Enhancement of lump-sum compensation for illegal termination based on length of service despite suppression of facts.

The appellant (workman) challenged his termination from 2001 through a reference in 2002.

During the 20-year pendency of the proceedings, the workman reached the age of superannuation.

On 13.04.2023, the Labour Court declared the termination illegal but, citing his retirement, awarded only ₹1,20,000 as lump-sum compensation.

The workman accepted ₹1,25,000 during recovery proceedings on 26.07.2023 and withdrew those proceedings.

He subsequently filed a writ petition seeking back wages and continuity of service, which the learned Single Judge dismissed on the grounds of suppression of material facts, as the workman failed to disclose the receipt of the compensation amount.

The workman then filed this Letters Patent Appeal (LPA).

1. Whether the suppression of the receipt of compensation by the workman justified the dismissal of the writ petition, and if so, whether the compensation awarded was equitable given his 16 years of service.

2. Whether the lump-sum compensation should be enhanced in accordance with prevailing judicial guidelines for long-term service.

The Court applied the principle of equity to balance the technicality of "suppression of facts" against the substantive rights of a workman in industrial disputes.

It specifically relied on the judicial guidelines established by a coordinate Division Bench in LPA No. 908 of 2023, which sets a benchmark of ₹7.5 lakhs as lump-sum compensation for workmen who have completed 15 to 20 years of service in cases where reinstatement is not feasible due to superannuation.

The Court acknowledged that while the workman did suppress the fact of receiving ₹1,25,000, and thus the Single Judge’s dismissal was technically sound, a pragmatic and balanced view was required because the management had accepted the Labour Court's finding that the termination was illegal.

Given that the workman had completed 16 years of service and the litigation had lasted over two decades, the Court found the Labour Court’s award of ₹1.2 lakhs to be significantly inadequate.

Applying the formula from LPA No. 908 of 2023, the Court determined that the appropriate compensation for a service span of 15-20 years is ₹7.5 lakhs.

The Court allowed the appeal in part and directed the management to pay the difference of ₹6,30,000 (₹7,50,000 total compensation minus the ₹1,20,000 already awarded/paid) to the workman within eight weeks of the order.