ORDER : C.L SONI, J. Special Civil Application No. 727 of 2015 is filed by the State of Gujarat challenging the order dated 01/05/2014 passed by the Labour Court, Bhuj in Reference (LCB) No. 22 of 2005, whereby the Labour Court allowed the reference of the respondent no. 1 (to be referred as workman) and set aside the order dated 12/01/2004 his removal from service and ordered to reinstate him with continuity of service and with 50% backwages. 2. Special Civil Application No. 5112 of 2015 is filed by the workman against the order of the Labour Court, insofar as the Labour Court has not granted full backwages. The workman has also filed Civil Application No. 8182 of 2016 seeking direction against the petitioner of the first petition to pay all consequential benefits including the benefit of resolution dated 17/10/1988 of the State Government by considering his services as continuous services. 3. In the first petition, the Court passed following order dated 3/02/2015:- The State seeks to challenge judgment and award dated 01.05.2014 passed by Labour Court, Bhuj, in Reference (LCB) No. 22 of 2005. Thereby, the workman was directed to be reinstated with 50% backwages. 2. It is not disputed rather jointly stated by learned Assistant Government Pleader Mr. Janak Raval for the petitioner-State and learned advocate Mr. P.H Pathak appearing on caveat for the respondent-workman that upon contempt proceedings filed, the workman has been reinstated in service by order dated 17.12.2014 passed by the competent authority. Learned AGP stated that the reinstatement is final and unconditional. 3. In the aforesaid view, the only part of the award which could be brought under challenge is as regards the grant of 50% backwages. The reasoning of the Labour Court in granting 50% backwages is that the workman has not stated anything in his Statement of Claim to which it was pointed out by learned advocate for the workman that necessary statement was made. Learned advocate submitted that in view of decision in Bhuvnesh Kumar Dwivedi v. Hindalco Industries Limited, [ (2014) 11 SCC 85 : AIR 2014 SC 2258 ], the principle is reiterated that for the purpose of award of backwages, the proof of workman being in gainful employment is required to be elicited by the employer and it is its burden to prove the gainful employment of the workman. 4.
4. Learned AGP stated that grant of backwages is in the realm of discretion of the Labour Court and the grant has to be determined on the basis of host of relevant considerations. 5. The issue requires analytical examination. Hence, RULE, returnable on 6th April, 2015. Learned advocate Mr. P.H Pathak waives service of notice of Rule for the respondent-workman. 6. There shall be stay of the impugned judgment and award so far as it grants 50% backwages. 7. Both the learned advocates stated that on the returnable date, they will proceed for final hearing. 4. In view of the above order, learned Assistant Government Pleader Mr. Joshi addressed the Court on the issue of grant of 50% backwages by the Labour Court. Mr. Joshi submitted that the workman failed to prove that he was not gainfully employed during the interregnum period. Mr. Joshi submitted that the workman was a daily wager and it is not believable that he would not have got any work to earn his livelihood after he was relieved from service till the reference was decided. Mr. Joshi submitted that since the workman had not stated whether he made any attempt to get any work elsewhere, it was not for the petitioner to prove that the workman was gainfully employed. Mr. Joshi submitted that the Labour Court also committed error in granting 50% backwages by treating services of the workman as continuous services. 5. Learned advocate Ms. Kini Himani Kishore appearing for learned advocate Mr. Pathak for the workman submitted that the workman has proved that he had continuously served for more than 14 years in the Forest Department of the State and though he had completed 240 days of service in a year and just when he was about to become entitled to the benefit of the resolution dated 17/10/1988, his services were illegally terminated. She submitted that after the workman was relieved from service, the other persons junior to him were continued in service and therefore there was clear case of unfair labour practice adopted by the petitioner establishment. She submitted that the workman by his evidence proved that he was not gainfully employed after his services were illegally terminated, and therefore, the workman was entitled to full backwages. 6.
She submitted that the workman by his evidence proved that he was not gainfully employed after his services were illegally terminated, and therefore, the workman was entitled to full backwages. 6. The Court, having heard learned advocates for both the sides and having perused the impugned award, finds that the Labour Court has arrived at finding that the workman continuously served from 1992 to 2003. It was found that the workman had completed 240 days in every year between 1992 to 2003 and when he was relieved from service, no legal procedure was followed. The Labour Court has recorded a finding that the workman had proved by his oral and documentary evidence that when he was relieved from service, the other persons junior to whom were continued in service as the work was available and even after he was relieved from service, there was increase in the work and the new workers were employed by the establishment, whereas he was not called back for work. It is observed by the Labour Court that the petitioner was not able to dislodge the evidence of the workman. Learned AGP has failed to point out as to how finding recorded by the Labour Court that the workman continuously served for long time and that no legal procedure was followed before removing him from service and that the persons junior to him were continued in service is in anyway perverse. 7. Learned AGP Mr. Joshi however submitted that the grant of 50% backwages is without any evidence. Mr. Joshi submitted that when there was no clear evidence adduced by the workman that he made any attempt to get work elsewhere and did not get any work, that he remained absolutely unemployed, the Labour Court ought not to have granted 50% backwages. 8. In the case of Novartis India Limited v. State of West Bengal reported in (2009) 3 SCC 124 relied by learned AGP MR. Joshi, the Hon'ble Supreme Court has held and observed in paragraph Nos. 21, 22 and 32 as under:- 21. There can, however, be no doubt whatsoever that there has been a shift in the approach of this Court in regard to payment of back wages.
