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Case Analysis of:United India Insurance Co. Ltd. v. Siraj Uddin Khan(2019) 7 SCC 564(Before: Ashok Bhushan and Navin Sinha, JJ)FACTSIn the present case the respondent was appointed by the Appellant company for the post of Assistant/Typist. The respondent was transferred from Allahabad branch of the ...

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Case Analysis of: United India Insurance Co. Ltd. v. Siraj Uddin Khan (2019) 7 SCC 564 (Before: Ashok Bhushan and Navin Sinha, JJ)

FACTS In the present case the respondent was appointed by the Appellant company for the post of Assistant/Typist. The respondent was transferred from Allahabad branch of the company to Juanpur branch in pursuance of office order. However, the respondent was absent from his office for straight 4 months and continued to be absent from work until 2012. Several charge sheets were issued to the respondent, Disciplinary Enquiry was initiated against the respondent and an order of reduction of basic pay was passed in 2009 under section 23(a) of The General Insurance (Conduct, Discipline & Appeal) Rules, 1975. Set of petitions were filed by the respondent in the high court against the orders passed by the Committee. Allahabad High Court passed an order directing the Appellant to pay back wages with interest. The order passed by Allahabad High Court was challenged by the appellant in the hon’ble Supreme Court.

CONTENTIONS: Appellant: Appellant submitted that the High Court committed error in directing for payment of salary after 14.05.2009 to 20.06.2012, whereas the Respondent absented from work during the period and was clearly not entitled for payment of salary on the principle of "No Work No Pay". Respondent: The Respondent contended that charge sheet alleging unauthorized absence for 663 days was never served on the Respondent. Respondent prayed that he was entitled for salary since his dismissal order dated 26.06.2012 was set aside on 29.05.2015, against which special leave petition filed by the company had been dismissed by this Court on 18.09.2015

FINDINGS: The Hon’ble Supreme court referred two judgments and clearly concluded 1. If a person was absent from work without authorized leave or valid justification, he would not be eligible for wages for that period. 2. Where an employer has restrained the employee from working, the employer cannot plead ‘no work no pay’, the principle of ‘no work no pay’ applies only in instances where the employee has voluntarily absented himself from work, and not where the employer has restrained the employee from attending work. In the present case the respondent was not restrained from his duty by any means the responded continued to be absent from work voluntarily NO PAY, NO WORK RULE Can an employee claim back wages upon reinstatement after absenting himself from work without authority? Or can he claim back wages upon reinstatement after the employer had restrained him from attending work? These questioned were answered by the Supreme Court in Chief Regional Manager, United India Insurance Company v. Siraj Uddin Khan judgement in July this year. The apex court held that the worker is not entitled to back wages upon reinstatement after he has absented himself from work without permission of the authority. However, in case the employer has restrained the worker, the principle of ‘No Work, No Pay’ would not apply when he is reinstated. THE CASE Siraj Uddin Khan was appointed by United India Insurance Company on the post of assistant/typist. He was transferred on August 8, 2006 from Allahabad branch of the company to Jaunpur branch. He was relieved from Allahabad Branch on February 1, 2007 to join the Jaunpur Branch. However, Khan did not join the Jaunpur branch and remained unauthorizedly absent from duty for four months. The company conducted a disciplinary proceeding against Khan and ordered to reduce his basic pay by two steps in May 2009. However, Khan continued to remain absent from work until 2012, when the company terminated his services. Khan then challenged the company’s decision to remove him from bank in the Allahabad High Court, which set aside the order of the company on the ground of lapses in the disciplinary proceedings adopted by the company against Khan.SC has reiterated that no individual can claim wages for the period that he/she remained absent without leave or justification. In the present case, the Respondent was relieved from the Allahabad branch of the Appellant to join the Jaunpur branch of the Appellant. However, the Respondent did not join the Jaunpur branch on the assigned date and was unauthorizedly absent from work for four months. Disciplinary enquiry was conducted against the Respondent and an order for reduction of basic pay by two steps was

passed in May 2009. However, the Respondent continued to be absent from work until 2012. Consequently, the Appellant passed an order in June 2012, terminating the services of the Respondent. The Respondent preferred a series of writ petitions before the High Court of Allahabad against the above-mentioned orders. The High Court of Allahabad quashed the above-mentioned orders citing procedural lapses in the conduct of disciplinary enquiry, without specially directing the Appellant to provide back wages to the Respondent from 2009-2012. Upon refusal of the Appellant to pay back wages from 2009 - 2012, the Respondent filed another writ petition before the High Court of Allahabad. The High Court of Allahabad directed the Appellant to pay salary for the period 2009 - 2012, along with 18% interest. The Appellant preferred the present appeal before the SC against this order of the High Court of Allahabad. The two-judge bench of the SC held that, setting aside of the termination order does not automatically entitle the Respondent to the salary for the period 2009 - 2012. The SC differentiated the present case from a situation where an employee was dismissed from service and when such dismissal was set aside, he would automatically be entitled for back wages. The SC noted that since the Respondent was not kept away from the work on account of dismissal or by any order of the Appellant, the Respondent was not eligible to claim arrears of wages. Therefore, the SC partly allowed the appeal and directed the Appellant to consider the claim of back wages of the Respondent and pass appropriate orders with reasons. COMMENTS While the SC in this case did not conclusively determine whether the Respondent was eligible for wages or not, it referred to judicial precedents dealing with the principle of 'no work no pay'. The SC referred to the decision of the SC in Airports Authority of India and Others v. Shambhu Nath Das [(2008) 11 SCC 498] wherein it was held that if a person was absent from work without authorized leave or valid justification, he would not be eligible for wages for that period. On the other hand, the SC has also referred to the judgement of Shobha Ram Raturi v. Haryana Vidyut Prasaran Nigam Limited and Others [(2016) 16 SCC 663] wherein the SC held that where an employer has restrained the employee from working, the employer cannot plead 'no work no pay'. Therefore, the SC has attempted to reiterate that the principle of 'no work no pay' applies only in instances where the employee has voluntarily absented himself from work, and not where the employer has restrained the employee from attending work. The High Court also did not direct the company to pay back wages to Khan for the period of his absence from work. Following this, he filed a Writ Petition in the High Court, seeking direction to the company to pay him back wages from 2009 to 2012. The HC ordered the company to pay back wages to Khan along with interest at 18 per cent. The company challenged this order in the Supreme Court through an SLP.

The apex court set aside the HC order. SC cited its judgement in Airports Authority of India case In this case, the respondent had not joined after the end of his leave and claimed back wages. The apex court had ruled in this case that “there was no justification whatsoever to grant any back wages to the respondent on the general principle that nobody could be directed to claim wages for the period that he remained absent without leave or without justification.” The apex court said that in the present case, Khan was not kept away from work by any order of the company. The SC, hence, set aside the HC direction for providing back wages to Khan for the period after 14-05-2009 and 20-06-2012....