The Delhi High Court has clarified that reinstatement with back wages is not an automatic remedy for casual workers whose termination violates procedural requirements under the Industrial Disputes Act, 1947. Where the termination is due to non-compliance with Section 25F but lacks elements of mala fide or victimisation, monetary compensation may be substituted to achieve justice, particularly where reinstatement serves no practical purpose.
Background & Facts
The Dispute
The respondent, Chedda Lal Sharma, claimed continuous employment with the Union Bank of India from 1998 until his termination on 21.06.2011, performing book binding, voucher stitching, and maintenance of cash books and day books across various branches. He alleged that his services were terminated without notice, without payment of retrenchment compensation, and without compliance with Section 25F of the Industrial Disputes Act, 1947. He filed a claim application before the Central Government Industrial Tribunal (CGIT-I), Dwarka, seeking reinstatement with continuity of service and full back wages.
Key Facts
- The respondent was engaged on a casual, job-work basis for book binding and clerical support duties from 1998 to 21.06.2011
- He was not on the regular payroll but received payments via cheque or ECS under the head ‘book binding/miscellaneous expenses’
- He produced bank statements, cheque deposit slips, cover notes of cash books, and photographs showing his presence within bank premises
- The Bank did not maintain attendance records for casual workers - a practice admitted to be systemic across branches
- The Bank’s witness, Sh. Roop Lal Meena (MW-1), confirmed in cross-examination that the respondent worked for over a decade and was paid regularly for such work
- The Tribunal found that the respondent had worked more than 240 days annually, thereby qualifying as a ‘workman’ under Section 2(s) of the Act
Procedural History
- 1998: Respondent began casual work for Union Bank of India
- 21.06.2011: Services terminated without notice or compensation
- 2012: Complaint filed before Conciliation Officer; Government initially declined to refer the dispute
- 2013: Certificate under Section 2A issued; respondent filed Statement of Claim before CGIT-I, Dwarka (ID No. 154/2013)
- 04.12.2018: Tribunal awarded reinstatement with 50% back wages
- 2019: Union Bank filed Writ Petition (W.P.(C) 3388/2019) before Delhi High Court challenging the award
- 2022 & 2024: CM Applications filed for stay and interim relief
- 27.04.2026: Judgment pronounced by Delhi High Court
Relief Sought
The petitioner sought quashing of the Tribunal’s award dated 04.12.2018. The respondent sought enforcement of reinstatement with continuity of service and back wages. The Bank also contended that Rs. 10,66,000 had already been paid to the respondent as back wages under Section 17B of the Act from February 2021 to 31.12.2025.
The Legal Issue
The central question was whether reinstatement with back wages is an automatic remedy for a casual worker whose termination is found illegal solely due to non-compliance with Section 25F of the Industrial Disputes Act, or whether monetary compensation may be substituted in light of the worker’s casual status, long lapse of time, and lack of prospect of regularisation.
Arguments Presented
For the Petitioner
The Bank contended that the Tribunal’s award was perverse and contrary to law. It argued that the respondent was a casual worker engaged only for book binding on an ad hoc basis, with no expectation of permanency or regularisation. It submitted that no documentary proof of continuous service existed beyond bank statements, and that the non-maintenance of attendance records was a systemic failure, not an admission of employment. It further argued that the respondent had already received Rs. 10,66,000 as back wages under Section 17B, and that reinstatement after 15 years would be futile since he could not claim regularisation even if reinstated (Umadevi (3)). The Bank relied on Jagbir Singh and Bharat Sanchar Nigam Limited to argue that reinstatement is not automatic for daily wage workers terminated due to procedural defects.
For the Respondent
The respondent’s counsel supported the Tribunal’s award, arguing that the nature of duties performed - book binding, record maintenance, and clerical support - was perennial and integral to the Bank’s operations. He submitted that the respondent had worked over 240 days annually, thereby attracting protection under the Act. He relied on Delhi Cantonment Board v. CGIT to establish that the Act does not distinguish between permanent, casual, or daily wage workers. He argued that the Tribunal had properly appreciated oral and documentary evidence, including admissions by the Bank’s witness, and that the award was neither perverse nor illegal.
The Court's Analysis
The Court acknowledged that the respondent qualified as a ‘workman’ under Section 2(s) of the Industrial Disputes Act, 1947, and that his termination without compliance with Section 25F rendered it illegal. The Court affirmed the Tribunal’s finding that the respondent had rendered continuous service for over a decade and had worked more than 240 days annually, thereby attracting statutory protections.
However, the Court emphasized that the remedy of reinstatement with back wages is not automatic, even where termination is illegal. Citing Jagbir Singh v. Haryana State Agriculture Marketing Board and Bharat Sanchar Nigam Limited v. Bhurumal, the Court observed that the Supreme Court has consistently held that for casual or daily wage workers, reinstatement is inappropriate where the termination defect is purely procedural and not tainted by mala fide, victimisation, or unfair labour practice.
"When he cannot claim regularisation and he has no right to continue even as a daily-wage worker, no useful purpose is going to be served in reinstating such a workman..."
The Court noted that the respondent was 57 years old at the time of judgment, had not been gainfully employed since termination, and was nearing superannuation. Reinstatement after 15 years would serve no practical purpose, as the Bank could lawfully retrench him again upon payment of retrenchment compensation. The Court further observed that the respondent had already received Rs. 10,66,000 as back wages under Section 17B, and that the Tribunal’s award of 50% back wages was already partially satisfied.
The Court held that the balance of justice required a lump sum compensation in lieu of reinstatement, particularly given the respondent’s age, long service, and lack of alternative employment prospects.
The Verdict
The petition was dismissed. The Tribunal’s award was modified: reinstatement was set aside. The petitioner, Union Bank of India, was directed to pay the respondent a lump sum compensation of Rs. 2,00,000 within four weeks from the date of judgment. Any delay beyond this period shall attract interest at 12% per annum until realization. The amount already deposited with the Registrar General, along with accrued interest, shall be released to the respondent. The balance of the awarded back wages, if any, shall also be paid.
What This Means For Similar Cases
Reinstatement Is Not Automatic for Casual Workers
- Practitioners must now argue that reinstatement is only warranted if termination involved mala fide, victimisation, or violation of last-in-first-out principles
- For purely procedural violations under Section 25F, compensation is the norm, not the exception
- Employers may rely on Jagbir Singh and Bharat Sanchar to oppose reinstatement for long-term casual workers
Age and Employment Prospects Are Critical Factors
- Courts will weigh the worker’s age, health, and prospects of re-employment when deciding between reinstatement and compensation
- Workers nearing retirement with no alternative employment options are more likely to receive lump sum compensation
- Evidence of post-termination employment may weaken a claim for compensation
Documentary Evidence Must Be Corroborated by Employer’s Conduct
- Bank statements, payment records, and witness admissions can establish continuous service even without formal attendance records
- Systemic non-maintenance of records by the employer cannot be used to deny employment status
- Photographs and work product (e.g., cover notes of cash books) are admissible as corroborative evidence
