2014 (1) TMI 1977 - SC - Indian Laws

Validity of reinstatement orders under industrial termination law; Court permits compensation based on length of service.

Validity of reinstatement orders where termination contravenes statutory protection was considered; the court affirmed that reinstatement is not automatic ... Validity of the order of reinstatement of the respondents - violation of Section 25-F of the Industrial Disputes Act, 1947 - HELD THAT:- The decisions of this Court Senior Superintendent Telegraph (Traffic), Bhopal vs. Santosh Kumar Seal and Ors [2010 (4) TMI 965 - SUPREME COURT], in no uncertain terms hold that in case of termination in violation of Section 25-F of the I.D. Act, relief of reinstatement may not be the natural consequence. It will depend upon the facts and circumstances of each case. It is not automatic. In the facts of a given case, instead of reinstatement, monetary compensation can be granted. The cases in hand clearly fall within the ratio of the decisions of this Court. In the present cases, some of the respondents have worked for periods spread over two to seven years or little over seven years intermittently on daily wages. Their terminations have taken place long back. In the facts and circumstances of the present cases, it is opined that a compensation of Rs. 50,000/- to those respondents who have worked for a period spread over two years shall meet the ends of justice. Those respondents who have worked for a period spread over more than two years and up to five years shall be entitled for compensation of Rs. 75,000/-. Such of the respondents who have worked for a period spread over more than five years and up to seven years shall be entitled for compensation of Rs. 1,00,000/-. Those respondents who have worked for a period spread over more than seven years shall be entitled for compensation of Rs. 1,50,000/-. The impugned orders setting aside the orders of termination and directing reinstatement are set aside - Appeal allowed. Issues: Whether the orders of reinstatement granted to daily-wage employees terminated in breach of Section 25-F of the Industrial Disputes Act, 1947 should be sustained, or substituted with monetary compensation in the facts of these cases.Analysis: The Court considered precedents establishing that relief of reinstatement for termination in violation of Section 25-F is not automatic and depends on facts and circumstances of each case. The Court examined the duration of engagement of the respondents (ranging from about two years to more than seven years, intermittently), the long lapse of time since termination, and relevant Supreme Court decisions which have substituted monetary compensation for reinstatement where reinstatement would not meet the ends of justice. Applying these principles to the present facts, the Court found that monetary compensation, graded by length of service, is appropriate instead of reinstatement, and set specific compensation amounts and an eight-week time frame for payment with interest on default.Conclusion: The appeals are allowed. The impugned orders directing reinstatement are set aside. The appellants are directed to pay monetary compensation to the respondents in the graded amounts specified by the Court within eight weeks, failing which the amounts shall carry interest at 9% per annum.Ratio Decidendi: Where termination contravenes Section 25-F of the Industrial Disputes Act, 1947, reinstatement with back wages is not an automatic remedy; the Court may, in appropriate factual circumstances (including length of service and delay), refuse reinstatement and award monetary compensation in lieu thereof.