Can Contractual Employees once regularized, be entitled to the same benefits as their regularly employed counterparts? – The case of HRTC employees (2023)

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In a pivotal judgment by the Himachal Pradesh High Court in Vikram Singh vs. State, CWPOA No. 2343 of 2020, Justice Bipin Chander Negi tackled the significant issue of regularization of contractual employees in the Himachal Road Transport Corporation (HRTC). This saga began with the HRTC’s inclusion of ‘contractual recruitment’ in 2003, a move that led to the hiring of 153 drivers under fixed-term contracts. The heart of the dispute lay in the inconsistent regularization of these drivers, some after 6 years of service, compared to others regularized merely after a year. The case presents a detailed examination of the equitable treatment of contractual employees in government services, addressing the nuances of employment law.

Background and Facts of the Case

Initial Regulations and Subsequent Amendments

  • Initial Service Regulations (1996): The Himachal Road Transport Corporation (HRTC) established its service regulations in 1996, which governed the terms of employment for various classes of its employees.
  • Amendment for Contractual Recruitment (2003): In 2003, the HRTC, following the Government of Himachal Pradesh’s directive, amended these regulations to include ‘contractual recruitment’ as an additional mode of recruitment.

Recruitment and Regularization of Drivers

  • Recruitment of Contractual Drivers (2003-2006): Between 2003 and 2006, HRTC decided to recruit 153 drivers on a contractual basis, offering a fixed monthly remuneration.
  • Regularization Process: The petitioners, who were among these recruited drivers, were regularized after 6-8 years of service. This delay in regularization formed the crux of their grievance.

Core Grievances of the Petitioners

  • Inconsistent Regularization: The petitioners highlighted that their regularization was inconsistent compared to other employees who were regularized after just one year of service.
  • Contractual Appointment Provisions: They argued that the service regulations did not initially envisage contractual appointments, asserting that their appointments should be considered regular from the start.

Legal Proceedings and Tribunal Involvement

  • Approach to State Administrative Tribunal: Some petitioners initially sought relief from the Himachal Pradesh State Administrative Tribunal. The Tribunal referenced a previous High Court decision (Jagdish Chand v. HRTC) that dealt with a similar issue and asked HRTC to consider the case of the employees in light of the said case.
  • Consideration and Rejection by HRTC: HRTC, in its evaluation, differentiated these cases from the Jagdish Chand case, leading to the dismissal of the petitioners’ claims.
  • The employees ultimately approached the High Court, challenging the rejection.

HRTC’s Defense and Legal Pleas in the High Court

  • Alternate Remedy and Acquiescence: In response to the petitioners’ High Court appeal, HRTC argued the existence of an alternate remedy under the Industrial Disputes Act and claimed that the petitioners had acquiesced to their contractual terms without protest.
  • Pleas of Limitation and Delay: HRTC also contended that the petition was barred by limitation, delay, and laches.

Legal Principles from Cited Cases and Their Application

In the case, legal principles from the below-mentioned cases were collectively used to reinforce the argument for equitable treatment of contractual employees, emphasizing the necessity for consistent regularization policies, protection from exploitative employment practices, and adherence to the principles of equality and non-discrimination in government employment. The Court’s application of these principles highlighted the need for fairness and consistency in the treatment of employees, regardless of their contractual or regular status.

1. Jagdish Chand v. Himachal Road Transport Corporation, CWP No. 9279 of 2011

  • Legal Principle: This case addressed the regularization of contractual employees and set a precedent for similar cases in HRTC.
  • Application in HRTC Case: Used as a benchmark to argue for the equitable regularization of the petitioners, underscoring the need for consistency in regularization policies within the same organization.

2. Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly (1986) 3 SCC 156

  • Legal Principle: Examined the issue of exploitative and unconscionable terms in employment contracts, emphasizing employee protection.
  • Application in HRTC Case: This Supreme Court judgment was referenced to emphasize the exploitation in employer-employee relationships. It highlighted the need to protect employees from exploitative contractual terms, especially in cases where there is a significant disparity in bargaining power between the employer and employee.

3. Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1

  • Legal Principle: Clarified when courts can intervene despite the existence of an alternate remedy, especially in cases involving fundamental rights or glaring legal errors.
  • Application in HRTC Case: Supported the Court’s decision to intervene despite the existence of alternative remedies like industrial tribunals, given the fundamental rights issues at stake.

4. K. Thimmappa v. Chairman, Central Board of Directors, State Bank of India, (2001) 2 SCC 259

  • Legal Principle: Stated that petitions cannot be dismissed on the grounds of delay and laches if there is an infraction of fundamental rights.
  • Application in HRTC Case: Justified the Court’s consideration of the case despite potential delays, as it involved the fundamental right to equality under Article 14.

5. State of Uttar Pradesh v. Arvind Kumar Srivastava, (2015) 1 SCC 347

  • Legal Principle: Emphasized that all identically placed individuals should be treated alike, barring exceptions like policy decisions or schemes of regularization.
  • Application in HRTC Case: Used to argue against the discriminatory treatment of similarly placed contractual employees in HRTC.

6. Himachal Pradesh State Electricity Board Limited v. Jagat Singh, CWP No. 211 of 2018

  • Legal Principle: Discussed employment regularization and equal treatment.
  • Application in HRTC Case: This case was distinguished in the HRTC context, with the Court focusing on the unique aspects of the petitioners’ situation.

7. Rakesh Kumar v. State of HP, CWP No. 2735 of 2010

  • Legal Principle: Addressed the employer’s responsibility in the regularization process.
  • Application in HRTC Case: This judgment highlighted that the delay in regularization should not be attributed to the employees when the onus lies with the employer, in this case, a state entity. The Court in this precedent emphasized that employees should not be penalized for administrative delays in regularization processes.

8. The Road Transport Corporation Act, 1950

The case deals with Section 45 of the act and its influence on the employment policies of HRTC. Central to the case was the interpretation of these regulations and the principle of equality as enshrined in the Constitution.

Court’s Findings:

Justice Negi meticulously analyzed the conditions under which the petitioners were employed and subsequently regularized. The Court scrutinized the amendments to the HRTC service regulations and the state government’s directives, noting inconsistencies in their application.

The Court found that the regularization process in HRTC was arbitrary and discriminatory, violating the principles of equality under Article 14 of the Constitution. The Court emphasized that contractual employees, once regularized, should be entitled to the same benefits as their regularly employed counterparts.

The Court directed the regularization of the petitioners from the date of completion of one year of contractual service, aligning their status with other similarly placed employees. This directive was a significant step towards ensuring fair treatment of contractual employees in government services.

“The essence of equitable treatment in employment lies not only in the adherence to regulations but also in their fair and just application, ensuring uniformity and non-discrimination.”

Justice Bipin Chander Negi in Vikram Singh Vs State, CWPOA No. 2343 of 2020, 2023 SCC OnLine HP 1501

Conclusion

This judgment is a testament to the High Court’s commitment to uphold the principles of fairness and equality in employment. It sets a precedent for the treatment of contractual employees in government services, emphasizing the need for consistency and non-discriminatory practices in employment regularization.

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Advocate Deven Khanna, an alumnus of the esteemed National Law School, is currently engaged in legal practice at the High Court of Himachal Pradesh and the Supreme Court of India. His practice primarily focuses on areas such as Civil liberties, Constitutional law, Writs, Labour and Service matters, Public Interest Litigations, and Bail matters. His academic contributions include articles in national journals, judging moot courts, and presentations at various legal conferences. He is committed to advancing legal education. For inquiries, he can be contacted at khannadeven@gmail.com or on mobile at 7018469792.

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