Reinstatement is not automatic when termination is illegal; Lump-sum compensation is appropriate after long delays and superannuation.

Lata Devi (Respondent) was engaged as a sweeper at IGI Airport via a contractor. Following the Supreme Court’s decision in Air India v. United Labour Union, the Petitioner (AAI) took her under its care on February 01, 1997, pending regularisation.

AAI discontinued her services on July 13, 1998, alleging she violated service regulations by contracting a "dual marriage," based on name discrepancies of her husband in her ration card versus her affidavit.

The Central Government Industrial Tribunal (CGIT), vide award dated December 13, 2013, set aside the termination for lack of an inquiry/proof and ordered reinstatement without back wages.

Both parties filed cross-petitions: AAI challenging the reinstatement and the Respondent seeking back wages.

1. Whether a direct employer-employee relationship existed between AAI and the Respondent in light of the overruling of Air India by SAIL v. National Union Waterfront Workers.

2. Whether the discontinuation of service on the grounds of a bigamous marriage without a formal inquiry was legally sustainable.

3. Whether reinstatement or back wages is the appropriate relief given the Respondent has surpassed the age of superannuation.

The Court applied the principles of Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970, regarding the prohibition of contract labour in sweeping/cleaning.

It relied on Air India v. United Labour Union (1997), which held that upon prohibition of contract labour, a direct relationship arises between the worker and the principal employer.

While acknowledging that SAIL v. National Union Waterfront Workers (2001) overruled Air India, the court noted the prospective application of SAIL.

The court applied Jagbir Singh v. Haryana State Agriculture Mktg. Board and Allahabad Bank v. Krishan Pal Singh, which establish that reinstatement and back wages are not automatic consequences of illegal termination and can be substituted with lump-sum compensation.

The Court observed that AAI had already implemented the Air India judgment by regularising 50-60 similarly placed co-employees; thus, it could not arbitrarily deny the Respondent the same status.

Because the Respondent was treated as a direct employee, her services could not be terminated without following the Industrial Disputes Act and the principles of natural justice.

The Court found the termination "illegal and unjustified" as AAI failed to conduct an inquiry or provide cogent evidence to prove the alleged bigamous marriage.

The Court noted that nearly 30 years had passed since termination (1998) and the Respondent had reached the age of superannuation around 2007-08; furthermore, the Respondent failed to provide evidence of being unemployed during the intervening period to justify back wages.

The Court set aside the order of reinstatement and directed AAI to pay a lump-sum compensation of ₹5,00,000/- to the Respondent in lieu of reinstatement and back wages, to be paid within eight weeks.