1. When a dismissal order issued by management is not upheld by a Tribunal or acompetent court or an application for approval under Section 33(2)(b) is finally rejected, the employer is legally obligated to reinstate the workman to his previous position. However, in some instances, instead of reinstating the workman at his original place of posting, management may explore options to transfer him to a different location within the organisation’s operational framework. This often leads to the perception that management is attempting to circumvent the intent of the reinstatement order by not restoring the workman to his former role or location.
2. The key legal issue here is whether reinstating a workman at a different location amounts to compliance of order passed by the competent Court/Tribunal. To address this, it is crucial to examine Sections 33(2)(b) and 17B of the Industrial Disputes Act, 1947. Section 33(2)(b) stipulates that during the pendency of an industrial dispute, an employer cannot discharge or punish a workman by dismissal or otherwise, for matters unrelated to the dispute, without approval from the authority, before whom the ID is pending. Section 17B provides that a workman is entitled to receive last-drawn wages if the employer challenges the reinstatement order before a higher court.
3. The core question then is : Can an employer comply the reinstatement order by placing a workman at a location different from the place, where he was employed at the time of dismissal?
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4. In the case of Management, Micro Labs Limited vs. Patil Veershetty & Anr (2022 LLR 24 Mad), the employer’s application seeking approval for the dismissal order under Section 33(2)(b) of the Industrial Disputes Act was rejected. The workman, initially posted in Hosur, was instructed by management to report in Puducherry. However, the workman refused to comply and demanded last drawn wages under Section 17B of the Act. Herein, the Madras High Court observed as under :-
- As per law settled by the Supreme Court of India reinstatement “means reinstatement to the original place of employment”. The ratio of this judgment is being followed by various High Courts.
- Against award of reinstatement, the Management cannot contend that they will transfer the workman from his original place of work to a new place.
- When an application under Section 33(2)(b) of the Industrial Disputes Act, 1947 is not approved, the dismissal of the workman by the employer would be ab-initio-void.
- When the dismissal order is held to be ab-initio-void, the workman will be treated to be continued in service without any break; as if the order of dismissal was not passed at all. {Supreme Court in P.D. Sharma Vs State Bank of India, AIR 1968 SC 985}.
- When the workman was not reinstatement at his last place of employment, it would be construed that order of reinstatement was not complied by the Management and consequently workman would be entitled to wages under 17B of the Industrial Disputes Act, 1947 from the date of filing of application by Management, challenging impugned award till the final disposal of the same.
5. In P.D. Sharma Vs State Bank of India, Air 1968 SC 985, the Hon’ble Supreme Court had held that when the application under Section 33 (2) (b) is rejected, then the action taken by the employer becomes ab-initio-void and the employee will deem to be continued in service without any break, on conditions of service as were applicable at the time of dismissal.
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6. In the case of The Management of Lakshmi Mills Ltd. vs. The Presiding Officer, Labour Court (MANU/TN/1021/1996) the Madras High Court ruled that when there was an award directing Management to reinstate an employee, it was not possible for Management to say that they would transfer him from the place where he was originally working to a new place. In this case, the employee was reinstated after transferring him from the showroom at Coimbatore to the showroom at Madras. The Court held that reinstatement must occur at the same place where the employee was originally working.
7. To conclude, when faced with the reinstatement of a workman, management must ensure full compliance of the order issued by the Tribunal/Court, which generally requires placing the employee back at the original location, where he was posted at the time of dismissal or termination. If reinstatement at the original location is not feasible due to administrative reasons, employers may explore an out-of-court settlement, offering a one-time compensation in exchange for waiving reinstatement rights. However, if no settlement is reached, the reinstatement order must be honoured.
8. If operational needs require a transfer, the employer must ensure that the relocation is reasonable, and transparent, and does not unfairly disadvantage the workman compared to his peers. It is also essential to carefully review employment contracts, appointment letters, certified standing orders, and service rules for any clauses related to location, as altering these terms, without explicit permission, may lead to un-desired litigation. Some laws protect employees from relocations that significantly affect their working conditions or livelihood or similar reasons.
9. In case a dispute arises over the relocation, management should first attempt to resolve the issue through clear communication and negotiation with the workman. If necessary, alternative dispute resolution methods like arbitration or mediation can be pursued, with litigation as a last resort. A balance between the interests of employer and workman can be maintained by alternative dispute resolution methods and by maintaining transparency.
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