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Labour & Industrial LawSupreme Court of India

The State of Punjab PSEB (now Punjab State Power Supply Corporation Ltd.) v. Kulwant Singh

Civil Appeal · 2018 INSC 928Decided 3 Oct 2018
Civil Appeal No. 10181 of 2018
Justice R. Banumathi · Justice Indira Banerjee

Background

The respondent, a daily-wage helper employed by the Punjab State Power Supply Corporation from 1997-98, was terminated and successfully challenged his termination before the Industrial Tribunal, which found the employer had not complied with Section 25-F of the Industrial Disputes Act and ordered reinstatement with 40% back-wages. This was upheld by a Single Judge and then a Division Bench of the High Court, and by an earlier Supreme Court order the respondent was already reinstated and partially paid.

Decision Breakdown

The Supreme Court noted that back-wages for a violation of Section 25-F are not automatic even where non-compliance is established, and that 40% back-wages spread over 13 years would impose a heavy financial burden on the Corporation. Balancing these considerations, and given the peculiar facts, the Court directed the Corporation to pay the respondent a lump sum of Rs. 1,50,000 in full and final settlement of the back-wages claim, instead of the 40% ordered by the lower fora. The appeal was partly allowed on this specific limited basis, with the Court clarifying the order was not to be treated as a precedent.

Lesson Learnt

Even where a worker's termination is found unlawful, back-wages are not automatic: courts can convert a percentage-based back-wages award into a capped lump-sum amount based on the practical financial impact and facts of the case.

The State of Punjab PSEB (now Punjab State Power Supply Corporation Ltd.) v. Kulwant Singh – Legal Case Shots | LegalAware