2010 (4) TMI 1176 - SC - Indian Laws

Supreme Court Reinstates Employee & Awards Back Wages

The Supreme Court allowed the appeal, setting aside the Division Bench's order and restoring the Labour Court's award. The respondent was directed to ... - Issues Involved1. Jurisdictional error or violation of natural justice by the Division Bench of Punjab and Haryana High Court.2. Non-compliance with Section 25F of the Industrial Disputes Act, 1947.3. Legality of the appellant's initial engagement/employment.4. Reinstatement and back wages entitlement.Detailed AnalysisJurisdictional Error or Violation of Natural JusticeThe Supreme Court considered whether the Division Bench of Punjab and Haryana High Court erred in upsetting the award dated 1.8.2002 passed by the Industrial Tribunal-cum-Labour Court, Panipat, without recording a finding of jurisdictional error, violation of natural justice, or an error of law apparent on the face of the record. The Division Bench set aside the Labour Court's award without addressing the fact that similar awards for other employees had been upheld by higher courts. The Supreme Court noted that the High Court's approach was contrary to the judicially recognized limitations of its power to issue a writ of certiorari under Article 226 of the Constitution.Non-Compliance with Section 25F of the Industrial Disputes Act, 1947The Labour Court concluded that the respondent did not comply with Section 25F of the Industrial Disputes Act, which mandates giving one month's notice or pay in lieu thereof and retrenchment compensation before terminating a workman's service. The Labour Court found that the appellant received compensation months after his termination, and the respondent failed to provide evidence that compensation was offered at the time of retrenchment. The Supreme Court upheld this finding, emphasizing that non-compliance with Section 25F renders the retrenchment null and void.Legality of the Appellant's Initial Engagement/EmploymentThe Division Bench of the High Court held that the appellant could not be reinstated as his initial engagement was not against any sanctioned post and did not comply with statutory provisions. The Supreme Court, however, found that the High Court erred in considering the legality of the appellant's initial employment without it being a pleaded case before the Labour Court or the High Court. The Supreme Court noted that the High Court was unduly influenced by judgments related to the regularization of casual or temporary employees, which were not applicable to the interpretation of Section 25F.Reinstatement and Back Wages EntitlementThe Labour Court had ordered the reinstatement of the appellant with full back wages. The High Court set aside this award, but the Supreme Court restored it, directing the respondent to reinstate the appellant within one month and pay back wages within three months. The Supreme Court also ruled that if the back wages were not paid within the stipulated time, the appellant would be entitled to interest at the rate of 9% per annum from the effective date of reinstatement.ConclusionThe Supreme Court allowed the appeal, setting aside the Division Bench's order and restoring the Labour Court's award. The respondent was directed to reinstate the appellant and pay back wages, with interest applicable if payments were delayed. The judgment emphasized the mandatory nature of Section 25F and the limitations on the High Court's power to interfere with findings of fact by the Labour Court.