Holding

The Tribunal’s direction that the workers be regularised only when vacancies arise is reasonable and must stand; the High Court’s orders treating them as regular and granting benefits irrespective of vacancy are set aside.

Summary

The Oil & Natural Gas Corporation (ONGC) employs seasonal casual/contingent workers for field survey work from November to May each year. The Engineering Mazdoor Sangh sought regularisation of those workers who had completed at least 240 days of attendance in a twelve‑month period, invoking Rule 2 of the Certified Standing Orders. The Industrial Tribunal directed that such workers be considered for conversion to regular posts only when vacancies arose. The Gujarat High Court, first a Single Judge and then a Division Bench, expanded the relief, treating the workers as regular for all benefits and notionally regularising them from 1 May 1999, with benefits from 1 May 2005. ONGC appealed. The Supreme Court held that the High Court’s directions were unreasonable given the seasonal nature of the work and restored the Tribunal’s order, adding safeguards that no external recruitment be made until the 153 workers are absorbed and that they be given priority for seasonal work.

Issues considered

Whether casual/contingent workers who have completed 240 days of attendance are entitled to regularisation as permanent employees irrespective of the existence of vacant posts.
Whether the High Court’s direction to treat such workers at par with regular employees and to notionally regularise them is legally valid.
Interpretation of Rule 2 of the Certified Standing Orders and Sections 33 and 33A of the Industrial Disputes Act, 1947 in the context of seasonal employment.

Legislation cited

Industrial Disputes Act, 1947s. 33, s. 33A

Subjects

labour lawunfair labour practiceregularisationcasual workerstemporary workersindustrial disputecertified standing ordersseasonal employmentONGCEngineering Mazdoor Sangh

Judgment

OIL & NATURAL GAS CORPN. LTD. A
v.
ENGINEERING MAZDOOR SANGH

NOVEMBER 20, 2006

[DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.] B

Labour Laws:

Unfair labour practice-Casual/Contingent/temporary workmen
employed for six months in a year for field survey work-Such employees C
working over a long period of time-Claim of regularisation as permanent
workmen-Tribunal holding that workmen having acquired temporary status
could be considered for conversion as regular employee when they complete
240 days ofattendance in a period of I 2 consecutive months, against vacancies
as and when such vacancies become available-Single Judge of High Court D
holding that person to be treated as regular even if a permanent post was
not available-Division Bench directing that the workman be notionally
treated as regularized with effect from I st May, 1999 and to be given actual
benefits at par with regular employees, with effect ji·om Ist May, 2005-0n
appeal, held : Direction cannot be implemented seeing the nature of work
and the period of employment-Thus, direction by the tribunal being E
reasonable is restored-Orders of both the High Court set aside-Certified
standing Orders-Rule 2-Industrial Disputes Act, 1947.

Appellant-ONGC is engaged in the exploration of petroleum. The said
work is seasonal, for about 6 months in a year between November and May. F
Every year when such survey work begins, ONGC recruits casuaVcontingent/
temporary workmen for specified periods and terminates their services at
the end of the field season. Respondent-Union sought regularization of such
workmen as permanent workman from the date of their engagement. It also
filed a complaint alleging that the ONGC had altered the terms of service of
the workmen by giving work to contractors in preference to the casual/ G
contingent/temporary workmen. Thereafter, Tribunal held that ONGC on
obtaining its prior permission could terminate the services of the casual/
temporary workmen on the ground of no work. ONGC then sought permission
to terminate the services of casuaVtemporary workmen mentioned in the list

177 H
178 SUPREME COURT REPORTS [2006) SUPP. 9 S.C.R.

A Tribunal directed termination of services of 80 casual/contingent/temporary
workmen, out of269 workmen indicated in the list filed by the Union. With
regard to the eligibility for appointment to regular post, tribunal taking
recourse to Rule 2 of the Certified Standing Orders held that a casual
workmen who put in attendance of 180 or more days in 12 consecutive months
automatically become a temporary workman who could after completion of 240
B days of attendance in any period of 12 consecutive months and poseessing
qualifications be considered for conversion as a regular employee. It rejected
the list of269 workmen shown by the Union and accepted the list by the Chief
Geophysicist showing about 189 workmen and directed ONGC that as and
when vacancy to regular post arise they would be considered for
C regularisation.

