Facts
The petitioner-workman was appointed as a wireman by the respondent in 1984.
Source reference: p.2He was first terminated in 1990, but a Labour Court award in 1998 (Reference No. 125/1991) directed his reinstatement with continuity of service.
Source reference: p.2He was reinstated on 16.11.1998 but was terminated again on 17.04.2018 without the mandatory notice or notice pay required under Section 25F of the Industrial Disputes Act.
Source reference: p.3The Labour Court No. 2, Jamnagar, found the termination illegal but, considering the petitioner’s age (66 years), awarded a lump sum compensation of only ₹27,000/- in lieu of reinstatement.
Source reference: p.3, 5The petitioner challenged this award, seeking a modification of the compensation amount.
Source reference: p.1Issues
1. Whether the lump sum compensation of ₹27,000/- awarded by the Labour Court was just and reasonable given the petitioner's 33 years of service.
Source reference: p.4-52. Whether the compensation should be modified in light of judicial precedents governing lump sum payments in lieu of reinstatement.
Source reference: p.5-6Law Applied
The Court applied Section 25B(1) of the Industrial Disputes Act, 1947, regarding the definition of continuous service.
Source reference: p.5Where reinstatement is not feasible due to the age of the workman, reasonable lump sum compensation must be awarded in lieu of reinstatement and back wages.
Source reference: p.5The Court followed the scale of compensation established by the Division Bench of the Gujarat High Court in Bhikhabhai Fatabhai Solanki vs. Executive Engineer, Narmada Project Canal System & Anr. (2024), which categorized compensation amounts based on the length of service.
Source reference: p.6Reasoning
The Court found that the petitioner had established continuous and uninterrupted service since 1984, satisfying the requirements of Section 25B(1).
Source reference: p.5While the Labour Court correctly determined that reinstatement was inappropriate given the petitioner was 66 years old, the High Court held that the awarded amount of ₹27,000/- was "too meager" and "unreasonable".
Source reference: p.5-6Applying the framework from the Bhikhabhai Fatabhai Solanki case—which suggests ₹7.5 lacs for service between 15-20 years—the Court reasoned that a workman with over 30 years of service deserved at least that maximum threshold to meet the ends of justice.
Source reference: p.6-7Holding
The petitioner is entitled to a lump sum compensation of ₹7.5 lacs in lieu of reinstatement and consequential benefits.
The petition was allowed and the award dated 04.11.2023 was modified; the respondent was directed to deposit the amount within six weeks, failing which it attracts interest at 6% per annum from the date of termination (17.04.2018) until realization.
Source reference: p.6, 7Original Court PDF
ISHWARLAL MANILAL THAKERvsCHIEF OFFICER
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