Bombay High Court Orders Bata To Compensate Terminated Salesmen For Unlawful Dismissal

Bombay High Court Orders Bata To Compensate Terminated Salesmen For Unlawful Dismissal

The court awarded compensation of 75 per cent of the back wages for the last 16 years.

Urvi MahajaniUpdated: Thursday, November 02, 2023, 09:36 PM IST
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Bombay High Court | File

Observing that Bata terminated the services of former salesmen in 2007 without conducting an inquiry, the Bombay High Court has directed the leading Indian shoe company to pay compensation ranging from Rs 19.5 lakh to Rs 33 lakh to these seven salesmen.

In 2007, the services of seven salesmen were terminated for refusing to adhere to a modified roster for operating showrooms seven days a week with extended hours.

Although Justice Sandeep Marne observed that they were terminated without any inquiry, he refused to reinstate them, noting that 16 years have elapsed since their termination, and they may not be able to discharge duties as salesmen effectively. The court awarded compensation of 75 per cent of the back wages for the last 16 years.

“Considering the nature of the job of a salesman and the rapid advancement in the industry, it is not known whether the complainants would now be in a position to discharge duties as salesmen in the retail outlets of Bata effectively… In my view, the ends of justice would meet if Bata is directed to pay a lump-sum compensation of approximately 75% of back wages during the last 16 years to each of the complainants in lieu of reinstatement and back wages,” the judge held.

Bata, in 2007, decided to operate its showrooms in Mumbai, Thane, and Pune all seven days a week with extended hours to mitigate losses. The state government permitted this on the condition that a weekly holiday would be given to each employee, and the shops must be shut by 9:30 pm. Bata prepared a duty chart for this purpose. However, some of its salespersons opposed the altered working hours and not having a designated day as a weekly holiday. Bata terminated their services, treating their refusal to adhere to the roster as misconduct.

The salesmen approached the Labour Court, which ruled in their favor and awarded them reinstatement with 50 percent back wages. The decision was upheld by the Industrial Court.

Bata challenged this before the HC claiming that the salesmen were not workmen and thus the Labour Court had no jurisdiction over the dispute. The salesmen too challenged the order before the HC seeking 100 percent back wages.

The court concluded that multifaceted duties indicate that the salesmen can be considered “workmen” under the provisions of the ID Act.

The court found that Bata had not conducted any inquiry to prove the alleged misconduct and thus held the terminations to be illegal.

The court directed Bata to provide a lump-sum compensation of approximately 75 percent of the back wages to each affected salesman within four months. The court also ordered Bata to pay interest at 8 percent per annum if the compensation was not provided within the stipulated period.

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