A) ABSTRACT / HEADNOTE

This judgment addresses the legality of termination and the nature of engagement of long-service horticulture workers employed in the Horticulture Department of Ghaziabad Nagar Nigam. The central questions were whether the discontinuation of services during pending conciliation proceedings breached Section 6E and whether retrenchment formalities under Section 6N of the U.P. Industrial Disputes Act, 1947 were complied with; and, relatedly, whether the workers were de facto municipal employees or merely contractor-personnel.

The Court examined documentary gaps (absence of contractor contracts, missing muster rolls), the pattern of direct supervision and wage disbursement, the perennial nature of horticultural work, and prior Labour Court awards. Relying on adverse inference from the Employer’s failure to produce records and on labour jurisprudence disfavoring perpetual temporaryization of permanent tasks, the Court held that termination without statutory compliance was illegal.

The High Court’s limited remedy (future daily wages) was set aside to the extent it denied continuity and meaningful back wages. Directions were given for reinstatement, counting continuity from date of termination, payment of 50% of back wages, and a process for fair regularization. The decision clarifies limits of Uma Devi reasoning where long-term exploitative engagements exist and reaffirms protections under Sections 6E and 6N.

Keywords: Sections 6E, 6N U.P. Industrial Disputes Act, 1947; equal pay for equal work; regularization; reinstatement; muster rolls; contractor vs employer; Uma Devi; adverse inference.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The litigation arises from long-standing horticultural engagements beginning in 1998–1999. Workers performing planting, pruning and park upkeep pressed for regularization and statutory benefits through conciliation (C.B. Case No. 6 of 2004). While conciliation remained pending, numerous workmen allege oral termination in July 2005 without notice or retrenchment compensation. The State referred disputes for adjudication under the U.P. Industrial Disputes Act. Two conflicting Labour Court awards followed: some awards ordered reinstatement with partial back wages; others denied relief on contractor-engagement findings.

The High Court heard consolidated writ petitions, noted factual complexity about contractor arrangements and referenced a governmental recruitment ban for municipalities. It attempted a compromise: re-engagement on future daily wages tied to minimum scale with prospective consideration for regularization. Both sides appealed to this Court. The Supreme Court undertook a focussed inquiry into the existence of direct employer control, documentary proof of contracting, compliance with Sections 6E and 6N, and the applicability of Uma Devi in cases of prolonged, essential municipal functions. The Court emphasized that public institutions cannot perpetuate precarious engagements where the need is perennial and direct supervision suggests an employer-employee relationship.

D) FACTS OF THE CASE

The Appellant workmen assert continuous horticulture service for the Nagar Nigam since 1998–1999, performing routine municipal duties planting, pruning, park maintenance under direction of Horticulture Department officers. No formal appointment letters existed. Wages were allegedly paid from the municipal Horticulture Department. In 2004 the workmen raised industrial dispute seeking regularization and benefits; thereafter they contend salary delays and adverse conditions followed. Around July 2005 many were orally disengaged without written orders, notice, or retrenchment compensation. The State referred the dispute to the Labour Court.

The Labour Court issued bifurcated awards: some workmen were reinstated with 30% back wages; others had claims dismissed on a finding they were contractor personnel. The Employer produced limited documentary proof of contractor agreements or independent contractor payments. Despite directions, certain muster rolls and contractor documents were not furnished. The High Court, while accepting jurisdiction under the U.P. Act, factored in a governmental ban on fresh municipal recruitments and modified relief to daily-wage re-engagement with future consideration for regularization. The Supreme Court record shows the municipal shortage of garden staff, the perennial nature of tasks, and the absence of convincing evidence of third-party contracting.

E) LEGAL ISSUES RAISED

i. Whether termination during pending conciliation proceedings violated Section 6E of the U.P. Industrial Disputes Act, 1947?
ii. Whether retrenchment formalities and notice/wages in lieu under Section 6N were complied with?
iii. Whether the Appellant Workmen were direct employees of the Nagar Nigam or personnel supplied by an independent contractor?
iv. Whether Uma Devi bars relief or regularization where long-term temporary engagements perform perennial municipal duties?
v. What equitable relief (reinstatement, continuity, back wages, regularization) is appropriate when statutory protections were breached?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for Petitioner / Appellant submitted that the workmen discharged duties continuously for over a decade and thus mirrored regular Gardeners in job content and continuity. They emphasized direct supervision by municipal officers and wage payments from the Horticulture Department as indicators of direct employment rather than contractor engagement. The petitioners argued the July 2005 discontinuation occurred during pendency of conciliation (C.B. Case No. 6 of 2004), breaching Section 6E; no approval was sought to alter service conditions or dismiss protected workmen. They maintained retrenchment procedure under Section 6N was totally absent—no prior notice, no wages in lieu, no compensation.

The appellants urged that equal pay for equal work and settled labour principles require reinstatement, back wages and a pathway to regularization rather than precarious daily re-engagement. They contended Uma Devi cannot sanctify indefinite temporaryization where administration failed to conduct legitimate recruitments despite perennial need.

G) RESPONDENT’S ARGUMENTS

The counsels for Respondent submitted that municipal public employment is governed by recruitment norms and a standing ban on fresh municipal recruitment precluded direct appointment. They maintained horticulture tasks were outsourced through contractors; therefore the Nagar Nigam was not the direct employer and could not be ordered to regularize or absorb daily wagers absent sanctioned vacancies and constitutional selection. Reliance was placed on Secretary, State of Karnataka v. Umadevi to argue against automatic absorption of daily wages into permanent posts. The Employer also challenged proof of continuous service (240 days in a year) and asserted that documentary lacunae undermined the workmen’s claims. The Respondent urged judicial restraint in altering municipal personnel policy and cautioned against undermining recruitment bans.

H) JUDGEMENT

The Court found the Employer failed to produce credible contractor documentation, tender records, or consistent third-party pay records. The pattern of direct oversight, instruction, and municipal wage disbursement supported an inference of de facto employer control. The oral terminations during pending conciliation clearly contravened Section 6E, which bars prejudicial alteration of service conditions without prior approval. The Court held retrenchment obligations under Section 6N apply when dismissals effectively operate as retrenchment; lack of statutory notice or compensation rendered terminations illegal.

The Court rejected reliance on a recruitment ban as a shield to perpetuate precarity; such policy cannot defeat fundamental statutory protections nor enable long-term exploitation. Drawing on adverse inference doctrine due to failure to produce muster rolls, and recent jurisprudential criticism of misuse of temporary contracts (Jaggo v. Union of India), the Court concluded the workers performed perennial municipal functions and therefore could not lawfully be treated as dispensable casuals. The High Court’s remedy future daily-wage re-engagement without meaningful continuity or adequate back wages was inadequate and unjust in the factual matrix.

Accordingly, the Supreme Court quashed termination orders, directed reinstatement within four weeks, counted continuity from date of termination for seniority and consequential benefits, awarded 50% of back wages payable within three months of reinstatement, and directed the Employer to initiate a fair regularization process within six months, without retrospective imposition of educational/procedural tests not previously applied.

a. RATIO DECIDENDI

The operative ratio is that when workers perform perennial, essential municipal functions under direct supervision and municipal wage disbursement, absence of contractor documentation permits an adverse inference that they were de facto employees. Termination during pendency of conciliation proceedings without approval violates Section 6E, and terminations without compliance with Section 6N are illegal. A municipal ban on fresh recruitment cannot be used to perpetuate indefinite daily-wage status when statutory protections and equitable considerations point to reinstatement and a remedial pathway to regularization.

b. OBITER DICTA

The Court observed more broadly that public bodies must not mimic gig-economy exploitation; government institutions bear heavier duties to avoid misuse of temporary labels. Uma Devi cannot be pressed into service to sanctify long-term exploitative engagements. The judgment articulates policy criticisms of indefinite temporaryization and endorses adverse inference where employers fail to discharge evidentiary obligations (muster rolls, contractor contracts). The Court emphasized fairness in assessing regularization and cautioned against retroactive imposition of criteria. These observations, while not strictly necessary to the decision, guide lower authorities and tribunals in analogous disputes.

c. GUIDELINES

i. Termination during conciliation or adjudication requires prior written permission under Section 6E; absent approval, termination is void.
ii. Retrenchment formalities under Section 6N (notice, wages in lieu, compensation) must be complied with irrespective of label—direct employee or deployed through contractor—if facts show de facto employer control.
iii. Failure to produce muster rolls or contractor documentation permits an adverse inference against the employer.
iv. Where duties are perennial and under direct municipal supervision, courts should scrutinize attempts to evade statutory protections via outsourcing or temporary labels.
v. Remedies should combine reinstatement with meaningful back wages and a transparent, time-bound process for regularization where warranted.

I) CONCLUSION & COMMENTS

The decision reaffirms core protective principles of labour law: process rights in retrenchment, protection during pendency of disputes, and substantive scrutiny of employer-worker relationships. Practically, the Court balances administrative constraints (recruitment bans) with worker rights by mandating reinstatement, partial back wages, and a fair regularization mechanism rather than immediate absorption that would breach public recruitment norms. The award of 50% back wages reflects equitable adjustment acknowledging institutional limits while vindicating workers’ statutory entitlements. The judgment signals judicial impatience with cosmetic outsourcing used to deny benefits where control and permanence are evident.

For municipal administrations, the lesson is plain: preserve transparent contracting records, avoid ad hoc arrangements for perennial tasks, and respect statutory safeguards in industrial disputes. For labour tribunals, the case supplies a template—adverse inference, examination of wage payment streams, and focus on task permanence—to resolve contested employment classifications. Overall, the ruling advances labour justice without obliterating legitimate recruitment rules; it insists that legality and equity must guide resolution where long-service workers are left in limbo.

J) REFERENCES

a. Important Cases Referred

1. Shripal & Anr. v. Nagar Nigam, Ghaziabad, 1 S.C.R. 1427 : 2025 INSC 144.

2. Secretary, State of Karnataka v. Umadevi (2006) 4 SCC 1.

3. Jaggo v. Union of India, 2024 SCC OnLine SC 3826.

b. Important Statutes Referred

1. U.P. Industrial Disputes Act, 1947, Sections 6E and 6N.