Delhi High Court enhances compensation from Rs 50,000 to Rs. 1,50,000 for illegal termination of ‘workman’
Contents News/Article Date: 12th June 2023
Relating to which Act: The Indian Constitution grants the Central and state governments the powers to enact laws to protect the employees and foster a professional work environment. Based on the industry, nature of the work, number of employees in the company, location, and more, there are various legislations like the Industrial Disputes Act 1947 (ID Act), Factories Act 1948 (Factories Act), and Shops and Establishment Acts in relevant states (S&E Act).
Applicable to which State: Acts and Rules and Judgements as are applicable to all States
Type: SCC Blog – Delhi High Court Judgement
Pertains to: Establishments and Employees in all types of Organizations running businesses for profit or non profit
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And in this instance: Delhi High Court: A petition was filed under Article 226 by the National Institute of Immunology (petitioner) assailing the validity of the award dated 09-12-2002 (‘impugned award’) passed by the Labour Court, adjudicated the terms of reference in favour of the workman holding that the National Institute of Immunology (‘management’) illegally terminated the service of the workman, thereby granting a lump sum compensation of Rs. 50,000. Gaurang Kanth, J., modified the award passed by Labour Court from Rs 50,000 to 1,50,000 to meet the ends of justice as the termination was illegal being in violation of Section 25-F of Industrial Disputes Act, 1947….
Subject: Delhi High Court enhances compensation from Rs 50,000 to Rs. 1,50,000 for illegal termination of ‘workman’.
Appended is the complete news item
Delhi High Court enhances compensation from Rs 50,000 to Rs. 1,50,000 for illegal termination of ‘workman’
Delhi High Court observed that Bangalore Water Supply and Sewerage Board v. R. Rajappa, 1978 (3) SCR 207 acts as a North star for the courts to reach the conclusion regarding the applicability of the Industrial Dispute Act to an organization by laying down elaborate guidelines with respect to the definition of ‘industry’ under Section 2(j) of the Industrial Dispute Act.
A petition was filed under Article 226 by the National Institute of Immunology (petitioner) assailing the validity of the award dated 09-12-2002 (‘impugned award’) passed by the Labour Court, adjudicated the terms of reference in favour of the workman holding that the National Institute of Immunology (‘management’) illegally terminated the service of the workman, thereby granting a lump sum compensation of Rs. 50,000.
Gaurang Kanth, J., modified the award passed by Labour Court from Rs 50,000 to 1,50,000 to meet the ends of justice as the termination was illegal being in violation of Section 25-F of Industrial Disputes Act, 1947.
A workman, engaged on a daily wage basis to work in the Store Department of management for handling miscellaneous work applied to the management for regularization of his services. The workman was refused duty and aggrieved by the verbal termination from service, the workman sent a demand notice against the illegal termination for demanding reinstatement in service in violation of Section 25-F of the Industrial Dispute Act.
An industrial dispute was raised by the workman against the management. The Labour Court held that the management qualifies as an ‘industry’ under the Industrial Disputes Act and in the absence of any charge and inquiry conducted by the management against the workman, it cannot be presumed that workman abandoned duty on his own accord. The Labour Court awarded a lump sum compensation of Rs. 50,000/- in lieu of reinstatement and back wages in favour of the workman. Aggrieved by the impugned award, the management preferred a petition challenging the validity of the same. While on the other hand, the workman is aggrieved by the fact that Labour Court erred in not awarding reinstatement, hence filed another petition for appropriate modification in the impugned award. Issue 1: Whether the management falls under the definition of an ‘industry’ under Section 2(j) of the Industrial Disputes Act. Placing reliance on Bangalore Water Supply and Sewerage Board v. R. Rajappa, (1978) 2 SCC 213, Workmen v. Indian Standards Institution, (1975) 2 SCC 847 and Indian Medical Association v. PO Labour Court-I, 2012 SCC OnLine Del 4852, the Court noted that that the management for the purpose of achieving their objectives has been involved in organizing advanced research by establishing labs and stores, providing consultation services to the public health institutions and veterinary institutes, conducting educational courses by instituting professorship and offering Ph.D. programmes.
The Court further noted that the management is also operating different laboratories by the name of Immuno-Chemistry, Small Animal facility, Immuno Endocrinology, Embryo Biotechnology, etc. All these activities require synchronization between all the departments and the employees for the smooth functioning of the organisation’s machinery. There exists not only systematic activity being carried out by the management, but also an element of cooperation between the employee and the employer. The consultative services and the research publication offered by the management can be classified as the production of services, intended to satisfy human needs and wishes i.e., the development and improvement of immunology research for developing effective immune response.
Thus, the Court concluded that management is an industry under Section 2(j) of the ID Act and provisions of the said legislation applicable to the present case.
Issue 2: Whether the workman was illegally terminated by the management in violation of Section 25 of the Industrial Dispute Act? The Court noted that the workman was not informed at the very time of his appointment that his services will be utilised for the specific project, and his service tenure will be co-terminus with the project. In such a scenario, it cannot be presumed that the workman signed up for limited-term employment with his full consent. The management has failed to bring on record any evidence to prove that they made efforts towards directing the workman to join back the services. The Court affirmed the decision of the Labour Court with respect to the plea of absenteeism taken by the management. Thus, the Court held that the workman was illegally and arbitrarily terminated by the management in violation of the provisions of the ID Act.
The Court concluded that the workman worked with the management as a daily wager for a period of approximately 1 year and 4 months in the year 1991. The termination of the workman is held to be illegal as there was a violation of Section 25-F of the ID Act. Hence, considering the workman has already attained the age of 56 years, in the interest of justice, the compensation in lieu of reinstatement granted to the workman is enhanced from Rs. 50,000 to Rs. 1,50,000.
[National Institute of Immunology v Vinod Kumar Gupta, W.P.(C) 5016 of 2003, decided on 02-06-2023]
Advocates who appeared in this case: Ms. Rachna Sharma and Mr. G.D. Sharma, Advocates with Mr. Madan Mohan, Admn. Officer and Mr. Ranjiv Mahajan, Senior Technical Officer, National Institute of Immunology; Mr. N.S. Dalal, Mr. Alok Kumar, Ms. Rachana Dala & Ms. Sweta Kadyan, Advocates for the Respondents….