Appeal Partially Allowed: Back Wages & Compensation Granted; Case-Specific Factors Key in Award Decisions.

The SC partially allowed the appeal, overturning the decisions of the Labour Court and HC. The respondent was granted 25% of back wages from 1.4.1987 to 26.3.1993 and compensation under Section 6-N of the U.P. Industrial Disputes Act. The Court clarified that back wages are not automatically awarded and depend on case-specific circumstances.

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Issues Involved:
1. Whether the direction to pay back wages is automatic upon a declaration of wrongful retrenchment under Section 6-N of the U.P. Industrial Disputes Act.
2. Whether the respondent was entitled to back wages and reinstatement despite the closure of the appellant's establishment.
3. Whether the respondent had worked for 240 days in the twelve months preceding his termination.
4. Whether the respondent was gainfully employed during the period post-termination.

Issue-wise Detailed Analysis:

1. Automatic Payment of Back Wages:
The primary issue was whether the direction to pay back wages is automatic upon a declaration that a workman has been retrenched in violation of Section 6-N of the U.P. Industrial Disputes Act. The Court noted that although traditionally, full back wages were granted upon such a declaration, a more pragmatic approach is now taken. The Court emphasized that payment of back wages is not automatic and depends on the specific facts and circumstances of each case. The Labour Court and the High Court must consider various factors, including whether the workman remained unemployed or was gainfully employed during the period in question.

2. Entitlement to Back Wages and Reinstatement:
The respondent's entitlement to back wages and reinstatement was questioned due to the closure of the appellant's establishment. The Court acknowledged that the establishment was sold on 26.3.1993 and that a Government Order (GO) had been issued on 17.11.1990 to close down the establishment. The Court concluded that reinstatement was not feasible due to the closure. Therefore, the respondent was entitled to compensation as per Section 6-N of the U.P. Industrial Disputes Act and 25% of the total back wages for the period from 1.4.1987 to 26.3.1993.

3. Completion of 240 Days of Service:
The Court examined whether the respondent had worked for 240 days in the twelve months preceding his termination. The Labour Court had relied on a certificate issued by the appellant to conclude that the respondent had completed 240 days of service. However, the Court found that neither the Labour Court nor the High Court had properly considered whether the respondent had indeed completed 240 days of service in the twelve months preceding his termination. The Court emphasized the importance of this aspect in determining the respondent's entitlement to back wages.

4. Gainful Employment Post-Termination:
The Court addressed whether the respondent was gainfully employed during the period post-termination. The respondent did not plead that he was unemployed during this period. The Court held that the burden of proof lies on the employee to show that he was not gainfully employed. Since the respondent did not provide any evidence of unemployment, the Court concluded that he was not entitled to full back wages. Instead, the Court awarded 25% of the total back wages for the period from 1.4.1987 to 26.3.1993.

Conclusion:
The Supreme Court allowed the appeal in part, setting aside the judgments and orders of the Labour Court and the High Court. The respondent was awarded 25% of the total back wages for the period from 1.4.1987 to 26.3.1993 and compensation under Section 6-N of the U.P. Industrial Disputes Act. The Court emphasized that payment of back wages is not automatic and must be determined based on the specific facts and circumstances of each case.

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