.1989. These facts show that the respondent had not worked continuously from 16.3.1988 to 28.2.1989 in the establishment of the appellant. A person appointed on daily wage basis gets wages only for days on which he has performed work.
10. In Smt. Saran Kumar Gaur and others vs. State of Uttar Pradesh and others [JT 1991 (3) SC 478], this Court observed that when work is not done remuneration is not to be paid and accordingly did not make any direction for award of past salary. In State of U.P. and Anr. vs. Atal Behari Shastri and anr. [JT 1992 (5) 523], a termination order passed on 15.7.1970 terminating the services of a Licence Inspector was finally quashed by the High Court in a writ petition on 27.11.1991 and a direction was issued to pay the entire back salary from the date of termination till the date of his attaining superannuation. This Court, in absence of a clear finding that the employee was not gainfully employed Page 27 of 36 HC-NIC Page 27 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT during the relevant period, set aside the order of the High Court directing payment of entire back salary and substituted it by payment of a lumpsum amount of Rs.25,000/.
In Virender Kumar, General Manager, Northern Railways, New Delhi vs. Avinash Chandra Chadha and others [(1990) 3 SCC 472], there was a dispute regarding seniority and promotion to a higher post. This Court did not make any direction for payment of higher salary for the past period on the principle 'no work no pay' as the respondents had actually not worked on the higher post to which they were entitled to be promoted. In Surjit Ghosh vs. Chairman and Managing Director, United Commercial Bank and others [(1995) 2 SCC 474], the appellant (Assistant Manager in the Bank) was dismissed from service on 28.5.1985, but his appeal was allowed by this Court on 6.2.1995 as his dismissal order was found to be suffering from an inherent defect. His claim for arrears of salary for the past period came to about Rs.20 lakhs but this Court observed that a huge amount cannot be paid to anyone for doing no work and accordingly directed that a compensation amount of Rs.50,000/be paid to him in lieu of his claim for arrears of salary. In Anil Kumar Gupta vs. State of Bihar [(1996) 7 SCC 83], the appellants were employed as daily wage employees in Water and Land Management Institute of the Irrigation Department of Government of Bihar and they were working on the posts of stenotypists, typists, machine operators and peons, etc. This Court allowed the appeal of the workmen and directed reinstatement but specifically held that they would Page 28 of 36 HC-NIC Page 28 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT not be entitled to any past salary. These authorities show that an order for payment of back wages should not be passed in a mechanical manner but host of factors are to be taken into consideration before passing any order for award of back wages.
11. In the case in hand the respondent had worked for a very short period with the appellant, which was less than one year. Even during this period there were breaks in service and he had been given short term appointments on daily wage basis in different capacities. The respondent is not a technically trained person, but was working on a class IV post. According to the finding of the Industrial TribunalcumLabour Court plenty of work of the same nature, which the respondent was doing, was available in the District of Rohtak. In such circumstances we are of the opinion that the respondent is not entitled to payment of any back wages."
c) The decision in case of U.P. SRTC vs. Mitthu Singh [(2006) 7 SCC 180] wherein Hon'ble Apex Court observed, inter alia, that:
13. In G.M. Haryana Roadways v. Rudhan Singh , [2005] 5 SCC 591, this Court held that there is no rule of thumb that in each and every case, where a finding is recorded by Court or Tribunal that the order of termination of service was illegal that an employee is entitled to full back wages. A host of factors must be taken into account. The Court Page 29 of 36 HC-NIC Page 29 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT stated:
"8. There is no rule of thumb that in every case where the Industrial Tribunal gives a findings that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of actors like the manner and method of selection and appointment i.e. whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the Page 30 of 36 HC-NIC Page 30 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT nature of employment. A regular service of permanent character cannot be compared to short or intermittent dailywage employment though it may be for 240 days in a calendar year."
14. Again, in Allahabad Jal Sansthan v. Daya Shankar Rai ,[2005] 5 SCC 124, after considering the relevant cases on the point, the Court stated"
"16 We have referred to certain decisions of this Court to highlight that earlier in the event of an order of dismissal being set aside, reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realized that industry is being compelled to pay the workman for a period during which he apparently contributed little or nothing at all, for a period that was spent unproductively, while the workman is being compelled to go back to a situation which prevailed many years ago when he was dismissed. It is necessary for us to develop a pragmatic approach to problems dogging industrial relations. However, no just solution can be offered but the golden mean may be arrived at."
