Industrial Adjudicator Cannot Direct Permanency On Completion Of 240 Days As It Amounts To Creation Of Posts: Bombay High Court Directs Regularisation Of ONGC Oil Rig Workers
The Court also rejected ONGC’s plea as "totally baseless" that the Industrial Disputes Act does not apply to workers deployed at offshore rigs, finding their appointment and service-related decisions were made in Mumbai
Justice Sandeep V. Marne, Bombay High Court
The Bombay High Court has held that an industrial adjudicator does not possess the power to direct that workers be made permanent on completion of 240 days of service, since such a direction is tantamount to creating posts on the establishment of a Government company, a power vested exclusively in the employer and not exercisable by a Tribunal.
At the same time, applying the one-time regularization exception recognised by the Supreme Court in Secretary, State of Karnataka & Ors. v. Umadevi (3) and Ors. 2006 4 SCC 1, the Court held that nine tenure-based Field Operators of Oil and Natural Gas Corporation Ltd. (ONGC), who had rendered continuous, unbroken service on successive fixed-term engagements for over two decades, were entitled to be treated as regular employees from the date of completion of ten years of service, since they were duly qualified persons engaged through the Employment Exchange after a written test and interview, and were not "backdoor entrants".
The Court further castigating ONGC's objection that the Industrial Disputes Act had no application to workers deployed at its offshore rigs beyond 12 nautical miles from the coastline, rejected, holding the contention " totally baseless" and was “preposterous and outrageous” since the workers' appointment orders were issued at Mumbai and all decisions relating to their service conditions, including disciplinary action, were taken at Mumbai, thereby squarely attracting the provisions of the Act.
A Single Judge Bench of Justice Sandeep V. Marne observed, “The term ‘permanency’ is used by the Industrial Tribunal in the Award since it has directed making the workers permanent on completion of 240 days of service. In my view the Tribunal has faltered to this limited extent as the direction for making workers permanent on completion of 240 days of service is akin to creation of posts on the establishment of ONGC, which power the industrial adjudicator does not possess. By now, it is well settled principle that an industrial adjudicator cannot direct creation of posts on establishments of the State and its Instrumentalities”.
“I find the contention raised on behalf of the Petitioner about absence of jurisdiction to be totally baseless. Through the concerned workers may be posted to work at the Rigs located beyond 12 nautical miles of India’s coastline, however, their appointment orders were issued at Mumbai and were addressed to the workers at Mumbai…The case does not involve engagement of a foreign national to work at the oil rig. Here, the appointments are made in Mumbai, India and all decisions relating to service conditions of the workers are taken at Mumbai, India. It is therefore absurd to suggest that Indian laws do not apply to the service conditions of the concerned workers or that CGIT does not have jurisdiction to decide the Reference concerning them”, it said.
Senior Advocate J.P. Cama appeared for the petitioner and Advocate Lilesh P. Sawant appeared for the respondent.
The petitioner, ONGC, had engaged the nine workmen between 2000 and 2001 as Assistant Rigmen/Field Operators on fixed-tenure contracts of two to three years, later standardised to four-year terms, to meet the uncertain manpower requirements of offshore oil exploration at Mumbai High. The workmen were sponsored by the Employment Exchange and selected after a written test, interview and medical examination, though no open advertisement was issued.
In 2008, 79 such workmen raised an industrial dispute seeking regularization, which was referred by the Ministry of Labour to the Central Government Industrial Tribunal-II, Mumbai. During the pendency of the Reference, 55 workmen secured regular appointment through open selection and 15 dropped out on account of retirement, death or resignation, leaving only nine workmen to prosecute the Reference.
By its Award dated April 24, 2025, the CGIT answered the Reference in the affirmative and directed ONGC to make the nine workmen permanent from the date of completion of 240 days of service, together with consequential financial benefits.
ONGC challenged this Award before the High Court, contending that the Industrial Disputes Act had no application to workers deployed beyond 12 nautical miles from the coastline, that the Tribunal had exceeded the terms of reference by granting "permanency" when only "regularization" had been sought, that the workmen were ineligible for the one-time exception under Umadevi (3) since their initial engagements were not against sanctioned vacancies, and that participation by the workmen in unsuccessful regular selection processes estopped them from claiming permanency.
“…I therefore find the objection of non-applicability of provisions of the ID Act and absence of jurisdiction of the Tribunal over service conditions of 9 workers raised by the Petitioner-ONGC to be preposterous, baseless and outrageous. The case does not involve engagement of a foreign national to work at the oil rig. Here, the appointments are made in Mumbai, India and all decisions relating to service conditions of the workers are taken at Mumbai, India. It is therefore absurd to suggest that Indian laws do not apply to the service conditions of the concerned workers or that CGIT does not have jurisdiction to decide the Reference concerning them”, the Bench further noted.
On the merits, the Court held that the workmen could not be treated as backdoor entrants, since they had undergone a bona fide selection process, and that their continuous, unbroken service of over 25 years indicated a genuine and continuing need for their services rather than any project-specific requirement.
However, the Court agreed with ONGC that regularization and permanency are distinct concepts under Umadevi (3), and that an industrial adjudicator, while empowered to direct regularization under the limited exception in paragraph 53 of Umadevi (3), cannot direct permanency on completion of 240 days, since doing so would amount to creating posts on the employer's establishment, a power the adjudicator does not possess.
Cause Title: Oil & Natural Gas Corporation Ltd. v. Central Government Industrial Tribunal-II and Another Writ Petition No. 13673 of 2025.
Appearances:
Petitioner: J.P. Cama, Senior Advocate, Mallika Joshi, Akshay Gupte, instructed by Solomon & Co.
Respondent: Lilesh P. Sawant, Advocate.