On December 31, 2025, the Supreme Court delivered a decision that should haunt every HR leader who thinks litigation is "just legal's problem". A bench of Justices Manoj Misra and Ujjal Bhuyan restored 50% back wages to a hotel employee whose termination case stretched across decades - and who did not live to see the verdict. The employee, Dinesh Chandra Sharma, began working as a room attendant in 1978 and was terminated in July 1991 on alleged misconduct. The Labour Court found the management's inquiry unfair and noted that even after being given a chance to prove charges in court, the management led no evidence. In December 2015, the Labour Court ordered reinstatement with full back wages. A Rajasthan High Court single bench reduced back wages to 50%, but the division bench later set aside even that relief, citing the worker's failure to prove he was not "gainfully employed". The Supreme Court reversed that, noting stigma hampers re-employment and "odd jobs" for survival should not become a reason to deny back wages.
Picture the human timeline: a worker terminated in 1991, a labour court order in 2015, a Supreme Court decision in 2025 - and a man who never got to hear "you were right" while alive. This is not just delay. This is a slow erasure of dignity. The family becomes legal representatives, carrying files instead of a living wage. The workplace becomes a memory, but the punishment remains fresh because the economic consequences never end. For current employees watching these stories, the message is chilling: your job can be taken in a day, but getting justice can take a lifetime. For leaders, this is where ethics meets governance: if an organisation fights a worker for decades without being able to prove misconduct properly, it is not defending discipline - it is weaponising time.
From a compliance and leadership lens, this decision is a direct warning about domestic inquiries, documentation, and the burden of proof in misconduct-based terminations. Under the Industrial Disputes framework and principles of natural justice, a defective inquiry and failure to lead evidence can convert "termination for misconduct" into a long-term financial and reputational liability. HR needs controls that prevent cases from rotting into generational disputes: properly constituted inquiry processes, trained inquiry officers, evidence preservation, reasoned orders, and clear separation between "performance management" and "misconduct punishment". Leaders should also ask an uncomfortable question: when the facts are weak, why are we litigating - pride, precedent, or punishment? Because the costs are not only back wages. They are trust erosion, employer-brand decay, and the moral injury of making families wait decades for closure.
Source: @IndianExpress (Supreme Court back wages and wrongful termination reporting, Dec 31, 2025)
The Indian Express
What does it mean for an organisation to be "right" if the process destroys a worker's life while the case is still pending - and who owns that ethical weight?
What governance controls would you implement so misconduct terminations don't become 20-30 year liabilities: inquiry training, evidence standards, early settlement gates, record retention rules, independent review, or something else?
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7Picture the human timeline: a worker terminated in 1991, a labour court order in 2015, a Supreme Court decision in 2025 - and a man who never got to hear "you were right" while alive. This is not just delay. This is a slow erasure of dignity. The family becomes legal representatives, carrying files instead of a living wage. The workplace becomes a memory, but the punishment remains fresh because the economic consequences never end. For current employees watching these stories, the message is chilling: your job can be taken in a day, but getting justice can take a lifetime. For leaders, this is where ethics meets governance: if an organisation fights a worker for decades without being able to prove misconduct properly, it is not defending discipline - it is weaponising time.
From a compliance and leadership lens, this decision is a direct warning about domestic inquiries, documentation, and the burden of proof in misconduct-based terminations. Under the Industrial Disputes framework and principles of natural justice, a defective inquiry and failure to lead evidence can convert "termination for misconduct" into a long-term financial and reputational liability. HR needs controls that prevent cases from rotting into generational disputes: properly constituted inquiry processes, trained inquiry officers, evidence preservation, reasoned orders, and clear separation between "performance management" and "misconduct punishment". Leaders should also ask an uncomfortable question: when the facts are weak, why are we litigating - pride, precedent, or punishment? Because the costs are not only back wages. They are trust erosion, employer-brand decay, and the moral injury of making families wait decades for closure.
Source: @IndianExpress (Supreme Court back wages and wrongful termination reporting, Dec 31, 2025)
The Indian Express
What does it mean for an organisation to be "right" if the process destroys a worker's life while the case is still pending - and who owns that ethical weight?
What governance controls would you implement so misconduct terminations don't become 20-30 year liabilities: inquiry training, evidence standards, early settlement gates, record retention rules, independent review, or something else?
Acknowledge(0)Amend(0)
The case of Dinesh Chandra Sharma highlights the ethical and financial implications of prolonged litigation in misconduct terminations. It underscores the need for HR leaders to ensure fair and efficient handling of such cases to prevent long-term liabilities and uphold the dignity of the workforce.
From a legal standpoint, the Industrial Disputes Act, 1947, and principles of natural justice mandate a fair inquiry and the presentation of evidence in cases of misconduct-based terminations. A flawed inquiry or failure to present evidence can transform a termination into a long-term financial and reputational liability.
To prevent such situations, HR leaders can implement several governance controls:
1. Inquiry Training: Equip inquiry officers with the necessary skills and knowledge to conduct fair and thorough investigations. This includes understanding the legal requirements, gathering and assessing evidence, and documenting the process.
2. Evidence Standards: Establish clear standards for the type and quality of evidence required to substantiate misconduct allegations. This can help prevent wrongful terminations and the resulting litigation.
3. Early Settlement Gates: Introduce mechanisms for early resolution of disputes, such as mediation or conciliation, to avoid protracted legal battles.
4. Record Retention Rules: Maintain comprehensive and accurate records of all disciplinary proceedings. This can serve as crucial evidence if the termination is challenged in court.
5. Independent Review: Engage an independent party to review termination decisions. This can help ensure fairness and objectivity.
Leaders should also introspect on the reasons for litigating when the facts are weak. Is it due to pride, precedent, or punishment? The costs of litigation extend beyond back wages to include trust erosion, employer-brand decay, and the moral injury of making families wait decades for closure.
In conclusion, it's crucial for HR leaders to balance the need for discipline with respect for employees' rights and dignity. By implementing robust governance controls, they can prevent misconduct terminations from becoming long-term liabilities and uphold the ethical standards of the organisation.
From India, Gurugram
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From a legal standpoint, the Industrial Disputes Act, 1947, and principles of natural justice mandate a fair inquiry and the presentation of evidence in cases of misconduct-based terminations. A flawed inquiry or failure to present evidence can transform a termination into a long-term financial and reputational liability.
To prevent such situations, HR leaders can implement several governance controls:
1. Inquiry Training: Equip inquiry officers with the necessary skills and knowledge to conduct fair and thorough investigations. This includes understanding the legal requirements, gathering and assessing evidence, and documenting the process.
2. Evidence Standards: Establish clear standards for the type and quality of evidence required to substantiate misconduct allegations. This can help prevent wrongful terminations and the resulting litigation.
3. Early Settlement Gates: Introduce mechanisms for early resolution of disputes, such as mediation or conciliation, to avoid protracted legal battles.
4. Record Retention Rules: Maintain comprehensive and accurate records of all disciplinary proceedings. This can serve as crucial evidence if the termination is challenged in court.
5. Independent Review: Engage an independent party to review termination decisions. This can help ensure fairness and objectivity.
Leaders should also introspect on the reasons for litigating when the facts are weak. Is it due to pride, precedent, or punishment? The costs of litigation extend beyond back wages to include trust erosion, employer-brand decay, and the moral injury of making families wait decades for closure.
In conclusion, it's crucial for HR leaders to balance the need for discipline with respect for employees' rights and dignity. By implementing robust governance controls, they can prevent misconduct terminations from becoming long-term liabilities and uphold the ethical standards of the organisation.
From India, Gurugram
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