[Shivankar Sukul and Mudit Burad are fourth year students at National Law University Jodhpur pursuing the course of BBA-LLB (Hons.)]
Section 11A of the Industrial Disputes Act, 1947 (“ID Act”) vests the court with the power to set aside the order of dismissal and direct reinstatement in cases it considers such order to be illegal. The provision also provides the discretion to the court to award any other relief that it considers necessary. This discretionary power is often exercised to award back wages to the employee except in cases where he was engaged in gainful employment. This is awarded to ensure that the employee is compensated for the period for which had to endure enforced idleness due to illegal and unwarranted actions of the employer.
The issue of whether the employee or employer bears the burden of proving the existence or absence of gainful employment remains to be a contentious issue to date. The apparent contradiction of views by the coordinate decisions of the Supreme Court (“SC”) within a period of mere three months aptly illustrates this conflict. In September 2021, the division bench of the Apex court in National Gandhi Museum v. Sudhir Sharma (“Gandhi Museum case”) subscribed to the view that the onus to prove the absence of gainful employment vests on the employee. Whereas, a division bench of the SC in Pradeep S/o Rajkumar Jain v. Manganese Ore India (“Manganese case”) took the contrary opinion and held that the burden to adduce cogent evidence to prove gainful employment of the employee in the intervening period rests with the employer. In this context, the present article seeks to evaluate the above-mentioned conflict of authorities.
The post will firstly seek to trace the evolution of jurisprudence regarding award of back wages. Secondly, it seeks to analyze the position taken by the two contradicting lines of reasonings while evaluating their validity. Lastly, it will suggest the solutions which can be taken to solve this inconsistency so as to put this issue to rest.
Tracing the Evolutionary Trend and Jurisprudential Shift in Views of Apex Court
To better understand the jurisprudence regarding the shift of burden of proof between the employer and employee, one needs to understand the evolution of policy guiding the award of back wages to the employee during reinstatement. In the earlier cases where the court was faced with this issue, the court manifested a sympathetic view towards the plight of employees. It took the view that awarding all the benefits of the continuance of employment in event of unlawful dismissal of an employee is a standard rule, this was intended to ensure that employers are not allowed to shirk their responsibility of compensating the employee for the loss of wages due to the illegal actions of the employers. A natural corollary of this policy shall be that the party advocating against the award of such back wages would have the onus to adduce evidence and provide cogent reasoning to deny the employee of such award.
This view is also evinced in a catena of judgments by the SC. A three-judge bench of the court in the matter of Hindustan Tin Works. Pvt. Ltd. v. Employees of Hindustan Tin Works Pvt. Ltd. (“Hindustan Tin”) held that in the case an employee has to endure a gamut of protracted litigation for reinstating him back to service due to an invalid termination by the employer, any determination which denies him back wages would be tantamount to imposing an unwarranted penalty on him. Therefore, employers would have the burden of proving circumstances necessitating divergence from this thumb rule, placing the onus of proof on the employer.
Similarly, a three-judge bench of the court also subscribed to this view in the matters of Shambhu Nath Goyal v. Bank of Baroda where it held that the employee could not be asked to prove the negative and it is incumbent upon the employer to prove that the employee was engaged in gainful employment, during the intermittent time if he seeks to deny the employee of back wages during that period.
Despite these judgments of three-judge benches having settled the law, the applicability of this reasoning did not remain smooth sailing as the division benches of the SC erroneously decided to ignore this settled proposition of law established by a larger bench. The aberration was evident in the observations of the division bench of the Supreme Court in decisions such as U.P Brassware v. Uday Narain Pandey (“UP Brassware”) and Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya where it held that lack of statement regarding non-engagement in gainful employment would be fatal to the claim of back wages. The court also readjusted the onus of proving such absence, turning the established law on its heel. The reasoning of the court was based on Section 106 of the Evidence Act which places the burden of proving any fact on the person who alone holds it within his knowledge.
