Illegal termination may warrant lump-sum compensation instead of reinstatement when superannuation makes reinstatement impracticable.

The respondent was employed as a clerk with the petitioner-company from 21 December 1982. He alleged that his services were orally terminated on 8 November 1989, in breach of Section 25F of the Industrial Disputes Act, 1947. The petitioner contended that the respondent had attended work on 8 and 9 November 1989 and had not been terminated.

The Labour Court, Bhuj, ultimately held the termination illegal and directed reinstatement with 50% back wages. The petitioner challenged that award under Articles 226 and 227 of the Constitution. It further contended that the respondent had been reinstated from 15 to 26 January 2001, after which the factory was rendered non-functional due to the earthquake, and that reinstatement was no longer possible because the respondent had reached superannuation. The respondent, then approximately 74 years old, did not press for reinstatement but sought compensation of ₹15 lakh in lieu thereof.

Whether the Labour Court was justified in holding that the respondent’s services had been illegally terminated in violation of Section 25F of the Industrial Disputes Act, 1947.

Whether, given the respondent’s age and the petitioner’s asserted closure/non-functioning of the unit, reinstatement should be substituted by monetary compensation.

Whether the award of 50% back wages was legally and factually sustainable.

The Court applied Section 25F of the Industrial Disputes Act, 1947, which requires compliance with statutory conditions, including notice or wages in lieu of notice and retrenchment compensation, before retrenchment of a qualifying workman. An order of termination in breach of Section 25F is illegal.

The Court also applied the principle that although reinstatement may ordinarily follow an illegal termination, the appropriate relief is discretionary and may be substituted by lump-sum compensation where reinstatement is impracticable because of the employee’s age, lapse of time, closure or non-functioning of the establishment, and other surrounding circumstances.

The writ jurisdiction under Articles 226 and 227 is supervisory and does not ordinarily permit reappreciation of factual findings absent perversity or jurisdictional error.

No specific judicial precedent was cited in the judgment.

The Court accepted the Labour Court’s finding that the respondent had been terminated despite the petitioner’s reliance on muster rolls and attendance sheets. The respondent’s evidence that he was present at the workplace but was not assigned work was not effectively controverted, and the petitioner neither issued a notice requiring resumption of duties nor initiated proceedings for abandonment. The respondent’s subsequent reinstatement on 15 January 2001, while the industrial dispute was pending, further supported the inference that his earlier services had in fact been terminated.

Since the petitioner produced no evidence showing compliance with Section 25F, the finding of illegal termination did not warrant interference in writ jurisdiction.

However, reinstatement in 2026 was impracticable because the respondent had reached approximately 74 years of age. Considering his approximately seven years of service, last drawn wages of ₹1,125 per month, prolonged litigation, and the petitioner’s repeated restoration applications and delays, the Court substituted reinstatement with compensation calculated at ₹1,125 × 12 × 25 years, amounting to ₹3,37,500.

The petitioner also failed to prove its allegation that the respondent had been engaged in a transport business or other gainful employment; therefore, the award of 50% back wages was maintained.

The petitioner was directed to pay ₹3,37,500 as lump-sum compensation in lieu of reinstatement, together with 50% back wages, within eight weeks from receipt of the order. In default, the amount would carry interest at 5% per annum from the date of the award until realisation. The petition was dismissed and the rule discharged.