Del HC | Reinstatement cannot be granted where employee acts in a manner by which management loses confidence in him; order of reinstatement quashed

Delhi High Court: J.R. Midha, J. allowed a writ petition filed by the employer challenging the award of the Labour Court whereby the respondent was ordered to be reinstated with 40% back wages.

The employer had engaged the respondent on daily wages, who deposited deficient sale proceeds for several months in 1989 and 1990. The employer issued memos to the respondent, whose services were ultimately terminated on the ground of loss of confidence. The respondent raised an industrial dispute which was referred to the Labour Court, which subsequently made the impugned award.

Anju Bhattacharya, Nandita Chandra and Elign Matt John, Advocates representing the employer, submitted that there was no infirmity in termination of respondent’s service. Per contra, B.P. Singh Parihar, Advocate for the respondent, supported the impugned award.

The High Court observed: “the law with respect to the loss of confidence is well- settled that the reinstatement cannot be ordered when an employee acts in a manner by which the management loses confidence in him. In case of loss of confidence, only compensation can be awarded.” Reliance was placed on State of Travancore v. Prem Singh, 2019 SCC OnLine Del 8258 wherein the High Court had summarised the principles regarding the termination of service in case of loss of confidence.

It was brought to Court’s notice that the employer had paid around 7.47 lakhs to the respondent under Section 17-B of the Industrial Disputes Act, 1947 (payment of full wages to the workman pending proceedings in higher courts).

The Court was satisfied that the instant case was squarely covered by principles laid down in State of Travancore case. No infirmity was found in termination of respondent’s services. The writ petition was allowed and the award of Labour Court impugned herein was set aside. However, a compensation of Rs 75,000 was awarded to the widow of the respondent (who had expired during the pendency of the petition).[Delhi State Civil Supply Corpn. Ltd. v. Badan Singh, 2019 SCC OnLine Del 9977, decided on 30-08-2019]

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