[CASE NUMBER] JUD[SECTION]MENT IN THE HI[SECTION]H COURT OF [SECTION]UJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 9677 of 2010 FOR APPROVAL AND SI[SECTION]NATURE: HONOURABLE MR.JUSTICE [ENTITY] 1 Whether Reporters of Local Papers may be allowed Yes to see the judgment ? 2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of No the judgment ? 4 Whether this case involves a substantial question of No law as to the interpretation of the [ACT] or any order made thereunder ? [ENTITY] Petitioner(s) Versus [ENTITY] Respondent(s) Appearance: MR [ENTITY], ADVOCATE for the Petitioner(s) No. 1 MR [ENTITY], ADVOCATE for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE [ENTITY] Date : 30/06/2017 ORAL JUD[SECTION]MENT
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1. Heard Mr. [ENTITY], learned advocate for petitioner Corporation and Mr. [ENTITY], learned advocateforrespondent.
2. The petitioner Corporation is aggrieved by videawarddated16.1.2010inReferenceNo.31/94 wherebythelearnedLabourCourthasdirectedthe petitionerCorporationtoreinstatetheclaimant with20%backwages.
3. Sofarasfactualbackgroundisconcerned,it has emerged from the record andfrom submission by learned advocates for the petitioner Corporation and the respondent Corporation that the claimant raised industrial dispute with the allegations that the Corporation illegally terminatedhisservice.Withthesaidallegations the claimant demanded reinstatement with backwagesandotherbenefits.
3.1 Appropriate[SECTION]overnmentreferredthedispute HC-NIC Page 2 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT for adjudication to learned Labour Court. The disputewasregisteredasReferenceNo.31/94. 3.2 In the statement of claim, the claimant alleged that he was employed by the petitioner Corporation as [ENTITY] and he was working withtheCorporationsincemorethan5yearsand despite such facts, the Corporation illegally terminated his service by oral instruction on 15.8.1993.Theclaimantallegedthatatthetime when the Corporation terminated his service on oral instruction, Corporation did not serve any notice and his service came to be terminated without granting opportunity of hearing and without payment of compensation and without following any procedure prescribed by law. The claimant also alleged that during tenure ofhis service he worked continuously, regularly and diligently and that during each year, he had worked for more than 240 days, however, the Corporation terminated his service without following principle of Seniority and after his HC-NIC Page 3 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT service came to be terminated the Corporation engagedotherpersonsforsamework,however,the Corporationdidnotofferworktothepetitioner and thereby committed breach of statutory obligation. With such allegations the claimant demandedthattheCorporationshouldbedirected toreinstatedwithconsequentialbenefits. 3.3 The Corporation opposed the Reference. In its written statement the Corporation contended that the Reference is not maintainable because the claimant raised disputed after 1 year and thattheclaimantwasengagedonadhocanddaily wage basis for temporary period and that the claimant was not engaged regularly or continuouslyandduringpreceding12months,the claimant had not worked for 240 days. The Corporation also denied the allegations that juniorpersonswerecontinuedinserviceandthat other persons were engaged by the Corporation. TheCorporationcontendedthatsincetheclaimant was engaged casually and on adhoc basis the demandofreinstatementand/orbackwagesmaynot HC-NIC Page 4 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT be granted. The Corporation also contended that the claimant was not engaged on any permanent vacancyonsanctionedsetup.
3.4 After the parties completed the pleadings, learned Labour Court recorded evidence and upon conclusion of recording of evidence, learned Labour Court heard rival submissions and upon takingintoconsiderationtheevidenceavailable on record, learned Labour Court reached to the conclusionthattheCorporationcommittedbreach ofSection25[SECTION]andSection[SECTION].Havingreachedto such conclusion, learned Labour Court passed impugnedawardwithabovementioneddirection.
4. Mr. [ENTITY], learned advocate vehemently assailed the award and submitted that learned Labour Court failed to appreciate that claimant hadnotworkedfor240daysduringpreceding12 monthsandthat,therefore,theallegationsabout breachofSection[SECTION]isunjustandincorrect.He submittedthatsincetheclaimanthadnotworked HC-NIC Page 5 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT for 240 days the termination would not amount retrenchmentandconsequently,theconclusionby learnedLabourCourtthattheretrenchmentofthe claimant is illegal and in breach of statutory provision, is erroneous and deserves to be set aside.Healsosubmittedthatsincetheclaimant was engaged on adhoc basis, the direction to reinstatetheclaimantisunjustified.
5. Mr. [ENTITY], learned advocate for respondent opposed the submission by learned advocate for petitioner. He submitted that the claimant had worked for more than 240 days in each year and thathisservicewasterminatedwithoutfollowing procedure prescribed by law. He submitted that eveniftheclaimofthepetitionerisbelieved thatclaimantfailedtoprovethathehadworked for240daysandthat,therefore,thecontention about breach of [SECTION] should not be accepted, then also from the fact that the Corporation had not followed the principle of seniority and subsequently other persons were HC-NIC Page 6 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT employed, breach of [SECTION] and [SECTION] is established and that, therefore, the award is justandproperandmaynotbedisturbed.
