A worker who was removed from service illegally is entitled to 100% of the back wages: High Court of Orissa

In cases where a workman is suspended from service illegally, he is entitled to gain 100% of the back wages he was owed for the time period he was kept out of service by his employer. The issue of back wages was addressed in the judgement passed by a bench of the High Court of Orissa consisting of Justice S.K Panigrahi and Justice Sanju Panda in the case of Sun Pharmaceutical Industries Ltd. v State of Odisha and another [W.P.(C) No. 6156 of 2017] on 11th June 2021.

Sun Pharmaceutical Industries Ltd., the petitioner terminated the services of former employee Niranjan Sahoo, who is opposite party no: 2 on 18th February 2014. Sahoo was the district manager at Ranbaxy Laboratories, Bhubaneshwar since 3rd May 2010 which is owned by the petitioners.  He was suspended from his job on account of poor attitude and team management skills which lead to members of the Orissa Union detaining the regional manager of the concerned unit to demand the revocation of Sahoo’s suspension. Instead it resulted in Niranjan Sahoo being terminated from services permanently.

The matter was taken to Labour Court where the Presiding Officer held that the petitioners had not followed the principles of natural justice while conducting the domestic inquiry against opposite party no: 2 and as opposite party no: 2 was a workman under Section 2(s) of the ID Act 1947, the petitioner was liable for the offence of illegal termination of workman. The Presiding Officer also directed the petitioner to reinstate opposite party no: 2 as well as pay him 50% of the back-wages for his time out of service. The petitioners filed a writ petition in the High Court of Orissa against the Presiding Officer’s judgement on the grounds that opposite party no: 2 should not be considered as a workman.

The High Court stated that designation or name of a post is irrelevant in ascertaining whether a person is a workman or not and therefore the opposite party 2 would be considered as a workman despite holding the post of district manager as he did not possess the authority to take disciplinary action against the other workers or to grant them leave. It was also added that considering that the termination was found to be illegal, opposite party no: 2 should be entitled to 100% of the back wages as opposed to the 50% granted by the Labour Court. The case of Bhuvesh Kumar Dwivedi v M/s Hindalco Industries Ltd. [11 SCC 85 of 2014] was cited, where the Supreme Court of India held that if a workman is kept out of work due to the mistake of the establishment, he is entitled to full back wages for the time he was kept out of service.

The judgement concluded “In our considered opinion, the act of suspension and subsequent termination of Opposite Party No.2 without due compliance of the principle of natural justice vitiates the proceedings, dehors sufficient reasons, smacks arbitrariness and malafide. Hence, the order dated 31.12.2016 passed in I.D. Case No.32 of 2015 by the learned Presiding Officer, Labour Court, Bhubaneswar is affirmed but the direction of 50% back wages granted to the opposite party No.2 is modified and made 100%”.

Click here for the judgement

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