Lump sum compensation substituted for reinstatement and backwages in cases of delayed industrial disputes and daily-rated employment.

The respondent-workmen were employed as Valvemen by the Gondal Nagarpalika from 1994 until their termination on December 12, 2000

The workmen alleged their services were terminated without notice or compensation, violating Sections 25(F), (G), and (H) of the Industrial Disputes Act, 1947

After a delay of 11 years, the workmen raised an industrial dispute in 2011 (Reference (LCR) Nos. 76 and 77 of 2011)

The Labour Court, Rajkot, condoned the delay and passed an award directing reinstatement with theoretical continuity of service and 20% backwages

The Nagarpalika challenged these awards under Articles 226 and 227 of the Constitution

1. Whether the unexplained delay of 11 years in raising the industrial dispute rendered the Reference liable to be rejected on the grounds of delay and laches

2. Whether the relief of reinstatement with backwages was appropriate given the nature of employment (daily rated) and the significant passage of time since termination

The Court applied the provisions of the Industrial Disputes Act, 1947, specifically regarding illegal termination

It relied on the principle established by the Hon’ble Supreme Court in *Maharashtra State Cooperative Marketing Federation Limited v. Suresh S/o Dadarao Gadge* (2015) 4 SCC 542, suggesting that lump sum compensation is an appropriate alternative to reinstatement in certain industrial disputes

Furthermore, it followed the Division Bench of the Gujarat High Court’s formula from *LPA No. 908 of 2023*, which balances the length of service against the delay in filing to determine a quantized lump sum compensation scale

The Court observed that while the Nagarpalika argued the workmen had not completed 240 days of service and that the 11-year delay should have precluded adjudication, the Labour Court had already found in favor of the workmen without rebuttal evidence from the employer

However, the High Court noted the practical difficulty of reinstatement after such a prolonged period.

Referencing recent Division Bench precedents, the Court determined that the "interest of justice would be subserved" by substituting reinstatement with lump sum compensation

The Court specifically adjusted the relief because the Nagarpalika had failed to comply with Section 17B of the Act (payment of last drawn wages during pendency of proceedings) despite previous court orders

Following the judicial scale for 5–10 years of service, the Court found it fit to grant compensation in lieu of all other benefits

It set aside the directions for reinstatement, continuity of service, and backwages, instead ordering the petitioner-Nagarpalika to pay a lump sum compensation of Rs. 3,00,000/- to each respondent-workman as a full and final settlement

The payment must be made via RTGS/NEFT within eight weeks

Rule was made absolute to this extent