6. In support of his submission that the direction by learned Labour Court may not be disturbed,Mr.[ENTITY],learnedadvocatereliedon the order dated 15.10.2010 whereby the Corporation reinstated present respondent (i.e. originalclaimant)alongwithother3claimants, who also prosecuted the reference case Nos. 39/94, 13/94 and 21/94 along with present respondentclaimant. He submitted that since 2010, the respondent is in service with the Corporation and, therefore, award may not be disturbed. Learned advocate for respondent also relied ontheorder dated 8.10.2015 whereby the Corporation has regularized service of several daily wage employees including the employees workingonpostofhelper,peonetc.Onstrength of the said Order dated 8.10.2015, learned advocatefortherespondentsubmittedthatthere HC-NIC Page 7 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT is nojustification forgiving anydifferent or othertreatmenttotheclaimant.
7. Ihaveconsideredrivalsubmissionbylearned advocatesforthepetitionerCorporationandthe respondentoriginal claimant, I have also consideredimpugnedawardandmaterialavailable onrecord.
8. The learned advocate for petitioner Corporation is justified in his contention that in present case the respondent failed to prove thathehadworkedfor240daysinpreceding12 months. The learned advocate for petitioner Corporation is also justified in his contention thatsincetheclaimanthadnotworkedformore than 240 days in preceding 12 months, the allegationsaboutbreachofSection[SECTION]shouldbe rejected and it cannot be said that the CorporationcommittedbreachofSection[SECTION].
9. However,thelearnedadvocateforpetitioner HC-NIC Page 8 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT Corporation could not refute the conclusion by learned Labour Court that the Corporation committed breach of [SECTION] and [SECTION] of theRules.
10. Itispertinenttonoteatthisstageandin thiscontextthatheCorporationfailedtoplace anyevidencebeforelearnedLabourCourtandthe learned advocate for petitioner also failed to show, during hearing of this petition, any material from record to establish that the Corporation maintained and displayed seniority listinaccordancewithRule81oftheIndustrial Disputes ([SECTION]ujarat Rules), 1966 and that the Corporation had followed the principle of seniorityi.e."lastcome,firstgo"atthetime when the Corporation terminated service of the claimant.
11. Evenatthetimeofhearing,learnedadvocate for petitioner could not showany evidence from record that all employees junior to the HC-NIC Page 9 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT respondent were relieved and principle of senioritywasdiligentlyfollowedandrequirement anddisplayingsenioritylistinaccordancewith Rule81wascomplied.
12. Inthisviewofthematter,theconclusionby learned Labour Court with regard to breach of [SECTION] cannot be faulted and the said conclusiondoesnotwarrantanyinterference.
13. Sofarasthecontentionbylearnedadvocate for petitioner with reference to[SECTION]is concerned,evenlearnedLabourCourthasrejected the claimant's allegations about breach of [SECTION] Learned Labour Court has held that the claimant failed to prove breach of [SECTION]
14. ThelearnedLabourCourthas,onthebasisof evidence available on record, reached to the conclusionthataftertheserviceoftheclaimant wasterminated,otherpersonswereengagedbythe HC-NIC Page 10 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT Corporation,however,Corporationfailedtooffer worktotheclaimant.Fromtheawarditemerges thattheCorporationfailedtoplaceanymaterial onrecordtoestablishthatthepersonswhowere subsequently employed, were not employed in the samecategory/onthesamepost.Atthetimeof hearing of the petition, learned advocate for petitioner could notshow anydocument from the recordwhichwouldconvincethisCourtandwhich wouldestablishthatthepersonswhocametobe subsequently employed in different category/ on differentpostand,therefore,[SECTION] notbeattracted.
15. Inabsenceofsuchmaterial,thefindingsof factrecordedbythelearnedLabourCourtcannot bedisturbedbythisCourt.
16. Therefore, the finding of fact recorded by thelearnedLabourCourtwithregardtobreachof Section[SECTION]doesnotwarrantinterference.
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17. Evenotherwise,whenbreachofSection25[SECTION]is already established, the conclusion by the learned Labour Court that the termination of claimant's service was illegal and inbreach of statutory provisions, is fortified and the said position justifies the order directing the Corporationtoreinstatetheclaimant.
18. In the decision in case of Surendranagar DistrictPanchayatandAnotherv.ParsottamManji (2016 3 [SECTION]LR 1981), this Court has held that [SECTION] and [SECTION] are independent of 25h and breach of compliance of [SECTION] is not necessary condition for invoking [SECTION] to challenge illegal termination. In the said decision,theCourthasobservedthat "14. In this view of the matter, even if the petitioner's contention that the breach of [SECTION] is not established, is, for testing the other contention is entertained, then also,the learned Labour Court's conclusion that the petitioner committedbreachofSection25[SECTION]cannotbefaulted.
Section25[SECTION]operatesindependentlyandisnot dependenton[SECTION]and for applicabilityand operation of [SECTION], it is not necessary to establishbreachofSection[SECTION].
