STATE OF KARNATAKA VRS UMA DEVI

SOME REFLECTIONS IN INDUSTRIAL AND SERVICE JURISPRUDENCE: CLAIM FOR REGULARISATION OF SERVICES BY CONTRACT,CASUAL AND AD-HOC WORKERS IN GOVERNMENT SERVICE, PUBLIC SECTOR UNDERTAKINGS AND AUTONOMOPUS BODIES: ARE SUCH DEMANDS LEGALLY AND CONSTITUTIONALLY VALID AND TENABLE : AN APEX JUDICIAL DICTUM : PART-I

AJAYA KUMAR SAMANTARATY,DEPUTY DIRECTOR GENERAL,LABOUR WELFARE,MINISTRY OF LABOUR AND EMPLOYMENT,JAISALMER HOUSE, NEW DELHI : 11 00 11 

PART-I: PUBLIC EMPLOYMENT AND ROLE OF STATE

PRELUDE : Some 16 months back (December 2015), at the request of some colleagues I had transmitted the original judgment to them and had mailed the same also to Commodore Parimal K Doshi, General Manager, Indian Naval Canteen Services, Indian Navy, Mumbai since he was my boss for 2 years (2010 to 2012) when I was working in Naval Dockyard as a Deputy Labour Welfare Commissioner (Central) and Legal Advisor. Since Commodore Doshi was the Additional General Manager (Personnel and Administration) he was in-charge of the establishment civilian personnel and service matters and we used to discuss very elaborately on the subjects most of the times. I am very fortunate to say that during the said period I had rendered the maximum legal advice (271) to HQWNC as well as to Naval Dockyard on service regulations, trade union. safety committee, canteen committee, shop committee and service association matters and I am also fortunate to tell that not a single advice has back fired. On the judgment Commodore Doshi opined that the judgment is large and may not be understood by an ordinary reader. He suggested that a simplified article may be penned on this decision so that a good number of readers may benefit out of the same. This prompted me to pen this article in 3 parts as follows:

1. PUBLIC EMPLOYMENT AND ROLE OF THE STATE (Please read Article 12 of the Constitution of India)

2.REGULARISATION AND CONFERMENT OF PERMANENT STAUS ON CASUAL, AD-HOC WORKERS.

3.THE CONSTITUTIONAL ASPECTS AND PUBLIC EMPLOYMENT : ARTICLES 14 AND 16 OF THE CONSTITUTIONM OF INDIA.

From our experience we have seen that some public sector undertakings hire contract workers through contractors and such workers, after working for 1 to 2 years, run to the Labour Authorities with disputes through some trade unions claiming regularisation or payment of same and similar wages at par with the regular workers of the concerned establishments. Even some trade union leaders threaten the labour authorities that in the past they had got such order from the officers by criminal intimidation. They cite some judgments which were delivered 10 to 20 years back.They do not understand that law keeps changing and the judgments delivered 15 to 20 years back do not hold good now. Such so called leaders do not think that Public Employment in a sovereign socialist secular democratic republic, has to be as set down by the Constitution and the laws made thereunder. Our constitutional scheme envisages employment by the Government and its instrumentalities (Public Sector Undertakings and Autonomous or Statutory Bodies and Autonomous Societies) on the basis of a procedure established in that behalf. Equality of opportunity is the hallmark, and the Constitution has provided also for affirmative action to ensure that unequals are not treated equals. Thus, any public employment has to be in terms of the constitutional scheme.

Temporary, casual, contract or ad-hoc employments:

 A sovereign government, considering the economic situation in the country and the work to be got done, is not precluded from making temporary appointments or engaging workers on daily wages. Going by a law newly enacted, The National Rural Employment Guarantee Act, 2005, the object is to give employment to at least one member of a family for hundred days in an year, on paying wages as fixed under that Act. But, a regular process of recruitment or appointment has to be resorted to, when regular vacancies in posts, at a particular point of time, are to be filled up and the filling up of those vacancies cannot be done in a haphazard manner or based on patronage or other considerations. Regular appointment must be the rule.

