Lump sum compensation in lieu of reinstatement is justified for daily wagers despite long service.

The appellant worked as a peon-cum-sweeper for the respondent insurance company from August 2000 to June 2006.

He challenged his termination in 2009, alleging a violation of the Industrial Disputes Act, 1947.

The Labour Court found that although the appellant was a daily wager working sporadically, his evidence of employment via 144 salary vouchers remained unrebutted.

Finding the termination technically flawed but noting the appellant's status as a temporary hand, the Labour Court awarded lump sum compensation of Rs. 2 lakhs in lieu of reinstatement.

The appellant’s writ petition against this order was dismissed by a Single Judge.

The appellant then filed this Letters Patent Appeal seeking reinstatement and back wages.

Whether the appellant is entitled to reinstatement and full back wages despite being a daily wager and filing the dispute after a three-year delay.

Whether the lump sum compensation of Rs. 2 lakhs is adequate and whether interest should be awarded on the unpaid amount.

The court applied the principles of the Industrial Disputes Act, 1947, regarding the termination of workmen.

It relied on established judicial discretion that daily wagers or temporary employees, even if terminated in violation of procedural law, may be awarded lump sum compensation instead of reinstatement.

The court also considered the doctrine of laches/delay, noting that a significant delay in raising an industrial dispute (three years in this case) weakens the prayer for reinstatement.

The Court observed that while the appellant proved five years of service, several factors militated against reinstatement.

Primarily, the appellant was a daily wager filling in for a permanent peon, making his status inherently temporary.

Furthermore, the three-year delay between the termination (2006) and the reference (2009) was deemed sufficient to deny the claimant the remedy of reinstatement.

Regarding the quantum of compensation, the Court found the Rs. 2 lakhs awarded by the Labour Court and affirmed by the Single Judge to be just and proper given the totality of circumstances.

However, the Court noted that the respondent, a corporate entity, had retained the awarded sum for over three years since the 2023 award while the appellant litigated, thereby benefiting from those funds.

Equity demanded that the appellant be compensated for this delay in payment.

It held that the lump sum of Rs. 2 lakhs was appropriate but ordered the respondent to pay interest at the rate of 6% per annum on the said amount from the date of the award (14.12.2023) until the date of payment.

The management was directed to settle the full amount within two months.