Thepetitioners'contentionagainstthelearned Labour Court's conclusion about breach of [SECTION] basedonerroneousreadingandconstruction of [SECTION] When the learned counsel for the HC-NIC Page 12 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT petitioners claims that despite the fact that the workman had not worked for 240 days, breach of [SECTION] was not established and consequently, the action would not amount to breach of [SECTION], the petitioner ignores the effect, scope, purportandrequirementsofSection25[SECTION]oftheAct, thelearnedLabourCourtcommittederrorinholding that the action of relieving the respondent is in breach of[SECTION]According tothepetitioner said conclusion is recorded disregarding the fact that the workman had not worked for 240 days and consequently, the petitioner had not violated [SECTION] of the Act. At first blush and on initialreadingofSection25[SECTION]itstrikesthatthe said provision is part of the same family namely, [SECTION] which comprises [SECTION] and that the said [SECTION] is intertwined withandcloselyattachedtoSection[SECTION]and[SECTION]. However,on closureexaminationofthe scheme of [SECTION] and definition of the term "retrenchment" under [SECTION] of the Act, it emergesthatsaidSection25[SECTION]operatesindependently anditsoperationorapplicabilityisnotdependent on compliance or breach of [SECTION] It also emerges that for attracting the applicability and operation of [SECTION], it is not necessary to establish breach of [SECTION] It is true that [SECTION], [SECTION] and [SECTION] collectively provide against arbitrary retrenchment ofworkmanandalsoprovideasafetyvalveagainst employer's "pickandchoose" action and against employer's action of "hire and fire at will". It also provides protection to the workman against employer's action of selectively and arbitrarily drivingoutaworkmanwithaviewtomakingroomfor and accommodating another person in his place. In manycases,itmaysohappenthattheworkmanorthe post / position may not have become redundant and need for the particular work or operation and the need for the person to perform the said work may continue, but the employer may, for ulterior reasons,wanttoreplacethepersonmanningthepost byappointingsomeotherperson.Thereasonforsuch substitution or replacement may not be necessarily associatedwithanyfaultormistakeinperformance of duties by the concerned person, but still the employer may want to relieve such person for undisclosed reasons. [SECTION] and [SECTION] provide protection againstsuch whimsand fancyof theemployer.
Actually,ingrainedinSection25[SECTION],andsoalso [SECTION],aretheprinciplesofArticle14of the [ACT], namely equality and fairness. [SECTION] despises motivated HC-NIC Page 13 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT retrenchment and aims at nipping in the bud the tendencyofharassingorvictimizingoneemployeeby bestowingfavourtootherperson.
WhenSection25[SECTION]isexaminedinlightofthis objectiveandinlightofentireschemeoftheAct and particularly [SECTION], then, it comes out, clearly, that it operates independently and it is notdependentonbreachand/orcomplianceof[SECTION] of the Act. [SECTION] of the Act does not require compliance of the condition necessary for attracting [SECTION] viz. Work / service of minimum240daysin12monthspreceedingthedateof retrenchment. The only requirement for attracting [SECTION] is to establish that at the time when the service of the claimant workman came to be terminated, some person(s) junior to him was/were retainedinserviceandtheprincipleof"lastcome, firstgo"wasnotfollowed.
Ifthesaidfactisestablished,then,breach of [SECTION] would stand established and that would render the action of termination of the workman contrary to and in violation of statutory provision.
Theexpression"retrenched"usedinSection25[SECTION] doesnotrefertotheworkmanretrenchedunderand as per [SECTION] of the Act. The expression "retrenched"employedinsection25[SECTION]is relatedto theterm"retrenchment"definedunderSection2(oo) ofthe Actandthe retrenchment contemplated under [SECTION] cannot and does not circumvent or curtailorrestricteitherthemeaningortheambit ofSection25[SECTION]oroftheexpression"retrenched"in Section25[SECTION]oftheAct.
AsobservedbyHon'bleApexCourtinpara9of thedecisioninthecaseofCentralBankofIndiav. S.Satyam&Ors.[(1996)5SCC419],theSection25[SECTION] borrowsandappliestheconceptof"lastcome,first go"buttheterm"retrenchment"isnotandcannotbe restrictedonlytothecasescoveredbySection[SECTION]. Inthesaiddecision,ApexCourthasobserved,inter alia,that: "9.Theplainlanguageof Section[SECTION] speaks onlyofreemploymentof'retrenchedworkmen'. The ordinary meaning of the expression 'retrenched workmen must relate to the wide meaning of 'retrenchment' given in [SECTION]. [SECTION] also uses the word 'retrenchment'butqualifiesitbyuseofthe further words 'workman' who has been in continuousservicefornotlessthanoneyear'. Thus, [SECTION] does not restrict the meaning of retrenchment but qualifies the categoryofretrenchedworkmencoveredtherein by use of the further words workman. Who has HC-NIC Page 14 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT been in continuous service for not less than oneyear.ItisclearthatSection[SECTION]applies to the retrenched workman who has been in continuousservicefornotless:oneyearand nottoanyworkmanwhohasbeanincontinuous serviceforlessthanoneyear;anditdoesnot restrictorcurtailthemeaningofretrenchment merely because the provision therein is made onlyfortheretrenchmentofaworkmanwhohas beenincontinuousservicefornotlesstheone year.ChapterVAdealswithallretrenchments whileSection[SECTION]isconfinedonlytothemode of retrenchment of workmen in continuous servicefornotlessthanoneyear.Section25 [SECTION]prescribestheprincipleforretrenchmentand appliesordinarilytheprincipleof'lastcome firstso'whichisnotconfinedonlytoworkmen who have been in continuous service for not lessthanoneyear,coveredbySection[SECTION]." Under the circumstances, in present case, when breachofSection25[SECTION]isestablished,ittranslates into factsituation, and leads the Court to the conclusion that the petitioner's action viz. terminatingtherespondent'sservicewhileretaining juniors to him, is illegal and in violation of statutoryprovision.
