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Synopsis

The Supreme Court has said that bureaucratic limitations cannot trump the legitimate rights of workmen who have served continuously in de facto regular roles for an extended period.

A bench of Justices Vikram Nath and Prasanna B Varale said, while concerns of municipal budget and compliance with recruitment rules merit consideration but it would not absolve the employer of statutory obligations or negate equitable entitlements.

"The principle of 'equal pay for equal work', repeatedly emphasised by this court, cannot be casually disregarded when workers have served for extended periods in roles resembling those of permanent employees. Long-standing assignments under the Employer’s direct supervision belie any notion that these were mere short-term casual engagements," the bench said.

The apex court quashed all the orders or communications issued by the Ghaziabad Nagar Nigam in 2005 terminating services of appellant Shripal and others who were engaged as gardners since 1998 by the horticulture department, without any notice, written orders, or retrenchment compensation.

"Indian labour law strongly disfavors perpetual daily-wage or contractual engagements in circumstances where the work is permanent in nature. Morally and legally, workers who fulfil ongoing municipal requirements year after year cannot be dismissed summarily as dispensable, particularly in the absence of a genuine contractor agreement," the bench said.

Court noted by seeking regular work from the appellant workmen still compensating them inadequately and inconsistently, the respondent employer had effectively engaged in an unfair labour practice.

It held the employer’s discontinuation of the appellant workmen stood in violation of the most basic labour law principles.

The bench said once it was established they were engaged in essential, perennial duties, these workers cannot be relegated to perpetual uncertainty.

Court directed that all the appellant workmen would be treated as continuing in service from the date of their termination, for all purposes, including seniority and continuity in service. It said they would be entitled to 50% of the back wages from the date of their discontinuation until their actual reinstatement and their dues should be cleared within three months from the date of their reinstatement.

Court directed the respondent employer to initiate a fair and transparent process for regularizing the appellant workmen within six months from the date of reinstatement, duly considering the fact that they have performed perennial municipal duties akin to permanent posts. It clarified that in assessing regularisation, the employer should not impose educational or procedural criteria retroactively if such requirements were never applied to them in the past.

The workmen alleged they were persistently denied minimum wages, weekly offs, national holidays, and other statutory benefits. As they raised an industrial dispute before the conciliation officer at Ghaziabad, seeking regularisation of their services and the requisite statutory benefits, they were terminated by the oral orders.

The State government referred the disputes to the labour court, which passed two orders. In June, 2011, it directed for reinstatement with 30 % back wages. In another order in October, 2011, the labour court dismissed the claims on the finding that the concerned workmen had not been engaged directly by the Nagar Nigam but rather through a contractor, and hence had no enforceable right to reinstatement or regularisation against the respondent employer.

Both the workmen and the Nagar Nigam filed separate writ petitions before the Allahabad High Court which by its judgment on March 1, 2019, modified the relief granted, directing re-engagement of the workmen on daily wages, with pay equivalent to the minimum in the regular pay scale of Gardeners, while allowing future consideration of their regularisation if permissible by law.

Having heard the matter, the bench opined that the nature of engagement of the appellant workmen, the admitted shortage of Gardeners, and the circumstances under which their services were brought to an end, merited closer scrutiny.

Referring to Section 6E of the UP Industrial Disputes Act, 1947, the court said any unilateral alteration in service conditions, including termination, is impermissible. The court found the respondent Nagar Nigam's conduct reflected a deliberate attempt to circumvent the lawful claims of the workmen, particularly when their dispute over regularisation and wages remained sub judice.

Court also noted that the provision mandated a proper notice or wages in lieu thereof as well as retrenchment compensation. "In this context, whether an individual is classified as regular or temporary is irrelevant as retrenchment obligations under the Act must be met in all cases attracting Section 6N. Any termination thus effected without statutory safeguards cannot be undertaken lightly," the bench said.

The court said employer’s stance that there was never a direct employer-employee relationship remained wholly unsubstantiated.

"In fact, it appears that the workmen were reporting directly to the Horticulture Department officials, receiving instructions on their duties, and drawing wages issued under the Municipality’s authority. This pattern of direct oversight and wage disbursement substantially negates the narrative that they were 'contractor’s personnel'," the bench said.

It held the discontinuation of their services carried out without compliance with statutory obligations pertaining to notice, retrenchment compensation, or approval under Section 6E of the U.P. Industrial Disputes Act, stood on precarious ground.

"The very foundation of the Employer’s defense (i.e., lack of an employer employee relationship) is not supported by any credible or contemporaneous evidence," the bench said.

After going through the evidence, including documentary material and undisputed facts, the court, pointed out, those revealed that the appellant workmen performed duties integral to the respondent employer’s municipal functions specifically the upkeep of parks, horticultural tasks, and city beautification efforts.

"Such work is evidently perennial rather than sporadic or project-based. Reliance on a general 'ban on fresh recruitment' cannot be used to deny labor protections to long serving workmen. On the contrary, the acknowledged shortage of Gardeners in the Ghaziabad Nagar Nigam reinforces the notion that these positions are essential and ongoing, not intermittent," the bench said.

The court also said its judgment in Uma Devi Vs State of Karnataka cannot serve as a shield to justify exploitative engagements persisting for years without the Employer undertaking legitimate recruitment. "Given the record which shows no true contractor based arrangement and a consistent need for permanent horticultural staff the alleged asserted ban on fresh recruitment, though real, cannot justify indefinite daily-wage status or continued unfair practices," the bench said.

The court also cited Jaggo Vs Union of India (2024), which highlighted the pervasive misuse of temporary employment contracts, reflecting a broader systemic issue that adversely affected workers' rights and job security.

The bench said the high court did acknowledge the employer’s inability to justify abrupt terminations but it ordered re-engagement on daily wages with some measure of parity in minimum pay.

"Regrettably, this only perpetuated precariousness: the appellant Workmen were left in a marginally improved yet still uncertain status. While the High Court recognised the importance of their work and hinted at eventual regularisation, it failed to afford them continuity of service or meaningful back wages commensurate with the degree of statutory violation evident on record," the bench said.

Court allowed the appeals by the workmen and dismissed those by Nagar Nigam.

Case Title: Shripal & Anr Vs Nagar Nigam Ghaziabad