Prolonged delay after illegal termination justifies lump-sum compensation in lieu of reinstatement.

The respondent-workman claimed that he had worked with the Forest Department for approximately eight years on monthly wages of Rs.4,000 and that his services were orally terminated on 20 December 2015 without notice or compliance with the applicable retrenchment procedure.

He raised an industrial dispute, which was referred to the Labour Court, Valsad, as Reference (L.C.V.) No.133 of 2016. The State denied continuous employment and asserted that the work was temporary, casual, seasonal and need-based, and that the workman had not completed 240 days of service in the preceding year.

The State also contended that notice had been served and retrenchment compensation had been paid.

The Labour Court nevertheless held the termination illegal and directed reinstatement with 50% back-wages and consequential benefits by award dated 5 November 2022. The State challenged that award under Articles 226 and 227 of the Constitution.

Whether the Labour Court was justified in holding that the respondent had completed 240 days of service in the twelve months preceding termination and that Section 25F of the Industrial Disputes Act, 1947 applied.

Whether the termination was illegal for non-compliance with the notice and retrenchment-compensation requirements under Section 25F of the Industrial Disputes Act, 1947.

Whether, having regard to the lapse of time since the 2015 termination, reinstatement should be substituted by lump-sum compensation.

The Court applied Section 25F of the Industrial Disputes Act, 1947, which requires compliance with statutory notice and retrenchment-compensation conditions where a workman meeting the continuous-service requirement is retrenched.

The Court relied on the evidentiary principle that where the employer possesses the best records—such as attendance registers, muster rolls and wage registers—but fails to produce them, the workman’s assertion regarding completed service may be accepted when supported by the available evidence.

It further followed the Division Bench decision in Letters Patent Appeal No.1027 of 2025 and allied matters, decided on 18 June 2026, which upheld the finding of illegal termination in comparable forest-department employment disputes but substituted reinstatement with lump-sum compensation of Rs.3 lakhs per workman because reinstatement after a prolonged passage of time would be inappropriate.

The Court found that the respondent’s claim of having completed 240 days of service was not rebutted by reliable documentary evidence. Although the State relied on attendance records in argument, it did not produce the attendance register, muster roll or wage records, which were the best available evidence; nor did it establish service of notice or payment of retrenchment compensation.

Consequently, the Labour Court was correct in holding that the 240-day requirement was satisfied and that the termination violated Section 25F. However, the respondent had been terminated in 2015 and the proceedings had continued until 2026. Applying the Division Bench’s approach in the comparable forest-worker cases, the Court held that reinstatement at that stage would be inappropriate and that monetary compensation was the proper relief.

In default, the State was directed to pay interest at 5% per annum. The petition was disposed of on those terms, with no order as to costs.