2011 (4) TMI 1219 - SC - Indian Laws

Supreme Court reinstates worker, orders back wages.

The Supreme Court allowed the appeal, set aside the High Court's order, and restored the Labour Court's award for reinstatement of the appellant. The ... Whether the award passed by Labour Court, Patiala for reinstatement of the appellant set aside and declared that he shall be entitled to wages in terms of Section 17-B of the Industrial Disputes Act, 1947 was correct? Held that:- Appeal allowed. The impugned order is set aside and the award passed by the Labour Court for reinstatement of the appellant is restored. The appellant could hardly be blamed for the delay, if any, in the adjudication of the dispute by the Labour Court or the writ petition filed by the respondent. The delay of four to five years in the adjudication of disputes by the Labour Court/Industrial Tribunal is a normal phenomena. If what the High Court has done is held to be justified, gross illegalities committed by the employer in terminating the services of workman will acquire legitimacy in majority of cases. Therefore, we have no hesitation to disapprove the approach adopted by the High Court in dealing with the appellant's case. The plea of the respondent that the action taken by it is covered by Section 2(oo)(bb) was clearly misconceived and was rightly not entertained by the Labour Court because no material was produced by the respondent to show that the engagement of the appellant was discontinued by relying upon the terms and conditions of the employment. Issues Involved:1. Legality of the termination of the appellant's service.2. Applicability of Section 25-F of the Industrial Disputes Act, 1947.3. Jurisdiction and correctness of the High Court's decision.4. Entitlement to wages under Section 17-B of the Industrial Disputes Act.5. Applicability of Section 2(oo)(bb) of the Industrial Disputes Act.Detailed Analysis:1. Legality of the Termination of the Appellant's Service:The appellant was engaged by the respondent from 1.8.1994 to 29.9.1996 and his service was discontinued without notice and compensation as required under Section 25-F of the Industrial Disputes Act. The Labour Court found that the appellant had worked for more than 240 days in the calendar year preceding his termination, thus making the termination illegal due to non-compliance with Section 25-F. The High Court, however, set aside the Labour Court's award of reinstatement, citing the appellant's appointment as contrary to recruitment rules and Articles 14 and 16 of the Constitution.2. Applicability of Section 25-F of the Industrial Disputes Act, 1947:Section 25-F mandates that no workman employed for more than one year shall be retrenched without one month's notice, pay in lieu thereof, and retrenchment compensation. The Labour Court held that the termination of the appellant's service was in violation of these provisions, thus null and void. The Supreme Court reaffirmed that compliance with Section 25-F is mandatory and non-compliance renders the termination illegal.3. Jurisdiction and Correctness of the High Court's Decision:The High Court set aside the Labour Court's award without finding any jurisdictional infirmity or error of law apparent on the face of the record. The Supreme Court criticized the High Court's approach, stating it was contrary to the principles laid down in precedents such as Syed Yakoob v. K.S. Radhakrishnan and Surya Dev Rai v. Ram Chander Rai. The High Court's decision was deemed erroneous for assuming the appellant's appointment was illegal without considering the context of the State Government's ban on filling vacant posts.4. Entitlement to Wages Under Section 17-B of the Industrial Disputes Act:The High Court declared that the appellant shall be entitled to wages in terms of Section 17-B of the Act, which provides for payment of full wages last drawn by the workman during the pendency of proceedings in higher courts. The Supreme Court restored the Labour Court's award for reinstatement and directed the respondent to pay the appellant wages from the date of the award until actual reinstatement.5. Applicability of Section 2(oo)(bb) of the Industrial Disputes Act:The respondent claimed that the termination was covered under Section 2(oo)(bb), which excludes termination due to non-renewal of a contract from the definition of retrenchment. The Labour Court rejected this plea, and the Supreme Court upheld this rejection, noting that no evidence was provided to show that the termination was in accordance with the terms of the contract.Conclusion:The Supreme Court allowed the appeal, set aside the High Court's order, and restored the Labour Court's award for reinstatement of the appellant. The respondent was directed to reinstate the appellant within four weeks and pay the arrears of wages within three months. The judgment emphasized the mandatory nature of Section 25-F and criticized the High Court's erroneous approach in setting aside the Labour Court's award.