Irregular appoints by State and its agencies:

 But, sometimes this process is not adhered to and the Constitutional scheme of public employment is by-passed. The Union, the States, their departments and instrumentalities have resorted to irregular appointments, especially in the lower rungs of the service, without reference to the duty to ensure a proper appointment procedure through the Public Service Commission or otherwise as per the rules adopted and to permit these irregular appointees or those appointed on contract or on daily wages, to continue year after year, thus, keeping out those who are qualified to apply for the post concerned and depriving them of an opportunity to compete for the post. It has also led to persons who get employed, without the following of a regular procedure or even through the backdoor or on daily wages, approaching Courts, seeking directions to make them permanent in their posts and to prevent regular recruitment to the concerned posts. Courts have not always kept the legal aspects in mind and have occasionally even stayed the regular process of employment being set in motion and in some cases, even directed that these illegal, irregular or improper entrants be absorbed into service. A class of employment which can only be called 'litigious employment', has risen like a phoenix seriously impairing the constitutional scheme. Such orders are passed apparently in exercise of the wide powers under Article 226 of the Constitution of India. Whether the wide powers under Article 226 of the Constitution is intended to be used for a purpose certain to defeat the concept of social justice and equal opportunity for all, subject to affirmative action in the matter of public employment as recognized by our Constitution, has to be seriously pondered over. Viewing the same, the Hon’ble Supreme Court said:

 It is time, that Courts desist from issuing orders preventing regular selection or recruitment at the instance of such persons and from issuing directions for continuance of those who have not secured regular appointments as per procedure established. The passing of orders for continuance, tends to defeat the very Constitutional scheme of public employment. It has to be emphasized that this is not the role envisaged for High Courts in the scheme of things and their wide powers under Article 226 of the Constitution of India are not intended to be used for the purpose of perpetuating illegalities, irregularities or improprieties or for scuttling the whole scheme of public employment. Its role as the sentinel and as the guardian of equal rights protection should not be forgotten.

EQUITY : ITS TRUE IMPORT

      We are aware that even the Hon’ble Apex Court has also on occasions issued directions which could not be said to be consistent with the Constitutional scheme of public employment. Such directions are issued presumably on the basis of equitable considerations or individualization of justice. The question arises, equity to whom? Equity for the handful of people who have approached the Court with a claim, or equity for the teeming millions of this country seeking employment and seeking a fair opportunity for competing for employment? When one side of the coin is considered, the other side of the coin, has also to be considered and the way open to any court of law or justice, is to adhere to the law as laid down by the Constitution and not to make directions, which at times, even if do not run counter to the Constitutional scheme, certainly tend to water down the Constitutional requirements. It is this conflict that is reflected in these cases referred to the Constitution Bench.

THE POWER OF THE STATE (READ ARTICLE 12 OF THE CONSTITUTION) IN THE MATTERS OF PUBLIC EMPLOYMENT

      The esteemed readers may please note that the power of a State as an employer is more limited than that of a private employer inasmuch as it is subjected to constitutional limitations and cannot be exercised arbitrarily (in this context the esteemed readers may please refer to Durga DasBasu'sShorter Constitution of India). 

Article 309 : This Article of the Constitution gives the Government the power to frame rules for the purpose of laying down the conditions of service and recruitment of persons to be appointed to public services and posts in connection with the affairs of the Union or any of the States. The Article also contemplates the drawing up of a procedure and rules to regulate the recruitment and regulate the service conditions of appointees appointed to public posts. It is well acknowledged that because of this, the entire process of recruitment for services is controlled by detailed procedure which specify the necessary qualifications, the mode of appointment etc.

Adherence to Recruitment Rules and the relevant laws : A Salutary Principle of Article 309:

 If rules have been made under Article 309 of the Constitution, then the Government can make appointments only in accordance with the rules. The State is meant to be a model employer. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 was enacted to ensure equal opportunity for employment seekers. Though this Act may not oblige an employer to employ only those persons who have been sponsored by employment exchanges, it places an obligation on the employer to notify the vacancies that may arise in the various departments and for filling up of those vacancies, based on a procedure. Normally, statutory rules are framed under the authority of law governing employment. It is recognized that no government order, notification or circular can be substituted for the statutory rules framed under the authority of law. This is because, following any other course could be disastrous inasmuch as it will deprive the security of tenure and the right of equality conferred on civil servants under the Constitutional scheme. It may even amount to negating the accepted service jurisprudence. Therefore, when statutory rules are framed under Article 309 of the Constitution which are exhaustive, the only fair means to adopt is to make appointments based on the rules so framed.

