Back Wages Claim Rejected: Employee Reinstated After Acquittal

The Supreme Court of India, in the case of P. Karupaiah (D) Thr. Lrs. vs. The General Manager, Thruuvalluvar Transport Corporation Ltd., dealt with a crucial issue of back wages for an employee who was dismissed due to criminal charges but later reinstated after acquittal. The judgment, delivered on October 12, 2017, sheds light on the legal principles governing back wages in employment disputes.

The appellant, a driver for the respondent corporation, was dismissed from service after being prosecuted for murder. Although initially convicted by the Sessions Court, he was later acquitted by the High Court. Upon acquittal, the appellant sought reinstatement, which was granted, but his request for back wages from July 21, 1994, to August 31, 1999 was denied by the employer. The appellant then approached the High Court seeking back wages.

Petitioner’s Arguments

The petitioner contended that:

Since his dismissal was based on criminal charges and he was acquitted, he should be entitled to full back wages.
The employer had unjustly deprived him of his salary during the period of his dismissal.
The principle of justice demanded that he be compensated for the financial hardships faced during the period of suspension.

Respondent’s Arguments

The respondent corporation argued that:

The appellant was dismissed due to his involvement in a serious criminal offense, and not due to any action taken arbitrarily by the employer.
There was no rule that automatically entitled an acquitted employee to back wages.
As per settled law, back wages are not granted as a matter of right unless the employee proves that he was not gainfully employed elsewhere.

Key Observations by the Court

The Supreme Court ruled in favor of the employer and upheld the High Court’s decision, stating that:

“The law on the question of award of back wages has taken some shift. It is now ruled in cases that when the dismissal/removal order is set aside/withdrawn by the Courts or otherwise, as the case may be, directing employee’s reinstatement in service, the employee does not become entitled to claim back wages as of right unless the order of reinstatement itself in express terms directs payment of back wages and other benefits.” (Referencing M.P. State Electricity Board vs. Jarina Bee (Smt.), (2003) 6 SCC 141).

The Court further noted:

The burden of proof was on the appellant to show that he was not gainfully employed elsewhere.
The principle of “No Work – No Pay” was applicable in the present case.
The relief of reinstatement does not automatically grant the right to back wages unless evidence is produced to support the claim.

Final Judgment

The Court dismissed the appeal, stating:

“Having seen the record of the case, we are satisfied that there was no evidence brought on record by the appellant (employee) in his writ petition to claim the back wages for the period in question either in full or part.”

It emphasized that since the issue was not raised before the Industrial or Labour Tribunal, where evidence could have been presented, the High Court rightly declined to grant relief.

Furthermore, the Court remarked:

“The appellant should feel satisfied that he was able to secure reinstatement in service despite his involvement in a murder case. The appellant should be content with what he has got.”

Conclusion

This case reiterates that back wages are not an automatic right upon reinstatement. The burden lies on the employee to prove that they were unemployed during the dismissal period. The principle of ‘No Work – No Pay’ is applicable unless directed otherwise by the reinstatement order. Employers and employees must understand that reinstatement does not necessarily come with monetary compensation for the period of absence, unless legally justified.

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