Theterminationofrespondent'sserviceinviolation of statutory condition/provision would invite and justify the direction to reinstate the respondent. Therefore,thedirectionbythelearnedLabourCourt requiringthepetitionertoreinstatetherespondent cannot be faulted and the petitioner's contention against saiddirectionisnot sustainable anddoes notdeservetobe entertained. Thesaidcontention fails and that therefore, it is, accordingly, rejected.Bytheimpugnedaward,thelearnedLabour Courthasnotgrantedbenefitofbackwagesandthe order is restricted to the direction to reinstate therespondentwithoutbackwages.ThelearnedLabour Court has not committed any error on that count. Therefore,thepetitionfiledbythepanchayat,i.e. [CASE NUMBER], fails anditisherebyrejected."
19. In this view of the matter, the said conclusion by learned Labour Court cannot be faulted.
HC-NIC Page 15 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT 20. When the breach of [SECTION] is
established, it means that the termination of claimant's service was effected in breach of statutory provision. This would entail natural and normal consequence namely reinstatement in service.
21. This is one reason in light of which the order by learned Labour Court directing the Corporation to reinstated the claimant does not warrantinterference.
22. In present case, there is additional reason whichconvincedtheCourtthatthesaiddirection does not warrant interference. The Court is informed that after the learned Labour Court passed impugned award, the Corporation issued order dated 15.10.2010 and reinstated the claimant. Since then i.e. for last 7 years the claimant is already in service with the Corporation. In this view of the matter, this HC-NIC Page 16 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT Court would, even otherwise, not interfere with theorderdirectingtheCorporationtoreinstate the workman. The said direction is already complied.
23. Above discussion takes the Court to the petitioner's objection against direction to pay 20%backwages.
24. Inthiscontextreferencemaybehadtothe observations by the Apex Court (a) in case of ReetuMarblesvs.Prabhakant[ENTITY][(2010)2SCC 70] wherein Hon'ble Apex Court observed, inter alia,that:
"11.Theonlylimitedissuetobedeterminedbyus, in this appeal, is whether the High court was justified in granting full back wages to the respondent in spite of the denial thereof by the LabourCourt.InouropiniontheHighCourterredin lawinnotexaminingthefactualsituation.TheHigh Courtmerelystatedthatitwasnotthecaseofthe employer that the workman had been gainfully employed elsewhere. Although it noticed the principle that the payment of back wages having a discretionary element involved in it, has to be dealtwithinthecircumstancesofeachcaseandno straitjacketformulacanbeevolved,yettheaward oftheLabourCourtwasmodifiedwithoutanyfactual HC-NIC Page 17 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT basis.
12. In the case of [PRECEDENT]TheEmployeesofM/s.HindustanTinWorks Pvt.Ltd.andOrs.AIR1979SC75,ithasbeenheld asfollows:
"9 Ordinarily, therefore, a workman whose servicehasbeenillegallyterminatedwouldbe entitledtofullbacksexcepttotheextenthe was gainfully employed during the enforced idleness.Thatisthenormalrule."
13.Theseobservationsweresubsequentlyconsidered inthecaseofHindustanMotorsLtd.vs.TapanKumar 8[ENTITY]acharyaandAnr.(2002)6SCC41anditwas observedasfollows:
"[ENTITY] Industrial Tribunal is statutorily mandated, while setting aside the order of discharge or dismissal and directing reinstatement of the workman to consider the terms and conditions, subject to which the relief should be granted or to give such other relief to the workman includingtheawardofanyotherpunishmentin lieu of the discharge or dismissal, as the circumstances of the case may require. The section is couched in wide and comprehensive terms. It vests a wide discretion in the Tribunal in the matter of awarding proper punishmentandalsointhematteroftheterms and conditions on which reinstatement of the workman should be ordered. It necessarily follows that the Tribunal is duty bound to consider whether in the circumstances of the case,backwageshavetobeawardedandifso, HC-NIC Page 18 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT towhatextent.
