The Rajasthan High Court (Jaipur Bench) has clarified that while violation of Section 25F the Industrial Disputes Act, 1947, renders retrenchment illegal, the relief consequent to such illegality is not automatic and must depend upon the facts and circumstances of each case. The Court also noted that reinstatement of daily wagers after decades of litigation serves neither industrial harmony nor justice, and compensation is a pragmatic substitute.
Pointing out that the earlier approach of treating reinstatement as inevitable has undergone a marked shift, the Court held that in cases involving daily wagers, ad hoc or contractual employees, particularly where the engagement was for a short duration and the dispute is adjudicated after a long lapse of time, monetary compensation is a more appropriate and equitable relief than reinstatement.
The High Court emphasised that mechanical reinstatement may disturb the administrative and financial equilibrium of the employer. Reference was made to the decision of the Supreme Court in the case of Ranbir Singh vs Executive Engineer PWD [ (2021) 14 SCC 815], which declined reinstatement and awarded lump sum compensation, especially where there was no material to suggest unfair labour practice or victimization.
A Single Judge Bench of Justice Anand Sharma found that the petitioner was engaged as a daily wager, de hors any regular recruitment process, had rendered limited service, and there was no finding of mala fide action or unfair labour practice. Also, a considerable period had elapsed since termination. Thus, the Bench held that directing reinstatement would be wholly disproportionate and contrary to settled legal position.
Accordingly, the Bench modified the impugned award, and held the petitioner–workman entitled to lump sum monetary compensation at the rate of Rs. 1.5 lakh for the period he had worked, considering the nature of engagement, length of service, and time elapsed since termination. The Bench also directed that the amount was to be paid within 8 weeks, failing which interest at 9% per annum would apply.
Briefly, the petitioner was engaged by respondent No.2 (Telecom District Manager, BSNL, Bundi) on daily wages on June 21, 1997, however, his engagement was not pursuant to any regular process of recruitment, nor against a sanctioned post. Later, his services were discontinued on July 31, 1998.
An industrial dispute was raised in 1999, culminating in the impugned award by the Labour Court, which found that the mandatory requirements of Section 25F of the Industrial Disputes Act, 1947, were not complied with. However, instead of reinstatement, the petitioner was awarded lump sum compensation of Rs. 60,000/-.
Appearances:
Advocates Nadeem Mazahir, Hitesh Bagari, and C.P. Saini, for the Petitioners
Advocates Gunjan Chawla, Ravinder Pal Singh, Sneha Kaushal, and Neeraj Batra, for the Respondents
