Minimising the misuse of the duty to pay wages during appeals

Section 17B gives protection to workmen who have obtained an award from the Labour Court, Industrial Tribunal or National Tribunal that sets aside an order of termination and directs their reinstatement. However, they are nevertheless not allowed to resume work because the employer has challenged the order before the High Court or the Supreme Court. Under Section 17B, the employer must pay the wages last drawn by the workman while the appeal is pending.  

The Supreme Court of India has explained that the aim of Section 17B is to relieve any financial hardship that may be caused to a workman due to delay in the implementation of the award whilst further proceedings are pending before the High Court or Supreme Court.

To be eligible for wages under Section 17B, the workman must file an affidavit stating that they are not gainfully employed elsewhere, because if they are, they will not be eligible for wages under Section 17B. This provision is only intended to protect workmen who would otherwise suffer financially.  

However, critics point out that there is a risk that people might file a false affidavit, saying that they have no other employment, whilst having secured gainful employment elsewhere. There is no provision in the Act to prevent this. The only avenue available for an employer would be to initiate an action for perjury against the workman, but there is no monetary relief for this, even if perjury is proven.  

Moreover, even if an order of reinstatement is eventually overturned by the High Court or the Supreme Court, the employer has no right to claim back Section 17B wages already paid.  

Additionally, the Supreme Court’s rulings have been inconsistent with regard to who bears the onus of proving whether a terminated workman is gainfully employed. In September 2021, the Supreme Court ruled that the onus was on the workman to prove that he was not gainfully employed during the period of appeal. It further held that the issue of whether the burden had been met depended on the facts of each case.  

However, three months later, the Supreme Court took a contrary view, holding that the burden was on the employer to prove the workman was gainfully employed during the relevant period. These conflicting judgements by the Supreme Court make it difficult to ascertain the prevailing position in law.  

It is also useful to consider the rules of evidence, which state that when some facts are particularly within the knowledge of a person, the burden of proof should be with that person. When a workman is employed in a different establishment during an appeal, this is a fact which is in his or her special knowledge. Under this principle (which has been affirmed by the Supreme Court), the onus of proving lack of gainful employment should lie with the workman.  

Given the different approaches the courts have taken to this issue, the legislature should step in to clarify the position. Prescribing some level of enforcement, such as fines for filing false affidavits may discourage false claims under Section 17B and ensure the provision is used to provide for those dependent on it for their livelihood.  

Meanwhile, employers would be well advised to elicit information about a workman’s current employment during the trial before the Labour Court, Tribunal or National Tribunal. One source could be the Provident Fund authorities, who can be accessed by serving them notice through the court. It is also advisable for employers to gather and produce reliable proof of the workman’s employment before they file an appeal before the High Courts or the Supreme Court.