Labour Court Can Award 100% Backwages For Termination Of Employment If Fault Is Found On Part Of Employer: Gujarat High Court

The division bench of Chief Justice Sunita Agarwal And Justice N.V. Anjaria observed, “It is settled law that in a case of termination of employment, though award of backwages is not automatic with the award of reinstatement, but in case the fault is found on the part of the employer, 100% wages can be provided. The fundamental principle is that no one can take benefit of its own wrong.”

The above ruling came in a Letters Patent Appeal directed against the judgment and order passed by a single Judge, affirming the Labour Court's award for reinstatement with full back wages.

The single Judge had previously made a clear finding that the employer's departmental inquiry into allegations of misconduct against the workman amounted to victimization. The inquiry was found to be flawed due to the lack of opportunities provided to the workman to cross-examine the employer's witnesses and present his own.

Furthermore, the Court noted significant delays in the case. The workman's reference was made in 2001, but it took 17 years for it to be decided. The writ petition challenging the award was filed in June 2018, five months after the award was made. The workman was only reinstated in August 2019, without any explanation for the lengthy delay, and the appeal challenging the single Judge's decision was filed in May 2019.

During the proceedings, it was revealed that there was no interim order in the writ petition. Notably, the court found that there was no challenge to the Labour Court's award other than the award of 100% backwages, and there was no explanation for the delayed reinstatement.

The appellant's counsel sought to challenge the single Judge's decision, citing decisions of the Apex Court in P.V.K. Distillery Limited vs. Mahendra Ram [(2009) 5 SCC 705] and Kanpur Electricity Supply Company Ltd. vs. Shamim Mirza [(2009) 1 SCC 20], arguing that 100% back wages should not be automatic with reinstatement. It was contended that each case's unique circumstances should determine the amount of back wages, especially when a termination is set aside.

Conversely, the respondent's counsel referenced the Labour Court and single Judge's findings, emphasizing that the workman had suffered wrongful termination, and the employer should not benefit from its own wrongdoing. Reliance was placed on the Apex Court’s decision in Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya [(2013) 10 SCC 324], where it was held that in cases of wrongful termination, reinstatement with continuity of service and back wages is the norm.

“In light of the above legal principles, we are required to note that in the facts and circumstances of the instant case, it is established that the workman was illegally terminated. The inquiry was vitiated, as it was conducted without providing opportunity of hearing. The Labour Court took around 17 years in deciding the Reference and it is not before us as to who was at fault. Whether there was delay in deciding the Reference attributed to the employer.

“In absence of all these information and in view of the findings returned by the Labour Court, as noted by the learned single Judge in the order impugned, it is more than clear that it is a case of victimisation of workman,” the bench added.

The Court concluded that there were no substantial grounds to challenge the findings returned by the Labor Court and affirmed by the single Judge. Accordingly, the appeal was dismissed, and the Civil Application was disposed of in line with these findings.

Case Title: Cargo Motors ( Gujarat ) Limited vs Kritikant Shivajirav Jadav

Case Citation: 2023 Livelaw (Guj) 144

Case No.: R/Letters Patent Appeal No. 1512 Of 2019

Appearance: Mr Dg Chauhan(218) For The Appellant(S) No. 1 Ronak D Chauhan(7709) For The Appellant(S) No. 1 For The Respondent(S) No. 2 Mr Subramaniam Iyer(2104) For The Respondent(S) No. 1

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