Respondent-Union challenged the order of the tribunal. Single Judge
of High Court held that though regularization could not be effected in the
absence of availability of permanent posts, but a person could be treated to be
regular even if a permanent post was not available and that the concerned
D workmen would have to wait for their turn for being made permanent as and
when permanent posts become available. It modified the order of the Tribunal
and extended the benefits to all workmen who fulfilled the requirement.
Appellant filed an appeal. Division Bench of High Court directed that the
workman should be notionally treated as regularized with effect from 1st May,
E 1999 and that the surviving employees out of the 189 employees be given actual
benefits at par with regular employees, with effect from 1st May, 2005. Hence
the present matters.

Disposing of the matters, the Court

HELD: 1.1. The reasoning both of the Single Judge as well as the
F
Division Bench of the High Court in firstly_ directing that the concerned 153
workmen be treated at par with regular employees as far as all benefits are
concerned, except for being given permanent status and the subsequent
direction of the Division Bench directing that they be treated as having been
notionally regularized with effect from 1st May, 1999 cannot be concurred
G with. Having regard to the nature of employment an~ the period during which
these field workers are employed, it would create various difficulties if the
seasonal workmen were to be treated at par with regular employees as directed
by the Single Judge. It would be even more difficult for the appellant to adjust
the workmen in permanent employment when the need for them was only
H seasonal. Admittedly, these workmen who are employed for fieid survey work
OIL & NATURAL GAS CORPN. LTD. 1·. ENGINEERING MAZDOOR SANGH J 79

are employed for about six months in a year between November and May. If at A
all they are to be regularized, the appellant will have to find work for them
during the months when their services would otherwise have not been required.
Previously, appellant had monopolistic control over geological survey work
for oil and natural gas but today the scene has changed and it is just another
competitor along with others, notwithstanding the fact that they are a
Government company. Appellant is now required to compete with other's in B
securing exploration work and can only recruit field workers as and when
required. Even then the Tribunal found a via media in directing that the 153
workmen who had admittedly completed 240 days and had acquired a
temporary status be regularized against vacancies as and when such
vacancies become available. [186-B-FJ C

- 1.2. The directions given by theTribunal are reasonable and should be
allowed to stand as against the directions given by the High Court, firstly to
treat the said 153 workmen at par with the regular employees and thereafter
to treat their services as having been notionally regularized from 1st May,
1999. A few further safeguards can be added in order to protect the interests D
of the said 153 workmen so that they are assured of employment as before.
[186-F-H)
1.3. Till such time as these 153 workmen are not absorbed against
regular vacancies in the concerned category no recruitment from outside will
be made by the appellant. Furthermore, even in matters of seasonal E
employment, the said 153 workmen or the numbers that remain after
regularization from time to time, shall be first considered for employment
before any other workmen are engaged for the same type of work in the field.
[187-A-B)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6607 of2005.
F
From the judgment and Order dated 12-5-2005 of the High Court of
Gujarat at Ahmedabad in L.P.A. No. 759/1999.

WITH

Cont. Petn. (C) No. 164/2006 in C.A. No. 6607/2005. G

Harish N. Salve, V.N. Koura, Rakesh Sawhney, A. Marjarputhani, Paramjit
Benipal and Aruna Mathur (for M/s. Arputham, Aruna & Co.) for the Appellant.

P.H. Parekh, Sameer Parekh, Sonali Basu Parekh, Shalin Mehta and Rajiv
Mishra (for P.H. Parekh & Co.) for the Respondent. H
180 SUPREME COURT REPORTS [2006) SUPP; 9 S.C.R.

