Employment Dispute Resolved: Supreme Court Grants Compensation Instead of Reinstatement
The case of Deputy Executive Engineer vs. Kuberbhai Kanjibhai brought an important legal issue to the forefront regarding the rights of daily wage workers and the conditions under which reinstatement can be granted. The Supreme Court of India, in its ruling on January 7, 2019, modified the earlier judgment and instead of reinstating the worker, directed that he be paid a lump sum compensation.
This case highlights the complexities of labor laws in India, particularly the provisions of the Industrial Disputes Act, 1947, which govern the reinstatement and compensation of workers whose services have been terminated without following due process.
Background of the Case
The respondent, Kuberbhai Kanjibhai, worked as a daily wager in the Roads & Buildings Department of the Gujarat Government for 18 years. However, his services were abruptly terminated by the State without following the due procedure required by law. The dispute over his termination led to litigation that spanned more than a decade.
Key Facts
- The respondent claimed to have worked continuously as a daily wager for 18 years.
- The State, however, argued that he had only worked intermittently from 1979 to 1981.
- The worker raised a dispute nearly 15 years after his alleged termination.
- The Labour Court ruled in favor of the worker and ordered reinstatement without back wages.
- The Gujarat High Court upheld the Labour Court’s decision.
- The State Government challenged this decision in the Supreme Court.
Legal Proceedings
Labour Court Decision
The Labour Court, Surendranagar, ruled in favor of the worker on May 9, 2007, directing that he be reinstated. However, the court denied him back wages, recognizing that his employment had been on a daily wage basis and not a regular position.
High Court Judgment
The Gujarat High Court upheld the Labour Court’s decision, dismissing the State’s writ petition. It ruled that since the termination had been done without following due process, the worker was entitled to reinstatement.
Supreme Court’s Observations
The Supreme Court, after reviewing the case, found that the worker had been employed as a daily wager or muster roll employee for only a short period. The Court noted:
“It is trite law that when the termination is found to be illegal because of non-payment of retrenchment compensation and notice pay as mandatorily required under Section 25-F of the Industrial Disputes Act, even after reinstatement, it is always open to the management to terminate the services of that employee by paying him the retrenchment compensation.”
The Court further elaborated:
“Since such a workman was working on a daily wage basis and even after he is reinstated, he has no right to seek regularization. Thus, when he cannot claim regularization and he has no right to continue even as a daily wage worker, no useful purpose is going to be served in reinstating such a workman, and he can be given monetary compensation.”
Key Legal Issues
Arguments by the Petitioner (State Government)
- The respondent was not a regular employee and had no right to seek reinstatement.
- The Labour Court and High Court failed to consider that he had only worked for a short period.
- The worker filed his dispute nearly 15 years after his alleged termination.
Arguments by the Respondent (Worker)
- He had worked for 18 years, and his termination was illegal as it violated Section 25-F of the Industrial Disputes Act.
- Reinstatement was the appropriate remedy since he was terminated without following due process.
- The Labour Court and High Court had already ruled in his favor, and there was no reason to interfere with their decisions.
Supreme Court’s Final Judgment
The Supreme Court ruled in favor of modifying the previous orders and provided the following key directives:
- The reinstatement order was set aside.
- The worker was awarded a lump sum compensation of Rs. 1,00,000 in full and final settlement.
- The compensation was to be paid within three months from the date of the judgment.
The Court concluded:
“Having regard to the totality of the facts taken note of supra, we consider it just and reasonable to award a sum of Rs. 1,00,000/- (Rs. One Lakh) to the respondent in lieu of his right to claim reinstatement and back wages in full and final satisfaction of this dispute.”
Conclusion
This case sets an important precedent regarding employment disputes, particularly concerning daily wage workers. It establishes that while due process must be followed before termination, reinstatement is not always the appropriate remedy. Instead, in cases where long delays exist or the worker was never a permanent employee, monetary compensation may be a more suitable resolution.
The Supreme Court’s decision aligns with its earlier rulings in Bharat Sanchar Nigam Limited vs. Bhurumal (2014) and District Development Officer vs. Satish Kantilal Amerelia (2018), reinforcing that compensation, rather than reinstatement, is the norm in cases where procedural violations occur but there is no fundamental right to permanent employment.
Petitioner Name: Deputy Executive Engineer.Respondent Name: Kuberbhai Kanjibhai.Judgment By: Justice Abhay Manohar Sapre, Justice Indu Malhotra.Place Of Incident: Gujarat.Judgment Date: 07-01-2019.
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