Illegal Termination, Daily Wage Workers Entitled To Reinstatement With 50% Back Wages : MP HC

Background

Amit Gautam worked as a security worker on daily wages at a government department, continuously for more than 240 days. The management used to pay him at the Collectorate rate. However, his services were terminated without any reason, notice, or retrenchment compensation. Gautam claimed this termination violated Sections 25-N and 25-F of the Industrial Disputes Act, 1947, and sought reinstatement with back wages. Further, he maintained that he remained unemployed after his termination despite his best efforts to find work.

The Labour Court, Satna, concluded that Gautam had indeed worked for more than 240 days. It established that a master-servant relationship existed between him and the department. The court drew an adverse inference against the department for not filing attendance registers or muster-rolls for the period Gautam worked. Consequently, on November 19, 2019, the Labour Court directed his reinstatement with 50% back wages. Aggrieved, the State of Madhya Pradesh challenged this award before the High Court.

Arguments

Mr. A.S. Baghel, representing the State of Madhya Pradesh, argued that reinstatement should not be awarded routinely in all cases. He relied on Incharge Officer v. Shankar Shetty (2010 INSC 561) to argue that the facts of each case must be assessed in their proper perspective. He submitted that in Gautam's case, compensation should have been directed instead of reinstatement. Baghel further argued that the Labour Court erred in granting reinstatement, since no appointment order was ever issued to Gautam and nor was he appointed against any vacant or sanctioned post.

Mr. Sanjay Verma, appearing for Gautam, countered that the Labour Court's award was legally sound and based on cogent material evidence. He maintained that there was no illegality or perversity in the award and prayed for dismissal of the petition.

Court's Reasoning

Firstly, the court observed that Gautam had continuously worked from September 1, 2012, to April 30, 2014; however, no retrenchment compensation was paid before terminating him, nor was any inquiry conducted. It also noted that Gautam had categorically deposed about being unemployed after his termination, and the State had not led any evidence to contradict this claim.

The court then referred to the Supreme Court's decision in Hindustan Tin Works v. Employees (Civil Appeal No. 656 of 1978), to hold that reinstatement with continuity of service can be granted if termination is invalid. It clarified that when an employer is found to be in the wrong and a workman is reinstated, the employer must pay the requisite wages.

Further, the court referred to Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (2013 INSC 529). Citing this case, it held that for wrongful termination, reinstatement with continuity of service and back wages is the normal rule, subject to the length of service and financial condition of the employer. The court explained that if the employer wanted to avoid payment of full back wages, they must prove that the employee was gainfully employed elsewhere.

Thus, the court concluded that the Labour Court was correct in reinstating Gautam with 50% back wages. It found that Sections 25-N and 25-F of the Industrial Disputes Act had not been complied with before terminating Gautam's services. Consequently, the court upheld the Labour Court's award and dismissed the petition.

Decided on: February 25, 2025

Neutral Citation: 2025:MPHC-JBP:9151 | The State of Madhya Pradesh v. Amit Gautam

Counsel for the petitioners-State: Mr. A.S. Baghel

Counsel for the respondent-workman: Mr. Sanjay Verma

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