A The Judgment of the Court was delivered by

ALTAMAS KABIR, J. When the application being I.A.No. 7/06 for
revocation of the leave granted, filed by the respondent-union, was taken up .,
for hearing, the appeal itself was taken up for disposal.

B The Oil & Natural Gas Corporation Ltd. {hereinafter referred to as 'the
ONGC' ) is a public sector undertaking constituted under the Oil & Natural
Gas Commission Act to provide for production and sale of petroleum and
petroleum products. In order to achieve these objects, the ONGC carries out
geological and geophysical surveys for the exploration of petroleum. Such
work of survey is seasonal and is confined to the period between November
C each year and April or May of the following year. The workload is far less
during the monsoon period and is generally referred to as the off season.
Every year when such survey work or field season begins, the ONGC starts
recruiting casual/contingent/temporary workmen for specified periods and
their service are terminated at the end of the field season. Such practice
D appears to have been continuing from the very inception of the ONGC in
1956. While in 1956, the ONGC had a staff strength of 450 employees, in
course of time the number increased to about 25,000 employees by the year
1979. It has been stated that the strength of the labour force has increased
even further since then.

E In view of the aforesaid phenomenon relating to employment of seasonal
workers, the Engineering Mazdoor Sangh on behalf of its members who had
been recruited as such casual/contingent/temporary workmen, raised an
industrial dispute in the form of a demand for regularization of such workmen.
The dispute was ultimately referred by the Government oflndia to the Industrial
F Tribunal (Central) at Vadodra (hereinafter referred to as 'the Tribunal'), being
Reference (ITC) No. 6/1991. The following issue was referred to the Tribunal
for adjudication:-

"Whether the demand of Engineering Mazdoor Sangh, Vadodra that
the employees employed in the ONGC, Western Region, Vadodra who
G have completed 240 days or more in the Commission as casual/
contingent/temporary be regularized as permanent workman from the
date of their engagement in ONGC, with other consequential benefits,
is justified? ff yes, to what reliefs the said workmen are entitled?"

While the reference was pending, the union filed a complaint under
H Section 33A of the Industrial Disputes Act, 1947 (hereinafter referred to as
the' 1947 Act') being Complaint (ITC) No. 5/1993 alleging that the ONGC had
OIL & NATURAL GAS CORPN. LTD. v. ENGINEERING MAZDOOR SANGH (ALTAMAS KABIR. J.] } 8}

started giving work to contractors in preference to the casual/contingent/ A
temporary workmen and had thus altered the tenns of service of the workmen
and committed breach of Section 33 of the 1947 Act. The said complaint was
.- tried by the Tribunal and by its award dated 30th October, 1993, it held that
it was not permissible for the Tribunal to examine whether the work of the
ONGC was seasonal or not or whether the ONGC had breached the tenns of B
service of the workmen by giving the work to contractors in preference to the
casual/contingent/temporary workmen. By the said order, the ONGC was also
directed to follow the principle of "last come first go" in case it wanted to
tenninate the services of the casual/temporary workmen on the ground that
they had no work. !n such case, the ONGC was required to obtain the prior
pennission of the Tribunal under Section 33 (I) (a) of the 1947 Act. c
Consequent upon such order, the ONGC filed an application on 25th
April, 1994 seeking pennission to tenninate the services of the casual/temporary
workmen mentioned in the list enclosed with the application. Due notice of
the application was served on the Engineering Mazdoor Sangh and after
hearing both the sides, by order dated 30th May, 1994, the Tribunal directed D
the ONGC to terminate the services of casual/contingent/temporar~ workmen,
except 189 out of 269 workmen who were indicated in the list filed by the
union.

