international employment law firm alliance L&E Global

India: Obligation on an Employee while Making a Claim for Back Wages

Authors: Avik Biswas and Ivana Chatterjee

In the case of Allahabad Bank and Others vs. Avtar Bhushan Bhartiya (SLP (Civil) Number 32554 of 2018), a dispute arose between Allahabad bank (“Bank”) and an employee named- Avtar Bhushan Bhartiya (“Employee”) with respect to the dismissal of the Employee by the Bank and Employee’s entitlement to back wages on account of such dismissal.

A departmental enquiry found that the Employee failed to maintain integrity and devotion to duty and violated the Allahabad bank Officer Employees’ (Conduct) Regulations.  The Employee was dismissed from service on 31 March 1989, pursuant to this enquiry. The Employee filed a departmental appeal, inter alia contending that the findings of the inquiry officer were not provided to him. The appellate authority dismissed the appeal and stated that after the Employee filed the appeal, a copy of the inquiry report was sent to his address, but it was returned undelivered. A review petition filed by the Employee was also dismissed.

Aggrieved by the above, the Employee approached the High Court of Allahabad. The High Court, vide an order dated 27 April 2011, directed the Bank to supply a copy of the inquiry report to the Employee within one month. On 8 May 2012, the Bank issued a letter to the Employee stating that the enquiry report was missing, and that the Employee may file a statutory appeal. Aggrieved by the Bank’s statement, the Employee filed a writ petition before the High Court of Allahabad. The High Court  vide an order dated 1 October 2018 set aside the order of dismissal of the Employee, and held that the Employee would be entitled to 50% of back wages (with all consequential benefits including post-retirement benefits to which he would have been entitled had he not been dismissed from service, since the Employee attained superannuation on 29 February 2013) and imposed costs of INR 50,000 (payable by the Bank to the Employee).

Subsequently, the Bank filed a special leave petition before the Supreme Court of India, challenging the order of the High Court dated 1 October 2018. The Supreme Court stayed the order of the High Court with respect to the aspect on back wages, pursuant to which a special leave petition was filed by the Employee before the Apex Court. The Employee claimed that he was entitled to 50 % of his back wages due to wrongful dismissal.

The Supreme Court, in this case, determined that there is nothing on record to show whether the Employee was gainfully employed after his dismissal from services by the Bank. The Employee had not pleaded about his non-employment in any of his petitions. The Apex Court determined that in the first instance, there is an obligation on the part of an employee to plead that he is not gainfully employed. It is only then that the burden would shift upon the employer to make an assertion and establish the same. Further considering that the Employee worked for about 15 years and was out of employment for 24 years, the Supreme Court opined that the High Court was right in awarding 50% of back wages.

Key Action Points for Human Resources and In-house Counsel

Employers should take into consideration the nature of pleadings in a claim for back wages by an employee in a wrongful termination suit. If a wrongfully dismissed employee does not assert that she/he was not gainfully employed, the employer is not required to make an assertion that the employee is gainfully employed.