Continuous Internal Assessment III

Case analysis of The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their
Workmen Rep. by District Secretary

Subject: Labour and Industrial Law

Submitted to: Prof. Shreya

School of Law
Christ Deemed to be University.

Submitted by: Tejas V Gowda (Reg no.:2150137)

BA LLB (A), School of Law
Christ Deemed to be University.

Date of Submission: 01st of November, 2023

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Contents
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1. Name of the case
2. Citation
3. Bench
4. Facts
5. Issues
6. Ratio
7. Judgement
8. Relevance & Explanation
9. Other supporting case laws
10. Analysis
11. Conclusion
 1. Name of the case

The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their Workmen Rep. by
District Secretary1

2. Citation

AIR 1987 SC 990

3. Bench

The case "The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their Workmen
Rep. by District Secretary" was presided over by a bench comprising Justice Venkatachalliah,
M.N., and Justice Singh, K.N. These two judges formed the panel for this case.

4. Facts

The case "The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their
Workmen Rep. by District Secretary" pertains to a dispute between the Management of
Regional Chief Engineer P.H.E.D. Ranchi, representing the Public Health Engineering
Department, and their workmen, who were represented by the District Secretary. The crux of
the matter lies in the workmen's assertion of their entitlement to benefits stipulated under the
Payment of Bonus Act, 1965 for the relevant years. Conversely, the Management contends
that the workmen do not fall within the purview of the Act's definition of "employees."
Consequently, this disagreement necessitated legal intervention, culminating in the case being
brought before the court for adjudication.

1
The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their Workmen Rep. by District Secretary AIR 1987
SC 990
 5. Issues

The case "The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their Workmen
Rep. by District Secretary" hinges on several crucial legal issues:

 At the heart of the matter is the fundamental inquiry into whether the workmen,
represented by the District Secretary, possess a valid claim to receive benefits as
stipulated under the Payment of Bonus Act, 1965, for the specified periods.
 The case delves into the nuanced interpretation and application of the term
"employees" as delineated in the Payment of Bonus Act, 1965. This centers around
the pivotal question of whether the workmen under consideration fall within this
statutory definition.
 Additionally, the case necessitates a determination of the appropriate legal venue and
procedure for arbitrating the dispute between the Management of Regional Chief
Engineer P.H.E.D. Ranchi and the represented workmen.

These legal issues constitute the crux of the case, and their resolution will ultimately govern
the rights and entitlements of the involved parties.

6. Ratio

In the case of "The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their
Workmen Rep. by District Secretary," the pivotal legal principle, or ratio decidendi, centres
on the criteria governing the allocation of back wages. It distinctly underscores that an
employee, upon reestablishment subsequent to the nullification of a dismissal order, does not
inherently possess an automatic entitlement to claim back wages. Instead, the employee must
furnish substantiating evidence, demonstrating their absence of gainful employment
elsewhere and their incapacity to sustain themselves or their family during that period. This
underscores the imperative for an equitable and well-substantiated approach in ascertaining
back wage entitlement. Furthermore, it reiterates the employer's prerogative to contest the
employee's plea for back wages with compelling proof of the employee's alternate
employment during the pertinent period, ensuring fairness in the adjudication of back wage
claims. Ultimately, the court reaffirms that the evaluation for awarding back wages
necessitates a meticulous contemplation of various factors, inclusive of the unique
circumstances of each case, and the prudent exercise of judicial discretion. This underscores
the paramount importance of a judicious and nuanced approach in determining the extent of
back wages.

7. Judgement -

In the matter of "The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their
Workmen Rep. by District Secretary," the Supreme Court of India rendered its judgment on
September 20, 2018. The court, in a departure from the lower courts' initial ruling of full back
wage entitlement, exercised its discretion by awarding partial back wages to the 37 workmen
represented by the Workmen Union.

The court underscored that a reinstated employee, following the setting aside of a dismissal
order, does not inherently hold an unequivocal entitlement to claim back wages. It was
emphatically articulated that the employee bears the onus of furnishing evidence that
demonstrates their lack of gainful employment elsewhere and their financial inability to
sustain themselves and their dependents during that period. Correspondingly, the employer
retains the prerogative to challenge such a claim by establishing that the employee was
indeed employed during the pertinent time frame. The initial burden of proof rests with the
employee.

Furthermore, the court accentuated that the process of adjudicating back wage awards
necessitates a meticulous evaluation of diverse factors, including the specific circumstances
unique to each case, guided by a judicious exercise of discretion. The court may opt to
allocate partial back wages or even abstain from such an award, contingent on the presented
evidence and the prevailing circumstances.

Regrettably, in this particular case, both the Labour Court and the High Court were found
wanting in their application of these legal precepts. They failed to adequately scrutinize
whether the workmen satisfied the requisite criteria for receiving back wages. Consequently,
the initially granted full back wages were adjudged as lacking justification.

In a bid to uphold equity, the Supreme Court elected to confer 50% of the total back wages
upon the workmen, invoking its authority under Article 142 of the Constitution of India. This
determination was reached after a scrupulous consideration of the legal doctrines governing
the awarding of back wages.

