IMPORTANT POINTS
1. Court cannot direct continuation in service of a non regular appointee.
2. The casual, daily rated or ad hoc employees have no right to be continued in service, far less of being regularized and get regular pay.
3. It is well settled that a mere direction of the Supreme Court without laying down any principle of law is not a precedent.

Headnote:(i) LABOUR LAW - Regularization - Appointment as casual workers on daily rate basis for the reason that they were dependents of employees dying in harness - Such appointments were made by appellant due to persistent and prolonged agitation by the trade union although there was no rule/policy for such compassionate appointment in the service of appellant company - Company was already over-staffed - These persons were paid wages according to the rates of daily wages and were given work in the nature of cleaning window panes, sweeping floors and sundry jobs on contract basis which work was not the work of regular employees of appellant company - From year 1986, financial position of appellant company became critical as it was running on huge losses, hence its corporate office issued stop/ban order, banning any fresh recruitment/appointments admittedly employees in question in Court had not been appointed by following the regular procedure - Labour Court held that although the said ten persons were employed as ‘casual daily rated employees’ by the company, yet in view of their having continued for a long time, they were entitled to regularisation - Action of management in not regularizing them was unjustified - Direction made by Labour Court that they should be paid the wages and benefits as given to other regular employees from the date of the award - High Court held that impugned award, to the extent it directed for regularization of respondents, could not be sustained - However, it directed that company shall continue such employees in its services till their superannuation and they shall be paid wages like the regular employees of the company - Whether judgment of the High Court is sustainable - (No) - There are no vacancies on which respondents could have been appointed.
       Held : The distinction between a temporary employee and a permanent employee is well settled. Whereas a permanent employee has a right to the post, a temporary employee has no right to the post. It is only a permanent employee who has a right to continue in service till the age of superannuation (unless he is dismissed or removed after an inquiry, or his service is terminated due to some other valid reason earlier). As regards a temporary employee, there is no age of superannuation because he has no right to the post at all. Hence, it follows that no direction can be passed in the case of any temporary employee that he should be continued till the age of superannuation.(Para 13)
       We are afraid that the Labour Court and High Court have passed their orders on the basis of emotions and sympathies, but cases in Court have to be decided on legal principles and not on the basis of emotions and sympathies. Admittedly, the employees in question in Court had not been appointed by following the regular procedure, and instead they had been appointed only due to the pressure and agitation of the union and on compassionate ground. There were not even vacancies on which they could be appointed.(Paras 15 & 16)
       No doubt, there can be occasions when the State or its instrumentalities employ persons on temporary or daily wage basis in a contingency as additional hands without following the required procedure, but this does not confer any right on such persons to continue in service or get regular pay. Unless the appointments are made by following the rules, such appointees do not have any right to claim permanent absorption in the establishment. A perusal of the record of the present case shows that the respondents were appointed on purely casual and daily rate basis without following the relevant service rules. Thus they had no right to the post at all.(Paras 26 & 27)
       Thus, it is well settled that there is no right vested in any daily wager to seek regularization. Regularization can only be done in accordance with the rules and not de hors the rules. (Para 29)
       The respondents have not been able to point out any statutory rule on the basis of which their claim of continuation in service or payment of regular salary can be granted. It is well settled that unless there exists some rule no direction can be issued by the court for continuation in service or payment of regular salary to a casual, ad hoc, or daily rate employee. Such directions are executive functions, and it is not appropriate for the court to encroach into the functions of another organ of the State. The courts must exercise judicial restraint in this connection. The tendency in some courts/tribunals to legislate or perform executive functions cannot be appreciated. Judicial activism in some extreme and exceptional situation can be justified, but resorting to it readily and frequently, as has lately been happening, is not only unconstitutional, it is also fraught with grave peril for the judiciary.(Para 33)
       No doubt, in some decisions the Supreme Court has directed regularization of temporary or ad hoc employees but it is well settled that a mere direction of the Supreme Court without laying down any principle of law is not a precedent. It is only where the Supreme Court lays down a principle of law that it will amount to a precedent. Often the Supreme Court issues directions without laying down any principle of law, in which case, it is not a precedent. (Para 36)
       We are of the opinion that if the court/tribunal directs that a daily rate or ad hoc or casual employee should be continued in service till the date of superannuation, it is impliedly regularizing such an employee, which cannot be done as held by this Court.(Para 40)
       Before parting with this case, we would like to state that although this Court would be very happy if everybody in the country is given a suitable job, the fact remains that in the present state of our countrys economy the number of jobs are limited. Hence, everybody cannot be given a job, despite our earnest desire.(Para 42)
       (ii) Constitution of India - Articles 37 and 41 - Right to work - Article 21 of the Constitution cannot be stretched so far as to mean that everyone must be given a job - Number of available jobs are limited, and hence Courts must take a realistic view of the matter and must exercise self restraint - Jobs cannot be created by judicial orders, nor even by legislative or executive decisions.
       Held : It may be mentioned that jobs cannot be created by judicial orders, nor even by legislative or executive decisions. Jobs are created when the economy is rapidly expanding, which means when there is rapid industrialization. At present, the state of affairs in our country is that although the economy has progressed a little in some directions, but the truth is that this has only benefited a handful of persons while the plight of the masses has worsened. Unemployment in our country is increasing, and has become massive and chronic.(Para 43)
       No doubt, Article 41 provides for the right to work, but this has been deliberately kept by the founding fathers of our Constitution in the Directive Principles and hence made unenforceable in view of Article 37, because the founding fathers in their wisdom realized that while it was their wish that everyone should be given employment, but the ground realities of our country cannot be overlooked. In our opinion, Article 21 of the Constitution cannot be stretched so far as to mean that everyone must be given a job. The number of available jobs are limited, and hence Courts must take a realistic view of the matter and must exercise self-restraint.(Para 45)

