2006 JTR(SC) 437
2006 3 AIR(Jhar)(R) 391 ; 2006 AIR(SC) 2427 ; 2006 AIR(SCW) 2979 ; 2006 3 AllCJ 2201 ; 2006 2 CalLJ(SC) 131 ; 2006 109 FLR 1000 ; 2006 3 JLJR(SC) 126 ; 2006 11 JT 232 ; 2006 2 KLT(SN) 92 ; 2006 2 LLJ 744 ; 2006 3 LLN 802 ; 2006 LLR 667 ; 2006 3 PLJR(SC) 145 ; 2006 3 RLW(Raj) 2545 ; 2006 5 Scale 164 ; 2006 9 SCC 434 ; 2006 SCC(L&S) 1830 ; 2006 5 SCJ 526 ; 2006 Supp1 SCR 638 ; 2006 2 SCT 647 ; 2007 1 SLR 482 ; 2006 2 WBLR 417 ; 2006 KHC 1285 ; 2006 4 Supreme 56
2006(4) Supreme 56
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
S.B. Sinha and P.K. Balasubramanyan, JJ.
Haryana State Electronics Dev. Corpn.—Appellant
versus
Mamni—Respondent
Civil Appeal No. 2410 of 2006
(Arising out of SLP (Civil) No. 14929 of 2004)
Decided on 2-5-2006
Counsel for the Parties :
For the Appellant : Arvind Nayar, Ms. Kavita Wadia, Advocates.
For the Respondent : Ranbir Singh Yadav, L.D. Sharma, S. Anand Krishna Raj, Advocates.
IMPORTANT POINT
Where services of workman were terminated or a regular basis and he had been appointed after a gap of one or two days and completed 240 days in the year, Section 2 (oo) (bb) of Industrial Disputes Act would not be attracted.
Act Referred :INDUSTRIAL DISPUTES ACT : S.25(f), S.2(o)(o)(b)(b)
(A) The Industrial Disputes Act, 1947, Section 2(oo)(bb) defines the termination of a workmans service arising from the non-removal of an expired contract or its termination under a stipulated term, categorizing it as a contract basis appointment. Section 25F mandates specific safeguards against unfair labour practices, requiring compliance with notice, representation, and compensation norms when engaging workers on an ad hoc or repeated short-term basis. The impugned orders are evaluated under these provisions to determine whether the appointments were regularized in violation of the Act and whether the consequences of such violations necessitate reinstatement with back wages or an appropriate compensatory measure. The interplay between the definition of contract termination, the prohibition on circumventing permanent employment, and the judicial precedents on ad hoc appointments form the statutory framework within which the present dispute is adjudicated.
(B) Key legal principles include: (i) an appointment on repeated short-term contracts with nominal gaps may constitute unfair labour practice and defeat the object of the Act; (ii) non-application for advertised permanent posts by a workman does not absolve the employer of liability for irregular appointments; (iii) reinstatement with full back wages is not automatic and must be assessed on the facts of each case; (iv) courts may modulate relief, including awarding a lump sum compensation in substitution for reinstatement, considering the duration of service, lapses in work, and the interests of justice; and (v) compliance with statutory provisions such as Section 25F is essential to validate terminations and appointments.
Facts of the case:
The respondent was engaged repeatedly for 89-day periods as a Junior Technician on an ad hoc basic, with similar terms in each offer. She remained absent for 19 days in JanuaryFebruary 1992 and 11 days in March 1992. Her services were terminated in 1992, and she raised an industrial dispute. The Labour Court found that she had completed 240 days of work within twelve months preceding termination and held that non-compliance with Section 25F warranted reinstatement with back wages. The High Court dismissed the appeal of the Corporation. The respondent did not apply for a subsequent advertisement for the regular post. She has not worked since 1992.
Findings of Court:
The Supreme Court held that the pattern of engagement89-day contracts with nominal gapswas not bona fide and was adopted to defeat statutory rights under Section 25F. However, given that the respondents services were terminated as far back as 1992, she did not apply for the advertised post, and she has not worked since, reinstatement with full back wages was not appropriate. The Court also noted that the High Court had not applied its mind to the question of back wages and that the relief of reinstatement should be modified in view of the changed circumstances and settled jurisprudence.
Issues:
(i) Whether repeated short-term ad hoc appointments with nominal gaps constitute unfair labour practice and evasion of statutory obligations under the Industrial Disputes Act. (ii) Whether non-application for advertised permanent posts by the workman affects the employers liability for reinstatement or compensation. (iii) Whether reinstatement with full back wages is maintainable after a long lapse in service and without work being offered by the employer. (iv) Whether the High Court erred in not considering the implications of Section 25F and the precedents on ad hoc appointments.
