Rights and Damages of Illegally Terminated Employees

Under the Indian Legal system, there is a difference between the terms “worker” and “employee” and hence, the remedies provided by the law are also different. In the following article we will discuss the remedies available to workers and employees and the different termination rules for the employees in India.

Which authority has jurisdiction in these cases?

The jurisdiction of the cases for remedies in these cases depends upon the type of right that was infringed. For example, on termination of the employment there was a wrongful forfeiture of the gratuity. For the remedy in this case, the appropriate forum for deciding this case shall be the one established under the gratuity regulations. 

While determining the appropriate jurisdiction in the case of workers, the Apex Court held that-

In case the dispute is not an ‘industrial dispute’ nor does it relate to the enforcement of the rights granted under industrial laws, civil courts shall have the jurisdiction.

In case the dispute is an ‘industrial dispute’, however the remedy sought is not under the industrial law, but common law, civil courts will have the jurisdiction. 

In the case of ‘industrial dispute’ and the remedy is sought under the industrial law, the civil courts shall have jurisdiction. 

Here, the term industrial dispute includes the disputes arising out of discharge, dismissal or retrenchment of the workers. 

Reinstatement or Specific performance in the case of employees- 

In the case of employees, the Indian law is clear on the issues of the specific performance of employment contracts or reinstatement. Under the Specific Relief Act, 1963, in the context of private employment, even if there is an illegal termination of the employees in India, he could only demand compensation/damages and relief regarding the specific performance of the contract cannot be demanded as- 

The employment contract is on personal service

The contract is determined by providing a prescribed period’s notice. 

In case of Workers-

The position is more of a nuance in the case of the workers as the industrial law empowers the industrial tribunals to award reinstatement and compensation in addition to or in lieu of the reinstatement. 

In case a worker is fired from a job because of a reason, it was held by the courts that the termination order shall be set aside only if the termination was not in accordance to the cause or the enquiry held by the employer was unfair. 

In case the employee secured the employment through false representation, the courts have held the termination as just. 

Similarly, the decision of termination was held just by the courts in the \case where the employee engaged in misappropriation or displayed habitual absence from his job. In each case the enquiry before the dismissal was held just

Damages- 

The courts have held the principle of mitigation of damages for the wrongful termination of the employees as provided under Section 73 of the Indian Contract Law, 1872.

As per the law, the quantum of damages paid shall be in accordance with the context of the employment agreement. 

In the case of S.S. Shetty v Bharat Nidhi LtdThe Supreme Court held that the employment expressly contemplates the termination by a prior notice of 1 month, the damages awarded shall be ordinarily up to 1 month’s salary. Thus, the courts have only awarded the salary for the notice period and denied the damages for the further period of unemployment beyond the stipulated notice period.

In case of workers- 

As provided above the quantum of damages shall be based on the fact as to whether the damages are paid in lieu of reinstatement or in addition to the reinstatement. 

In each case, the relevant facts are considered before deciding upon the damages to be paid. 

Conclusion-

In the case of the employees, the limited remedy payable for the job loss for the private employee is in accordance with the salary paid for the prescribed termination period.

In the case of the workers, if terminated, reinstatement or damages would not be provided in case the termination has been just and the enquiry before the termination was in accordance with the law.

In case you are suffering from similar issues, or are facing legal difficulties in your reinstatement or claiming damages, you may contact us for legal assistance or guidance. We at Lead India offer you an experienced team of  advocates who have been successfully handling the cases involving labour law or employment issues.

Lead India offers you a team of experienced advocates, who have successfully been dealing with matters involving labour laws and similar issues. If you are facing the same problems and seek legal advice or assistance you can contact us.