Lump sum compensation for deceased workman’s heirs enhanced based on years of service and unfair labour practices.

The deceased workman was appointed as a Rojamdar (daily wager) Driver under the respondent in June 1998 and served for over six years.

His services were orally terminated on February 15, 2003, allegedly because he demanded benefits under Government Resolution dated October 17, 1988.

The workman challenged the termination before the Labour Court, Godhra (Reference (T) No. 90 of 2004).

During the Pendency of the proceedings, the workman passed away, and his widow was joined as his legal heir.

The Labour Court found the termination illegal due to violations of Sections 25F and 25G of the Industrial Disputes Act but awarded a lump sum compensation of only ₹50,000.

The petitioner sought enhancement of this compensation and other consequential benefits.

Whether the lump sum compensation of ₹50,000 awarded by the Labour Court was adequate given the findings of unfair labour practices and statutory violations.

Whether the legal heir of the deceased workman is entitled to an enhanced quantum of compensation in lieu of reinstatement and back wages.

The Court primarily applied Section 25F (conditions precedent to retrenchment) and Section 25G (procedure for retrenchment) of the Industrial Disputes Act, 1947.

It relied on the precedent set by the Hon’ble Supreme Court in Maharashtra State Cooperative Marketing Federation Limited v. Suresh S/o Dadarao Gadge (2015) 4 SCC 542, regarding the appropriateness of lump sum compensation in such disputes.

The Court followed the quantification slabs established by the Division Bench of the Gujarat High Court in Letters Patent Appeal No. 908 of 2023, which categorized compensation amounts based on the length of service (e.g., ₹3.00 lacs for 5–10 years of service).

The Court observed that the Labour Court correctly identified the illegality of the termination but failed to award a proportionate remedy.

It noted that the deceased had served for approximately six years before his service was terminated without following due process.

Referring to recent Division Bench rulings, the Court reasoned that where reinstatement is impossible (due to the death of the workman), the "interest of justice" is best subserved by awarding a standardized lump sum amount that reflects the duration of service.

The Court specifically utilized the scale from the Division Bench order dated April 18, 2024, which prescribes ₹3,00,000 for workmen with 5 to 10 years of service.

The Court balanced the equities by substituting the meager compensation with a figure aligned with contemporary judicial standards for daily wagers.

The Court held that this amount represents a final settlement in lieu of all consequential benefits, including back wages and pensionary claims.

The respondent was directed to pay the balance amount (after deducting any previous payments) to the widow via RTGS within eight weeks, subject to identity verification.

No costs were awarded.