Interestingly, this fallacious reasoning has found endorsement by a series of decisions of the SC in the recent decades such as Talwara Credit Cooperative Society v. Sushil Kumar, Rajasthan State Road Transport v. Phool Chand, where the courts have insisted on providing evidence from the employee as an inflexible sine qua non for the award of back wages, thereby diluting the right of back wages to a mere discretionary relief against the ethos of guiding labor law jurisprudence in India.
Recently, we have observed a striking contradiction in views creating an anomalous situation. In cases such as the Gandhi Museum Case, the court has echoed the misplaced and per incuriam view evinced in the recent judgements which provide that “the burden is on the employee to come out with a case that he was not gainfully employed during the relevant period.” There are also cases such as the Manganese Case where the court has followed the law laid down by the earlier rulings thereby viewing the award of back wages as a matter of right rather than mere discretionary relief. This creates uncertainty that needs to be clarified.
Analyzing the Contradicting Pronouncements
Since a catena of judgments in the recent past following the ratio of UP Brassware is contradictory to the law established by the three-judge bench in Hindustan Tin, it becomes pertinent to analyze the validity of jurisprudence behind them.
In the case of Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (“Deepali Gundu”) where the same issue was in question, the divisional bench of the SC while analyzing the earlier three-judge bench decisions gave an authoritative ruling on the issue of “gainful employment”. It observed, “Ordinarily, an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement.. that he/she was not gainfully employed or was employed on lesser wages.”
Herein, the word “ordinarily” must be given its due meaning. A useful reference in this behalf may be made to a four-judge bench decision of the SC in Jasbhai Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed and Others wherein it has been held that wherever the word “ordinarily” is used, it indicates that the rule is not iron cast but rather flexible which can be changed whenever real and substantial interest of the workers is in threat.
In the landmark judgment of Bangalore Water Supply v. A. Rajappa, the SC held that a worker-oriented statute must receive an expansive construction so that maximum benefit is derived to the worker.
From the preceding decisions, we can conclude that no iron cast rule can be laid with regard to the duty of the employee to plead that he was not gainfully employed till the time of reinstatement. The court in the Deepali Gundu case suggests but does not mandate the employee to plead lack of gainful employment by drawing parallel with a similar mandate of Section 17B of the ID Act. Interestingly, Section 17B mandates the employee to plead his non-engagement in gainful employment for claiming payment of back wages during the pendency of the appeal by the employer.
However, the court in recent decisions like Rajasthan State Road Transport v. Phool Chand, Gandhi Museum Case and Manganese Case have not only made it incumbent on the employee to “plead” their non-engagement in gainful employment, but also moved a step ahead by shifting the burden on the employee to prove a negative proposition with evidence. This inexplicable turn of tables has undermined the jurisprudence laid down by the larger benches.
Finally, one may argue that, as per Section 106 of the Evidence Act, when a fact is especially within the knowledge of a particular person, then that person bears the burden of proof. However, in light of decisions like Shambhu Nath Mehra v. the State of Ajmer it should also be noted that using the word “especially” means that Section 106 is exclusively invoked only when there is no other way for the opposite party to get hold of that information by exercising due diligence. But in the cases of gainful employment, though it might be inconvenient, it is not impossible for the employer to adduce evidence proving gainful employment of the employee. Thus, as a thumb rule, the burden of proving should always lie with the person who alleges, and here since the employer stands in that position, the burden of proof can by no stretch of imagination be shifted to the employee.
Recently, jurisprudence regarding the burden of proof is shifting from pro-employee stance to suggesting the employee to at least plead in the court, to finally shifting the complete burden on the shoulders of the employee. Due to this shift, it will become a herculean task for the employee to prove a negative proposition, therefore foreclosing the right of the employee to claim back wages. For the reasons discussed, it could be concluded that the burden of proof should lie with the employer. We agree with the pronouncement of the SC in Hindustan Tin where the court held that “Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.” All the judgments which shift the burden on the employee should be held as per incuriam and if ever the SC should change its stance, they have to set up a larger bench.
– Shivankar Sukul & Mudit Burad