12. From the award passed by the Industrial Tribunal which has been confirmed by the DivisionBenchoftheHighCourt,itisclear thattheorderforpayment offullbackwages to the workman was passed without any discussion and without stating any reason. It appears that the Tribunal and the Division Bench had proceeded on the footing that since theorderofdismissalpassedbythemanagement wassetaside,theorderofreinstatementwith full back wages was to follow as a matter of course.
13. In [PRECEDENT] a three Judge Bench of this Court laiddown:(SCCp.86,para11)"11.Inthevery natureofthingstherecannotbeastraitjacket formulaforawardingreliefofbackwages.All relevantconsiderationswillentertheverdict. Moreorless,itwouldbeamotionaddressedto thediscretionoftheTribunal.Fullbackwages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stagetheTribunalwillexerciseitsdiscretion keepinginviewalltherelevantcircumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing andmustappearonthefaceofthe record.Whenitissaidthatsomethingistobe done within the discretion of the authority, thatsomethingistobedoneaccording tothe HC-NIC Page 19 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT rules of reason and justice, according to law and not humour. It is not to be arbitrary, vagueandfancifulbutlegalandregular.
16.Asalreadynoted,therewasnoapplication of mind to the question of back wages by the LabourCourt.Therewasnopleadingorevidence whatsoever on t he aspect whether the respondent was employed elsewhere during this longinterregnum."
14.Theaforesaidjudgmentwassubsequentlyconsideredin the case of [PRECEDENT] it was observed as follows:
"17. Before adverting to the decisions relied upon by the learned counsel for the parties, we may observe that although direction to pay full back wagesonadeclarationthattheorderoftermination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matterisbeingtakenbythecourtrealizingthatan industrymaynotbecompelledtopaytotheworkman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a resultwhereoftheemployerwouldbecompelledtogo backtoasituationwhichprevailedmanyyearsago, namely,whentheworkmanwasretrenched.
[ENTITY] what circumstances payment of entire back wages shouldbeallowed.Indisputably,itdependsuponthe facts and circumstances of each case. It would, however, not be correct to contend that it is HC-NIC Page 20 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT automatic. It should not be granted mechanically only because on technical grounds or otherwise an orderofterminationisfoundtobeincontravention oftheprovisionsofSection6NoftheU.P. IndustrialDisputesAct.
43. The changes brought about by the subsequent decisions of this court, probably having regard to the changes in the policy decisions of the [SECTION]overnmentinthewakeofprevailingmarketeconomy, globalization, privatization and outsourcing, is evident."
15.Fromtheaboveobservationsitbecomesapparentthat paymentoffullbackwagesuponanorderoftermination beingdeclaredillegalcannotbegrantedmechanically.It doesnotautomaticallyfollowthatreinstatementmustbe accompanied by payment of full back wages even for the period when the workman remained out of service and contributedlittleornothingtotheindustry.
16. Again in the case of [PRECEDENT]. Recently this Court again examined the issues with regard to payment of full back wages in the case of [PRECEDENT] as follows:
"18.Althoughdirectiontopayfullbackwagesona declaration that the order of termination was invalid used to be the usual result but now, with thepassageoftime,apragmaticviewofthematter HC-NIC Page 21 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT is being taken by the court realizing that an industrymaynotbecompelledtopaytotheworkman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a resultwhereoftheemployerwouldbecompelledtogo backtoasituationwhichprevailedmanyyearsago, namely,whentheworkmanwasretrenched.
19.InHaryanaUrbanDevelopmentAuthorityv.OmPal itisstatedthat:(SCCp.745,para7)"7 Itis now also well settled that despite a wide discretionary power conferred upon the Industrial Courts under [SECTION] of the 1947 Act, the reliefofreinstatementwithfullbackwagesshould notbegrantedautomaticallyonly becauseitwould belawfultodoso.[SECTION]rantofreliefwoulddependon thefactsituation obtaining ineachcase.Itwill depend uponseveralfactors, oneofwhich would be astowhethertherecruitmentwaseffectedinterms ofthestatutoryprovisionsoperatinginthefield, ifany."
20. In deciding the question, as to whether the employeeshouldberecompensedwithfullbackwages andotherbenefitsuntilthedateofreinstatement, the tribunals and the courts have to be realistic albeit the ordinary rule of full back wages on reinstatement.(WesternIndia [PRECEDENT])"
Applyingtheaforesaidratiooflawwehaveexaminedthe factual situation in the present case. The services of therespondentwereadmittedlyterminatedon11.6.87.The LabourCourtgaveitsawardon27.9.02.Therefore,there HC-NIC Page 22 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT is a gap of more than 15 years from the date of termination till the award of reinstatement in service. Labour Court upon examination of the entire issue concluded that the respondent would not be entitled to anybackwagesfortheperiodhedidnotwork.Aperusal oftheawardalsoshowsthattherespondentdidnotplace on the record of the Labour Court any material or evidence to show that he was not gainfully employed during the long spell of 15 years when he was out of serviceoftheappellant.
