* IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment reserved on: 15.03.2013 % Judgment delivered on: 21.05.2013 + W.P.(C) 3453/2007 THE OFFICER INCHARGE DEFENCE STANDARDIZATION CELL Petitioner Through: Mr. [ENTITY], Advocate versus MUKESH KUMAR Respondent Through: Mr. [ENTITY], Advocate CORAM: HON'BLE MR. JUSTICE [ENTITY] JUDGMENT
[ENTITY], J.
1. The petitioner has preferred this writ petition under [SECTION] of the [ACT] of India to assail the award dated 18.12.2006 passed by Central Government Industrial Tribunal cum Labour Court -II (CGIT hereinafter) in [CASE NUMBER] wherein the reference mentioned herein below was answered in favor of the respondent workman by directing reinstatement of the respondent with [SECTION]% back wages. The reference made by the Central Government reads as follows:
"Whether the action of the management of Officer-In-Charge, Defence Standardization Cell, Raksha Manak Bhawan, Defence Camping Ground, New Delhi in terminating the services of Shri [ENTITY], Ex. [ENTITY] w.e.f. 12.05.2003 is just and legal? If not, to what relief the workman is entitled to and from which date."
2. It was the case of the respondent workman before the CGIT that he was engaged as a sweeper on 09.08.2000 with the petitioner management and that his appointment was through the Employment Exchange, Kibri Place Cantt., New Delhi. It was the respondent's case that the petitioner management was not providing him the benefits to which he was entitled under the law, and his constant demand for the same annoyed the petitioner who terminated his services on 19.05.2003 in violation of the provisions of [SECTION] of the [ACT] for short). It was his claim that his juniors were continued in employment by the petitioner, and fresh hands were employed subsequent to his termination, which was done without conducting an inquiry or issuing a charge sheet. He raised the aforesaid industrial dispute as a consequence of his termination, submitting that the petitioner was guilty of violating [SECTION]T and [SECTION] of the Act. He alleged that the petitioner had adopted unfair labour practice.
3. The petitioner management contested the aforesaid claim before the CGIT by contending that the respondent had been employed, along with three others sponsored by the employment exchange, as a casual worker pursuant to an agreement between him and the petitioner management. It was their case that the respondent was given periodical appointments between August 2000- May 2003. Under the terms and conditions he could be terminated at anytime if his services were not upto the mark. The management contended that the services of the respondent were unsatisfactory and his services were terminated on one week notice issued to him verbally. It was also the petitioner's case that the holdings of an inquiry or issuance of a charge sheet was not a prerequisite, as the respondent was a casual workman and not a permanent worker.
4. It may be noticed at this stage itself that the contract between the parties titled as an "Agreement" - which was renewed every month, labelled the respondent as a "Contractor"- as if, it was for the respondent to arrange to get the conservancy work done and it was not a case of his personal employment. For example, the agreement for August, 2002, inter-alia, recited:
"This AGREEMENT made at New Delhi for the month of August, 2002 on this day between Shri [ENTITY] here in after referred to as The first Party (Which expression shall unless repugnant to the context or meaning thereof be deemed to include its partners successor and assigness) and the OIC Defence Standardisation Cell, Defence Camping Ground, Badarpur, New Delhi-44, herein after referred to as the Second Party (Which expression shall unless repugnant to the context or meaning thereof be deemed to include its successors or assignees) WHEREAS THE FIRST PARTY is doing the business of providing conservancy Service through its own personnel, and where as Services as desired by the second party in their premises at Raksha Manak Bhawan, Defence Camping Ground, Badarpur, New Delhi-44.
1. That the First Party shall provide Conservancy Services for the cleaning of the office premises reception office of the Second Party namely from the Adm. Block to RU, FIS, TSG, Oi/c Office, TIC and complete area of the cell.
2. That the First Party shall provide the requisite number of personnel for clean slip and also be responsible for payment of their wages and other dues, discipline and work.
