Reinstated Employee Not Automatically Entitled to Back Wages Upon Termination: SC

In the case of Ramesh Chand vs Management of Delhi Transport Corporation, the supreme court has reaffirmed that reinstatement of an employee doesn’t automatically entitle them to back wages.

The court clarified that the entitlement to back wages depends on the circumstances of each case.

According to the court, an employee who has been reinstated must demonstrate that they were not gainfully employed during the relevant period in order to claim back wages.

” The law is very well-settled. Even if Court passes an order of reinstatement in service, an order of payment of back wages is not automatic. It all depends on the facts and circumstances of each case” stated the court.

The case before the court involved a retired bus conductor who was terminated by the Delhi Transport Corporation in 1996 for allegedly not issuing tickets to two passengers, despite collecting the fare in 1992.

In 2009, the Labour Court reinstated the employee but denied him back wages for the period he was not working for the Delhi Transport Corporation. The Delhi High Court upheld this ruling.

The bus conductor, dissatisfied with the decision, filed an appeal with the Supreme Court in 2016 and retired from service in 2020.

After considering the appellant’s inability to find alternative employment for approximately one year following his termination in 1996, the Supreme Court granted him partial relief.

Taking into account his current and past salary, the court modified the Labour Court’s award and ordered the payment of back wages amounting to ₹3 lakh. The court further stipulated an annual interest of 9 percent from 2009 if the payment is not made within two months.

Advocates P George Giri and Jasmine Kurian Giri represented the appellant, while Advocate Monika Gusain appeared for the respondent.