TMI Blog2007 (2) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of dismissal was not warranted and therefore, imposed a lesser punishment of withholding the two annual increments. In such circumstances, award of back wages was neither automatic nor consequential. In fact, back wages was not warranted at all. 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 interfered with the punishment only on the ground that the employee had worked for four years without giving room for any such complaint. It ignored the seriousness of the misconduct. That was not warranted. The consistent view of this Court is that in the absence of a finding that the punishment was shockingly disproportionate to the gravity of the charge established, the Labour Court should not interfere with the punishment. We, therefore, hold that the punishment of dismissal did not call for interference. The contention of employer is that the first respondent did not report back to service, even though it was ready to reinstate him subject to final decision. Be that as it may. The mere fact that the first respondent was not reinstated in pursuance of the award o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 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 not amount to habitual negligence or carelessness. Thus in effect, the findings in regard to three charges were (i) not proved, (ii) proved, and (iii) entitled to benefit of doubt. On the said findings, it made an award dated 8.3.1983, the operative part of which reads thus : "The concerned workman has been working in the company for four years and there was no such complaint against him in the past, hence instead of the punishment of termination of service as a result of Ex. E-2 (dated 17.2.1977) being proved against him, I deem it proper that the increments of two years of the concerned workman should be stopped as punishment." The said award was published on 27.4.1983 and became enforceable from 27.5.1983. 2.4) On 4.5.1983, first respondent filed an application under section 6(6) of the U.P. Industrial Disputes Act, 1947 ('Act' for short) seeking corrections of the award, stating that the workman was entitled to reinstatement with continuity of service and full back-wages from 6.4.1977. The appellant resist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 petitioner, who willfully violates lawful orders is not entitled to equitable discretion under Article 226 of the Constitution of India." 3. The said order of the learned Single Judge, is challenged in this appeal by special leave. On the contentions urged, the following questions arise for consideration : (i) Whether a provision enabling a court to correct any clerical or arithmetical mistake, or error in the order arising from any accidental slip or omission, empowers the Labour Court to grant a relief of back- wages, which was not granted in the original award. (ii) When the punishment of dismissal is substituted by a lesser punishment (stoppage of increments for two years), and consequently, the employee is directed to be reinstated, whether the employee is entitled to back-wages from the date of termination to date of reinstatement. (iii) Whether on the facts and circumstances, the Labour Court was justified in interfering with the punishment of dismissal. (iv) If the employer was otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 omitted to answer the second question referred to it. The Labour Court allowed the application and amended the award and directed the employer to place the workmen in their respective grades from 1.1.1960. The said amendment to the award was challenged on the ground that it was not a consequence of any clerical or arithmetic error or accidental slip/omission. It was also contended that power under section 6(6) can only be exercised before the date on which the award became enforceable and not thereafter. This Court negatived the said contentions. This Court held that the reference comprised two questions, the first relating to fitment, and the second relating to the date from which such fitment was to have effect; that the award as originally made answered the first question but did not decide the second question; that as the reference was in respect of two questions, the Labour Court was bound to answer the second question also; and the failure to do so was an error in the award due to an accid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on an application under section 6(6), the Labour Court neither upset nor altered any of the findings recorded in its original award, but only answered the second part of the reference, which had earlier been omitted. Therefore, this Court held that such correction was permissible. On the other hand in Imtiaz Hussain, the Labour Court, in its award had specifically refused back-wages to the employee on the ground that his name was not in the list of permanent employees. But on an application under section 6(6), it re-examined the issue and held that though his name was not in the list of permanent employees, he was entitled to payment of salary and allowances from the date of termination till the date of reinstatement with continuity of service. In Tulsipur Sugar Company, there was a correction of an omission which fell within section 6(6). In Imtiaz Hussain, there was a review of the original order which of course, was impermissible. We may now summarize the scope of section 6(6) of the Act t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld 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. That was challenged by the employer. This Court granted leave to appeal, only in regard to the question of back-wages, as it did not consider it necessary to interfere with the direction for reinstatement. Ultimately, while reducing the back-wages to 75%, this Court observed as follows : "If thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer. Speaking realistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted. More so in our system where the law's proverbial delay has become stupefying. If after such a protracted time and energy consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 has the discretion to deny full back-wages. In the concurring judgment Pathak J. (as he then was), held as follows : "Ordinarily, a workman who has been retrenched in contravention of the law is entitled to reinstatement with full back wages and that principle yields only where the justice of the case in the light of the particular facts indicates the desirability of a different relief. It has not been shown to us on behalf of the respondent why the ordinary rule should not be applied." 