3. That for the services rendered by the First Party, the Second Party shall pay a consolidated sum of Rs. 2348/- (Rupees Two Thousand Three Hundred Forty Eight only) per month as conservancy charges. The first party shall be liable for payment of salaries, GPF, Gratuity, Bonus and all other sums etc. payable to workers under various central/local laws including [ACT]. The Second Party will not be liable for any claim of the employees of the first party and if any payment is to be made by the second party under the orders of any competent authority of law, the first Party will fully reimburse the same to the second party, failing which the second party shall deduct the amount from their pending bills "
5. The "agreement" for the other months contained identical terms. The averment and evidence of the petitioner, however, was that the respondent was employed on casual basis. The respondent-it is obvious, was appointed to render service personally. He was no contractor. There would have been no question of a "contractor" being sponsored by the employment exchange. The "Agreement", therefore, on the face of it appears to be at variance with the real nature of engagement of the respondent.
6. On the basis of the record, the CGIT returned the finding that the respondent had completed 240 days service preceding his termination, as he had worked from August 2000 to May 2003 - which fact was not disputed by the petitioner and, therefore, the respondent workman was entitled to retrenchment compensation as per [SECTION] of the Act at the time of his retrenchment. The CGIT also observed that in view of [SECTION] of the Act, it was an unfair labour practice on part of the petitioner to give repeated casual and temporary appointments to the workman who had been reappointed again and again as a casual worker for more than 3 years. [SECTION] and [SECTION] to the Act read as follows -
"[SECTION] - unfair labor practice" means any of the practices specified in the Fifth Schedule"
"Vth Schedule (10) To employ workman as Badlis, Casuals or temporaries and to continue them as such for years with the object of depriving them of status and privilege of a permanent workman"
7. The CGIT held that the intention of the legislature in enacting [SECTION], [SECTION], [SECTION] and [SECTION] was to avoid harassment to workers who are engaged for years and then terminated suddenly. [SECTION] of the Act lays down that "No employer or workman or a trade union, whether registered under the [ACT], or not, shall commit any unfair labor practice." [SECTION] of the Act states "Any person who commits any unfair labor practice shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both."
8. The CGIT also observed that the contract of appointment was in violation of [SECTION] of the [ACT] as the management had taken advantage of its bargaining capacity vis-a-vis the respondent workman and had constrained the workman to sign the contract. The relief of reinstatement with [SECTION]% back wages was, accordingly, granted to the workman.
9. The first submission of the petitioner is that the impugned award granting reinstatement is in teeth of the [ACT] Bench Judgment of the Supreme Court in [PRECEDENT] . He submits that reinstatement into service could not have been granted to the respondent-who had been engaged on casual basis dehors the rules and a transparent procedure for recruitment. He submits that the petitioner is justified in making adhoc appointments as recognized in [PRECEDENT] (supra). Reliance is placed upon Para 11 of the afore cited decision which reads as follows -
"11. In spite of this scheme, there may be occasions when the sovereign State or its instrumentalities will have to employ persons, in posts which are temporary, on daily wages, as additional hands or taking them in without following the required procedure, to discharge the duties in respect of the posts that are sanctioned and that are required to be filled in terms of the relevant procedure established by the [ACT] or for work in temporary posts or projects that are not needed permanently. This right of the Union or of the State Government cannot but be recognized and there is nothing in the [ACT] which prohibits such engaging of persons temporarily or on daily wages, to meet the needs of the situation. But the fact that such engagements are resorted to, cannot be used to defeat the very scheme of public employment. Nor can a court say that the Union or the State Governments do not have the right to engage persons in various capacities for a duration or until the work in a particular project is completed. Once this right of the Government is recognized and the mandate of the constitutional requirement for public employment is respected, there cannot be much difficulty in coming to the conclusion that it is ordinarily not proper for courts whether acting under [SECTION] of the [ACT] or under [SECTION] of the [ACT], to direct absorption in permanent employment of those who have been engaged without following a due process of selection as envisaged by the constitutional scheme."
