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Judgment
Siddharth Mridul, J.—The present petition is directed against the Award dated 7th December, 2006 in I.D.1072/2006 whereby the Industrial Adjudicator awarded compensation of Rs. 25,000/- (rupees twenty five thousand) to the petitioner (workman) in lieu of reinstatement, back wages and continuity of services.
The petitioner prays for reinstatement with continuity of service and full back-wages or alternatively for a direction to Respondent No. 2 (Management) to pay an enhanced amount of compensation.
Briefly adumbrated, the facts as are relevant for the adjudication of the present writ petition, are that the workman was in the employ of the Management since 25th January, 1986, as a store-keeper and his last drawn wages were Rs. 3070/- (rupees three thousand and seventy) per month.
According to the workman, on account of his being an active member of the Hotel Majdoor Union and because of his activities as a member of the Union, the Management refused duties to the workman on 20th September, 1999, without payment of any retrenchment compensation. The dispute between the parties could not be resolved and led to a reference dated 21st June, 2000 to the Industrial Adjudicator in the following terms:
Whether the services of Shri Roop Singh have been terminated illegally and/or unjustifiably by the management, and if so, to what relief is he entitled and what directions are necessary in this respect?.
The Management filed its written statement and took up the plea that the services of the workman had not been terminated and consequently, the latter should be directed to report for duty along with an explanation in writing for remaining absent from duty with effect from 20th September, 1999.
The Industrial Adjudicator framed an issue as per terms of reference aforesaid.
The workman led his evidence and was cross-examined. However, the Management did not produce any evidence and thereafter stopped participating in the proceedings.
The Industrial Adjudicator after considering the uncontroverted testimony of the workman returned a finding that the Management had terminated the services of the workman illegally and in violation of the provisions of the Industrial Disputes Act, 1947. However, the Industrial Adjudicator also came to a finding that the workman had admitted in his cross-examination that he did not search for any employment after the termination of his services.
The Industrial Adjudicator relying upon the decisions of the Supreme Court in M.P. State Electricity Board v. Jareena Bee reported as 2003 LLR 848 and Ram Ashray Singh and Anr. v. Ram Baksh Singh and Ors. reported as 2003 II LLJ 106, held that since the workman did not search for any alternative employment and chose to sit idle, he was not entitled to back-wages and proceeded to award compensation in the amount of Rs. 25,000/-(rupees twenty five thousand) in lieu of reinstatement, back-wages and continuity of services.
Mr. Atul T.N., Advocate, appearing on behalf of the workman made two submissions. Firstly, he submitted that the Industrial Adjudicator had erred in awarding compensation in lieu of the reinstatement, back-wages and continuity of service, inasmuch as, once termination was held to be illegal, the workman was entitled to reinstatement with continuity of service and full back-wages.
In support of this contention, counsel relied on the judgment of the Supreme Court in Hindustan Tin Works Pvt. Ltd. Vs. The Employees of Hindustan Tin Works Pvt. Ltd. and Others, , where the Supreme Court had held as under:
Ordinarily, 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 litigative activity of the employer. If the employer terminates the service illegally and the termination is motivated as in this case, viz., to resist the workmen''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.
The second or alternative submission made on behalf of the petitioner was to the effect that since the workman had been in continuous service since 25th January, 1986 till 20th September, 1999, the date of his illegal termination, and had been unemployed thereafter, the amount of compensation awarded to the workman, whose last drawn wage was Rs. 3070/- (rupees three thousand and seventy), was grossly inadequate in the facts and circumstances of the case.
On behalf of the Management, Mr. M.K.Sharma, Advocate supported the award of the Industrial Adjudicator, but, without the Management having filed a counter-affidavit to the petition. It would be prudent and necessary to consider the judicial pronouncements in this respect, before determining the rival contentions urged on behalf of the parties.
(i) In M.P. State Electricity Board v. Jareena Bee (supra), the Supreme Court held that - "when termination of a workman is set aside the Award of back-wages is not the only consequence."
(ii) In Ram Ashray Singh and Anr. v. Ram Baksh Singh and Ors. (supra), the Supreme Court observed that - "when fixing the back-wages several factors need to be noted. It is a well settled position in law that on reinstatement there is no automatic entitlement of full back-wages."
(iii) In Allahabad Jal Sansthan Vs. Daya Shankar Rai and Another, , the Supreme court whilst considering the issue of reinstatement/backwages/arrears, and after analyzing the decisions of the Supreme Court in Hindustan Tin Works Pvt.Ltd.(supra), M.P.State Electricity Board (supra) and Ram Ashray Singh and Anr.(supra) observed that -
We have referred to certain decisions of this Court to highlight that earlier in the event of an order of dismissal being set aside, reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realized that industry is being compelled to pay the workman for a period during which he apparently contributed little or nothing at all, for a period that was spent unproductively, while the workman is being compelled to go back to a situation which prevailed many years ago when he was dismissed. It is necessary for us to develop a pragmatic approach to problems dogging industrial relations. However, no just solution can be offered but the golden mean may be arrived at.