THE CASE-LAW:

SECRETARY, STATE OF KARNATAKA AND OTHERS vrs UMADEVI AND OTHERS [2006 (2) M.L.J. 326 (S.C.)= AIR 2006 SC 1806 = 2006 AIR (SCW) 1991 = 2006 (4) JT 420 = 2006 (4) Kant LJ 29 = 2006 – II - LLJ - 722 = 2006 (4) Scale 197= 2006 (4) SCC 1= 2006 (5) SCJ 577= 2006 (2) SCT 462= 2006 (3) SLJ 1,= 2006 (3) SLR 1= 2006 (5) SRJ 380= 2006 (3) Supreme 415 = 2006 (2) KLT SN. 70=www.indiankanoon.org/doc/1591733] DoJ : 10 APRIL, 2006

FACTS OF THE CASE:

CIVIL APPEAL NO.1861-2063/2001, 3849/2001, 3520-3524/2002 and CIVIL APPEAL NO. 1968 of 2006 arising out of SLP(C)9103-9105 OF 2001

       The above two sets of appeals reflect the cleavage of opinion in the High Court of Karnataka based on the difference in approach in two sets of decisions of the Hon’ble Apex Court leading to a reference of these appeals to the Constitution Bench for decision. The conflict relates to :

 The right, if any, of employees appointed by the State or by its instrumentalities on a temporary basis or on daily wages or casually, to approach the High Court for the issue of a writ of mandamus directing that they be made permanent in appropriate posts, the work of which they were otherwise doing.

 The claim is essentially based on the fact that they having continued in employment or engaged in the work for a significant length of time, they are entitled to be absorbed in the posts in which they had worked in the department concerned or the authority concerned. There were also more ambitious claims that even if they were not working against a sanctioned post, even if they do not possess the requisite qualification, even if they were not appointed in terms of the procedure prescribed for appointment, and had only recently been engaged, they are entitled to continue and should be directed to be absorbed.

 Civil Appeal Nos.3595-3612 of 1999 : In these appeals the respondents therein who were temporarily engaged on daily wages in the Commercial Taxes Department in some of the districts of the State of Karnataka claim that they worked in the department based on such engagement for more than 10 years and hence they are entitled to be made permanent employees of the department, entitled to all the benefits of regular employees. They were engaged for the first time in the years 1985-86 and in the teeth of orders not to make such appointments issued on 3rd July 1984. Though the Director of Commercial Taxes recommended that they be absorbed, the Government did not accede to that recommendation. These respondents thereupon approached the Administrative Tribunal in the year 1997 with their claim. The Administrative Tribunal rejected their claim finding that they have not made out a right either to get wages equal to that of others regularly employed or for regularization. Thus, the applications filed were dismissed. The respondents approached the High Court of Karnataka challenging the decision of the Administrative Tribunal. The Hon’ble Supreme Court observed that the High Court without really coming to grips with the question falling for decision in the light of the findings of the Administrative Tribunal and the decisions of this Court, proceeded to order that they are entitled to wages equal to the salary and allowances that are being paid to the regular employees of their cadre in government service with effect from the dates from which they were respectively appointed. It may be noted that this gave retrospective effect to the judgment of the High Court by more than 12 years. The High Court also issued a command to the State to consider their cases for regularization within a period of four months from the date of receipt of that order. The High Court seems to have proceeded on the basis that, whether they were appointed before 1st July 1984, a situation covered by the decision of the Hon’ble Supreme Court in Dharwad District Public Works Department vrs. State of Karnataka [1990 (1) SCR 544] and the scheme framed pursuant to the direction thereunder, or subsequently, since they have worked for a period of 10 years, they were entitled to equal pay for equal work from the very inception of their engagement on daily wages and were also entitled to be considered for regularization in their posts.

