[Archika and Deeksha are employment lawyers based out of Mumbai, India. The views of the authors in this article are personal and do not constitute legal / professional advice.]
The determination of gainful employment of a workman comes into question where there is a case of unlawful termination of employment alleged by a workman before the competent judicial forum. In such cases, the workman usually claims reinstatement of his / her services with continuity of service and full back wages for the period he / she was out of employment. Notably, such relief is not automatic upon ascertaining termination of employment as unlawful; the judicial forum would look into several factors, and importantly, whether the workman was in gainful employment during the period post the termination of employment which he / she had claimed as unlawful.
One of the most important questions that arise in such scenarios is whether it would be the employer or, in the alternative, the workman who would have to bear the burden of proof to establish existence or absence of gainful employment, as the case may be. The jurisprudence on this issue is quite interesting, as we would observe in this article.
EVOLUTION OF THE JURISPRUDENCE ON THE ISSUE
In the case of Talwara Cooperative Credit and Service Society Limited v Sushil Kumar [(2008) 9 SCC 486] (Talwara), the Supreme Court of India (Supreme Court) indicated the “paradigm shift” in the matter of burden of proof as regards gainful employment of a workman. The court observed that Section 106 of the Indian Evidence Act 1872 was clearly applicable in such cases, as per which the burden of proof is on the person who has, in his / her possession, special knowledge about a certain fact. It is only when the workman discharges such burden that the same shifts on to the employer to demonstrate that the workman was, in fact, gainfully employed.
It appears that the “paradigm shift” noted by the apex court was not as permanent as one thought it to be. In the case of Deepali Gundu Surwase v Kranti Junior Adhyapak Mahavidyalaya [(2013) 10 SCC 324], the tribunal had noted that the employee was subjected to suspension without any specified reason, and that the allegations on the basis of which her services were terminated were frivolous. On account of non-compliance with the principles of natural justice, the tribunal had ordered her reinstatement with full back wages. When the matter reached the Supreme Court, it noted the following in respect of the issue of gainful employment while holding the onus to prove to be falling on the employer:
“If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service. This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person who makes a positive averments about its existence. It is always easier to prove a positive fact than to prove a negative fact.”
In the case of Bhuvnesh Kumar Dwivedi v Hindalco Industries Limited [AIR 2014 SC 2258] (Bhuvnesh), the Supreme Court was examining a case where the employer had not complied with the provisions of Section 6N of the Uttar Pradesh Industrial Disputes Act 1947, which sets out the conditions precedent to effectuating retrenchment of workmen (including payment of retrenchment compensation). The termination was accordingly held to be void ab initio, and the labour court held the employee as being entitled to reinstatement with all consequential benefits. On the question of the employee’s gainful employment, the Supreme Court noted that the employer had made a vague averment regarding his gainful employment elsewhere and opined that the same could not be accepted; the employee was, therefore, entitled to the relief (reinstatement with full back wages) as the burden of proof was not successfully discharged by the employer.
Given the inconsistent position taken by the Supreme Court on the issue, there has been considerable uncertainty in the position taken by High Courts. In the case of Divisional Railway Manager, Northern Railway v Vinod Kumar Bajpai and Others [2020 (164) FLR 408], the Allahabad High Court observed that “the burden is not upon the employer to show that the employee has not been gainfully employed. That burden is upon the workman.” On this basis, the court opined that there was hardly anything stated by the workman in his written statement about gainful employment (or lack thereof). Accordingly, the court ordered back-wages for the period between the removal from service and the date of the impugned award to the extent of 50% of the entire outstanding amount. On the other hand, in the case of DTC v Dharamvir Singh [Writ Petition (Civil) Number 10966 of 2004], the Delhi High Court observed the existence of two rulings of the respective division benches of the Supreme Court, one in Talwara and another in Bhuvnesh, and noted that the prevalent position being the latter, it was the onus of the employer to prove that the employee was gainfully employed.
In another division bench judgment delivered as recently as 24 September 2021, the Supreme Court, in an appeal against the order of reinstatement of a workman with back wages, observed that reinstatement was completely unjustified not only in view of the charge of assault clearly proven against the workman, but also because the workman failed to demonstrate that he was not gainfully employed after his services were dispensed with by the appellant (reference National Gandhi Museum v Sudhir Sharma [Civil Appeal Numbers 8215-8216 of 2011]).
COMMENTS
What makes the examination of the jurisprudence on the subject interesting is that the existence of another employment or engagement of a workman post the alleged unlawful termination of previous employment is not enough. Courts examine whether the other employment was gainful, which again depends inter alia on whether the said employment was sporadic or had some semblance of permanency, and whether the workman was receiving adequate compensation from such alternative employment. However, what is often not taken cognizance of is that the aspects of employment of an individual, including how gainful an employment is in terms of its nature, remuneration, and roles and responsibilities, are matters that are typically confidential on account of the terms of employment entered between the individual and the current employer. These are aspects which the workman in question has exclusive and special knowledge of, and therefore, Section 106 of the Indian Evidence Act 1872 holds significant relevance.
It is, therefore, positive that the recent ruling of the Supreme Court in National Gandhi Museum v Sudhir Sharma [Civil Appeal Numbers 8215-8216 of 2011] has placed the onus on the workman to prove that he is not gainfully employed. However, the hitherto inconsistent jurisprudence calls for a clearer ruling on the issue by a larger bench of the Supreme Court.