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TMI Blog2007 (2) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment referred the following dispute to the Labour Court for adjudication : "Whether the termination of the services of its workman Shri Kashi Prasad (s/o Shri Lala Shyam Lal), Assistant, Accounts Department by the Employers from 6.4.1977 is proper, and/or legal ? If not, for what benefits/compensation the workman is entitled to and any other, with details." 2.3) By order dated 20.12.1980, the Labour Court held that the inquiry was not fair and proper, and permitted parties to adduce evidence. The Labour Court made its award dated 8.3.1983. The Labour Court held that the charge of insubordination and disorderly behaviour in the first charge-sheet, was not proved. The charge under the second charge-sheet, that the first respondent made false (indecent) allegations against his superior officer, and thereby violated office discipline, was held to be proved. In regard to the charge under the third charge-sheet, the Labour Court found that the employee had admitted that he had not prepared the annual accounts correctly, but gave the employee the 'benefit of doubt' by holding that the mistakes in the accounts might not have been committed knowingly or deliberately, and therefore, may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Single Judge of the High Court vide order dated 28.7.2003 dismissed the petition holding as follows : "From a perusal of the award of the labour court, it is apparent that the tenor of the order is that the workman could not be punished by resorting to termination. The spirit of the order also shows that in fact the labour court had in mind to grant back-wages to the workman, but by omission, the aforesaid mistake has crept in. The contention of the learned counsel for the petitioner cannot be accepted and in my opinion, there was an omission which could be corrected under section 6(6). Though a plea has been made that the court becomes functus officio after tendering the award, in my view, this argument has only to be stated to be rejected. Section 6(6) gives power to the labour court for making corrections in an award." Referring to the submission of learned counsel for the employee that he had not been reinstated in spite of refusal of stay, the learned Single Judge observed thus : "Learned counsel for the respondent workman has submitted that in spite of the aforesaid fact till date the petitioner has not reinstated the workman and, therefore, even equity is against him. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributed to the Judge himself. He may say something or omit to say something which he did not intend to say or omit. This is described as a slip or omission in the judgment itself. The cause for such a slip or omission may be the Judge's inadvertence or the advocate's mistake. But, however wide the said expressions are construed, they cannot countenance a re-argument on merits on questions of fact or law, or permit a party to raise new arguments which he has not advanced at the first instance." 6. Section 6(6) itself was considered in Tulsipur Sugar Company Ltd., vs. State of U.P. [1970 (1) SCR 35]. In that case, two questions were referred to Labour Court : (i) fitment of certain workmen in a new grade; and (ii) the date from which such fitment should have effect. The Labour Court made an award holding that the workmen should be fitted into certain grades and directed the employer to do so within one month after the award became enforceable. But it omitted to fix the date from which such fitment should be effected. The employer fitted the workmen in the new grades prospectively. The employees-Union applied under section 6(6) of the Act to amend the award on the ground that it had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(6) of the U.P. Industrial Disputes Act, 1947 is similar to section 152 CPC. The settled position of law is that after the passing of the judgment, decree or order, the same becomes final subject to any further avenues of remedies provided in respect of the same and the very Court or the tribunal cannot, on mere change of view, is not entitled to vary the terms of the judgments, decrees and orders earlier passed except by means of review, if statutorily provided specifically therefor and subject to the conditions or limitations provided therein. The powers under Section 152 CPC are neither to be equated with the power of review nor can be said to be akin to review or even said to clothe the Court concerned under the guise of invoking after the result of the judgment earlier rendered, in its entirety or any portion or part of it." 8. A careful reading of section 6(6) and the two decisions shows that the two decisions considered two different situations. In Tulsipur Sugar Company, this Court found that the reference to the Labour Court consisted of two parts. The award answered only the first part and had omitted to answer the second (consequential) part. While modifying the award ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amend the award. 10. But whether such modification was warranted, is a different question. The next question, therefore, is whether the facts and circumstances warrant grant of back-wages, assuming that the punishment imposed was excessive. Re : Question (ii) 11. Learned counsel for the employee relied on several decisions of this Court to contend that where the order of dismissal or removal is set aside and the employee is directed to be reinstated, full back-wages should follow as a matter of course. Reliance is placed on the decisions of this Court in Hindustan Tin Works Pvt. Ltd., vs. Employees of Hindustan Tin Works Pvt. Ltd. [1979 (2) SCC 80], Surendra Kumar Verma vs. Central Government Industrial Tribunal-cum-Labour Court, New Delhi [1981 (1) SCR 789], and Mohan Lal vs. Bharat Electronics Ltd., [1981 (3) SCC 225]. 