Joshi, the Hon'ble Supreme Court has held and observed in paragraph Nos. 21, 22 and 32 as under:- 21. There can, however, be no doubt whatsoever that there has been a shift in the approach of this Court in regard to payment of back wages. Back wages cannot be granted almost automatically upon setting aside an order of termination inter alia on the premises that the burden to show that the workman was gainfully employed during interregnum period was on the employer. This Court, in a number of decisions opined that grant of back wages is not automatic. The burden of proof that he remained unemployed would be on the workmen keeping in view the provisions contained in Section 106 of the Evidence Act, 1872. This Court in the matter of grant of back wages has laid down certain guidelines stating that therefor several factors are required to be considered including the nature of appointment; the mode of recruitment; the length of service; and whether the appointment was in consonance with Articles 14 and 16 of the Constitution of India in cases of public employment; etc. 22. It is also trite that for the purpose of grant of back wages, conduct of the concerned workman also plays a vital role. Each decision, as regards grant of back wages or the quantum thereof, would, therefore, depend on the fact of each case. Back wages are ordinarily to be granted, keeping in view the principles of grant of damages in mind. It cannot be claimed as a matter of right. 32. Even if some income was derived by the employee, the same should be taken into for consideration for the purpose of consideration in regard to grant of entire back wages. Our attention has been drawn to a decision of the Bombay High Court in Navin J. Surti v. Modi Rubber Ltd. wherein it was observed (FLR p.902, para 17):- “17…Eventually, there would be a burden cast upon the employee to disclose the efforts made by him to secure another job during the time he was out of employment on account of termination of the service, in order to justify the claim for the back wages in its entirety.
Indeed, the Division Bench in Sadanand Patankar's case (supra) has clearly ruled that:- ‘Since the facts about the employment or non-employment and/or the efforts made or not made to secure an alternative employment during the period of enforced idleness are within the special knowledge of the employee, it is only fair and proper that he should first state whether, he was employed or not and during what period, the amount of income earned by him if any, the nature of efforts made by him for securing alternate employment or the circumstances which prevented him from making such efforts’. It has also been clearly held that once such burden is discharged by the employee, it would be for the employer to prove facts to the contrary. Similarly is the decision of the learned Single Judge, as he then was (Sri Justice B.N Srikrishna), in Indiana Engineering Works (Bombay) Pvt. Ltd. v. Labour Court where it has been clearly held that (FLR p.153) “…I am of the considered view that the dismissed workman also owes a duty to the industrial adjudicator to honestly disclose full particulars of the facts which are purely within his knowledge and that any attempt to mislead the Tribunal must surely be looked at askance,” It was furthermore observed: (Navin case FLR pp 902-03, para 18) “18… “Apart from the obligation on the part of the employer to establish gainful employment of the employee during such period, it would also be necessary for the employee to disclose the efforts made by him to get some other job or employment during such period as well as about the source of income during the said period and if so, to what extent. Mere silence on the part of the employee in that regard cannot, in any manner, ensure to the benefit of the employee to justify the claim for back wages in entirety. It cannot be forgotten that the order for payment of back wages has to be from the point of view of compensating the employee for the loss suffered during the time he was out of the employment and not a reward for having succeeded in establishing the action of termination of the service by the employer to be illegal.” 9. In the case of General Manager, Haryana Roadways v. Rudhan Singh reported in (2005) 5 SCC 591 relied by learned AGP Mr.
In the case of General Manager, Haryana Roadways v. Rudhan Singh reported in (2005) 5 SCC 591 relied by learned AGP Mr. Joshi, the Hon'ble Supreme Court has held and observed in paragraph No. 8 as under:- “8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period, i.e, from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendar year”. 10. In the case of J.K Synthetics Ltd. v. K.P Agrawal reported in (2007) 2 SCC 433 , the Hon'ble Supreme Court has held and observed in paragraph Nos. 15 to 18 as under:- 15. But the manner in which ‘back-wages’ is viewed, has undergone a significant change in the last two decades. They are no longer considered to be an automatic or natural consequence of reinstatement. We may refer to the latest of a series of decisions on this question. In U.P State Brassware Corpn.
