Where transgression is established u/s 25F of Industrial Disputes Act, 1947, an appropriate remedy is compensation and not reinstatement: High Court of Delhi

18 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 20th January 2022 MS. VANDANA W.P.(C) 2359 2020 Through: Ms. K.B. Hina Advocate. ..... Petitioner M S HBL GLOBEL PVT. LTD. Through: Ms. Romila Joshi Advocate. ..... Respondent JUSTICE PRATHIBA M. SINGH Prathiba M. Singh J.This hearing has been done through video conferencing. The present petition has been filed challenging the impugned Award dated 15th October 2019 passed by the Labour Court in LC DID No.408 16 titled Ms. Vandana v. M s. HBL Globel Pvt. Ltd. By the impugned Award the Petitioner Workman who had challenged the termination of her services was awarded a sum of Rs.1 02 420 instead of reinstatement in service with full back wages and continuity of service along with all the consequential benefits as prayed for in the claim petition. The background of the present petition is that the Petitioner was employed as a Tele caller on 13th August 2008 with the Respondent Management 2359 2020 services. However upon filing a complaint with the Labour Commissioner she was taken back into service. It was the case of the Petitioner that post her termination in 2012 when she joined back the Management started sending various warning letters to her and she was finally terminated on 30th December 2014. The said termination was challenged by the Petitioner before the Labour Court wherein she prayed for reinstatement with continuity of service and full back wages along with all consequential benefits. The following issues were framed in the said proceedings before the Labour Court: “1. Whether the claimant workman is not a workman as defined under Section 2(s) of the industrial Disputes Act 1947O.P.M. 2. Whether the performance of the claimant workman was not up to the mark and she was asked to improve her performance and she was issued various warning letters by the management but the claimant did not improve her performance despite various letters of the management to this effect if so its effect O.P.M. 3. Whether the claimant workman was directed by the management to show quantitative and qualitative improvement in her performance vide its letters but the claimant workman failed to improve rather she indulged into the acts of indiscipline and misconduct during the course of her employment and discharge of her duty and started absenting from quality training session and refused to abide by the directions given to her by her seniors as alleged by the management if so its effect O.P.M. to be the claimant was 4. Whether unprofessional and callous while making dialer calls to the customer and was found busy chatting and interacting with her colleagues and made a W.P.(C) 2359 2020 disrespectful comment about a deceased customer if so its effect O.P.M. the claimant was 5. Whether the claimant wrote false and frivolous letters making baseless allegations against the various employees of the management to the management as alleged by the management if so its effect O.P.M. 6. Whether management vide its letter dated 26.12.2014 that her services shall be terminated w.e.f. 31.12.2014 and subsequently one month salary amounting to Rs. 13100 was credited in to the bank account of the claimant towards notice pay as per the terms and conditions of employment as claimed by management O.P.M. informed by 7. Whether the full and final settlement amount of the claimant was credited into her account maintained with HDFC Bank on 02.01.2015 and the was intimated to the claimant vide letter dated 03.01.2015 and further on 07.01.2015 an amount of Rs.26 180 was also credited Into the account of the claimant towards the gratuity payable regarding the same through letter dated 08.01.2015 if so its effect O.P.M. 8. Whether terminated by unjustifiably as claimed by the workman O.P.W. the workman were illegally and to her and she was the management the services of 9. Whether the workman is entitled to the relief claimed in the statement of claim O.P.W. 10. Relief.” The Labour Court held in favour of the Petitioner on most issues. The termination was held to be illegal however only compensation was awarded in lieu of reinstatement in service. The Management has paid the sum awarded. But the Petitioner has challenged the award and prays that she W.P.