18. In the writ petition the respondent was mainly concerned with receiving wages in accordance with the MinimumWagesActandforinclusionoftheperiodspent in Conciliation Proceedings for the calculation of financialbenefits.TheHighCourtwithoutexaminingthe factual situation, and placing reliance on the judgment in [PRECEDENT] [PRECEDENT]. heldthatthenormalruleoffullbackwagesoughttobe followedinthiscase.Weareoftheconsideredopinion that such a conclusion could have been reached by the HighCourtonlyafterrecordingcogentreasonsinsupport thereof.Especiallysince theawardoftheLabour Court was being modified. The Labour Court exercising its discretionary jurisdiction concluded that it was not a fitcaseforthegrantofbackwages.
19.InthecaseofP.V.K.DistilleryLtd.(supra),itis observedasfollows:
"15.Theissueasraisedinthematterofbackwages has been dealt with by the Labour Court in the manner as above having regard to the facts and HC-NIC Page 23 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT circumstances of the matter in the issue, upon exerciseofitsdiscretionandobviouslyinamanner which cannot but be judicious in nature. There existsanobligationonthepartoftheHighcourt to record in the judgment, the reasoning before however denouncing a judgment of an inferior tribunal, intheabsence ofwhich,thejudgment in our view cannot stand the scrutiny of otherwise beingreasonable."
20. In our opinion the High Court was unjustified in awardingfullbackwages.Wearealsooftheopinionthat the Labour Court having found the termination to be illegalwasunjustifiedinnotgrantinganybackwagesat all.Keepinginviewthefactsandcircumstancesofthis casewedirectthattherespondentshallbepaid50per cent of the back wages from the date of termination of servicetillreinstatement."
b) Inthedecisionincaseof [SECTION]eneralManager, Haryana Roadways vs.Rudhav Singh [(2005) 5SCC 591]Hon'bleApexCourtobservedthat:
"6.Thenextquestion,whichrequiresconsideration is whether the respondent is entitled to any back wages. The Industrial TribunalcumLabour Court awarded50%backwagesonthegroundthatinRohtak District of State of Haryana work of the nature, whichwasbeingdonebytherespondent,isavailable inplentyasalargeworkforcecomesfromEastern UPandBiharfordoingsuchkindofwork.However,a general observation has been made that keeping in viewthefactsandcircumstancesofthecaseitwill HC-NIC Page 24 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT be proper to award 50% back wages. The High Court has also not given any reason for upholding this partoftheaward.
7. In our opinion certain factors, which are relevant for forming an opinion regarding award of back wages, have been completely ignored and, therefore,theawardonthispointisvitiated.The listofdates given intheSpecial LeavePetition, which have not been controverted, show that though according to the own case of the respondent his services had been terminated on 18.2.1989, yet he servedademandnoticeprayingforreinstatementin serviceaftertwoandhalfyearson24.8.1991.The State [SECTION]overnment made reference to the Industrial TribunalcumLabour Court in the year 1997, which meanseightyearsaftertheterminationofservice. Normally,areferenceshouldnotbemadeafterlapse of a long period. A labour dispute should be resolvedexpeditiouslyandthereisnojustification for the State [SECTION]overnment to sleep over the matter andmakeareferenceafteralongperiodoftimeat its sweet will. It causes prejudice both to the workmanandalsototheemployer.Itisnotpossible for an employer to retain all the documents for a long period and then to produce evidence, whether oral or documentary, after years as the officers, [ENTITY],mighthaveleft the establishment on account of superannuation or any other reason. The employer is not at fault if thereferenceisnotmadeexpeditiouslybytheState [SECTION]overnment, but it is saddled with an award directingpaymentofbackwageswithouthavingtaken anyworkfromtheconcernedworkman. Theplight of HC-NIC Page 25 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT the workman who is thrown out of employment is equallybadasitisaquestionofsurvivalforhis family and he should not be left in a state of uncertaintyforalongperiod.
8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of [SECTION],entirebackwagesshouldbe awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or invitingapplicationsfromtheemploymentexchange, natureofappointment,namely,whetheradhoc,short term, daily wage, temporary or permanent in character, any special qualification required for thejobandthelikeshouldbeweighedandbalanced intakingadecisionregardingawardofbackwages. Oneoftheimportantfactors,whichhastobetaken intoconsideration,isthelengthofservice,which theworkman hadrendered withtheemployer.Ifthe workman has rendered a considerable period of serviceandhisservicesarewrongfullyterminated, hemaybeawardedfullorpartialbackwageskeeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where thetotallengthofservicerenderedbyaworkmanis verysmall,theawardofbackwagesforthecomplete period,i.e.,fromthedateofterminationtillthe date of the award, which our experience shows is often quite large, would be wholly inappropriate. Anotherimportantfactor,whichrequirestobetaken into consideration is the nature of employment. A HC-NIC Page 26 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendaryear.
9. The written statement filed by the respondent shows that between 16.3.1988 to 31.10.1988 he had been given short term appointments as Helper, Wash Boy and Water Carrier with breaks of two days and seven days respectively on two occasions. After 31.10.1988 he was employed as Helper on 8.1.1989 after a gap of more than two months. This appointmentwasonlyupto31.1.1989andthereafter he was given fresh appointment on 7.2.1989, which cametoanendon28.2.1989.Thesefactsshowthat the respondent had not worked continuously from 16.3.1988 to 28.2.1989 in the establishment of the appellant. A person appointed on daily wage basis getswagesonlyfordaysonwhichhehasperformed work.
