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Management of the Barara Cooperative Marketing-cum-Processing Society Ltd. Vs. Pratap Singh - (Supreme Court) (02 Jan 2019)

Regularization by management gives no right to retrenched employee to claim re-employment


Labour and Industrial

Present appeal is directed against the final judgment passed by the High Court whereby the Division Bench of the High Court dismissed the appeal filed by the Appellant herein and affirmed the judgment passed by the Single Judge of the High Court by which the Respondent herein was ordered to be reinstated into service with back wages.

There was no case made out by the Respondent (workman) seeking re-employment in the Appellant's services on the basis of Section 25(H) of the Industrial Disputes Act, 1947 (ID Act). In the first place, the Respondent having accepted the compensation awarded to him in lieu of his right of reinstatement in service, the said issue had finally come to an end; and Second, Section 25(H) of the ID Act had no application to the case at hand.

In order to attract the provisions of Section 25(H) of the ID Act, it must be proved by the workman that firstly, he was the "retrenched employee" and secondly, his ex-employer has decided to fill up the vacancies in their set up and, therefore, he is entitled to claim preference over those persons, who have applied against such vacancies for a job while seeking re-employment in the services.

The case at hand is a case where the Respondent's termination was held illegal and, in consequence thereof, he was awarded lump sum compensation of Rs. 12,500 in full and final satisfaction. The Respondent also accepted the compensation. This was, therefore, not a case of a retrenchment of the Respondent from service as contemplated under Section 25(H) of the ID Act. The Respondent was not entitled to invoke the provisions of Section 25(H) of the ID Act and seek re-employment by citing the case of another employee (Peon) who was already in employment and whose services were only regularized by the Appellant on the basis of his service record in terms of the Rules.

The regularization of an employee already in service does not give any right to retrenched employee so as to enable him to invoke Section 25(H) of the ID Act for claiming re-employment in the services. The reason is that, by such act the employer does not offer any fresh employment to any person to fill any vacancy in their set up but they simply regularize the services of an employee already in service. Such act does not amount to filling any vacancy.

There lies a distinction between the expression 'employment' and 'regularization of the service". The expression 'employment' signifies a fresh employment to fill the vacancies whereas the expression 'regularization of the service' signifies that the employee, who is already in service, his services are regularized as per service Regulations. The Labour Court was, therefore, justified in answering the reference in Appellant's favour and against the Respondent. The appeal is accordingly allowed. Impugned order is set aside and the award of the Labour Court is restored.


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