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Supreme Court rules against automatic reinstatement of terminated workmen, but hikes compensation for PWD employee

Appellant Ranbir Singh had been working with Executive Engineer, PWD for nearly eight years and his service was terminated without complying with Section 25F of the Industrial Disputes Act, 1947.

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The Supreme Court has observed that in cases of violation of retrenchment conditions under Section 25F of the Industrial Disputes Act, 1947, the reinstatement of terminated workmen cannot be automatic.

The bench comprising Justices K.M. Joseph and P.S. Narasimha observed on September 2,

“The Labour Court rejected the contention of the respondent that the appellant had not worked for 240 days and found that appellant had indeed worked for 240 days. It is found that there is non-compliance of Section 25F of the Act and the Labour Court awarded reinstatement of the appellant with 25 per cent back wages. As already noticed, it is this award, which is set aside by the High Court.”

The petition contended that appellant Ranbir Singh was working with the respondent (Executive Engineer, PWD) for nearly eight years and his service was terminated without complying with Section 25F of the Industrial Disputes Act, 1947.

“This is a case where it is found that, though the appellant had worked for 240 days, appellant’s service was terminated, violating the mandatory provisions of Section 25F of the Act. The authority involved in this case, apparently, is a public authority,” noted the bench.

Manjeet Singh, Senior Counsel for the appellant, relied upon the judgment of this Court in Ajaypal Singh vs Haryana Warehousing Corporation. “Some of persons juniors to him were also dealt with in a different fashion, and in their case, they are working and they have, in fact, been regularised also. The appellant should be reinstated in terms of the order of the Labour Court,” he said.

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Samar Vijay Singh, AAG appearing for the respondent, said “The acceptance of the contention of the appellant involved violation of the law laid down by this court in Secretary, State of Karnataka and others v. Umadevi  and others. He still further drew out attention to the decision of this Court in State of Uttarakhand and another v. Raj Kumar and points out that, in such circumstances, an order of reinstatement may not be justified.

The Apex Court noted, in the Ajay Pal Singh (supra), “When the termination is effected of service of a daily wager, there must be compliance of Section 25F. This Court, in fact, went on also to note that unlike a private body, in the case of a public body, while it may be open to resort to retrenchment of the workmen on the score that there is non-compliance of Articles 14 and 16 in the appointment, in which case, in the order terminating the services, this must be alluded to, it would still not absolve the public authority from complying with the provisions of Section 25F of the Act and, should it contravene Section 25F, it would amount to an unfair trade practice.”

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However, the Court noted there is another line of decisions, with respect to the observations made in Raj Kumar:-

“The reasons for denying the relief of reinstatement in such cases are obvious. It is trite law that when the termination is found to be illegal because of non-payment of retrenchment compensation and notice pay as mandatorily required under Section 25-F of the Industrial Disputes Act, even after reinstatement, it is always open to the management to terminate the services of that employee by paying him the retrenchment compensation.”

“We would, however, like to add a caveat here. There may be cases where termination of a daily-wage worker is found to be illegal on the ground that it was resorted to as unfair labour practice or in violation of the principle of last come first go viz. while retrenching such a worker daily wage juniors to him were retained. There may also be a situation that persons junior to him were regularised under some policy but the workman concerned terminated. In such circumstances, the terminated worker should not be denied reinstatement unless there are some other weighty reasons for adopting the course of grant of compensation instead of reinstatement. In such cases, reinstatement should be the rule and only in exceptional cases for the reasons stated to be in writing, such a relief can be denied,” the bench said.

While allowing the appeal partly, the court directed that in place of Rs 25,000 as lumpsum compensation, the appellant be paid Rs 3.25 lakh compensation.

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