Holding

Continuous employment of daily‑wage workers for a long period obliges the employer to regularise them, with relaxed qualification criteria and a phased absorption scheme, subject to the State creating the requisite posts.

Summary

The Gujarat Agricultural University, a state‑aided institution, employed daily‑wage workers such as plumbers, carpenters and sweepers. The workers claimed regularisation and benefits of permanent Class IV employees after completing ten years of service, invoking Section 10(1)(c) of the Industrial Disputes Act. The Industrial Tribunal ordered their regularisation, but the Supreme Court set aside that blanket order, directing the University to frame a scheme. The University proposed a scheme that regularised workers with ten years’ service, subject to qualification criteria, phased absorption, and payment of minimum wages to those not yet regularised. The Court held that continuous employment of daily‑wage workers for a long period creates an obligation to regularise them, that qualification requirements should be relaxed for long‑serving workers, and that a phased scheme is permissible provided the State creates sufficient posts. It approved the modified scheme, ordered the State to assess and create additional posts within six months, and disposed of the appeals.

Issues considered

Whether daily‑wage workers who have completed ten years of continuous service are entitled to regularisation as permanent employees under Section 10(1)(c) of the Industrial Disputes Act.
Whether the qualification criteria prescribed in recruitment rules can be relaxed for long‑serving daily‑wage workers.
Whether a phased absorption scheme is a valid mechanism for regularisation in view of financial constraints.
Whether workers not regularised under the scheme are entitled to the minimum pay scale of regular employees or only to statutory minimum wages.

Legislation cited

Industrial Disputes Act, 1947s. 10(1)(c)
Minimum Wages Act

Subjects

regularisationdaily wage workersunfair labour practiceIndustrial Disputes Actequal pay for equal workphased absorptionqualification relaxationstate funding

Judgment

GUJARAT AGRICULTURAL UNIVERSITY A
v.
RATHOD LABHU BECHAR AND ORS.

JANUARY 18, 2001

(A.P. MISRA AND D.P. MOHAPATRA, JJ.] B

labour law:

Industrial Disputes Act, 1947: Section 10(/)(c).

Daily wage workers-Regularisation of-Plumbers, carpenters,
c
sweepers, pump operators, helpers, masons etc. employed as daily wage
~ labourers for a long time-Industrial dispute raised seeking their
regularisation from the day they had completed 240 days of service and
sought further benefits at par with permanent employees-Industrial Tribunal
directed the employer to regularise the services of such daily wage workers D
who had completed JO years of service (with minimum 2400 days) as on
1-1-/993-Sing/e Judge directed employer to make payment to the workmen
at the minimum of the pay scale and also to frame a Scheme for regularisation
of such daily wage /abourers-lPAs dismissed-During pendency of appeal
before the Supreme Court employer framed a Scheme for absorption of such E
employees-Scheme provided for regularisation of daily wage workers who
had completed JO years of service as on 31-12-1999-Scheme also provided
for regularisation in a phased manner and prescribed minimum qualifications
for such daily wage workers-Validity-Held: Taking work from daily wage
workers or ad hoc appointees has to be for a short period or as a stop-gap
arrangement-Work taken by an employer from daily wage workers F
continuously for a long time without regularisation is an unfair labour
practice-Such a practice is denounced-Financial viability may be a
consideration for such a practice but it should not be stretched beyond
limits-Prescribed minimum qualification needs to be relaxed in respect of
daily wage workers with long experience without complaints-Maximum G
workers who had completed JO years of service as on 3/-12-1999 be
absorbed-Thereafter, reassessment for additional posts to be done in the
same perspective-Phased manner of absorption of workers, approved-
Scheme modified to this extent.
The appellant, an educational institution fully aided by the State H
413
414 SUPREME COURT REPORTS [200 I] I S.C.R.

A Government, was engaged in the educational activities in agricultur·e and
other allied sciences. The appellant engaged the respondents as daily wage
workers such as plumbers, carpenters, sweepers, pump operators, helpers,
masons etc.

The respondents raised an industrial dispute seeking regularisation
B of their services from the day they completed 240 days of service and benefit
at par with the permanent employees. The Industrial Tribunal directed the
appellant to regularise the services of all such daily wage employees who had
-...
completed 10 years of service (with minimum 2400 days) as on 1-1-1993.
Single Judge set aside the award with a direction to the appellant to make
the payment to the workmen at the minimum of the pay scale and also to
c
frame a Scheme for the regularisation of such daily wage labourers. The
LPA was dismissed. Hence this appeal.

During the pendency of the appeal before this Court the appellant
framed a Scheme for the absorption of these daily wage labourers. The
D Scheme provided for regularisation of the daily wage workers who had
completed 10 years of service as on 31-12-1999. The Scheme also prescribed
the minimum qualification and also proposed regularisation in a phased
manner.

