Continuity of service entitles reinstated workmen to consequential benefits, even when back wages are denied.

Seven employees of LGB Forge Private Limited were dismissed on 29 September 2018 following a domestic enquiry.

The Union sought a reference, and the Labour Court partly allowed it, directing reinstatement with continuity of service but denying back wages and consequential benefits.

The Union challenged the denial of those benefits, contending that the workers had remained unemployed and without earnings after their dismissal.

1. Whether, after ordering reinstatement with continuity of service, the Labour Court’s denial of consequential benefits was sustainable

2. Whether the Labour Court’s denial of back wages warranted interference

The Court applied the principle that, where reinstatement is ordered with continuity of service, the workmen are entitled to the benefits attached to that continuity.

The Court did not expressly rely on any statutory provision or precedent.

The Labour Court had held the dismissal illegal and ordered reinstatement with continuity of service. The High Court reasoned that consequential benefits arising from that continuity should therefore follow, making their denial unsustainable.

Although the Court noted that evidence of the workers’ unemployment had not been properly considered, it concluded that the denial of back wages did not warrant interference.

The denial of back wages remained undisturbed.