Case Note & Summary
The appellant, was appointed as a Cleaner in the Chandrapur Division of the Maharashtra State Road Transport Corporation (MSRTC) on 1st April 1993 as a daily wage worker. He worked until 20th May 1994 when he was orally terminated. The Labour Commissioner ordered reinstatement and back wages, but the order was not complied with. The appellant then approached the Labour Court, which found the termination illegal and directed reinstatement with continuity and back wages. The respondent filed a writ petition, and by an interim order dated 2nd May 2003, the High Court denied stay on reinstatement but directed deposit of back wages. The appellant was reinstated as a daily wager on 23rd June 2003. In 2004, the appellant approached the Industrial Court seeking regularisation from the date he completed 180 days of service. The Industrial Court partly allowed the petition on 12th January 2007, directing regularisation from the date of completion of 180 days against a clear vacancy under Clause 19(1) of the Settlement, 1985. Despite this, the respondent did not comply until 22nd January 2011, when the appellant was taken into service as a regular Cleaner (Junior). The appellant then filed IDA Case No.10/2016 before the Labour Court, which on 14th January 2020 granted back wages from October 1993 to 20th January 2011 with 12% interest. The High Court set aside this order in Writ Petition 299 of 2022 on 1st August 2022. The Supreme Court held that the Industrial Court's 2007 order had attained finality as it was not challenged, and the respondent could not impose additional conditions like five years' satisfactory service. The Court rejected the respondent's estoppel argument, noting the unequal bargaining power. The Supreme Court allowed the appeal, restored the Labour Court's order, but reduced the interest from 12% to 8% considering financial implications. The respondent was directed to pay the amount within eight weeks, failing which the original 12% interest would revive. Litigation costs of Rs.1,00,000 were awarded to the appellant.
Headnote
A) Service Law - Back Wages - Regularisation - Entitlement to back wages from date of completion of 180 days - Industrial Court order directing regularisation from that date attained finality - Employer cannot impose additional conditions like five years' satisfactory service - Held that employee entitled to back wages from October 1993 till actual regularisation in 2011 (Paras 4-7). B) Service Law - Estoppel - Unequal Bargaining Power - Employer cannot rely on estoppel when employee was forced to accept regularisation on unfair terms due to unequal bargaining power - Held that doctrine of estoppel does not shield employer from paying legitimate dues (Paras 5-6). C) Interest - Reduction of Interest - Court reduced interest from 12% to 8% considering financial implications - Held that interest component reduced to 8% per annum (Para 7).
Issue of Consideration
Whether the appellant-employee is entitled to back wages from October 1993 (date of completion of 180 days) or from the date of actual regularisation in 2011.
Final Decision
Appeal allowed. Impugned High Court order set aside. Labour Court order granting back wages of Rs.8,09,218 from October 1993 to 20th January 2011 restored, but interest reduced from 12% to 8% per annum. Respondent to pay within eight weeks, failing which 12% interest revives. Litigation costs of Rs.1,00,000 awarded to appellant.
Law Points
- Back wages
- Regularisation
- Unequal bargaining power
- Estoppel
- Interest rate
