Employment LawDelhi High Court Upholds Compensation in Lieu of Reinstatement for Wrongfully Terminated Daily Wage Worker

The Hon’ble High Court of Delhi in AIIMS vs Ashok Kumar [W.P(C) 5193/2024 & CM APPL. 21253/2024] decided on 09.04.2024, held that when the termination is found to be illegal, grant of reinstatement with full back wages has to be provided as per the facts and circumstances of each case and shall not be awarded mechanically.

FACTS

Ashok Kumar (hereinafter referred to as “Respondent”) served as a daily wage worker in AIIMS’s laundry department since 1989. In 1995, the Respondent was charged with theft, and a FIR was filed under sections 379 and 411 of the Indian Penal Code (hereinafter referred to as “IPC”). According to the FIR, the Respondent was not permitted to join services until he had been cleared of all charges in 2004. In 2007, the Respondent filed a claim for reinstatement and regularisation. However, AIIMS (hereinafter referred to as “Petitioner”) did not respond to the Respondent’s representation. The Respondent filed an Industrial Dispute with the Ld. Joint Labour Commissioner.

In 2022, the Hon’ble Labour Court issued an award dated 08.07.2022 (hereinafter referred to as “impugned award”) determining that the Respondent  was entitled to a lump sum settlement of Rs.90,000/- in lieu of reinstatement. Thus, aggrieved by the same, Petitioner filed a the  present case challenging the decision of the Hon’ble Labour Court.

ISSUES BEFORE THE HIGH COURT

1. Whether Respondent’s termination was illegal or unjustified?
2. Whether the Hon’ble Labour Court’s order of compensation in lieu of reinstatement appropriate?

CONTENTION OF PARTIES

The Petitioner submitted that the Hon’ble Labour Court did not consider all of the evidence, facts, and circumstances before issuing the impugned Award . The Respondent has failed to explain the 16-year wait in filing his statement of claim, and he failed to clarify whether he was gainfully employed during the ten years he claimed to be unemployed.

Furthermore, the Petitioner contended that the daily wage labourers and regular employees are two distinct classes of employees. Thus, the Respondent  cannot be compared to other normal employees working for the Petitioner.

It was further submitted  that the Respondent’s services were terminated due to the theft accusations levelled against him, and that the decision to remove him from service is entirely administrative and cannot be challenged in court.

The Respondent contends that his termination was unjust and based on false allegations of theft, which arose from a personal dispute with his supervisor. He was subsequently acquitted in the criminal case associated with these charges, indicating that the accusations were baseless.

Furthermore, the Respondent emphasizes that similarly situated co-workers, who were also employed as daily wagers, had their services regularized. The false charges against him unfairly prevented his regularization.

Therefore, in the interest of justice, the respondent argues that he should be treated on par with his fellow workers, despite being a daily wager, and granted appropriate relief to rectify the prejudice caused by his wrongful termination.

DECISION AND FINDINGS

The Hon’ble High Court observed that the Hon’ble Labour Court’s decision stated that the Respondent’s services were terminated due to the theft accusations levelled against him. The Hon’ble Labour Court further highlighted that the Respondent was cleared of theft charges, and his coworkers who were in a similar situation had been regularized. The Hon’ble Labour Court therefore stated that the Workman’s services would have been regularized if he had not been wrongfully charged with stealing, and that in the interests of fairness, the Workman must be treated equally with his coworkers.

The Hon’ble High Court further observed that the Ld. Labour Court also stated that because both parties had lost faith in each other, reinstatement was not in the parties’ best interests, and so a better alternative was to provide compensation in lieu of reinstatement.

Therefore , the Hon’ble High Court held  that compensation is the appropriate remedy for the Respondent whose services were ended prematurely due to being wrongly accused in a theft case. Furthermore, the Respondent was engaged as a daily wagerer, but because his similarly situated coworkers had been regularised, it was in the interests of justice to treat him equally with them.

With the aforementioned considerations, the Hon’ble High Court upheld the Ld. Labour Court’s impugned award of Rs. 90,000 as lump sum compensation and dismissed the present petition.

The Hon’ble Court also held that it has the jurisdiction to intervene with the Ld. Labour Court’s findings under Article 226 of the Constitution of India (hereinafter referred to as “COI”), which enabled it to act in a supervisory capacity. The High Court shall not exercise its writ jurisdiction in case where prima facie there has been no error of law. The Hon’ble Court therefore held that the High Court can intervene with an order of a lower court only in cases where there is a gross violation of the rights of the petitioner and the conclusion of the lower court is perverse. Considering the above factors, the Hon’ble High Court found it necessary to exercise its powers under Article 226 of COI, to analyse the impugned findings of the Ld. Labour Court.

AMLEGALS REMARKS

The judgment in the present case  highlights the Court’s nuanced approach to labor disputes, particularly those involving daily wage workers. It reflects a balance between procedural fairness and practical employment law concerns. The Hon’ble  High Court upheld the Ld. Labour Court’s decision to award compensation instead of reinstatement, acknowledging the impracticality of reinstating a worker after many years and the breakdown of trust between the parties.

The judgment reiterates the limited scope of writ jurisdiction under Article 226 of the Constitution, emphasizing that the High Court’s role is supervisory, not appellate, and it will only intervene in cases of manifest error or gross injustice. The Hon’ble High Court recognized the vulnerability of daily wage workers, who lack the job security of permanent employees, and the need for a just remedy, such as compensation, in cases where reinstatement is not feasible. The judgment underscores the importance of balancing procedural fairness with practical realities to ensure equitable justice, especially for vulnerable workers.

– Team AMLEGALS