While considering the question as to who would be eligible to be
considered for appointment to the regular posts and \Mhether the present E
workmen couid be included in such list and whether the reference should be
restricted only to those workmen who were members of the Engineering
Mazdoor Sangh and whose names appeared in the list filed by the union, the
Tribunal came to a finding that only a temporary workman who had put in
not less than 240 days of attendance in a period of 12 consecutive months F
was entitled to be considered for conversion as regular employee. The
learned Tribunal took note of the practice of ONGC of recruiting casual
workmen in the beginning of November every year and terminating their
services in April or May {,Very year as a recurring phenomenon. But it also
observed that keeping workmen casual/badli or temporary over long spells of
time amounts to unfair labour practice and observed that there had to be some G
scheme for regularizing such workmen. In order to find a solution to the said
problem, the Tribunal took recourse to the Certified Standing Orders which
govern the parties and in partfcular Rule 2 thereof which reads as follows:-

2 Classification of Workmen
H
182 SUPREME COURT REPORTS [2006) SUPP. 9 S.C.R.

A (i) The contingent employees of the Commission shall hereafter be
classified as under:-

(a) Temporary, and

(b) Casual
B (ii) A workman who has been on the rolls of the Commission 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
c the minimum qualifications prescribed by the Commission may be
considered for conversion as regular employee.

(iii) A workman who is neither temporary nor regular shall be considered
as casual workman."

On the basis of the above, the Tribunal held that a casual workman who
D put in attendance of 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. The Tribunal
also rejected the list of 269 workmen shown by the Union who according to
E the Union had completed 240 days and accepted as correct the list submitted
by the Chief Geophysicist showing about 189 workmen arranged in descending
order as per number of days put in by each workmen. Taking such list to be
correct and proceeding on the assumption that the workmen had completed
240 days in the Commission, the Tribunal ordered as follows:-

F "The present reference is ordered to be restricted to the workmen r
'.!'
whose names appear in the Schedule to the affidavit Ex.48 in the
Complaint (ITC) No. 5/93 a copy of which is appended to this award
for the sake of convenience. The ONGC is directed that as and when
vacancy to the regular post arise, they shall consider the names of
those workmen in the same descending order in which they are
G 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. Ten workmen mentioned at the bottom of this
Schedule are not entitled to any relief. It is made clear that the
H
OIL& NATURAL GAS CORPN. LID. v. ENGINEERING MAZDOORSANGll [AL TAMAS KABIR, J] J83

workmen have to compete with other workmen seeking employment A
through Employment Exchange or similar lawful manner. The ONGC is
warned to ensure that no officer in their employment resorts to the
unfair labour practice of inducing any casual workman to change his
name. Similarly no workman shall hereinafter change his own name to
conceal his previous employment with the. ONGC.
B
Lastly, the ONGC is directed to pay a sum of Rs.5,000/- (Rupees Five
Thousand only) as special cost to the Engineering Mazdoor Sangh,
Vadodra."

The aforesaid order of the Tribunal was challenged by the respondent-
Union before the High Court of Gujarat in Special Civil Application No. 12850/ C
1994. After considering the submissions of the respective parties, the learned
Single Judge observed that though regularization could not be effected in the
absence of availability of permanent posts; the availability of permanent post
is a fortuitous circumstance and consequential confirmation is, therefore,
uncertain, but that there was no. ban against treating a person to be regular D
even if a permanent post was not available. On the basis of the aforesaid
reasoning, the learned Single Judge modified the order of the learned Tribunal
in the following manner:-

(i) " .... the relief will not be restricted only to those workmen whose
name appear in the schedule to the affidavit at Exh.48 which was filed E
by the ONGC before the Industrial Tribunal in the complaint (ITC) 5
of 1993, but it will be available to all the employees who fulfil the
requirements of completion of 240 days or more and the minimum
qualifications under the ONGC (Recruitment and Promotions)
Regulations, 1980 in accordance with the relevant Certified Standing
Order and in case they fulfil these requirements, all of them shall be F
considered at par with regular employees for the benefits which are
given to regular employees, whether their names are there in the
Schedule or not, whether they are members of the petitioner Sangh or
not from the due date.

