Sunday, November 19, 2006
No guarantee on contract employees’ extension
19th November, 2006 - Economic Times
The Supreme Court has ruled that employees on contract cannot seek continuation of their services even though they may have completed 240 days in such employment. Such contract for a fixed period automatically stood terminated after the expiry of the stipulated period, the apex court said in a ruling on Thursday.
Contractual employees are not regular employees and their termination is not retrenchment, the court said while upholding automatic termination of the service of a contract worker by a PSU in Karnataka. A bench comprising justice AR Lakshamanan and justice Altamas Kabir set aside the order of the labour court which was upheld by the Karnataka High Court. The labour court had directed the authorities to re-instate the contractual employee on the ground that he completed 240 days in such service.
Setting aside the re-instatement order, the apex court said, “Even assuming that the he had worked 240 days continuously, in our opinion, he cannot claim that his services should be continued because the number of 240 days does not apply to the case inasmuch as his services were purely contractual.”
Mahadeva Laxman Raval was appointed by the Karnataka Handloom Development Corn, a PSU for various spells of fixed periods on a fixed honorarium as an expert weaver to train the weavers in the unorganised sector. He was appointed on contract basis for a period of 200 days only, on a fixed pay of Rs 400 per month with a stipulation that the contract of appointment automatically expires on the 201st day.
Then the Karnataka government introduced “VISHWA” programme to train and rehabilitate the weavers. He was again appointed specifically under the scheme on contract basis in February, 1993, for three months with a pay of Rs 1,000 per month. He was again appointed on contract basis for 9 months as per the terms set out in the letter of appointment. After the expiry of the contract of appointment, on August 31, 1994, he was not appointed again.
This led to a industrial dispute being raised by Raval. Challenging non-nenewal of service, he said that he had worked from 1987 to 1994 for more than 240 days as contemplated under Section 25B of the Industrial Disputes Act and, hence, his dismissal amounted to retrenchment.
The Supreme Court has ruled that employees on contract cannot seek continuation of their services even though they may have completed 240 days in such employment. Such contract for a fixed period automatically stood terminated after the expiry of the stipulated period, the apex court said in a ruling on Thursday.
Contractual employees are not regular employees and their termination is not retrenchment, the court said while upholding automatic termination of the service of a contract worker by a PSU in Karnataka. A bench comprising justice AR Lakshamanan and justice Altamas Kabir set aside the order of the labour court which was upheld by the Karnataka High Court. The labour court had directed the authorities to re-instate the contractual employee on the ground that he completed 240 days in such service.
Setting aside the re-instatement order, the apex court said, “Even assuming that the he had worked 240 days continuously, in our opinion, he cannot claim that his services should be continued because the number of 240 days does not apply to the case inasmuch as his services were purely contractual.”
Mahadeva Laxman Raval was appointed by the Karnataka Handloom Development Corn, a PSU for various spells of fixed periods on a fixed honorarium as an expert weaver to train the weavers in the unorganised sector. He was appointed on contract basis for a period of 200 days only, on a fixed pay of Rs 400 per month with a stipulation that the contract of appointment automatically expires on the 201st day.
Then the Karnataka government introduced “VISHWA” programme to train and rehabilitate the weavers. He was again appointed specifically under the scheme on contract basis in February, 1993, for three months with a pay of Rs 1,000 per month. He was again appointed on contract basis for 9 months as per the terms set out in the letter of appointment. After the expiry of the contract of appointment, on August 31, 1994, he was not appointed again.
This led to a industrial dispute being raised by Raval. Challenging non-nenewal of service, he said that he had worked from 1987 to 1994 for more than 240 days as contemplated under Section 25B of the Industrial Disputes Act and, hence, his dismissal amounted to retrenchment.
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