Supreme Court Upholds Reinstatement with Partial Back Wages for Wrongfully Terminated Employee Apex Court restores High Court's decision granting 50% back wages to Dinesh Chandra Sharma in a landmark labour law case.
In a significant ruling, the Supreme Court of India has reinstated the decision of the Single Judge of the Rajasthan High Court, which awarded 50% back wages to Dinesh Chandra Sharma, a former room attendant, who was wrongfully terminated by Bhartiya Paryatan Vikas Nigam Limited. The judgment delivered by Justices Manoj Misra and Ujjal Bhuyan emphasizes the principles of labour law concerning wrongful termination and back wages.
The case arose from the termination of Sharma's services in 1991 on charges of misconduct, which were later found unproven. The Labour Court initially ordered his reinstatement with full back wages, a decision subsequently challenged by the employer. The High Court's Single Judge modified this order, reducing the back wages entitlement to 50%, considering the absence of evidence of Sharma's gainful employment during the intervening years.
The Supreme Court, in its judgment dated December 15, 2025, underscored that the burden of proving gainful employment lies with the employer, as reiterated in the precedent set by Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyala. The Court noted that the High Court's Single Judge had rightly considered the affidavit submitted by Sharma, asserting his unemployment during the litigation period, which went unchallenged by the employer.
The Apex Court highlighted the long duration of litigation and the employee's age as relevant factors in deciding the quantum of back wages. It acknowledged that while the onus to demonstrate unemployment typically lies with the employee, the employer's failure to rebut such claims can justify partial back wages.
By restoring the High Court's decision, the Supreme Court has reinforced the principle that wrongful termination cases should generally result in reinstatement with continuity of service and back wages, barring substantial evidence to the contrary from the employer. This ruling affirms the judiciary's commitment to protecting workers' rights against unjust employment practices.
Bottom Line:
In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule. Denial of back wages requires the employer to prove that the employee was gainfully employed during the intervening period.
Statutory provision(s): Labour Law, Wrongful Termination, Reinstatement, Back Wages, Burden of Proof, Gainful Employment
