Reinstatement is the normal rule upon finding termination to be an illegal retrenchment and unfair labour practice.

The appellant was employed as a peon with the respondent corporation on a daily-wage basis from January 1987 until May 1990

His services were terminated effective May 22, 1990, after serving for approximately three and a half years

The Labour Court, via an award dated February 14, 1997, held that the termination amounted to "retrenchment" without compliance with Section 25F and was thus illegal

However, instead of reinstatement, the Labour Court awarded a lump-sum compensation of ₹50,000

A Single Judge of the High Court upheld this award in 2013, rejecting the appellant's plea for reinstatement

The appellant subsequent filed this Letters Patent Appeal (LPA) seeking reinstatement with back wages

1. Whether the termination of the appellant’s services, following periodic contract extensions with artificial breaks, amounted to an unfair labour practice and "retrenchment" under Section 2(oo) of the ID Act

2. Whether the appellant was entitled to the relief of reinstatement with full back wages, or if lump-sum compensation was the appropriate remedy

The court applied Section 2(oo) of the ID Act defining "retrenchment" and Section 25F regarding conditions precedent to retrenchment

It relied on the principle that courts may "lift the veil" to identify unfair labour practices where contracts are terminated by efflux of time through artificial breaks

Regarding relief, the court applied the "normal rule" established in Deepali Gundu Surwase v. Kranti Junior Adhyapak and Jasmer Singh v. State of Haryana, which mandates reinstatement with back wages when retrenchment is found illegal

It further noted the modulation of back wages as per Dinesh Chandra Sharma v. Bhartiya Paryatan Vikas Nigam Limited

the discretionary scope of LPA jurisdiction cited in DTC v. Bahadur Singh

The court affirmed the concurrent findings of the Labour Court and the Single Judge that the respondent engaged in an unfair labour practice by providing short-term appointments with artificial breaks for a job of perennial nature (Peon), thus violating Section 25F

In addressing the relief, the court noted that while compensation is sometimes awarded, recent Supreme Court jurisprudence post-Jagbir Singh has reiterated that reinstatement is the standard remedy for illegal retrenchment

The court found that because the DFC did not challenge the finding of illegal termination, that finding attained finality

the court modulated the financial relief, calculating that the ₹50,000 awarded in 1997 effectively covered approximately 50% of the back wages due until the date of the award based on the appellant’s salary at the time

The award of ₹50,000 was maintained but re-characterized as 50% back wages for the period prior to the 1997 award; no back wages were granted for the period beyond that