SC Says To Reinstate An Employee Does Not Automatically Guarantee The Entitlement To Back Wages

On Wednesday, the Supreme Court reaffirmed that a directive to reinstate an employee does not automatically guarantee the entitlement to back wages for the reinstated employee. A bench comprising Justices Abhay S Oka and Rajesh Bindal clarified that the availability of back wages would depend on the specific circumstances of each case.

The Court elaborated that an employee who has been reinstated would need to demonstrate that they were not employed elsewhere and did not earn income during the relevant period to seek back wages.

The Supreme Court addressed an appeal filed by a retired bus conductor who had been terminated from service by the Delhi Transport Corporation in 1996. The termination was based on allegations of not issuing tickets to two passengers despite collecting ₹4 for the same in 1992.

In 2009, the bus conductor was reinstated by a Labour Court; however, the Labour Court ruled that he was not eligible for back wages during the period he was not employed by the Delhi Transport Corporation. The Delhi High Court upheld this ruling. Dissatisfied with the decision, the bus conductor filed an appeal before the Supreme Court in 2016, and he retired from service in 2020.

After careful consideration, the Supreme Court granted partial relief to the appellant. Noting that the appellant was unable to secure alternative employment for approximately one year following his termination in 1996, the Court modified the Labour Court's award to include back wages amounting to ₹3 lakh. The Court also specified that if the payment is not made within two months, it would accrue an annual interest of 9 percent from 2009.