Supreme Court reinstates hotel worker 34 years after termination, orders 50% back wages

The Supreme Court recently reinstated and restored partial back wages to a hotel worker whose services were terminated more than thirty years ago [Dinesh Chandra Sharma Dead Through Lrs v. Bhartiya Paryatan Vikas Nigam Limited & Anr].

Holding the termination to be wrongful, a Bench of Justices Manoj Misra and Ujjal Bhuyan ruled that an employer cannot avoid liability for back wages merely because the workman did not initially plead that he was unemployed during the intervening period.

The Court was hearing an appeal filed by the legal representatives of the late Dinesh Chandra Sharma, who had joined the Rajasthan unit of Bhartiya Paryatan Vikas Nigam Limited in 1978 as a room attendant. His services were terminated in July 1991 on charges of misconduct - charges that were found to be unproven years later.

The dispute began after Sharma raised an industrial claim against his termination, which was referred to the labour court. In March 2015, the labour court found the disciplinary enquiry to be unfair and allowed the management a chance to prove the charges. When the management failed to lead any evidence, the labour court passed an award in December 2015 directing Sharma’s reinstatement with continuity of service and full back wages.

The management challenged the award before the Rajasthan High Court. A single-judge partly modified the order by reducing the back wages to 50%. However, in January 2020, a Division Bench of the High Court set aside the award of back wages altogether, holding that Sharma had not specifically pleaded before the labour court that he was unemployed during that period. Relying on the apex court's judgment in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyala (DED) and Others, (2013), the Bench held that a workman seeking back wages must ordinarily state that they were not gainfully employed.

In appeal, the Supreme Court held that the word “ordinarily” used in the precedent made it clear that the burden to prove gainful employment does not always lie on the employee.

“The use of expression ‘ordinarily’ in paragraph 38.3 of the judgment would make it clear that this is not an inviolable rule and, therefore, each case would have to be decided on its own facts,” the Court said.

The Court noted that Sharma had worked for 13 years before his termination and the reference was made in 1997 - six years after his dismissal - with the final award coming nearly 24 years later in 2015. Given his age and the nature of his employment, the Bench said that it was unrealistic to assume he could have secured comparable work in the intervening years.

It further observed that the stigma attached to a dismissal on grounds of misconduct made re-employment even more difficult.

“A person may do odd jobs to survive but that cannot be a ground to deny back wages, particularly when termination of his service is by way of punishment. Because punishment, as a matter of course, visits a person with stigma which hampers re-employment."

It added that the single-judge’s approach of awarding half the back wages balanced both fairness and practicality, especially since the hotel where Sharma worked, the Jaipur Ashoka, had since been transferred to the Rajasthan government.

The Court thus set aside the Division Bench’s 2020 ruling and restored the single-judge’s 2018 order granting Sharma 50% of his back wages, with continuity of service and full retiral benefits amounting to ₹33,68,326.

Sharma's legal representatives were represented by Advocates Gopal Verma, Umang, Rajeev Pal and Vanshika.

The respondent was represented by Advocate Krishan Kumar.

[Read Order]