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Judgment
Shampa Dutt (Paul), J.:
The writ application has been preferred assailing an Award dated 09.06.1999 (hereinafter referred to as the “impugned award”) passed by the Central Government Industrial Tribunal-cum-Labour Court (hereinafter referred to as the “CGIT”) in Reference Case No. 22 of 1989 as also the Reference made by the respondent no. 53 vide order no. L-22012 (236)/88-D.IV.B dated 07.06.1989.
The petitioner’s case is that the petitioner awarded several work contracts to its contractors for undertaking and/or accomplishing various works including construction of masonry dams, walls and stoppings for checking and preventing gas, which are essential for coal mining activities, at the Mithani Colliery of the petitioner. The works under the contracts were neither perennial nor permanent in nature. The contractors used to engage their own labours for executing the work under the contracts and the petitioner never had any control over such labours. In no case the number of labours engaged by the contractors under each contract was more than 20.
In or about March, 1986, the respondent no. 54 raised a purported industrial dispute demanding regularization of the respondent nos. 1 to 53 in the petitioner company. Conciliation having been failed, the conciliatory machinery, the Government of India, being the respondent no. 53 herein made a purported reference dated 7th June, 1989 (hereinafter referred to as the “impugned reference”) vide order no. L-22012 (236)/88-D-IV-B referring the matter to the CGIT, Asansol. Such reference was numbered as Reference Case No. 22 of 1989.
CGIT disposed of the said Reference Case by the impugned Award dated 09.06.1999 directing the petitioner to regularize the 51 workmen, being the respondent nos. 1 to 51 herein, within two months from the date of enforceability of the award.
It is stated that the respondent authorities failed to take into consideration that similar dispute as to regularization of the same persons were raised by the INTUC Union in or about the year 1979-80 in respect of which conciliation proceedings were held and the conciliation proceedings having failed, the Government of India decided the same not to be a fit case for Reference as would be evident from the letter dated 15-01-1981.
After the decision of the Government of India not to refer the purported dispute as raised for the self-same respondents in 1979-80, no new circumstances occurred neither no new documents could be furnished on behalf of the respondent Nos. 1 to 51 nor the status of the respondent Nos. 1 to 51 was altered and as such there could not be any reason or situation for making the impugned reference as was already denied in 1981.
It is thus evident that the impugned reference is bad as no cause for reference existed as it is an admitted position that the status of the respondent No. 1 to 51 remained unaltered in 1979-80 or when the impugned reference was made from that of the status as was on 15-01-1981. Therefore, in view of the reference itself being bad, the impugned award is also bad and cannot be sustained.
Four persons adduced oral evidence for the workmen - They are (1) Ram Karan Singh (2) Dinesh Mondal (3) Biresh Singh and (4) Noor Ali Khan. None of such witness could produce any salary or wage slip of any of the respondent Nos. 1 to 51 to prove that they were working directly under the petitioner and not under any contractor - Had they been working directly under the petitioner then they would have been paid directly by the petitioner and the respondent Nos. 1 to 51 would have been able to produce such wage slip but admittedly the same was not done thereby proving that the respondent Nos. 1 to 51 and the respondent No. 54 had failed to prove that the respondent Nos. 1 to 51 were working directly under the petitioner and not under any contractor.
The observations made by the CGIT in the impugned award itself is contradictory. On the one hand, the CGIT has observed that the respondent No. 1 was not contract labour as it appears from paragraph 9 of the Award and paragraph 14 of the award while on the other hand, regularization of the respondent Nos. 1 to 51 has been directed on the ground that the respondent Nos. 1 to 51 were contract labours and the Notification No. S.O. 2063 dated 21-06-1988 of the Ministry of of Labour prohibiting raising of coal and stone cutting underground under section 10 (1) of the Contract Labour (Regulation & Abolition) Act, 1970 is applicable to them Approbation and Reprobation cannot be made at the same time as has been done by the CGIT.
CGIT has also not laid down any source as to its conclusion that the contractors had been allowed to operate without license as appears from paragraph 12 of the award. The petitioner all along had taken the plea that none of the contractors had ever engaged 20 or more persons as is evident from paragraph 14 of the written statement of the petitioner and in the examination-in-chief of the MW1 and such stand has not been controverted by any of the respondents and thus the Contract Labour (Regulation & Abolition) Act, 1970 does not apply as a whole in the present case in view of Section 1 (4) and Section 2 (b) of the Contract Labour (Regulation & Abolition) Act, 1970 and as such the finding or observation of the CGIT that the contractors had been allowed to operate without license has no basis and footing at all..
Finally, the petitioner has prayed that the impugned Award dated 09.06.1999 made by the CGIT, Asansol, in Reference Case NO. 22 of 1989 as also the Reference made by the respondent no. 53 vide order no. L-22012(236)/88-D.IV.B dated 07.06.1989 are bad in law and are liable to be set aside and/or quashed.
