M J Antony: Labour issues plague courts

OUT OF COURT

As promises of a comprehensive labour law reform turn into a mirage, courts have to carry the burden of old statutes.

Parliament was adjourned sine die last week, reportedly because there was no business to be done. But this attitude of the lawmakers seems to create business for the courts as the laws are not amended and updated. Some laws cry for reform, like the legislations on labour. Though successive governments have promised a comprehensive review of the statutes in this field, such assurances have been repeatedly forgotten. One of the consequences is that the courts, including the Supreme Court, are burdened with the task of explaining and clarifying old provisions of labour statutes and laying down more guidelines.

The flow of labour judgements from the Supreme Court itself is ominously large. Most of the recent ones refer to disputes over whether a particular worker was employed as casual, daily-rated, temporary, ad hoc and the like and his claim to wages, reinstatement or retrenchment benefits. The existing laws have not been able to cope with the new economic regime. Therefore, the courts continue to deal with such nettlesome issues.

A quick look at some of these cases would show how the high courts and the Supreme Court are struggling with labour issues. The National Thermal Power Corporation has just lost its appeal in the Supreme Court in a case involving a survey boy. He was employed in 1977 on a casual basis at the rate of Rs 6 per day. His services were terminated in 1981, leading to the industrial dispute. The case under the UP Industrial Disputes Act had been going on for the past 26 years. The labour court had directed the corporation to reinstate him with full back wages. The Allahabad high court upheld the decision. The Supreme Court has now stated that the labour court and high court were right.

Hindustan Aeronautics Ltd was luckier than the NTPC. Its muster roll trade union moved a writ petition in 1990 demanding the regularisation of its members as they had all put in 240 days of continuous service. HAL argued that they did seasonal work, and there was no full time workload to justify such a large workforce on a permanent basis. The high court rejected this contention. On appeal, the Supreme Court accepted the arguments of HAL and set aside the judgements of the courts below.

Regarding the claim based on the completion of 240 continuous working days in a calendar year, the Supreme Court emphasised that it did not confer any right on the employee to claim regularisation in service. It quoted several earlier decisions on this point. For instance, in Madhyamik Shiksha Parishad vs Anil Kumar Mishra (2005), it was held that the completion of 240 days' work did not confer such right under the Industrial Disputes Act. It merely imposed certain obligations on the employer at the time of termination of services. In a recent case, IDPL vs Workmen, the Supreme Court underlined that there was no right vested in any daily wager to seek regularisation. It can be done only in accordance with the rules and not outside them.

It was reiterated that the creation and abolition of posts and regularisation are purely executive functions. The court cannot issue any direction to absorb workers or continue them in service or pay them salaries of regular employees. "There is a broad separation of powers under the Constitution and the judiciary too must know its limits," the judgement emphasised.

Another case on the 240-days rule was State of Punjab vs Des Bandhu, which started nearly two decades ago. The labour court held that this temporary worker was entitled to reinstatement with full back wages. It was affirmed by the high court. However, the Supreme Court did not approve of those decisions. Still it settled the issue with a lump sum payment to the employee, in view of the long litigation.

In a recent Constitution bench judgement, Secretary, State of Karnataka vs Umadevi, the court has categorically held that regularisation cannot be ordered against legal provisions. This 2006 decision came as a boon for managements who are increasingly employing temporary hands. However, the message of the judgement does not seem to have percolated to the labour and high courts. Therefore more disputes are coming to the Supreme Court.

Parliamentarians continue to look the other way as courts battle these cases, as well as other issues on the labour front, like the rights of workers of sick companies, and their entitlements during winding up operations. The lawmakers are not even aware that the definition of 'industry' has been described as "not comprehensive, clear and conclusive" and the Supreme Court has decided to take a second look at it. With 41,000 cases pending, the judges have not been able to do it. They are not as lucky as the MPs who can advance their summer vacation for want of work.