P&H HC Upholds 25% Back Wages For Reinstated Store Keeper, Says Unemployment Alone Did Not Require Full Pay

The appellant’s services were terminated with effect from 24 August 1983.

The Labour Court set aside the termination and ordered reinstatement with continuity of service, but denied back wages.

On the appellant’s challenge, the High Court remanded the matter for reconsideration of back wages alone, leaving reinstatement and continuity undisturbed.

On remand, the Labour Court awarded 25% back wages.

The Single Judge dismissed the appellant’s petition seeking full back wages, leading to this appeal, which concerned only the quantum of back wages.

Reinstatement does not automatically entitle a workman to full back wages; the entitlement and quantum depend on the facts and circumstances, including the nature of the termination, the workman’s conduct, the period out of service, evidence concerning gainful employment, and other relevant equities.

In J.K. Synthetics Ltd. v. K.P. Agrawal, 2007 (2) SCC 433, and U.P. State Brassware Corporation Ltd. v. Uday Narain Pandey, 2006 (1) SCC 479, the Supreme Court held that back wages require a reasoned exercise of judicial discretion and cannot be granted mechanically.

Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.Ed.), 2013 (10) SCC 324, recognizes the importance of restitution following an illegal termination, while leaving room for consideration of the particular facts.

No statutory provision was identified as the basis of decision.

The Court noted that the Labour Court considered the management’s evidence of notices calling on the appellant to resume duty, his absence without permission, and his assertion that he had applied for leave.

It also considered his claim that he had not been gainfully employed.

Rather than denying back wages altogether, the Labour Court awarded 25% after assessing the competing circumstances on the existing record; the remand had not permitted further evidence.

The absence of proof of gainful employment, even if accepted, did not by itself require full back wages.

As the appellant failed to show that material circumstances had been overlooked or that the Labour Court’s assessment was perverse or contrary to law, the possibility of a different view on the percentage did not justify appellate interference.

The Letters Patent Appeal was dismissed; the Single Judge’s order and the Labour Court’s award, to the extent challenged, were affirmed, with no order as to costs.