Case: Ongc Ltd Vs. Petroleum Coal Labour Union

The appellant-Corporation is a Public Sector Undertaking of the Government of India in the name of Oil and Natural Gas Corporation Limited (hereinafter referred to as theThe Corporation has a project in the Cauveri Basin, situated in and around Karaikal, Union Territory of Puducherry and about 1050 employees have been regularly employed by the Corporation for its project. For the purpose of thesecurity requirement for the project, it initially employed the concerned workmen some of whom are members of the respondent-Union, as security guards and security supervisors through contractors. However, on the notification dated 08.12.1976 issued by the Government of India under Section 10(1) of the Contract Labour (Abolition and Regulation) Act, 1970, abolishing contract labour for watch and ward, dusting and cleaning jobs in the Corporation, the concerned workmen were employed as per the settlement arrived at between the Trade Union and the Management of the Corporation under Section 18(1) of the Industrial Disputes Act, 1947 (for short ‘theunder which it was agreed to form a Co-operative Society in the name of ‘Thai Security Service Priyadarshini Indira Cooperative(for short ‘the Co-operativefor the welfare of such erstwhile contract workmen. The services were utilised by the Corporation through the Co-operative Society to meet its requirements and for the time period for which required, thus dispensing with intermediary contractors.4. On 24.11.1982 subject to sanction by the Government of India, the Corporation passed a resolution by its policy decision to entrust security work to the Central Industrial Security Force (CISF) to protect their installations. The said resolution was sanctioned by the President of India on 16.12.1985 for creation of posts for security coverage of the Corporation.5. This decision of the Corporation was challenged by the Tamilnadu National Industrial and Commercial Employees Union by filing W.P. No. 9688 of 1987 and W.P. No. 11964 of 1987 was filed by the Petroleum Industrial Casual Contract Labour Union before the High Court of Madras on the ground of breach of settlement arrived at under Section 18(1) of the Act and prayed for a consequential direction to absorb the workmen as regular employees. The workmen obtained an interim order dated 6.10.1987 restraining the Corporation from dispensing with the services of the workmen. The learned single Judge of the High Court upheld the policy decision of the Corporation even in the absence of the copy of the policy framed by the Central Government and dismissed the aforesaid writ petitions vide order dated 5.1.1988 holding that the workers were not entitled for regularisation and rejected the contentions of the workmen in these writ petitions.6. On 8.9.1987, the Corporation sent a letter to the Co-operative Society to withdraw the services of the security personnel of the Co-operative Society w.e.f. 19.10.1987 after handing over charge of the Corporation Unit to CISF personnel. An order was passed by the Director General, CISF, releasing 52 posts with immediate effect for induction of CISF personnel in the Corporation.7. Thereafter, since the induction of the CISF personnel into security posts of the Corporation was still awaiting sanction from the Central Government, the Corporation issued memorandum of appointment directly to each one of the concerned workmen appointing them in the posts of ‘Watch and Wardon term basis from 13.1.1988 to 29.2.1988 and also on the condition that the ‘Certified Standing Orders for Contingent Employees of the Oil and Natural Gas(for short ‘the Certified Standingwill not apply to them. The concerned workmen were paid a monthly salary of approximately Rs.445/- per month to security guards and Rs.675/- per month to security supervisors. After completion of the above mentioned term, the concerned workmen were continued by the Corporation in their respective posts as a stop gap measure without formal written orders. As a result of which, the concerned workmen who were engaged through contractors and those who were members of the Cooperative Society became employees of the Corporation on temporary basis.8. Thereafter, the concerned workmen raised an industrial dispute claiming regularisation of their services in the Corporation and on 10.10.1991, the Central Government in exercise of its power under Section 10 of the Act, 1947 referred the same to the Industrial Tribunal, Chennai, Tamil Nadu (for short ‘theto adjudicate the dispute on the following twowhether the management of ONGC is justified in not regularising the workmen in the instant dispute, and, if not, to what relief the workmen are entitled to?(ii) whether the management of ONGC is justified in not paying equal wages to the workmen in the instant dispute on par with that of the regular workmen and, if not, to what relief the workmen are entitledThe reference was taken on file by the Tribunal as I.D. No.66 of 1991. On 28.04.1993, the Trade Union filed a memo stating that question no.(ii) of the dispute had been settled out of Court and no further adjudication was required in that regard by the Tribunal. The Tribunal, adjudicated the industrial dispute on question no.