No Illegality If Labour Court Awards Compensation In Lieu Of Reinstatement: Madhya Pradesh HC

The Court was hearing a Miscellaneous Petition filed against Award passed by the Labour Court by which claim filed by the Petitioner was allowed and it was held that the termination of services of the Petitioner was in violation of Section 25-F of Industrial Disputes Act. However, instead of reinstating the Petitioner, the Labour Court directed for payment of compensation of Rs.1L in lieu of reinstatement.

The bench of Justice GS Ahluwalia observed, “no illegality was committed by the Labour Court by awarding compensation of Rs.1,00,000/- in lieu of reinstatement…”

Advocate Gaurav Sharma appeared for the Appellant and Government Advocate Abhishek Singh appeared for the Respondent.

The Court noted that the Supreme Court in Jayant Vasantrao Hiwarkar v. Anoop Ganpatrao Bobde (2017) has upheld the grant of compensation in lieu of reinstatement as the respondent had merely worked for a period of one year.

The Court further mentioned the Supreme Court decision in the case of Mahboob Deepak v. Nagar Panchayat (2008) where according to the Court it was held, “merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same would not mean that his services were liable to be regularized. At the most, interest of justice will be subserved if payment of sum of Rs.50,000/- by way of damages is made to the Workman.”

Accordingly, the Court rejected the Petition.