(ii) All such employees who are found to be covered by the preceding G
para of the relief as modified by this com1 shaH be treated at par with
the other regular employees working against the corresponding or
equivalent/equated or identical posts and grant of such benefit shall
not wait for the availability of the vacancies on the regular posts, of
course, they wil I have to wait according to their turn for being made H
184 SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A permanent as and when the permanent posts become available. For
this purpose, the age requirement shall be seen with reference to the
point of time when such employees were initially employed instead of
the relaxation as has been directed by the Industrial Tribunal in the
impugned award.

B (iii) Whereas the status of regular appointee is to be given to the
employees who are covered by the Standing Order No. 2 (ii) as above
on the basis of conversion, the requirement to compete with other
workman seeking employment through Employment Exchange or similar
manner as has been mentioned by the Industrial Tribunal in the
impugned award, simply does not arise ... "
c
The impugned award of the Tribunal dated 6th June, 1994, was modified
accordingly.

The appellant herein took the matter in appeal to the Division Bench in
Letters Patent Appeal No. 759/1999. While the appeal was pending, the
D respondent-Union gave up its claim for modification of the award as per the
first direction given by the learned Single Judge and only pressed for
implementation of the second direction given by the Tribunal. Similarly, on
behalf of the ONGC, it was submitted that it did not wish to press its
challenge in respect of the third direction. Accordingly, the controversy in the
E appeal was restricted to the challenge in respect of the second direction only.
Going one step further, the Division Bench disposed of the appeal by directing
that the workman concerned should be notionally treated as regularized with
effect from 1st May, 1999. Since most of the benefits had already been given
to the workmen, a furthel" direction was given to give them actual benefits at
par with regular employees, including all the perquisites and applicable
F allowances, as also regular employment during the year, with effect from lst
May, 2005. It was made clear that the aforesaid directions would apply to the
surviving employees out of the 189 employees who had been accepted as
having acquired temporary status and whose employment had been saved by
the order dated 30th May, 1999 in Complaint (ITC) No. 511993.
G Appearing for the ONGC - the appellant herein, Mr. Harish Salve, learned
senior advocate, while indicating the aforesaid facts submitted that by filing
the appeal, the appellant was placed in a more disadvantageous position than
when the learned Single Judge passed his order on the Writ Application. It
was submitted that the learned Tribunal had realized the difficulty of
H regularizing altogether all the 189 workmen who had acquired temporary
OIL & NATURAL GAS CORPN. LID. 1•. ENGINEERING MAZDOOR SANGH [ALT AMAS KABIR,!.] 185

status and were eligible for being considered for conversion. It had accordingly A
directed that they be absorbed against vacancies that may arise from time to
time in terms of seniority. The learned Single Judge of the High Court,
however, on a completely erroneous construction of the law that non-availability
of a pennanent post is no bar for considering the employees to be at par with
the regular employees for the purpose of giving them all the benefits other B
than the status of a pennanent workman, directed that not only the 189
workmen, but all employees who had fulfilled the requirements of completion
of 240 days or more and had the minimum qualificfftion under the recruitment
rules would be treated at par with the other regular employees and the grant
of such benefit would not wait for the availability of vacancies to regular
posts. The learned Single Judge, however, also made it clear that in the C
absence of vacancies, the concerned workmen would have to wait for their
turn for being made permanent as and when permanent posts became available.

Mr. Salve submitted that not only was such a direction based on a
wrong reasoning, but such a direction would be impossible to implement
given the nature of work and the period of employment. Mr. Salve submitted D
that contrary to the settled law, the Division Bench had even directed that
the workman concerned be notionally treated to have been regularized with
effect from Ist May, 1999 in the appeal which had been preferred by ONGC
against the direction of the learned Single Judge to treat such employees at
par with the regular employees. Mr. Salve urged that the directions given by E
the learned Tribunal were more in confonnity with the Certified Standing
Orders than the directions given both by the learned Single Judge as also the
Division Bench of the High Court and could be worked out gradually.

