Article (June-2017)


Compensation in lieu of reinstatement

R. N. Mishra

Designation : -   Consultant - HRM

Organization : -  Tata Steel, Jamshedpur


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It has been a common phenomenon that workmen engaged in perennial nature of jobs for a longer duration, raise industrial disputes under the provisions of Industrial Disputes Act, 1947, either by themselves or through their representative union, claiming regularisation, absorption and permanency and back wages from the date of their initial engagement as well. It is therefore, very pertinent to understand the views of the Hon. Supreme Court of India in this regard.

A similar matter was raised before the Hon. Supreme Court of India by Rastriya Colliery Mazdoor Sangh, Dhanbad against Employers in relation to management of Kenduadih Colliery of M/s BCCL vide Civil Appeal No. 11003 of 2016. The brief background of this case is as under:

Initially an industrial dispute was raised by 88 workmen who had worked as "Tyndals at Kenduadih Colliery and on 14th May, 1993, a reference was made to Industrial Tribunal by the appropriate government under section 10 (1) (d) of the Industrial Disputes Act. The Industrial Tribunal by its award dated 16th July, 1996, held that:

"It is beyond the question that the persons worked under the contractor are genuine who are the present workmen and they performed job which was of permanent and perennial in nature and the person performing the same type of job in other collieries were regularised and so no doubt a step-motherly attitude was taken so far these concerned workmen are concerned."

The Tribunal directed the management to form a panel of the concerned workmen in accordance with the seniority to absorb or regularise them either in the work of Tyndal or any suitable category so that the list is exhausted within a period of one year. Back wages were denied.

This impugned award was challenged before the Hon. Jharkhand High Court vide writ case bearing No. CWJC 1655 of 1997. On 18th May 2004, the learned Single Judge modified the award of the tribunal and directed that as and when the management intends to employ regular workmen it shall grant preference to the workmen governed by the award if they are otherwise suitable by relaxing the age and academic qualifications. This order of the High Court attained finality.

In 2007 the Union representing the workmen before the High Court vide WP (L) 4915 of 2007 seeking implementation of the order dated 18th May 2004. While disposing of the writ petition on 24th September, 2010, the High Court recorded the statement of the management that no vacancy had occurred in the post of Tyndal since the judgment which was rendered on 18th May, 2004. However, the High Court recorded the undertaking of the management that if any vacancy arises in future and the post is advertised for which the workmen applies, they would be considered for the post and the management would also accommodate them if there was vacancy under any other category.

The Union filed a review petition based on information which was obtained under Right to Information Act. The management indicated that appointment was made only on compassionate grounds. The High Court disposed of the review petition by recording the statement of the management that if and when posts were advertised, the workmen would be entitled to apply and would be considered. The rejection of the review petition led to the filing of the SLP / Civil appeal before the Hon. Supreme Court.

The Union relied on another proceedings relating to another distinct reference of industrial dispute vide reference 204 of 1994 on which the Industrial Tribunal passed its award on 14th August, 2000 directing regularisation of 70 workmen in general category No. 1. The said award was confirmed by the Single Bench of High Court on 26th July 2001 against which the management preferred a Letters Patent Appeal in which the award was modified by directing that as and when the management intended to appoint regular workmen it would grant preference to the workmen concerned in the reference by relaxing the conditions of age and academic qualifications. However, the Union filed a SLP before the Hon. Supreme Court and the latter delivered its judgment on 18th November, 2009, by setting aside the judgment of Division Bench and restoring the award of the Tribunal granting reinstatement without back wages.

Coming to the present case (Civil Appeal No. 11003 of 2016) the Hon. Supreme Court observed that the judgement of the High Court dated 18th May, 2004, modifying the award of the tribunal attained finality. The Hon. Supreme Court further relied on a judgment delivered by them on 3rd October, 2016 in the case of Workmen, Rastriya Colliery Sangh vs. Bharat Coking Coal Limited (C.A 13953 of 1015) vide which it had declined to grant reinstatement but allowed compensation to 14 workmen whose services were in issue, each in the amount of Rs. 2 lakh in full and final settlement for all claims for compensation. The relevant part delivered in the judgment is extracted below:

"7. The basic grievance of the workmen is that as a result of the position which has ensued, the workmen governed by the present proceedings of whom only 14 are left in the fray, are virtually without any relief or remedy in practical terms. The workmen were engaged between 1987 and 1989. Nearly 27 years have lapsed since then. Many of the 14 workmen would be on the verge of attaining the age of retirement. There is no occasion at present to grant them reinstatement since in any event such relief has been denied in the judgment of High Court dated 14th May, 2004 which has not been challenged. However, the predicament of the workmen is real. Two sets of workmen in the same colliery under the same Company have received unequal treatment. The present group of workmen has faced attrition in numbers and has been left with no practical relief. This situation should be remedied, to the extent that is no permissible in law, having regard to the above background. In order to render full, final and complete justice, we are of the view that an order for payment of compensation in final settlement of all the claims dues and outstanding payable to the 14 workmen in question would meet the ends of justice."

While reverting to the instant civil appeal the Hon. Court admitted the contention of the management with regard to arisen of no vacancy as well as the colliery is stated to be a closed mine. Relying on their judgment dated 3rd October, 2016, as has been quoted above, the Hon. Supreme Court observed that it would be appropriate to direct that the respondents should settle the full and final settlements of all the claims and outstanding of the 88 workmen concerned and to that effect deposit an amount of Rupees four lakhs each per workmen (since skilled category) before the Tribunal in reference case 54 of 1993. The amount shall be disbursed to the workmen concerned subject to due verification of their identity by the Industrial Tribunal. This amount shall be full and final satisfaction of all claims, demands and outstanding payable to the workmen. Accordingly, the three judges bench presided by the Hon. CJI disposed of the civil appeal on November, 21, 2016. 

From the narration of the facts and circumstances involved in the aforementioned case, it is observed that similar situation prevails in many other establishments wherein workmen are engaged in perennial & permanent nature of jobs for very long duration and as a natural consequence, they raise  industrial dispute(s) demanding regularisation, absorption and permanency with full back wages and other allied benefits. Their industrial dispute may culminate in adverse order against the management as well as huge financial liability. It is therefore, desirable that while engaging temporary, casual or even contract labour to that extent, the management must be careful and take precaution as available under law, so as to avoid such litigation(s) consuming huge time, energy and money. It may be noted that   as provided under the Constitution of India the higher judiciary can always enlarge the scope of relief to the workmen, depending on the merit involved to meet the ends of justice. Thus preventive is better than cure.