Disposing of the appeal, the Court
E
HELD : 1.1. It is well settled that if the employer takes work continuously
from daily wage workers for a long number of years without considering
their regularisation for the employer's financial gain as against the
employees' legitimate claim, such a practice has been held repeatedly as an
unfair labour practice. In fact, taking work from daily wage workers or ad :..
F hoc appointees is always viewed to be only for a short period or as a stop-
gap arrangement, but it is found that a culture is growing to continue with
it for a long time, either for financial gain or for controlling its workers
more effectively with the sword of Damocles hanging over their heads or to
continue with the favoured ones in the cases of ad hoc employee withstaling
G competent and legitimate claimants. This practice is denounced.(424-B-C-D(

1.2. If the work is of such a nature, which has to be taken continuously •
and in any case when this pattern becomes apparent, when they continue to
work for year after year, only option to the employer is to regularise them.
Financial viability no doubt is one of the considerations but then such
H enterprise or institution should not spread its arms longer than its means.
.
GUJARAT AGRI. UNI. v. RATHOD bABHU BECHAR 415
The consequent corollary is, where \vork is taken not for a short period or A
limited for a season or where work is not of a part time nature and if pattern
shows work is to be taken continuously year after year, there is no
justification to keep such persons hanging as daily rate workers. In such
a situation a legal obligation is cast on an employer if there be vacant posts
to fill it up with such workers in accordance with the rules, if any, and where
necessary by relaxing the qualifications. If no post exists then duty is cast
B
....... to assess the quantum of such work and create such equivalent posts for
their absorption. (424-D-FJ

2. Daily rate workers who have been working on the posts for such
a long number of years without complaint is a ground by itself for the c
relaxation of the eligibility condition of minimum qualification. It would not
be appropriate to disqualify them on this ground for their absorption. Hence,
~
Clause 1(a) of the Scheme prescribing minimum qualification needs
modification to this extent. (429-F(

3. The decision to absorb some of the employees at one point of time D
or in a phased manner depends on the facts and circumstances of each case.
Where very large number of workers are required to be absorbed, this Court
... ..,.. accepted the formula in the past to absorb such employees under a Scheme
in a phased manner. This is done to work it out within its financial means.
Every liberty and entitlement is always subject to such financial limits. But
E
in considering such absorption, the financial means have to be stretched to
the maximum but should not be a defence with motive to disentitle the claim
of the workmen. The grant of this phased absorption thus is in itself a
mechanism under this principle. But this mechanism is not a tool to misuse
~ for taking away any legitimate rights of any worker. The Court has to be
cautious in exercising its discretion. On the one hand it has to keep the F
interest of the workers alive and on the other to see that the employer does
not become spineless for the lack of funds eroding the very workers' interest.
In the present case admittedly in the first phase in terms of Clause 1 of the
Scheme, one block of daily wage workers is to be regularised for which the
posts are being created. In creating the posts the government shall see that
G
.... maximum posts are created to absorb maximum such workers who have
completed ten years of service as on 31-! 2-1999, as these workers have
more than eligible claim. Thereafter, even reassessment for additional posts
should be done in the same perspective. In other words there may still be a
number of workers who may still not be covered for absorption under the
first phase of Clause I due to initial non-availability of posts though working H
416 SUPREME COURT REPORTS [2001] 1 S.C.R.

A for a long number of years. This is so because Clause l(d) is silent as to
what number of posts the Government has created initially for the first phase yl
of absorption. 1430-D-H; 431-AI

Daily Rated Casual Labour Employed under P& T Department v. Union
of India, 119881 1 SCC 122; State of Haryana v. Jasmer Singh, 11996] 11
B SCC 77; State of Ha1yana v. Surinder Kumar, (19771 3 SCC 633; State of
Haryana '" Piara Singh, (1992 I 4 SCC 118; Surinder Singh v. Engineer-in-
Chief, CPWD, 1198611 SCC 639; Moo! Raj Upadhyaya v. State of HP, (19941 .....
Supp. 2 SCC 316; Dharwad Distt. PWD literate daily wage employees
Association v. State of Karnataka, 119901 2 SCC 396; Rao Somashekara v.
State of Karna/aka, 1199718 SCC 649; Raj Narain Prasadv. State of UP,
c
119981 8 SCC 473; Hindustan Machine Tools v. M. Rangareddy, 120001 7
SCC 741; Delhi Veterinmy Association v. Union of India, 119841 3 SCC 1;
Bhagwati Prasad v. Delhi State Mineral Development Corporation, 119901 ~
1 SCC 361; UP Income Tax Department Contingent Paid Staff Welfare
Association v. Union of India, 119871 Supp. SCC 658; State of Punjab v.
D Devinder Singh, 119981 9 SCC 595; Chief Conservator of Forests v. Jagannath
Marzili Kondhare, 11996) 2 SCC 293; Ghaziabad Development Authority v.
Vikram Choudhary, 1199515SCC210 and Basudev Pati v. State of Orissa,
119971 3 sec 632, referred to.
_... ....
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 691 of
E 2001.