10. It is submitted that the respondent was employed on contract basis for the purpose of conservancy and that his employment was on the basis of an agreement which was renewed every month. This being the position, it is submitted that the appointment of the respondent falls under [SECTION] of the Act, and the termination of his service does not amount to retrenchment within the meaning of [SECTION], as the same is in accordance with the terms of engagement. Therefore, the respondent is not entitled to the benefit of [SECTION]
At this stage, I consider it appropriate to extract [SECTION] of the Act which reads as follows -
"(oo) "retrenchments" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include-
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or [(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation on that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued ill-health"(emphasis supplied)
11. It is further submitted that the employment of the respondent having come to an end by afflux of time as stipulated in the terms of the appointment, the non-renewal of the contract falls outside the purview of the meaning of retrenchment. As regards, the other legal facilities/benefits such as PF, ESI etc entitled to the respondent and his grievance regarding denial of the same are concerned, the petitioner submits that the onus of the same lies on the respondent contractor. Learned counsel for petitioner places reliance on the following judgments to advance the argument that termination in accordance with the stipulated terms of the contract of appointment, does not amount to retrenchment -
(i) [PRECEDENT] -
The appellant had been appointed as a Development Officer by the respondent on probation. Clause 11 of his appointment provided that his services would be confirmed on satisfactorily completing the period of probation subject to him attaining the minimum target fixed in clause 10 of the appointment letter. The services of the appellant were terminated before expiry of his probation period. The Supreme Court held that the appellant's services were discharged under a stipulation in the order of appointment itself and therefore his discharge was covered under [SECTION]. It was also held that his termination was in consonance with [SECTION] of the [ACT] which provided for discharge from service during the period of probation without any notice.
(ii) [PRECEDENT]
- Relying on the judgment in [PRECEDENT] (supra), the Supreme Court held that the appellant hving been appointed on probation was terminated before the expiry of the probation period and therefore his termination was in accordance with [SECTION] of the Act. The Court held that the same did not constitute retrenchment and was not protected by [SECTION] and [SECTION]G of the Act.
(iii) [PRECEDENT]-In this case, the Supreme Court held that the relationship between the appellant and respondent was contractual and as per the contract, the services of the respondent stood terminated at the end of the day the respondent had been freshly appointed for a period of one day on four occasions.
12. The next submission of the petitioner is that the contract of appointment contained an arbitration clause, in the event of any dispute between the parties and, therefore, the impugned award is perverse in as much, as, it ignores the clauses in the contract of appointment.
13. On the other hand, learned counsel for respondent workman submits that the respondent was appointed through the employment exchange, which was a proper channel, amongst a pool of 23 applicants, pursuant to an interview conducted by the petitioner and, therefore, the modus operandi of the petitioner in issuing fixed term appointments to the respondent on a continuous basis tantamounts to an unfair labour practice as per [SECTION] with clause 10 of the Vth schedule of the Act. It is submitted that the action of the petitioner in continuing the services of the respondent for three years, and then terminating him suddenly without compliance of [SECTION] defeats the very purpose of the intent behind the provision of [SECTION], which is that the workman should be able to survive any interregnum unemployment. It is further submitted that the CGIT held that the respondent had completed 240 days preceding his termination and therefore he is entitled to avail the protection of [SECTION]
14. It is further submitted that the respondent cannot be deemed to be a contractor as alleged by the petitioner because under the provisions of the [ACT], the petitioner, being the principal employer, could not have hired contractors without obtaining a license for the same.
15. A perusal of the impugned award shows that the CGIT has delved into the depths of the respective submissions of the parties and then proceeded to conclude that the respondent is entitled to the relief of reinstatement with [SECTION]% back wages. The observation of the CGIT as regards the unfair action of the petitioner in giving repeated appointments to the respondent workman on a monthly basis for a continuous period of three years is based on its perusal of the appointment letters placed on record by the petitioner before the CGIT. On perusing the appointment letters myself, I find no infirmity in the observation of the CGIT that the grant of appointment for only 30 days at a stretch and its successive renewal amounts to an unfair labour practice on the part of the petitioner. The appointment letters placed on record exhibit that the petitioner reappointed the respondent workman every month thereby making a fresh monthly appointment purportedly on contractual basis.
