COMPENSATION in lieu OF REINSTATEMENT

[Mr. M. GOVINDARAJAN]

In ‘Natha Singh V. Presiding officer, Industrial Tribunal-cum-Labor Court, Gurdaspur and others’ – 2014 (11) TMI 386 - PUNJAB & HARYANA HIGH COURT the workman was employed on 01.09.1994 as a keyman, controlling the flow of water.   The said work was regular and perennial nature.   The petitioner drew a salary of ₹ 2,500 per month and he was remained in employment till 31.10.2002.  The respondent Municipal Council, Pathankot engaged him on contract basis and there was no break in service.  A policy of regularization was framed by the Municipal Council by which persons having three years of service were entitled to be regularized.  But the service of the petitioner was terminated without issuing any show cause notice, conducting inquiry and without making retrenchment compensation. 

The Labor Court took into consideration of the statement of the workman and Section Officer of the Municipal Council.  The Labor Court came to the conclusion that the post of keyman was created by the Director, Local Government, Punjab and the regular appointment was not made by the competent authority.   To regulate the work, applications had been taken by the Executive Officer and persons were appointed against these posts as a time gap arrangement for a specific period.   The Labor Court held that these persons were not appointed or selected by the Selection Committee and the posts were temporarily created and the Government decided that the services of the contractual employees were not to be extended.  The Labor Court observed that the workman had never alleged any complaint to any authority and the agreements were signed by the workman.  Thus the Labor Court answered the references against the workmen and in favor of the respondents.  The Labor Court held that the petitioners were not entitled to the relief of reinstatement.

The allegation of the petitioner is that the act of the respondent amount to unfair labor practice and in violation of the terms of Section 25F of the Industrial Disputes Act.  New appointments were made through back door entries and his juniors were given posting.  The Council restricted the claim of the petitioner on the following grounds-

• The workman was covered by clause 2(oo)(bb) of the Act;
• He was a contract employee for a specific job and specific period and the wages were fixed by the Local Government, Punjab;
• No proper selection of the work man has been made and there existed no such post of permanent vacancy and no interview was held nor any selection was made;
• The workman was engaged on contractual basis on stop gap arrangement due to exigency of work;
• The Deputy Director clarified that the employees engaged on contractual basis cannot be considered for regularization;
• There was no junior retained nor any person appointed in his place.

In the replication filed by the petitioner alleged that the act of the respondents was contrary to spirit of law of industrial jurisprudence to cheat the law by camouflage or fraud and amounted to unfair labor practice and there was victimization and the shelter of Section 2(oo)(bb) could not be taken.  The job was perennial in nature and did not cease to exist and because of the non compliance of selection process due to the fault of the respondent the petitioner’s rights had been affected and the workman could continue working in future and therefore, there was violation of Section 25-F of the Industrial Disputes Act.

The High Court framed the following issues to be decided in this petition:

• Whether the petitioners were only contractual employees in view of the agreement that they entered into and the benefit of Section 25F of the Act would not be applicable to them;
• Whether the provisions of Section 2(oo)(bb) of the Act would be attracted in the facts and circumstances of the present case;
• If the provisions of Section 2(oo)(bb) are not applicable as to what would be the relief the workman would be entitled;
• Whether the workman would be entitled for reinstatement or compensation.

The High Court found that there is no denying fact that the work of Keyman is of perennial in nature and the petitioner and had worked for eight and half years. The services of the petitioner were shunted out by the Municipal Council on the pretext and on the ground that they were contractual employees and were bound by the terms of the contract and therefore the Council is protected under Section 2(oo) (bb) of the Act.

The services of the workmen were terminated in spite of the fact that the workman had completed 240 days in the preceding year.   The provisions of Section 2(oo)(bb) provides an exception to the retrenchment of the workman on account of non renewal of the contract between the employee and the employer or on the expiry of such contract being terminated under stipulation in that behalf.

The High Court observed that it is not the case of the Municipal Council that there was any break in service and it was only that the workmen were working on contractual basis and even the request for regularization had been made for all contractual employees by the Council which was rejected by the State Government.   Thus it would be clear that even proposal for regularizing the services of the contractual employees was the subject matter of consideration and the workman having completed 240 days were, thus, entitled for the benefit of the protective umbrella of Section 25F of the mandatory provisions as laid down under it had to be followed before dispensing with the services of the workmen.   But the same had not been done.   The Labor Court was in error in not granting the said benefit by holding that the provisions of Section 2(oo)(bb) would apply.

However, two factors stand in the way of the workman to get a right to reinstatement.   One dominant factor which weighs with this Court is that admittedly, there is no post under the rules and therefore, relief of reinstatement in such circumstances cannot be   granted.  The workman was appointed at that time to overcome the exigency of the situation and the Municipal Council made an effort to get their services regularized but the Government declined the said request in the absence of any post and in such circumstances it has been held that the reinstatement cannot be directed.

Then the High Court is to decide the compensation amount in lieu of reinstatement.  The Court awarded ₹ 20,000/- as compensation per completed year along with the cost of the case ₹ 20,000/- to the petitioners.