Termination Violating S.25F Industrial Disputes Act Doesn't Automatically Lead To Reinstatement: Rajasthan High Court

The Rajasthan High Court has partly upheld the order of a Labour Court which directed monetary compensation to the petitioner, instead of reinstatement, despite ruling his termination to be in violation of Section 25F of the Industrial Disputes Act, 1947 (“the Act”).

The bench of Justice Anand Sharma observed that even though a violation of Section 25F rendered the retrenchment illegal, the nature of the relief was not automatically reinstatement but dependent on the facts of each case.

“The earlier approach of treating reinstatement as an inevitable consequence has undergone a marked and reasoned shift.”

The petitioner was engaged as a contractual employee by the State, not pursuant to any regular process of recruitment, when his services were terminated. An industrial dispute was raised and while the Labour Court found the termination to be violative of Section 25F of the Act, the petitioner was awarded the relief of monetary compensation of Rs. 60,000.

This order was challenged before the Court by the petitioner, and it was argued that once the violation of Section 25F was recorded, reinstatement with continuity of service was the normal and logical relief. It was submitted that denial of reinstatement amounted to legitimising the illegal act of the employer.

On the contrary, it was argued by the State that since the petitioner was a contractual employee, reinstatement was not an automatic consequence of a technical violation of Section 25F, and monetary compensation met the ends of justice.

After hearing the contentions, the Court took into consideration the fact that the petitioner was engaged as a daily wager/contractual employee, who had rendered only short-term service, and was never appointed through a regular selection process or against any sanctioned post.

Reference was made to the Supreme Court case of Bharat Sanchar Nigam Ltd. v. Bhurumal that opined that, “in cases involving daily wagers, ad hoc or contractual employees, particularly where the engagement was for a short duration and the dispute has been adjudicated after a long lapse of time, monetary compensation is a more appropriate and equitable relief than reinstatement. The Apex Court has cautioned against mechanical reinstatement which may disturb the administrative and financial equilibrium of the employer.”

In this background, the Court held that since the petitioner was engaged as a daily wager, without any regular recruitment process and had rendered limited services, directing reinstatement would be disproportionate and contrary to settled legal position.

Accordingly, the petition was disposed of with an enhancement in the monetary compensation to the petitioner to Rs. 1.5 lakhs considering his nature of engagement and length of service.

Title: Satya Narain v the Judge, Central Industrial Tribunal & Anr.

Citation: 2025 LiveLaw (Raj) 16

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