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Issues: (i) Whether full back wages must automatically follow an order of reinstatement after termination is found illegal. (ii) What relief should be granted where the establishment had remained closed for years and was under rehabilitation with a new management.
Issue (i): Whether full back wages must automatically follow an order of reinstatement after termination is found illegal.
Analysis: Relief under Section 11A of the Industrial Disputes Act, 1947 is discretionary. Reinstatement and back wages do not follow as a matter of course merely because the termination is held illegal. The quantum of back wages depends on the facts and circumstances of the case, and the court must consider whether awarding full back wages would be just and equitable.
Conclusion: Full back wages are not automatic and may be curtailed depending on the circumstances.
Issue (ii): What relief should be granted where the establishment had remained closed for years and was under rehabilitation with a new management.
Analysis: The establishment had remained closed for a long period and had been taken over for rehabilitation and reconstruction. In such exceptional circumstances, the relief had to be moulded realistically. Although the termination was illegal and the workman was entitled to reinstatement, directing payment of full back wages for the entire period would place an undue burden on the employer. The appropriate relief was to restrict back wages to 50% of the total amount payable for the relevant period under Section 6-N of the U.P. Industrial Disputes Act.
Conclusion: The workman was entitled only to 50% of the back wages, not full back wages.
Final Conclusion: The award and the High Court order were modified by reducing the monetary relief, while maintaining the substantive finding of illegal termination and entitlement to reinstatement-related relief.
Ratio Decidendi: Back wages on reinstatement are a matter of judicial discretion and may be reduced where the facts show exceptional circumstances making full back wages unjust or inequitable.
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