Ratio Decidendi:
The appointments, though labeled ad hoc, were found to be systematically structured in a manner that circumvented the protections under Section 25F of the Industrial Disputes Act. However, given the long gap since termination, the respondents failure to apply for available permanent opportunities, and the absence of gainful employment, the interests of justice were better served by awarding a lump sum compensation in lieu of reinstatement with back wages, consistent with the principles of proportionality and statutory compliance.
Result:
The appeal is allowed to the extent of substituting the reinstatement order with a compensatory payment of Rs. 25,000. No costs are awarded.
(A) The Industrial Disputes Act, 1947, Section 2(oo)(bb) defines the termination of a workmans service arising from the non-removal of an expired contract or its termination under a stipulated term, categorizing it as a contract basis appointment. Section 25F mandates specific safeguards against unfair labour practices, requiring compliance with notice, representation, and compensation norms when engaging workers on an ad hoc or repeated short-term basis. The impugned orders are evaluated under these provisions to determine whether the appointments were regularized in violation of the Act and whether the consequences of such violations necessitate reinstatement with back wages or an appropriate compensatory measure. The interplay between the definition of contract termination, the prohibition on circumventing permanent employment, and the judicial precedents on ad hoc appointments form the statutory framework within which the present dispute is adjudicated.
(B) Key legal principles include: (i) an appointment on repeated short-term contracts with nominal gaps may constitute unfair labour practice and defeat the object of the Act; (ii) non-application for advertised permanent posts by a workman does not absolve the employer of liability for irregular appointments; (iii) reinstatement with full back wages is not automatic and must be assessed on the facts of each case; (iv) courts may modulate relief, including awarding a lump sum compensation in substitution for reinstatement, considering the duration of service, lapses in work, and the interests of justice; and (v) compliance with statutory provisions such as Section 25F is essential to validate terminations and appointments.
Facts of the case:
The respondent was engaged repeatedly for 89-day periods as a Junior Technician on an ad hoc basic, with similar terms in each offer. She remained absent for 19 days in JanuaryFebruary 1992 and 11 days in March 1992. Her services were terminated in 1992, and she raised an industrial dispute. The Labour Court found that she had completed 240 days of work within twelve months preceding termination and held that non-compliance with Section 25F warranted reinstatement with back wages. The High Court dismissed the appeal of the Corporation. The respondent did not apply for a subsequent advertisement for the regular post. She has not worked since 1992.
Findings of Court:
The Supreme Court held that the pattern of engagement89-day contracts with nominal gapswas not bona fide and was adopted to defeat statutory rights under Section 25F. However, given that the respondents services were terminated as far back as 1992, she did not apply for the advertised post, and she has not worked since, reinstatement with full back wages was not appropriate. The Court also noted that the High Court had not applied its mind to the question of back wages and that the relief of reinstatement should be modified in view of the changed circumstances and settled jurisprudence.
Issues:
(i) Whether repeated short-term ad hoc appointments with nominal gaps constitute unfair labour practice and evasion of statutory obligations under the Industrial Disputes Act. (ii) Whether non-application for advertised permanent posts by the workman affects the employers liability for reinstatement or compensation. (iii) Whether reinstatement with full back wages is maintainable after a long lapse in service and without work being offered by the employer. (iv) Whether the High Court erred in not considering the implications of Section 25F and the precedents on ad hoc appointments.
Ratio Decidendi:
The appointments, though labeled ad hoc, were found to be systematically structured in a manner that circumvented the protections under Section 25F of the Industrial Disputes Act. However, given the long gap since termination, the respondents failure to apply for available permanent opportunities, and the absence of gainful employment, the interests of justice were better served by awarding a lump sum compensation in lieu of reinstatement with back wages, consistent with the principles of proportionality and statutory compliance.
Result:
The appeal is allowed to the extent of substituting the reinstatement order with a compensatory payment of Rs. 25,000. No costs are awarded.
Relief - The court relied on this case to support the principle that courts can mould relief and that reinstatement with full back wages is not automatic.
Compensation - The court referred to this case to support the award of lump sum compensation in lieu of reinstatement.
Regularization - The court cited this Constitution Bench decision to hold that the respondent's ad hoc service could not be regularized.
BackWages - The court referred to this case to support the principle that the workman should plead and prove that he was not gainfully employed to claim back wages.
JUDGMENT
S.B. Sinha, J.—Leave granted.
