The Supreme Court reaffirmed that reinstatement with full back wages is not an automatic remedy in every case of wrongful termination while awarding lump sum monetary compensation to a worker.
The Supreme Court ruled on Monday that an employee’s reinstatement with full back salary is not inevitable in every case when the firing was not done legally (Allahabad Bank vs. Kishan Pal Singh).
An appeal by Allahabad Bank (appellant) against an order of the Allahabad High Court requiring the bank to restore the respondent-worker with all perks was dismissed by a Bench of Justices Subhash Reddy and Sanjiv Khanna.
Given that the respondent had only been in effective service with the bank for six years and had already reached the age of superannuation, the top court deemed it appropriate to alter the High Court ruling. As a result, it proceeded to award a one-time monetary settlement.
“Where termination / dismissal is deemed to be not in compliance with procedure established by law, reinstatement with full back wages is not automatic,” the judgement stated.
The respondent worked for Allahabad Bank as a clerk-cum-cashier, and while stationed in the Aurangabad branch, he was suspected of being involved in a bank fire that resulted in the destruction of bank documents. As a result, he was placed on administrative leave and eventually fired.
The respondent went to the Industrial Tribunal after his departmental and mercy appeals were denied. The tribunal found that the respondent’s wrongdoing was not substantiated, and that despite significant suspicions, there was insufficient evidence to prove misconduct.
However, in place of reinstatement, a monetary award of 30,000 was made due to management’s lack of faith.
The respondent’s appeal to the High Court resulted in reinstatement with all benefits.
The bank filed an appeal with the Supreme Court.
The Supreme Court recognised that the respondent had only been employed for around six years and had been unsuccessful prior to the departmental investigation. During the course of the procedures, he had also reached the age of superannuation.
As a result, instead of restoration, the Court modified the High Court judgement and ordered that the respondent be paid compensation of Rs. 15 lakh.
“We believe it is acceptable to meet the goals of justice by providing a lump sum monetary compensation. As a result, we direct payment of Rs.15 lakhs in lump sum compensation to the respondent within eight weeks of today “According to the order.
Advocate Rajesh Kumar Gautam represented the appellant bank, while advocate Rakesh Taneja represented the respondent.