2007 (2) TMI 584 - SC - Indian Laws

Supreme Court Upholds Dismissal, Sets Precedent on Disciplinary Actions

The Supreme Court allowed the appeal, setting aside the High Court's order and the Labour Court's award. The Court upheld the punishment of dismissal ... Whether a provision enabling a court to correct any clerical or arithmetical mistake, or error in the order arising from any accidental slip or omission, empowers the Labour Court to grant a relief of back- wages, which was not granted in the original award? When the punishment of dismissal is substituted by a lesser punishment (stoppage of increments for two years), and consequently, the employee is directed to be reinstated, whether the employee is entitled to back-wages from the date of termination to date of reinstatement? Whether on the facts and circumstances, the Labour Court was justified in interfering with the punishment of dismissal? If the employer was otherwise entitled to relief, whether it could be denied on the ground that it had failed to reinstate the employee, in spite of the non-stay of the direction for reinstatement? Held that:- The Labour Court had the power to amend the award. As the Labour Court found that a charge against the employee in respect of a serious misconduct was proved. It, however, felt that the punishment of dismissal was not warranted and therefore, imposed a lesser punishment of withholding the two annual increments. In such circumstances, award of back wages was neither automatic nor consequential. In fact, back wages was not warranted at all. The charge established against the employee was a serious one. The Labour Court did not record a finding that the punishment was harsh or disproportionately excessive. It interfered with the punishment only on the ground that the employee had worked for four years without giving room for any such complaint. It ignored the seriousness of the misconduct. That was not warranted. The consistent view of this Court is that in the absence of a finding that the punishment was shockingly disproportionate to the gravity of the charge established, the Labour Court should not interfere with the punishment. We, therefore, hold that the punishment of dismissal did not call for interference. The contention of employer is that the first respondent did not report back to service, even though it was ready to reinstate him subject to final decision. Be that as it may. The mere fact that the first respondent was not reinstated in pursuance of the award of the Labour Court cannot result in dismissal of the writ petition challenging the award. Appeal allowed and set aside the order dated 28.7.2003 of the High Court as also the award dated 08.3.1983 (as modified on 29.6.1983) of the Labour Court and uphold the punishment of dismissal imposed upon the first Respondent. Issues Involved:1. Jurisdiction of Labour Court to amend the award under Section 6(6) of the U.P. Industrial Disputes Act, 1947.2. Entitlement of the employee to back-wages upon reinstatement.3. Justification of the Labour Court in interfering with the punishment of dismissal.4. Impact of employer's failure to reinstate the employee despite non-stay of the reinstatement order.Issue-wise Detailed Analysis:Re: Question (i) - Jurisdiction of Labour Court to amend the award under Section 6(6) of the U.P. Industrial Disputes Act, 1947:Section 6(6) of the Act allows a Labour Court to correct clerical or arithmetic mistakes or errors arising from accidental slips or omissions. The Supreme Court examined whether this provision permits the Labour Court to grant back-wages not included in the original award. The Court referenced previous rulings, such as *Master Construction Co. (P) Ltd. vs. State of Orissa* and *Tulsipur Sugar Company Ltd. vs. State of U.P.*, to delineate the scope of Section 6(6). It clarified that corrections under Section 6(6) are permissible for inadvertent omissions but do not allow for re-argument on merits or reconsideration of facts or law. The Court concluded that the Labour Court had the power to amend the award to include back-wages as it had omitted to answer the second part of the reference initially.Re: Question (ii) - Entitlement of the employee to back-wages upon reinstatement:The Court analyzed whether back-wages should be awarded when the punishment of dismissal is substituted by a lesser punishment. It referenced several cases, including *Hindustan Tin Works Pvt. Ltd. vs. Employees of Hindustan Tin Works Pvt. Ltd.*, *Surendra Kumar Verma vs. Central Government Industrial Tribunal-cum-Labour Court*, and *Mohan Lal vs. Bharat Electronics Ltd.*, which historically supported the notion that reinstatement should ordinarily include back-wages. However, the Court noted a shift in judicial approach, emphasizing that back-wages are not automatic and depend on the specifics of each case. The Court highlighted that in cases where misconduct is proven, but the punishment is reduced, back-wages are not a natural consequence. The Court concluded that in this case, awarding back-wages was not warranted.Re: Question (iii) - Justification of the Labour Court in interfering with the punishment of dismissal:The Court reviewed whether the Labour Court was justified in substituting the punishment of dismissal with a lesser penalty. It noted that the Labour Court had found one serious charge against the employee to be proven. The Court referenced recent trends emphasizing workplace discipline and cited cases like *Hombe Gowda Educational Trust vs. State of Karnataka* and *Mahindra and Mahindra Ltd. vs. N. B. Narawade*, which underscore the importance of proportionality in punishment. The Court held that the Labour Court's interference was unwarranted as the punishment of dismissal was not disproportionately excessive given the seriousness of the misconduct.Re: Question (iv) - Impact of employer's failure to reinstate the employee despite non-stay of the reinstatement order:The Court addressed the High Court's observation that the employer had wilfully violated the reinstatement order. It noted that the employer was not given an opportunity to explain the non-reinstatement and that the assumption of wilful violation was not substantiated. The Court emphasized that the failure to reinstate the employee could not justify dismissing the writ petition challenging the Labour Court's award.Conclusion:The Supreme Court allowed the appeal, set aside the High Court's order dated 28.7.2003, and the Labour Court's award dated 08.3.1983 (as modified on 29.6.1983). The Court upheld the punishment of dismissal imposed upon the employee. Each party was directed to bear its respective costs.