(i) referred to it on the basis of facts, circumstances and evidence on record and passed an award dated 26.05.1999, directing the Corporation to regularise the services of the concerned workmen by relying on the legal principles laid down by this Court in the case of Air India Statutory Corporation & Ors. v. United Labour Union & Ors. (1997) 9 SCC 377 ) and further held that the concerned workmen were entitled for regularisation of their services since they had completed 480 days of work as required under Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981.10. Aggrieved by the award passed by the Tribunal, the Corporation challenged the same by filing W.P. No.1846 of 2000 before the learned single Judge, inter alia, contending that the Tribunal has erroneously exercised its jurisdiction and passed an award directing the Corporation to regularise the services of the concerned workmen. It was further contended by the Corporation that the concerned workmen were originally engaged through contractors, without following any procedure of selection and appointment, therefore, their services cannot be regularised. In support of this contention, reliance was placed on the decision of this Court in the case of Secretary, State of Karnataka & Ors. v. Uma Devi (3) & Ors. (2006) 4 SCC 1 ).11. On behalf of the concerned workmen, it was contended before the single Judge of the High Court that the dispute falls within the jurisdiction of the Tribunal under the provisions of the Act and that the Tribunal had sufficient jurisdiction to adjudicate the dispute referred to it. It was further contended on behalf of the concerned workmen that they have been working on temporary basis from the year 1988 and continuing their services on temporary basis is an unfair labour practice on the part of the Corporation. Therefore, it was contended that the Tribunal was right in directing the concerned workmen to be regularized and that the law laid down in the case of Uma Devi (supra) had no application to cases of industrial adjudication.12. The learned single Judge on appreciation of the facts, circumstances and the legal contentions urged on behalf of both the parties held that the dispute between the parties regarding non-regularisation of the concerned workmen falls within the scope of industrial dispute as defined under Section 2(k) of the Act. It is further held that the concerned workmen are all victims of unfair labour practice having been employed by the Corporation for several years on temporary basis and even though they were not appointed by following the procedure laid down by the Corporation for recruitment to such posts, they were entitled for regularization and that their appointment cannot be stated to be illegal. With the above findings, the writ petition was dismissed on merits by the learned single Judge of the High Court by its judgment and order dated 04.01.2011.13. The said judgment and order of the learned single Judge was challenged by the Corporation by filing Writ Appeal No. 1006 of 2011 before the Division Bench of the High Court raising certain questions of law. After considering the facts, circumstances and nature of the evidence on record which was placed before the Tribunal the same was appreciated by the learned single Judge, the learned Division Bench of the High Court held that the appointment of the concerned workmen by the Corporation cannot be termed as illegal appointment, but was only an irregular appointment and therefore, they were entitled for regularisation in their services having been employed on temporary basis and having completed more than 240 days in the calendar year subsequent to 13.1.1988. Therefore, it was held by the learned Division Bench of the High Court that no justifiable or reasonable grounds were found for it to interfere with the judgment and order passed by the learned single Judge of the High Court. The writ appeal of the Corporation was dismissed accordingly. Hence, the Corporation filed this appeal by framing certain substantial questions of law for consideration of thisappellant-Corporation is a Public Sector Undertaking of the Government of India in the name of Oil and Natural Gas Corporation Limited (hereinafter referred to as theThe Corporation has a project in the Cauveri Basin, situated in and around Karaikal, Union Territory of Puducherry and about 1050 employees have been regularly employed by the Corporation for its project. For the purpose of they requirement for the project, it initially employed the concerned workmen some of whom are members of the respondent-Union, as security guards and security supervisors through contractors. However, on the notification dated 08.12.1976 issued by the Government of India under Section 10(1) of the Contract Labour (Abolition and Regulation) Act, 1970, abolishing contract labour for watch and ward, dusting and cleaning jobs in the Corporation, the concerned workmen were employed as per the settlement arrived at between the Trade Union and the Management of the Corporation under Section 18(1) of the Industrial Disputes Act, 1947 (for short ‘theunder which it was agreed to form a Co-operative Society in the name of ‘Thai Security Service Priyadarshini Indira Cooperative(for short ‘the Co-operativefor the welfare of such erstwhile contract workmen. The services were utilised by the Corporation through the Co-operative Society to meet its requirements and for the time period for which required, thus dispensing with intermediary contractors.4. On 24.11.1982 subject to sanction by the Government of India, the Corporation passed a resolution by its policy decision to entrust security work to the Central Industrial Security Force (CISF) to