Order
1. Leave granted.
2. Admittedly, the respondent had been employed by the appellant as a messenger for a period of 91 days from 15-3-1980 to 30-6-1980. Prior to the appellant being appointed for this short stint the appellant had in a similar manner appointed one Sooraj for a short period. Subsequent to the expiry of the period for which the appellant was appointed, one Ram Kumar was appointed in the same capacity for a period of 88 days. The question to be resolved in this appeal is whether the respondent could, in these circumstances, be reinstated as a temporary employee with the appellant; and, if so, whether the respondent could claim and be allowed back wages until he was so reinstated.
3. The issue was brought before the Labour Court at Kanpur when the Government of India referred the following question for adjudication by it:
“Whether the action of the management of State Bank of India, Varanasi in terminating the services of Shri Raja Ram, sub-staff with effect from 14-6-1980 is justified? If not, to what relief is the workman concerned entitled?”
4. The Labour Court held that the respondent was a casual employee and that he was entitled to continue in service despite the expiry of the period for which he was appointed because there was an unfair labour practice on the part of the appellant in terminating the services of the respondent “when he was likely to acquire the status of a permanent employee after working for six months on that post, when he had already worked for three months and for another three months another person was appointed”. The Labour Court, therefore, came to the conclusion that the action of the appellant in terminating the services of the respondent was not justified and that the respondent should be reinstated with full back wages.
5. The writ petition filed by the appellant challenging the award of the Labour Court was rejected. The High Court concurred with the view of the Labour Court that the “repeated short-term appointments” to the post of temporary messenger amounted to unfair labour practice and that in the circumstances the respondent was entitled to reinstatement with full back wages.
6. At the time of entertaining the special leave petition this Court granted stay of the operation of the award as affirmed by the High Court.
7. Before us it has been submitted by the appellant that the provisions of Section 25-H of the Industrial Disputes Act, 1947 would only apply to a permanent employee if the employee had been retrenched within the meaning of Section 25-F read with Section 25-B of the Act. It is the further submission of the appellant that if Section 25-H applied, all the persons who had been retrenched, which in this case would include the persons who had been appointed on casual basis prior to the respondent, would have to be offered re-employment. It is also brought to this Court's notice that after the award had been passed and while the proceedings were pending before the High Court the appellant had entered into settlements with the Federation of Workmen of the appellant. These three settlements dated 17-11-1987, 22-10-1988 and 9-1-1991 provided a scheme for the employment of casual employees on permanent basis subject to certain terms and conditions. The Scheme had been advertised and applications were invited from those who could claim benefit under the Scheme. The respondent who was otherwise covered by the Scheme and who could have applied, did not choose to do so. It is stated that in terms of the settlements casual employees like the respondent had in fact been permanently employed and that to allow the respondent relief as granted by the Labour Court would run counter to the Scheme and settlements.
8. The learned counsel appearing on behalf of the respondent has submitted that as far as the settlements were concerned, the point had never been raised by the appellant before the High Court and that in any event no offer had been made to the respondent to appoint him against the permanent vacancy in terms of the settlement. It is further submitted that the issue relating to the first contention raised by the appellant regarding the inapplicability of Section 25-H to the respondent's case had already been negatived by this Court in the decision of Central Bank of India v. S. Satyam (1996) 5 SCC 419, JT (1996) 7 SC 181. It is submitted that the Labour Court had found, as a matter of fact, that the respondent, as a temporary employee, was entitled to a 14 days' notice before his services were dispensed with. In the absence of such notice, the respondent could continue in service. It is also submitted that Sooraj who had been appointed prior to the respondent had never come forward to claim continuity of service and as such the respondent alone was entitled to be reappointed on the basis of the requirements of Section 25-H of the Act.