Mr. Salve's submissions were vehemently opposed on behalf of the
Union by Mr. P.H. Parekh who tried to establish that the directions given by p
the High Court, both by the learned Single Judge as well as the Division
Bench, were just and reasonable and did not warrant any interference in this
appeal. Mr. Parekh contended that neither the Single Judge nor the Division
Bench had directed that the service of the concerned 189 workmen now
reduced to 153 workmen be regularized. On the other hand, what weighed with
the learned Single Judge as also the Division Bench was the fact that these G
employees had been working with the appellant over a long period of time,
though on a periodical basis, and that they, therefore, deserved to be treatec.i
at par with regular employees as far as financial benefits were concerned. Mr.
Parekh pointed out that while the learned Single Judge had only directed that
these workmen be treated at par with the regular employees, the Division H
186 SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A Bench felt that since the said workmen had worked for even as long as 15
years, though on a seasonal basis, they deserved to be treated as permanent
employees and accordingly directed that they be treated to have been
notionally regularized with effect from 1st May, 1999, though-the actual
monetary benefits were to be made available with effect from lst May, 2005.

B We have carefully considered the submissions made on behalf of the
respective parties and we are unable to agree with the reasoning both of the
learned Single Judge as well as the Division Bench of the High Court in firstly
directing that the concerned 153 workmen be treated at par with regular
employees as far as all benefits are concerned, except for being given
C permanent status and the subsequent direction of the Division Bench directing
that they be treated as having been notionally regularized with effect from 1st ·
May, 1999. Having regard to the nature of employment and the period during
which these field workers are employed, it would create various difficulties if
the seasonal workmen were to be treated at par with regular employees as
directed by the learned Single Judge. It would be even more difficult for the
D appellant 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 about six months in a year between
November and May. If at all they are to be regularized, the appellant will have
to find work for them during the months when their services would otherwise
E have not been required. As pointed out by Mr. Salve, previously the appellant
had monopolistic control over geological survey work for oil and natural gas
but today the scene has changed and it is just another competitor along with
others, notwithstanding the fact that they are a Government company. The
appellant is now required to compete with others in securing exploration work
and can only recrui< field workers as and. when required. Even then the
F learned Tribunal found a via media in directing that the 153 workmen who had
admittedly completed 240 days and had acquired a temporary status be
regularized against vacancies as and when such vacancies became available.

We are of the view that the directions given by the learned Tribunal are
reasonable and should be allowed to stand as against the directions given
G by the High Court, firstly to treat the said 153 workmen at par with the regular
employees and thereafter to treat their services as having been notionally
regularized from I st May, I 999. We can, of course, add a few further safeguards
in order to protect the interests of the said 153 workmen so that they are
assured of employment as before.
H
.... OIL& NATURAL GAS CORPN. LTD."· ENGINEERING MAZDOOR SANGH [ALTA~!AS KABIR. J.] J87

I
We, accordingly, dispose of this appeal by setting aside the judgments
.
A
, and orders of both the learned Single Judge and the Division Bench of the
High Court and restoring the judgment and order passed by the Tribunal. We,
however, add that till such time as these 153 workmen are not absorbed
against regular vacancies in the concerned category no recruitment from
outside will be made by the appellant. Furthermore, even in matters of seasonal B
employment, the said 153 workmen or the numbers that remain after
regularization from time to time, shall be first considered for employment
before any other workmen are engaged for the same type of work in the field.
The appellant should make a serious attempt to regularize the services of the
workman concerned, in terms of the order passed by the Tribunal, as quickly
as possible, but preferably within a period of two years from the date of this C
order. There will be no order as to costs.

Having regard to this order, no further orders are required to be passed
on the Contempt Petition which is disposed of accordingly. LA.Nos. 7, 8 and
9 are also disposed of by this order.
D
N.J. Matters disposed of.