Madhya Pradesh High Court: A single court of Justice GS Ahluwalia upheld the Labor Court’s decision to award monetary compensation in lieu of reinstatement to a dismissed day laborer. The Court held that even when dismissal violates Section 25-F of the Industrial Disputes Act, reinstatement with back wages is not an automatic remedy. Drawing on Supreme Court precedent, the Court emphasized that for day laborers, monetary compensation may better serve the ends of justice than reinstatement, particularly in cases of procedurally defective dismissal.
Background
The case arose from a dispute between Rajguru Dubey and Nagar Palika Parishad Hata over the termination of Dubey’s services. The Sagar Labor Court, in its award dated 09/13/2024, determined that the dismissal violated Article 25-F of the Industrial Disputes Act. However, instead of ordering reinstatement, the Labor Court awarded compensation of Rs. 1,00,000/- in lieu of refund. This decision prompted Dubey to file a petition under Article 227 of the Constitution before the High Court.
Arguments
The petitioner’s counsel argued that since the Labor Court had conclusively established that the services were terminated unlawfully, it should have ordered reinstatement with back wages as the appropriate remedy. Counsel argued that mere monetary compensation was insufficient given the conclusion that an unlawful dismissal had occurred.
Also read – Punjab & Haryana High Court Upholds Termination Based on Employee’s History of Misconduct
The court’s decision
The court upheld the Labor Court’s decision to award compensation instead of reinstatement. First, it was based on the Supreme Court’s decision in Bharat Sanchar Nigam Limited v. Bhurumal (2014), which established that the principle of reinstatement with full back pay cannot be applied mechanically in all cases. While this remedy may be appropriate for regular/permanent workers dismissed illegally or through unfair labor practices, a different approach is warranted for daily wage workers whose dismissal is procedurally flawed. The court emphasized that in such cases, monetary compensation often better serves the ends of justice.
Secondly, the court referred Jayant Vasantrao Hiwarkar vs. Anoop Ganpatrao Bobde (2017), which had confirmed compensation in lieu of reinstatement when the employee had worked only for a short period. This precedent reinforced the view that short terms of service may justify monetary compensation in lieu of reinstatement. The court also cited Hari Nandan Prasad v. Food Corporation India (2014), which highlighted that recent court decisions have consistently held that reinstatement with back wages is not automatic, even when dismissal violates prescribed procedures.
Furthermore, the court stated that reinstatement is not an invariable consequence of declaring a dismissal order void, particularly in public sector undertakings. While reinstatement remains the norm for lower-level blue-collar and administrative employees, exceptions may be made based on broader considerations. The court also considered the constitutional aspects through Ghaziabad Development Authority v. Ashok Kumar (2008), which emphasized that statutory authorities must carry out procurement in accordance with Articles 14 and 16 of the Constitution. Any appointment that violates this constitutional scheme or the legal hiring rules would be void, justifying compensation before reinstatement.
Finally, the court referred Mahboob Deepak vs. Nagar Panchayat (2008), which established that the mere completion of 240 days of work in a year prior to the reduction does not automatically entitle a worker to regularization or reintegration. This was considered relevant in determining the appropriateness of monetary compensation as a solution. Therefore, the court did not find illegality in the decision of the Labor Court to award Rs. 100,000/- as compensation instead of ordering refund. Consequently, the petition was dismissed.
Decided by: 10-21-2024
Citation: 2024:MPHC-JBP:52594 (Rajguru Dubey vs. Nagar Palika Parishad Hata)
Petitioner’s Attorney: Sri Gaurav Sharma
Defendant’s lawyer: Shri Abhishek Singh (Government Advocate)
Source : ourladyoftheassumptionparish
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