protect their installations. The said resolution was sanctioned by the President of India on 16.12.1985 for creation of posts for security coverage of the Corporation.5. This decision of the Corporation was challenged by the Tamilnadu National Industrial and Commercial Employees Union by filing W.P. No. 9688 of 1987 and W.P. No. 11964 of 1987 was filed by the Petroleum Industrial Casual Contract Labour Union before the High Court of Madras on the ground of breach of settlement arrived at under Section 18(1) of the Act and prayed for a consequential direction to absorb the workmen as regular employees. The workmen obtained an interim order dated 6.10.1987 restraining the Corporation from dispensing with the services of the workmen. The learned single Judge of the High Court upheld the policy decision of the Corporation even in the absence of the copy of the policy framed by the Central Government and dismissed the aforesaid writ petitions vide order dated 5.1.1988 holding that the workers were not entitled for regularisation and rejected the contentions of the workmen in these writ petitions.6. On 8.9.1987, the Corporation sent a letter to the Co-operative Society to withdraw the services of the security personnel of the Co-operative Society w.e.f. 19.10.1987 after handing over charge of the Corporation Unit to CISF personnel. An order was passed by the Director General, CISF, releasing 52 posts with immediate effect for induction of CISF personnel in the Corporation.7. Thereafter, since the induction of the CISF personnel into security posts of the Corporation was still awaiting sanction from the Central Government, the Corporation issued memorandum of appointment directly to each one of the concerned workmen appointing them in the posts of ‘Watch and Wardon term basis from 13.1.1988 to 29.2.1988 and also on the condition that the ‘Certified Standing Orders for Contingent Employees of the Oil and Natural Gas(for short ‘the Certified Standingwill not apply to them. The concerned workmen were paid a monthly salary of approximately Rs.445/- per month to security guards and Rs.675/- per month to security supervisors. After completion of the above mentioned term, the concerned workmen were continued by the Corporation in their respective posts as a stop gap measure without formal written orders. As a result of which, the concerned workmen who were engaged through contractors and those who were members of the Cooperative Society became employees of the Corporation on temporary basis.8. Thereafter, the concerned workmen raised an industrial dispute claiming regularisation of their services in the Corporation and on 10.10.1991, the Central Government in exercise of its power under Section 10 of the Act, 1947 referred the same to the Industrial Tribunal, Chennai, Tamil Nadu (for short ‘theto adjudicate the dispute on the following twowhether the management of ONGC is justified in not regularising the workmen in the instant dispute, and, if not, to what relief the workmen are entitled to?(ii) whether the management of ONGC is justified in not paying equal wages to the workmen in the instant dispute on par with that of the regular workmen and, if not, to what relief the workmen are entitlede reference was taken on file by the Tribunal as I.D. No.66 of 1991. On 28.04.1993, the Trade Union filed a memo stating that question no.(ii) of the dispute had been settled out of Court and no further adjudication was required in that regard by the Tribunal. The Tribunal, adjudicated the industrial dispute on question no.(i) referred to it on the basis of facts, circumstances and evidence on record and passed an award dated 26.05.1999, directing the Corporation to regularise the services of the concerned workmen by relying on the legal principles laid down by this Court in the case of Air India Statutory Corporation & Ors. v. United Labour Union & Ors. (1997) 9 SCC 377 ) and further held that the concerned workmen were entitled for regularisation of their services since they had completed 480 days of work as required under Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981.10. Aggrieved by the award passed by the Tribunal, the Corporation challenged the same by filing W.P. No.1846 of 2000 before the learned single Judge, inter alia, contending that the Tribunal has erroneously exercised its jurisdiction and passed an award directing the Corporation to regularise the services of the concerned workmen. It was further contended by the Corporation that the concerned workmen were originally engaged through contractors, without following any procedure of selection and appointment, therefore, their services cannot be regularised. In support of this contention, reliance was placed on the decision of this Court in the case of Secretary, State of Karnataka & Ors. v. Uma Devi (3) & Ors. (2006) 4 SCC 1 ).11. On behalf of the concerned workmen, it was contended before the single Judge of the High Court that the dispute falls within the jurisdiction of the Tribunal under the provisions of the Act and that the Tribunal had sufficient jurisdiction to adjudicate the dispute referred to it. It was further contended on behalf of the concerned workmen that they have been working on temporary basis from the year 1988 and continuing their services on temporary basis is an unfair labour practice on the part of the Corporation. Therefore, it was contended that the Tribunal was right in directing the concerned workmen to be regularized