Bombay High Court Modifies Labour Court Award: Compensation Substituted for Reinstatement Post-Retirement

In a significant decision delivered in Writ Petition (Civil) No. 10454 of 2024, the Bombay High Court adjudicated upon the legality of an award rendered by the Labour Court in favour of a workman who had been terminated on grounds of redundancy. The petitioner, the employer, challenged the Labour Court’s direction to reinstate the terminated employee, submitting that the employee occupied a supervisory role and hence did not fall within the definition of a “workman” under Section 2(s) of the Industrial Disputes Act, 1947.

Upon careful evaluation, the High Court concluded that although the respondent did perform supervisory tasks, the predominant nature of his duties remained technical. Consequently, he did qualify as a “workman” under the Act. However, the Court acknowledged that reinstatement was neither practical nor legally appropriate given that the workman had attained superannuation. Accordingly, the Court upheld the Labour Court’s finding of wrongful termination but substituted the relief of reinstatement and back wages with a direction to pay a lump-sum compensation.

The predominant nature of duties performed determines the classification under the Industrial Disputes Act. Reinstatement post-retirement may be substituted by financial compensation.