Reinstatement with full back wages is mandatory when dismissal is based on unproven misconduct and lack of evidence.

The Workman, a Professional Service Representative and union member, was dismissed from service by the Petitioner-Company on November 15, 1993, following a domestic enquiry into allegations of riotous behavior and "freezing" work at NIMS hospital on June 26, 1992.

The Workman challenged this under Section 2-A(2) of the Industrial Disputes Act. An initial Award for reinstatement with full back wages was remanded by the High Court for fresh consideration.

On remand, the Industrial Tribunal passed the impugned Award dated October 15, 2003, directing reinstatement with 50% back wages and withholding two annual increments, finding the primary charges unproven but noting minor obstruction.

Both the Company (seeking to uphold the dismissal) and the Workman (seeking full back wages) filed cross-writ petitions.

The court applied Section 11-A of the Industrial Disputes Act regarding the Tribunal's power to interfere with increments/punishments.

Tribunals must give cogent reasons for differing from management findings but have the power to reappreciate evidence as established in Workmen of M/s. Firestone Tyre and Rubber Co. v. Management.

The "loss of confidence" plea must be substantiated by material evidence of integrity breach, as seen in M/s. Francis Klein & Co. (P) Ltd. v. Their Workmen.

While reinstatement is not automatic, full back wages are the normal consequence when termination is found unjustified and not attributable to proven misconduct per Allahabad Bank v. Krishan Pal Singh.

The Court observed that the Tribunal, upon remand, correctly re-evaluated the evidence under the "preponderance of probabilities" standard.

The Court found that the Company’s evidence (MW1 and MW2) was riddled with inconsistencies regarding security presence at NIMS and whether any actual obstruction occurred, as the witnesses admitted they eventually entered the wards.

Conversely, the Workman provided unrebutted documentary evidence—including an approved expense report for the day of the alleged incident and a performance increment granted five days later—which rendered the Company's allegations of misconduct highly improbable.

The Court also noted the unexplained 50-day delay in issuing the charge sheet as a factor weakening the Company's case.

Crucially, the Court determined that because the "major charges" were found unproven, the Tribunal's decision to deny 50% back wages and impose an increment penalty was arbitrary and lacked "convincing reasons".

The Court dismissed the Company’s petition (W.P. No. 1844/2004) and allowed the Workman’s petition (W.P. No. 20970/2004), modifying the impugned Award to grant reinstatement with continuity of service and full back wages, and setting aside the penalty of withholding two annual increments.