2. The respondent herein was appointed initially for a period of 89 days in the post of Junior Technician (Electronics) on an ad hoc basic on or about 31.10.1990. In terms of an offer of appointment made to her, she was appointed therein. The post was purely temporary and her services were liable to be terminated without assigning any reason or notice. It was categorically stated that the respondent shall have no claim for regular appointment having worked with the appellant-Corporation on ad hoc basis. Her services were extended from time to time. In each of the offer of appointment, indisputably, similar terms and conditions were laid down. The details of such appointments are as under :
“Sl.No.Period Working days
1.13.2.91 to 12.5.9189
2.14.5.91 to 10.8.9189
3.13.8.91 to 9.11.9189
4.11.11.91 to 7.2.9289"
3. It is not in dispute that she remained absent for 19 days during the period 20th Janurary, 1992 and 7th February, 1992 as also for a period of 11 days during the period 17.3.1992 to 27.3.1992. Her services were terminated on 7.8.1992. She raised an industrial dispute, whereupon the State of Punjab in exercise of its power under Section 10(1)(c) of Industrial Disputes Act, 1947 referred the said dispute for adjudication of the Labour Court. In the meanwhile, the appellant Corporation has issued an advertisement for filling up some posts on regular basis including the said post of Junior Technician. The respondent, however, did not apply pursuant to the said advertisement.
4. Before the Labour Court, the appellant herein has raised a plea that the appointment of the respondent being ad hoc in nature and furthermore on a contract basis as envisaged under Section 2(oo)(bb) of the Industrial Disputes Act, her services were liable to be terminated in terms thereof. By reason of the impugned Award dated 21.5.2003, the Labour Court directed reinstatement of the respondent with back wages on the premise that she had completed 240 days of work during a period of twelve months immediately preceding the date of termination of her services and in view of the fact that the conditions laid down under Section 25F of the Industrial Disputes Act had not been complied with by the Appellant.
5. The Appellant-Corporation herein, being aggrieved by the said Award, filed a Writ Petition before the Punjab and Haryana High Court which was numbered as W.P.(C) No. 2464 of 2004. By reason of the impugned judgment, the said Writ Petition has been dismissed.
6. Mr. Arvind Nayyar, the learned counsel appearing on behalf of the appellant submitted that having regard to the fact that the services of the respondent could not have been directed to be regularized in the light of the judgments of this Court and furthermore in view of the fact that her appointment had been for a fixed period of 89 days, the impugned judgment cannot be sustained.
7. Mr. Ranvir Singh Yadav, learned counsel appearing for the respondent, on the other hand, urged that the respondent having completed 240 days of service within a period of twelve months preceding the date of her termination and in view of the fact that no compensation had been paid as provided in Section 25-F of the Industrial Disputes Act; the Labour Court and consequently the High Court has rightly directed her reinstatement with full back wages.
8. Section 2 (oo)(bb) of the Industrial Disputes Act reads as under :-
“termination of the service of the workman as a result of the non-removal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein.”
9. The respondent was appointed from time to time. Her services used to be terminated on the expiry of 89 days on regular basis. However, it is noticed that she used to be appointed after a gap of one or two days upon completion of each term. Such an action on the part of the Appellant cannot be said to be bona fide. The High Court rejected the contention raised on behalf of the appellant herein stating :
“...It is not possible for us to accept the aforesaid plea raised at the hands of the management on account of the fact that the factual position, which has not been disputed, reveals that the respondent-workman was repeatedly engaged on 89 days basis. It is, therefore, clear that the intention of the management was not to engage the respondent - workman for a specified period, as alleged, but was to defeat the rights available to him under Section 25-F of the Act. The aforesaid practice at the hands of the petitioner - management to employ the workman repeatedly after notional break, clearly falls within the ambit and scope of unfair labour practice...”
10. A finding of fact was arrived at that her services were terminated on regular basis but she was re-appointed after a gap of one or two days. In that view of the matter, the Labour Court or the High Court cannot be said to have committed any illegality.
11. In this case the services of the respondent had been terminated on a regular basis and she had been re-appointed after a gap of one or two days. Such a course of action was adopted by the Appellant with a view to defeat the object of the Act. Section 2 (oo)(bb) of the Industrial Disputes Act, 1947, therefore, is not attracted in the instant case.
12. However, indisputably, the respondent was appointed on an ad hoc basis. She, although qualified to hold the post of Junior Technician, when the advertisement had been issued for filling up the said post, did not apply therefor. The services of the respondent was termination as far back as in the year 1992. Even if she is reinstated in her service on an ad hoc basis, her services cannot be regularized in view of a recent Constitution Bench decision of this Court in Secretary, State of Karnataka & Ors. v. Uma Devi & Ors. [2006(4) SCALE 197]. Furthermore, she had absented herself for a period of 19 days from 20.1.1992 to 7.2.1992 and for a period of 11 days from 17.2.1992 to 27.2.1992.