10.InSmt.SaranKumar[SECTION]aurandothersvs.Stateof UttarPradeshandothers[JT1991(3)SC478],this Court observed that when work is not done remunerationisnottobepaidandaccordinglydid notmakeanydirectionforawardofpastsalary. In [PRECEDENT] on 15.7.1970 terminating the services of a Licence InspectorwasfinallyquashedbytheHighCourtina writ petition on 27.11.1991 and a direction was issuedtopaytheentirebacksalaryfromthedate of termination till the date of his attaining superannuation. This Court, in absence of a clear findingthattheemployeewasnotgainfullyemployed HC-NIC Page 27 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT during therelevantperiod, setasidetheorder of the High Court directing payment of entire back salary and substituted it by payment of a lumpsum amountofRs.25,000/.
In Virender Kumar, [SECTION]eneral Manager, Northern Railways, New Delhi vs. Avinash Chandra Chadha and others [(1990) 3 SCC 472], there was a dispute regardingseniorityandpromotiontoahigherpost. ThisCourtdidnotmakeanydirectionforpaymentof higher salaryforthepastperiodontheprinciple 'noworknopay'astherespondentshadactuallynot worked on the higher post to which they were entitled to be promoted. In Surjit [SECTION]hosh vs. Chairman and Managing Director, United Commercial Bank and others [(1995) 2 SCC 474], the appellant (Assistant Manager in the Bank) was dismissed from serviceon28.5.1985,buthisappealwasallowedby this Court on 6.2.1995 as his dismissal order was found tobesufferingfromaninherent defect.His claimforarrearsofsalaryforthepastperiodcame toaboutRs.20lakhsbutthisCourtobservedthata hugeamountcannotbepaid toanyonefordoingnoworkandaccordinglydirected that a compensation amount of Rs.50,000/be paid to himinlieuofhisclaimforarrearsofsalary. In AnilKumar[SECTION]uptavs.StateofBihar [(1996)7SCC 83], the appellants were employed as daily wage employeesinWaterandLandManagementInstituteof theIrrigationDepartmentof[SECTION]overnmentofBiharand they were working on the posts of stenotypists, typists, machine operators and peons, etc. This Courtallowedtheappealoftheworkmenanddirected reinstatementbutspecificallyheldthattheywould HC-NIC Page 28 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT not be entitled to any past salary. These authoritiesshowthatanorderforpayment ofback wages should not be passed in a mechanical manner buthostoffactorsareto betakenintoconsiderationbeforepassinganyorder forawardofbackwages.
11. In the case in hand the respondent had worked for a very short period with the appellant, which was less than one year. Even during this period therewerebreaksinserviceandhehadbeengiven short term appointments on daily wage basis in different capacities. The respondent is not a technically trained person, but was working on a class IV post. According to the finding of the IndustrialTribunalcumLabourCourtplentyofworkof thesamenature,whichtherespondentwasdoing,was available in the District of Rohtak. In such circumstances we are of the opinion that the respondent is not entitled to payment of any back wages."
c) [PRECEDENT] wherein Hon'ble Apex Courtobserved,interalia,that:
13. In [SECTION].M. Haryana Roadways v. Rudhan Singh , [2005]5SCC591,thisCourtheldthatthereisno ruleofthumbthatineachandeverycase,wherea finding is recorded by Court or Tribunal that the orderofterminationofservicewasillegalthatan employeeisentitledtofullbackwages.Ahostof factors must be taken into account. The Court HC-NIC Page 29 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT stated:
"8. There is no rule of thumb that in every case where the Industrial Tribunal gives a findingsthattheterminationofservicewasin violation of [SECTION] of the Act, entire backwagesshouldbeawarded.Ahostofactors like the manner and method of selection and appointment i.e. whether after proper advertisement of the vacancy or inviting applications from the employment exchange, natureofappointment,namely,whetheradhoc, shortterm,dailywage,temporaryorpermanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service which theworkmanhadrenderedwiththeemployer.If theworkmanhasrenderedaconsiderableperiod of service and his services are wrongfully terminated, he may be awarded full or partial backwageskeepinginviewthefactthatathis age and the qualification possessed by him he may not be in a position to get another employment.However,wherethetotallengthof service rendered by a workman is very small, theawardofbackwagesforthecompleteperiod i.e.fromthedateofterminationtillthedate of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requirestobetakenintoconsiderationisthe HC-NIC Page 30 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT nature of employment. A regular service of permanentcharactercannotbecomparedtoshort orintermittentdailywageemploymentthoughit maybefor240daysinacalendaryear."
