Supreme Court Allows Regularization: Workers Engaged in Perennial Work Cannot Be Classified as Contractual Employees

Supreme Court Allows Regularization: Workers Engaged in Perennial Work Cannot Be Classified as Contractual Employees

The Supreme Court has ruled that individuals employed for tasks of a perennial or permanent nature should not be considered contract workers under the Contract Labour (Regulation & Abolition) Act, 1970. This observation emphasizes that such workers should not be deprived of the opportunity for job regularization.

The Bench, consisting of Justices P.S. Narasimha and Sandeep Mehta, has observed that tasks of a permanent or perennial nature cannot be assigned to contract workers and must be carried out by regular or permanent employees.

Acknowledging the consistent and enduring nature of spillage removal work in the railway siding undertaken by non-regularized workers, Justice P.S. Narasimha's judgment upheld the rulings of the Industrial Tribunal and High Court. It affirmed the decision to regularize the appointment of these workers, who had been treated as contractual employees and deprived of regularization benefits despite their engagement in permanent or perennial work.

The issue pertains to the non-regularization of 13 out of 32 workers employed by Mahanadi Coalfields, a subsidiary of Coal India Ltd. These workers were designated as contract workers, despite performing work of a perennial nature.

Nineteen workers out of the total 32 employed by the company were granted regularization, while 13 were denied on the basis that their work was considered casual and not continuous or perennial. Consequently, they were deemed ineligible for regularization under the Contract Labour (Regulation & Abolition) Act, 1970.

Following a representation made on behalf of the Workers Union to the appellant urging the consideration of regularization for the 13 workers, a settlement was reached. However, the settlement only addressed the regularization of 19 workers, while denying regularization to the remaining 13 workers.

Following intervention by the Central Government, the dispute was referred to the Central Industrial Disputes Tribunal. Upon deliberation, the tribunal determined that the duties performed by the 13 workers were identical to those of the 19 workers. Consequently, they were deemed entitled to back wages and job regularization, akin to the treatment afforded to the other 19 workers. The tribunal emphasized that the tasks undertaken by the 13 workers, involving spillage removal in the railway siding beneath the bunker and chute operation within the bunker, were of a regular and perennial nature.

The High Court upheld the Tribunal's decision, dismissing the plea against it. Subsequently, Mahanadi Coalfields appealed before the Supreme Court.

Before the Supreme Court, the appellant argued that the tribunal lacked the authority to confer permanent status upon the workers, citing the binding nature of the settlement reached between the appellant and the respondent/workers union.

Rejecting this contention, the court upheld the decision of the Central Industrial Tribunal to grant permanent status to the 13 workers.

The court observed that the remaining workers were in a similar position to the regularized employees, and their exclusion from the settlement was unjustified. This conclusion was drawn by the Tribunal after analyzing the nature of work performed by both the initial group of 19 workers and the additional 13 workers.

The court noted that the appellant had not provided any evidence of differentiation between the two groups of workers. Consequently, the Tribunal's decision to determine that both sets of workers held the same status as the regularized employees was deemed justified by the court.

In regards to back wages, the Supreme Court affirmed that the workers were entitled to such payments, aligning with the observation made by the Industrial Tribunal. However, the Court modified the tribunal's order by specifying that the calculation of back wages would commence from the date of the tribunal's decision rather than from the date of employment.

Based on this reasoning, the appeal was dismissed.