Larger Bench of Supreme Court to decide if Labour and Industrial Courts can order regularisation of employees

A Division Bench of the Supreme Court on Friday referred to a larger Bench the question of whether Labour and Industrial Courts have the power to order for the regularisation of employees in the absence of sanctioned posts..The Bench of Justices DY Chandrachud and Ajay Rastogi made the reference to a larger Bench in a case involving the Oil and Natural Gas Corporation (ONGC), observing that the case of Oil and Natural Gas Corporation Limited v Petroleum Coal Labour Union (PCLU case) needs to be reconsidered by a larger Bench..The Bench opined that the questions that need reconsideration by the larger Bench would include the meaning of unfair labour practice under Section 2(ra) read with Item 10 of the Vth Schedule of the Industrial Disputes Act. The Court has also referred the question of interpretation of provisions of clause 2(ii) of the Certified Standing Orders..The Court was considering a batch of appeals against the decisions of various High Courts including the High Courts of Andhra Pradesh, Uttarakhand and Delhi, among others, which had all relied upon the decision of the Court in the PCLU judgment..The question that was before the Court was whether the decision in the PCLU judgment was per incuriam, given that the same had not taken into account the precedents by the Supreme Court prior to it..In PCLU, it was held that after the completion of 240 days service in a calendar year, workmen are entitled for regularisation of their service into permanent posts. After 240 days, the workmen would acquire a "valid statutory right" and shall be granted the status of regular employees of the corporation, it had been held..However, the Supreme Court on Friday noted that the PCLU decision did not consider the binding precedents. The Division Bench went on to analyse the propositions that would emerge after analysing the ignored judgments. In this regard, the Court observed that the powers of the Labour or Industrial Courts could not have extended to allow them to issue direction for regularisation, "where such a direction would in the context of public employment offend the provisions contained in Article 14 of the Constitution.".The Court also opined that the statutory power of the Courts to grant relief to workmen, including granting a status of permanency, continued to exist in circumstances where the Corporation had indulged in unfair or discriminatory labour practices. .The Court further added that the power to create permanent or sanctioned posts lies outside the judicial domain. Where no posts are available, a direction by the Court to grant regularisation would be impermissible merely on the basis of the number of years of service, the Bench said..Moreover, the Court also said that when the Corporation has regularised some workmen and left out other similarly placed workmen, it would be open to those left out to approach the Courts on grounds of violation of Article 14 of the Constitution..In view of these observations, the Court has said that the decision of the Court in PCLU needs to be revisited "in order to set the position in law which it adopts in conformity with the principles emerging from the earlier line of precedent.". [Read Judgment]