BENCH: Justice Vikram Nath and Justice Prasanna B Varale
FACTS:
The Appellant Workmen claim they were engaged as Gardeners in the Horticulture Department of the Ghaziabad Nagar Nigam since 1998-99, performing horticultural and maintenance duties under its supervision. They allege they were denied appointment letters, minimum wages, and statutory benefits. In 2004, they raised an industrial dispute seeking regularization, following which their services were allegedly terminated orally in mid-2005 during ongoing conciliation proceedings. The State Government referred the dispute to the Labour Court, which, through separate orders in 2011, ruled in favor of some workmen by ordering reinstatement with 30% back wages, while dismissing others' claims, citing engagement through contractors.
Aggrieved, both parties challenged these decisions before the Allahabad High Court, which, in a 2019 judgment, acknowledged the municipality as an "industry" but found factual complexities regarding employment status. Citing a state-imposed recruitment ban, the High Court modified relief by directing re-engagement of the workmen on daily wages with minimum pay-scale benefits but without full regularization. Both the workmen and the Nagar Nigam have now approached the Supreme Court—the former seeking full reinstatement and regularization, and the latter contesting the High Court’s modifications as exceeding jurisdiction and contravening the recruitment ban.
ISSUES:
The main in this case was the employment status of long term temporary employees. The question before the Court was whether long-serving temporary workers appointed to sanctioned positions can be allotted regularization in the company.
JUDGEMENT WITH REASONING:
The Court overruled the judgement made by the High Court. The appeal filed by the workmen was allowed, whereas the appeal filed by the Nagar Nigam Ghaziabad was dismissed. 20. All pending applications stand disposed of regarding the matter in the case.
The court's reasoning is primarily based on the statutory protections provided under the U.P. Industrial Disputes Act, 1947, particularly Sections 6N and 6E, which mandate that any termination of workmen must follow due process, including proper notice, retrenchment compensation, and government approval during conciliation proceedings. The Respondent Employer’s failure to provide evidence of compliance with these provisions—such as retrenchment notices, contractor agreements, or independent payment records—led the court to infer that the workmen were directly engaged by the municipal authority rather than through a contractor. The absence of contractual documentation, combined with evidence of direct supervision and wage payments by the Horticulture Department, further reinforced the notion that the workmen were in an employer-employee relationship with the Nagar Nigam. As a result, their abrupt termination was deemed unlawful, lacking procedural fairness and violating statutory safeguards.
Additionally, the court considered the nature and continuity of the work performed by the Appellant Workmen, highlighting that horticultural and maintenance duties are perennial rather than temporary or project-based. Given their longstanding engagement (spanning over a decade in some cases), the court viewed the employer’s reliance on a general recruitment ban as an inadequate defense against labor rights violations. It also invoked the principle of "equal pay for equal work" and criticized the practice of engaging workmen in roles functionally identical to regular employees while denying them corresponding wages and benefits. Although the High Court sought a middle ground by directing daily-wage re-engagement with minimum pay-scale benefits, the Supreme Court emphasized that the workers’ statutory and equitable rights cannot be indefinitely deferred under the guise of bureaucratic restrictions. The reasoning underscores the illegality of their termination, the lack of a genuine contractual arrangement, and the broader unfair labor practices that deprived the workmen of job security and fair wages.
ANALYSIS:
The Supreme Court’s decision in this case underscores the critical importance of statutory protections for workers under the U.P. Industrial Disputes Act, 1947. The court found that the Nagar Nigam’s classification of the Appellant Workmen as casual employees or contract workers was unsubstantiated, as there was no documentary evidence proving engagement through a contractor. Instead, the direct payment of wages by the Horticulture Department, the absence of any contractor-related records, and the workmen’s continuous service for several years all indicated an employer-employee relationship. By failing to comply with Section 6N, which mandates notice, compensation, and procedural fairness in retrenchment, the Nagar Nigam’s termination of these workmen was deemed unlawful. The court rejected the employer’s argument that a recruitment ban justified their status as temporary employees, emphasizing that statutory labor protections cannot be circumvented through administrative restrictions.
Furthermore, the judgment reaffirmed the principle of "equal pay for equal work" and condemned the practice of denying long-serving workers the benefits and security of permanent employment despite their engagement in essential, perennial tasks. The court criticized the employer’s attempt to exploit temporary employment arrangements to evade long-term obligations, noting that such practices contradict both labor laws and constitutional protections. While the High Court sought to strike a balance by ordering re-engagement on daily wages with minimum pay benefits, the Supreme Court held that this approach failed to address the core issue of wrongful termination and job insecurity. By allowing the workmen’s appeal and rejecting the employer’s, the court reinforced the necessity of fair labor practices, ensuring that workers performing ongoing, essential municipal duties receive the stability and rights they are legally entitled to.
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