GRANT OF BACK WAGES IS NOT AUTOMATIC ON REINSTATEMENT.

[Mr. M. GOVINDARAJAN]

                        The employment in an organization is as per the agreement reached between the employer and employee which is not inconsistent with the provisions of labour laws.  The employer and employee are having certain obligations to fulfil the same during the course of employment.   The employer is having right to take action against the erring employee if he has violated the provisions of law and he may be punished even dismissal from service.   The employee is having right to get recourse through proper channel.  In the course of litigation the dismissal order may be upheld by the judicial authorities or set aside.  In the course of time i.e., between the date of dismissal and the order of the Court setting aside the award, if the employee is not engaged in other jobs, full back wages were allowed in earlier periods.   But this concept has been changed.   The grant of back wages is not automatic on reinstatement.   This has been analyzed with reference to decided case laws.

                        In ‘Ram Ashrey Singh V. Ram Bux Singh’ – 2003-II-LLJ-4, the Supreme Court held that a workman has no automatic entitlement to back wages since it is discretionary and has to be dealt with in accordance with the facts and circumstances of each case.  In ‘General Manager, Haryana Roadways V. Rudhan Singh’ – 2005-III-LLJ-4, the Supreme Court held that an order for payment of back wages should not be passed in a mechanical manner but, a host of factors are to be taken into consideration before passing any such order. 

                        In ‘A.P. State Road Transport and others V. Abdul Kareem’ – 2005-III-LLJ-477, the Supreme Court held that a workman is not entitled to any consequential relief on reinstatement as a matter of course unless specifically directed by forum granting reinstatement.

                        In ‘Jagbir Singh V. Haryana State Agriculture Marketing Board’ – 2009-IV-LLJ-336 the Supreme Court held that it is true that the earlier view of the Supreme Court articulated in many decisions reflected the legal position that if the termination of the employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow.  However in recent part, there has been a shift in the legal position and in a long line of cases, the Supreme Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure.   Compensation instead of reinstatement has been held to meet the ends of justice.

                        In ‘Senior Superintendent of Telegraphs (Traffic), Bhopal V. Santosh Kumar Seal and others’ – 2010-III-LLJ-600 the Supreme Court held that in the last few years it has been consistently held by the Supreme Court that the relief by way of reinstatement with back wages is not automatic even if termination of the employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of reinstatement and back wages in cases of such nature may be appropriate.

                        The Supreme Court in ‘Chairman-cum-Managing Director, Coal India Limited and others V. Ananta Saha and others’ – 2011-III-LLJ-165 held that the issue of entitlement of back wages has been considered by Supreme Court time and again and consistently held that even after punishment imposed upon the employee is quashed by the Court or Tribunal, the payment of back wages still remains discretionary. The power to grant back wages is to be exercised by the Court/Tribunal keeping in view the facts in their entirety as no strait-jacket formula can be evolved, nor a rule of universal application can be laid for such cases.  Even if the delinquent is reinstated, it would not automatically make him entitled for back wages as entitlement to get back wages.

                        In ‘Bhojabhai Dhanabahi Rabari V. State of Gujarat’ – 2012-I-LLJ-174(Guj) the appellant employer has appointed as Rojamdar  Watchman by the respondent department on a particular project.  The services of the appellant was terminated after a service from the year 1985 to 1993.  Hence the appellant raised an industrial dispute.  The Labour Court allowed the claim of the appellant and directed reinstatement of the appellant along with the back wages.  Being aggrieved with the award of Labour Court the respondent filed a writ petition before the High Court.  The High Court allowed the petition partly and the award of the Labour Court was modified to the extent that grant of full back wages quashed and rest of the award was confirmed. 

                        The appellant filed an appeal against the order of Single Judge on the ground that he was entitled to back wages as evidence was led before the Labour Court that the appellant was not gainfully employed during the period.  The High Court amazed to see how the workman or his family could survive without any employment or income.  On analyzing the various judgments of Supreme Court in this regard the High Court held that the appellant was not entitled to back wages even though relief of reinstatement has been granted to him.  At the most, the appellant could have claimed for compensation but such claim was not raised by the respondent/appellant before the Single Judge.  Therefore, in appeal, the said relief could not be granted.   The High Court dismissed the appeal of the appellant.

                        From the catena of judgments the Supreme Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F of Industrial Disputes Act although me be set aside but an award of reinstatement should not, however, be automatically passed.  The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wages, has not been found to be proper and instead compensation has been awarded.  Monetary compensation would meet the ends of justice.

                        Let us consider another judgment of Bombay High Court in this regard.   In ‘Managing Director, Shree Panchaganga Sahakari Sakar Karkhana Limited, Kohlapur and another V. Kallappa Narasappa Sangale and Others’- 2012-I-LLJ-225 (Bom) the employee was working as a wireman from December 1972.   He was charge sheeted and disciplinary proceedings were conducted against him.  Pursuance to the enquiry the services of the employee were dismissed.  The employee preferred an application before the Labour Court seeking reinstatement with continuity of service and full back wages.  The Labour Court held that the period of limitation was over and therefore dismissed the same.  The Industrial Court, on appeal, also confirmed the order of the lower authority during 1985.  The employee filed a writ petition before the High Court during 1995.  The High Court set aside the orders of the authorities below and the application was restored to file before the Labour Court.  The Court also directed that the employee would not be entitled to back wages from the period 1985 to 1995 since the employee had taken no steps to approach the court for 10 years after the Industrial Court had dismissed the appeal.

                        On remand the Labour Court held the employee had committed a misconduct by retaining the keys to the power house with him without prior sanction.  However the Labour court found that the punishment of dismissal was too harsh and therefore the employee was directed to be reinstated with continuity of service but without back wages.  On appeal, the order of the Labour Court was stayed by the Industrial Court with the condition that the Karkhana to deposit the monthly wages of the employee periodically from March 1996 while the appeal was pending.  The order of Industrial Court was carried out by the employer.  The Industrial Court on 04.10.1999 dismissed the appeals and upheld the order of the Labour Court and further directed that the salary deposited by the Karkhana should be returned.  An appeal was filed against this order.  The High Court held that the order refusing payment of back wages for the entire period as a punishment is too harsh.  The charge against the employee was that he retained the keys of the powerhouse without the knowledge of the superiors.  Admittedly the employee was a wireman and the keys of the powerhouse were with him because of his nature of work.   There is no evidence on record that there was any theft or any other act due to which the employer has been caused losses because the employee had retained the keys.   In these circumstances, the Court was of the view that the employee was wrongly deprived of his back wages.   The Court as held earlier not allowed back wages to the employee from the period 1985 to 1995.  Since the employee attained superannuation the Court directed to disburse the amount deposited by the Karkhana. 

                        Thus grant of back wages is not automatic on reinstatement.  It is on the discretion of the judicial authorities considering the facts and circumstances of the case.