Case Note & Summary
The Petitioner, Paper Machine Wire Industries, challenged the order dated 13-9-2011 passed by the Labour Court, Nasik, directing payment of full back wages and continuity of service to the Respondent workman, Mr. Athin Patra, from 30-11-2001. The dispute arose from the termination of the workman on grounds of alleged inefficiency due to weak eyesight. A domestic inquiry was conducted, and the Industrial Court initially held the inquiry fair but the findings perverse. The employer was not allowed to lead evidence, leading to a writ petition (W.P. No.7976/2009) which was allowed, remanding the matter for de novo consideration with an opportunity to lead evidence. On remand, the employer could not produce witnesses due to passage of time and proceeded on the basis of inquiry proceedings. The Labour Court then awarded full back wages and continuity, holding the termination illegal. The High Court examined the issue of back wages, noting that the Labour Court erroneously treated back wages as automatic. The Court held that the workman must plead and prove that he was not gainfully employed. Since the workman did not lead any evidence on this aspect, the Court reduced the back wages to 50% of the full back wages, while upholding the finding of illegal termination and continuity of service. The petition was partly allowed, modifying the award to 50% back wages.
Headnote
A) Industrial Dispute - Back Wages - Automatic Entitlement - Back wages are not an automatic consequence of reinstatement; the workman must plead and prove that he was not gainfully employed during the period of unemployment. The Labour Court erred in granting full back wages without such proof. (Paras 7-9)
B) Industrial Dispute - Domestic Inquiry - Employer's Right to Lead Evidence - When the Labour Court finds the inquiry findings perverse, the employer must be given an opportunity to lead evidence to justify the termination. Failure to do so vitiates the award. (Para 4)
C) Industrial Dispute - Remand - De Novo Consideration - On remand, the employer could not lead evidence due to passage of time; the Labour Court must consider the inquiry proceedings on record and decide the matter afresh. (Para 4)
D) Industrial Dispute - Back Wages - Quantum - In the absence of evidence of gainful employment, the workman is entitled to 50% back wages instead of full back wages, balancing the equities. (Para 9)
Issue of Consideration
Whether the Labour Court was justified in awarding full back wages to the workman upon a finding of illegal termination, and what principles govern the grant of back wages in such cases.
Final Decision
The High Court partly allowed the petition. The impugned award of the Labour Court was modified to the extent that the Respondent workman would be entitled to 50% of the back wages instead of full back wages. The rest of the award regarding continuity of service was upheld.
Law Points
- Back wages not automatic upon reinstatement
- Workman's burden to prove non-employment
- Employer's right to lead evidence in domestic inquiry
- Remand for de novo consideration
Case Details
2013 LawText (BOM) (01) 40
Writ Petition No.11201 of 2011
Ms. N. R. Patankar with Mr. V. P. Sawant for the Petitioner, Mr. Bennet D'Costa for the Respondent
Paper Machine Wire Industries
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Nature of Litigation
Writ Petition under Articles 226 and 227 of the Constitution of India challenging the Labour Court's order granting full back wages and continuity of service to the workman.
Remedy Sought
The Petitioner employer sought to set aside the Labour Court's order dated 13-9-2011 directing payment of full back wages and continuity of service to the Respondent workman.
Filing Reason
The Labour Court awarded full back wages without considering that the workman had not pleaded or proved that he was not gainfully employed during the period of unemployment.
Previous Decisions
The Industrial Court initially held the inquiry fair but findings perverse; the employer was not allowed to lead evidence. This Court in W.P. No.7976/2009 set aside the award and remanded the matter for de novo consideration with opportunity to lead evidence. On remand, the employer could not lead evidence due to passage of time.
Issues
Whether the Labour Court was justified in awarding full back wages to the workman upon a finding of illegal termination?
What principles govern the grant of back wages in cases of illegal termination?
Submissions/Arguments
Petitioner argued that the Labour Court erred in granting full back wages without the workman pleading or proving that he was not gainfully employed.
Respondent argued that back wages are incidental to reinstatement and since termination was illegal, full back wages must follow.
Ratio Decidendi
Back wages are not an automatic consequence of reinstatement. The workman must plead and prove that he was not gainfully employed during the period of unemployment. In the absence of such proof, the court may award a reduced percentage of back wages, balancing the equities.
Judgment Excerpts
The Labour Court has awarded the said back wages and the continuity of services on the ground that they are incidental to the right of reinstatement...
The Apex Court has time and again held that back wages are not an automatic consequence of reinstatement.
The workman has to plead and prove that he was not gainfully employed during the period of unemployment.
Procedural History
The workman raised a demand regarding wrongful termination. The matter was referred to the Industrial Court. A preliminary issue on fairness of inquiry was framed. The Industrial Court held inquiry fair but findings perverse. The employer was not allowed to lead evidence. The employer filed W.P. No.7976/2009, which was allowed, remanding the matter for de novo consideration with opportunity to lead evidence. On remand, the employer could not lead evidence due to passage of time. The Labour Court passed the impugned award on 13-9-2011 granting full back wages and continuity. The employer filed the present writ petition.
Acts & Sections
- Constitution of India: Articles 226, 227
- Industrial Disputes Act, 1947:
