Employment LawEmployees Cannot Be Regularized If Their Employment Was Based On Outsourcing Contracts Not Intended To Create Permanent Positions.

The Hon’ble Karnataka High Court in Uemsha T.N. & Ors v. State of Karnataka, (WP No. 19588 of 2023) decided on 09.05.2024, held that employees engaged through outsourcing contracts cannot claim regularization of their employment. The Hon’ble Court emphasized that their employment status, governed by temporary contracts with various contractors, did not entitle them to be considered as permanent government employees.

FACTS

Uemsha T.N. & Ors (hereinafter referred to as “Petitioners”) contractually worked for the Government of India  for over 2 decades.  The work was consistently outsourced to the Petitioners through contractors, and hence were never directly employed by the government. Initially stationed at the Tumkur press, they were transferred to the Peenya press after the Tumkur press was closed in 2016.The Petitioners had persistently requested the government and filed a Writ petition seeking regularization of their employment.. Unfortunately,  their plea for regularization was repeatedly denied. In 2023,  after the closure of Peenya press the services of the Petitioners were entirely terminated.

The workers challenged this decision in the High Court, arguing that their long-term service justified their regularization. Despite a previous order from the Karnataka High Court instructing the state to reconsider their regularization request, their appeal was ultimately rejected. This result led the workers to file a writ petition contesting the dismissal. They asked the court to overturn the denial, regularize their employment, and ensure the payment of outstanding wages.

ISSUES BEFORE THE HIGH COURT

1. Whether the petitioners are entitled to the benefits of regularized employment and arrears?
2. whether the Government’s decision to terminate the services of the Petitioner lawful?

CONTENTIONS OF THE PARTIES

 The Petitioners argues that they have been employed since year 2000, as binders and later as printers at the government printing press. The work of the Petitioners had been consistent and uninterrupted despite the shift to an outsourced model.  Even after the closure of the Tumkur press and their subsequent relocation to the Peenya press did not interrupt their employment. The Petitioners emphasized that they have effectively been serving the government continuously for 22 years, and this long tenure should entitle them to regularization of their services which in turn would entitle them to many benefits of a regular employee.

Furthermore, the Petitioners contented  that the outsourcing arrangement was implemented solely to escape from  providing them with the benefits and protections accorded to full-time employees. they argued that their extended tenure and consistent service justified similar treatment, entitling them to the benefits associated with regularization.

Moreover, the Petitioners highlighted that in the previous writ petition W.P.No.3718/2023 the Hon’ble Court had directed the government to consider their request for regularization. Despite the direction, their plea was rejected without adequate consideration, prompting them to file the current writ petition. They contended that the government’s decision to terminate their services following the closure of the Peenya press was arbitrary and unjust, especially in light of the earlier court order directing consideration of their regularization request.

While, the Respondents, contended that the Petitioners were not eligible for regularization because they were never directly employed by the government.

The Respondents further  argued that the Petitioners were engaged through contractors on a piece-rate basis, which did not establish a direct employer-employee relationship with the government. period undermined the petitioner’s claim of uninterrupted service and rendered it false and unsubstantiated.

Furthermore, the Respondents alleged that the outsourcing model was a legitimate and standard practice used in several private workplace as well. the Petitioner’s employment through contractors was not to deny them regularization benefits, but it was the operational needs of the printing press.

The Respondents also stated that the decision to close the Peenya press and terminate the services of the Petitioners was only a necessary administrative action.

DECISION AND FINDINGS

The Hon’ble Karnataka High Court, held that the Petitioners were engaged through contractors and were not directly employed by the Government Printing Press. The Hon’ble Court ruled  that the outsourcing contracts were designed to be temporary arrangements and did not establish permanent employment relationships with the government. Therefore, the Hon’ble Court found that the Petitioners were not entitled to be regularized as government employee based on the nature of their contractual engagements.

The Hon’ble Court also stated that regularizing the Petitioners employment would create inequity and unfairness towards other workers engaged under similar outsourcing contracts.

Despite rejecting the Petitioners claims for regularization, the Hon’ble Court recognized the long-standing nature of their employment and opted to provide monetary compensation and  awarded each of the 27 Petitioners compensation ranging from ₹5,00,000 to ₹6,25,000, calculated based on their years of service that is ₹25,000 for each year from 2000 to 2010 and ₹50,000 for each year from 2016 to 2023.

AMLEGAL REMARKS

The Court ruled that despite their long-term service spanning over two decades with the government printing press, the petitioners could not claim regularization as permanent government employees. This decision hinged on the contractual nature of their employment, which was governed by outsourcing agreements with various contractors, rather than direct employment by the government.

Central to the Court’s reasoning was the distinction between temporary contractual engagements and permanent government employment. It emphasized that the outsourcing contracts were specifically designed to fulfil operational needs and did not confer the rights and benefits associated with permanent public sector employment. This ruling underscores the importance of adhering to established recruitment procedures and legal frameworks governing public employment, preventing casual or temporary workers from being regularized without due process.

Despite denying regularization, the Court acknowledged the petitioners’ extended service and awarded monetary compensation. This aspect of the judgment reflects a balanced approach, aiming to mitigate the economic impact of termination while upholding the integrity of public sector employment practices. By recognizing the petitioners’ contributions through financial compensation, the Court addressed concerns of fairness and equity in employment relations, ensuring that contractual workers receive appropriate redress for their long-standing service.

– Team AMLEGALS assisted by Ms. Mehul Agarwal (Intern)

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