TN Medical Services Corporation Not Allowed To Wash Its Hands Off Responsibilities: SC Upholds Regularization Of Workmen
Case title: TAMIL NADU MEDICAL SERVICES CORPORATION LIMITED & ORS Versus TAMIL NADU MEDICAL SERVICES CORPORATION EMPLOYEES WELFARE UNION & ANR.
Case no: CIVIL APPEAL NO.6511 OF 2024 AND CIVIL APPEAL NO.6512 OF 2024
Dated on: May 17, 2024
Quorum: HON’BLE JUSTICE SANJAY KAROL AND HON’BLE MR. JUSTICE PRASANNA BHALACHANDRA VARALE
Fact of the case:
The case involves two civil appeals which was Civil Appeal No. 6511 of 2024 and Civil Appeal No. 6512 of 2024. The Corporation, which is the appellant in Civil Appeal No. 6511 of 2024, was incorporated under the Indian Companies Act, 1956, on 1st July 1994. It operates under the management of the State of Tamil Nadu. The Corporation has employed various workers in different capacities, including the appellants in the appeal arising out of SLP(C)No. 2649 of 2020. The workers employed by the Corporation sought regularization under the provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. Despite their representations, their requests for regularization were unsuccessful.
Consequently, two Writ Petitions were filed before the learned Single Judge of the High Court. This order accepted the claim of 53 workmen for permanent status in the Corporation while rejecting the claim of 42 others.
Issues framed by court:
Whether the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 apply to the parties involved in the case.
Whether the suggestion made in the impugned judgment to institute an ‘Industrial Disputes Claim’ regarding non-employment sustainable, considering that the Inspector of Labour had already passed orders in that regard.
Whether the claims of the workmen for permanent status in the Corporation were in accordance with the provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981.
Whether the authorized office under the aforementioned act, specifically the Labour Inspector, have the authority to try this case.
Whether if the respondent’s management falls under the jurisdiction of the aforementioned act, what type of relief can be awarded to the petitioners.
Legal provisions:
Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981: Deals with the regularization of employment for certain categories of workers in industrial establishments within the state of Tamil Nadu.
Tamil Nadu Shops and Establishments Act, 1947: Deals with the regulation of working conditions and employment practices in shops and commercial establishments across the state of Tamil Nadu
Industrial Disputes Act, 1947: Deals with the resolution of disputes between employers and employees in industrial establishments
Indian Companies Act, 1956: It provided comprehensive provisions regarding the formation, management, and operation of various types of companies, including public and private companies.
Contentions of Appellant:
The appellant argues that the order of the Court dated 10th March 2016 was not adhered to. They state that the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, and the Tamil Nadu Shops and Establishments Act, 1947, should not apply to them. They claim that the High Court did not consider their plea that these acts were not applicable to them and that the only way they could be applicable is if the Corporation falls under the definition of ‘commercial establishment’ under Section 2(3) of the 1947 Act. They contend that the judgment did not analyze whether any of the activities of the Corporation fell under Section 2(3) of the 1947 Act. The appellant argued that 53 employees directed to be given permanent status by the Inspector of Labour and have found other profitable employment, and thus, the Corporation should not be bound to grant them permanent status.
Contentions of Respondents:
The respondent argued that the Corporation is trying to distinguish the status of the respondents by applying the ratio of the case State of Karnataka v. Uma Devi after exploiting them as temporary employees for years. They rely on the case Maharashtra State Road Transport Corporation v. Casteribe Rajya Parivahan Karmachari Sanghathana to support their argument. They also argued that if the case involves regularization, the same rule applies as established in U.P. Power Corporation Limited & Anr. v. Bijli Mazdoor Sangh & Ors., and the powers of Industrial and Labour Courts were not considered in the case of Uma Devi. The respondent provides a tabular chart for the appellants in one of the appeals SLP(C) No.2649 of 2020 and contends that since the Inspector of Labour has declared the eligibility of the workmen for permanent status, there is no requirement to raise an industrial dispute questioning non-employment. They also argued that those who have reached superannuation age would be entitled to compensation instead of regularization, citing Ranbir Singh v. S.K. Roy, Chairman, Life Insurance Corporation of India & Anr.
Court analysis& Judgement:
The case involved appeals arising from Special Leave Petitions (SLPs) filed by Tamil Nadu Medical Services Corporation Limited and G. Sumathi & Ors. The respondents in both cases were the Tamil Nadu Medical Services Corporation Employees Welfare Union and others. In this case, the Supreme court analyzes the question of whether the High Court, upon remand, had the authority to disregard the order of the Inspector of Labour and suggest that the employees raise an industrial dispute questioning their non-employment. The Supreme court emphasized that the scope of remand was limited to the High Court’s failure to consider the applicability of the Industrial Disputes Act, 1947 to the parties involved. Accordingly, the appeal filed by the Corporation was dismissed, and the appeal filed by the respondent-Union was allowed, with directions for compliance with the Inspector of Labour’s order. Which had concluded that the members of the respondent-Union should be given permanent employment.
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Judgement Reviewed By- Antara Ghosh