Supreme Court Orders Reinstatement and Regularization for Ghaziabad Gardeners: Shripal vs. Nagar Nigam (2025)

Date of the Judgment: January 31, 2025

Citation: 2025 INSC 144

Judges: Vikram Nath, J., Prasanna B. Varale, J.

Can a municipal corporation terminate the services of long-term daily wage workers without adhering to statutory procedures? The Supreme Court of India recently addressed this critical question in a case involving gardeners employed by the Ghaziabad Nagar Nigam. The court’s decision clarifies the rights of such workers and the obligations of employers. This judgment emphasizes the importance of fair labor practices and the need to protect workers from arbitrary termination, especially when they have served for extended periods.

The Supreme Court bench, comprising Justices Vikram Nath and Prasanna B. Varale, delivered the judgment. Justice Vikram Nath authored the opinion for the bench.

Case Background

The case involves a group of gardeners (referred to as “Appellant Workmen”) who were engaged by the Ghaziabad Nagar Nigam (referred to as “Respondent Employer”) starting in 1998 or 1999. These workers were responsible for maintaining parks and public spaces. They claimed they were never given formal appointment letters and were denied basic labor rights such as minimum wages and weekly offs.

In 2004, the Appellant Workmen raised an industrial dispute seeking regularization of their services and statutory benefits. Following this, the Respondent Employer allegedly delayed their salaries and subjected them to adverse working conditions. In mid-July 2005, the services of numerous workmen were terminated orally without notice or compensation.

The Appellant Workmen argued that their termination during the pendency of conciliation proceedings violated Section 6E of the U.P. Industrial Disputes Act, 1947. The matter was referred to the Labour Court, Ghaziabad, for adjudication.

Timeline

Course of Proceedings

The Labour Court, Ghaziabad, issued two conflicting sets of awards. In some cases, the court held the terminations illegal for not complying with Section 6N of the U.P. Industrial Disputes Act, 1947, and ordered reinstatement with 30% back wages. However, in other cases, the Labour Court dismissed the claims, stating that the workers were engaged through contractors and not directly by the Nagar Nigam.

Both the Respondent Employer and the aggrieved workmen filed writ petitions before the High Court of Judicature at Allahabad. The High Court modified the Labour Court’s decision, directing re-engagement of the workmen on daily wages with pay equivalent to the minimum in the regular pay scale of gardeners, and allowed for future consideration of their regularization.

Both parties then approached the Supreme Court of India via Special Leave Petitions. The workmen sought full reinstatement with back wages and regularization, while the Respondent Employer sought to quash the High Court’s modifications.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 6E of the U.P. Industrial Disputes Act, 1947: This section states that during the pendency of any conciliation proceeding, an employer cannot alter the conditions of service of a workman or discharge them without the express permission of the authority before which the proceeding is pending. The section reads as follows:

  “6E. [ Conditions of service, etc. to remain unchanged in certain circumstances during the pendency of proceedings. [Inserted by U.P. Act No. 1 of 1957.]
  (1) During the pendency of any conciliation proceeding before a Conciliation Officer or a Board or of any proceeding before a Labour Court or Tribunal in respect of an industrial dispute, no employer shall, –
  (a) in regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding, or
  (b) for any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise any workman concerned in such dispute save with the express permission in writing of the authority before which the proceeding is pending.
  (2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute, –
  (a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding, or
  (b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise:
  Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.
  (3) Notwithstanding anything contained in sub -section (2) no employer shall during the pendency of any such proceeding in respect of an industrial dispute, take any action against any protected workman concerned in such dispute, –
  (a) by altering, to the prejudice of such protected workman, the conditions of service applicable to him immediately before the commencement of such proceeding, or
  (b) by discharging or punishing, whether by dismissal or otherwise, such protected workman, such with the express permission in writing of the authority before which the proceeding is pending.
  Explanation. – For the purposes of this sub-section, a ‘protected workman’ in relation to an establishment, means a workman who, being an officer of a registered trade union connected with the establishment, is recognized as such in accordance with rules made in this behalf.
  (4) In every establishment, the number of workmen to be recognized as protected workmen for the purposes of sub -section (3) shall not exceed one per cent of the total number of workmen employed therein subject to a minimum number of five protected workmen and a maximum number of one hundred protected workmen and for the aforesaid purpose, the State Government may make rules providing for the distribution of such protected workmen among various trade unions, if any, connected with the establishment and the manner in which they may be chosen and recognized as protected workmen.
  (5) Where an employer makes an application to a Board, Labour Court or Tribunal under the proviso to sub -section (2) for approval of the action taken by him, the authority concerned shall, without delay, hear such application and pass, as expeditiously as possible, such order in relation thereto as it deems fit.”
  