From the Judgment and Order dated 24.09.1998 in LPA 1047/97 of the
High Court of Gujarat at Ahmedabad.

With
F
C.A. Nos. 692, 693 and 694 of 200 I.

Kirit N. Raval Addi. Solicitor General, Dr. Rajeev Dhawan, D. G. Chauhan,
Rajiv Kapur, Sanjay Kapur, Mrs. Devyaniben T. Shah, Ms. Parul Patel, S. C.
Patel. Ms. Hemantika Wahi and Ms. Sumita Hazarika for the appearing parties.
G The Judgment of the Court was delivered by

MISRA, J. Delay condoned in SLP (C) No. 1386 of2001 (CC No. 2360).

Leave granted in all the special leave petitions.

H The aforesaid appeals raise common questions hence are being disposed
GUJARAT AGRI. UNI. v. RA THOD LABHU BECH AR [MISRA, J.] 417

of by means of this common judgment. These appeals arise out of industrial A
'llr disputes through references by the Government of Gujarat under Section IO
(!) (C) of the Industrial Disputes Act, 1947. It raised the following questions:

"Whether the employees listed in the scheduled annexed be made
permanent, as from the day, when they complete 240 days service, and ·
if in affirmative, whether they are entitled to all the benefits at par with B
the permanent employees, and be paid arrears."

Before entering into the issues in this case it is necessary to give
certain essential facts in order to appreciate the controversies.

The appellant is an educational institution fully aided by the State C
Government and is engaged in the educational activities in agriculture and
"" allied sciences and humanity and is also prosecuting research in agriculture
and other allied science. It performs its duties and functions under the
statutory provisions and in doing so it engages daily rated labourers for
various activities. According to the appellant these labourers are being paid D
their wages as per the minimum wages fixed by the State Government from
time to time under the Minimum Wages Act. They were engaged due to
exigencies of work, without considering relevant factors about their educational
_.,.. qualification, age limit and other relevant requirements for the purpose of
regular appointment under the Recruitment Rules. There are different
agricultural research centres at different places with different projects and E
these daily rated workers are unskilled, semi-skilled, skilled and field labourers
of different categories. Since the University is grant-in-aid institution fully
funded by the State Government it requires prior permission/sanction of the
State Government for appointment of its employees. In fact, all the posts are
,._ sanctioned by the State Government and thereafter they are filled by the
University, as per the Recruitment Rules. The present case pertains to daily F
wage workers who are plumbers, carpenters, sweepers, pump operators, helpers
and masons etc. According to the appellant, no posts are sanctioned for them
and hence they are working on daily rate basis. Thus their appointments are
on irregular basis and not in accordance with the recruitment rules.
G
11 The respondents raised, as aforesaid, an industrial dispute who are
daily rated employees, before the Industrial Tribunal, Rajkot. The Industrial
Tribunal directed the appellant to regularise the services of all such daily
rated labourers who have completed I 0 years of service (with minimum of
2400 days) as on 1.1.1993 with pay and all allowances along with other
benefits of the permanent class IV employees. The appellant being aggrieved H
418 SUPREME COURT REPORTS [2001] l S.C.R.

A filed the writ petition before the High Court challenging this award. Learned
Single Judge partly allowed the writ petition and set aside the award, however, '1'
with a direction to the appellant to make the payment to the workmen at the
minimum of the pay scale and also to frame a scheme for the regularisation
of such daily rated labourers. The appellant not satisfied filed letters patent
appeals.
B
The Special Leave Petition (C) No. 1490 of 1999, arises out of the
Letters Patent Appeal No. 1047of1997, which concern 23 respondents who ...-
were working as carpenters, masons, plumbers etc. in the appellant-University.
The appellant has a huge campus covering the large area of about 16000 sq.
C mtrs. and 240 staff quarters of the employees at Junagadh and other places.
Nine daily rated workers were involved in Letter Patent Appeal No. I051 of
1997 from which arises Special Leave Petition (C) No. 2528 of 1999. Similarly,
there were three daily rated workers in Letter Patent Appeal No. I 095 of 1997
which gave rise to the Special Leave Petition (C) No. 2529of1999. SLP of2001
(arising out of CC No. 2360 of 1999) arises out of LPA No. 808 of 1998 wherein
D the respondents representing the daily rated workers of Junagadh Jilla Majdoor
Sangh.

