### Termination for unauthorised absence modified to lumpsum compensation where punishment is shockingly disproportionate to proven misconduct.

The Petitioner, a cooperative sugar factory, dismissed the Respondent (a Clerk) on February 12, 2002, following a domestic enquiry.

The primary charge was unauthorized absence for 240 days.

The Respondent claimed the absence was due to illness (tennis elbow and backache) and submitted medical certificates several months late.

The Labour Court held the enquiry was fair but later ordered reinstatement with 50% backwages, finding the Petitioner failed to communicate the rejection of leave applications.

The Industrial Court subsequently modified this to 100% backwages.

The Petitioner challenged these orders, arguing the courts failed to frame a preliminary issue on "perversity" and denied the employer an opportunity to lead evidence to justify the dismissal.

1. Whether the Labour Court erred in law by failing to frame a preliminary issue regarding perversity in the Enquiry Officer's findings and by denying the Petitioner an opportunity to lead evidence

2. Whether the Respondent’s absence for 240 days, supported by delayed medical certificates, constituted a proven misconduct

3. Whether the punishment of dismissal was proportionate to the established misconduct

4. Whether the Respondent was entitled to 100% backwages given his agricultural income and subsequent physical disability

The Court applied the principles of industrial adjudication established in Workmen of The Motipur Sugar Factory Private Limited v. The Motipur Sugar Factory, which mandates that if a domestic enquiry is found defective or findings are perverse, the employer must be given an opportunity to justify the dismissal by leading evidence before the Tribunal.

It also applied Section 28 and Items of Schedule IV of the MRTP & PULP Act, 1971 regarding unfair labour practices.

Regarding backwages and gainful employment, the Court followed North-East Karnataka Road Transportation Corporation v. M. Nagangouda, which holds that agricultural income must be considered when determining the quantum of backwages.

The Court found the Labour Court's procedure "unknown to law" because it failed to frame an issue on perversity and proceeded to decide the merits without allowing the Petitioner to lead evidence to justify the dismissal.

On the merits, the High Court held the lower courts were "perverse to the core" for suggesting an employer must communicate leave rejection to an employee who goes missing for eight months; the burden of inquiry lies with the employee.

The sickness (tennis elbow/sprain) did not justify an eight-month absence without hospitalization, and the submission of all medical certificates "at one go" seven months late suggested they were procured to cover the absence.

However, while misconduct was proved, the Court found dismissal "shockingly disproportionate" for a 16-year service record where only unauthorized absence was ultimately pressed.

Considering the Respondent's agricultural income and a 2009 accident that rendered him unfit for work, full backwages were deemed inappropriate.

The High Court set aside and modified the orders of the Labour and Industrial Courts and ordered the Petitioner to pay a lump sum compensation of ₹15,00,000/- in lieu of reinstatement and backwages as a full and final settlement. If not paid within four weeks, the amount carries 8% interest p.a.