• Section 6N of the U.P. Industrial Disputes Act, 1947: This section mandates that a proper notice or wages in lieu thereof, as well as retrenchment compensation, must be provided to a workman before their retrenchment.

Arguments

Arguments of the Appellant Workmen:

• Continuous Service & Comparable Duties: The Appellant Workmen argued that they had been performing duties similar to regular gardeners for over a decade under the direct supervision of the Respondent Employer.
• Direct Engagement & Wage Disbursement: They claimed their wages were paid directly by the Horticulture Department of the Respondent Employer, indicating a direct employer-employee relationship. They cited muster rolls and internal notes as evidence.
• Illegal Termination: They contended that their termination in July 2005 during the pendency of conciliation proceedings violated Sections 6E and 6N of the U.P. Industrial Disputes Act, 1947, as they were not given any notice or statutory payments.
• Entitlement to Reinstatement & Regularization: They argued that they were entitled to full reinstatement with back wages and regularization, based on their long service and the principle of “equal pay for equal work.”

Arguments of the Respondent Employer:

• Compliance with Constitutional Requirements: The Respondent Employer argued that there was a ban on fresh recruitment in Municipal Corporations and that no proper selection process was followed for the appointment of the workmen.
• No Direct Employer-Employee Relationship: They claimed that all horticulture work was carried out through independent contractors and that the wage documentation cited by the workmen did not establish direct engagement.
• Inapplicability of Regularization: They relied on the case of Secretary, State of Karnataka vs. Umadevi (2006) 4 SCC 1, asserting that daily wagers cannot claim permanent absorption without adherence to constitutional requirements and availability of sanctioned vacancies.
• Inadequate Proof of 240 Days’ Service: They argued that the workmen did not demonstrate that they had completed 240 days of continuous work in any calendar year, which is necessary to prove illegal cessation of service.
• Challenge to Modified Relief: They argued that the High Court’s direction to pay minimum-scale wages and consider the workmen for future regularization was beyond its legal boundaries.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court considered the following main issues:

1. The nature of engagement of the Appellant Workmen.
2. The circumstances under which their services were terminated.
3. Whether the termination was in compliance with the U.P. Industrial Disputes Act, 1947.
4. Whether the workmen were entitled to reinstatement, back wages and regularization.

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

How each submission made by the Parties was treated by the Court?

• Secretary, State of Karnataka vs. Umadevi (2006) 4 SCC 1: The Supreme Court distinguished this case, stating that it does not justify exploitative engagements and that it differentiates between illegal and irregular appointments.
• Jaggo v. Union of India 2024 SCC OnLine SC 3826: The Supreme Court relied on this case to highlight the misuse of temporary employment contracts and the exploitation of temporary employees.
• Section 6E of the U.P. Industrial Disputes Act, 1947: The Court held that the Respondent Employer had violated this section by not obtaining prior approval before terminating the services of the workmen during the pendency of conciliation proceedings.
• Section 6N of the U.P. Industrial Disputes Act, 1947: The Court held that the Respondent Employer had violated this section by not providing proper notice or wages in lieu thereof as well as retrenchment compensation.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the following considerations:

• Violation of Labour Laws: The court emphasized that the Respondent Employer had violated Sections 6E and 6N of the U.P. Industrial Disputes Act, 1947, by terminating the services of the workmen without following due process.
• Direct Employer-Employee Relationship: The court found that the workmen were directly engaged by the Respondent Employer, not through contractors, based on the lack of contractor documentation and direct wage payments by the Horticulture Department.
• Exploitation of Workers: The court noted that the Respondent Employer had engaged in unfair labor practices by denying the workmen fair wages and benefits, despite their long service and the essential nature of their work.
• Principle of Equal Pay for Equal Work: The court highlighted that the workmen were performing duties similar to regular gardeners and were entitled to equal pay and benefits.
• Need for Regularization: The court recognized that the workmen had been performing perennial municipal duties and were therefore entitled to a fair and transparent process for regularization.

