Supreme Court Directs Regularization Based on Seniority: Union of India vs. Sant Lal (2019) INSC 16

LEGAL ISSUE: Whether casual workers are entitled to regularization based on seniority, especially when juniors have been regularized.

CASE TYPE: Service Law

Case Name: Union of India & Ors. vs. Sant Lal & Ors.

Judgment Date: 8 January 2019

Date of the Judgment: 8 January 2019

Citation: (2019) INSC 16

Judges: Dr Dhananjaya Y Chandrachud, J and Hemant Gupta, J.

Can an employer selectively regularize junior employees while ignoring the claims of their seniors? The Supreme Court of India recently addressed this question in a case concerning casual workers at the Regional Training Institute in Allahabad. The court ruled that the principle of seniority must be followed when regularizing employees, especially when previous court orders mandated a seniority list. This judgment clarifies the rights of long-serving casual workers and reinforces the importance of fair and equitable treatment in employment matters. The judgment was delivered by a two-judge bench comprising of Dr. Dhananjaya Y Chandrachud, J and Hemant Gupta, J, with the opinion authored by Dr. Dhananjaya Y Chandrachud, J.

Case Background

The case originated from a dispute involving casual Group ‘D’ workers at the Regional Training Institute in Allahabad. These workers had been employed on a casual basis since 1986 and sought regularization of their services. Despite many years of service, they were not being made permanent employees.

The Central Administrative Tribunal (CAT) initially directed the authorities to prepare a seniority list based on the number of days worked and to consider regularizing the workers against existing or future vacancies. However, the authorities did not adhere to this order, leading to further litigation.

The core issue arose when the authorities regularized some junior employees, bypassing the claims of the senior workers. This act of selective regularization was challenged by the aggrieved senior workers, leading to the present case before the Supreme Court.

Timeline

Course of Proceedings

The Central Administrative Tribunal (CAT) initially directed the authorities to prepare a seniority list based on the number of days worked and to consider regularizing the workers against existing or future vacancies. The Allahabad High Court upheld this order, clarifying that there was no positive direction for regularization, but only a direction to consider the possibility.

Subsequently, the casual workers approached the Tribunal again in 2008, alleging that the authorities had breached the seniority list by regularizing junior employees. The Tribunal ruled in favor of the applicants, directing regularization based on seniority and notional pay fixation. This order was again confirmed by the Allahabad High Court.

The Union of India then appealed to the Supreme Court, challenging the High Court’s decision.

Legal Framework

The case primarily revolves around the interpretation of the directions given by the Central Administrative Tribunal (CAT) and the Allahabad High Court in earlier proceedings, and the principles of fair and equitable treatment in employment law.

The Supreme Court also considered the implications of its earlier judgment in Secretary, State of Karnataka v. Uma Devi (3), which dealt with the regularization of irregularly appointed employees. The court clarified that Uma Devi does not allow for discrimination between similarly placed employees.

The court also referred to the “Indian Audit and Accounts Department Multi- Tasking Staff Recruitment Rules, 2011”, which came into force in 2011.

The relevant legal provisions discussed in the judgment are:

• Rule 77 of the Industrial Dispute (Central) Rules, 1957: This rule was mentioned by the High Court in the first round of proceedings, noting that the Tribunal’s direction to accommodate the first 20 casual laborers was in consonance with it.

Arguments

The arguments presented before the Supreme Court can be summarized as follows:

Arguments by the Union of India (Appellant)

• The Union of India argued that the High Court was not justified in directing the consideration of regularization in other establishments, as no posts were available at the Regional Training Institute.
• They contended that the Multi-Tasking Rules of 2011 were in force, and at best, the workmen could be allowed an age relaxation if new posts were advertised.

Arguments by the Casual Workers (Respondents)

• The casual workers argued that the Union of India was required to adhere to the seniority list as per the earlier Tribunal order and that there was a clear breach by regularizing juniors.
• They relied on the judgments in Malathi Das v. Suresh and Prem Ram v. Managing Director Uttarakhand Pey Jal and Nirman Nigam Dehradun to support their claim that the principle of seniority should be followed.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame the issues in a separate section. However, the main issues that the court addressed were:

1. Whether the High Court was justified in directing the Union of India to consider the regularization of casual workers in other establishments.
2. Whether the Union of India was correct in regularizing junior employees while bypassing the claims of senior employees, in violation of the seniority list.
3. Whether the decision in Uma Devi can be used to discriminate between similarly placed employees.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court held that the High Court was not justified in directing the Union of India to consider the regularization of casual workers in other establishments. However, the Court upheld the direction of the Tribunal and the High Court that the Union of India must follow the seniority list in regularizing the workmen.

The Court emphasized that the decision in Uma Devi cannot be used to discriminate between similarly placed employees. The Court directed that the case for regularization shall be considered strictly in accordance with the seniority list and that those who have crossed the age of superannuation will be entitled to the computation and payment of their retiral dues.