(C) 2359 2020 ought to be reinstated. Submissions of the Parties: 5. Ms. K.B. Hina appearing as Legal Aid counsel on behalf of the Petitioner Workman submits that the Labour Court has completely erred in not granting reinstatement in service along with full back wages. She submits that the conclusion of the Labour Court clearly shows that the Petitioner was victimized and harassed unnecessarily by the Management. Since there as was no specific allegation of misbehaviour or insubordination and the termination of service was held to be illegal following the judgment of the Supreme Court in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya & Ors. reinstatement with back wages ought to have been granted. Reliance is placed upon paragraph 33 of the said judgment which has been extracted below: “33. The propositions which can be culled out from the aforementioned judgments are: i) In cases of wrongful termination of service reinstatement with continuity of service and back wages is the normal rule. ii) The aforesaid rule is subject to the rider that while deciding the issue of back wages the adjudicating authority or the Court may take into consideration the length of service of the employee workman the nature of misconduct if any found proved against the employee workman the financial condition of the employer and similar other factors. iii) Ordinarily an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement before the adjudicating authority or the Court of first instance that he she was not gainfully W.P.(C) 2359 2020 employed or was employed on lesser wages. If the employer wants to avoid payment of full back wages then it has to plead and also lead cogent evidence to the employee workman was gainfully employed and was getting wages equal to the wages he she was drawing prior to the termination of service. This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person who makes a positive averments about its existence. It is always easier to prove a positive fact than to prove a negative fact. Therefore once the employee shows that he was not employed the onus lies on the employer to specifically plead and prove that the employee was gainfully employed and was getting the same or substantially similar emoluments. iv) The cases in which the Labour Court Industrial Tribunal exercises power Under Section 11 A of the Industrial Disputes Act 1947 and finds that even though the enquiry held against the employee workman is consistent with the rules of natural justice and or certified standing orders if any but holds that the punishment was disproportionate to the misconduct found proved then it will have the discretion not to award full back wages. However if the Labour Court Industrial Tribunal finds that the employee or workman is not at all guilty of any misconduct or that the employer had foisted a false charge then there will be ample justification for award of full back wages. v) The cases in which the competent Court or Tribunal finds that the employer has acted in gross violation of the statutory provisions and or the principles of natural justice or is guilty of victimizing the employee or workman then the concerned Court or Tribunal will be fully justified in directing payment of full back wages. In such cases the superior Courts should not exercise power under Article 226 or 136 of the Constitution and interfere with the award passed by W.P.(C) 2359 2020 to pay the employer and sufferer the Labour Court etc. merely because there is a possibility of forming a different opinion on the entitlement of the employee workman to get full back wages or the employer s obligation to pay the same. The Courts must always be kept in view that in the cases of wrongful illegal termination of service the employee workman and there is no justification to give premium to the employer of his wrongdoings by relieving him of the burden employee workman his dues in the form of full back vi) In a number of cases the superior Courts have interfered with the award of the primary adjudicatory authority on the premise that finalization of litigation has taken long time ignoring that in majority of cases the parties are not responsible for such delays. Lack of infrastructure and manpower is the principal cause for delay in the disposal of cases. For this the litigants cannot be blamed or penalised. It would amount to grave injustice to an employee or workman if he is denied back wages simply because there is long lapse of time between the termination of his service and finality given to the order of reinstatement. The Courts should bear in mind that in most of these cases the employer is in an advantageous position vis à vis the employee or workman. He can avail the services of best legal brain for prolonging the agony of the sufferer i.e. the employee or workman who can ill afford the luxury of spending money on a lawyer with certain amount of fame. Therefore in such cases it would be prudent to adopt the course suggested in Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works Private LimitedThe observation made in J.K. Synthetics Ltd. v. K.P. Agrawal that on reinstatement employee workman cannot claim continuity of service as of right is contrary to the ratio of the judgments of W.P.