14. Again, in [PRECEDENT], after considering the relevant casesonthepoint,theCourtstated"
"16 We have referred to certain decisions of this Court to highlight that earlier in the eventofanorderofdismissalbeingsetaside, reinstatement with full back wages was the usualresult.Butnowwiththepassageoftime, it has come to be realized that industry is beingcompelledtopaytheworkmanforaperiod during which he apparently contributed little ornothingatall,foraperiodthatwasspent unproductively, while the workman is being compelled to go back to a situation which prevailedmanyyearsagowhenhewasdismissed. Itisnecessaryforustodevelop apragmatic approach to problems dogging industrial relations. However, no just solution can be offeredbutthegoldenmeanmaybearrivedat."
15. Recently, in [PRECEDENT] one of us ([ENTITY],J.)hadanoccasiontoconsiderasimilar issue.Referringtoearliercaselaw,itwasobserved:
"16.Fromtheabovecases,itisclearthatno precise formula can be adopted nor `cast iron rule' can be laid down as to when payment of fullbackwagesshouldbeallowedbythecourt HC-NIC Page 31 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT or Tribunal. It depends upon the facts and circumstancesofeachcase.Theapproachofthe Court/Tribunal should not be rigid or mechanical but flexible and realistic. The Court or Tribunal dealing with cases of industrial disputes may find force in the contention of the employee as to illegal terminationofhisservicesandmaycometothe conclusion that the action has been taken otherwisethaninaccordancewithlaw.Insuch casesobviously,theworkmanwouldbeentitled to reinstatement but the question regarding payment of back wages would be independent of the first question as to entitlement of reinstatmentinservice.Whileconsideringand determining the second question the Court or Tribunal would consider all relevant circumstancesreferredtoaboveandkeepingin viewtheprincipleofjustice,equityandgood conscience,shouldpassanappropriateorder.
16.Thus, entitlement ofaworkman togetreinstatement does not necessarily result in payment of back wages which would be independent of reinstatement. While dealingwiththeprayerofbackwages, factual scenario and the principles of justice, equality and good conscience have to be kept in view by an appropriate Court/Tribunal.
17.Intheinstantcasetherecordclearlyreflectsthat theservicesoftherespondent workman werenever found tobesatisfactory.Infact,beforemorethan30years, his services were terminated but he was taken back by HC-NIC Page 32 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT giving a chance to improve. Unfortunately, however, the respondent did not utilise it. Even prior to the three incidents in question, at several times, the respondent workmanwaswarned.Itwas,therefore,notafitcaseto grantbackwagesandtheLabourCourtandtheHighCourt were not right in granting the said prayer. To that extent,therefore,theorderdeservesinterference.
18. For the foregoing reasons, the appeal is partly allowed. The order passed by the Labour Court and confirmedbytheHighCourtissetasidetotheextentof granting back wages and it is held that the respondent workman is not entitled to back wages. The appeal is accordingly disposed of. In the facts and circumstances of the case, however, there shall be no order as to costs."
Thus, what emerges from the above quoted observations by Hon'ble Apex Court is that the direction with regard to payment of backwages should not be passed mechanically and only because relief of reinstatement is granted. The issue with regard to award forbackwages should be decided by taking into account host of relevantfactsandcircumstancesincludingtotal tenure of service of the claimant prior to termination, the ground on which the claimant's service wasterminated, theground onwhich the HC-NIC Page 33 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT order / action terminating service of the claimantissetaside,thefactastowhetherthe claimant was gainfully employed during interregnum, any exceptional circumstances pleaded and established by the employer against claimantforbackwagesetc.
25. In present case, it has emerged that the appointmentoftheclaimantwasirregular.Itis also not in dispute that at the time when the serviceoftheclaimantcametobeterminated,he was working on daily wage basis. Under the circumstances, the order granting 20% backwages isnotjustified.Thesaiddirectiondeservesto be set aside in facts and circumstances of the case. It is pertinent to note that the learned Labour Court has passed the said direction mechanically and without recording any justification and without taking into account facts and circumstances which would be relevant todecidetheissuewithregardtotheclaimfor backwages. The said direction, therefore, HC-NIC Page 34 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT deservestobesetaside.
26. Inlightoftheforegoingdiscussionandthe facts which have emerged, it appears that following order and direction would balance equityandwouldmeetendsofjustice.
27. Consequently,followingorderispassed:
a. The petition is partly allowed. The award impugnedinpresentpetitionispartlysetaside andmodifiedinasmuchastheorderdirectingthe Corporation to reinstate the claimant, is not disturbed.
b. Thesaiddirectionisalreadycompliedbythe Corporationand,therefore,anyfurtherorderis notrequiredtobepassed.
c. However,sofarasthedirectiontopay20% backwages is concerned, the said order and directionissetaside.
HC-NIC Page 35 of 36 Created On Sun Aug 20 09:44:01 IST 2017 [CASE NUMBER] JUD[SECTION]MENT
28. Consequently, the award passed by learned LabourCourtispartiallysetasideandmodified and with aforesaid direction and order, the petition is partly allowed. Rule is made absolute.
([ENTITY], J.) saj HC-NIC Page 36 of 36 Created On Sun Aug 20 09:44:01 IST 2017