Case: U.P.State Brassware Corpn. Ltd.  Vs. Udai Narain Pandey

service was held to have been made in violation of Section 25F of the Industrial Disputes Act, 1947 stating: ... A host of factors 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, nature of appointment, namely, whether and hoc, short term, daily wage, temporary or permanent 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 the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping 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 the total length of service rendered by a workman is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily-wage employment though it may be for 240 days in a calendar year. 57. In A.P. State Road Transport Corporation and Others vs. Abdul Kareem [(2005) 6 SCC 36] while the Labour Court directed reinstatement with continuity of service of the Respondent but without back wages, this Court denied even the continuity of service. 58. A Division Bench of this Court In M.L. Binjolkar vs. State of Madhya Pradesh [JT 2005 (6) SC 461 : (2005) 6 SCC 224] , referring to a large number of decisions, held: 7... The earlier view was that whenever there is interference with the order of termination or retirement, full back wages were the natural corollary. It has been laid down in the cases noted above that it would depend upon several factors and the Court has to weigh the pros and cons of each case and to take a pragmatic view... 59. In Management of Madurantakam Coop. Sugar Mills Ltd. vs. S. Viswanathan [(2005) 3 SCC 193] , quantum of back wages was confined to 50% stating: 19..It is an undisputed fact that the workman had since attained the age of superannuation and the question of reinstatement does not arise. Because of the award, the respondent workman will be entitled to this retiral benefits like gratuity, etc. and accepting the statement of the learned Senior Counsel for the appellant Mills that it is undergoing a financial crisis, on the facts of this case we think it appropriate that the full back wages granted by the Labour Court be reduced to 50% of the back wages.. 60. In State of U.P. and others vs. Ram Bachan Tripathi (2005) 6 SCC 496) , this Court denied the service benefits for the period the employee remained absent. 61. In Rajasthan State Road Transport Corpn. and Others vs. Shyam Bihari Lal Gupta (2005) 7 SCC 406, it was observed: 3. According to the learned counsel for the appellant Corporation, the decree is absolutely silent so far as the back wages are concerned. The decree in essence contains only a declaratory relief without any consequential payment for monetary benefits. That being so, the executing court and the High Court were not justified in granting the relief sought for. Learned counsel for the respondent on the other hand submitted that when the decree clearly indicated that the termination was illegal non est, as a natural corollary the plaintiff was entitled to the back wages. 62. In the instant case, we have noticed hereinbefore that the establishment of the Appellant wherein the Respondent could be directed to be reinstated had been sold on 26.3.1993. In that view of the matter, Section 60 of the U.P. Industrial Disputes Act would apply in terms whereof compensation will be payable in the same manner as if he was retrenched under Section 6N thereof. 63. It is not in dispute that the Respondent did not arise any plea in his written statement that he was not gainfully employed during the said period. It is now well-settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of Section 106 of the Indian Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman. In Kendriya Vidyalaya Sangathan (supra), this Court held: ... When the question of determining the entitlement of a person to back wages is concerned, the employee has to show that he was not gainfully employed. The initial burden is on him. After and if he places materials in that regard, the employer can bring on record materials to rebut the claim. In the instant case, the respondent had neither pleaded nor placed any material in that regard. (See also Allahabad Jal Sansthan (supra) para 6) 64. The only question is whether the Respondent would be entitled to back wages from the date of his termination of service till the aforementioned date. The decision to close down the establishment by the State of Uttar Pradesh like other public sector organizations had been taken as far back on 17.11.1990 wherefor a GO had been issued. It had further been averred, which has been noticed hereinbefore, that the said GO has substantially been implemented. In this view of the matter, we are of the opinion that interest of justice would be subserved if the back wages payable to the Respondent for the period 1. 4.1987 to 26.3.1993 is confined to 25% of the total back wages payable during the said period.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]13. It is not in dispute that the Respondent was appointed on daily wages. He on his own showing was appointed in a project work to look after the construction of building16. The Labour Court in its impugned award has not arrived at any finding that the order of appointment dated 8.1.1987 whereby the Respondent was appointed afresh in the Non Ferrous Rolling Mill was by way of unfair labour practice. It is, however, true that the Appellant relying on or on the basis of the aforementioned order dated 12/13.2.1987 in terms whereof the Respondents services were approved for appointment in the said mill on minimum daily wages for the period 8.1.1987 till 31.3.1987 terminated his services without giving any notice or paying salary of one month in lieu thereof. No compensation in terms of Section 6-N of the U.P Industrial Disputes Act was also paid17. Before adverting to the decisions relied upon by the learned counsel for the parties, we may observe that although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman 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 result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenchedIt is not disputed that the Respondent did not plead that he after his purported retrenchment was wholly unemployed21. The Labour Court although passed its award relying on or on the basis of the certificate issued by the Appellant, it did not hold that during the preceding 12 months, namely, for the period 1st April, 1986 to 31st March, 1987 the workman had completed 240 days of service. Unfortunately, neither the Labour Court nor the High Court considered this aspect of the matter in right perspective22. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6-N of the U.P. Industrial Disputes Act39. The decisions of this Court strongly relied upon by Mr. Sangal, therefore, do not speak in one voice that the industrial court or for that matter the High Court or this Court would not have any discretionary role to play in the matter of moulding the relief. If a judgment is rendered merely having regard to the fact situation obtaining therein, the same, in our opinion, could not be a declaration of law within the meaning of Article 141 of the Constitution of India62. In the instant case, we have noticed hereinbefore that the establishment of the Appellant wherein the Respondent could be directed to be reinstated had been sold on 26.3.1993. In that view of the matter, Section 60 of the U.P. Industrial Disputes Act would apply in terms whereof compensation will be payable in the same manner as if he was retrenched under Section 6N thereof63. It is not in dispute that the Respondent did not arise any plea in his written statement that he was not gainfully employed during the said period. It is now well-settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of Section 106 of the Indian Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman64. The only question is whether the Respondent would be entitled to back wages from the date of his termination of service till the aforementioned date. The decision to close down the establishment by the State of Uttar Pradesh like other public sector organizations had been taken as far back on 17.11.1990 wherefor a GO had been issued. It had further been averred, which has been noticed hereinbefore, that the said GO has substantially been implemented. In this view of the matter, we are of the opinion that interest of justice would be subserved if the back wages payable to the Respondent for the period 1. 4.1987 to 26.3.1993 is confined to 25% of the total back wages payable during the said periodIn that view of the matter, although no notice was required to be service in view of the proviso to Clause (a) of Section 6-N of the U.P. Industrial Disputes Act, compensation therefor as provided for in Clause (b) was payable. But, it is not necessary for us to go into the correctness or otherwise of the said decision as it is not disputed that before the provisions of Section 6-N of the U.P. Industrial Disputes Act can be invoked, the concerned workman must work at least for 240 days during a period of twelve calendar months preceding the date with reference to which calculation is to be made48. The Court, therefore, emphasized that while granting relief application of mind on the part of the industrial court is imperative. Payment of full back wages, therefore, cannot be the natural consequence.