2007 JTR(SC) 1608
2008 Supp AIR(SC) 342 ; 2008 1 JT 150 ; 2008 Supp2 KLT 309 ; 2008 1 LLJ 855 ; 2008 1 SCC 575 ; 2007 8 Supreme 336
2007(8) Supreme 336
Supreme Court of india
S.B. Sinha & G.S. Singhvi, JJ.
Mahboob Deepak — Petitioner
versus
Nagar Panchayat Gajraula & Anr. — Respondents
Appeal (civil) 5875 of 2007
(Arising out of SLP (C) No.6506 of 2005)
Decided on 13-12-2007
Important Point
Merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same does not mean that his services are liable to be regularized.
Act Referred :UTTAR PRADESH INDUSTRIAL DISPUTES ACT : S.6(n)
(A) The impugned order of termination of daily wager services was challenged before the Labour Court under the UTTAR PRADESH INDUSTRIAL DISPUTES ACT, specifically invoking Section 6(n). The High Court, while setting aside the Labour Courts award, emphasized that the appointment of the employee as a daily wager in Class-III category was de hors rules and made purely on a temporary basis without any entitlement to permanency. The Supreme Court applied the provisions read with the principles of Section 6N of the U.P. Industrial Disputes Act, noting that termination after 240 days of work in a twelve-month period attracts the procedural safeguards under the said section, including compensation or notice pay, and that reinstatement is not to be automatically granted in cases of misconduct or statutory non-compliance.
(B) Appointment of daily wager employees is permissible only on a temporary basis and does not carry any right to regularization or permanent absorption unless specifically provided by statute. Termination of services, especially after completion of 240 days in a rolling year, must comply with the provisions of Section 6N of the U.P. Industrial Disputes Act, which mandates a compensation package or notice pay instead of automatic reinstatement. Where statutory recruitment rules and constitutional principles of equality under Articles 14 and 16 are violated, the appointment is null, and monetary compensation in lieu of reinstatement is the appropriate remedy.
Facts of the case:
Appellant was appointed as a daily wager on Rs.20 per day on 30.7.1988 in respondent No. 1, a Local Authority, and was allegedly involved in financial irregularities. His services were terminated w.e.f. 16.7.1989. He raised an industrial dispute seeking regularization after three months, which was accepted by the Labour Court and directed reinstatement with back wages. The High Court set aside the award, holding that daily wagers are temporary in nature, the termination was for misconduct, and no right to permanent employment arose. The Supreme Court reviewed the case, noting non-compliance with Section 6N and directed payment of compensation.
Findings of Court:
The Labour Court erred in directing reinstatement as the appointment was not in accordance with statutory rules and the employee had no right to permanent post. The High Court correctly set aside the award but failed to consider the effect of non-compliance with Section 6N. The Supreme Court held that where statutory requirements are not met and the employee has worked for a short period, compensation rather than reinstatement is the appropriate remedy.
Issues:
Whether the Labour Court was justified in directing reinstatement and regularization of services of a daily wager who had completed 240 days of work. Whether the High Court was correct in ignoring the impact of non-compliance with Section 6N of the U.P. Industrial Disputes Act. What is the appropriate relief in cases of termination after short-term daily wage employment in violation of statutory rules.
Ratio Decidendi:
In cases of termination of daily wager employees without statutory compliance, Section 6N of the U.P. Industrial Disputes Act governs and requires adequate monetary compensation instead of automatic reinstatement. The interest of justice is served by awarding damages proportional to the short period of work, and appointments in violation of recruitment rules are null.
Result:
The appeal is allowed to the extent of modifying the impugned judgment and directing the respondent to pay Rs.50,000 as damages within eight weeks, failing which interest at 9% per annum shall apply.
(A) The impugned order of termination of daily wager services was challenged before the Labour Court under the UTTAR PRADESH INDUSTRIAL DISPUTES ACT, specifically invoking Section 6(n). The High Court, while setting aside the Labour Courts award, emphasized that the appointment of the employee as a daily wager in Class-III category was de hors rules and made purely on a temporary basis without any entitlement to permanency. The Supreme Court applied the provisions read with the principles of Section 6N of the U.P. Industrial Disputes Act, noting that termination after 240 days of work in a twelve-month period attracts the procedural safeguards under the said section, including compensation or notice pay, and that reinstatement is not to be automatically granted in cases of misconduct or statutory non-compliance.
(B) Appointment of daily wager employees is permissible only on a temporary basis and does not carry any right to regularization or permanent absorption unless specifically provided by statute. Termination of services, especially after completion of 240 days in a rolling year, must comply with the provisions of Section 6N of the U.P. Industrial Disputes Act, which mandates a compensation package or notice pay instead of automatic reinstatement. Where statutory recruitment rules and constitutional principles of equality under Articles 14 and 16 are violated, the appointment is null, and monetary compensation in lieu of reinstatement is the appropriate remedy.
Facts of the case:
Appellant was appointed as a daily wager on Rs.20 per day on 30.7.1988 in respondent No. 1, a Local Authority, and was allegedly involved in financial irregularities. His services were terminated w.e.f. 16.7.1989. He raised an industrial dispute seeking regularization after three months, which was accepted by the Labour Court and directed reinstatement with back wages. The High Court set aside the award, holding that daily wagers are temporary in nature, the termination was for misconduct, and no right to permanent employment arose. The Supreme Court reviewed the case, noting non-compliance with Section 6N and directed payment of compensation.
Findings of Court:
The Labour Court erred in directing reinstatement as the appointment was not in accordance with statutory rules and the employee had no right to permanent post. The High Court correctly set aside the award but failed to consider the effect of non-compliance with Section 6N. The Supreme Court held that where statutory requirements are not met and the employee has worked for a short period, compensation rather than reinstatement is the appropriate remedy.
