Supreme Court Sets Aside Labour Court Award Due to Workman’s Failure to Report for Duty: Creative Garments Ltd. vs. Kashiram Verma (2023)

Date of the Judgment: 16 March 2023

Citation: Civil Appeal No 5758 of 2012

Judges: Abhay S. Oka, J., Rajesh Bindal, J.

Can a worker who has been ordered to be reinstated with back wages by a Labour Court, refuse to report for duty and still claim the benefits of the order? The Supreme Court of India recently addressed this question, setting aside the Labour Court’s award in a case where the worker did not report for duty despite multiple opportunities and court orders. This judgment highlights the importance of a workman’s active participation in the reinstatement process and the need for complete addresses in labour disputes.

The Supreme Court bench, comprising Justices Abhay S. Oka and Rajesh Bindal, delivered the judgment. Justice Rajesh Bindal authored the opinion for the bench.

Case Background

The case involves a dispute between M/s. Creative Garments Ltd. (the Management) and their employee, Kashiram Verma (the Respondent). The Labour Court had ordered the reinstatement of the Respondent with continuity of service and full back wages, effective from December 8, 1997. The Management challenged this award, initially before the Single Bench of the High Court of Judicature at Bombay, and subsequently before the Division Bench of the same High Court.

Despite the High Court upholding the Labour Court’s award, the Management appealed to the Supreme Court. The core issue arose from the Respondent’s failure to report for duty despite the reinstatement order and multiple communications from the Management and court directions.

Timeline:

Course of Proceedings

The Labour Court initially ruled in favor of the workman, ordering reinstatement with back wages. The Management challenged this decision before the Single Bench of the High Court of Judicature at Bombay, which upheld the Labour Court’s award. Subsequently, the Management appealed to the Division Bench of the High Court, which also upheld the Single Bench’s order. The Management then approached the Supreme Court, primarily contesting the award of back wages.

Notably, during the proceedings before the Division Bench of the High Court, the Management had stated that they would reinstate the workman and communicate the same to him. Despite this, the workman did not report for duty. The counsel for the workman had also stated that he would report for duty on 05.11.2007 at 10:00 A.M., which he failed to do.

Legal Framework

The judgment references several key pieces of legislation related to labour and employment:

• ✓ The Payment of Wages Act, 1936: Specifically, section 15(2) and section 16 of the Act, which require the furnishing of a permanent address in applications filed under the Act. Form-A is to be used for individual applications, and Form-B for group applications, as per the Payment of Wages (Procedure) Rules 1937.
• ✓ The Workman Compensation Act, 1923: This Act requires a workman to furnish their residential address in Form-F (Rule 20) when applying for compensation. In cases of fatal accidents, the permanent address is required on Form-A (Rule 6(1)) as per the Workman Compensation Rules, 1924.
• ✓ The Industrial Disputes Act, 1947: This Act mandates the mentioning of addresses of the parties to the disputes in Forms-I, J, and K, as per the Industrial Dispute (Central) Rules, 1957.
• ✓ The Minimum Wages Act, 1948: Section 20(2) of this Act requires an applicant to mention their residential address in Form-VI.
• ✓ The Payment of Gratuity Act, 1972: This Act requires an employee to mention their full address in Form-I (Rule 7(1)) when applying for payment of gratuity as per the Payment of Gratuity (Central) Rules 1972.
• ✓ Civil Procedure Code, 1908: Order VI Rule 14A mandates that parties furnish their complete addresses in every pleading.
• ✓ Supreme Court Rules: Form-32 of the Supreme Court of India Handbook on Practice and Procedure and Office Procedure requires petitioners and respondents to furnish their complete addresses.

The Court also notes the consolidation of 29 labour laws into 4 Codes, namely, the Wage Code, Social Security Code, Occupational Safety, Health and Working Conditions Code, and The Industrial Relations Code. These codes are yet to be enforced.

Arguments

The primary argument of the Management was that the Labour Court’s award of back wages and continuity of service was not sustainable because the workman failed to report for duty despite multiple opportunities and court orders. The Management highlighted that:

• ✓ The workman did not respond to communications sent by the Management requesting him to report for duty.
• ✓ The workman did not appear for duty on 05.11.2007, as stated by his counsel in court.
• ✓ The workman’s conduct indicated that he was no longer interested in the employment and was likely gainfully employed elsewhere.

The respondent, on the other hand, did not appear before the Supreme Court to defend the litigation. The Court noted that the respondent was aware of the proceedings as he was represented before the Single Bench of the High Court. However, he chose not to participate in the proceedings before the Supreme Court, indicating a lack of interest in pursuing the matter.

The Management argued that the lack of a permanent address for the workman made it difficult to serve notices effectively. They emphasized that the address provided was “care of Union,” which may not be interested in pursuing the matter on behalf of the workman.