The Court’s treatment of the authorities is summarized below:

• Secretary, State of Karnataka v. Uma Devi (3) [(2006) 4 SCC 1]: The Court clarified that this judgment does not allow for discrimination between similarly placed employees. It emphasized that once the Union of India decides to regularize employees based on a seniority list, it cannot discriminate between employees.
• Malathi Das v. Suresh [(2014) 13 SCC 249]: The Court relied on this case to support the view that regularization should be granted to similarly placed individuals. This case highlighted that authorities had granted regularization to other similarly placed individuals, even after the decision in Uma Devi.
• Prem Ram v. Managing Director Uttarakhand Pey Jal and Nirman Nigam Dehradun [(2015) 11 SCC 255]: This case was used to emphasize that seniority should be the basis for regularization. The Court noted that in Prem Ram, individuals appointed earlier were bypassed in favor of those appointed later, which was deemed unfair.
• State of Karnataka v. M L Kesari [(2010) 9 SCC 247]: The Court used this case to clarify that the “one-time measure” prescribed in Uma Devi is completed only when all eligible employees are considered. This ensures that no eligible employee is left out of the regularization process.
• Narendra Kumar Tiwari v. State of Jharkhand [(2018) 8 SCC 238]: This case was cited to highlight that the intent of Uma Devi was to confer a benefit on those irregularly appointed in the past. The Court emphasized that a pragmatic approach should be taken to ensure that employees who have completed the requisite years of service are regularized.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure fairness and equity in the regularization process. The Court emphasized that once the Union of India decided to regularize employees based on a seniority list, it could not discriminate between employees. The Court was also concerned about the arbitrariness in the conduct of the authorities at the Institute, who had picked up individuals for regularization while ignoring seniors. The Court also took into account the fact that the casual workers had put in over twelve years of service even before the decision in Uma Devi.

The Supreme Court’s judgment was influenced more by the legal principles and precedents than by the factual aspects of the case.

The Court’s reasoning can be summarized as follows:

The Court rejected the argument that no posts were available for regularization, emphasizing that the authorities could not evade their responsibility by claiming a lack of vacancies. The Court also rejected the argument that only those who reported for work should be considered for regularization, noting that this defense was not supported by the record.

The Court’s decision was based on the following reasons:

• The Union of India had failed to adhere to the seniority list as mandated by the earlier Tribunal order.
• The regularization of junior employees while bypassing senior employees was arbitrary and unfair.
• The decision in Uma Devi does not allow for discrimination between similarly placed employees.
• The casual workers had put in long years of service, and their claims should be considered fairly.

The Court quoted the following from the judgment of Uma Devi:

“In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularise as a one-time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed.”

The Court also quoted the following from State of Karnataka v. M L Kesari:

“The one-time exercise should consider all daily-wage/ad hoc/casual employees who had put in 10 years of continuous service as on 10-4-2006 without availing the protection of any interim orders of courts or tribunals. If any employer had held the one-time exercise in terms of para 53 of Umadevi, but did not consider the cases of some employees who were entitled to the benefit of para 53 of Umadevi, the employer concerned should consider their cases also, as a continuation of the one-time exercise. The one-time exercise will be concluded only when all the employees who are entitled to be considered in terms of para 53 of Umadevi, are so considered.”

The Court also quoted the following from Narendra Kumar Tiwari v. State of Jharkhand:

“The purpose and intent of the decision in Umadevi was therefore twofold, namely, to prevent irregular or illegal appointments in the future and secondly, to confer a benefit on those irregularly appointed in the past…”

There was no minority opinion in this case.

Key Takeaways

• Seniority must be strictly followed in the regularization of casual workers.
• Employers cannot discriminate between similarly placed employees when regularizing services.
• The decision in Uma Devi does not allow for bypassing seniority in regularization.
• Long-serving casual workers have a right to be considered for regularization based on their seniority.
• Employers must adhere to court orders regarding seniority lists and regularization.

Directions

The Supreme Court directed the following:

• The case for regularization shall be considered strictly in accordance with the seniority list in pursuance of the directions which were issued by the Tribunal and confirmed by the High Court.
• Such of the persons, who are available for regularization on the basis of vacancies existing at present, shall be considered in accordance with law.
• Persons who have crossed the age of superannuation will be entitled to the computation and payment of their retiral dues on that basis.
• This exercise shall be carried out within a period of three months from the receipt of a copy of the judgment.
• If it becomes necessary to grant age relaxation to the concerned workmen, the appellants shall do so.

Development of Law

The ratio decidendi of this case is that the principle of seniority must be strictly followed in the regularization of casual workers and that the decision in Uma Devi cannot be used to discriminate between similarly placed employees. This judgment reinforces the importance of fair and equitable treatment in employment matters. The judgment clarifies that the one-time measure as per Uma Devi is not a one-time exercise and is a continuing exercise until all eligible employees are considered.

Conclusion

The Supreme Court’s judgment in Union of India vs. Sant Lal emphasizes the importance of seniority in the regularization of casual workers. The Court held that the Union of India must adhere to the seniority list and cannot discriminate between similarly placed employees. This decision ensures that long-serving casual workers are given a fair chance at regularization and that employers cannot bypass seniority in favor of junior employees.