Ratio: Fact vs. Law

Logical Reasoning

Judgment

The Supreme Court held that the Respondent Employer’s discontinuation of the Appellant Workmen’s services was illegal, as it violated Sections 6E and 6N of the U.P. Industrial Disputes Act, 1947. The court emphasized that the workmen were engaged in essential, perennial duties and could not be relegated to perpetual uncertainty. The court also noted that the employer had failed to prove that the workers were employed through a contractor and not directly by the municipality.

The court stated, “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.”

The court further stated, “The Respondent Employer consistently labelled the Appellant Workmen as casual employees (or workers engaged through an unnamed contractor), yet there is no material proof of adherence to Section 6N of the U.P. Industrial Disputes Act, 1947, which mandates a proper notice or wages in lieu thereof as well as retrenchment compensation.”

The court also observed, “Indian labour law strongly disfavors perpetual daily -wage or contractual engagements in circumstances where the work is permanent in nature.”

The Supreme Court set aside the High Court’s order to the extent it confined the Appellant Workmen to future daily-wage engagement without continuity or meaningful back wages. The court ordered:

• The discontinuation of the Appellant Workmen’s services was declared illegal, and all orders terminating their services were quashed.
• The Appellant Workmen were to be treated as continuing in service from the date of their termination, for all purposes, including seniority and continuity in service.
• The Respondent Employer was directed to reinstate the Appellant Workmen within four weeks.
• The entire period of absence was to be counted for continuity of service and all consequential benefits.
• The Appellant Workmen were entitled to 50% of the back wages from the date of their discontinuation until their actual reinstatement.
• The Respondent Employer was directed to initiate a fair and transparent process for regularizing the Appellant Workmen within six months.

Key Takeaways

• Municipal corporations cannot terminate the services of long-term daily wage workers without adhering to statutory procedures.
• Workers engaged in perennial duties are entitled to fair wages, benefits, and a process for regularization.
• The principle of “equal pay for equal work” must be applied to workers performing similar duties as regular employees.
• Employers must maintain proper documentation to prove the nature of employment and cannot deny benefits by claiming workers are engaged through contractors without evidence.
• Termination of workers during the pendency of conciliation proceedings without prior approval is illegal.

Directions

The Supreme Court issued the following directions:

• The discontinuation of the Appellant Workmen’s services, effected without compliance with Section 6E and Section 6N of the U.P. Industrial Disputes Act, 1947, is declared illegal. All orders or communications terminating their services are quashed. In consequence, the Appellant Workmen shall be treated as continuing in service from the date of their termination, for all purposes, including seniority and continuity in service.
• The Respondent Employer shall reinstate the Appellant Workmen in their respective posts (or posts akin to the duties they previously performed) within four weeks from the date of this judgment. Their entire period of absence (from the date of termination until actual reinstatement) shall be counted for continuity of service and all consequential benefits, such as seniority and eligibility for promotions, if any.
• Considering the length of service, the Appellant Workmen shall be entitled to 50% of the back wages from the date of their discontinuation until their actual reinstatement. The Respondent Employer shall clear the aforesaid dues within three months from the date of their reinstatement.
• The Respondent Employer is directed to initiate a fair and transparent process for regularizing the Appellant Workmen within six months from the date of reinstatement, duly considering the fact that they have performed perennial municipal duties akin to permanent posts. In assessing regularization, the Employer shall not impose educational or procedural criteria retroactively if such requirements were never applied to the Appellant Workmen or to similarly situated regular employees in the past. To the extent that sanctioned vacancies for such duties exist or are required, the Respondent Employer shall expedite all necessary administrative processes to ensure these longtime employees are not indefinitely retained on daily wages contrary to statutory and equitable norms.

Development of Law

The ratio decidendi of this case is that the termination of long-serving daily wage workers without following the due process as per the U.P. Industrial Disputes Act, 1947 is illegal. This case reinforces the principle that workers engaged in perennial duties are entitled to a fair process for regularization and cannot be denied their rights under the guise of a “ban on fresh recruitment.” The judgment also clarifies that the employer has the responsibility to prove that the workers were engaged through a contractor, and not directly by the municipality. It further highlights the misuse of temporary employment contracts and the exploitation of temporary employees, as also noted in Jaggo v. Union of India 2024 SCC OnLine SC 3826.

Conclusion

The Supreme Court’s judgment in Shripal vs. Nagar Nigam, Ghaziabad is a significant victory for the Appellant Workmen. The court’s decision not only ensures reinstatement and back wages for the workers but also mandates a fair process for their regularization. This judgment reinforces the importance of adhering to labor laws and protecting the rights of workers, particularly those engaged in long-term, essential services.