Civil Appeal Nos.1861-2063 of 2001 : These appeals, according to the Hon’ble Supreme Court reflects the other side of the coin. The appellant association with indefinite number of members approached the High Court with a writ petition under Article 226 of the Constitution of India challenging the order of the government directing cancellation of appointments of all casual workers/daily rated workers made after 1st July 1984 and further seeking a direction for the regularization of all the daily wagers engaged by the government of Karnataka and its local bodies. A learned Single Judge of the High Court disposed of the writ petition by granting permission to the petitioners before him, to approach their employers for absorption and regularization of their services and also for payment of their salaries on par with the regular workers, by making appropriate representations within the time fixed therein and directing the employers to consider the cases of the claimants for absorption and regularization in accordance with the observations made by the Supreme Court in similar cases. The State of Karnataka filed appeals against the decision of the learned Single Judge. A Division Bench of the High Court allowed the appeals. It held that the daily wage employees, employed or engaged either in government departments or other statutory bodies after 1st July 1984, were not entitled to the benefit of the scheme framed by the Hon’ble Supreme Court in Dharwad District Public Works Department’s case (supra), referred to earlier. The High Court considered various orders and directions issued by the government interdicting such engagements or employment and the manner of entry of the various employees. Feeling aggrieved by the dismissal of their claim, the members of the associations have filed these appeals.

REFERENCE OF THE APPEALS TO A LARGER BENCH:

When these matters came up before a Bench of two Judges, the learned Judges referred the cases to a Bench of three Judges. The order of reference is reported in 2003 (9) SCALE 187. The Hon’ble Apex Court noticed that in the matter of regularization of ad hoc employees, there were conflicting decisions by three Judge Benches of the Hon’ble Apex Court and by two Judge Benches and hence the question required to be considered by a larger Bench. When the matters came up before a three Judge Bench, the Bench in turn felt that the matter required consideration by a Constitution Bench in view of the conflict and in the light of the arguments raised by the Additional Solicitor General. The order of reference is reported in 2003 (10) SCALE 388. It appears to be proper to quote that order of reference at this stage. It reads:

1. "Apart from the conflicting opinions between the three Judges' Bench decisions in Ashwani Kumar and Others. vrs. State of Bihar and Others, reported in 1997 (2) SCC 1, State of Haryana and Others vrs.,Piara Singh and Others, reported in 1992 (4) SCC 118 and DharwadDistt. P.W.D. Literate Daily Wage Employees Association and Others vrs. State of Karnataka and Others,reported in 1990 (2) SCC 396, on the one hand, and State of Himachal Pradesh vrs. Suresh Kumar Verma and Another, reported in AIR 1996 SC 1565, State of Punjab vrs. Surinder Kumar and Others. reported in AIR 1992 SC 1593, and B.N. Nagarajan and Others vrs. State of Karnataka and Others, reported in 1979 (4) SCC 507 on the other, which had been brought out in one of the judgments under appeal of Karnataka High Court in State of Karnataka vrs. H. Ganesh Rao, decided on 1.6.2000, reported in 2001 (4) Karnataka Law Journal 466, learned Additional Solicitor General urged that the scheme for regularization is repugnant to Articles 16 (4), 309, 320 and 335 of the Constitution of India and, therefore, these cases are required to be heard by a Bench of Five learned Judges (Constitution Bench).

2. On the other hand, Mr. M.C. Bhandare, learned senior counsel, appearing for the employees urged that such a scheme for regularization is consistent with the provision of Articles 14 and 21 of the Constitution.

3. Mr. V. Lakshmi Narayan, learned counsel, appearing in CC Nos.109-498 of 2003, has filed the G.O. dated 19th July2002 and submitted that orders have already been implemented.

4. After having found that there is conflict of opinion between three Judges Bench decisions of this Court, the Hon’ble Apex Court we are of the view that these cases are required to be heard by a Bench of five learned Judges.

5. Let these matters be placed before Hon'ble the Chief Justice for appropriate orders."

We are, therefore, called upon to resolve this issue here. We have to lay down the law. We have to approach the question as a constitutional court should.

