Bombay HC Directs Bata To Pay Compensation To Salesmen Terminated 16 Years Ago For Objecting To 7 Days’ Work Week With Extended Hours

In the year 2007, Bata had decided to operate its showrooms in Mumbai, Thane and Pune for 7 days a week with extended hours to reduce losses. This decision raged the employees and thus created a rift between the company and some of its salesmen, who were not willing to work as per the roster prepared by Bata. Therefore, Bata treated the refusal to work as per the roster by its salesperson as ‘misconduct’ leading to discontinuation of services of some of its salespersons in the year 2007.

Therefore, while granting a lumpsum compensation to the salesmen ranging from ₹19.5 lakhs to ₹ 33 lakhs instead of reinstatement, a bench of Justice Sandeep V. Marne observed, “Considering the fact that reinstatement is not being granted to them thereby denying an opportunity to the employee to work in future period and to earn wages and also considering the inflationary wage rise during the interregnum, in my view, ends of justice would meet if Bata is directed to pay lump-sum compensation of approximately 75% of backwages during last 16 years (determined on the basis of last wages drawn by them) to each of the Complainants in lieu of reinstatement and backwages”.

The present matter was a batch of petitions, where Bata challenged preliminary findings on the status of a salesman as a workman. Bata has also challenged the Labour Court’s decision directing reinstatement and 50% backwages whereas the salesmen, on the other hand, are aggrieved by non-grant of 100% backwages. The Industrial Court had also upheld the decisions of the Labour Court by dismissing revision applications filed by Bata as well as the complainants.

For the background, the salesmen while challenging the termination had approached the Labour Court by filing complaints under provisions of Section 28(1) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 (MRTU & PULP Act).

While Bata had refused to consider the salesman as a ‘workman’ under the Industrial Disputes Act 1947 and consequently as an ‘employee’ under the MRTU & PULP Act. Labour Court, however, holding the complaints to be maintainable, held those salesmen as workmen under the provisions of the Industrial Disputes Act and ‘employees’ under the MRTU & PULP Act. In two sets of complaints, Bata is before this Court challenging findings on preliminary point of status of salesman as workman.

In rest of complaints, the Labour Court, while holding salesman as workman, went into the merits of the termination Orders and has set aside the same directing payment of 50% backwages. Bata has challenged the Labour Court’s decision directing reinstatement and 50% backwages whereas the salesmen, on the other hand, are aggrieved by non-grant of 100% backwages and accordingly have filed their own petitions.

Accordingly, while granting a lumpsum to the complainants (salesmen), the bench observed “considering the nature of job of salesman and rapid advancement in the industry, it is not known whether the Complainants would now be in a position to discharge duties as salesman in the retail outlets of Bata effectively. In such circumstance, instead of directing reinstatement and payment of any backwages, in my view ends of justice would meet if the Complainants are awarded lump-sum compensation in the peculiar facts and circumstances of case. Since reinstatement is being denied to the Complainants, there is no question of entertaining the Petitions filed by them for grant of 100% backwages.

Further, while holding that Bata’s contention to be an afterthought that enquiry was not necessary as charge was admitted and that the Labour Court ought to have given an opportunity to Bata to lead evidence to prove misconduct, the bench also noted, “It appears that to prove misconduct, charge-sheets were issued to the employees. However, it is admitted position that no enquiry was held to prove misconduct alleged in the charge-sheets…I find this submission to be totally misplaced as there is no admission on the part of any of complainants either before the employer or before the Labour Court. The services of the employees are terminated without holding any enquiry and without offering any opportunity of defence. Therefore, no fault can be found in the orders passed by the Labour Court setting aside their terminations…However, I do not find any application being filed by Bata seeking liberty to prove misconduct by adducing evidence before Labour Court”.

Resultantly, the bench directed the amount to be paid within a period of 4 months, failing which Bata shall be liable to pay interest @ 8% per annum on the amount of compensation till the actual date of payment.

Cause Title: Kiran P. Pawar v. Bata India Ltd. [Neutral Citation: 2023:BHC-AS:33057]