Back Wages cannot be claimed as Right on reinstatement in service, Supreme Court

The Supreme Court has ruled that an employee has no right to claim back wages from employer as a right only because the Court has set aside the dismissal order and directed reinstatement in service of the employee..This principle was reiterated by a Bench of Justices AM Sapre and S Abdul Nazeer in two separate judgments delivered today – 1. Rajasthan State Road Transport Corporation v. Shri Phool Chand and 2. The Management of Regional Chief Engineer P.H.E.D. Ranchi v. Their Workmen Rep. by District Secretary. .In the first case the appellant, Rajasthan Road Transport Corporation, dismissed their driver Phool Chand from the service on the ground of dereliction of duties on various occasions while he was in the employment. The charge against the Phool Chand was his continuous absence from the work, which was proved..Phool Chand felt aggrieved by his dismissal and filed an application before the Labour Court. The Labour Court held the charge against Phool Chand as proved but interfered in the quantum of punishment..It converted the punishment of removal from service to that of “stoppage/forfeit of four annual grade increments without cumulative effect” and directed the reinstatement of the deceased workman in service with the award of full back wages for a period of 13 years..The appellant (employer), felt aggrieved by the award of the Labour Court and filed a writ petition in the High Court of Rajasthan. The Single Judge of the High Court dismissed the writ petition and affirmed the award passed by the Labour Court. The same was also upheld by the Division Bench of the High Court leading to the appeal in Supreme Court..The Supreme Court held that back wages cannot be awarded by the court as a right of the workman consequent upon the setting aside of the termination/ dismissal order..“..a workman has no right to claim back wages from his employer as of right only because the Court has set aside his dismissal order in his favour and directed his reinstatement in service”, it ruled..It is necessary for the employee in such cases to plead and prove with the aid of evidence that after dismissal from the service, the person was not gainfully employed anywhere and had no earning to maintain himself/ herself or/and his/ her family. The employer is also entitled to prove it otherwise against the employee, namely, that the employee was gainfully employed during the relevant period and hence not entitled to claim any back wages. The initial burden is, however, on the employee, the court held..It, therefore, partially set aside the judgment of the High Court while awarding 50 percent back wages to Phool Chand taking into account the circumstances of the case such as period and money spent in litigation by the deceased workman and on his death, by his legal representatives..The second case also dealt with a very similar issue: whether the Courts below, namely, the High Court and the Labour Court were justified in awarding full back wages to the 37 workmen represented by Workmen Union after setting aside their dismissal order?.The ruling was identical as in the case of Rajasthan Road Transport with the Court holding that back wages cannot be claimed as a right and the employee has to plead and prove with the aid of evidence that after dismissal from the service, the person was not gainfully employed anywhere..The Court, therefore, passed a very similar order awarding 50 percent back wages to the employees..Read the judgments below.