RESOLUTION OF THE ISSUE BY THE HON’BLE SUPREME COURT AS A CONSTITUTIONAL COURT:

      While proceeding to adjudicate upon the above issues the Hon’ble Supreme Court stated that in addition to the equality clause represented by Article 14 of the Constitution, Article 16 has specifically provided for equality of opportunity in matters of public employment. Buttressing these fundamental rights, Article 309 provides that subject to the provisions of the Constitution, Acts of the legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of a State. In view of the interpretation placed on Article 12 of the Constitution by this Court, obviously, these principles also govern the instrumentalities that come within the purview of Article 12 of the Constitution. With a view to make the procedure for selection fair, the Constitution by Article 315has also created a Public Service Commission for the Union and Public Service Commissions for the States. Article 320 deals with the functions of Public Service Commissions and mandates consultation with the Commission on all matters relating to methods of recruitment to civil services and for civil posts and other related matters. As a part of the affirmative action recognized by Article 16 of the Constitution, Article 335 provides for special consideration in the matter of claims of the members of the scheduled castes and scheduled tribes for employment. The States have made Acts, Rules or Regulations for implementing the above constitutional guarantees and any recruitment to the service in the State or in the Union is governed by such Acts, Rules and Regulations. The Constitution does not envisage any employment outside this constitutional scheme and without following the requirements set down therein.

Appointments beyond the Constitutional Scheme: Is there any prohibition?

 In spite of this scheme, as stated hereinbefore, 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 Constitution 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 Constitution 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 Article 226 of the Constitution or under Article 32 of the Constitution, 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.

Equity in such cases and the role of Courts:

      The Hon’ble Supreme Court stated that what is sought to be pitted against this approach, is the so called equity arising out of giving of temporary employment or engagement on daily wages and the continuance of such persons in the engaged work for a certain length of time. Such considerations can have only a limited role to play, when every qualified citizen has a right to apply for appointment, the adoption of the concept of rule of law and the scheme of the Constitution for appointment to posts. It cannot also be forgotten that it is not the role of courts to ignore, encourage or approve appointments made or engagements given outside the constitutional scheme. In effect, orders based on such sentiments or approach would result in perpetuating illegalities and in the jettisoning of the scheme of public employment adopted by us while adopting the Constitution. The approving of such acts also results in depriving many of their opportunity to compete for public employment. The Hon’ble Apex court staed that it has to consider the question objectively and based on the constitutional and statutory provisions. In this context, the Hon’ble Apex Court said that it has also to bear in mind the exposition of law by a Constitution Bench in State of Punjab vrs. Jagdip Singh and Others. [1964 (4) SCR 964]. It was held therein as follows:

 "In our opinion, where a Government servant has no right to a post or to a particular status, though an authority under the Government acting beyond its competence had purported to give that person a status which it was not entitled to give, he will not in law be deemed to have been validly appointed to the post or given the particular status."

 During the course of the arguments, various orders of courts either interim or final were brought to the notice of the Hon’ble Apex Court. The purport of those orders more or less was the issue of directions for continuation or absorption without referring to the legal position obtaining. Learned counsel for the State of Karnataka submitted that chaos has been created by such orders without reference to legal principles and it is time that this Court settled the law once for all so that in case the court finds that such orders should not be made, the courts, especially, the High Courts would be precluded from issuing such directions or passing such orders. The submission of learned counsel for the respondents based on the various orders passed by the High Court or by the Government pursuant to the directions of Court also highlights the need for settling the law by the Apex Court. The bypassing of the constitutional scheme cannot be perpetuated by the passing of orders without dealing with and deciding the validity of such orders on the touchstone of constitutionality. While approaching the questions falling for our decision, it is necessary to bear this in mind and to bring about certainty in the matter of public employment. The argument on behalf of some of the respondents is that this Court having once directed regularization in the Dharwadcase (supra), all those appointed temporarily at any point of time would be entitled to be regularized since otherwise it would be discrimination between those similarly situated and in that view, all appointments made on daily wages, temporarily or contractually, must be directed to be regularized. Acceptance of this argument would mean that appointments made otherwise than by a regular process of selection would become the order of the day completely jettisoning the constitutional scheme of appointment. This argument also highlights the need for this Court to formally lay down the law on the question and ensure certainty in dealings relating to public employment. The very divergence in approach in this Court, the so-called equitable approach made in some, as against those decisions which have insisted on the rules being followed, also justifies a firm decision by this Court one way or the other. It is necessary to put an end to uncertainty and clarify the legal position emerging from the constitutional scheme, leaving the High Courts to follow necessarily, the law thus laid down. 

[The next part will deal with legality and legitimacy of conferring permanent status on casual employees]