Presumption Of Existence Of Vacancy If Engagement Of Workman Is For Substantially Long Term: Supreme Court

The Court further pulled up the employer for withholding employment records, affirming that the Labour Court was right to draw an "adverse inference" against the department for failing to produce summoned documents.

The Bench of Justice Manoj Misra and Justice Manmohan observed, “In a case where engagement is for a substantial length of time, a presumption would arise that the work for which the workmen is engaged is of a perennial nature and there exists a vacant post. In the instant case, there is no dispute that workmen were initially engaged in the year 1993 and their services were dispensed with in the year 2006. It is difficult to accept that for that long period of time they were only working as substitutes for regular workers. In such circumstances, when they had led evidence regarding their continuous service and a direction was issued to the employer to produce the relevant records and, despite such direction, records were not produced, if the Labour Court had raised an adverse inference, the same could not have been faulted.”

AOR Ashish Kumar Upadhyay appeared for the Appellant, whereas AOR Lokesh Kumar Choudhary appeared for the Respondents.

Appeals were filed impugning the common judgment passed by the Allahabad High Court whereby three connected writ petitions filed by Nagar Nigam, Kanpur (Respondent herein) against three separate awards of Labour Court were allowed and the awards were set aside.

Facts of the Case

The Appellants worked as Switchmen for Nagar Nigam, Kanpur. They entered service in 1993 and continued to work until July 11, 2006, when the Respondent orally terminated their services. The workmen claimed that they served continuously for over 12 years and completed more than 240 days of work in the year preceding their dismissal. Consequently, they raised an industrial dispute, arguing that their termination was illegal as the respondent failed to follow the mandatory retrenchment procedure.

The matter was referred to the Labour Court, Kanpur. The Respondent contested the claim, stating that the appellants were merely "substitute" workers who worked only 10 days a month and never completed 240 days of service in any calendar year. However, the Labour Court rejected this defence. It noted that the respondent failed to produce the relevant employment records despite a specific order to do so. Therefore, the court drew an "adverse inference" against the employer and held that the termination violated Section 6N of the U.P. Industrial Disputes Act, 1947. The court ordered the reinstatement of the workmen with back wages.

Aggrieved by the awards, Nagar Nigam filed writ petitions before the High Court. The High Court set aside the Labour Court's orders and ruled in favor of the employer. It held that the primary "burden of proof" to establish 240 days of continuous service rested solely on the workmen. Since the High Court felt the workmen failed to produce sufficient documentary evidence, such as payment slips, it concluded that the burden could not be shifted to the employer to prove the negative.

Submissions of the Parties

The Appellants challenged the High Court's judgment, arguing that 13 years of service raised a legal presumption of regular and perennial work. They pointed out that they led oral and documentary evidence, while the employer deliberately suppressed records. Furthermore, they argued that other similarly situated workmen in the same department received relief which was upheld by the Supreme Court in earlier instances. They contended that denying them the same benefit resulted in a "travesty of justice."

In response, the Respondent supported the High Court’s view. They argued that there was no cogent evidence to prove the completion of 240 days of service. Additionally, the respondent challenged the grant of back wages, asserting that the Labour Court failed to record a specific finding on whether the workmen remained unemployed during the period of litigation.

Observations of the Court

The Court examined the materials and noted that the Nagar Nigam did not specifically deny that the workmen served from 1993 to 2006. The Respondent's claim that the appellants were only "substitute" workers for 10 days a month lacked evidence. Although a witness for the Nagar Nigam claimed his testimony was based on official records, the employer failed to produce those records despite the Labour Court's summons. Consequently, the Court held that the Labour Court acted correctly by drawing an adverse inference against the employer for withholding vital documents.

“We are, therefore, of the view that the judgment and order passed by the High Court is liable to be set aside. However, merely because the retrenchment procedure was not followed may not automatically entitle the workmen to be reinstated with full back wages… In this case, though, we are of the view that the workmen were entitled to reinstatement as they had served for over a decade, however, whether they were entitled to full back-wages/ arrears or lesser amount, requires adjudication based on an assessment whether they were gainfully employed elsewhere in the interregnum.”, it said.

Consequently, the Court set aside the High Court’s judgment and restored the Labour Court's decision regarding the illegality of the termination. It upheld the order for reinstatement of the workmen, given their long tenure of service.

However, on the issue of back wages, the Court noted that a specific assessment was needed to check if the workmen were "gainfully employed" elsewhere during the litigation period.

Therefore, the Court remanded the matter back to the High Court solely to decide the quantum of back wages, while the order for reinstatement remained final.

Cause Title: Mohammad Sagir and Ors. v. Nagar Nigam Kanpur [SLP (C) No(s). 14760-14762/2024]

Appearances:

Appellants: Advocate on Record Ashish Kumar Upadhyay, Advocate Anurag Dubey, Advocate Anu Sawhney, Advocate Satpal Wadhwa, Advocate Maitri Goal.

Respondents: Advocate on Record Lokesh Kumar Choudhary, Advocate Ajay Singh, Advocate Mukteswari Shukla, Advocate Himanshu Shukla, Advocate Ankur Gulyani Panda, Advocate Mayank Sharma.

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