Supreme Court Awards Compensation to Workers Terminated Without Compliance Under Industrial Disputes Act
The Supreme Court of India recently delivered a crucial ruling in K.V. Anil Mithra & Anr. vs. Sree Sankaracharya University of Sanskrit & Anr., addressing the wrongful termination of non-teaching staff employed on a daily wage basis. The judgment reaffirmed the importance of procedural compliance under Section 25F of the Industrial Disputes Act, 1947, while balancing fairness in awarding compensation instead of reinstatement.
Background of the Case
The case originated from the appointments of non-teaching staff at Sree Sankaracharya University of Sanskrit during 1993-1995. The university engaged various staff, including Watchmen, Attenders, Peons, Sweepers, Assistant Cooks, and Gardeners, on a daily wage basis. Their services were regularized in 1996 but later de-regularized in 1997, leading to their termination.
Following the de-regularization, the affected employees challenged their termination. The Kerala High Court upheld the university’s decision, leaving open the question of whether the termination violated the Industrial Disputes Act. Consequently, the matter was referred to the Industrial Tribunal.
Arguments by the Petitioners (Appellants-Workmen)
The petitioners contended that:
- They were in continuous service for over 240 days before termination, making them eligible for protection under Section 25F of the Industrial Disputes Act.
- The university failed to provide one month’s notice and retrenchment compensation as required by law.
- Their employment was unlawfully terminated without following due process.
Arguments by the Respondents (University)
The university countered that:
- Their initial appointments were made without a proper selection process and were irregular.
- The university had the authority to de-regularize improperly appointed staff.
- The employees’ appointments were not valid under the University Ordinance.
Industrial Tribunal’s Findings
The Industrial Tribunal ruled in favor of the employees, holding that their termination violated Section 25F of the Industrial Disputes Act. The Tribunal declared the terminations illegal and ordered reinstatement with 50% back wages.
Kerala High Court’s Reversal
The university challenged the Tribunal’s award before the Kerala High Court. The Single Judge quashed the Tribunal’s order, reasoning that employees appointed irregularly could not claim benefits under the Industrial Disputes Act. The Division Bench upheld this ruling, stating that Section 25F protections did not apply to workers whose appointments were invalid.
Supreme Court’s Judgment
The Supreme Court overturned the High Court’s ruling and held that:
- The employees were covered under the Industrial Disputes Act as ‘workmen.’
- Non-compliance with Section 25F rendered the termination void.
- However, reinstatement was not automatic, and compensation was a just alternative.
- Each employee was awarded Rs. 2,50,000 in lieu of reinstatement and back wages.
The Court emphasized: “The nature of appointment is irrelevant when determining compliance with retrenchment laws under the Industrial Disputes Act.”
Conclusion
This judgment reinforces the mandatory nature of retrenchment procedures under the Industrial Disputes Act while acknowledging the practical challenges of reinstating employees terminated decades ago. The ruling provides a fair balance between workers’ rights and institutional governance, ensuring compliance while awarding reasonable compensation instead of automatic reinstatement.
Read also: https://judgmentlibrary.com/supreme-court-upholds-union-of-indias-decision-on-ias-cadre-allocation/
Petitioner Name: K.V. Anil Mithra & Anr..Respondent Name: Sree Sankaracharya University of Sanskrit & Anr..Judgment By: Justice Ajay Rastogi, Justice Abhay S. Oka.Place Of Incident: Kerala.Judgment Date: 27-10-2021.
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