After a 34-year legal battle, the Supreme Court restored 50% back wages to a hotel employee wrongfully terminated in 1991, setting aside the Rajasthan High Court’s denial of relief. The worker, however, passed away before he could see justice delivered.
New Delhi: Justice finally came after more than three decades in a long-running labour dispute, though sadly, the employee at the centre of the case did not live to see the final outcome.
Over 34 years after a hotel worker was removed from service on allegations of misconduct, the Supreme Court restored the relief of 50 per cent back wages in his favour, setting aside the order of the Rajasthan High Court which had completely denied him that benefit.
The case was heard by a Bench of Justice Manoj Misra and Justice Ujjal Bhuyan on an appeal filed by the legal representatives of the employee. They had challenged the judgment of the Division Bench of the Rajasthan High Court, which had overturned the earlier order granting the worker 50 per cent back wages.
While allowing the appeal, the Supreme Court made important observations on the impact of punitive termination on a worker’s life and employment prospects.
The Court observed,
“Punishment, as a matter course, visits a person with stigma which hampers re-employment. In such circumstances, if the learned Single Judge of the High Court reduced the back wages entitlement to 50%, no interference was required with its order.”
The dispute goes back to the year 1978, when Dinesh Chandra Sharma joined service as a room attendant in a hotel. He continued working for several years until his services were terminated in July 1991 on allegations of misconduct. Aggrieved by his termination, Sharma raised an industrial dispute.
The matter eventually reached the Labour Court, which examined the legality of the disciplinary proceedings initiated by the management.
After a long delay, the Labour Court delivered its award in December 2015. It found that the domestic inquiry conducted by the management was unfair.
Even after being granted an opportunity by the Labour Court to prove the misconduct allegations independently, the hotel management failed to produce any evidence. In view of this failure, the Labour Court ordered Sharma’s reinstatement along with full back wages.
The management challenged this award before the Rajasthan High Court. A Single Bench of the High Court partly modified the Labour Court’s decision by reducing the back wages from 100 per cent to 50 per cent, taking into account the long passage of time and surrounding circumstances.
However, the Division Bench later interfered with even this limited relief. It set aside the grant of 50 per cent back wages on the ground that the employee had not proved that he was not “gainfully employed” during the period between his termination and the Labour Court’s award.
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The Supreme Court disagreed with the approach taken by the Division Bench. It clarified that there is no absolute or rigid rule that a workman must always plead and prove non-gainful employment in order to claim back wages.
The Court noted that this requirement is not an “inviolable rule” and emphasised that labour disputes must be decided based on the facts and circumstances of each individual case.
The Bench further observed that an affidavit had been filed on behalf of the employee stating that he was not gainfully employed during the intervening period.
Importantly, this statement was never rebutted by the management through any evidence. The Court found this omission significant and held that the benefit of doubt could not be denied to the workman in such a situation.
The Supreme Court also agreed with the reasoning of the Single Bench of the High Court, noting,
“The learned Single Judge of the High Court was just and proper in the facts of the case. Reason being, the workman had served for long and a gainful employment, either in a Government Department or Public Sector Undertaking, is not possible if one crosses the age bar.”
Addressing the argument that the employee may have survived by doing small or temporary work, the Court made it clear that mere survival activities cannot be equated with stable or gainful employment. The Bench observed,
“No doubt, a person may do odd jobs to survive but that cannot be a ground to deny back wages particularly when termination of his service is by way of punishment.”
Reiterating the serious consequences of punitive termination, the Supreme Court once again highlighted the stigma attached to such dismissal and its effect on future employment opportunities.
The Court held,
“Because punishment, as a matter course, visits a person with stigma which hampers re-employment.”
In conclusion, the Supreme Court allowed the appeal filed by the legal heirs of the deceased employee. It set aside the judgment of the Division Bench of the Rajasthan High Court and restored the order of the Single Bench, thereby confirming the entitlement of the workman to 50 per cent back wages.
The judgment stands as a significant reminder of the need for fairness in labour adjudication and recognition of the harsh realities faced by workers who are removed from service as a form of punishment.
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