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Central Government Employees Consumer Cooperative Society vs. Om Prakash & Ors.

Writ Petition (Civil) · 2026:DHC:7657Decided 7 Sept 2026New Delhi Bench
W.P.(C) 10997/2005CNR: DLHC010643932005
Justice Amit Mahajan

Background

The respondent-workman was engaged as a "Helper" on one year's probation from December 1989, extendable based on satisfactory performance. His services were terminated in April 1991 for unsatisfactory work, without any domestic inquiry (since he was still on probation) and without paying retrenchment compensation. After an earlier writ petition was disposed of with liberty to approach the Labour Court, he raised an industrial dispute in 1996 (five years after termination). In 2004, the Labour Court held the termination illegal for not following Section 25-F of the Industrial Disputes Act (which requires notice/compensation before retrenchment) and ordered reinstatement with 50% back wages from 1996 onward. The employer challenged this award, while the workman (who was reinstated in the interim and continued working) separately sought back wages for the earlier 1991-1996 period too.

Decision Breakdown

The Court agreed that once a workman completes 240 days of continuous service, Section 25-F's protections apply regardless of probationary status, so the 1991 termination, made without retrenchment compensation, was indeed illegal. However, it held that illegality under Section 25-F does not automatically entitle a workman to reinstatement with full back wages; relief must be tailored to the facts, following the Supreme Court's guidance in Allahabad Bank v. Krishan Pal Singh. Given that roughly three decades had passed, and the workman had already reached retirement age in August 2026 while continuing in service under an interim order, reinstatement itself could no longer be undone. The Court modified the award, substituting a lump-sum compensation of Rs. 1,00,000/- in lieu of the disputed back wages, payable within eight weeks.

Lesson Learnt

Even a probationary employee is protected by the mandatory retrenchment procedure once they cross 240 days of continuous service, but when litigation drags on for decades, courts may replace an old back-wages award with a modest lump-sum payment rather than mechanically enforcing decades-old financial calculations.

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