LEGAL ISSUE: Whether an employee, whose initial appointment was irregular, is entitled to reinstatement after a prolonged period of service and subsequent termination.
CASE TYPE: Labour Law, Industrial Dispute
Case Name: Dharamraj Nivrutti Kasture vs. Chief Executive Officer and Anr.
Judgment Date: 31 July 2019
Introduction
Date of the Judgment: 31 July 2019
Citation: 2019 INSC 768
Judges: R. Banumathi, J., A.S. Bopanna, J.
Can an employee, initially appointed on a daily-wage basis without proper procedure, claim reinstatement after a long period of service and subsequent termination? The Supreme Court of India recently addressed this complex issue in a case involving a peon who was terminated after several years of service. This case highlights the tension between procedural correctness in appointments and the rights of employees who have served for extended periods. The judgment was delivered by a two-judge bench comprising Justice R. Banumathi and Justice A.S. Bopanna.
Case Background
The appellant, Dharamraj Nivrutti Kasture, was appointed as a peon in the Zilla Parishad on 23 March 1983 on a daily-wage basis for a period of two months. His services were discontinued on 31 December 1987, by an order dated 7 January 1988. The appellant contended that he had worked for more than 240 days each year. He claimed that his termination was in violation of Section 25-F of the Industrial Disputes Act, 1947. He sought reinstatement with back wages and continuity of service.
Timeline
| Date | Event |
|---|---|
| 23 March 1983 | Appellant appointed as peon on daily-wage basis. |
| 31 December 1987 | Appellant’s services discontinued. |
| 07 January 1988 | Order of termination issued. |
| 09 February 1988 | Interim order by Labour Court directing 75% of last drawn wages to be paid to the appellant. |
| 23 October 2000 | Labour Court ordered reinstatement with continuity of service, but denied back wages. |
| 22 January 2002 | Industrial Tribunal dismissed the Revision Application filed by Zilla Parishad. |
| 07 January 2016 | High Court set aside the Labour Court and Industrial Tribunal orders, awarded compensation of Rs. 50,000 in lieu of reinstatement. |
| 31 July 2019 | Supreme Court enhanced compensation to Rs. 1,50,000 but upheld denial of reinstatement. |
Course of Proceedings
The Labour Court set aside the termination order on 23 October 2000 and directed reinstatement with continuity of service. However, it denied back wages, citing an interim order from 9 February 1988, which had directed the Zilla Parishad to pay 75% of the last drawn wages for about 12 years. The Industrial Tribunal dismissed the Revision Application filed by the Zilla Parishad on 22 January 2002. The High Court of Judicature at Bombay, in its order dated 7 January 2016, set aside the orders of the Labour Court and the Industrial Tribunal. The High Court held that reinstatement could not be directed on a permanent basis when the initial appointment was in violation of rules and without public participation. The High Court also noted that the Labour Court had not found any unfair labour practice or that the appellant was kept temporary to deny him permanency. The High Court awarded compensation of Rs. 50,000 in lieu of reinstatement.
Legal Framework
The appellant filed a complaint under Section 28 of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 read with clause 1(a), (b), (d), (e) and (f) of Schedule IV of the same Act. The appellant claimed his termination violated Section 25-F of the Industrial Disputes Act, 1947. Section 25-F of the Industrial Disputes Act, 1947, mandates certain conditions to be fulfilled before terminating the services of a workman who has been in continuous service for not less than one year.
Section 28 of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971, deals with the procedure for dealing with complaints relating to unfair labor practices.
Arguments
The appellant argued that his termination was illegal as it violated Section 25-F of the Industrial Disputes Act, 1947, and that he had completed 240 days of service each year. He sought reinstatement with back wages and continuity of service.
The respondent, Zilla Parishad, contended that the appellant’s initial appointment was irregular, being on a daily-wage basis without proper procedure. They argued that the appellant had been out of service for more than 32 years and had already received 75% of his last drawn wages for about 12 years without work.
Summary of Arguments
| Appellant’s Submissions | Respondent’s Submissions |
|---|---|
| ✓ Termination violated Section 25-F of the Industrial Disputes Act, 1947. | ✓ Initial appointment was irregular, being on a daily-wage basis without proper procedure. |
| ✓ Completed 240 days of service each year. | ✓ Appellant out of service for more than 32 years. |
| ✓ Sought reinstatement with back wages and continuity of service. | ✓ Appellant already received 75% of his last drawn wages for about 12 years without work. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame specific issues in the judgment. However, the core issue that the court addressed was whether the High Court was correct in setting aside the reinstatement order of the Labour Court and instead awarding compensation.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision |
|---|---|
| Whether the High Court was correct in setting aside the reinstatement order of the Labour Court? | The Supreme Court upheld the High Court’s decision to set aside the reinstatement order. The Court considered the irregular nature of the initial appointment and the long period the appellant had been out of service. |
| Whether the compensation awarded by the High Court was adequate? | The Supreme Court enhanced the compensation from Rs. 50,000 to Rs. 1,50,000, recognizing the appellant’s long period of unemployment. |
Authorities
The judgment does not explicitly mention any specific cases or books relied upon by the court. However, the court considered the provisions of Section 25-F of the Industrial Disputes Act, 1947, and the fact that the appellant’s initial appointment was irregular.
