Supreme Court settles back wages for temporary workers in Superintending Engineer vs. M. Natesan (2019)

Introduction

Date of the Judgment: 10 May 2019

Citation: (2019) INSC 471

Judges: R. Banumathi, J. and R. Subhash Reddy, J.

Can a temporary worker, whose services were terminated due to lack of vacancies, claim full back wages upon reinstatement? The Supreme Court of India addressed this question in a case involving daily wage workers of the Tamil Nadu Water Supply and Drainage (TWAD) Board. The court clarified the conditions under which such workers are entitled to back wages and the extent of such compensation. This judgment provides important insights into the rights of temporary workers in India.

The bench comprised of Justice R. Banumathi and Justice R. Subhash Reddy. Justice R. Banumathi authored the judgment.

Case Background

Between 1986 and 1989, the respondents were engaged as Store Watchmen on daily wages under the NMR (Nominal Muster Roll) basis. They were temporarily employed in newly created Sectional stores in various Sub Divisions under the control of Rural Water Supply (RWS) Divisions, Nagercoil. The engagement orders specified that their employment was purely temporary and would be terminated when the requirement was over, without any claim for further appointment in the TWAD Board.

In 1990, all the Sectional stores were closed, and Divisional stores were formed. Consequently, the respondents’ services were terminated due to a lack of vacancies. The respondents then raised an industrial dispute.

Timeline

Course of Proceedings

The respondents raised an industrial dispute, which, after failed conciliation proceedings, was referred to the Labour Court, Madurai. The Labour Court ruled in favor of the respondents on 12.04.2000, holding their termination invalid and directing reinstatement with back wages and continuity of service.

The appellant-Board challenged the Labour Court’s award by filing a writ petition (W.P.No.23720 of 2002) at the High Court. The learned Single Judge affirmed the reinstatement but limited back wages to 50%, noting that neither party had produced documents to show whether the workmen had worked continuously for 240 days.

The appellant-Board filed a writ appeal before the Division Bench, which was dismissed. The Board then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of the Industrial Disputes Act, 1947, specifically concerning the rights of temporary workers. The key issue is whether the respondents, who were engaged on a daily wage basis, are entitled to reinstatement and back wages. The judgment also touches upon the burden of proof in establishing continuous service of 240 days in a year for temporary workers.

Arguments

Appellant-Board’s Arguments:

• The appellant-Board contended that the initial burden to prove continuous service of 240 days lies with the workmen.
• They argued that the respondents failed to produce any documents to show that they have worked continuously for 240 days.
• The Board submitted a chart detailing the 50% back wages payable to the respondents from the date of termination up to the Labour Court order and also till the date of superannuation.

Respondents-Workmen’s Arguments:

• The respondents argued that the attendance register, salary certificates, and other relevant documents were in the possession of the appellant-Board, and the same were not marked as documents.
• They contended that the termination was illegal and they were entitled to reinstatement with full back wages.

The High Court had observed that the relevant documents were with the appellant-Board, and they failed to produce the same. However, the Supreme Court noted that the initial burden was on the workmen to prove that they had worked for 240 days.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues that the court addressed were:

1. Whether the High Court was correct in affirming the order of reinstatement despite the respondents not proving that they had worked continuously for 240 days.
2. Whether the respondents were entitled to 50% back wages.
3. What should be the quantum of money payable in lieu of reinstatement, considering that most of the respondents have attained the age of superannuation.

Treatment of the Issue by the Court

Authorities

The judgment does not explicitly mention any specific cases or books that the court relied upon. However, the judgment does refer to the Industrial Disputes Act, 1947, and the concept of continuous service of 240 days in a year.

The court considered the following legal points:

• The initial burden of proof lies on the workmen to establish that they have worked continuously for 240 days in a year.
• The court considered the payment of 50% back wages as directed by the High Court.
• The court considered the payment of compensation in lieu of reinstatement.

Judgment

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that most of the respondents had reached the age of superannuation, making the issue of reinstatement impractical. The Court also considered the fact that the appellant-Board had already paid a substantial amount to the respondents as per the interim orders of the Supreme Court. The court aimed to bring the long-pending dispute to a close by treating the amount paid as full and final settlement.

The court emphasized the practical aspect of the matter, focusing on the fact that most respondents had already retired. The legal point of the burden of proof was not delved into deeply because the practical aspect of the case had become more important.

The court did not delve into the legal aspects of whether the respondents had worked for 240 days, as that was not the primary issue in light of the superannuation of the workers. The court focused on reaching a practical conclusion.

The court’s decision was influenced by the following:

• The fact that most of the respondents had reached the age of superannuation.
• The amount already paid to the respondents by the appellant-Board, including Rs. 2,00,000 ordered by the Supreme Court.
• The need to bring the long-pending dispute to a close.

The Court stated:

• “For temporary worker like NMR respondents, it is mandatory to show that they have continuously worked for 240 days in a year.”
• “In the peculiar facts and circumstances of the case, we are not inclined to go into this question any further. The reason being that most of the respondents have attained the age of superannuation therefore, there is no question of reinstatement.”
• “The amount already paid to each of the respondents (including Rs.2,00,000/- ordered by the Supreme Court) shall be in full quit of all claims including 50% back wages and also the quantum of compensation in lieu of reinstatement.”

There was no minority opinion in this case.

Key Takeaways

• For temporary workers, it is essential to maintain records of their continuous service to prove that they have worked for 240 days in a year.
• The court emphasized that the initial burden of proof lies with the workmen to establish their continuous service.
• The court considered the practical implications of the case, especially the superannuation of the workers, in deciding on the compensation.
• The judgment provides clarity on the payment of back wages and compensation in lieu of reinstatement for temporary workers.

Directions

The Supreme Court directed that:

• The amount already paid to each of the respondents (including Rs. 2,00,000 ordered by the Supreme Court) shall be in full quit of all claims, including 50% back wages and compensation in lieu of reinstatement.
• For the deceased respondent, M. Muthuswamy Nadar, the amount of Rs. 2,00,000 shall be paid to his legal representatives.
• The amount lying in the deposit of the Labour Court/High Court, along with accrued interest, is to be refunded to the appellant-Board.

Specific Amendments Analysis

There is no specific amendment discussed in this judgment.

Development of Law

The ratio decidendi of this case is that in cases involving temporary workers who have been terminated and are seeking reinstatement, the courts must consider the practical aspects of the case, especially if the workers have reached the age of superannuation. The court also reiterated that the initial burden of proof lies with the workmen to establish their continuous service of 240 days in a year. This judgment does not change any previous positions of law but emphasizes the practical approach that the courts must take in such cases.

Conclusion

The Supreme Court’s judgment in The Superintending Engineer, TWAD Board & Another vs. M. Natesan ETC. settles the issue of back wages for temporary workers. The Court focused on the practical implications of the case, particularly the fact that most of the respondents had reached the age of superannuation. The Court directed that the amount already paid to the respondents should be considered as full and final settlement of all claims, including back wages and compensation in lieu of reinstatement. This judgment highlights the importance of considering the practical aspects of a case and the need for temporary workers to maintain records of their continuous service.