Illegal and mala fide transfers require consequential relief, including compensation where reinstatement is not sought.

The petitioners/workmen were employed by M/s G4S Cash Service (India) Pvt. Ltd. in Delhi and were members of a registered trade union. After the management proposed, inter alia, the introduction of an inter-State transfer condition, which the union opposed, the management’s Delhi premises were found locked on 12 May 2010.

Following union representations and complaints alleging an illegal lockout, the management issued orders transferring the workmen from Delhi to distant locations across India.

The workmen challenged the transfers, asserting that their employment was Delhi-specific, that they had not executed appointment contracts containing transfer clauses, and that the transfers were mala fide and punitive responses to their trade-union activities.

The Labour Courts held that the union had validly espoused the disputes and that the transfers were illegal, unjustified and mala fide. One set of awards granted lump-sum compensation in lieu of reinstatement, while another set declared the transfers illegal but granted no consequential monetary relief.

Whether the Labour Courts’ findings that the inter-State transfer orders were illegal, unjustified and mala fide warranted interference in writ jurisdiction.

Whether the Labour Courts erred in failing to grant consequential monetary relief after holding the transfers to be illegal and mala fide.

Whether the lump-sum compensation awarded in the connected matters required enhancement having regard to the workmen’s length of service, last-drawn wages and the prolonged litigation.

The Court applied the limited scope of review under Articles 226 and 227 of the Constitution, under which the High Court does not sit as an appellate court over Labour Court findings but may interfere where the decision is without jurisdiction, perverse or contrary to natural justice, relying on Syed Yakoob v. K.S. Radhakrishnan, 1963 SCC OnLine SC 24, International Airport Authority of India v. International Air Cargo Workers Union, (2009) 13 SCC 374, and Ritz Theatre Pvt. Ltd. v. Ramesh Chandra, 2024 SCC OnLine Del 3633.

The Court further applied the applicable standing-order principle that inter-State transfer was impermissible absent an express contractual term or the workman’s consent.

On compensation in lieu of reinstatement, the Court relied on Delhi Stock Exchange & Anr. v. K.C. Sharma & Ors., 2002:DHC:12566 (DB), which holds that no fixed formula governs such compensation and that the Court should consider the nature of employment, age of the workman, length of service, last-drawn wages and prospects of alternative employment.

The findings that the transfers were illegal, unjustified and mala fide, as well as the finding regarding valid union espousal, had not been challenged by the management and had therefore attained finality.

The Labour Courts had found that the management failed to prove appointment contracts containing transfer clauses and failed to substantiate its alleged business exigencies by producing client termination notices or outstation service contracts; the timing of the transfers, following rejection of the management’s agenda by the union, supported the conclusion that they were punitive.

In the first group of cases, the Labour Court had appropriately declined reinstatement because of the loss of mutual confidence and the passage of time, but the compensation required enhancement in view of the workmen’s tenure, wages and litigation lasting more than a decade.

In the second group, merely declaring the transfers illegal while granting no consequential relief left the workmen without an effective remedy. Since reinstatement was not pressed, the closure of the Delhi/NCR operations and the passage of time justified awarding lump-sum compensation in lieu of reinstatement and back wages.

The amounts were fixed by reference to the principles in Delhi Stock Exchange and parity with the connected matters.

In the matters where compensation had already been granted—W.P.(C) Nos. 12008/2019, 12034/2019, 12453/2019, 12456/2019, 2414/2020, 833/2022 and 921/2022—the compensation was enhanced by an additional ₹1,00,000 for each workman.

In the matters where no monetary relief had been awarded, the management was directed to pay: Augustus Toppo ₹2,00,000; Krishna Chander Kumar ₹2,30,000; Satya Prakash Tiwari ₹2,00,000; Narender Mudgal ₹2,50,000; and Arun Kumar Singh ₹2,40,000.

The respondent was directed to disburse the amounts within six weeks, failing which the sums would carry simple interest at 9% per annum from expiry of that period until realization.