(C) 2359 2020 three Judge Benches referred to hereinabove and cannot be treated as good law. This part of the the very concept of reinstatement of an is also against On the other hand Ms. Romila Joshi ld. Counsel appearing for the Management submits that the Petitioner Workman had received various letters showing that she was under performing and the said letters were placed on record before the Labour Court. However the same have been ignored by simply stating that no specific incident of indiscipline and misconduct was pointed out by the Management. She emphasises the fact that the letters were written way back in 2009 even before the Petitioner’s alleged miscarriage is stated to have taken place for which no medical records have been filed. Thus it is wrong to suggest that the Management had a grievance against the Petitioner only due to her absence from work at the time of her miscarriage. In fact the performance of the Petitioner was not satisfactory which is evident from the letters dated 1st April 2009 24th August 2009 20th October 2009 3rd December 2009 and 1st April 2010. In this letter the grade and the compensation package qua the Petitioner was restructured and it was clearly intimated to her that her performance was not satisfactory. On the basis of these letters which went on to be addressed to the Petitioner till the years 2012 2014 the Management claims that the services of the Petitioner were not satisfactory and the termination of her services was legal. 7. Ms. Joshi ld. Counsel further argues that in every case where the termination of service is held to be illegal it is not necessary that reinstatement in service has to be granted automatically. Reliance is placed W.P.(C) 2359 2020 upon the judgement of the Supreme Court in Municipal Council Sujanpur v. Surinder Kumaras also the judgment of the Delhi High Court in Vinod Kumar and Ors. v. Salwan Pubic School & Ors.of the Industrial Disputes Act 1947. Hence the impugned Award deserves no interference. Analysis & Findings: Heard ld. Counsels for the parties. Admittedly there is enormous Respondent Management. The Petitioner was terminated way back in the year 2014 and by that time she had rendered six years of service. Even if the period between the years 2008 to 2012 is considered she had rendered uninterrupted service to the Management for a period of four years. A perusal of the record shows that sometime during the year 2012 due to various reasons which need not be gone into in the present petition the Petitioner had absented herself from work and the first round of dispute had taken place between the Management and the Petitioner. Thereafter she was then reinstated with the Management and continued to work with the Management till 2014. However in respect of this period a large number of letters have been placed on record by the Management which purportedly allege that the performance of the Petitioner was not satisfactory. 10. After perusing the evidence which was led before it the labour court gave the following findings on each of the issues: Issue No.1 In respect of the question as to whether the Petitioner was a Workman under W.P.(C) 2359 2020 Issue No.2 Section 2(s) of the Industrial Disputes Act 1947 the Labour Court held the Petitioner to be a Workman as defined under the said provision. Thus Issue No.1 was decided in favour of the Petitioner and against the Management. In respect of the issue as to the performance of the Petitioner not being up to the mark and the warning letters which were served upon her for improving her performance the Labour Court came to the conclusion that the Management failed to establish that the Petitioner was under performing. It appeared to the labour court that the intention of the Management was to somehow get rid of the Petitioner. Thus Issue No.2 was decided in favour of the Petitioner and against the Management. Issue No.3 In respect of the issue as to whether she was absenting herself from quality improvement training sessions wrongfully and was guilty of indiscipline and misconduct the Labour Court held that the Management could not establish the same. Further the Petitioner had a valid reason not to attend the quality improvement training sessions as she had an infant daughter. Thus Issue No.3 was decided in favour of the Petitioner and against the Management. Issue No.4 In respect of the issue as to the Petitioner’s unprofessional and callous attitude in her interaction with her colleagues and customers the Labour Court held that the Management did not lead any evidence of customers or colleagues to establish the same. Thus Issue No.4 was decided in favour of the Petitioner and against the Management. Issue No.5 In respect of the allegations raised by the Management that the Petitioner W.P.(C) 2359 2020 had written false and frivolous letters making baseless allegations against the Management after examining some of the said letters on record the Labour Court came to the conclusion that insofar as supply of PCs and the software is concerned it was clear that the Petitioner was not raising any false or frivolous allegations. Thus Issue No.5 was decided in favour of the Petitioner and against the Management. Issue Nos. 6 and 7 These two issues were taken up together. In respect of these two issues the Management relied upon various letters stated to be written by them to the Petitioner. The Petitioner denied the receipt of the said letters. However the Labour Court held that the said letters were received by the Petitioner inasmuch as it was sent properly and the proof of dispatch was also placed on record. Thus these two issues were disposed of in the above terms. Issue