ISSUE VI : Getting serious about casual labor

Getting Serious About Casual Labor

Introduction

In India, sectors such as the construction, oil surveying, oil exploration and agriculture extensively employ seasonal and casual labor. The reason for this is that most of the work is performed outdoors or in the fields and during the intervening monsoon season, no work is available for the workmen. A similar situation may obtain in industries such as garment exports and others, where due to a glut of orders, additional work force is temporarily required from time to time. Though the nature of work in these sectors is seasonal, there is a recurrent pattern of employment, in that casual and temporary labor is employed at the commencement of the season and their services terminated at the end of the season.

This bulletin examines the various issues that arise from such a situation and attempts to respond to them through the medium of a recently decided case, which is symptomatic of both, how the problem arises and is resolved in the Indian context. Solely due to the fact that the work is seasonal, can the work force be kept “casual” for an indefinite duration, thereby depriving them of the right of security of tenure, social security and retirement benefits. How has this problem been viewed and how have the courts responded to these challenges.

1.0 The response of the Supreme Court

In a recent affirmation1 of an earlier judgment2 pertaining to the casual and temporary workmen of the Oil & Natural Gas Corporation Ltd. (“ONGC”), the Supreme Court has held that such a practice is impermissible as it constitutes an unfair labor practice. The Supreme Court held that the services of such casual and temporary workmen need to be regularized and directed that ONGC shall consider and regularize all such workmen, as and when any vacancy to regular post arose, provided the workmen concerned possessed the prescribed educational qualifications.

1.1 The facts of the ONGC case

The ONGC is a public sector undertaking engaged in the extraction, production and sale of petroleum and petroleum products and was established sometime in 1956. In the process of exploration, ONGC carries out geological and geophysical surveys. However, such work is seasonal in nature and is confined to the period between November of each year till the month of May of the following year. The monsoon season between June and October is the off season, when no survey work can be proceeded with. Hence, every year when such survey work or field season begins, ONGC recruits casual, contingent and temporary workmen for specified periods and their service are terminated at the end of the field season. Amazingly, ONGC was permitted to continue with such practices for over 50 years, since its very inception, when it had a staff strength of 450 employees. However, by the year 1979 it staff strength had grown to 25,000 employees and has continued to rise ever since.

1.2 The position in the Standing Orders

The Certified Standing Orders (“Orders”) in force in ONGC define the minimum period a workman should have put in to be considered as a temporary workman, and thereafter the number of days a temporary workman should have put in to be considered as a regular employee, provide that the contingent employees in ONGC can be classified as temporary and casual. It further provides that a workman who has been on the rolls and has put in not less than 180 days of attendance in any period of 12 consecutive months shall be a temporary workman, provided that a temporary workman who has put in not less than 240 days of attendance in any period of 12 consecutive months and who possesses the minimum qualifications prescribed by the Commission may be considered for conversion as regular employee.

1.3 The Union raises the dispute

Despite the favorable and fairly unambiguous position in the Standing Order, and for reasons unknown, the Engineering Mazdoor Sangh (“Union”) bore with this situation for over three and a half decades. It was only in 1991, that the Union raised an industrial dispute in the form of a demand for regularization of the casual, contingent and temporary workmen. The dispute raised by the union was referred by the Government of India to the Industrial Tribunal (Central) at Vadodara (“Tribunal”). The issue referred to the Tribunal was whether the demand of Union that the employees, who had completed 240 days or more in the ONGC, as casual, contingent, temporary workers, to be regularized as permanent workman, from the date of their engagement in ONGC, with other consequential benefits was justified, and if so, to what reliefs were the said workmen entitled.

During the pendency of this reference, the union filed a further complaint alleging that the ONGC had started giving work to contractors in preference to the casual, contingent and temporary workmen and had thus altered the terms of service of the workmen and committed breach of the provisions of the Industrial Disputes Act, 1947 (“Act”).

1.4 The decision and the principle established by the Tribunal

Though the Tribunal declined to examine whether the work of the ONGC was seasonal or not or whether the ONGC had breached the terms of service of the workmen by giving the work to contractors in preference to the casual, contingent and temporary workmen, it directed ONGC shall follow the principle of “last come first go” in case it wanted to terminate the services of the casual/temporary workmen on the ground that no work was available for them. However, in such an event ONGC was required to obtain the prior permission of the Tribunal under the Act.

