2005 (7) TMI 618 - SC - Indian Laws

Supreme Court: Invalid termination due to non-compliance with labor law; reinstatement without back wages

The Supreme Court held that the termination of the respondent's service was invalid due to non-compliance with Section 25-F of the Industrial Disputes ... Award of Industrial Tribunal-cum-Labour Court, Rohtak directing reinstatement of the respondent Rudhan Singh with continuity of service and 50% back wages dismissed challenged Held that:- 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 Tribunal-cum-Labour 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. The appeal is accordingly partly allowed and the award of the Industrial Tribunal-cum-Labour Court insofar as it directs reinstatement with continuity of service is upheld but the award regarding payment of 50% back wages is set aside. Issues Involved:1. Validity of termination of service under Section 25-F of the Industrial Disputes Act, 1947.2. Entitlement to back wages upon reinstatement.Detailed Analysis:1. Validity of Termination of Service under Section 25-F of the Industrial Disputes Act, 1947:The respondent was employed in various capacities on a class IV post from 16.3.1988 to 28.2.1989, with some breaks. He was not given any appointment thereafter and raised a demand for reinstatement on 24.8.1991. The Industrial Tribunal-cum-Labour Court found that the respondent had worked for 264 days in one calendar year, and his termination without complying with Section 25-F of the Act was illegal. Section 25-F mandates that no workman employed in any industry who has been in continuous service for not less than one year shall be retrenched unless he has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid wages in lieu of such notice and retrenchment compensation.The appellant argued that the respondent was appointed for a fixed period, and his employment came to an automatic end, thus not constituting retrenchment under Section 2(oo)(bb) of the Act. However, this plea was neither pressed before the Industrial Tribunal-cum-Labour Court nor substantiated with evidence, and it was not raised before the High Court. Consequently, the Supreme Court held that it was not open to the appellant to raise this new plea at this stage.The appellant further contended that the respondent had not worked for one year and thus Section 25-F did not apply. However, the Supreme Court referred to the amended Section 25-B(2) of the Act, which states that a workman is deemed to be in continuous service if he has worked for not less than 240 days in the preceding twelve months. The Industrial Tribunal-cum-Labour Court's finding that the respondent worked for 264 days was not challenged before the High Court. Therefore, the Supreme Court concluded that the termination was invalid due to non-compliance with Section 25-F.2. Entitlement to Back Wages upon Reinstatement:The Industrial Tribunal-cum-Labour Court awarded 50% back wages, reasoning that work of the nature performed by the respondent was available in Rohtak District. The High Court upheld this award without providing specific reasons.The Supreme Court noted that several relevant factors were ignored in awarding back wages. The respondent served a demand notice for reinstatement two and a half years after termination, and the State Government made the reference to the Industrial Tribunal-cum-Labour Court eight years after termination. The Court emphasized that a labor dispute should be resolved expeditiously, and a delay in making a reference causes prejudice to both the workman and the employer.The Supreme Court highlighted that there is no rule of thumb for awarding entire back wages in cases of wrongful termination. Factors such as the manner of selection and appointment, the nature of employment, the length of service, and the possibility of alternative employment should be considered. The respondent had short-term, intermittent daily wage employment with breaks in service and was not a technically trained person. Given these circumstances, the Supreme Court concluded that the respondent was not entitled to any back wages.Conclusion:The Supreme Court partly allowed the appeal, upholding the award of reinstatement with continuity of service but setting aside the award regarding payment of 50% back wages. No costs were imposed.