2007 (12) TMI 411 - SC - Indian Laws

Termination of service - Held that - 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. 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. 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. 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.

Summary

Issues:
1. Regularization of services of a daily wager.
2. Validity of termination based on financial irregularities.
3. Compliance with statutory requirements for termination.
4. Entitlement to compensation and notice pay.
5. Applicability of Section 6N of the U.P. Industrial Disputes Act.
6. Right of daily wagers to permanent absorption.
7. Legal principles governing regularization of services.

Analysis:

1. The appellant, a daily wager, contended that his services were to be regularized after three months, which was accepted by the Presiding Officer, Labour Court. However, the High Court set aside the award, stating that daily wagers have no right to a post and can be dispensed with without notice, especially in cases of misconduct. The High Court emphasized that daily wagers are not entitled to hearings in cases of service termination due to misconduct.

2. The High Court considered the appellant's alleged financial irregularities as grounds for termination. However, it was noted that a departmental proceeding should have been initiated against the appellant if the termination was based on misconduct. The termination, occurring after the appellant had completed 240 days of work, required compliance with Section 6N of the U.P. Industrial Disputes Act.

3. The judgment highlighted the importance of compliance with statutory rules in employment matters governed by a statute. It was emphasized that appointments made in violation of recruitment rules and constitutional equality provisions would be deemed null and void. The court clarified that completion of a certain number of workdays does not automatically entitle a daily wager to permanent absorption.

4. In light of the legal principles discussed, the court found the relief granted by the Labour Court unsustainable and modified the High Court judgment. The appellant was awarded monetary compensation of Rs.50,000 as damages within eight weeks, failing which interest would accrue at 9% per annum. The judgment underscored the preference for monetary compensation over reinstatement with full back wages in such cases.

5. The judgment concluded by allowing the appeal in part, directing the payment of damages to the appellant and assessing counsel's fee at Rs. 10,000. The decision aimed to balance the interests of justice and the legal principles governing the regularization and termination of services in the context of daily wage employment.