Employee Can't Be Denied Back Wages Merely Because There Was A Stay On Reinstatement Order Which Ultimately Came To Be Confirmed: SC

The Supreme Court has observed that merely because there was an interim order/stay of the order of reinstatement, the employee cannot be denied back wages/wages when ultimately the reinstatement order came to be confirmed.

The bench of Justice MR Shah and Justice CT Ravikumar observed that "…merely because there was an interim order/stay of the order of reinstatement during the pendency of the proceedings, the employee – appellant cannot be denied the back wages/wages when ultimately the order of reinstatement came be confirmed by the Court."

In this case, the appellant was working with the respondent – bank. In the departmental proceedings, he was dismissed from service.

The order of dismissal was challenged by the appellant. The Labour Court set aside the order of dismissal and passed an order of his reinstatement with 50% back wages.

The said award was challenged before the High Court by the bank as well as the appellant herein. The Single Judge confirmed the order of reinstatement, however, reduced the back wages from 50% to 25%.

In the appeal(s), the Division Bench of the High Court also confirmed the order of reinstatement passed by the Labour Court, however held that the appellant is not entitled to back wages.

Thereafter, the appellant came to be reinstated in 2013.

However neither was he reinstated earlier in spite of award dated July 2007 nor was he paid full wages from the date of award i.e., July 2007, therefore, he again approached the Labour Court.

The Labour Court directed the bank – employer to pay the wages due from the date of award to the date of actual reinstatement.

The bank approached the High Court.

By the impugned Judgment and Order, the Division Bench of the High Court set aside the Order passed by the Labour Court and held that the Labour Court had no jurisdiction to decide the application of the employee-appellant.

Aggrieved, the employee-appellant approached Supreme Court.

Advocate Shailesh Madiyal appeared on behalf of the appellant whereas Advocate Rajesh Kumar Gautam appeared on behalf of the respondent - bank.

The Supreme Court observed that it was the employer – bank who obtained the stay against reinstatement and ultimately order of reinstatement attained the finality.

The Court noted why should the employee be made to suffer, when the bank obtained the stay of reinstatement and when the order of reinstatement subsequently came to be confirmed.

"Merely because the reinstatement order was under challenge and there was a stay of the order of reinstatement during the pendency of the proceedings before the High Court, it cannot be a ground to deny the wages to the employee when ultimately the order of reinstatement came to be confirmed and attained the finality.", the Court observed.

Therefore the Court set aside the Order passed by the Division Bench of the High Court. The Court held that the appellant-employee shall be entitled to the full wages with all emoluments from the date of order of reinstatement i.e., July 2007 to the date of actual reinstatement in 2013.

Cause Title- D.N. Krishnappa v. The Deputy General Manager

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