13. We, therefore, are of the view that in the peculiar facts and circumstances of this case, interests of justice would be sub-served if in the place of reinstatement with back wages, a lump sum amount is directed to be paid by way of compensation. This order is being passed keeping in view the fact that the respondent has not worked since 1992. The post on which she may have been working must have also been filled up.
14. It is wholly unlikely that respondent in the meantime had not been working anywhere else, since the respondent had not placed any material on record to show that she had not been working.
15. This Court in a number of decisions has categorically held that the relief of reinstatement with full back wages is not to be given automatically. Each case must be considered on its own merit.
16. In U.P. State Brassware Corporation Ltd. & Anr. v. Udai Narain Pandey [JT 2005(10) SC 344], it was observed :
“Order VII, Rule 7 of the Code of Civil Procedure confers power upon the Court to mould relief in a given situation. The provisions of the Code of Civil Procedure are applicable to the proceedings under the Industrial Disputes Act. Section 11-A of the Industrial Disputes Act empowers the Labour Court, Tribunal and National Tribunal to give appropriate relief in case of discharge or dismissal of workmen.”
It was further opined :
“Industrial Courts while adjudicating on disputes between the management and the workmen, therefore, must take such decisions which would be in consonance with the purpose the law seeks to achieve. When justice is the buzzword in the matter of adjudication under the Industrial Disputes Act, it would be wholly improper on the part of the superior courts to make them apply the cold letter of the statutes to act mechanically. Rendition of justice would bring within its purview giving a person what is due to him and not what can be given to him in law.
A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an industrial court shall lose much of its significance.
The changes brought about by the subsequent decisions of this Court probably having regard to the change in the policy decisions of the government in the wake of prevailing market economy, globalization, privatization and outsourcing is evident.
17. In Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya & Anr., this Court noticed Raj Kumar (supra) and Hindustan Tin Works (supra) but held :
“As already noted, there was no application of mind to the question of back wages by the Labour Court. There was no pleading or evidence whatsoever on the aspect whether the respondent was employed elsewhere during this long interregnum. Instead of remitting the matter to the Labour Court or the High Court for fresh consideration at this distance of time, we feel that the issue relating to payment of back wages should be settled finally. On consideration of the entire matter in the light of the observations referred to supra in the matter of awarding back wages, we are of the view that in context of the facts of this particular case including the vicissitudes of long-drawn litigation, it will serve the ends of justice if the respondent is paid 50% of the back wages till the date of reinstatement..”
This Court held :
“It is not in dispute that the respondent did not raise any plea in his written statement that he was not gainfully employed during the said period. It is now well-settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of Section 106 of the Indian Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman.”
[See also Haryana State Agricultural Marketing Board v. Subhash Chand & Anr. (2006) 2 SCC 794].
18. In Nagar Mahapalika (Now Municiapal Corporation) v. State of U.P. & Ors. [Civil Appeal of 2006 @ SLP [C] No. 23732 of 2004], disposed of this date, this Court held that :
“In Nilajkar (supra), this Court cannot be said to have laid down a law having universal application. In that case also backwages had been denied by the learned Single Judge of the High Court which order was held to be just and reasonable. Therein, the question which arose was whether in fact the Appellants therein were appointed in a project work.
The said decision has been distinguished by this Court in various decisions including Executive Engineer, ZP Engg. Divn. And Another v. Digambara Rao and Others [(2004) 8 SCC 262] which in turn has been followed in a large number of decisions.
However, there cannot be any dispute that provisions of Section 6-N of the U.P. Industrial Disputes Act have not been complied with. We are, however, of the opinion that in stead and in place of issuing a direction for reinstatement of service, interests of justice shall be sub-served if compensation of Rs. 30,000/- per person is directed to be paid.
It goes without saying that the Respondents would be entitled to wages and other remunerations in terms of the interim order passed by the High Court so long they have actually worked. We, furthermore, hope and trust that in all future appointments, the Appellant shall strictly follow the provisions of the Adhiniyam and the Rules.”
19. In view of the settled legal position, as noticed hereinbefore, we modify the impugned order by directing that the respondent shall be compensated by payment of a sum of Rs. 25,000/- in stead of the order for reinstatement with back wages.
20. The appeal is allowed to the aforementioned extent. No costs.
Appeal allowed accordingly.
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