SC ruling on retrenchment compensation

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New Delhi, Oct 17 (UNI) The Supreme Court has held that without establishing a relationship of employer and employee, an employee is not entitled to any retrenchment compensation.

A bench, comprising Justices S B Sinha and H S Bedi, also held that a court cannot order reinstatement if a post does not exist.

The ruling has come on an appeal filed by the G M Tanda Thermal Power Project which had challenged the Allahabad High Court judgement refusing to interfere in the order of the Labour Court ordering reinstatement of Jay Prakash Srivastava and Gomati Prasad Srivastava, who were employed on daily wages by the Special Land Acquisition Officer to look after the land acquisition matters in courts.

The apex court, while allowing the appeal in its judgement, noted, ''If there does not exist any relationship of the employer and the employee, the question of appellant's fulfilling the obligations required in terms of the UP Industrial Disputed Act, that is payment of retrenchment compensation or a month's pay in lieu of notice did not and could not arise.'' ''The High Court, therefore, in our opinion committed a serious error in refusing to interfere in the matter. The High Court, furthermore, committed a serious error insofar as it failed to take into consideration that a direction for reinstatement cannot be issued when there does not exist any post.'' ''Even in a case where the workman is appointed on a contractual basis, the Industrial Court would ordinarily not direct for reinstatement. Subject to statutory interdict, the agreement between the parties in this behalf must be given due weight.'' The apex court set aside the High Court judgement and allowed the appeal.


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