Lump Sum Compensation Substituted for Termination Reinstatement Given Impending Retirement and Lengthy Litigation

The appellant (workman) was dismissed by the Management on 23.04.2014 following an inquiry that established misbehavior with a superior

The Labour Court subsequently rejected the Management’s application for approval of the dismissal on 12.12.2014, resulting in the workman's continued employment

The Management challenged this in the High Court via a writ petition; the learned Single Judge allowed the petition and quashed the Labour Court's order, effectively terminating the workman on 08.02.2017

The workman preferred this Letters Patent Appeal, which remained pending for eight years

Whether the dismissal of the workman was warranted given he had only one month of service remaining and had previously served for 17 years

Whether, in lieu of prolonged litigation, the court could award a lump-sum compensation to resolve the dispute finally

The Court adopted the principle of achieving finality in industrial disputes through equitable compensation to avoid multiple rounds of litigation

It specifically relied on the precedent set by a Division Bench of the Gujarat High Court in Letters Patent Appeal No. 908 of 2023 (in Special Civil Application No. 21754 of 2017), which established that an employee with a significant remaining period of service (10 to 15 years) is entitled to a compensation amount of Rs. 5,00,000/- in lieu of other claims

The Court observed that the workman had 17 years of service history and only one month of service left before retirement

Instead of adjudicating the merits of the dismissal—which would likely lead to further rounds of litigation before the Labour Court—the Court determined it was "not desirable" for either party to continue the decade-long legal battle

Applying the compensation benchmark from recent Division Bench precedents, the Court calculated that a sum of Rs. 5,00,000/- served as an adequate full and final settlement, balancing the workman’s long tenure against the remaining service period he lost due to the 2017 termination

The payment must be made within eight weeks of the receipt of the order. Consequently, the appeal was disposed of and the interim relief application was declared infructuous