JUDGMENT

Markandey Katju, J. - Leave granted.

2. This appeal has been filed against the impugned judgment and order dated 30.9.2005 passed by the Uttaranchal High Court in W.P. No.3360 of 2001. By that Judgment the High Court has modified the award of the Labour Court, U.P., Dehradun, to the extent that the workmen, in whose favour the award had been made, were allowed to be continued in the service of the appellant employer till their superannuation, and if their services were not required they should not be terminated except in accordance with Industrial Law. The High Court further directed that the workmen in question should be paid wages like the regular employees performing the work and duties in the appellant-company.

3. We have heard the learned counsel for the parties and perused the record.

The facts of the case are that the appellant is a Public Sector Undertaking which has a plant in Rishikesh where it was manufacturing pharmaceuticals. The present dispute relates to the ten concerned employees who were appointed as casual workers on daily rate basis for the reason that they were dependants of employees dying in harness. Such appointments were made by the appellant due to the persistent and prolonged agitation by the trade union since the appellant wanted to maintain industrial harmony, although there was no rule/policy for such compassionate appointment in the service of the appellant company, which was already over-staffed. As against 1049 sanctioned posts, there were already 1299 employees working in the company at the relevant time.

4. The aforesaid ten persons were paid wages according to the rates of daily wages, declared by the State Government from time to time, as agreed with the union. Since the appellant was already over-staffed in all its departments, the said persons were given work in the nature of cleaning window panes, sweeping floors and such sundry jobs on contract basis which work was not the work of the regular employees of the appellant-company.

5. From the year 1986 the financial position of the appellant-company became critical as it was running on huge losses and hence its corporate office issued stop/ban order, banning any fresh recruitment/appointments. The company also applied to the BIFR as it had become sick. The BIFR had also issued directions to the company to reduce its manpower in order to try to revive the company, but despite this situation the union started pressing and agitating for regularization of the aforesaid ten concerned daily rated employees. The failure of talks between the company and the union led to the reference of a dispute under the Industrial Disputes Act before the Labour Court in the year 1992 in the following terms:

"Whether the action of the employer in not regularizing 22 workmen and not granting them wage scales and other benefits given to the regular employees is unjustified and/or illegal"

6. Before the Labour Court, only 10 out of the 22 workmen appeared and filed written statement and therefore the award was passed only in respect of the said ten persons. The Labour Court held that although the said persons were employed as "casual daily rated employees" by the company, yet in view of their having continued for a long time, they were entitled to regularization and the action of the management in not regularizing them was unjustified and consequentially they should be paid the wages and benefits as given to other regular employees from the date of the award i.e. 25.7.1996.

7. In the writ petition filed by the appellant challenging the said award, the High Court upheld the contention of the appellant that the respondents were not entitled to regularization in view of the well settled law laid down by this Honble Court in the case of Madhyamik Shiksha Parishad, U.P. vs. Anil Kumar Mishra & Ors. reported in 2005(5) SCC 122 wherein it has been categorically held that completion of 240 days or more does not entitle/import the right of regularization. The Hig

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2006 Supreme(SC) 1127

Cases Referred (31)