Vide the impugned order the learned Central Government Industrial Tribunal decided the following issues:-
"Whether the action of the Management of Mithani Colliery under the Agent, Bejdih-Methani-Patmohna Collieries of M/s. E.C.Ltd. P.O. Sitarampur, Dist. Burdwan in not taking the workers as mention in the list attached in their direct roll from the date they are working as such, was justified ? If not, to what relief the workmen are entitled and from which date ?"
Finally, the Tribunal considering the evidence on record and also the materials on record and the evidence adduced held as follows:-
“12.The alleged contract labour system having been adopted in such sphere of prohibited work, the so called contractor would be non existant in the eye of law and the workmen engaged in the system would stand in the footing of workers directly engaged by the principal employer. This legal proposition flows from the principle laid down by th Hon'ble Apex Court in the decision in A.I.R. 1997 SC 645 that on abolition of contract labour system, the contractor stands removed from the regulation under the Act and direct relationship of employer and employee is created between the principal employer and workmen. This legal system is further strengthened because of the reason that the alleged contractors had been allowed to operate without licence.
13.Thus if the plea of alleged contract labour system advanced by the management, is accepted, relationship of employer and employee between the management and the concerned workmen, emerges from the existing facts. Management's witness No. 1 (MW-1) admits in para-5 of his deposition that even now also the concerned workmen have been working in the colliery under contractors. That means even now also the relationship of employer and employee between the management and concerned workmen exists. This being the position the management ought to regularise them as its direct employees in the under ground sector.
14.The other side of the matter is that, as found earlier, the so called contractors are actually workmen and are not contractors. Therefore the management's plea that there is no relationship of employer and employee with the concerned workmen is not acceptable. Admittedly the concerned workmen have been deployed by the management since 1980 and as per the admission by MW-1, even now also they have been working in the colliery. Facts advanced by the management itself reveal that the works performed by them constitute important function in mining operation, as explained earlier. Their continued casualisation in the guise of contract labour system over so many years amounts to unfair labour practice by the management vide Item No. 10 in part-I of the fifth schedule of the I.D.Act. Natural justice requires that an end to it should be brought by way of declaration that they are directly employed workmen of the management.
15. Concluding observation and direction:-
The action of the management of Mithani Colliery of M/s. E.C.L., P.O. Sitarampur, Dist. Burdwan in not regularising the concerned workmen (as per list) in their direct roll was not justified. The concerned workmen be regularised as direct employees of the management, preferably in under ground sector, within two months from the date of enforceability of the Award. The reference is answered accordingly.”
The respondent no. 54 the Union of India in the present case has contested the writ application on filing written notes and argued that the petitioner company challenged the maintainability of the reference before the learned Tribunal which was rejected by the learned Tribunal by an order dated 15.01.1991. The said order dated 15.01.1991 was challenged by the petitioner company before this Court by filing C.O. No. 9193 (w) of 1991, which was dismissed by an order dated 13.12.1995 and as such the writ petitioner company cannot challenge the maintainability of the reference again.
It is further stated that the workers were regular employees/workmen of the company and had been performing various duties underground since 1980. The said fact would be evident from the fact that the names of the employees were registered in "B" form, attendance register in "C" form, provident fund account numbers were allotted in their respective names. The said employees were duly given vocational training like employees of the colliery. The said facts were duly admitted by the company in their written statement itself. The duties performed by the employees were perennial in nature.
The witness of the management also admitted the fact that the employees / workers are still working in the colliery at least till the date of evidence being adduced i.e., 07.01.1997. Admittedly bonus register contains entries in respect of all the workers. The witness of the management further admitted that the workers used to work underground.
The nature of duties performed by the workers as admitted by another witness i.e., M.W.2 proves beyond doubt that the duties were necessary and perennial in nature.
The management had deliberately tried to colour the reference to be a dispute under Contract Labour (Regulation and Abolition) Act, but the learned Tribunal upon consideration of all the aspects of the matter, passed the award dated 09.06.1999.
Upon consideration and discussion on the nature of the duty performed by the workers, as admitted by the management witnesses, the learned Tribunal arrived at the conclusion that in underground mining operation, construction of isolation and ventilation stoppings constitute important operations.
