It is justified to pay compensation in lieu of reinstatement and back wages

Ashok Kumar Sharma - Appellant


Oberoi Flight Services – Respondent

Facts of the Case:

Appellant was employed by respondent as a loader. One day while returning from work, he was found carrying 30 KLM soup spoons illegally in his shoe. Appellant admitted his guilt and was thereby dismissed from service. But appellant raised an industrial dispute before labour court.

Appellant contended that he was a union leader. The respondent management conspired against him to remove him. He added that his confession letters were obtained under threat and coercion. Moreover, no inquiry was conducted or principles of the natural justice were observed prior to his dismissal. Labour court though justified appellant’s dismissal but awarded him full back wages from the date of his dismissal till the date of award.

Appellant challenged the award of Labour Court before Division Bench. The Division Bench held that it was difficult to believe allegations of the management that the appellant walked through the work area to security check area with spoons in his shoes. Also principles of natural justice were not followed. The Division Bench ordered respondent management to pay Rs.60, 000 in lieu of reinstatement and back wages. Appellant challenged this judgement before the Supreme Court.  

Supreme Court held compensation of Rs.60, 000 to be inadequate as appellant was a confirmed employee. It held that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given situation even where there is a lapse of prescribed procedure during termination of an employee. Thus, respondents were ordered to pay compensation of Rs.2 lakhs to the appellant in lieu of reinstatement and back wages.



Also Check: Other Legal Aspects