and that the law laid down in the case of Uma Devi (supra) had no application to cases of industrial adjudication.12. The learned single Judge on appreciation of the facts, circumstances and the legal contentions urged on behalf of both the parties held that the dispute between the parties regarding non-regularisation of the concerned workmen falls within the scope of industrial dispute as defined under Section 2(k) of the Act. It is further held that the concerned workmen are all victims of unfair labour practice having been employed by the Corporation for several years on temporary basis and even though they were not appointed by following the procedure laid down by the Corporation for recruitment to such posts, they were entitled for regularization and that their appointment cannot be stated to be illegal. With the above findings, the writ petition was dismissed on merits by the learned single Judge of the High Court by its judgment and order dated 04.01.2011.13. The said judgment and order of the learned single Judge was challenged by the Corporation by filing Writ Appeal No. 1006 of 2011 before the Division Bench of the High Court raising certain questions of law. After considering the facts, circumstances and nature of the evidence on record which was placed before the Tribunal the same was appreciated by the learned single Judge, the learned Division Bench of the High Court held that the appointment of the concerned workmen by the Corporation cannot be termed as illegal appointment, but was only an irregular appointment and therefore, they were entitled for regularisation in their services having been employed on temporary basis and having completed more than 240 days in the calendar year subsequent to 13.1.1988. Therefore, it was held by the learned Division Bench of the High Court that no justifiable or reasonable grounds were found for it to interfere with the judgment and order passed by the learned single Judge of the High Court. The writ appeal of the Corporation was dismissed accordingly. Hence, the Corporation filed this appeal by framing certain substantial questions of law for consideration of this

Court's reasoning:
It is clear from the above that the Court recognized the underlying message contained in Umadevi case to the effect that regularisation of a daily-wager, who has not been appointed after undergoing the proper selection procedure, etc. is impermissible as it was violative of Article 14 of the Constitution of India and this principle predicated on Article 14 would apply to the Industrial Tribunal as well inasmuch as there cannot be any direction to regularise the services of a workman in violation of Article 14 of the Constitution. As we would explain hereinafter, this would mean that the Industrial Court would not issue a direction for 23regularising the services of a daily-wage worker in those cases where such regularization would tantamount to infringing the provisions of Article 14 of the Constitution. But for that, it would not deter the Industrial Tribunals/Labour Courts from issuing such direction, which the industrial adjudicators otherwise possess, having regard to the provisions of the Industrial Disputes Act specifically conferring such powers.Further, it is very clear from the facts that all the concerned workmen have got the qualifications required for their regularisation, except one of them and have been employed by the Corporation even prior to 1985 in the posts through various irregular means. The Tribunal has got every power to adjudicate an industrial dispute and impose upon the employer new obligations to strike a balance and secure industrial peace and harmony between the employer and workmen and ultimately deliver social justice which is the constitutional mandate as held by the Constitution Bench of this Court in a catena ofthe case on hand, the concerned workmen were employed by the Corporation initially through contractors. Thereafter, on issuance of notification dated 08.12.1976 by the Central Government abolishing contract labour for the posts of Watch and Ward, dusting and cleaning jobs in the Corporation under Section 10(1) of the Contract Labour (Abolition and Regulation) Act, 1970, the Corporation and the concerned workmen arrived at a settlement under Section 18(1) of the Act, wherein a Co-operative Society was formed in the name of ‘Thai Security Service Priyadarshini Indira Cooperativefor their welfare, thus dispensing with intermediary contractors. During the pendency of the sanction from the Central Government of the alleged, the concerned workmen were appointed directly from 13.1.1988 to 29.2.1988 and thereafter, they were employed continuously without written orders by the Corporation. It is the contention of the learned senior counsel on behalf of the Corporation that the services of the concerned workmen cannot be regularized as their appointment was originally and initially through contractors and thereafter, without following any procedure of selection and appointment as per the RecruitmentIt is also contended on behalf of the Corporation that the right to be considered for regularisation by the Corporation as provided under Clause 2(ii) of the Certified Standing Orders of the Corporation does not mean right to regularisation and the discretion to regularise the workmen is with the Corporation as the same has to be exercised keeping in mind the interest of the organization by implementing the allegedof appointing the CISF