15 to 18 as under:- 15. But the manner in which ‘back-wages’ is viewed, has undergone a significant change in the last two decades. They are no longer considered to be an automatic or natural consequence of reinstatement. We may refer to the latest of a series of decisions on this question. In U.P State Brassware Corpn. Ltd. v. Uday Narain Pandey, this Court following Allahabad Jal Sansthan v. Daya Shankar Rai and Kendriya Vidyalaya Sangathan v. S.C Sharma held as follows: (Uday Narain Pandey case, SCC p. 480d-g) “A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance.” Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result, but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched. The changes brought about by the subsequent decisions of the Supreme Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of section 6-N of the U.P Industrial Disputes Act. While granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages cannot therefore be the natural consequence. In G.M Haryana Roadways v. Rudhan Singh this Court observed: (SCC p.596, para 8) “8.
While granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages cannot therefore be the natural consequence. In G.M Haryana Roadways v. Rudhan Singh this Court observed: (SCC p.596, para 8) “8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment i.e. whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where [the] total length of service rendered by a workman is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily-wage employment though it may be for 240 days in a calendar year.” 16. There has also been a noticeable shift in placing the burden of proof in regard to back wages. In Kendriya Vidyalaya Sangathan this Court held: (SCC p.366, para 16) “When the question of determining the entitlement of a person to back wages is concerned, the employee has to show that he was not gainfully employed. The initial burden is on him. After and if he places materials in that regard, the employer can bring on record materials to rebut the claim.
The initial burden is on him. After and if he places materials in that regard, the employer can bring on record materials to rebut the claim. In the instant case, the respondent had neither pleaded nor placed any material in that regard.” In U.P State Brassware Corpn. Ltd. (supra), this Court observed: (SCCp.495, para 61) “61. It is not in dispute that the respondent did not raise any plea in his written statement that he was not gainfully employed during the said period. It is now well settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of section 106 of the Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman.”, 17. There is also a misconception that whenever reinstatement is directed, ‘continuity of service’ and ‘consequential benefits’ should follow, as a matter of course. The disastrous effect of granting several promotions as a ‘consequential benefit’ to a person who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualized while granting consequential benefits automatically. Whenever courts or Tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether ‘continuity of service’ and/or ‘consequential benefits’ should also be directed. We may in this behalf refer to the decisions of this Court in A.P SRTC v. S. Narasagoud, A.P SRTC v. Abdul Kareem and Rajasthan SRTC v. Shyam Bihari Lal Gupta. 18. Coming back to back-wages, even if the court finds it necessary to award back-wages, the question will be whether back-wages should be awarded fully or only partially (and if so the percentage). That depends upon the facts and circumstances of each case. Any income received by the employee during the relevant period on account of alternative employment or business is a relevant factor to be taken note of while awarding back-wages, in addition to the several factors mentioned in Rudhan Singh and Uday Narain Pandey. Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination.
Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he has to at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Then the burden will shift to the employer. But there is, however, no obligation on the terminated employee to search for or secure alternative employment. Be that as it may. 11. As held in above judgments by Hon'ble Supreme Court, the question as to what backwages should be granted depends upon the facts and circumstances of each case. In each case, any income or any alternative employment or business done by the workmen is relevant factor to be taken into consideration while weighing backwages, therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. It is also held that the length of service put in by the employee is also required to be considered while weighing the grant of backwages. The Labour Court has recorded that the workman in his evidence has stated that after he was removed from service, he did not get any work whereas the petitioner has not come forward with any evidence that the workman was gainfully employed after his services was terminated. It is required to note that as per the finding recorded by the Labour Court, the workman after entering the service in the year 1989, remained in service for long time of 15 years and when he was terminated from service, the work was available and the persons junior to him were continued in service and other new persons were employed in service. In light of such finding recorded by the Labour Court and in the facts of the Case, when the Labour Court deemed it proper to grant 50% backwages, it cannot be said that the Labour Court has adopted unreasonable approach. The Court finds in the facts of the case, that the Labour Court has rightly not awarded full backwages to the workman. 12. In above view of the matter, no interference is required in the impugned order passed by the Labour Court in exercise of powers under Articles 226/227 of the Constitution of India.
The Court finds in the facts of the case, that the Labour Court has rightly not awarded full backwages to the workman. 12. In above view of the matter, no interference is required in the impugned order passed by the Labour Court in exercise of powers under Articles 226/227 of the Constitution of India. Both the petitions are therefore rejected. Rule is discharged in each of the petitions. Interim relief stands vacated. 13. As far as the Civil Application is concerned, the Court finds that while examining the legality or otherwise of the impugned order passed by the Labour Court in the main petitions, the prayers made in the application cannot be considered. It is always open to the applicant to take out appropriate independent proceedings before the appropriate forum for the prayers made in the Civil Application. Therefore, without going into the merits of the Civil Application, it is disposed of leaving it open to the applicant-the workman to avail appropriate remedy before the appropriate forum for the reliefs prayed therein.