12. Hindustan Tin Works Pvt. Ltd (supra), related to retrenchment of some workmen on the ground that the employer was suffering mounting losses. The labour court held that the real reason for retrenchment was the annoyance felt by the management when the employees refused to agree to its terms. Consequently, it directed the reinstatement with full back wages. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour." [emphasis supplied] 13. Surendra Kumar Verma (supra) related to retrenchment of several workmen in violation of section 25-F of the Industrial Disputes Act, 1947 ('ID Act' for short). This Court held that when the order of termination is set aside as being invalid and inoperative, it must ordinarily lead to reinstatement as if the order of termination was never made and that would necessarily lead to back-wages too. This Court, however, observed that there may be exceptional circumstances which may make it impossible or wholly inequitable vis-`-vis employer and workmen to direct reinstatement with full back-wages as for example, when the industry might have closed down or might be in severe financial doldrums or where the concerned employee might have secured other employment elsewhere and in such situations, the court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld as follows : "A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance." "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 courts 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 retrenched... The changes (were) brought about by the subsequent decisions of the Supreme Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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." In U.P. State Brassware Corpn. Ltd. (supra), this Court observed : "It is not in dispute that the respondent did not raise 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 Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman." 17. There is also a misconception that whenever reinstatement is directed, 'continuity of service' and 'consequential benefits' should follow, as a matter of course. The disastrous effect of granting several promotions as a 'consequential benefit' to a person who has not worked for 10 to 15 years and who does not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unishment, resulting in the reinstatement of employee. Where the power under Article 226 or section 11A of the Industrial Disputes Act (or any other similar provision) is exercised by any Court to interfere with the punishment on the ground that it is excessive and the employee deserves a lesser punishment, and a consequential direction is issued for reinstatement, the court is not holding that the employer was in the wrong or that the dismissal was illegal and invalid. The court is merely exercising its discretion to award a lesser punishment. Till such power is exercised, the dismissal is valid and in force. When the punishment is reduced by a court as being excessive, there can be either a direction for reinstatement or a direction for a nominal lump sum compensation. And if reinstatement is directed, it can be effective either prospectively from the date of such substitution of punishment (in which event, there is no continuity of service) or retrospectively, from the date on which the penalty of termination was imposed (in which event, there can be a consequential direction relating to continuity of service). What requires to be noted in cases where finding of misconduct is af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the employee. The Labour Court also relied on the decisions of this Court in Rama Kant Misra vs. State of U.P. [AIR 1982 SC 952], wherein it was held that the punishment of dismissal was excessive where the employee was found to have uttered indecent words and used abusive language and substituted it by the lesser punishment of stoppage of two annual increments. The said decision depended on its special facts and may not apply to this case. The recent trend in regard to scope of interference with punishment in matters involving discipline at the workplace has been different. We may refer to some of the recent decisions. 23. In Hombe Gowda Educational Trust v. State of Karnataka [2006 (1) SCC 430], this Court stressed the need to give importance to discipline at the workplace. This Court observed : "This Court has come a long way from its earlier viewpoints. The recent trend in the decisions of this Court seek to strike a balance between the earlier approach to the industrial relation wherein only the interest of the workmen was sought to be protected with the avowed object of fast industrial growth of the country. In several decisions of this Court it has been noticed how disci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s jurisdiction under Article 226 of the Constitution and did not correct the erroneous order of the Labour Court which, if allowed to stand, would certainly result in miscarriage of justice." 26. In Bharat Forge Co. Ltd., vs. Uttam Manohar Nakate [2005 (2) SCC 489], M.P. Electricity Board vs. Jagdish Chandra Sharma [2005 (3) SCC 401], and Regional Manager, Rajasthan State Road Corporation vs. Ghanshayam Sharma [2002 (1) LLJ 234], this Court held that power under section 11A of ID Act (or under similar provisions) cannot be used to interfere with the quantum of punishment, on irrational or extraneous factors, or on compassionate grounds. This Court also observed that though section 11A gives the jurisdiction and power to the labour court to interfere with the quantum of punishment, the discretion has to be used judiciously and not capriciously. This Court observed that harsh punishment wholly disproportionate the charge should be the criterion for interference. 27. In this case, we have already found that the charge established against the employee was a serious one. The Labour Court did not record a finding that the punishment was harsh or disproportionately excessive. It interfe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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