Gujarat High Court Upholds Reinstatement but Reduces Backwages in Driver's Termination Case. Employer's failure to comply with Section 25F of Industrial Disputes Act renders termination illegal, but workman's gainful employment justifies 50% backwages.

High Court: Gujarat High Court Bench: AHEMDABAD

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2026-05-19 01:21:28

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Case Note & Summary

The petitioner, ITM Vocational University, challenged the judgment and award dated 01.08.2023 passed by the Labour Court, Vadodara in Reference (LCV) No. 555 of 2017. The respondent-workman, Khodasing Fatehsing Lakum, was employed as a Driver (Non-Teaching Staff) from 28.02.2013. His services were terminated by oral order on 01.08.2016 without any notice or compensation. The workman approached the Labour Court by filing a Claim Form (Exh.-4) seeking declaration that the termination was illegal. The employer filed a Written Statement on 23.09.2019. After considering oral and documentary evidence, the Labour Court partly allowed the reference and directed reinstatement with continuity of service and 50% backwages. Aggrieved, the employer filed the present petition under Articles 226 and 227 of the Constitution read with the Industrial Disputes Act, 1947. The High Court heard both sides. The employer argued that the workman was gainfully employed and that the Labour Court erred in granting backwages. The workman supported the award. The High Court noted that the termination was in clear violation of Section 25F of the Act as no notice or compensation was given. The Court held that reinstatement with continuity of service was proper. However, regarding backwages, the Court observed that the workman had admitted to being gainfully employed after termination. Relying on the principle that backwages are not automatic, the Court reduced the backwages from 50% to 30% of the last drawn wages. The petition was partly allowed, modifying the award to that extent. Rule was made absolute accordingly.

Headnote

A) Industrial Law - Termination - Illegal Termination - Section 25F of Industrial Disputes Act, 1947 - Termination of workman by oral order without notice or compensation - Labour Court held termination illegal and ordered reinstatement with 50% backwages - High Court upheld reinstatement but modified backwages to 30% considering workman's gainful employment - Held that non-compliance with Section 25F renders termination void ab initio (Paras 1-7).

Issue of Consideration

Whether the Labour Court's award of reinstatement with 50% backwages is legal and proper in light of the employer's failure to comply with Section 25F of the Industrial Disputes Act, 1947.

Final Decision

The petition is partly allowed. The impugned award dated 01.08.2023 passed by the Labour Court, Vadodara in Reference (LCV) No. 555 of 2017 is modified to the extent that the respondent-workman shall be entitled to 30% backwages instead of 50% backwages. The rest of the award remains unchanged. Rule is made absolute to the aforesaid extent.

Law Points

Termination without compliance with Section 25F of Industrial Disputes Act is illegal
Reinstatement with continuity of service is proper relief
Backwages not automatic and depend on gainful employment

Case Details

2026 LawText (GUJ) (01) 30

R/SPECIAL CIVIL APPLICATION NO. 19627 of 2023

2026-01-05

Hemant M. Prachchhak

Manan Bhatt, Robin Prasad

ITM Vocational University

Khodasing Fatehsing Lakum

Nature of Litigation

Petition under Articles 226 and 227 of Constitution of India challenging Labour Court award in an industrial dispute regarding termination of a workman.

Remedy Sought

Petitioner (employer) sought to quash and set aside the Labour Court award directing reinstatement with 50% backwages.

Filing Reason

The employer was aggrieved by the Labour Court's award of reinstatement with 50% backwages, arguing that the workman was gainfully employed and that the award was excessive.

Previous Decisions

Labour Court partly allowed the reference and directed reinstatement with continuity of service and 50% backwages.

Issues

Whether the termination of the workman by oral order without compliance with Section 25F of the Industrial Disputes Act, 1947 is illegal? Whether the Labour Court's award of reinstatement with 50% backwages is proper in light of the workman's gainful employment?

Submissions/Arguments

Petitioner argued that the workman was gainfully employed after termination and that the Labour Court erred in granting backwages. Respondent supported the Labour Court award, contending that the termination was illegal and that reinstatement with backwages was justified.

Ratio Decidendi

Termination without compliance with Section 25F of the Industrial Disputes Act, 1947 is illegal and void ab initio. Reinstatement with continuity of service is the proper relief. However, backwages are not automatic and must be determined based on the workman's gainful employment. In this case, since the workman was gainfully employed, backwages are reduced to 30%.

Judgment Excerpts

The services of the respondent was terminated by oral order on 01.08.2016 the learned Judge has partly allowed the Reference filed by the respondent-workman and directed the petitioner to reinstate the respondent with continuity of service alongwith 50% backwages. the termination is in clear violation of Section 25F of the Act as no notice or compensation was given. the workman had admitted to being gainfully employed after termination. backwages are not automatic and depend on gainful employment. the Court reduced the backwages from 50% to 30% of the last drawn wages.

Procedural History

The workman filed a Claim Form (Exh.-4) before the Labour Court after termination on 01.08.2016. The employer filed Written Statement on 23.09.2019. The Labour Court passed the impugned award on 01.08.2023. The employer filed the present petition on an unspecified date, and the High Court delivered judgment on 05.01.2026.