The learned Tribunal also held that vide notification no.S.O.2063 dated 21.06.1988 of the Ministry of Labour, contract labour system in respect of raising of coal and miscellaneous stone cutting underground have been prohibited u/s. 10(1) of the Contract Labour (Regulation and Abolition) Act. It was held that the alleged contract labour system having been adopted in such sphere of prohibited work, as admitted by the management witness, the so-called contractors would be non-existent in the eye of law and the workmen engaged by the principal employer. Reliance was placed on AIR 1997 SC 645 = (1997) 9 SCC 377 (para 66) – Air India Statutory Corporation & Ors. vs. United Labour Union & Ors., on the point that on abolition of contract labour system, the contractor stands removed from the regulation under the Act and direct relationship of employer and employee is created between the principal employer and workmen. This legal system is further strengthened because of the reason that the alleged contractors had been allowed to operate without licence. It was held that if the plea of alleged contract labour system advanced by the management, is accepted, relationship of employer and employee between the management and the concerned workmen, emerges from the existing facts. It was further held that, having already arrived at the conclusion that the alleged 4 contractors were actually workmen, the management's plea that there is no relationship of employer and employee is not acceptable. Ultimately the learned Tribunal held that admittedly the workmen were employed since 1980 and had been working in the petitioner colliery and that the works performed by them constitute important function in mining operation. Accordingly, continued casualization in the guise of contract labour system over so many years amount to unfair labour practice and accordingly declared the workers to be directly employed workmen of the management and directed for their regularization as direct employees of the management, preferably, underground sector.
The respondent has thus prayed for dismissal of the writ application.
The respondent no. 54 has relied upon the judgment in AIR India Statutory Corporation and Ors. vs United Labour Union and Ors., (1997) 9 SCC 377, wherein the Supreme Court held:-
“66.It is true that learned counsel for the appellant had given alternative proposal, but after going through its contents, we are of the view that the proposal would defeat, more often than not, the purpose of the Act and keep the workmen at the whim of the establishment. The request of the learned Solicitor General that the management may be left with that discretion so as to absorb the workman in the best manner favourable to the workmen cannot be accepted. In this behalf, it is necessary to recapitulate that on abolition of the contract labour system, by necessary implication, the principal employer is under statutory obligation to absorb the contract labour. The linkage between the contractor and the employee stood snapped and direct relationship stood restored between the principal employer and the contract labour as its employees. Considered from this perspective, all the workmen in the respective services working on contract labour are required to be absorbed in the establishment of the appellant. Though there exists no specific scale of pay to be paid as regular employees, it is for the establishment to take such steps as are necessary to prescribe scale of pay like class „D‟ employees. There is no impediment in the way of the appellants to absorb them in the last grade, namely, Grade IV employees on regular basis. It is seen that the criteria to abolish the contract labour system is the duration of the work, the number of employees working on the job etc. That would be the indicia to absorb the employees on regular basis in the respective services in the establishments. Therefore, the date of engagement will be the criteria to determine their inter se seniority. In case, there would be any need for retrenchment of any excess staff, necessarily, the principle of “last come, first go” should be applied subject to his reappointment as and when the vacancy arises. Therefore, there is no impediment in the way of the appellants to adopt the above procedure. The award proceedings as suggested in Gujarat Electricity Board case [(1995) 5 SCC 27 : 1995 SCC (L&S) 1166] are beset with several incongruities and obstacles in the way of the contract labour for immediate absorption. Since, the contract labour gets into the service of the principal employer, the Union of the existing employees may not espouse their cause for reference under Section 10 of the ID Act. The workmen, on abolition of contract labour system have no right to seek reference under Section 10 of the ID Act. Moreover, the workmen immediately are kept out of job to endlessly keep waiting for award and thereafter resulting in further litigation and delay in enforcement. The management would always keep them at bay for absorption. It would be difficult for them to work out their right. Moreover, it is a tardy and time-consuming process and years would roll by. Without wages, they cannot keep fighting the litigation endlessly. The right and remedy would be a teasing illusion and would be rendered otiose and practically compel the workmen to remain at the mercy of the principal employer. Considered from this pragmatic perspective, with due respect to the learned Judges, the remedy carved out in Gujarat Electricity Board case [(1995) 5 SCC 27 : 1995 SCC (L&S) 1166] would be unsatisfactory. The shortcomings were not brought to the attention of this Court. So, that part of the direction in Gujarat Electricity Board case [(1995) 5 SCC 27 : 1995 SCC (L&S) 1166] is not, with due respect to the Bench, correct in law. The Dena Nath case [(1992) 1 SCC 695 : 1992 SCC (L&S) 349] , as held earlier, has not correctly laid down the law. Therefore, it stands overruled. Moreover, the Bombay High Court has correctly held that the High Court under Article 226 of the Constitution would direct the principal employer to absorb the contract labour, after its abolition, even though some of the contractors have violated Section 12 of the Act and the appellants have violated Section 7 of the Act. In the judgments under appeal, the High Court has directed to absorb the services of the workmen from the date of the judgment. The respondent-Union did not challenge it. We are, therefore, constrained not to grant the benefit to the employees of the respondent-Union from the date of the abolition of the contract labour system. We, therefore, uphold the direction issued by the High Court to regularise their services with effect from the respective dates of the judgments of the High Court with all consequential benefits. Before concluding, we express our deep appreciation for the valuable assistance given by all the learned counsel in the appeals.”
