Case of wrongful denial of employment & regularization: SC dismisses appeal of Coal India’s subsidiary challenging Industrial Tribunal’s order directing regularization of 13 workmen
Justices Pamidighantam Sri Narasimha & Sandeep Mehta [12-03-2024]

Read Order:  MAHANADI COALFIELDS LTD v. BRAJRAJNAGAR COAL MINES WORKERS’ UNION [SC- CIVIL APPEAL NO(S). 4092-4093/2024]

Tulip Kanth

New Delhi, March 13, 2024: While dismissing the appeals of Mahanandi Coalfields, a subsidiary of Coal India Ltd, the Supreme has confirmed the decision of the Industrial Tribunal directing regularization of 13 workmen who actively participated in tasks deemed regular and perennial.

The Appellant-Mahanadi Coalfields Ltdfloated a tender for the transportation of crushed coal and selected a successful contractor for performance of the agreement for the period 1984 to 1994. The contractor employed workmen for execution of this contract.

The respondent-union espoused the cause of the workmen who were engaged by the contractor and sought permanent status for them. It relied on clauses 11.5.1 and 11.5.2 of the National Coal Wage Agreement-IV dated 27.07.1989 whereby it was agreed that the employer shall not engage contract labour with respect to jobs which are permanent and perennial in nature. It was also provided that such jobs would be executed through regular employees.

Following the representation of the respondent-union, the Assistant Labour Commissioner sent a notice to the appellant for conciliation. The conciliation process eventually culminated in a settlement under Rule 58 of the Industrial Disputes (Central) Rules, 1957. The Central Government referred the entire dispute to the Industrial Tribunal under Section 10 (2A)(1)(d) of the Industrial Disputes Act, 1947as the settlement was confined to only 19 workmen. The Tribunal allowed the industrial dispute and directed the regularization of the remaining 13 workmen. The Orissa High Court, thereafter, dismissed the appellant’s petition and thus, the appellants approached the Top Court.

The appellant had contended that the settlement was binding on the parties due to Section 18(1) read with Section 36, Industrial Disputes Act and it continued to be so by virtue of Section 19(2), since the settlement was never terminated. It was also contended that the Tribunal had wrongly directed the appellant to disburse backwages to the 13 workers. This was contrary to the settled principle that grant of backwages can never be automatic or a natural consequence of regularization. The workers seeking regularization and backwages have an onus to show that they are not gainfully employed.

The respondent- union submitted that all 32 workers were engaged in works of a similar nature. They asserted that the list in the industrial reference showed that workers were arbitrarily deprived of regularization, wherein certain workers from the bunker and the plant were left out of the settlement without any reason. It was also argued that the work in the railway siding was perennial and regular in nature, similar to the works in the bunker.

The Division Bench of Justice Pamidighantam Sri Narasimha & Justice Sandeep Mehta noted the fact that all the 32 workmen commenced their work through the contractor from 1984 and continued till 1994. In 1994, the respondent-union espoused the cause of all the 32 workers and the Asst. Labour Commissioner took up the entire cause. This culminated in the settlement relied upon by the appellant.

The settlement talked about the claim of the 32 workers raised by the respondent-union. It then talked about the contention of the management that others were engaged in purely casual nature of jobs. It was also agreed therein to regularize 19 contractors. The Tribunal was naturally bound by the reference to consider the claim of all the 32 workers.

“Despite the fact that there was a settlement with respect to some of the workmen, the Tribunal was tasked to examine the entire reference and give independent findings on the issue. Thus, the Tribunal was justified in giving its award on the reference made by the central government”, the Bench said.

As per the Bench, the findings of fact arrived at by the Tribunal were unassailable. It was also opined that the High Court had correctly rejected the writ petition filed against the award. Apart from the concurrent findings of fact, the Bench found no substantial question of law in these appeals.

It was proved that the remaining workers stood on the same footing as the regularized employees, and they were wrongly not made part of the settlement. This was established by the Tribunal, by examining the nature of work undertaken by the first set of 19 workmen and that of the other 13 workmen. After examining the Deputy General Manager, Personal Manager and the Project Officer, the Tribunal came to the conclusion that the nature of the duties performed by the 13 workmen were perennial in nature. The appellant had failed to establish any distinction between the two sets of workers. “The Tribunal was, therefore, justified in answering the reference and returning the finding that they hold the same status as the regularized employees”, it added.

The evidence on record disclosed that, of the total 32 workmen, 19 workers worked in the bunker, 6 worked in the Coal Handling Plant, and 7 worked on the railway siding. However, of the 19 workers who were regularized, 16 worked in the bunker, and 3 worked in the Coal Handling Plant. However, 3 workers from the same bunker, 3 workers from the same Coal Handling Plant and again 7 workers from the same railway siding were not regularized.

“In view of the concurrent findings of fact on the issue of nature of work, the continuing nature of work, continuous working of the workmen, we are of the opinion that there is no merit in the appeals filed by the appellant”, the Bench said while further adding, “This is a case of wrongful denial of employment and regularization, for no fault of the workmen and therefore, there will be no order restricting their wages.”

Observing that the workmen would be entitled to backwages as observed by the Industrial Tribunal, the Bench took into account, the long- drawn litigation affecting the workmen as well as the appellant in equal measure, and confined the backwages to be calculated from the decision of the Tribunal.

Thus, dismissing the appeal, the Bench directed that the concerned workmen shall be entitled to backwages with effect from 23.05.2002.