16. This action of the petitioner in giving fresh appointments continued for a period of 3 long years which in itself is evident of the fact that the nature of work for which the respondent was employed was of a perennial nature. Even otherwise, it cannot be disputed that the job of conservancy services, for which the respondent was employed, is of perennial in nature. In [PRECEDENT], the Court observed as follows -
"21. Therefore, while interpreting and applying various parts of [SECTION], the competent Court/Tribunal shall have to keep in mind the provisions of [SECTION] with [SECTION] and various paragraphs of the Fifth Schedule and if it is found that the action of the employer to engage a workman on casual basis or as a daily-wages or even on temporary basis for long periods of time with intermittent breaks and subsequent termination of service of such workman on the pretext of non-renewal of contract of employment or termination of contract of employment on the basis of a stipulation contained therein is an act of unfair labour practice, such an action of the employer will have to be nullified and the Court will be fully justified in rejecting the plea of the employer that termination of service of the workman does not amount to retrenchment but is covered by Clause (bb). In the context of various paragraphs of the [SECTION] which is an exception to the principal section will have to be given a narrow interpretation. This clause has the effect of taking away a right which was vesting in the workman prior to its insertion. Therefore, the same cannot be allowed to be used as a tool of exploitation by the employer who, as already observed above, enjoys a position of dominance as against the workman. The employer is always in a position to dictate the terms of service vis vis the workman or to be workman. The employer can unilaterally impose oppressive and unreasonable conditions of service and the workman will be left with little choice but to accept all such conditions. The employee cannot possibly protest against the incorporation of arbitrary, unreasonable and even unconsciounable conditions of service in the contract of employment. Any such protest by the employee or a to be employee will cost him job or a chance to enter employment. In respect of a work of permanent or continuing nature, the employer can always give an employment of fixed term or incorporate a condition in the contract of employment/appointment letter that the employment will come to an end automatically after a particular period or on the happening of a particular event. In such a situation, if the Court finds that the conditions are arbitrary and unreasonable and the employer has forced these conditions upon a workman with the sole object of avoiding his obligation under the [ACT], a bald plea of the employer that the termination of service is covered by Clause (bb) will be liable to be rejected.
24. Therefore, in every case of termination of service of a workman, where the workman claims that he has worked for a period of 240 days in a period of twelve months and termination of his service is void for want of compliance with the requirement of [SECTION] and where the employer pleads that termination of service has been brought about in accordance with the terms of contract of employment or termination is as a result of non-extension of terms of employment, the Court will have to carefully scrutinise all the facts and apply the relevant provisions of law. It will be the duty of the Court to determine the nature of employment with reference to the nature of duties performed by the workman and the type of job for which he was employed. Once the employee establishes that he was employed for a work of permanent/continuous nature and that employer has arbitrarily terminated his service in order to defeat his rights under the [ACT] or other labour legislations, a presumption can appropriately be drawn by the Court that the employer's action amounts to unfair labour practice. In such a case, burden will lie on the employer to prove that the workman was engaged to do a particular job and even though the employee may have worked for 240 days such employment should be treated as covered by the amended clause because the service was terminated on the completion of the work. A stipulation in the contract that the employment would be for a specified period or till the completion of a particular job may legitimately bring the termination of service within the ambit of Clause (bb), However, if the employer resorts to methodology of giving fixed term appointment with a view to take it out of the [SECTION] and terminate the service despite the continuity of the work and job requirement, the Court may be justified to draw an inference that the employers' action lacks bona fide or that he has unfairly resorted to his right to terminate the service of the employee." (emphasis supplied).
17. From the facts of the case, as well as a perusal of the appointment letters, it is evident that the petitioner adopted the modus operandi to appoint the respondent for fixed terms successively and continuously only to evade the rights that the respondent would get vested with, if he were to be regularly appointed. This Court dealt with a similar issue of successive fixed term appointments in [PRECEDENT], wherein it was held as follows:
"9. From the facts of the case, it is evident that the respondent adopted the modus operandi to appoint the petitioner for fixed terms successively and continuously only to evade the rights that the petitioner would get vested with, if he were to be regularly appointed. Admittedly, there were regular vacant posts of beldar lying vacant. Yet the respondent did not make regular appointments. The nature of work was also perennial. The conduct of the respondent in making successive fixed term appointment has to be judged in the light of [SECTION] to the Act. There is absolutely no explanation furnished by the respondents for making fixed term appointment and for continuing the same successively and continuously."