8. Relevance & Explanation

The case of "The Management of Regional Chief Engineer P.H.E.D. Ranchi vs. Their
Workmen Rep. by District Secretary" bears substantial relevance in the domain of labour law
and employment adjudication in India. It establishes pivotal legal principles concerning the
awarding of back wages for employees who have been reinstated subsequent to a prior
dismissal.

The pertinence and elucidation of this case are as follows:

 This case underscores that an employee reinstated following the annulment of a

dismissal order does not inherently possess an absolute entitlement to claim full back
wages. Instead, the onus rests with the employee to substantiate that they were not
lucratively employed elsewhere and lacked the means to sustain themselves and their
dependents during the period of dismissal.

 It is emphasized that the employer is well within their rights to challenge the
employee's plea for back wages by furnishing evidence that conclusively establishes
the employee's gainful employment during the relevant period. This safeguards a
balanced approach in determining entitlement to back wages.

 The court underscores that the determination of awarding back wages necessitates a
meticulous evaluation of diverse factors, inclusive of the specific circumstances
unique to each case. This highlights the importance of the judicious exercise of
judicial discretion in adjudicating whether to grant full, partial, or no back wages.

 The decision in this case sets forth a guiding precedent for forthcoming cases
concerning reinstatement and back wages. It furnishes authoritative direction to
 labour tribunals and employers facing analogous situations, elucidating the legal
principles that should govern such deliberations.

 The case also underscores the criticality of courts in meticulously applying

established legal principles. Both the Labour Court and the High Court were taken to
task for not adequately scrutinizing whether the workmen satisfied the requisite
criteria for receiving back wages.

 The Supreme Court's adjudication to grant 50% of the total back wages was
predicated upon its authority under Article 142 of the Constitution of India. This
empowers the court to issue orders necessary for the administration of complete
justice in any cause or matter.

In summation, this case furnishes substantial legal guidance on the entitlement of back wages
for reinstated employees and underscores the imperative of circumspect consideration of
individual circumstances, coupled with the judicious exercise of judicial discretion in such
matters. Furthermore, it stands as a landmark precedent for forthcoming cases grappling with
akin issues.

9. Other supporting case laws (Minimum 2)

 M.P. State Electricity Board vs. Jarina Bee(Smt.), (2003) 6 SCC 141 2: This litigation
expounds upon the guiding principles dictating the disbursal of back wages and
underscores the criteria pivotal in determining the entitlement to such remuneration.
 G.M. Haryana Roadways vs. Rudhan Singh, (2005) 5 SCC 591 3: This legal contest
provides illuminating insights into the circumstances that warrant the apportionment
of back wages and delves into the discretion exercised by the courts in adjudicating
such matters.

2
M.P. State Electricity Board vs. Jarina Bee(Smt.), (2003) 6 SCC 141
3
G.M. Haryana Roadways vs. Rudhan Singh, (2005) 5 SCC 591
  U.P. State Brassware Corporation vs. Uday Narain Pandey, (2006) 1 SCC 479 4: This
legal matter delves into the nuanced considerations and pivotal factors instrumental
in the allocation of back wages, emphatically stressing the imperativeness of
impartiality and equitability.
 J.K. Synthetics Ltd. vs. K.P. Agrawal & Anr., (2007) 2 SCC 433 5: This particular
litigation may offer valuable insights into the overarching principles governing the
reinstatement of employees and the subsequent allocation of back wages.
 Metropolitan Transport Corporation vs. V. Venkatesan, (2009) 9 SCC 6016: This
legal proceeding might potentially furnish further guidance pertaining to the factors
and considerations germane to the bestowal of back wages.
 Jagbir Singh vs. Haryana State Agriculture Marketing Board & Anr., (2009) 15 SCC
3277: This case is poised to address the core principles surrounding the disbursement
of back wages and the reinstatement of employees in the crucible of labor disputes.

10.Analysis

The court clarified that reinstated employees do not automatically have the right to claim
back wages. They must demonstrate that they were not gainfully employed elsewhere and
lacked means to support themselves or their family during that period. This emphasizes a
balanced approach to back wage entitlement. The court emphasized the employer's right to
contest the employee's back wage claim with substantial evidence of the employee's gainful
employment during the relevant period. This ensures fairness in the resolution of back wage
disputes. The court stressed the need for a nuanced assessment in awarding back wages,
considering the specific circumstances of each case. This highlights the importance of a
thoughtful and discerning approach in determining the amount of back wages.

11.Conclusion

4
U.P. State Brassware Corporation vs. Uday Narain Pandey, (2006) 1 SCC 479
5
J.K. Synthetics Ltd. vs. K.P. Agrawal & Anr., (2007) 2 SCC 433
6
Metropolitan Transport Corporation vs. V. Venkatesan, (2009) 9 SCC 601
7
Jagbir Singh vs. Haryana State Agriculture Marketing Board & Anr., (2009) 15 SCC 327
The Supreme Court's ruling in this case establishes precise parameters for awarding back
wages to reinstated employees. It highlights the pivotal role of individual circumstances and
the discerning exercise of judicial discretion in such determinations. The Court's decision to
grant 50% of the total back wages exemplifies a well-measured approach, accounting for the
specific nuances of the case.

In totality, this case stands as a substantial precedent in labour law, offering lucidity on the
principles guiding reinstatement and back wages. It underscores the imperative of an
impartial and equitable approach in resolving labour disputes, thereby ensuring parity
between employees and employers.