Madhya Pradesh High Court orders payment of lumpsum compensation to a workman, holding that reinstatement should not be viewed as automatic remedy

The present Misc. Petition No. 4540 of 2023 emanates from an award passed by the Labour Court directing the petitioner/employer to reinstate the respondent/ workman with 25% back-wages. Aggrieved the by the award, the petitioner approached the Madhya Pradesh High Court contending that the award has been erroneously passed by considering 8 years of continuous service of the respondent contrary to the fact that respondent was never appointed in the regular service, rather he was appointed on a contract basis for a period of 6 months and then again for 6 months after a cooling period of 2 months, thereafter the contract was never renewed, thus his removal would not come under retrenchment.

It was argued by the respondent that the petitioner did not submit any document to prove that respondent has not worked for more than 240 days in a calendar year and as the petitioner was in possession of every document it should be proved that respondent has not worked for the said statutory period since it is well established principle of law that if a party, who is in possession of best evidence, fails to produce the same then , an adverse inference is to be drawn against it, based on which the Labour Court passed the award.

Considering the arguments advanced from both the sides, the Madhya Pradesh High Court modified the order of the Labour Court and directed payment of monitory compensation in lieu of reinstatement and 25% back-wages, stating that reinstatement must not be considered as an automatic remedy in every case of termination.