Employment Status & Corresponding Rights Should Be Determined By The Nature Of Work Performed, Rather Than Label Assigned To Worker: SC

The Court, while deciding appeals filed by part-time workers engaged by the Central Water Commission (CWC), quashed their termination orders and directed the authorities to grant regularisation. The Appellants, who had served for several years in positions such as Safaiwalis and Khallasi, were initially denied relief by the Central Administrative Tribunal (CAT) and the Delhi High Court. The Court held that the denial of regularisation was unjustified, given the long and uninterrupted nature of their service.

The Bench of Justice Vikram Nath and Justice Prasanna B. Varale observed that “it is imperative for government departments to lead by example in providing fair and stable employment. Engaging workers on a temporary basis for extended periods, especially when their roles are integral to the organization's functioning, not only contravenes international labour standards but also exposes the organization to legal challenges and undermines employee morale. By ensuring fair employment practices, government institutions can reduce the burden of unnecessary litigation, promote job security, and uphold the principles of justice and fairness that they are meant to embody.”

Advocate Akshay Bedi represented the Appellants, while ASG K. M Nataraj appeared for the Respondents.

The Appellants were engaged as part-time workers by the CWC between 1993 and 2004. Despite their designations as part-time workers, they performed essential duties for the CWC over extended periods. In 2015, the Appellants filed applications before the CAT, seeking regularisation under government guidelines for employees engaged in work of a continuous nature.

However, the CAT dismissed their application stating that they were not eligible for regularisation since their appointments were not made against sanctioned posts. Shortly thereafter, the Appellants’ services were terminated.

The Appellants approached the High Court, which upheld the CAT’s decision, stating that their appointments did not conform to the requirements laid out by the Apex Court in Secretary, State of Karnataka v. Uma Devi (2006). Aggrieved by these decisions, the Appellants filed appeals before the Supreme Court.

The Supreme Court clarified that the decision in Uma Devi (Supra) did not intend to penalise employees who have rendered long years of service fulfilling ongoing and necessary functions of the State or its instrumentalities. The said judgment sought to prevent backdoor entries and illegal appointments that circumvent constitutional requirements.

“However, where appointments were not illegal but possibly “irregular,” and where employees had served continuously against the backdrop of sanctioned functions for a considerable period, the need for a fair and humane resolution becomes paramount. Prolonged, continuous, and unblemished service performing tasks inherently required on a regular basis can, over the time, transform what was initially ad-hoc or temporary into a scenario demanding fair regularization,” it explained.

The Court also pointed out that “the nature of the work performed, rather than the label assigned to the worker, should determine employment status and the corresponding rights and benefits. It highlights the judiciary's role in rectifying such misclassifications and ensuring that workers receive fair treatment.”

Consequently, the Court quashed the termination Order and held that “The High Court placed undue emphasis on the initial label of the appellants’ engagements and the outsourcing decision taken after their dismissal. Courts must look beyond the surface labels and consider the realities of employment: continuous, long-term service, indispensable duties, and absence of any mala fide or illegalities in their appointments. In that light, refusing regularization simply because their original terms did not explicitly state so, or because an outsourcing policy was belatedly introduced, would be contrary to principles of fairness and equity.”

Accordingly, the Supreme Court allowed the Appeal.

Cause Title: Jaggo v. Union of India & Ors. (Neutral Citation: 2024 INSC 1034)

Appearance:

Appellant: Advocates Akshay Bedi, Mohd. Anas, Udian Sharma, Jaitegan Singh Khurana, Akshaya Jebakumar, Manav Mitra and Anshul Rajora; AOR Ram Lal Roy and Kshitij Mudgal

Respondents: ASG K. M Nataraj; Advocates Bhuvan Kapoor, Rajan Kumar Chourasia, Vinayak Sharma, Shubham Saxena, Prasenjeet Mohapatra and Shashank Bajpai; AOR N. Visakamurthy

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