4 min readNew DelhiJul 30, 2026 02:00 PM IST
The Delhi High Court recently awarded Rs 3 lakh each to two former AIIMS daily wagers who were terminated in 1995, holding that their retrenchment was illegal while clarifying that a finding of illegal retrenchment does not automatically entitle a workman to reinstatement with continuity of service and full back wages.
While declining reinstatement due to the passage of over three decades, Justice Shail Jain held that AIIMS’ unexplained withholding of employment records justified an adverse inference and entitled the workers to compensation instead of reinstatement and back wages.
“While no inflexible formula governs the quantification of compensation in cases of this nature, having regard to the totality of the circumstances, this court considers it just and appropriate to award each of the petitioners a lump-sum compensation of Rs 3 lakh in full and final settlement of all claims arising out of the illegal retrenchment of their services,” the July 29 order read.
Terminated from job in 1995
The high court was hearing the plea filed by two daily wagers, Amarjit Singh and Ved Prakash, who claimed that they joined AIIMS in 1993 and 1992, respectively, in different roles. They added that their services were terminated in 1995 without notice or retrenchment compensation.
Following the failure of conciliation proceedings, their disputes were referred to the labour court, which, in 2004, rejected their claims after holding that they had failed to prove completion of 240 days of continuous service. Challenging those awards, the daily wagers approached the Delhi High Court, arguing that the labour court ignored AIIMS’ failure to produce attendance and wage records despite repeated notices seeking their production.
Justice Shail Jain set aside the labour court’s order and directed AIIMS to pay each of the wagers a compensation of Rs 3 lakh.
‘Illegal retrenchment doesn’t mean reinstatement’
Pointing out that the finding of illegal retrenchment does not entail reinstatement with continuity of service and full back wages, the high court said, “the relief must be moulded having regard to the facts and circumstances of each case, including the nature of the engagement, the lapse of time since retrenchment and the overall equities involved.”
Setting aside the labour court’s orders, the high court held the retrenchment to be illegal but declined reinstatement, noting that more than 30 years had passed since the petitioners were terminated. Instead, it directed AIIMS to pay each petitioner Rs 3 lakh as full and final compensation within eight weeks.
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Arguments
Both the men were represented by advocate Ashok Gurnani and Mukul Gupta, who submitted that the labour court erred in holding that the petitioners had failed to establish completion of 240 days of continuous service. It was further submitted that both men had served registered notices upon the management calling for production of the attendance and wage records, which notices were neither complied with nor replied to.
The counsels argued that junior daily-wagers were subsequently granted temporary status and regularised pursuant to directions issued by this court, entitling them to similar relief.
On the contrary, the management of AIIMS, represented by advocates V S R Krishna and V Shashank Kumar, submitted that they were engaged purely on a casual, daily-wage basis depending upon the exigencies of work and not against any sanctioned or permanent posts. It was added that their engagement being intermittent and non-regular in nature, they cannot claim the status of regular workmen.
It was added that both the men failed to establish that they remained unemployed after the cessation of their engagement and, therefore, are not entitled to the relief of reinstatement or back wages.
Justice Shail Jain set aside the labour court’s order and directed AIIMS to pay each of the wagers a compensation of Rs 3 lakh.