Employer can’t treat a worker as contract labour when employed to perform a perennial/ permanent nature of work. Supreme Court
The judgment by Justice P.S. Narasimha upheld the decisions of the Industrial Tribunal and High Court to regularize the appointment of non-regularized workers who were treated as contractual employees and denied benefits of regularization while performing permanent/perennial nature of work, noting that the work of removing spillages in the railway siding is regular and perennial.
In the case of “MAHANADI COALFIELDS LTD. v/s BRAJRAJNAGAR COAL MINES WORKERS’ UNION” (CIVIL APPEAL NO(S). 4092-4093/2024), the Supreme Court held that workers engaged in a permanent or perpetual nature could not be classified as contract (worker) workers under the terms of the Contract Labour (Regulation & Abolition) Act, 1970, in order to prevent them from receiving the benefits of regularization.
The panel, which was made up of Justices P.S. Narasimha and Sandeep Mehta, held that regular/permanent workers were required to conduct work that was permanent or perennial in nature because it could not be completed by a contract worker.
The judgment by Justice P.S. Narasimha upheld the decisions of the Industrial Tribunal and High Court to regularize the appointment of non-regularized workers who were treated as contractual employees and denied benefits of regularization while performing permanent/perennial nature of work, noting that the work of removing spillages in the railway siding is regular and perennial.
The issue concerns the non-regularization of thirteen out of thirty-two employees of Mahanadi Coalfields/Appellant, a Coal India Ltd. subsidiary, who were considered contract workers despite completing work that was perpetual in nature.
Out of the thirty-two employees of the company, only nineteen were regularized. The remaining thirteen were refused regularization on the grounds that their work was irregular and not permanent, which precluded them from regularization under the Contract Labor (Regulation & Abolition) Act, 1970.
A settlement was reached after the Worker’s Union requested that the appellant take into account the regularization of 13 workers; nevertheless, the settlement only took 19 people into account and rejected the requests of 13 workers.
The Central Industrial Disputes Tribunal was tasked with handling the case following the Central Government’s intervention. After giving it some thought, the tribunal found that the 13 workers’ tasks were similar to those of the other 19 workers, and as a result, they should be paid back for their previous labor and given regular positions like the other 19 workers. The Tribunal determined that the 13 workers’ regular and ongoing job consisted of clearing spillages in the railway siding beneath the bunker and operating chutes inside the bunker.
The Tribunal’s decision was supported by the High Court, which dismissed the appeal against it. Following that, Mahanadi Coalfields appealed to the Supreme Court.
The appellant argued before the Supreme Court that since the settlement made between the appellant and the Respondent/Workers Union is binding on all parties, the tribunal lacked the authority to grant the workers permanent status.
Judge PS Narasimha’s judgment, which rejected this argument, supported the Central Industrial Tribunal’s decision to grant the 13 workers permanent status and ordered them to pay their back salaries as per the tribunal’s ruling.
It has been established that the remaining workers were incorrectly excluded from the settlement and are now on an equal footing with the regularized workers. The nature of the work performed by the first group of 19 workers and the other 13 workers was examined by the Tribunal to determine this, the court noted.
The appellant has not been able to show that the two groups of workers are different from one another. The court said, “Therefore, the Tribunal was correct in responding to the reference and drawing the conclusion that they have the same status as the regularized employees.
The Supreme Court held that the workers would be entitled to back wages as determined by the Industrial Tribunal. However, it made modifications to the tribunal’s order, stating that the back wages would now be calculated based on the tribunal’s decision date rather than the date of employment.
The appeal was denied on the basis of the aforementioned premise.
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