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Nandkishore Shravan Ahirrao v. Kosan Industries (P) Ltd.

Civil Appeal · 2020 INSC 27Decided 10 Jan 2020
Civil Appeal Nos. 201-202 of 2020
Dr. Justice D.Y. Chandrachud · Justice Hrishikesh Roy

Background

A worker was dismissed from his job after being charged with disrupting work for about an hour in 1992. Years later, a Labour Court found the enquiry against him flawed and the dismissal too harsh, ordering his reinstatement with 25% back wages. The employer challenged this in the Gujarat High Court, which upheld reinstatement but removed the back-wages award and wrongly read the Labour Court's order as denying "continuity of service." The worker appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the High Court had misread the Labour Court's award: reinstatement ordinarily carries continuity of service with it unless expressly denied, and the Labour Court's order did not deny it. The Court also held that the High Court was wrong to strike down the 25% back wages, since the Labour Court had already factored in that the worker was gainfully employed elsewhere for part of the relevant period and had limited the award accordingly, making it fair. The appeal was allowed, restoring reinstatement with continuity of service and 25% back wages, with retiral dues to be computed and paid within three months since the worker had since retired.

Lesson Learnt

When a labour court orders reinstatement, continuity of service is presumed to follow automatically unless the order specifically says otherwise, and an appellate court should not disturb a back-wages award that already accounts for the worker's intervening employment.

Official source (sci.gov.in)View Judgment (PDF)

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