Constitution of India, 1950 – Article 14, Article 16 Right to Equality – Arbitrary termination of long-serving workmen without compliance with statutory safeguards violated Article 14. Right to Equal Opportunity in Employment – Workmen engaged in perennial municipal duties were entitled to regularization as per Article 16. The employer could not deny permanency by keeping them in perpetual daily-wage status.

U.P. Industrial Disputes Act, 1947 – Section 6E, Section 6N: Section 6E – Prohibition on Service Alterations During Pending Proceedings – Termination of workmen during conciliation proceedings was illegal, as no prior approval was taken from the competent authority. (Para 9, 10) Section 6N – Retrenchment Without Due Compensation – Employer failed to comply with the requirement of notice and retrenchment compensation, rendering the termination void. (Para 10, 11)

Labour Law – Regularization & Equal Pay for Equal Work Reinstatement & Back Wages – Workmen were entitled to full reinstatement with continuity of service and 50% back wages for the period of illegal termination. (Para 18) Equal Pay for Equal Work – Workmen performed identical duties as regular Gardeners, yet were denied parity in wages, amounting to unfair labor practice. (Para 13, 14)

Recruitment Ban – No Justification for Denial of Employment: State-imposed Recruitment Ban – Employer’s defense that regularization was barred due to a government ban on fresh recruitment was rejected. (Para 12, 15) Absence of Employer-Employee Relationship – Not Proved – Employer failed to produce evidence supporting its claim that workmen were hired through contractors. (Para 11, 14)

Supreme Court’s Directions

a) Termination Declared Illegal – Workmen to be reinstated with continuity of service. (Para 18-I)
b) Back Wages Awarded – Workmen to receive 50% back wages for the period of illegal termination. (Para 18-III)
c) Regularization Ordered – Employer directed to initiate regularization within six months. (Para 18-IV)

Held: The appeal of the workmen was allowed, and they were reinstated with back wages. The employer’s appeal was dismissed as the termination violated labor laws and constitutional protections.

Acts and Sections Discussed:

• Constitution of India, 1950 – Article 14, Article 16.
• U.P. Industrial Disputes Act, 1947 – Section 6E, Section 6N.
• Industrial Disputes Act, 1947 – Principles of retrenchment and unfair labor practices.
• Labour Laws – Equal pay for equal work, rights of contract workers, and regularization principles.

Subjects:

Reinstatement – Termination – Back wages – Regularization – Daily wages – Equal pay – Employer-employee relationship – Labour Court – Industrial dispute – Retrenchment compensation – Contract workers – Ban on recruitment – Illegal termination – Constitutional principles – Fair employment practices.

Facts:

1. Nature of the Litigation

• The dispute arose between Shripal & Anr. (Appellant Workmen) and Nagar Nigam, Ghaziabad (Respondent Employer) regarding the termination of workmen engaged as Gardeners (Malis) in the Horticulture Department.
• Workmen alleged they were engaged in 1998-99, continuously performed horticultural duties, and were wrongfully terminated in July 2005.
• The case was referred to the Labour Court, Ghaziabad, which passed conflicting orders—some granting reinstatement with partial back wages, others rejecting claims based on alleged contractual hiring.

2. Who Is Asking the Court and for What Remedy?

• The Appellant Workmen sought full reinstatement with back wages and regularization of services.
• The Respondent Employer challenged the reinstatement order, arguing there was no direct employer-employee relationship, and that a government ban on fresh recruitment prevented their absorption.

3. Reason for Filing the Case

• The termination allegedly violated Section 6E and Section 6N of the U.P. Industrial Disputes Act, 1947, as no proper notice, retrenchment compensation, or statutory payments were provided.
• The workmen argued they were engaged directly by the Nagar Nigam, their wages were paid by the Horticulture Department, and they performed perennial municipal duties akin to permanent employees.
• The Labour Court initially granted reinstatement to some, while dismissing others' claims on the ground that they were engaged through contractors.
• The High Court of Allahabad modified the Labour Court's order and allowed re-engagement of workmen on daily wages, with pay equal to the minimum pay scale of regular Gardeners.
• Dissatisfied with the partial relief, both parties approached the Supreme Court through Special Leave Petitions (SLPs).

Issues

a) Whether the termination of the workmen during conciliation proceedings violated Section 6E of the U.P. Industrial Disputes Act, 1947?
b) Whether the workmen were directly engaged by the Nagar Nigam, making them entitled to regularization?
c) Whether the High Court erred in restricting relief to daily-wage re-engagement instead of full reinstatement?
d) Whether the principles of "equal pay for equal work" and continuity of service applied in this case?
e) Whether the ban on recruitment could override labor rights under industrial laws?

Submissions/Arguments

Appellant Workmen

1. Continuous Service & Comparable Duties – Workmen had been continuously engaged in horticultural work for over a decade, similar to regular Gardeners.
2. Direct Employer-Employee Relationship – Wages were paid directly by the Horticulture Department, not through contractors.
3. Illegal Termination – Termination was arbitrary, done during pending conciliation proceedings, and violated Section 6E and 6N.
4. Entitlement to Reinstatement & Regularization – Workmen sought permanent absorption based on their long-standing service and the principle of equal pay for equal work.

Respondent Employer (Nagar Nigam, Ghaziabad)

1. Ban on Recruitment – No fresh appointments were allowed due to state-imposed restrictions on hiring in municipal corporations.
2. No Direct Employment – Claimed workmen were hired through contractors, and thus had no enforceable rights against the Nagar Nigam.
3. Non-Compliance with Constitutional Requirements – Cited Secretary, State of Karnataka v. Umadevi (2006) 4 SCC 1, arguing that daily wagers cannot claim regularization.
4. Failure to Prove 240 Days’ Service – Asserted that workmen failed to demonstrate continuous work for the required period under labor laws.

Decision:

• Supreme Court held the termination was illegal and set aside the High Court's order restricting relief to mere daily-wage re-engagement.
• Declared that denial of basic rights, social security, and abrupt termination without due process amounted to unfair labor practices.
• Noted that the absence of contractor records, direct supervision of workmen by the Nagar Nigam, and payment of wages through municipal accounts established an employer-employee relationship.
• Rejected the State's argument on recruitment ban, holding that municipal bodies cannot circumvent labor laws by keeping essential workers in perpetual precarious employment.

Ratio Decidendi:

1. Termination during conciliation proceedings is impermissible under Section 6E of the U.P. Industrial Disputes Act, 1947, unless prior approval is obtained.
2. Regular and continuous engagement in municipal duties establishes an employer-employee relationship, even in the absence of formal appointment letters.
3. "Equal pay for equal work" is a fundamental labor right, and perennial job functions cannot be arbitrarily labeled as contractual or temporary.
4. Ban on recruitment cannot be used to deny statutory rights, and long-serving employees performing essential services cannot be left in perpetual daily-wage status.
5. In absence of compliance with retrenchment laws, the termination was illegal, and the workmen were entitled to reinstatement with back wages.

Conclusion:

• Appeal of workmen allowed – granted reinstatement with partial back wages.
• Appeal of Nagar Nigam dismissed – restrictions imposed by the High Court on full reinstatement were lifted.
• Municipal bodies cannot arbitrarily terminate long-serving workers under the guise of a recruitment ban.