- (1.) By the award dated 2.11.2004 the Labour Court, Udaipur, while answering the reference made to it by appropriate government under a notification dated 23.3.1998, awarded the workman a compensation of Rs. 15,000/- in lieu of reinstatement, after holding his retrenchment void being in violation of the provisions of Section 25-F of the Industrial Disputes Act, 1947.
(2.) While placing reliance upon the judgment of Hon'ble Supreme Court in the case of Mohan Lal v. The Management of Bharat Electronics Ltd., 1981 AIR(SC) 1253, and Harjinder Singh v. Punjab State Were Housing Corporation, 2010 AIR(SCW) 1357, it is contended by counsel for the Petitioner that on being declared the retrenchment void ab-initio, the only natural corollary relating to the relief is reinstatement in service with all consequential benefits, as such the Labour Court erred while granting compensation in lieu 2 of the reinstatement. The issue agitated is considered by a Division Bench of this Court in Rajesh Kumar v.The Labour Court, Udaipur, DB Special Appeal Writ No. 799/2009, decided on 4.1.2011, holding as under: 12. We are supported by our reasoning with two decisions of the Supreme Court in which this power was exercised for awarding compensation to an employee in lieu of his right to claim reinstatement in service. In Gujarat State Road Transport Corporation v. Mulu, 1995 SCC(L&S) 141, an employee was dismissed in the year 1967 by the employer. The issue of dismissal reached upto Supreme Court in 1992 at the instance of employer Their lordships held that looking to the time leg, i.e. 25 years and other material facts, it would not be proper to award relief of reinstatement to an employee and instead the ends of justice would meet in awarding to him lump sum compensation of Rs. 75,000/- in place of his right to claim reinstatement. Accordingly, their lordship though decided the issue in employee's favour yet declined to award him the relief of reinstatement as claimed by him and instead, awarded to him a lump sum compensation of Rs. 75,000/- after taking into consideration his pay, future prospects and all other relevant factors. The other case is reported in Rolston John v. CGIT., 1995 SCC(L&S) 142 In somewhat similar facts, the Labour Court High Court and finally Supreme Court found that though the termination of an employee was bad being in contravention of the requirement of Section 25-Fib ibid, yet on facts found that a relief of reinstatement 3 could not be granted and instead, compensation was held to be proper and just in lieu of reinstatement. In other words, though it was held to be a case of illegal retrenchment, yet their lordships instead of directing his reinstatement, awarded lumpsum compensation to an employee in lieu of his right to claim reinstatement. This is what their lordships held: 5. As indicated earlier the termination of the service of the Appellant by virtue of Clause 24(e) of the Standing Order constitutes retrenchment under Section 2(oo) of the Industrial Disputes Act. It is not the case of the Respondent that the requirements of Section 25F of the Industrial Disputes Act have been complied with in this case. The said retrenchment being in contravention of the mandatory provisions of Section 25-F was void and ineffective. Keeping in view the facts and circumstances of the case we do not consider it appropriate to give the relief of reinstatement. 6. We accordingly direct that in full and final settlement of all the claims of the Appellant and in lieu of reinstatement and consequential benefits, if any, the Respondent shall pay the Appellant a lump-sum of Rs. 50,000/- within a period of six weeks from today. On such payment, the matter shall stand concluded between the parties. In the facts and circumstances of the case, we make no order as to costs. 13. In our view, therefore, the reliance placed by learned Counsel for the Appellant on the decision of Mohan Lal supra and 4 specially on observations made in para-17 of its decision does not help the Appellant in any way. It is for the reason that firstly the Supreme Court in para-17 itself recognised the power of Court to interfere in quantum of punishment by referring to earlier decisions on the issue and secondly this decision (Mohanlal) was referred by the Supreme Court in the later decision of Rolta John case (supra) wherein a lump-sum compensation was awarded in place of reinstatement. In the light of these two factors we find no good ground to accept the submission of learned Counsel for the Appellant though argued with vehemence. 14. So far as the decision in Harjinder Singh, on which heavy reliance was placed by learned Counsel for the Appellant, is concerned, the facts of that case were different than that of the one involved in this case. In that case, the Labour Court had directed reinstatement of an employee with payment of 50% back wages and the High Court at the instance of employer interfered with the award of Labour Court and awarded compensation to the employee in place of reinstatement and 50% award of payment of back wages. Their lordships while setting aside of the order of High Court and restoring that of Labour Court held that High Court should not have interfered with Article 226/227 of Constitution of India in the award of Labour Court, which was based on proper appreciation of facts and evidence. It was held that the High Court did not appreciate the facts on record properly as was done by Labour Court and hence committed an error in 5 improperly exercising the discretion under Article 227 of Constitution in reversing the well reasoned factual finding of Labour Court which had granted the relief of reinstatement to employee concern to earn his livelihood. Reading the ratio of this decision, it can not be said that it lays down the proposition that courts have no jurisdiction to award compensation in lieu of the relief of reinstatement in appropriate case. Though we may observe that we are inclined to take into consideration the general observations made by Supreme Court in this case for moulding the relief in Appellant's favour as indicated infra by enhancing the quantum of compensation. 15. Learned Counsel for the Appellant then also placed reliance on yet another decision of Supreme Court reported in Krishan Singh v. Executive Engineer, 2010 3 SCC 637. Having perused this decision, it is clear that facts of this case are almost similar to the one involved in Harjinder Singh case supra. On facts their lordship held that High Court should not have interfered in the award of Labour Court, which had granted the relief of reinstatement and payment of 50% back-wages to employee by substituting it for payment of compensation. 16. Therefore, keeping in view the object and purpose of the Industrial Disputes Act coupled with its interpretation made by the Supreme Court in the aforementioned cases, we have no hesitation in holding that in the case of wrongful discharge or dismissal, the normal rule is to award reinstatement yet the 6 industrial adjudicator has the discretion to award reasonable and adequate compensation in lieu of reinstatement. In other words,in appropriate cases, the courts are empowered to interfere in cases of discharge or dismissal of an employee but in lieu of a right to claim reinstatement, the Courts can award any other relief including the relief of awarding reasonable compensation to the employee concerned depending on the fact situation.
(3.) As held by the Division Bench, in appropriate cases the Labour Court is empowered to award an appropriate relief including reasonable compensation to the workman in lieu of reinstatement. The only question survives is what should be the reasonable compensation?;