Reinstatement and back wages may be substituted with lump-sum compensation after superannuation and prolonged litigation.

The claimant was appointed by the petitioner-management on 17 April 2008 and commenced work as an “Accounts Manager” from 16 May 2008, drawing a last salary of ₹29,000 per month.

He asserted that his actual duties were clerical/accounting in nature, involving preparation of ledgers and accounts, without managerial or supervisory authority.

He alleged that his services were illegally terminated on 13/16 November 2009 after he refused to resign, in violation of Sections 25F and 25G of the Industrial Disputes Act, 1947 (“ID Act”).

The management contended that the claimant was not a “workman” under Section 2(s) of the ID Act because he was designated as an Accounts Manager, headed the Accounts Division, and exercised administrative and supervisory control over subordinate employees.

It further alleged that he had abandoned his employment from 16 November 2009 after taking leave and communicating that he was leaving for better prospects.

The Labour Court framed issues regarding the claimant’s status as a workman, alleged abandonment of service, and relief.

It held that the claimant was a workman and that the management had failed to prove abandonment.

The Labour Court consequently directed reinstatement with full back wages and consequential benefits.

The management challenged the award under Articles 226/227 of the Constitution.

Whether the claimant, despite being designated as an “Accounts Manager”, was a “workman” within the meaning of Section 2(s) of the ID Act?

Whether the claimant had voluntarily abandoned his employment from 16 November 2009, or whether his services had been illegally terminated by the management?

Whether the Labour Court’s order granting reinstatement with full back wages warranted interference in writ jurisdiction, and what relief was appropriate in the circumstances?

The Court applied Section 2(s) of the ID Act, under which the determination of “workman” status depends on the dominant nature of the duties actually performed, rather than merely the employee’s designation or salary; employees principally performing managerial or supervisory functions are excluded.

Sections 25F and 25G of the ID Act prescribe safeguards relating to retrenchment and the order of retrenchment, although the central question before the Court concerned the legality of the termination.

The Court relied on Sonipat Cooperative Sugar Mills Ltd. v. Ajit Singh, (2005) 3 SCC 232, and H.R. Adyanthaya v. Sandoz (India) Ltd., (1994) 5 SCC 737, concerning the burden of establishing the nature of duties and the scope of the definition of “workman”.

Under Section 114 of the Indian Evidence Act, 1872, an adverse inference may be drawn where relevant evidence within a party’s possession is withheld.

The Court also applied the limited scope of judicial review under Articles 226/227, under which interference is justified only where the decision is without jurisdiction, perverse, or violative of natural justice, relying on Syed Yakoob v. K.S. Radhakrishnan, 1963 SCC OnLine SC 24, International Airport Authority of India v. International Air Cargo Workers’ Union, (2009) 13 SCC 374, and Ritz Theatre Pvt. Ltd. v. Ramesh Chandra, 2024 SCC OnLine Del 3633.

The Court found that the management failed to produce the final appointment letter, despite the initial appointment offer expressly contemplating its issuance.

Since the management’s witness admitted that the document produced was not the final appointment letter, the Labour Court was justified in drawing an adverse inference under Section 114 of the Evidence Act.

Although the management asserted that the claimant supervised Govind Beherwa, Virender Singh, and Reshmi Maurya, the claimant denied exercising such control, and the management neither examined those employees nor produced documentary material demonstrating the claimant’s supervisory powers.

Accordingly, the evidence did not establish that the dominant nature of the claimant’s duties was managerial or supervisory, and the finding that he was a workman under Section 2(s) was upheld.

On abandonment, the management admitted that it had issued no show-cause notice directing the claimant to resume duty and had initiated no domestic enquiry.

Further, its earlier reply to the Labour Inspector under the Minimum Wages Act did not mention the alleged telephonic communication regarding resignation or abandonment, indicating that the plea was an afterthought.

The Labour Court therefore correctly held that the management had failed to prove voluntary abandonment.

The finding of illegal termination was not perverse or otherwise amenable to correction in writ jurisdiction.

However, because the claimant had reached or crossed the age of superannuation and nearly 17 years had elapsed since termination, reinstatement was considered impracticable.

The Court accordingly exercised its power to mould the relief.

The Court held that the Labour Court’s findings did not suffer from perversity or jurisdictional error.

However, considering the claimant’s approximately one-and-a-half years of service, his last-drawn wages, the lapse of nearly 17 years, and his having crossed the age of superannuation, the relief of reinstatement and full back wages was modified.

The petitioner-management was directed to pay the claimant lump-sum compensation of ₹6,00,000 within six weeks, failing which the amount would carry interest at 9% per annum from the date of the order until realization.

The writ petition and pending applications were disposed of accordingly.