Issues:
Whether the Labour Court was justified in directing reinstatement and regularization of services of a daily wager who had completed 240 days of work. Whether the High Court was correct in ignoring the impact of non-compliance with Section 6N of the U.P. Industrial Disputes Act. What is the appropriate relief in cases of termination after short-term daily wage employment in violation of statutory rules.
Ratio Decidendi:
In cases of termination of daily wager employees without statutory compliance, Section 6N of the U.P. Industrial Disputes Act governs and requires adequate monetary compensation instead of automatic reinstatement. The interest of justice is served by awarding damages proportional to the short period of work, and appointments in violation of recruitment rules are null.
Result:
The appeal is allowed to the extent of modifying the impugned judgment and directing the respondent to pay Rs.50,000 as damages within eight weeks, failing which interest at 9% per annum shall apply.
JUDGMENT
S.B. Sinha, J.—
1.Leave granted.
2.Appellant was appointed as a daily wager on a remuneration of Rs.20/- per day in the services of respondent No. 1 on 30.7.1988. He is said to have been involved in financial irregularities. His services were terminated on and from 16.7.1989. He raised an industrial dispute contending that his services were to be regularized after three months of the joining the services. The said contention was accepted by the Presiding Officer, Labour Court in his award dated 30th November, 2002. On the said premise, the termination of services of the appellant was found to be illegal.
It was directed :
“–since the date of adopted this award employee Shree Mehboob Deepak s/o Shri Varan Singh shall be reestablished on his post in the investigation of old service and the other facililities or payment of the middle period after discharging date along with which he were obtain in service period should be paid.”
It is difficult to understand the reasoning of the learned Presiding Officer, Labour Court.
3.The High Court, however, by reason of the impugned judgment passed in the writ petition filed by the respondent herein set aside the said award holding :
“I have heard learned counsel for the parties, I find that respondent-employee was deployed as a daily wager in Class-III category and he has no right to the post and deployment of daily wager is made purely on temporary basis on day to day basis and respondent-employee could not have been deployed against any class-III post and the appointment is said to have been de hors the rules and daily wagers are not entitled to opportunity of hearing at the time of dispensation of service on the ground of misconduct. Here the award impugned passed by the Presiding Officer, Labour Court did not consider that the termination order dated 16.9.1989 was passed in reference to serious irregularities and misconduct. I find force in the contention of the petitioner. The deployment of daily wagers are made in exigency of work and when there was no work the deployment of daily wagers is dispensed with without any notice or opportunity of hearing, even non-renewal of appointment in consonance to the terms and conditions of appointment is not illegal. The petitioners have no right to the post after a limited period.”
4.Ms. Suresh Kumari, learned counsel appearing for the appellant, inter alia, submitted that as the services of the appellant were to be made permanent after three months, the High Court committed an error in passing the impugned judgment, particularly, in view of the fact that other persons similarly situated have been made permanent. In any event, it was urged, as the statutory requirements for valid termination of service have not been complied with, the award of the Presiding Officer should be restored.
5.The High Court, in its impugned judgment, inter alia, took into consideration the purported misconduct committed by the appellant herein. If services were to be terminated on the ground that he was involved in financial irregularities, a departmental proceeding was required to be initiated against him. As indicated hereinbefore, he was asked not to join his duties w.e.f 16.7.1989.
6.Such termination of service, having regard to the fact that he had completed 240 days of work during a period of 12 months preceding the said date, required compliance of the provisions of Section 6N of the U.P. Industrial Disputes Act. An order of retrenchment passed in violation of the said provision although can be set aside but as has been noticed by this Court in a large number of decisions, an award of reinstatement should not, however, be automatically passed.
7.The factors which are relevant for determining the same, inter alia, are:
(i)whether in making the appointment, the statutory rules, if any, had been complied with;
(ii)the period he had worked;
(iii)whether there existed any vacancy; and
(iv)whether he obtained some other employment on the date of termination in passing of the award.
8.Respondent is a Local Authority. The terms and conditions of employment of the employees are governed by a statute and statutory rules. No appointment can be made by a Local Authority without following the provisions of the recruitment rules. Any appointment made in violation of the said rules as also the constitutional scheme of equality as contained in Articles 14 and 16 of the Constitution of India would be a nullity.
9.Due to some exigency of work, although recruitment on daily wages or on an ad hoc basis was permissible, but by reason thereof an employee cannot claim any right to be permanently absorbed in service or made permanent in absence of any statute or statutory rules. Merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same would not mean that his services were liable to be regularized.
10.Applying the legal principles, as noticed hereinbefore, the relief granted in favour of the appellant by the Labour Court is wholly unsustainable. The same also appears to be somewhat unintelligible.
11.The High Court, on the other hand, did not consider the effect of non-compliance of the provisions of Section 6N of the U.P. Industrial Disputes Act, 1947. Appellant was entitled to compensation notice and notice pay.
12.It is now well settled by a catena of decisions of this Court that in a situation of this nature instead and in place of directing reinstatement with full back wages, the workmen should be granted adequate monetary compensation. [See Madhya Pradesh Administration v. Tribhuban1, 2007 (5) SCALE 397].
13.In this view of the matter, we are of the opinion that as the appellant had worked only for a short period, the interest of justice will be subserved if the High Court judgment is modified by directing payment of a sum of Rs.50,000/- (Rupees fifty thousand only) by way of damages to the appellant by the respondent. Such payment should be made within eight weeks from this date, failing which the same will carry interest at the rate of 9% per annum.
14.The appeal is allowed to the aforementioned extent with costs. Counsels fee assessed at Rs. 10,000/-.
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