No.8 On the question of illegal termination which was considered as Issue No.8 the Labour Court holds that after she was taken back in 2012 various communications were addressed to her. However there was no specific incident of insubordination or unsatisfactory performance which was pointed out by the Management. No evidence of colleagues or customers was produced to establish the said allegations. Thus Issue No.8 was decided in favour of the Petitioner and against the Management. The Labour Court’s conclusion on this issue is crucial and is set out below: “Issue no. 8. Whether the services of the workman were terminated by the management illegally and unjustifiably as claimed by the workman O.P.W. The onus to prove this issue was upon the claimant worklady. From the pleadings as well as the W.P.(C) 2359 2020 evidence adduced by the parties it is an admitted position on record that the services of the claimant were dispensed with by the management earlier also in the year 2012 when she had returned back for her duties in the month of August 2012 after availing medical leaves and thereafter when she had filed the case before the Labour Commissioner then only the management had taken her back on job. It shall be interesting to see that after taking her back on job frequency of management s issuing her so called warning letters asking the claimant to improve her quality and quantity of performance had increased enormously. It shall be further pertinent to note here that in none of the aforesaid communication as placed on record neither any specific incident of her performance in discharge of her official duties or the manner and mode of her callous attitude in discharge of her duties was mentioned or explained except one incident of her leaving a caller online or that of making a comment about one of the deceased customers. claimant s However in context of these incidents as well neither any customer nor any co employee of the claimant was examined by the management to prove the same on record even by preponderance of Furthermore though management had talked about the conduct of quality improvement training sessions for the claimant and claimant had also admitted about attending in her communication Mark B. However no performance communicated to her nor it was placed on record in in her the present case performance. to show any decline claimant was those sessions report of For a prudent mind it is not very difficult to W.P.(C) 2359 2020 understand the plight of an employee who had been taken back on the job by the management under certain compulsions and the anxiety of the management in getting rid of such an employee at the earliest opportunity available to it. services of Although the management could not be held to have indulged into any illegal act while dispensing the claimant however straightaway dispensing with her services without even chargesheeting her or conducting or holding any inquiry against her for her alleged misconduct and gross insubordination could not be held to be justified either. Therefore this issue is answered in affirmative while holding the termination of the services of the claimant by to be unjustified amounting to her retrenchment and decided in favour of the claimant and against the management.” the management Issue No.9 On this issue as to whether the Petitioner is entitled to the relief as claimed the Labour Court arrived at the conclusion that both the parties are extremely animus towards each other. It would not be in the fitness of things to allow the reinstatement in service as they do not enjoy a good relationship. Considering the bitterness in the relationship between the parties Issue No.9 was decided in favour of the Petitioner and against the Management. However instead of reinstatement in service the Workman was held to be entitled to compensation as provided under Section 25F of the Industrial Disputes Act 1947. Relief awarded by the Labour Court: 11. Considering the facts and circumstances of the case the Labour Court found it appropriate to grant relief to the Petitioner Workman in the W.P.(C) 2359 2020 following manner: “In view of my findings to the above issues it is categorically clear that the claimant had joined the services of the management on 13.08.2008 and had continued to work till 30.12.2014 because once the management had taken her back in its employment in the year 2012 that would have amounted to continued and uninterrupted service of the claimant with the management. As such the claimant was entitled to compensation under Section 25(F) for her services rendered for a period of 6 years which fact the management had also recognized in the present case by paying her an amount of Rs. 26 180 towards her favour of Therefore an award for the following reliefs is passed management: the claimant and against 1. an amount of Rs. 13 100 is awarded in favour of the claimant for her one month s notice pay 2. the gratuity for the period of six years calculated at the rate of three month s salary after deducting the amount already paid by the management amounting to Rs. 13 120 is also awarded in favour of the claimant3. the retrenchment compensation @ 15 days average salary for each completed year of continuous service amounting Rs. 39 300 is also awarded in favour of the claimant 4. compensation towards incentive overtime and bonus as management had failed to prove her under performance on record for W.P.