(emphasis supplied)
18. Pertinently, in the present case too, the petitioner has offered no explanation for issuing successive appointment letters for periods of one month, even though the work was of a perennial nature. Pertinently, it was not a case where contractual / causal appointment was made as a stop gap arrangement till the filling of the vacant post through a regular process of appointment. In the evidence of the petitioner before the CGIT, it is stated that the respondent was employed on contract basis for conservancy in the unit and that he was neither casual labour nor a permanent employee. It is further stated that the respondent was employed as a daily wager on the basis of the aforesaid contract. In my view, this action of the petitioner in continuing to engage the respondent on a daily wage basis and to relegate him to a contractual appointment clearly amounts to an unfair labour practice as [SECTION] read with clause 10 of the Vth schedule.
19. In [PRECEDENT], the respondent therein was appointed initially for a period of 89 days in the post of Junior Technician on an ad hoc basis in terms of an offer of appointment made to her. The post was purely temporary and her services were liable to be terminated without assigning any reason or notice. It was categorically stated that the respondent shall have no claim for regular appointment having worked with the appellant- Corporation on ad hoc basis. Her services were extended from time to time. In each of the offer of appointment, indisputably, similar terms and conditions were laid down. Before the Labour Court, the appellant therein had raised a plea that the appointment of the respondent was ad hoc in nature and furthermore on a contract basis as envisaged under [SECTION] of the [ACT], and therefore her services were liable to be terminated in terms thereof. The Supreme Court held as follows-
"7. The respondent was appointed from time to time. Her services used to be terminated on the expiry of 89 days on regular basis. However, it is noticed that she used to be appointed after a gap of one or two days upon completion of each term. Such an action on the part of the Appellant cannot be said to be bona fide. The High Court rejected the contention raised on behalf of the appellant herein stating:
It is not possible for us to accept the aforesaid plea raised at the hands of the management on account of the fact that the factual position, which has not been disputed, reveals that the respondent- workman was repeatedly engaged on 89 days basis. It is, therefore, clear that the intention of the management was not to engage the respondent workman for a specified period, as alleged, but was to defeat the rights available to him under [SECTION] of the Act. The aforesaid practice at the hands of the petitioner management to employ the workman repeatedly after a notional break, clearly falls within the ambit and scope of unfair labour practice A finding of fact was arrived at that her services were terminated on regular basis but she was re- appointed after a gap of one or two days. In that view of the matter, the Labour Court or the High Court cannot be said to have committed any illegality.
8. In this case the services of the respondent had been terminated on a regular basis and she had been re-appointed after a gap of one or two days. Such a course of action was adopted by the Appellant with a view to defeat the object of the Act. [SECTION] of the [ACT], therefore, is not attracted in the instant case." (emphasis supplied)
20. In my opinion, the aforecited decision of the Supreme Court squarely covers this case. It is pertinent to note that in the aforesaid decision, the workman had been reappointed only on four occasions, whereas, in the present case, the repeated monthly engagements are over a period of three years. In my view, there can be no escaping from the conclusion that the action of the petitioner in issuing successive appointments was with a view to defeat the rights of the respondent workman. In fact, the petitioner is clearly guilty of violating [SECTION] of the Act which lays down that "No employer or workman or a trade union, whether registered under the [ACT], or not, shall commit any unfair labor practice."
21. Reliance of the petitioner on [PRECEDENT] (supra) to advance the argument that the impugned award is contrary to the aforesaid decision is completely misplaced. The aforesaid decision is in the context of the right of the State to employ persons in temporary positions in respect of regularly sanctioned posts without following the required procedure, and the negation of the right to claim regularisation by such back door appointees. As already discussed hereinabove, the petitioner has nowhere taken the stand that the recruitment of the respondent was done in lieu of regular posts till such time as those posts were duly filled with properly selected candidates. Pertinently, the CGIT has merely directed the respondent's reinstatement with [SECTION]% back wages, and not his regularization.
