SC on workmen’s Right to Back Wages.

In the matter of The Management of Regional Chief Engineer P.H.E.D. Ranchi v. Their Workmen Rep. by District Secretary (Copy of Judgement)on 20.09.2018, the Hon’ble Supreme Court expressed that:

The back wages could not be awarded by the Court as of right to the workman consequent upon setting aside of his dismissal/termination order. In other words, a workman has no right to claim back wages from his employer as of right only because the Court has set aside his dismissal order in his favour and directed his reinstatement in service.  (Para 11)

It is necessary for the workman in such cases to plead and prove with the aid of evidence that after his dismissal from the service, he was not gainfully employed anywhere and had no earning to maintain himself or/and his family. The employer is also entitled to prove it otherwise against the employee, namely, that the employee was gainfully employed during the relevant period and hence not entitled to claim any back wages. Initial burden is, however, on the employee. (Para 12)

For more enlightenment in this regard, the following judgements of the Hon’ble Supreme may be referred to:

  • (1979) 2 SCC 80Hindustan Tin Works Pvt. Ltd.The Employees of Hindustan Tin Works Pvt. Ltd. and Ors.

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 consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved. Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness.That is the normal rule. Any other view would be a premium on the unwarranted litigating activity of the employer. If the employer terminates the service illegally and the termination is motivated as in this case, viz., to resist the workman’s demand for revision of wages the termination may well amount to unfair labour practice. In such circumstances reinstatement being the normal rule, it should be followed with full back wages. (Para 9)

  • (2001) 2 SCC 54 G.I. of M.E. and Research, Chandigarh v. Raj Kumar

Payment of back wages having a discretionary element involved in it has to be dealt with, in the facts and circumstances of each case and no straightjacket formula can be evolved, though, however, there is statutory sanction to direct payment of back wages in its entirety. (Para 12)

  • (2005) 5 SCC 591 G.M. Haryana Roadways vs. Rudhan Singh

There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of provisions of the Industrial Disputes Act, 1947,  entire back wages should be awarded. (Para 8)

  • (2006)1SCC479P. State Brassware Corpn. Ltd. and Ors. v. Udai Narain Pandey

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 court 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.(Para 12)

  • (2007) 2 SCC 433 K. Synthetics Ltd. vs. K.P. Agrawal & Anr.

But the manner in which ‘back-wages’ is viewed, has undergone a significant change in the last two decades. They are no longer considered to be an automatic or natural consequence of reinstatement. (Para 15)

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. (Para 19)

  • (2009) 15 SCC 327Jagbir Singh Haryana State Agriculture Marketing Board and Ors.

It is true that earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in long line of cases, this 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 to the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice. (Para 7)

  • (2009) 9 SCC 601 Metropolitan Transport Corporation vs. v. Venkatesan

First, it may be noticed that in seventies and eighties, direction for reinstatement and payment of full back wages on dismissal order having been found invalid would ordinarily follow as a matter of course. But there is change in legal approach now. (Para 11)

-Tushar Kaushik

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