Case Note & Summary
By way of a special leave petition, the Ghaziabad Development Authority and others challenged an order dated 28 February 1994 passed by a single judge of the Allahabad High Court in Civil Misc. Writ Petition No. 11535 of 1991. The dispute concerned daily wage employees engaged by the authority in its planned development of urban areas under the U.P. Urban Planning and Development Act, 1973. The employees had filed the writ petition claiming parity in appointment and pay with regular employees and seeking regularisation of their services. The single judge negated the relief of regularisation but directed that the principles contained in Sections 25F and 25G of the Industrial Disputes Act be followed. The development authority challenged this direction on the grounds that it was not an industry and that the provisions of the Industrial Disputes Act, whether central or the U.P. local act, had no application. It also expressed apprehension that the order might require it to continue engaging the daily wagers even when no projects were available. The Supreme Court heard both sides after condoning delay and granting leave. It examined the High Court judgment and found that the single judge did not intend to declare the authority an industry or to apply the Industrial Disputes Act directly. Instead, the High Court intended only that so long as work was available, the authority could not terminate contingent daily wage employees, and if termination became necessary, the principle of last come first go should be followed, with preference to displaced respondents in case of re-employment. The Supreme Court held that this observation was consistent with well-established principles of natural justice, equity, justice and good conscience, and therefore the single judge had rightly extended those principles. The Supreme Court clarified that the appellant was not obliged to keep engaging the respondents when no projects were at hand. It directed that on completion of existing projects, if the authority undertook any fresh project, it should take the services of existing temporary daily wage respondents instead of fresh hands at the new project location. The authority was required to maintain the order of seniority of daily wage employees and engage the senior most persons according to work requirement. In the event of no project, the obligation to pay daily wages would not arise. On the question of pay parity, the Supreme Court held that since the respondents were temporary daily wage employees and no regular posts were available, the question of making pay on par with regular employees did not arise. However, the authority was bound to pay minimum wages prescribed under any statute, if applicable, or the prevailing wages available in the locality. Accordingly, the appeal was disposed of with no order as to costs, thereby affirming the High Court order with clarifications that protected both the authority’s operational flexibility and the employees’ equitable rights.
Headnote
A) Service Law - Termination of Daily Wage Employees - Last Come First Go and Re-employment Preference - U.P. Urban Planning and Development Act, 1973 and Industrial Disputes Act, 1947, Sections 25F and 25G - The High Court directed that so long as work was available, the authority could not terminate daily wage employees and if termination was necessary, the principle of last come first go was to be followed, with preference to displaced respondents in re-employment. Supreme Court held that this direction was consistent with natural justice, equity and good conscience and did not declare the authority an industry or directly apply the Industrial Disputes Act. Held that the equitable principles were correctly extended. (Paras 1-2) B) Service Law - Re-employment of Daily Wagers in Fresh Projects - Seniority and Work Requirement - U.P. Urban Planning and Development Act, 1973 - The appellant apprehended that it would have to keep engaging respondents even without projects. Supreme Court clarified that on completion of existing projects, if fresh projects are undertaken, services of existing temporary daily wage respondents must be taken instead of fresh hands, maintaining order of seniority and taking senior most persons according to work requirement. If no project exists, obligation to pay daily wages does not arise. Held that the apprehension was incorrect. (Paras 1-2) C) Service Law - Pay Parity and Regularisation of Daily Wage Employees - Minimum Wages - U.P. Urban Planning and Development Act, 1973 and Industrial Disputes Act, 1947 - Respondents claimed parity in appointment and pay with regular employees and regularisation. Single Judge negated regularisation. Supreme Court held that temporary daily wage employees cannot claim pay parity with regular employees when no regular posts are available. However, the appellant must pay minimum wages prescribed under statute or prevailing wages in the locality. Held that regularisation claim was rightly rejected and no parity arises. (Paras 1-2) D) Industrial Law - Applicability of Industrial Disputes Act to Development Authority - Industry Status - Industrial Disputes Act, 1947, Sections 25F and 25G - The appellant contended it is not an industry and that the U.P. local Industrial Disputes Act, not Central Act, would apply if at all. Supreme Court clarified that the High Court did not intend to decide industry status or direct application of the Industrial Disputes Act; only equitable principles were invoked. Held that the Industrial Disputes Act was not directly applied. (Paras 1-2)
Issue of Consideration
Whether the High Court correctly directed principles under Sections 25F and 25G of Industrial Disputes Act to the appellant authority; whether the authority is an industry and the Act applies; whether daily wage employees are entitled to regularisation and pay parity; and what obligations the authority has regarding termination, re-employment, seniority and minimum wages.
Final Decision
Appeal disposed of. Supreme Court clarified that High Court did not declare appellant an industry or directly apply Industrial Disputes Act. Appellant must follow last come first go and preference in re-employment for daily wage employees; maintain seniority; no pay parity with regular employees but must pay minimum wages prescribed under statute or prevailing local wages. No costs.
Law Points
- Daily wage employees cannot claim pay parity with regular employees
- termination must follow last come first go
- re-employment preference to displaced daily wagers
- employer must pay minimum wages or prevailing wages
- principles of natural justice and equity apply
- Industrial Disputes Act sections 25F and 25G principles do not directly apply to non-industry authority under U.P. Urban Planning and Development Act
- 1973