personnel to the security posts. This contention urged on behalf of the learned senior counsel for the Corporation cannot be accepted by us for the reason that even though due procedure was not followed by the Corporation for the appointment of the concerned workmen, this does not disentitle them of their right to seek regularization of their services by the Corporation under the provisions of the Certified Standing Orders, after they have rendered more than 240 days of service in a calendar year from the date of the memorandum of appointment issued to each one of the concerned workmen in the year 1988. The allegedto appoint CISF personnel to the security post is on deputation basis and cannot be called appointment per se.In view of the legal principles laid down by this Court in the above said case, the alleged policy decision taken under Section 30A of the ONGC Act does not prevail over the Standing Orders Act framed under the Industrial Employment (Standing Orders) Act, 1946, which is the Special Enactment. Therefore, the allegeden by the Corporation is neither valid in law nor applicable in the case on hand.We have perused the above two documents. The above mentioned sanction letter by the Central Government is for the creation of temporary posts for the security coverage of ONGC installation and not to depute CISF specifically into security posts in the Corporation, therefore, the reliance placed on the same in support of the contention urged by the learned senior counsel on behalf of the Corporation is misplaced as the same is wholly untenable in law as the same is not reflected in the sanction letter referred to supra. Further, the above mentioned guidelines cannot be considered to be the policy of the Central Government as it is not framed in accordance with the relevant ‘Business Transactionof the Central Government. Therefore, we are of the considered view that even if for the sake of argument, the decision to employ the CISF personnel into security posts of the Corporation is considered as the policy decision of the Corporation, the provision under Clause 2(ii) of Certified Standing Orders surely overrides the policy decision, as the said clause is not amended by following the provisions of the Act of 1946 and therefore, the said argument does not hold water as the Certified Standing Orders of the Corporation as per the Judgments of this Court referred to supra and the principle of law laid down in those cases are aptly applicable to the fact situation of the concerned workmen for their regularisation in the security posts of thethe instant case, the alleged Policy formulated by the Central Government has not been issued by following the due procedure as provided under the ‘Business TransactionFor this reason also, the said document produced by the learned counsel for the Corporation to justify the alleged Policy being applicable to the concerned workmen cannot be called as the policy document passed under Section 30A of the Act by the Central Government and moreover, the same was not incorporated by way of an amendment to the Certified Standing Orders of the Corporation by following the procedure as provided under Section 10 of the Industrial Employment (Standing Orders) Act, 1946. The reliance placed upon these documents by the Corporation in justification of their claim that the concerned workmen are not entitled to be regularised in their services as permanent employees in their posts as per the award passed by the Tribunal is misplaced and wholly untenable in law. Therefore, the same cannot be accepted by this Court. Hence, the said contention is liable to be rejected and is accordingly rejected.In light of the above said discussion and legal principles laid down by this Court in the cases referred to supra, we are of the considered view that the procedure of appointments adopted by the Corporation with respect to the concerned workmen initially appointed through contractors, subsequently through the Co-operative Society, and then vide memorandum of appointment issued to each one of the concerned workmen in the year 1988 and thereafter, continuing them in their services in the posts by the Corporation without following any procedure as contended by the learned senior counsel on behalf of the Corporation whose contention is untenable in law and their appointment can be said as irregular appointments but not as illegal as the same was not objected to by any other Authority of the Corporation at any point of time. But their appointment in their posts and continuing them in their services is definitely cannot be termed as illegal, at best it can be called irregular. Therefore, the Certified Standing Orders of the Corporation by all means apply to the concerned workmen.Further, the contention urged on behalf of the Corporation that the concerned workmen do not possess the required qualifications for their respective posts, in this regard, we have gone through the facts recorded by the Courts below in comparison with the ‘Recruitment and Promotion Regulations, 1980 of the Oil and Natural Gasframed and published with previous approval of the Central Government in exercise of the powers conferred upon it under Section 32 of the Oil and Natural Gas Commission Act, 1959, and we are fully satisfied that all of the concerned workmen barring just one of the concerned workmen have all the qualifications required to be regularised in the permanent posts of the Corporation as regular employees.