15. Recently, in U.P.S.R.T.C. Ltd. v. Sarada Prasad Misra, [2006] 4 SCC 733 JT (2006) 5 SC 114 one of us (C.K. Thakker, J.) had an occasion to consider a similar issue. Referring to earlier caselaw, it was observed :
"16. From the above cases, it is clear that no precise formula can be adopted nor `cast iron rule' can be laid down as to when payment of full back wages should be allowed by the court Page 31 of 36 HC-NIC Page 31 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT or Tribunal. It depends upon the facts and circumstances of each case. The approach of the Court/Tribunal should not be rigid or mechanical but flexible and realistic. The Court or Tribunal dealing with cases of industrial disputes may find force in the contention of the employee as to illegal termination of his services and may come to the conclusion that the action has been taken otherwise than in accordance with law. In such cases obviously, the workman would be entitled to reinstatement but the question regarding payment of back wages would be independent of the first question as to entitlement of reinstatment in service. While considering and determining the second question the Court or Tribunal would consider all relevant circumstances referred to above and keeping in view the principle of justice, equity and good conscience, should pass an appropriate order.
16. Thus, entitlement of a workman to get reinstatement does not necessarily result in payment of back wages which would be independent of reinstatement. While dealing with the prayer of back wages, factual scenario and the principles of justice, equality and good conscience have to be kept in view by an appropriate Court/Tribunal.
17. In the instant case the record clearly reflects that the services of the respondent workman were never found to be satisfactory. In fact, before more than 30 years, his services were terminated but he was taken back by Page 32 of 36 HC-NIC Page 32 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT giving a chance to improve. Unfortunately, however, the respondent did not utilise it. Even prior to the three incidents in question, at several times, the respondent workman was warned. It was, therefore, not a fit case to grant back wages and the Labour Court and the High Court were not right in granting the said prayer. To that extent, therefore, the order deserves interference.
18. For the foregoing reasons, the appeal is partly allowed. The order passed by the Labour Court and confirmed by the High Court is set aside to the extent of granting back wages and it is held that the respondent workman is not entitled to back wages. The appeal is accordingly disposed of. In the facts and circumstances of the case, however, there shall be no order as to costs."
Thus, what emerges from the above quoted observations by Hon'ble Apex Court is that the direction with regard to payment of backwages should not be passed mechanically and only because relief of reinstatement is granted. The issue with regard to award for backwages should be decided by taking into account host of relevant facts and circumstances including total tenure of service of the claimant prior to termination, the ground on which the claimant's service was terminated, the ground on which the Page 33 of 36 HC-NIC Page 33 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT order / action terminating service of the claimant is set aside, the fact as to whether the claimant was gainfully employed during interregnum, any exceptional circumstances pleaded and established by the employer against claimant for backwages etc.
25. In present case, it has emerged that the appointment of the claimant was irregular. It is also not in dispute that at the time when the service of the claimant came to be terminated, he was working on daily wage basis. Under the circumstances, the order granting 20% backwages is not justified. The said direction deserves to be set aside in facts and circumstances of the case. It is pertinent to note that the learned Labour Court has passed the said direction mechanically and without recording any justification and without taking into account facts and circumstances which would be relevant to decide the issue with regard to the claim for backwages. The said direction, therefore, Page 34 of 36 HC-NIC Page 34 of 36 Created On Sun Aug 20 09:44:01 IST 2017 C/SCA/9677/2010 JUDGMENT deserves to be set aside.
26. In light of the foregoing discussion and the facts which have emerged, it appears that following order and direction would balance equity and would meet ends of justice.
27. Consequently, following order is passed:
a. The petition is partly allowed. The award impugned in present petition is partly set aside and modified inasmuch as the order directing the Corporation to reinstate the claimant, is not disturbed.
b. The said direction is already complied by the Corporation and, therefore, any further order is not required to be passed.
c. However, so far as the direction to pay 20% backwages is concerned, the said order and direction is set aside.
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28. Consequently, the award passed by learned Labour Court is partially set aside and modified and with aforesaid direction and order, the petition is partly allowed. Rule is made absolute.
(K.M.THAKER, J.) saj Page 36 of 36 HC-NIC Page 36 of 36 Created On Sun Aug 20 09:44:01 IST 2017