22. The decision in [PRECEDENT] (supra) applies to cases of regularization in public employment and not reinstatement as laid down in [PRECEDENT] which states that "The decision of this Court in [PRECEDENT]. (supra) cited by the counsel for the respondent relates to regularization in public employment and has no relevance to an Award for re- instatement of a discharged workman passed by the Labour Court under [SECTION] of the Act without any direction for regularization of his services."
23. In the light of the above discussion, the stand of the petitioner that the termination of the respondent stands covered by [SECTION] is rejected.
24. The petitioner's reliance on the decisions in [PRECEDENT] (supra), [PRECEDENT] (supra) and [PRECEDENT] (supra) are also misplaced. The aforesaid cited decisions were not cases where there had been successive appointment of the workman. These were not cases of unfair labour practice unlike the present one. The position in law that appointments covered under [SECTION] stand outside the purview of retrenchment is not disputed. But, what has to be determined , in the facts of a case is, if the said provision of law is being misused by an establishment to defeat the rights of a workman as laid out in [PRECEDENT] (supra) and Haryana State Electronics Development Corporation Ltd .(supra). In [PRECEDENT] on a consideration of the decision in [PRECEDENT] (supra), the Supreme Court held as follows -
"4. The controversy now stands concluded by a judgment of this Court reported in [PRECEDENT]. (supra). Therein this Court had held that once an appointment is for a fixed period, [SECTION] does not apply as it is covered by [SECTION] of the Act. It is contended for the respondent that since the order of the learned single Judge was not challenged, the termination became final. Consequently, the appellant would be liable to pay back wages on reinstatement. In our considered view, the opinion expressed by learned single Judge as well Division Bench are incorrect in law. When the appointment is for a fixed period, unless there is finding that power under [SECTION] was misused or vitiated by its male fide exercise, it cannot be held that the termination is illegal. In its absence, the employer could terminate the services in terms of the letter of appointment unless it is a colourable exercise of power. It must be established in each case that the power was misused by the management or the appointment for a fixed period was a colourable exercise of power. Unfortunately, neither the learned single Judge nor the Division Bench recorded any finding in this behalf " (emphasis supplied)
[SECTION]. Therefore, the decision in [PRECEDENT] (supra) has been held to hold the field unless there is a finding that the contract of appointment itself was a colorable exercise of power. As already discussed hereinabove, a scrutiny of the appointment letters, as well as the aspect that the respondent was not appointed as a stop gap arrangement against any post lying vacant for regular appointees, it is clear that the petitioner establishment was depriving the respondent of legally entitled benefits by relegating him to the status of a contract employee, even though the job to be undertaken by him was of perennial nature.
26. It is pertinent to note that in [PRECEDENT] (supra) the workman had served only for a period of 4 days on the basis of an appointment letter which stated that his services would come to end on the expiry of each day. Therefore, the workman had, in any event, not completed 240 days in service, which is a condition precedent for invocation of [SECTION] Consequently, the decision in [PRECEDENT] (supra) has no application to the facts of the present case.
27. The next averment of the petitioner that the contract of appointment provided for arbitration as a means of dispute resolution has no force. On a perusal of the proceedings before the CGIT, it is seen that the petitioner never raised any grievance regarding the making of the reference to the Tribunal. Therefore, the petitioner cannot bring this as a ground at the stage of writ proceedings. The petitioner having participated in the proceedings before the CGIT, is estopped from raising the said ground at this belated stage of the proceedings. The petitioner's participation before the CGIT amounts to acquiescence and the petitioner has waived any right to invoke arbitration at this stage. Moreover, the rights conferred on a workman under the Act are special rights. The jurisdiction of the Tribunal cannot be taken away by any arbitration agreement between the parties.
28. In light of the aforesaid discussion, I find no infirmity in the impugned award. The present writ petition is dismissed. In fact, the petitioner is guilty of violating [SECTION] of the Act and I deem it fit to impose costs on the petitioner for the same. It is also noted that the writ petition was dismissed in default vide order of this court dated 15.07.2012 and the respondent workman has been made to contest a lengthy litigation. Accordingly, the petitioner is subjected to costs of Rs. 50,000/- to be paid to the respondent. The same be paid within four weeks.
[ENTITY] (JUDGE) MAY 21, 2013