9. It appears that the High Court as well as the Labour Court had proceeded on a fundamental misconception as to the nature of the right available to the respondent. The respondent was employed for a fixed period of 91 days. Assuming that such an employee could be called a temporary employee for the purposes of the Sastry Award, the requirement as to service of notice of 14 days, would, in cases where an employee has been appointed for a fixed tenure, amount to an embargo on the employer terminating the services prior to the expiry of such period without giving a 14 days' notice. The non-giving of the notice would not mean that the employee would thereby continue to serve beyond the period for which he was originally appointed. The exception to this principle is when an employee is appointed temporarily for successive fixed tenures with artificial breaks in between so as to deny the employee the right to claim permanent appointment. This action would be an unfair labour practice within the meaning of the phrase in Section 2(ra) of the Act. Section 2(ra) says that unfair labour practice means any of the practices specified in the Fifth Schedule to the Act. The Fifth Schedule to the Act contains a list of unfair labour practices which have been classified under two heads, namely: (I) on the part of the employer and trade unions of employers, and (II) on the part of the workmen and trade unions of workmen. The principle that we have referred to earlier finds place in Item 10 of Part I under which
“to employ workmen as ‘badlis’, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen”
is an unfair labour practice. In other words, before an action can be termed as an unfair labour practice it would be necessary for the Labour Court to come to a conclusion that the badlis, casuals and temporary workmen had been continued for years as badlis, casuals or temporary workmen, with the object of depriving them of the status and privileges of permanent workmen. To this has been added the judicial gloss that artificial breaks in the service of such workmen would not allow the employer to avoid a charge of unfair labour practice. However, it is the continuity of service of workmen over a period of years which is frowned upon. Besides, it needs to be emphasised that for the practice to amount to unfair labour practice it must be found that the workman had been retained on a casual or temporary basis with the object of depriving the workman of the status and privileges of a permanent workman. There is no such finding in this case. Therefore, Item 10 in List I of the Fifth Schedule to the Act cannot be said to apply at all to the respondent's case and the Labour Court erred in coming to the conclusion that the respondent was, in the circumstances, likely to acquire the status of a permanent employee. Furthermore, both the High Court and the Labour Court appeared to have proceeded on the basis that the appointment of Ram Kumar after the employment of the respondent ceased, also on casual basis, was an unfair labour practice. If this view is to be upheld the respondent's appointment in place of Sooraj would equally be an unfair labour practice and therefore unsustainable.
10. As far as the three settlements are concerned, the respondent is right in contending that the settlements dealt with the absorption of casual employees as permanent employees and did not touch on the question as to whether the respondent should be reinstated as a casual employee. However, the respondent's counsel is incorrect in his submission that the benefit of the Scheme could not have been availed of by the respondent because no offer was made to the respondent by the appellant. The settlements were advertised and it was for the respondent to have taken advantage of the Scheme. Although the settlements are, strictly speaking, not relevant to the question of the correctness of award, nevertheless their terms are necessary to be considered for the purpose of deciding whether, assuming everything in favour of the respondent and against the appellant, the respondent should be reinstated as a casual employee since the Scheme had been propounded by the employer with workmen with a view to granting benefit to persons whose services had been terminated as casual employees. However, the point does not appear to have been raised before the High Court by the appellant. The High Court, accordingly, merely affirmed the Labour Court's decision on the ground that the appellant was “indulging in one of the cruellest forms of unfair labour practices”. We have already held that that was an erroneous conclusion.
11. To sum up: we are of the view that Section 25-H could not be attracted in the facts and circumstances of the case and the order for reinstatement of the respondent was wrong. Consequently, there would be no question of payment of any back wages. The question whether any back wages would, in any event, be payable in these circumstances is left open. However, since the appellant had not at any stage brought on record the three settlements referred to earlier, we are of the view that the payments already made by the appellant to the respondent under Section 17-B of the Industrial Disputes Act, 1947 shall not be recovered.
12. The appeal is, therefore, allowed. The decision of the High Court and the award of the Labour Court are set aside. There shall be no order as to costs.