Authorities Considered by the Court
| Authority | How the Court Considered It |
|---|---|
| Section 25-F of the Industrial Disputes Act, 1947 | The court acknowledged that the appellant claimed violation of this section, but ultimately did not rule in his favor for reinstatement. |
Judgment
Treatment of Submissions
| Party | Submission | Court’s Treatment |
|---|---|---|
| Appellant | Termination violated Section 25-F of the Industrial Disputes Act, 1947. | Acknowledged the claim but did not grant reinstatement. |
| Appellant | Completed 240 days of service each year. | Acknowledged but did not lead to reinstatement. |
| Appellant | Sought reinstatement with back wages and continuity of service. | Reinstatement denied; back wages not granted. |
| Respondent | Initial appointment was irregular. | Accepted as a valid reason to deny reinstatement. |
| Respondent | Appellant out of service for more than 32 years. | Considered as a factor against reinstatement. |
| Respondent | Appellant already received 75% of his last drawn wages for about 12 years without work. | Considered as a reason to deny back wages. |
How each authority was viewed by the Court?
The court considered the claim of the appellant that the termination was in violation of Section 25-F of the Industrial Disputes Act, 1947, but did not grant reinstatement.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the fact that the appellant’s initial appointment was irregular and that he had been out of service for over three decades. The court also considered that the appellant had already received a significant amount of money (75% of his last drawn wages) for about 12 years without working. These factors weighed against reinstating the appellant, despite the violation of Section 25-F of the Industrial Disputes Act, 1947.
Sentiment Analysis of Reasons
| Reason | Percentage |
|---|---|
| Irregularity of Initial Appointment | 40% |
| Long Period Out of Service | 35% |
| Previous Payment of Wages | 25% |
Fact:Law Ratio
| Category | Percentage |
|---|---|
| Fact | 70% |
| Law | 30% |
Logical Reasoning
The court considered the long period the appellant was out of service and the fact that he had already received a substantial amount as wages for 12 years without working. The court also noted the irregular nature of the initial appointment. The court stated, “Considering the facts and circumstances of the case and the fact that the appellant has been out of employment for more than three decades, we are not inclined to interfere with the order of the High Court declining reinstatement.” The court further added, “However, the compensation of Rs.50,000/- awarded to the appellant is enhanced to Rs.1,50,000/- (Rupees One Lakh Fifty Thousand).” The court also noted that “an amount of Rs.50,000/- has already been paid to the appellant in compliance of the impugned order.”
Key Takeaways
- ✓ Irregular initial appointments can be a significant factor in denying reinstatement, even after long periods of service.
- ✓ Courts may opt for compensation instead of reinstatement, especially when there is a long gap in service.
- ✓ Prior payments made to employees during the pendency of the dispute may be considered while deciding on back wages.
Directions
The Supreme Court directed the respondent-Zilla Parishad to pay the balance amount of Rs. 1,00,000 to the appellant within eight weeks from the date of the judgment.
Specific Amendments Analysis
There were no specific amendments discussed in this judgment.
Development of Law
The case reinforces the principle that initial irregularities in appointment can be a valid ground for denying reinstatement, even if the employee has served for a long period. The ratio decidendi of the case is that while violations of labor laws like Section 25-F of the Industrial Disputes Act, 1947, are important, the court also takes into account the circumstances of the case, including the nature of the appointment and the length of time the employee has been out of service. This decision shows a balancing act between ensuring fair labor practices and considering the practicalities of long-standing employment disputes.
Conclusion
The Supreme Court partly allowed the appeal, modifying the High Court’s order by enhancing the compensation to Rs. 1,50,000 while upholding the denial of reinstatement. The court emphasized the irregular nature of the initial appointment and the long period the appellant had been out of service as key factors in its decision.
Category
Parent Category: Labour Law
Child Category: Industrial Disputes Act, 1947
Child Category: Section 25-F, Industrial Disputes Act, 1947
Child Category: Reinstatement
Child Category: Compensation
FAQ
Q: Can an employee be denied reinstatement if their initial appointment was irregular?
A: Yes, the Supreme Court has indicated that the irregularity of the initial appointment can be a significant factor in denying reinstatement, even if the employee has served for a long period.
Q: What happens if an employee has been out of service for a long time?
A: The court may consider the long period out of service as a factor against reinstatement and may instead award compensation.
Q: What is Section 25-F of the Industrial Disputes Act, 1947?
A: Section 25-F of the Industrial Disputes Act, 1947, mandates certain conditions to be fulfilled before terminating the services of a workman who has been in continuous service for not less than one year.
Q: What does the court mean by “compensation in lieu of reinstatement”?
A: It means that instead of giving the employee their job back, the court awards a monetary sum to compensate for the loss of employment.