Lump sum compensation substituted for reinstatement where termination violates statutory procedure after decade-long casual employment.

The respondent-workman was employed as a watchman by the petitioner (Forest Department) for approximately ten years on a monthly wage of Rs. 4,000/-.

He alleged oral termination of his services on July 1, 2015, without following due procedure under the Industrial Disputes Act, 1947.

The Labour Court, Valsad, in Reference (LCV) No. 134 of 2016, passed an award on February 20, 2024, partly allowing the reference and granting 50% "in lieu of reinstatement" and consequential benefits.

The State challenged this award, contending that the workman was engaged on a project-based grant, had no permanent status, and failed to prove 240 days of continuous service in a year.

Whether the Labour Court's award granting 50% relief in lieu of reinstatement was legally sustainable given the nature of the respondent's employment.

Whether lump sum compensation is a more appropriate remedy than reinstatement or consequential benefits in cases of long-delayed references and temporary employment.

The Court applied the provisions of the Industrial Disputes Act, 1947, regarding retrenchment and the burden of proof for continuous service.

It primarily 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, which supports awarding lump sum compensation instead of reinstatement in specific labor disputes.

Furthermore, it followed the scale of compensation established by the Division Bench of the Gujarat High Court in *LPA No. 908 of 2023*, which categorized compensation amounts based on the total years of service (e.g., Rs. 3.00 lacs for 5-10 years).

The Court noted that while the Labour Court found the termination unjustified, the nature of the work was temporary and based on government grants.

Applying the principles from the cited Division Bench judgments, the Court observed that when a significant time has elapsed since termination and the employment was not permanent, reinstatement is often impractical.

The Court found that the interest of justice would be better served by awarding a lump sum amount rather than the 50% benefit originally awarded by the Labour Court.

By referencing the unified scale in *LPA 908 of 2023*, the Court determined that for a tenure of 10 years, a fixed compensation of Rs. 3,00,000/- was appropriate to bring finality to the litigation.

It held that the respondent is entitled to a lump sum compensation of Rs. 3,00,000/- as a full and final settlement of all dues, replacing the original relief of 50% in lieu of reinstatement.

The Petitioner-State was directed to pay this amount via RTGS/NEFT within eight weeks.