Read Order: M/s Shahi Exports Private Limited v. Presiding Officer, Labour Court-1, Faridabad and Another

Monika Rahar

Chandigarh, June 8, 2022: The Punjab and Haryana High Court has recently held that if termination of an employee is found illegal by the Labour Court, then the relief to be granted to a workman, is an exclusive discretion of the Labour Court. In order to make the discretion of the Labour Court lean in his favour, the workman may plead and lead something in evidence to show that he was not gainfully employed in the interregnum.

However, Justice Rajbir Sehrawat added that the mere fact that he had not so pleaded, would not stop the Labour Court from granting any relief of back wages and that even in absence of any such pleading or proof, the Labour Court is fully entitled to grant any relief as deemed it appropriate by it in the facts and circumstances of the case.

“There is no such requirement under any other provision of Industrial Disputes Act regarding any pleading to that effect. Moreover, the respondent-workman cannot even claim any back wages as a matter of right”, held the Bench while adding, 

“… the respondent-workman cannot even claim any back wages as a matter of right”

The Court was dealing with a petition under Articles 226/227 of the Constitution of India for the issuance of a writ in the nature of certiorari for quashing the award passed by Presiding Officer, Labour Court-1, Faridabad. 

The workman worked with the petitioner-employer from March 2000 and his services were terminated in 2005. Aggrieved, the workman raised an industrial dispute. The conciliation failed and the appropriate government referred the dispute to the Labour Court, which was answered against the petitioner-employer and in favour of the respondent-workman. It was against that award that the present petition was filed by the petitioner-employer. 

It was the case of the counsel for the petitioner-employer that the respondent-workman, who joined the service in 2000, voluntarily resigned from his service in 2005 and therefore, the termination of service of the respondent was not covered in the definition of ‘retrenchment’ as defined by Section 2(oo) of the Industrial Disputes Act, 1947 (the Act). 

Further, it was the Counsel’s argument that the Labour Court held the termination of service to be the retrenchment and passed the award in favour of the respondent-workman on a wrong presumption created by the Labour Court on the ground that the respondent-workman was not confronted with the resignation letter during his cross-examination.

It was further submitted that the said document, in fact, was exhibited before the Labour Court and it had the thumb impression and signatures of the respondent-workman, therefore, the Labour Court should have accepted the version put up by the petitioner-employer and the reference should have been answered against the respondent-workman.

Lastly, the Counsel closed his case by making reference to the Supreme Court and the Delhi High Court to contend that the Labour Court wrongly granted full back wages with continuity of service; despite the fact that the petitioner did not even assert in the claim statement that he was not gainfully employed after the date of submission of the resignation. Thus, the Counsel contended that the respondent-workman was not entitled to any back wages. 

On the contrary, supporting the decision of the Labour Court, the Counsel to the respondent-state argued that the workman did not resign from his service rather he was wrongfully removed from it. Regarding the question of the resignation, the Counsel argued that the respondent-workman was not confronted with any such letter during his termination and therefore, the said document could not be relied upon by the petitioner-employer. 

On the relief granted by the Labour Court, the counsel submitted that although the relief of reinstatement with back-wages was rightly granted to the workman, however, at this stage the workman would be satisfied if he was granted an appropriate amount as the compensation, in lieu of reinstatement and the back-wages. 

At the very outset, the Court observed that it did not find force in the case advanced by the Counsel for the petitioner-employer. In furtherance of this observation, the Court held that once, the respondent-workman had completed 240 days of continuous service during the twelve calendar months preceding the date of severance of status of the employer-employee relationship, the employer comes under statutory obligation to comply with the provision of Section 25(f) of the Act and should have paid the consequent compensation and other benefits available to the respondent-workman.

Further, the Court did not find any illegality in the conclusion arrived at by the Labour Court that the factum of the resignation of the respondent-workman was not proved on record. 

Next, on the aspect of the claim of payback, the Court opined that the pleading and filing of affidavit qua not being gainfully employed is an exclusive concept applicable to the claim raised under Section 17-B of the Act, as statutorily provided and that there was no such requirement under any other provision of Industrial Disputes Act regarding any pleading to that effect.

Moreover, the Court added that the respondent-workman cannot even claim any back wages as a matter of right.

Additionally, the Court added that it was held in catena of judgments that in case of termination being found illegal by the Labour Court, the relief to be granted to a workman, is an exclusive discretion of the Labour Court. Also, Justice Sehrawat asserted that to make the discretion of the Labour Court lean in his favour, the workman may plead and lead something in evidence to show that he was not gainfully employed in the interregnum, however, the mere fact that he had not so pleaded, would not stop the Labour Court from granting any relief of back wages.  

“Even in absence of any such pleading or proof, the Labour Court is fully entitled to grant any relief as is deemed appropriate by it; in the facts and circumstances of the case”, Justice Sehrawat added.   

In view of the above, since the award passed by the Labour Court was found to be valid and the respondent-workman expressed his desire to get compensation, the Court found it appropriate to mould the relief as granted by the Labour Court to the grant of compensation instead of reinstatement with full back wages. 

The respondent-workman was held entitled to a lump sum compensation of Rs. 4.00 Lakh, keeping in view the undisputed fact that he rendered about five years of service with the petitioner-employer. 

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