After decades out of service, a daily-wage worker’s reinstatement may be replaced by lump-sum compensation.

The respondent workman was engaged as a daily-wage Watchman in the Petlad Irrigation Sub-Division from 11 June 1975 and was paid Rs. 600 per month.

His services were terminated orally with effect from 1 January 1996, following which he raised an industrial dispute seeking reinstatement and related relief.

The Labour Court partly allowed the reference on 26 December 2011, directing reinstatement on the original post with continuity of service and consequential benefits, but without back wages.

The State challenged that award.

Before the High Court, both sides referred to a decision in a connected matter involving an identically situated workman, in which the Court had substituted compensation of Rs. 3,00,000 for reinstatement.

Whether the Labour Court’s direction to reinstate the respondent with continuity of service and consequential benefits should be modified in light of the elapsed time and the Court’s decision concerning an identically situated workman.

Whether lump-sum compensation of Rs. 3,00,000 should be awarded in lieu of reinstatement.

The Court relied on the principle, stated in K. V. Anil Mithra v. Sree Sankaracharya University of Sanskrit and the authorities discussed there, including Bharat Sanchar Nigam Ltd. v. Bhurumal, that reinstatement with back wages is not automatic where a daily-wage worker’s termination is found unlawful for a procedural defect; monetary compensation may instead meet the ends of justice, depending on the circumstances.

The cited principle recognises an exception where termination involves unfair labour practice or breach of the “last come, first go” rule, in which reinstatement should ordinarily be granted absent weighty reasons to the contrary.

The judgment also referred to Allahabad Bank v. Krishan Pal Singh, where lump-sum compensation was substituted for reinstatement in light of the workman’s circumstances and the passage of time.

Sections 25(F), 25(G) and 25(H) of the Industrial Disputes Act, 1947, were raised in the connected matter reproduced in the judgment.

The Court noted that the dispute arose from the same set of facts as the connected matter and that the State had already complied with the direction to pay Rs. 3,00,000 to the identically situated workman.

Having referred to the coordinate Bench’s decision, which applied the principles permitting compensation instead of reinstatement after a prolonged period out of service, the Court considered an identical order appropriate in this case.

It did not separately analyse the Labour Court’s factual findings; it disposed of the petition by applying the same relief as in the connected matter.

The Rule was made absolute to that extent.