The innovativeness of the argument of the Management lies in highlighting the practical difficulties in enforcing labour awards when the workman does not cooperate by reporting for duty or providing a permanent address, thereby making the award infructuous.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues. However, the core issue that the Court addressed was:

• ✓ Whether the Labour Court’s award of reinstatement with back wages is valid when the workman fails to report for duty despite multiple opportunities and court orders.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following legal provisions:

• ✓ Section 15(2) and Section 16 of the Payment of Wages Act, 1936: These sections specify the requirement of furnishing a permanent address of the applicant in Form-A for individual applications and Form-B for group applications.
• ✓ Rule 20 of the Workman Compensation Rules, 1924: Requires a workman to furnish their residential address in Form-F when applying for compensation.
• ✓ Rule 6(1) of the Workman Compensation Rules, 1924: Requires the permanent address on Form-A for fatal accident compensation.
• ✓ Forms-I, J and K of the Industrial Dispute (Central) Rules, 1957: Mandates the mentioning of addresses of the parties to the disputes.
• ✓ Section 20(2) of the Minimum Wages Act, 1948: Requires an applicant to mention their residential address in Form-VI.
• ✓ Rule 7(1) of the Payment of Gratuity (Central) Rules 1972: Requires an employee to mention their full address in Form-I when applying for gratuity.
• ✓ Order VI Rule 14A of the Civil Procedure Code, 1908: Requires parties to furnish their complete addresses in every pleading.
• ✓ Form-32 of the Supreme Court of India Handbook on Practice and Procedure and Office Procedure: Requires petitioners and respondents to furnish their complete addresses.

The Court did not cite any specific case laws in its judgment.

Judgment

The Supreme Court allowed the appeal, setting aside the impugned order of the High Court and the award of the Labour Court. The Court reasoned that the workman’s failure to report for duty, despite multiple opportunities and a statement by his counsel, indicated that he was no longer interested in the employment.

How each authority was viewed by the Court:

The Court cited the legal provisions to highlight the importance of providing a permanent address in labour disputes. The court emphasized that the lack of a permanent address for the workman made it difficult to serve notices effectively and that the address provided “care of Union” was not sufficient. The Court used these provisions to highlight the need for complete addresses to ensure effective service of notices and to prevent situations where a workman could avoid reporting for duty while still claiming benefits.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the conduct of the workman. The Court emphasized that the workman’s failure to report for duty, despite multiple opportunities and a statement by his counsel, indicated a lack of interest in the employment. The Court also noted the practical difficulties in enforcing labour awards when the workman does not cooperate by reporting for duty or providing a permanent address.

Fact:Law Ratio

The Court’s decision was influenced by both factual aspects and legal considerations. The factual aspects included the workman’s failure to report for duty and the lack of a permanent address, while the legal considerations included the various provisions requiring permanent addresses in labour disputes. The ratio of fact to law was approximately 70:30, with facts playing a more significant role in the Court’s decision.

Logical Reasoning:

The Court did not consider any alternative interpretations, as the facts clearly indicated the workman’s lack of interest in the employment. The Court’s decision was based on the principle that a workman must actively participate in the reinstatement process to claim the benefits of a Labour Court award.

The Supreme Court concluded that the award of the Labour Court was not sustainable because the workman had not reported for duty despite multiple opportunities. The Court emphasized that the conduct of the workman indicated that he was no longer interested in the employment. The Court highlighted that the workman’s failure to report for duty, despite the statement made by his counsel, was a significant factor in its decision.

“Considering the aforesaid factual matrix, in our opinion the award of the Labour Court granting back-wages and continuity in service to the respondent workman deserves to be set aside as he has not reported for duty despite the statement made by his counsel in Court on 30.10.2007.”

“The present appeal cannot be kept pending as the conduct of the respondent itself establishes that he is no more interested in employment what to talk of back-wages.”

“Effective relief can be granted to a worker only if the permanent address of the workman is furnished in the pleadings.”

Key Takeaways

• ✓ Workman must actively participate in the reinstatement process to claim benefits of a Labour Court award.
• ✓ Failure to report for duty despite multiple opportunities can lead to the setting aside of a reinstatement order.
• ✓ Complete and permanent addresses of parties are crucial for effective service of notices in labour disputes.
• ✓ The court has emphasized the need for the authorities to take corrective steps to ensure that the parties furnish their permanent addresses in all the cases relating to labour law disputes.

The judgment highlights the need for workmen to actively pursue their reinstatement and to provide complete and permanent addresses to facilitate communication and compliance with court orders. This decision is likely to impact future cases where workmen fail to report for duty despite reinstatement orders. The court has also emphasized the need for the authorities to take corrective steps to ensure that the parties furnish their permanent addresses in all the cases relating to labour law disputes.

Directions

The Supreme Court directed the authorities working under various labour laws to take corrective steps to ensure that parties to a dispute furnish their permanent addresses in the cases relating to labour law disputes. The Court also directed that in all future cases and pending cases, parties must furnish their permanent addresses, even if represented by a union or legal practitioner. The Court emphasized that service of notice must be effected on the permanent address of the workman.

Specific Amendments Analysis

This section is not applicable as the judgment does not discuss any specific amendments.

Development of Law

The ratio decidendi of this case is that a Labour Court’s award of reinstatement with back wages can be set aside if the workman fails to report for duty despite multiple opportunities and court orders. This judgment also emphasizes the importance of providing complete and permanent addresses in labour disputes to ensure effective service of notices. This decision reinforces the principle that a workman must actively participate in the reinstatement process to claim the benefits of a Labour Court award.

Conclusion

The Supreme Court’s decision in M/s. Creative Garments Ltd. vs. Kashiram Verma sets aside the Labour Court’s award of reinstatement and back wages due to the workman’s failure to report for duty. This judgment underscores the importance of a workman’s active participation in the reinstatement process and the necessity of providing complete and permanent addresses in labour disputes. The Court’s directions to labour authorities to ensure that parties furnish permanent addresses in all labour disputes will have a significant impact on future cases.