14. Mohan Lal (supra) also related to retrenchment not in consonance with section 25-F of ID Act. This Court held : "As pre-condition for a valid retrenchment has not been satisfied the termination of service is ab initio void, invalid and inoperative. He must, therefore, be deemed to be in continuous service.. If the termination of service is ab initio void and inoperative, there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Act.. While granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages cannot therefore be the natural consequence. In General Manager, Haryana Roadways vs. Rudhan Singh [2005 (5) SCC 591], this Court observed : "There is no rule of thumb that in every case where the Industrial Tribuanl gives a finding that the termination of service was in violation of Section 25-F of the Act, entire back wages should be awarded. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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 the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualized while granting consequential benefits automatically. Whenever courts or Tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether 'continuity of service' and/or 'consequential benefits' should also be directed. We may in this behalf refer to the decisions of this Court in A.P.S.R.T.C. v. S. Narasa Goud [2003 (2) SCC 212], A.P.S.R.T.C. v. Abdul Kareem [2005 (6) SCC 36] and R.S.R.T.C. v. Shyam Bihari Lal Gupta [2005 (7) SCC 406]. 18. Coming back to back-wages, even if the court finds it necessary to award back-wages, the question will be whether back-wages should be awarded fully or only partially (and if so the percentage). That depends upon the facts and circumstances of each case. Any income received by the employee during the relevant period on account of alternative employment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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 affirmed and only the punishment is interfered with (as contrasted from cases where termination is held to be illegal or void) is that there is no automatic reinstatement; and if reinstatement is directed, it is not automatically with retrospective effect from the date of termination. Therefore, where reinstatement is a consequence of imposition of a lesser punishment, neither back-wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. In cases where the misconduct is held to be proved, and reinstatement is itself a consequential benefit arising from imposition of a lesser punishment, award of back wages for the period when the employee has not worked, may amount to rewarding the delinquent employee and punishing the employer for taking action for the misconduct committed by the employee. That should be avoided. Similarly, in such cases, even where continuity of service is directed, it should onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 discipline at the workplace/industrial undertakings received a setback. In view of the change in economic policy of the country, it may not now be proper to allow the employees to break the discipline with impunity." 24. In Mahindra and Mahindra Ltd. vs. N. B. Narawade [2005 (3) SCC 134], this Court considered a case where a workman used abusive and filthy language against his superior officer, in the presence of his subordinates. He was terminated after conducting an inquiry. Labour Court found the punishment to be excessive and in exercise of power under section 11A of the ID Act, imposed a lesser punishment. This Court held that the misconduct cannot be termed to be an indiscipline calling for lesser punishment than termination. A similar view was taken in Orissa Cement vs. Adikand Sahu [1960 (1) LLJ 518] and New Shorrock Mills vs. Mahesh Bhai T Rao [1996 (6) SCC 590]. 25. In U.P. SRTC vs. Subhash Chandra Sharma [2000 (3) SCC 324], this Court held that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. 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 interfered with the punishment only on the ground that the employee had worked for four years without giving room for any such complaint. It ignored the seriousness of the misconduct. That was not warranted. The consistent view of this Court is that in the absence of a finding that the punishment was shockingly disproportionate to the gravity of the charge established, the Labour Court should not interfere with the punishment. We, therefore, hold that the punishment of dismissal did not call for interference. Re : Question (iv) 28. It is true that when the employer challenged the award of the labour court and sought stay of the award, the High Court only stayed the order dated 29.6.1983 in regard to the back-wages but did not stay the award dated 08.3.1983 directing reinstatement; and that if he had been reinstated in 1983, he would have served till 31.3.1991 when he attained the age of superannuation. The learned counsel for the employee made a submission b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