(C) 2359 2020 the relevant period amounting to Rs. 50 000 is also awarded. In favour of the claimant Accordingly an award the amount of Rs.1 02 420 is passed in favour of the claimant and against the management and management is directed to pay the above said amount to the claimant within 30 days of publication of this award failing which the above said amount shall also be carrying an interest @ 8 percent per annum till the date of its realization. Statement of claim as filed by the claimant is allowed and disposed of accordingly. Copy of the award be sent to the Labour Commissioner for publication. Case file be consigned to record room.” 12. The Management has honoured the impugned Award dated 15th October 2019 and has admittedly paid the entire awarded sum. The Petitioner however has preferred the present petition challenging the relief which was granted by the Labour Court. From the findings discussed above the labour Court has held that the termination of the Petitioner’s services was illegal and there was a concerted effort made to somehow ensure that she can be removed from service. This finding of the Labour Court has been clearly held in answer to Issue No.8 and is not under challenge. Thus the illegality of the termination not being under challenge the only question which this Court is primarily considering is whether the compensation awarded to the Petitioner is just and reasonable or whether the Petitioner is entitled to the relief of reinstatement in service with back wages as sought in the claim petition. 13. The judgments in Municipal Council Sujanpuras also Vijay Kumarcited by the Management clearly hold that reinstatement in service is not automatic whenever the termination of service is held to be W.P.(C) 2359 2020 illegal. In Deepali Gundu Surwase the Supreme Court observed that in cases of wrongful termination of service reinstatement with continuity of service and back wages is the normal rule. The question of back wages however has to be considered depending on the length of service nature of misconduct etc. 14. However in its recent decisions the Supreme Court has held that reinstatement in service need not be granted in all cases of illegal termination of service and reasonable compensation in lieu of reinstatement may be granted by the Court depending upon the facts and circumstances of each case. In Allahabad Bank and Ors. v. Krishan Pal Singh No. 19648 2019 decided on 20th September 2021) held as under: the pendency of “8. The directions issued by the High Court of Allahabad for reinstatement were stayed by this Court on 23.08.2019. During proceedings the respondent workman had attained age of superannuation. Though there was strong suspicion there was no acceptable evidence on record for dismissal of the workman. However as the workman has worked only for a period of about six years and he has already attained the age of superannuation it is a fit case for modification of the relief granted by the High Court. The reinstatement with full back wages is not automatic in every case where termination dismissal is found to be not in accordance with procedure prescribed under law. Considering that the respondent was in effective service of the Bank only for about six years and he is out of service since 1991 and in the meantime respondent had attained age of superannuation we deem it appropriate that ends of justice would be met by awarding lump sum monetary compensation. We W.P.(C) 2359 2020 accordingly direct payment of lump sum compensation of Rs.15 lakhs to the respondent within a period of eight weeks from today. Failing to pay the same within the aforesaid period the respondent is entitled for interest @ 6% per annum till payment.” 16. Thus the Supreme Court has clearly recognised the fact that reinstatement is not an automatic consequence of wrongful termination especially when the Workman has during the pendency of litigation not performed any services with the Management. The Supreme Court has accordingly awarded lump sum compensation in lieu of reinstatement. 17. Even in Ranbir Singh v. Executive Eng. P.W.D. wherein it was observed as under: “6. .…In other words we find that reinstatement cannot be automatic and the transgression of Section 25F being established suitable compensation would be the appropriate remedy. 7. In such circumstance noticing that though the appellant was reinstated after the award of the Labour Court in 2006 the appellant has not been working since 2009 following the impugned order and also taking note of the fact that likelihood employed in all the appellant was otherwise also the interest of justice would be best subserved with modifying the impugned order and directing that in place of Rs. 25000 as lumpsum compensation appellant be paid Rs.3.25 lakhsas compensation consideration also the fact that the appellant had already been paid Rs. 25000 as compensation.” 