Protecting Labour Rights: Supreme Court Upholds Gardeners' Reinstatement and Regularization


Court: Supreme Court of India.

Case Name: SHRIPAL vs. NAGAR NIGAM, GHAZIABAD.

Citation: 2025 INSC 144 (Reportable)

Background of the Case

  • The case involves a dispute over the termination and regularization of daily-wage gardeners (Malis) working with the Ghaziabad Nagar Nigam.
  • The gardeners claimed continuous engagement with the Nagar Nigam's Horticulture Department since 1998 or 1999.
  • They performed duties such as planting trees, maintaining parks, and beautifying public spaces under the direct supervision of the Nagar Nigam.
  • The gardeners were never issued formal appointment letters.
  • They were allegedly denied minimum wages, weekly offs, national holidays, and other statutory benefits.
  • In 2004, the workmen raised an industrial dispute seeking regularization and benefits.
  • Around mid-July 2005, their services were allegedly terminated orally, without notice, written orders, or retrenchment compensation, while conciliation proceedings were pending.
  • The Labour Court issued conflicting awards, with one set ordering reinstatement with 30% back wages and another set dismissing claims, stating the workmen were engaged through a contractor.
  • The Allahabad High Court modified the Labour Court awards, directing re-engagement on daily wages with pay equivalent to the minimum in the regular pay scale of gardeners, and considered future regularization if legally permissible.
  • Both the workmen and the Nagar Nigam appealed to the Supreme Court.

Arguments of the Appellant Workmen

  • The workmen argued they had continuous service under direct supervision, performing duties comparable to permanent gardeners.
  • They asserted that their wages were paid directly by the Horticulture Department, not through a contractor.
  • They claimed their termination violated Sections 6E and 6N of the U.P. Industrial Disputes Act, 1947, as it occurred during pending conciliation without due process or compensation.
  • They sought full reinstatement, back wages, and regularization.

Arguments of the Respondent Employer (Nagar Nigam)

  • The Nagar Nigam argued that public employment must follow a proper selection process, and there was a ban on fresh recruitment.
  • They claimed no direct employer-employee relationship existed, asserting that horticulture work was done through contractors.
  • They argued that daily wagers could not be absorbed without proper procedures, citing the Umadevi case.
  • They argued that the workmen did not prove they worked continuously for 240 days in a year.
  • The Nagar Nigam challenged the High Court's order to pay minimum scale wages and consider regularization.

Supreme Court's Findings and Analysis

  • The Court found that the Nagar Nigam violated Section 6E of the U.P. Industrial Disputes Act by terminating services while conciliation proceedings were pending, without prior approval.
  • The court stated that even if the workmen were considered "casual," the retrenchment obligations under Section 6N were not met.
  • The Nagar Nigam failed to produce any evidence of a contractor’s involvement, such as contract documentation, licenses, or invoices.
  • The Court determined a direct employer-employee relationship, noting the workmen reported directly to Horticulture Department officials, received instructions, and were paid by the Municipality.
  • The work performed by the workmen was deemed essential and perennial, integral to municipal functions.
  • The Nagar Nigam was engaging in an unfair labor practice by paying inadequate wages for work similar to regular employees, violating the "equal pay for equal work" principle.
  • The Court distinguished the Umadevi case, stating it does not justify years of exploitative engagements, and clarified the difference between "illegal" and "irregular" appointments.
  • The court stated that the "ban on fresh recruitment" could not justify continued unfair practices.
  • The employer’s failure to produce muster rolls allowed for an adverse inference.
  • The Court cited the Jaggo v. Union of India judgment to criticize the misuse of temporary employment.

Supreme Court's Directions

  • The Court declared the terminations illegal, citing violations of Sections 6E and 6N, and quashed all termination orders.
  • The workmen are treated as continuously in service from the date of their termination.
  • The Nagar Nigam must reinstate the workmen within four weeks.
  • The workmen are entitled to 50% of back wages from the date of termination until reinstatement.
  • The Nagar Nigam must initiate a fair and transparent process for regularizing the workmen within six months, considering their long service and perennial duties, and cannot retroactively impose new criteria.
  • The employer must expedite administrative processes to ensure long time employees are not kept on daily wages.

Rationale

  • The Supreme Court emphasized the importance of protecting the rights of workers, especially daily-wage employees, from exploitative practices.
  • Employers, especially public sector employers, must strictly adhere to labor laws, including provisions regarding retrenchment and termination.
  • The Court looked beyond labels like "casual" or "contractual" and considered the actual nature of the work and employer's control.
  • The Court rejected the use of "temporary" employment to evade long-term obligations.
  • The Court upheld the "equal pay for equal work" principle, stating that workers performing the same tasks should receive equal pay.
  • A blanket ban on recruitment cannot be used to deny rights to long-serving employees in positions essential to the employer’s operations.
  • Failure to produce records can lead to an adverse inference against the employer.
  • Courts must intervene to ensure fair play, equity, and justice for workers in cases of exploitative employment practices.

Excerpt

  • "The Appellant Workmen had continuously discharged horticultural and maintenance duties—like planting trees, upkeep of public parks, and general beautification—under the direct supervision and control of the Respondent Employer for periods often exceeding a decade. They insist such long-standing, continuous work parallels that of permanent Gardeners."
  • "On a plain reading of this section, we can deduce that any unilateral alteration in service conditions, including termination, is impermissible during the pendency of such proceedings unless prior approval is obtained from the appropriate authority."
  • "Had there been a legitimate third-party contractor, one would expect to see details such as tender notices, contract agreements, attendance records maintained by the contractor, or testimony from the contractor’s representatives. The absence of these crucial elements undermines the Employer’s claim of outsourced engagement."
  • "The pervasive misuse of temporary employment contracts, as exemplified in this case, reflects a broader systemic issue that adversely affects workers' rights and job security."

Points to Remember

  • Section 6E of the U.P. Industrial Disputes Act, 1947 prohibits employers from altering service conditions or terminating workers during pending conciliation proceedings without prior approval.
  • Section 6N of the U.P. Industrial Disputes Act, 1947 outlines conditions for retrenchment, including notice and compensation, regardless of a worker's casual or temporary status.
  • The "equal pay for equal work" principle applies when workers perform the same tasks as regular employees.
  • The case of Secretary, State of Karnataka vs. Umadevi (2006) distinguishes between "illegal" and "irregular" appointments, the latter of which may be eligible for regularization.
  • The Jaggo v. Union of India case highlights the misuse of temporary employment contracts.
  • Failure to produce records, such as muster rolls, can lead to an adverse inference against the employer.
  • Muster rolls are official registers used to record the attendance and payment of employees, often daily wage workers.
  • Retrenchment compensation is a payment made to workers who are terminated due to economic or other non-disciplinary reasons.
  • Back wages are compensation paid to employees for the wages lost during the period of their illegal termination.

Conclusion

The Supreme Court’s judgment in Shripal & Anr. vs. Nagar Nigam, Ghaziabad is a significant victory for daily-wage workers, emphasizing that public sector employers cannot evade their legal and moral responsibilities. The court's ruling reinforces the importance of statutory compliance, substance over form in employment relationships, and the protection of labor rights. It sets a precedent for ensuring fair treatment and regularization of long-serving employees performing essential, perennial duties, while also establishing that a general ban on recruitment cannot be used to deny workers their rights. The decision sends a clear message that exploitative practices under the guise of "temporary" or "contractual" engagements will not be tolerated, and that the principle of "equal pay for equal work" must be upheld.

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