Contractual Appointment On Fixed Salary – SC Awards Compensation In Lieu Of Reinstatement And Back Wages To A Sweeper

Counsel Ms. Mayuri Raghuvanshi appeared for the Appellant-Employer while Counsel Mr. Subhasish Bhowmick appeared for the Respondent-Employee before the Apex Court.

An appeal was preferred by the Appellant – Employer - Maharashtra State Road Transport Corporation (MSRTC) assailing the judgment of the Division Bench of the Bombay High Court which had dismissed the appeal of the Appellant and confirmed the order of the Single Judge quashing and setting aside the order of the Industrial Tribunal and restoring the award passed by the Labour Court. The Labour Court had directed the Appellant to reinstate the Respondent with back wages.

Aggrieved, MSRTC approached the Supreme Court.

In this case, the Respondent was appointed on a contractual basis as a sweeper on a consolidated honorarium of Rs. 500/- per month. After serving for a period of four years, her services were terminated. Thereafter, she filed a complaint before the Labour Court under Section 28 read with the item (1) of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 challenging her termination.

The Labour Court directed for Respondent's reinstatement with back wages on the ground that her termination was in breach of Section 25F and Section 25G of Industrial Disputes Act. The Court also held that the provision of Section 2(oo)(bb) of the Act shall apply.

The Apex Court noted that even as per the appointment order produced by the Respondent herself, her appointment was on a contractual basis at a fixed salary/honorarium of Rs. 500/- per month.

In this context, the Court observed, "In the peculiar facts and circumstances of the case, when the appointment was purely on contractual basis and on a fixed salary/honorarium of Rs.500/- per month, the order of reinstatement with back wages was not warranted and instead if the lumpsum compensation is awarded in lieu of reinstatement and back wages as observed hereinabove, it will meet the ends of justice."

Accordingly, the Court partly allowed the appeal and modified the impugned judgment and order of the High Court and directed the Appellant to pay a lumpsum compensation of Rs. 3 lacs to the Respondent.