18. Similar is the view of the Supreme Court in Ram Manohar Lohia Joint Hospital and Ors. v. Munna Prasad Saini and Ors. 2359 2020 LLR 681]. 4400] as also in Madhya Bharat Gramin Bank v. Panchamlal Yadav2359 2020 case to award a further compensation of Rs.1 lakh to the Petitioner along with Rs.50 000 as litigation expenses. 22. Let the said amount of Rs. 1 50 000 be paid by Respondent Management to the Petitioner Workman within eight weeks failing which the said amount would be payable along simple interest at 7% per annum. 23. With the above observations the present petition along with all pending applications is disposed of. The impugned Award dated 15th October 2019 stands modified in the above terms. JANUARY 20 2022 corrected & released on 24th January 2022) PRATHIBA M. SINGH J W.P.(C) 2359 2020 

Summary: Reinstatement with full back wages is not an automatic rule in every case where termination/ dismissal is found to be not in accordance with procedure prescribed under law. Reinstatement is not an automatic consequence of wrongful termination, especially when the Workman has, during the pendency of litigation, not performed any services with the Management. In other words, since, reinstatement cannot be automatic, and if the transgression of Section 25F is established, then suitable compensation would be the appropriate remedy. These were stated by High Court of Delhi consisting, Justice Prathiba M. Singh in the case of Ms. Vandana vs. M/S HBL Globel Pvt. Ltd. [W.P.(C) 2359/2020] on 20.01.2022. The facts of the case are that the Petitioner was employed as a Tele-caller with the Respondent Management. Till 2012, she had rendered her services regularly. However, due to medical issues arising out of miscarriage which she is stated to have undergone in June, 2012, she had remained absent from work. This resulted in the Management terminating her services. However, upon filing a complaint with the Labour Commissioner, she was taken back into service. It was the case of the Petitioner that post her termination in 2012, when she joined back, the Management started sending various warning letters to her, and she was finally terminated on 30th December, 2014. The said termination was challenged by the Petitioner before the Labour Court, wherein she prayed for reinstatement with continuity of service and full back wages along with all consequential benefits. The termination was held to be illegal, however, only compensation was awarded in lieu of reinstatement in service. The Management has paid the sum awarded. But the Petitioner has challenged the award and prays that she ought to be reinstated. The Counsel for the petitioner submitted that the Labour Court completely erred in not granting reinstatement in service along with full back wages. She submitted that the conclusion of the Labour Court clearly shows that the petitioner was victimized and harassed unnecessarily by the Management. Since there as was no specific allegation of misbehaviour or insubordination and the termination of service was held to be illegal reinstatement with full wages ought to be granted. The Counsel for the respondent submitted that the Petitioner had received various letters showing that she was under-performing, and the said letters were placed on record before the Labour Court. However, the same have been ignored by simply stating that no specific incident of indiscipline and misconduct was pointed out by the Management. She emphasises the fact that the letters were written way back in 2009. Thus, it is wrong to suggest that the Management had a grievance against the Petitioner, only due to her absence from work at the time of her miscarriage. It was further submitted that in every case where the termination of service has been held to be illegal, reinstatement of service was not granted automatically. The High Court of Delhi held that there was no specific incident of insubordination or unsatisfactory performance which was pointed out by the Management. No evidence of colleagues or customers was produced to establish the said allegations. In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule. The question of back wages, however, has to be considered depending on the length of service, nature of misconduct, etc. Nevertheless, the reinstatement with full back wages is not automatic in every case, where termination / dismissal is found to be not in accordance with procedure prescribed under law. Reinstatement is not an automatic consequence of wrongful termination, especially when the Workman has, during the pendency of litigation, not performed any services with the Management. In other words, since, reinstatement cannot be automatic, and if the transgression of Section 25F is established, then suitable compensation would be the appropriate remedy. Therefore, the Court, in the present found it reasonable to grant a further compensation of Rs.1 lakh to the petitioner. With the above observations, the present petition was disposed of.