Should Reinstatement with Back Wages be an Automatic Right?

[By Rangin Halder]

The author is a student of West Bengal National University of Juridical Sciences.

 

INTRODUCTION 

One of the fundamental principles governing labour jurisprudence has been that of social justice, which aims at creating a fair and equitable working environment for workers in the country. In this regard, the Labour Courts and Industrial Tribunals have been given the discretion to use principles of “justice, equity and good conscience” to protect the interests of the workers in the market. Keeping this principle as the fundamental bedrock of the arguments furthered, this paper normatively proposes that reinstatement with back wages should be made an automatic right. 

DEFINING THE SCOPE OF THE PAPER. 

 The order of reinstatement of services is usually perceived as the common rule in cases of wrongful dismissals. It is, however, pertinent here to flesh out the constituting elements of wrongful dismissals. For the purpose of this paper, “wrongful dismissal” is to be construed as when the dismissal is either directly contravening a statute, is tainted with malice and illegality or is violating the principles of natural justice and is used as a tool for the victimisation of the worker. It is, however, necessary to point out that such a term will not encompass situations where the underlying cause has been upheld and the court adjudicates that only the punishment meted out is unduly harsh. This has two significance, the first one being that only after determining that it is indeed a wrongful dismissal the automatic right of reinstatement with back wages will accrue and secondly, given that the paper primarily furthers a principled reasoning for such a right to exist, it will not be logically consistent to argue for this in cases where the employee or the worker has been found guilty of the charges of wrongdoings and the only difference has arisen pertaining to the degree of punishment meted.  

WHY REINSTATEMENT WITH BACK WAGES SHOULD BE CONSIDERED AN AUTOMATIC RIGHT 

The right of reinstatement brings two remedies: first, that the dismissed worker is reinstated back to his/her previously held position and second, they are reinstated with wages and benefits from the time of dismissal. 

The fundamental basis for the existence of this right resides in the idea of “equity”. Essentially, it was to bring the employee back to the same position as if he had never been dismissed. This is, in essence, aiming to remedy the harm that was caused directly as a result of the wrongful dismissal. It is as if the employee had never been dismissed. Argued that reinstating the worker with back wages seems like the only logical choice. 

NECESSITY OF AN AUTOMATIC RIGHT 

The most important question here is, however, not the need for reinstatement with back wages. It is about asking why this remedy needs to be given the status of an automatic right. The primary reason for this is the “burden of proof”.  Many courts have held that after the charge of wrongful dismissal has been upheld, it is upon the worker to prove that he/she had attempted to get work but could not get gainfully employed. Without such proof, the worker is not entitled to receive back wages. The author believes that this additional burden being imposed on the worker after his/her dismissal has been proved to be wrongful and is, in essence, proving a premium to the employer. It is thus going against the principle of fairness. 

But even taking in practical considerations and realities of the Justice system in India, it adds an additional burden on the worker when he/she is already dealing with undue long delays in court hearings, legal fees and an additional burden of unemployment. It is also much easier to prove the existence of employment than to prove a period of unemployment or no gainful employment. 

The elevation of reinstatement with back wages as an automatic right makes it an inherent right of the worker, similar to the one which exists with copyright holders. The burden to prove that such a right should not accrue, thus, will naturally fall on the employer.  

It is, however, necessary to clarify that the author agrees with the Supreme Court in claiming that before the accrual of the right of back wages, a declaration of a lack of gainful employment post-dismissal should be given by the employee. 

REBUTTING COMMON ARGUMENTS AGAINST SUCH A RIGHT 

Argument 1: The duration of the work  

A common argument against the right of reinstatement with back wages is that such a remedy should be accorded subjectively based on the period of tenure of the dismissed employee and that back wages should only accorded to those workers who had been permanent or had been working for a long time. The flaw, however, is that this right exists independent of the duration of the employee’s tenure. The right is only remedying a wrongful dismissal, which, if it did not happen, the worker would have still presumably been employed. Thus, the right to reinstatement with back wages should not selectively accrue to employees based on their tenure as the nature of wrong suffered is similar for all dismissed employees independent of their tenure. 

Argument 2: No work, No Pay. 

Another common principle used to deny wages is “No work- No Pay”. It is essentially the idea that since the worker did not work for the duration of his dismissal, he is not entitled to receive wages for the same. However, such reasoning is giving an unfair premium to the employer when his act of dismissal is deemed illegal and the direct consequences of which have been unfairly borne by the worker. Also, it is pertinent to note that the idea of “no work, no pay” only kicks in when the worker chooses not to work and thereby forgoes his wages. However, in the present case the employee is forced to leave as a direct consequence of an illegal dismissal and not, in fact, choosing not to work. 

Argument 3: The Need for Judicial Discretion 

This argument furthers that such a right removes judicial discretions, and given that such subjective cases of dismissals are best left upon the discretion of the Court, it is better not to have an established rule dealing with wrongful dismissals. While this is a cogent argument to make, there are a few things that need to be noted. The need for an automatic right, as discussed in the previous sections, while based on several principled tenets, fundamentally works to reduce procedural burdens for the workers. But more importantly, the author believes that this right also allows for judicial discretion, albeit in limited circumstances. One such circumstance could be in cases where the worker was employed in an informal sector, and reinstatement with back wages will not be a complete remedy. The rationale here is that, above all, the instrument of judicial discretion should only be used in cases when the right will not secure complete justice for the worker. 

EXCEPTIONS 

While making reinstatement with back wages an automatic and inherent right, it is pertinent to note that this right is not an absolute one. There may be circumstances when the employer may be granted a favourable judgment. The only difference will be that the threshold of proof will be far greater in cases where the employer pleaded the denial of this right to the worker. One such circumstance is when the employer is able to prove that the worker was, in fact, gainfully employed after his/her dismissal. In such a case, the Court may choose to reinstate the worker without back wages. The rationale behind it is essentially that granting full back wages to an employee who was gainfully employed will be providing him with a remedy which is going over and beyond the harm which had originally been argued. 

Similarly, there may be circumstances where the Company is not in a financial position to pay full wages to the employee. In that scenario, the Court may order the payment of compensation instead, with the intention of securing the interests of the worker while ensuring that the employer is not penalised beyond the wrong that had been committed. 

Interestingly, in another case, the employer has pleaded a “strained relationship” as the reason for not granting the order of reinstatement in favour of the worker. However, the author believes that allowing such a claim will, in fact, be detrimental to the interest of the employee for no fault of his own while at the same time allowing the employer to enjoy a premium despite a wrongful act on his part. 

Thus, while the author does envisage exceptions to the right of automatic reinstatement with back wages, it believes that such exceptions should be wielded rarely and judicially in order to secure the interest of the workers. 

CONCLUSION 

The article pleasantly calls for reinstatement, including wage reversion, as an automatic right is available for all cases of unfair dismissal. Inspired by the ideals of equity and social justice, the objective of such a remedy is to rescue the people fired from their jobs and to get them back to their original status both financially and professionally. The institution of automatic reinstatement with the restoration of wages is the best way to remove the unfair burden of evidence from the person who has been dismissed. This situation is very typical, especially when the prolonged investigation or because of the huge financial problems of the dismissed worker. Such practice may be perfected by pushing employers into obstacles of justifying that right, which is to be abridged, fair, and rights whitened. 

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