1.5 ONGC seeks to terminate casual and temporary workmen

Consequent upon the above order, ONGC filed an application seeking the prior permission of the Tribunal to terminate the services of the casual and temporary workmen mentioned in a list enclosed with the application.

1.6 The directions passed by the Tribunal

By its order the Tribunal directed the ONGC to terminate the services of casual, contingent, and temporary workmen, except of such temporary workman who had put in not less than 240 days of attendance in the period of 12 consecutive months and who were entitled to be considered for conversion as regular employees. The Tribunal observed that keeping workmen casual or temporary over long spells of time amounts to an unfair labor practice and directed that a scheme for regularizing such workmen was required to be formulated.

On the basis of the above, the Tribunal held that a casual workman who put in 180 or more days in 12 consecutive months automatically became a temporary workman who could after completion of 240 days of attendance in any period of 12 consecutive months and possessing qualifications be considered for conversion as a regular employee.

Accordingly, the Tribunal ordered as below:

“The ONGC is directed that as and when any vacancies to the regular post arise, they shall consider the names of those workmen mentioned in the Schedule and shall regularize them, provided they satisfy the prescribed educational qualifications and for each 240 days of work put in by each workman, the ONGC shall give him age relaxation of one year.”

2.0 The First Appeal before the Single Bench of the High Court of Gujarat

On appeal, the Single Judge held that there was no bar against treating a person as a regular employee even if a permanent post was not available, and directed that all the employees who were a party to the dispute shall be treated at par with the other regular employees working against the corresponding or equivalent, equated or identical posts and that the grant of such benefits shall not wait for the availability of the vacancies on the regular posts.

2.1 The Second Appeal before the Division Bench

On further appeal, the Division Bench directed that workman concerned should be notionally treated as regularized with effect from specified prior date and directed that

benefits should be conferred to them at par with regular employees, including all the perquisites and applicable allowances.

2.2 The Supreme Court decision

Disagreeing with both the Single Judge and the Division Bench of the High Court, the Supreme Court set aside the direction of the Single Judge that the workmen concerned be treated at par with the other regular employees working against the corresponding or equivalent/equated  or  identical  posts,  as  also  the  direction  of  the  Division  Bench  that workman concerned should be notionally treated as regularized with effect from specified prior date.

The Supreme Court held that having regard to the nature of employment and the period during which these field workers are employed, the seasonal workmen cannot be treated at par with regular employees, as it would be difficult for ONGC to adjust the workmen in permanent employment when the need for them was only seasonal. Admittedly, these workmen who are employed for field survey work are employed for only about six months in a year between November and May. If at all they are to be regularized, ONGC will have to find work for them during the months when their services would otherwise not have been required. Hence, the Supreme Court was of the view that the directions given by the Tribunal were reasonable and should be allowed to stand.

The Supreme Court went on to hold that till such time that all the workmen were not absorbed against regular vacancies in the concerned category, no recruitment from outside shall be made by ONGC. Furthermore, even in matters of seasonal employment, the said workmen that remain to be regularized shall be first considered for employment before any other workmen are engaged for the same type of work in the field. Finally, it was directed that the ONGC should make a serious attempt to regularize the services of the workman concerned, in terms of the order passed by the Tribunal, within a period of two years from the date of the order.

Conclusion

An analysis of the judgment of the Supreme Court reveals that it had to engage in a delicate balancing exercise. The balance sought to be achieved was between the requirement of absorption of the workmen against regular vacancies and against the radical approach adopted by the Single Bench of the High Court who had directed that the regularization of the workman and directed payment of benefits at par with regular employees, and the Division Bench which had directed that the workman concerned should be treated as regularized with effect from specified prior date.

The Supreme Court while achieving the balance considered the seasonal nature of the work and the fact that the employer would be required to adjust the workmen in permanent employment when the need for them was only seasonal. Hence, it did not place an unfair burden upon the employer, and directed it to regularize the workmen, as and when regular vacancies became available.

It thus becomes abundantly clear that, despite the nature of the work, no employer can indefinitely keep the work force temporary and casual, without making any effort to absorb and regularize them. Where however, such an effort has not been undertaken, the courts would be free to intervene and direct their regularization in a time bound framework.

Authored by:

Naresh Sahai Mathur

1  MANU/SC/1706/ 2009 “Oil and Natural Gas Corpn. Ltd. Vs. Engineering Mazdoor Sangh.”
2 AIR 2007 SC 920 “Oil and Natural Gas Corpn. Ltd. Vs. Engineering Mazdoor Sangh.”

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