SC: Regularisation of employees already in service doesn’t give anyone right of retrenchment

Yesterday, i.e. on 2nd January 2019, in the matter of Management of the Barara Cooperative Marketing­cum­ Processing Society Ltd. v. Workman Pratap Singh, the Hon’ble Supreme Court pronounced that the regularisation of an employee already in service does not give any right to retrenched employee so as to enable him to invoke Section 25 (H) of the Industrial Disputes Act for claiming re­ employment in the services.

The Hon’ble Supreme Court observed that:

Section 25(H) of the ID Act applies to the cases where employer has proposed to take into their employment any persons to fill up the vacancies. It is at that time, the employer is required to give an opportunity to the “retrenched workman” and offer him re­employment and if such retrenched workman offers himself for re­employment, he shall have preference over other persons, who have applied for employment against the vacancy advertised. (Para 16)

The object behind enacting Section 25(H) of the ID Act is to give preference to retrenched employee over other persons by offering them re­employment in the services when the employer takes a decision to fill up the new vacancies. (Para 17)

Section 25(H) of the ID Act is required to be implemented as per the procedure prescribed in Rule 78 of the Industrial Disputes (Central) Rules, 1957 (hereinafter referred to as “the ID Rules”) which, in clear terms, provides that Section 25(H) of the ID Act is applicable only when the employer decides to fill up the vacancies in their set up by recruiting persons. It provides for issuance of notice to retrenched employee prescribed therein in that behalf. (Para 18)

So, in order to attract the provisions of Section 25(H) of the ID Act, it must be proved by the workman that firstly, he was the “retrenched employee” and secondly, his ex­employer has decided to fill up the vacancies in their set up and, therefore, he is entitled to claim preference over those persons, who have applied against such vacancies for a job while seeking re­employment in the services. (Para 19)

In case an employee’s termination is held illegal and in consequence thereof, he is awarded compensation in full and final satisfaction. After the employee accepts the compensation. It does not remain a case of retrenchment anymore. (This inference has been drawn on the basis of Para 20)

The regularization of an employee already in service does not give any right to retrenched employee so as to enable him to invoke Section 25 (H) of the ID Act for claiming re­ employment in the services. The reason is that by such act the employer do not offer any fresh employment to any person to fill any vacancy in their set up but they simply regularize the services of an employee already in service. Such act does not amount to filling any vacancy. (Para 22)

There lies a distinction between the expression ‘employment’ and ‘regularization of the service”. The expression ‘employment’ signifies a fresh employment to fill the vacancies whereas the expression ‘regularization of the service’ signifies that the employee, who is already in service, his services are regularized as per service regulations. (Para 23)

Copy of judgement: Judgement 02-Jan-2019

-Tushar Kaushik

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