Contract Employees Regularization Supreme Court Judgement

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Contract Employees Regularization Supreme Court Judgment: Hon’ble Supreme Court has given a historical decision in favor of contract employees on 12 March 2024. The employees employed for work of perennial/parament nature can’t be considered as a contract employee under the Contract Labour Act 1970 thereby depriving them of the benefit of regularization. Let us know in detail?

Contract Employees Regularization Supreme Court Judgement

The Hon’ble Justice P.S. Narasimha and Justice Sandeep Mehta division bench said in its order that work of baramasi or permanent nature cannot be taken from contract employees, in such a case they should be made permanent. Let us know in which case this order has been given?

What is the matter?

The Above case pertains to the refusal to regularize 13 out of 32 employed workers of Mahanadi Coalfields/appellant, a subsidiary of Coal India Limited. Those who were considered contract laborers by the management despite working year-round. Out of total 32 workers employed by the said company, only 19 were made permanent and 13 were refused regularization on the ground that the work was casual and not regular and perennial, due to which they can’t be regularized under the Contract Labour (Regulation and Abolition) Act, 1970.

The Labour’s union reached an agreement on the appeal for permanency of 13 workers, while the management considered regularization of only 19 workers and refused to regularize 13 workers.

The above said matter was sent by the union to the concern authority Regional Labor Commissioner (Central) and then refer to the CGIT (Labor Court) after with. The Central Tribunal (CGIT) held that the nature of work of 13 workers was similar to that of 19 workers and hence, they were entitled for the outstanding wages and job regularization provided to the other 19 workers. The concern Tribunal in its order considered the operation of 13 workers (in the bunker) to remove dirt in the railway siding and slopes below the bunker as perennial/permanent in nature.

Supreme Court Judgement on Contractual Employees

The management was challenged the decision of the Central Tribunal in the High Court.  The Hon’ble high court rejecting his appeal, upheld the Tribunal’s decision. After which Management Mahanadi Coalfields approached the Supreme Court.

The Appellant Management argued before the Supreme Court that the Tribunal had no power to grant permanent status to the workers as all parties were bound by the agreement between the Appellant and the Respondent and the labor union.

Hon’ble Justice PS Narasimha rejected such decision of the manager and upheld the Central Tribunal’s order granting permanency to 13 workers. In which instructions were issued to provide back wages from the day of effect of the decision.

The Hon’ble Court held that the remaining employees stood at the same level as the regular employees and were not made a part of the agreement by mistake. This was established by the Tribunal by examining the nature of work of the first group of 19 workers and the other 13 workers.

Contract Employees Regularization 2024

The Hon’ble Supreme Court further observed in its order that the Appellant failed to establish distinction between the two groups of workers. It is therefore appropriate for Central to respond to the reference and conclude that they hold the same status as regular employees.

The Supreme Court held that workers would be entitled to outstanding wages, as did the Industrial Tribunal (CGIT). However, the order of the Tribunal was modified to the extent that the salary arrears would be calculated from the date of the Tribunal’s order and not from the date of employment. On the above grounds the appeal was dismissed.

SC Order Copy

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