In Jaggo vs Union of India & Ors., (2024 INSC 1034), decided on 20th December 2024, the Supreme Court held:-
“25.It is a disconcerting reality that temporary employees, particularly in government institutions, often face multifaceted forms of exploitation. While the foundational purpose of temporary contracts may have been to address short-term or seasonal needs, they have increasingly become a mechanism to evade longterm obligations owed to employees. These practices manifest in several ways:
-Misuse of "Temporary" Labels: Employees engaged for work that is essential, recurring, and integral to the functioning of an institution are often labeled as "temporary" or "contractual," even when their roles mirror those of regular employees. Such misclassification deprives workers of the dignity, security, and benefits that regular employees are entitled to, despite performing identical tasks.
-Arbitrary Termination: Temporary employees are frequently dismissed without cause or notice, as seen in the present case. This practice undermines the principles of natural justice and subjects workers to a state of constant insecurity, regardless of the quality or duration of their service.
-Lack of Career Progression: Temporary employees often find themselves excluded from opportunities for skill development, promotions, or incremental pay raises. They remain stagnant in their roles, creating a systemic disparity between them and their regular counterparts, despite their contributions being equally significant.
-Using Outsourcing as a Shield: Institutions increasingly resort to outsourcing roles performed by temporary employees, effectively replacing one set of exploited workers with another. This practice not only perpetuates exploitation but also demonstrates a deliberate effort to bypass the obligation to offer regular employment.
-Denial of Basic Rights and Benefits: Temporary employees are often denied fundamental benefits such as pension, provident fund, health insurance, and paid leave, even when their tenure spans decades. This lack of social security subjects them and their families to undue hardship, especially in cases of illness, retirement, or unforeseen circumstances.
26.While the judgment in Uma Devi (supra) sought to curtail the practice of backdoor entries and ensure appointments adhered to constitutional principles, it is regrettable that its principles are often misinterpreted or misapplied to deny legitimate claims of long-serving employees. This judgment aimed to distinguish between "illegal" and "irregular" appointments. It categorically held that employees in irregular appointments, who were engaged in duly sanctioned posts and had served continuously for more than ten years, should be considered for regularization as a one-time measure.
However, the laudable intent of the judgment is being subverted when institutions rely on its dicta to indiscriminately reject the claims of employees, even in cases where their appointments are not illegal, but merely lack adherence to procedural formalities. Government departments often cite the judgment in Uma Devi (supra) to argue that no vested right to regularization exists for temporary employees, overlooking the judgment's explicit acknowledgment of cases where regularization is appropriate. This selective application distorts the judgment's spirit and purpose, effectively weaponizing it against employees who have rendered indispensable services over decades.
27.In light of these considerations, in our opinion, it is imperative for government departments to lead by example in providing fair and stable employment. Engaging workers on a temporary basis for extended periods, especially when their roles are integral to the organization's functioning, not only contravenes international labour standards but also exposes the organization to legal challenges and undermines employee morale.
By ensuring fair employment practices, government institutions can reduce the burden of unnecessary litigation, promote job security, and uphold the principles of justice and fairness that they are meant to embody. This approach aligns with international standards and sets a positive precedent for the private sector to follow, thereby contributing to the overall betterment of labour practices in the country.”
The Supreme Court's decision in Jaggo v. Union of India (2024 INSC 1034) sets a significant precedent for the regularization of long-serving temporary employees in government institutions. The judgment clarifies that:-
Lengthy and uninterrupted service in essential functions can warrant regularization, even if initial appointments were irregular. The misuse of temporary or part-time labels to deny employees their rightful claims is unacceptable and contrary to principles of fairness and equity. The decision discourages the exploitation of workers through temporary contracts and arbitrary terminations, encouraging government institutions to adhere to fair employment practices. The judgment is likely to influence future cases involving similar disputes, guiding courts to look beyond the initial terms of engagement and consider the actual nature and duration of service. It reinforces the responsibility of government departments to lead by example in providing stable and fair employment, thereby setting a higher standard for the private sector as well.
Thus in the guidelines of the Supreme Court, to consider a prayer for regularization of a casual worker the criterias are:-
Length of service,
Whether working in the vacancy of a permanent post.
Whether the worker carried out the duties of a regular employee for a substantial period of his service.
Etc.
Thus considering the said facts and the detailed observation and findings of the tribunal in the award impugned, the same does not call for interference, the same being in accordance with law.
Writ application stands dismissed.
Applications, if any, connected thereto stand disposed of consequently.
Interim order, if any, stands vacated.
Photostat certified copy of this Judgment, if applied for, be given to the parties on priority basis upon compliance of all formalities.