(iv) In Madhya Pradesh Administration Vs. Tribhuban, while considering the award of the Industrial Tribunal, where after holding that the services of the workman therein were terminated illegally and unjustly, the Industrial Adjudicator had awarded only retrenchment compensation along with notice pay together with interest @ 9% per annum; the Supreme Court allowed the appeal against the direction of the Division Bench of the Delhi High Court ordering reinstatement with full back-wages, with the following observations:
In this case, the Industrial Court exercised its discretionary jurisdiction u/s 11-A of the Industrial Disputes Act. It merely directed the amount of compensation to which the respondent was entitled had the provisions of Section 25-F been complied with should be sufficient to meet the ends of justice. We are not suggesting that the High Court could not interfere with the said order, but the discretionary jurisdiction exercised by the industrial Court, in our opinion, should have been taken into consideration for determination of the question as to what relief should be granted in the peculiar facts and circumstances of this case. Each case is required to be dealt with in the fact situation obtaining therein.
We, therefore, are of the opinion that keeping in view the peculiar facts and circumstances of this case and particularly in view of the fact that the High Court had directed reinstatement with full back wages, we are of the opinion that interest of justice would be subserved if the appellant herein be directed to pay a sum of Rs. 75,000/- by way of compensation to the respondent. This appeal is allowed to the aforementioned extent.
(v) In Assam Oil Company Vs. Its Workmen, , the Supreme court ordered that - "it would be fair and just to direct the appellant to pay a substantial sum as compensation to her", and accordingly directed payment of about two years'' salary to the employee upon which the order of reinstatement passed by the Tribunal was set aside.
(vi) In K.C. Joshi v. UOI reported as 1985 SCC 1032 , where the termination of the services of the workman as Assistant Storekeeper of the ONGC, was held to be illegally unjustified, the Supreme Court in the facts and circumstances of the case and particularly in view of the fact that a period of only 18 years had passed since the illegal termination, awarded a sum of Rs. 2,00,000/- (rupees two lakh) to the workman.
From a conspectus of the above, it is well settled that, in cases of wrongful dismissal or discharge, reinstatement and award of back-wages is not always the only consequence. Industrial Adjudicators are invested with discretion to give such other relief to the workman in lieu of reinstatement as the circumstances of the case may require, or where for some valid reasons it considers that reinstatement will not be fair or proper. The award of compensation in lieu of reinstatement in such a case is the solatium for unjustified and premature termination of employment. However, before awarding compensation the Tribunal has to take into consideration, the scope of the order of reference and the pleadings of the parties.
Further, even in cases where the retrenchment of a workman is illegal for non-compliance with the mandatory provisions of Section 25F, the compensation payable instead of reinstatement, in such a case ought not to be limited to compensation payable in the case of lawful retrenchment u/s 25F, and the quantum of compensation in such a case is in the discretion of the Tribunal. Some of the factors that have to be borne in mind in determining the quantum of compensation are the back wages receivable, the length of service in the establishment, the compensation for deprivation of the job, the capacity of the employer to pay and the nature of the employer''s business.
In the present case, the Management was the owner of a restaurant and had stated in its written statement that the services of the workman had never been terminated and in fact it was the workman who had been absenting from duty with effect from 20th September, 1999.
On behalf of the Management it had been stated that the workman should be directed to report for duty along with an explanation for his absence therefrom, and on a clear understanding that the workman would not be entitled to any wages from 20th September, 1999 till the time he reported for duty as offered. The Industrial Adjudicator returned a finding, based on the uncontroverted testimony of the workman, that his services had been terminated in violation of the provisions of the Industrial Disputes Act. The Industrial Adjudicator also found that the workman had not searched for any alternate employment after his termination and chose to sit idle and was, therefore, not entitled to back-wages.
The Industrial Adjudicator, therefore, exercised its discretionary jurisdiction in directing compensation in lieu of reinstatement in the amount of Rs. 25,000/- (rupees twenty five thousand).
It is observed that this Court in the exercise of its jurisdiction under Article 226 of the Constitution of India does not interfere with the discretionary jurisdiction exercised by the Industrial Court. However, in the facts and circumstances of the case, where the workman had been terminated illegally after having worked uninterruptedly for a period of thirteen years or so with the Management, and his last drawn wage was Rs. 3070/- (rupees three thousand and seventy) per month, the compensation for deprivation of the job does not appear to be adequate. Although, from the decided cases with respect to the payment of compensation in lieu of reinstatement, no definite yardstick for measuring the quantum of compensation is available, the Industrial Adjudicator ought to have taken into account the tenure of service as well as the money value of the benefit of reinstatement, for arriving at a fair and just solatium for the unjustified and premature termination of employment. Therefore, keeping in view the fact that the workman has not made any averment in the writ petition to the effect that he has remained unemployed from the date of his termination, and the fact that despite an offer from the Management in this behalf he did not join duty, in my opinion, it would be fair and just to award him about two years'' salary as compensation value of reinstatement, back-wages and continuity of service.
In the facts and circumstances of the case, the respondent/Management is directed to pay a sum of Rs. 75,000/- (rupees seventy five thousand) by way of compensation to the petitioner/workman within a period of two months failing which the petitioner/workman would be entitled to interest at the rate of 9% per annum thereon, from the date of this judgment till the date of actual payment.
Resultantly, the writ petition is allowed to the extent indicated above and disposed of accordingly. However, in the facts and circumstances of the case, there shall be no order as to costs.