In a landmark ruling reinforcing labor rights, the Supreme Court of India declared the termination of certain workmen employed with the Ghaziabad Nagar Nigam as illegal, ordering their reinstatement with 50% back wages and directing the municipal body to initiate a fair process for their regularization. The Court ruled that the employer’s actions violated Sections 6E and 6N of the U.P. Industrial Disputes Act, 1947, emphasizing that the Secretary, State of Karnataka v. Uma Devi (2006) judgment cannot be used as a shield to justify the prolonged exploitation of workers engaged in perennial municipal functions.
The case originated from an industrial dispute raised by gardeners (malis) employed in the Horticulture Department of Ghaziabad Nagar Nigam, who claimed they had been continuously working since 1998-1999 without formal appointment letters or statutory benefits. In 2004, they approached the Conciliation Officer, seeking regularization and fair wages. However, in mid-2005, their services were allegedly terminated orally, without notice, written orders, or retrenchment compensation—despite ongoing conciliation proceedings.
Since the termination occurred during the pendency of conciliation, the workmen argued it violated Section 6E of the U.P. Industrial Disputes Act, 1947, which restricts changes in employment conditions during an industrial dispute. The matter was referred to the Labour Court, Ghaziabad, which delivered two conflicting sets of awards: one directing reinstatement with partial back wages and another denying relief on the ground that some workmen were engaged through contractors.
Both the workmen and the Ghaziabad Nagar Nigam approached the Allahabad High Court, which modified the relief by directing dailywage re-engagement with minimum pay but without full reinstatement or back wages. Dissatisfied with this order, both parties filed appeals before the Supreme Court.
Key Legal Issues Considered by the Supreme Court
1. Legality of Termination – The Court examined whether the workmen’s services were terminated in violation of Sections 6E and 6N of the U.P. Industrial Disputes Act, 1947, which prohibit termination without due process when a dispute is pending before a labor authority.
2. Employer-Employee Relationship – The Court assessed whether the workmen were directly employed by the Nagar Nigam or through a contractor, a key point that had led to conflicting Labour Court rulings.
3. Right to Regularization – The Court addressed whether the workers, having served for decades in essential roles, had a legitimate claim to regularization under labor laws.
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4. Applicability of the Uma Devi Judgment – The Nagar Nigam cited the Uma Devi case to argue that casual workers cannot demand regularization unless appointed through proper selection processes. The Court, however, noted that Uma Devi applies to “illegal” appointments, whereas these workers had been engaged in essential municipal duties for years, creating an “irregular but not illegal” employment situation.
Supreme Court’s Ruling and Key Observations
Delivering the judgment in Shripal & Anr. v. Nagar Nigam, Ghaziabad (Civil Appeal No. 8157 of 2024), the Supreme Court bench comprising Justice Vikram Nath and Justice Prasanna B. Varale ruled in favour of the workmen, holding that:
1. Termination Was Illegal – The termination of workmen during conciliation proceedings, without notice or retrenchment compensation, was a clear violation of Section 6E and 6N of the U.P. Industrial Disputes Act, 1947. The Court held:
“Unilateral alteration in service conditions, including termination, is impermissible during pending proceedings unless prior approval is obtained from the appropriate authority.”
2. Direct Employment Was Established – The Court found no credible evidence supporting the Nagar Nigam’s claim that the workers were hired through contractors. The records showed that wages were paid directly by the Horticulture Department, and the employer exercised direct control over their duties, establishing an employer-employee relationship.
3. Municipality’s Conduct Was an Unfair Labor Practice – The Court criticized the Nagar Nigam’s prolonged engagement of workers in essential services without regularization, stating:
“The principle of ‘equal pay for equal work’ cannot be disregarded when workers have performed perennial duties under the direct supervision of the employer.”
4. Uma Devi Judgment Misapplied – Rejecting the employer’s reliance on the Uma Devi precedent, the Court observed
“Uma Devi cannot be used as a shield to justify exploitative employment practices that persist for years without legitimate recruitment processes.”
5. Directions for Reinstatement and Back Wages – The Court ordered:
Immediate reinstatement of workmen in their previous or equivalent posts.
50% back wages for the period between termination and reinstatement.
Continuous service benefits such as seniority and eligibility for promotions.
A transparent process for regularization within six months, ensuring that longtime workers are not indefinitely retained as daily wagers.
Source : lawtrend
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