Bombay High Court Modifies Labour Court’s Award, Grants Lump Sum Compensation in Employment Dispute.
20 March 2024
Employee Related >> Corporate Law | Workmen's Compensation >> Labor Law
In a recent case of M/s. Premsons Trading (P) Ltd. v/s Dinesh Chandeshwar Rai involving the reinstatement of an employee, the Bombay High Court addressed a dispute between a private limited company and its former employee regarding his termination. The petitioner, an employer in the trading business, challenged the Award passed by the Second Labour Court in Mumbai. The Labour Court had ordered the reinstatement of the respondent, along with full backwages and continuity of service, with effect from February 12, 2013.
Background of the Case:
The respondent had been employed with the petitioner company since 1988, starting as a Counter Boy at a retail store and later serving as Dispatch Incharge at different locations. His employment continued until his services were allegedly terminated on February 12, 2013. The respondent claimed that he had been granted leave from February 10, 2013, to March 15, 2013, to visit his native place, but his leave request was later denied by one of the company’s directors. He contended that his services were arbitrarily terminated without following proper procedures.
In response, the petitioner argued that the respondent had voluntarily abandoned his employment due to unauthorized absences from February 12, 2013, onwards. Despite offering multiple opportunities for the respondent to resume duties, the petitioner claimed that the employee did not rejoin work.
Proceedings in the Labour Court:
The dispute between the parties escalated when the respondent approached the Deputy Labour Commissioner, and after unsuccessful conciliation, the matter was referred to the Labour Court. In his claim, the respondent insisted that his termination was unlawful, while the petitioner denied terminating his services and maintained that the respondent had abandoned his job.
The Labour Court considered the evidence presented by both sides and ultimately concluded that the respondent had been wrongfully terminated. The court ruled in favor of the respondent, ordering his reinstatement, along with backwages and continuity of service, dating back to the alleged termination date of February 12, 2013.
Petitioner’s Appeal:
The petitioner appealed the Labour Court’s decision, arguing that the termination was not unlawful, but rather, the respondent had voluntarily abandoned his job. The petitioner further claimed that repeated opportunities had been offered to the respondent to resume work, but he had failed to do so. In support of this argument, the petitioner presented evidence of various letters sent to the respondent, offering him a chance to rejoin the company.
However, the respondent contested this claim, asserting that despite his attempts to report to work, he was denied entry by the company’s management. The court took into account the respondent’s testimony and evidence, which indicated that he had tried to resume his duties on several occasions but was prevented from doing so by the employer.
Court’s Decision:
After carefully reviewing the arguments and evidence, the court rejected the petitioner’s plea of voluntary abandonment of employment, emphasizing that to prove such abandonment, the employer must issue a notice directing the employee to resume duties. Since no such notice had been issued by the petitioner, the court found no merit in the claim of voluntary abandonment.
However, the court acknowledged that reinstatement might not be a practical solution given the strained relationship between the parties and the respondent’s current age. The court noted that a substantial period had passed since the termination, and the respondent had not been actively employed for over a decade. Considering the circumstances, the court decided that awarding a lump sum compensation would serve the interests of justice.
Final Judgment:
The court modified the Labour Court’s award, directing the petitioner to pay the respondent a lump sum compensation of Rs. 8,00,000. The petitioner was given six weeks to pay the compensation, and beyond this amount, the respondent would not be entitled to any further monetary benefits.
Conclusion:
This case highlights the importance of following proper procedures in employment termination, as well as the necessity for employers to issue formal notices when claiming voluntary abandonment of employment. Additionally, the judgment reflects the court’s pragmatism in considering the advanced age of the employee and the long duration since his termination, opting for a lump sum compensation rather than reinstatement, which might not be in the best interest of the respondent.