In Contempt Petition (Civil) No. 1921 of 2017-SC- LIC cannot be directed to carry out mass absorption of over 11,000 workers, says Top Court while suggesting that claims of eligible part-time workers be resolved by award of monetary compensation in lieu of absorption Justices D.Y.Chandrachud, Surya Kant & Vikram Nath [27-04-2022]

Read Judgment: Ranbir Singh v. SK Roy, Chairman, Life Insurance Corp. of India & Anr 

Tulip Kanth

New Delhi, April 28, 2022: While considering a dispute tracing back to nearly four decades pertaining to the claim for absorption of persons who were engaged by the Life Insurance Corporation of India (LIC) as temporary/badli/part-time workers, the Supreme Court has directed a fresh verification of the claims of workers who claim to have been employed for at least 70 days in Class IV posts over a period of three years or 85 days in Class III posts over a period of two years. Such verification has to be confined to persons who were engaged between May 20, 1985 and March 4, 1991.

The Larger Bench of Justice D.Y.Chandrachud, Justice Surya Kant and Justice Vikram Nath has also ordered that all persons who are found to be eligible on the above norm shall be entitled to compensation computed at the rate of Rs 50,000 for every year of service or part thereof. This payment of compensation at the above rate shall be in lieu of reinstatement, and in full and final settlement of all claims and demands of the workers in lieu of regularisation or absorption.

The dispute arose when on August 13,1982 an objection was raised by the Western Zonal Insurance Employees Association alleging that LIC had been engaging in unfair labour practices by employing temporary, badli and part-time workers and was restricting their employment to short tenures to deprive them of the claim for permanency.

Then, the dispute was referred for adjudication by the Central Government to the National Industrial Tribunal Bombay presided over by Justice R D Tulpule (Tulpule Tribunal).The Tulpule Tribunal stipulated that those ad hoc workers who were in employment between January 1,1982 and May  20, 1985 will be entitled for absorption. Following this dispute over the LIC circulars, the Central Government referred the Tulpule Award for interpretation under Section 36-A of the ID Act to another NIT presided over by Justice M S Jamdar (Jamdar Tribunal).

When the Jamdar Tribunal rendered its award holding that the absorption contemplated in the Tulpule Award did not imply recruitment, LIC challenged the same and during the pendency of the proceedings, terms of compromise were arrived at between LIC and all the Unions representing the workers, save and except the Akhil Bharatiya Jeevan Bima Nigam Chathurthi Sreni Karmachari Sangh (Karmachari Sangh). Pursuant to the compromise, LIC appointed 1875 persons to Class III posts and 1324 persons to Class IV posts in various divisions.

The genesis of the present dispute relates to a demand raised by the Unions pertaining to the claim for regularisation of those workers who were employed from May 20, 1985 till the date of reference on March 4, 1991. 

On October 23,1992, by the order of the three-judge Bench in E Prabavathy v. Life Insurance Corporation of India, LIC had been directed by the Court to work out a scheme for the purpose of regularising workers who were granted ad hoc appointment for a period of 85 days from time to time. This Court affirmed the relaxation of age and qualifications granted by the scheme to eligible ad hoc workers who had worked between May 20, 1985 till date in any two calendar years.

In 1998, a batch of writ petitions was filed in the High Court of Andhra Pradesh seeking the relief of absorption on a permanent basis. Among the petitions was a petition instituted by G Sudhakar and others which was dismissed. On November 3, 1998, the Division Bench of the High Court directed LIC to frame a scheme for regularisation. LIC preferred a Special Leave Petition which was allowed by this Court.

The Larger Bench was of the view that LIC as a statutory corporation is bound by the mandate of Articles 14 and 16 of the Constitution and as a public employer, the recruitment process of the corporation must meet the constitutional standard of a fair and open process.

Referring to the Dogra Report which put forth a list of eligible employees, the Bench held that the remit of the  Central Government Industrial Tribunal (CGIT) which resulted in the Dogra Report was confined to the process of verification, as distinct from an adjudication of rights and liabilities.

It was opined that the  formula of providing absorption to part-time, badli or temporary workers who have put in 85 days in any two calendar years in a Class III post or 70 days in any three calendar years in a Class IV post will, unless a balance were to be drawn, became an avenue for disregarding the need for an open and transparent process of recruitment by a public sector corporation governed by the rule of law and the mandate of Articles 14 and 16 of the Constitution. 

It was affirmed that LIC having been restrained by judicial orders from pursuing an open recruitment process, the situation which had now arisen was that unless a balance were to be drawn, absorption of part-time and badli workers would become a substitute for a recruitment process based on sanctioned posts, consistent with the principles of reservation and pursued on the basis of a structured recruitment which gives equal opportunities to all applicants. As per the Bench, such a consequence is a serious detriment to constitutional parameters and to the duty of LIC as a public employer to follow a process which is fair and in consonance with Articles 14 and 16 of the Constitution.

With regard to the  workers who had been recruited post March 4,1991, the Bench held that such workers couldnot make a claim for absorption ipso jure under Section 18(3)(d) of the ID Act, as a result of the overriding provision which is contained in sub-Section (2C) of Section 48.

Thus, directing that a fresh verification of the claims of workers who claim to have been employed for at least 70 days in Class IV posts over a period of three years or 85 days in Class III posts over a period of two years to be carried out, the Bench also appointed a  Committee who shall not be confined to the certified list before the CGIT and shall consider the claims of all workers who were engaged between May 20,1985 and March 4,1991.