Workmen Must Prove Lack of Gainful Employment to Claim Backwages Upon Reinstatement

The appellants, employees of the Primary Agricultural Cooperative Credit Society, Veerakeralam, challenged their service termination under Section 2A(2) of the Industrial Disputes Act.

The Additional Labour Court, Coimbatore, set aside the termination, ordering reinstatement with 50% backwages.

The Management challenged this award via writ petitions. The Writ Court modified the award, setting aside the grant of 50% backwages.

One appellant (S. Sasikala) has since been reinstated, while the other (S. Maheswari) has retired. The appellants moved the High Court in a Writ Appeal to restore the backwages.

1. Whether the Writ Court was justified in setting aside the Labour Court's award of 50% backwages to the appellants.

2. Whether the principle of "No Work, No Pay" applies when employees fail to prove they were not gainfully employed during the period of dismissal.

The court applied the principle of "No Work, No Pay," emphasizing that backwages are not an automatic consequence of reinstatement.

The court relied on the legal ratio that the burden of proof lies on the workman to establish they were not gainfully employed during the period of non-employment to qualify for backwages.

It noted the administrative governance of Rule 149 of the Tamil Nadu Co-operative Societies Rules regarding the service conditions of Society employees.

The Division Bench observed that the primary reason the Writ Court denied the 50% backwages was the lack of evidence provided by the appellants to prove they were not gainfully employed during their dismissal.

The court noted that a mere assertion of a lack of a written reinstatement order is insufficient to overcome the "No Work, No Pay" doctrine.

The Bench found that since one appellant was already working and the other had retired without placing any material on record regarding their employment status during the interim period, the Writ Court's decision lacked perversity.

The court also touched upon the fact that the appellants are governed by special by-laws and the Tamil Nadu Co-operative Societies Rules, though it declined to interfere with the jurisdictional path already taken.

The High Court dismissed the Writ Appeals, finding no perversity in the impugned common writ order dated 08.04.2025. No costs were awarded.