MP HC Grants Reinstatement With 50% Back Wages, As Termination Violated Section 25(F), Industrial Disputes Act, 1947

Background

Pankaj Kumar Mishra had worked for the Krishi Upaj Mandi Samiti from 2011, until he was terminated orally in 2019. Throughout this period, he claimed to have been employed as a skilled labourer. He alleged that his services were terminated without any written order, prior notice or payment of retrenchment compensation. This, he argued, breached the requirements of Section 25(f) of the ID Act, which mandates that before retrenching a workman who has completed 240 days of continuous service in the last twelve months, the employer must give provide month's notice and retrenchment compensation.

Following this, Pankaj Mishra raised an Industrial Dispute. The employer failed to provide any evidence to dispute Mishra's claim of 'continuous service'. However, the labour court held that Mishra failed to prove his continuous service for 240 days in the preceding year, and thus, denied his claim for full back wages.

Aggrieved, Mishra filed a writ petition challenging the labour court's award.

Arguments

Pankaj Mishra argued that terminating him orally was unlawful and violated Section 25(f) of the ID Act. He argued that he had worked with the Respondent continuously from 2011 until 2019, and was yet not given any retrenchment compensation or notice. Mishra cited Goverdhan v. Chief Municipal Officer (Misc. Petition No. 6329/2022), where the same court had reinstated an employee in similar circumstances, with 50% back wages. He submitted that once the employee has been deposed about continuous work for 240 days, the burden shifts on the employer to disprove it with proper records.

On the other hand, the Krishi Upaj Mandi Samiti argued that Pankaj Mishra was not a regular employee and was only working as and when required. They argued that since there was no formal order of termination and he was not employed continuously, the provisions of Section 25(f) were not violated.

Court's Reasoning

Firstly, the court noted that the Labour Court was wrong in placing the entire burden of proving 240 days on continuous service on the employee. Referring to Goverdhan v. Chief Municipal Officer (Misc. Petition No. 6329/2022), the court held that once the workman gives oral testimony of continuous service, the burden shifts on the employer to rebut it through evidence.

Secondly, the court referred to Director, Fisheries Terminal Dept. v. Bhikubhai Meghajibhai Chavda (009 INSC 1224). The court held that the employer's failure to produce satisfactory records allows the court to draw an adverse inference against the employer.

Thirdly, the court noted that the employer's own witness had confirmed that Mishra had worked from 2011 to 2019, and no evidence was produced to counter this claim. Thus, the court held that the employer failed to satisfactorily discharge its burden. Consequently, the court held that Pankaj Mishra had successfully proved his 'continuous service' and that the employer's failure to provide adequate notice and retrenchment compensation, violated Section 25(f) of the ID Act.

Thus, the court set aside the Labour Court's award. The court directed Pankaj Mishra's reinstatement with 50 % backwages and all consequential benefits.

Date: 02/05/2025

Neutral Citation: 2025:MPHC-GWL:9767

Counsel for the Petitioner: Ms. Chitra Bais

Counsel for the Respondent: Mr. S.P. Jain