Learned Single Judge relying on the decision of this Court in Daily
Rated Casual Labour Employed under P & T Department v. Union of India
E & Ors., [ 1988] I SCC 122, a case of daily rated casual workers of the P & T
Department, directed the appellant to submit a scheme for conferring permanent
status to the respondents. At this stage, when the question of framing a
scheme, came to the fore, before the Single Judge, learned counsel for the
appellant submitted then that such a scheme of giving permanent status to
these workers could not be confined to these workmen as large number of
F such workmen are involved, disputes about which are pending for adjudication
in the various labour courts. It was suggested, it would be fair and just,
instead of making multiple scheme in each such pending matters, the appellant
be permitted to frame a comprehensive scheme to cover all pending litigations.
The appellant specifically denies any such statement being given by the
G counsel for the appellant. The submission is, this fact was challenged even
before the bench of Letters Patent Appeal, but the court did not advert to
this question. However, the letters patent appeals were dismissed with the
following observations:

"As a result of foregoing discussion, all these three appeals are
H summarily dismissed. The learned Single Judge had directed the
GUJARAT AGRI. UNI. v. RA THOD LABHU BECHAR [MISRA, J.] 419

appellant to submit a scheme for consideration of the Tribunal A
with regard to extending permanent status to the workmen in·
question and the like workmen employed under it within a period .,
of two months from the date of receipt of writ of the judgment
and order, but, since the above direction ~as given way back in
the month of April, 1997, we direct the appellant to submit a
scheme for consideration of the Tribunal with regard to extending B
permanent status to the workmen in question and the like
workmen employed under it within a period of one month from
the date of receipt of writ of this order, and the Tribunal shall
thereafter make an award within three months after inviting
objections and suggestions from the respective parties. There C
shall be no order as to costs."

Aggrieved by this, the appellant filed the aforesaid appeals, in this
Court.

Since the appellant was fully funded by the State Government, the D
appellant was permitted to implead the State of Gujarat in these appeals and
notice was issued to it on the 8th February, I 999 by this Court. It seems
instead of contesting various issues, during pendency of these appeals in
~ this interregnum, learned counsel for the appellant submitted a scheme framed
by the university for the absorption of these employees with the approval of
the State Government, which is also filed in this case. Learned counsel for the E
respondents desired to file objections to this scheme, which this Court
permitted. The objections accordingly were filed by the respondents.

We heard learned counsel for the parties at length and considered the
objections of the respondents with respect to the proposed scheme for the F
regularisation of daily rated workers. The proposed scheme is reproduced
below:

"SCHEME FOR REGULARISA T!ON OF DAILY RA TED LABOURS
OF THE GUJARAT AGRICULTURAL UNIVERSITY.
G
I. Daily-wager workers, whether skilled, semi-skilled or unskilled,
who have completed I 0 years or more of continuous service
with a minimum of240 days in each calendar year as on 31. 12. I 999,
shall be regularised as regular employees with effect from 1.1.2000
and shall be put in the time scale of pay applicable to the
corresponding lowest grade in the University subject to the H
420 SUPREME COURT REPORTS (200 I] I S.C.R

A following terms and conditions:

(a) The daily rated employees shall be eligible and must possess
the prescribed qualifications for the post at the time of their
appointment on daily rated basis.

(b) Daily-wager employees shall be regularised in a phased
B
manner to the extent or available regular sanctioned posts/
vacancies on the date of regularisation and on the basis of
seniority-cum-suitability including physical fitness.

(c) The work and conduct of such employees should have
c been of over all good category and satisfactory and no
disciplinary proceedings are pending against them.

(d) The regularisation will be against the posts/vacancies of the
relevant categories only.

2. Daily workers, whether skilled s~mi-skilled or unskilled, who
D have completed I 0 years of contin'uous s,ervice with a minimum
of 240 days in each calendar year as on 31.12. I 999 but could not
b(: regularised shall be treated as monthly rated em~loyees w.e.f.
1.1.2000 in the fixed pay without allowances as per the following
fonnula:
E Prepared by University:

Daily rate Fixed pay-prescribed by 26+ Rs.500
the Government from time to time for
skilled, semi-skilled, unskilled workers
F as the case may be
They would be entitled to an annual increment of Rs. I 5, Rs. 20
and Rs. 25 respectively for unskilled, semi-skilled and skilled
workers till their services are regularised as per para-I.
3. Daily-wager whether skilled, semi-skilled or unskilled who have
G not completed 10 years of service with a minimum of 240 days
in each calendar year shall be paid daily wage at the rates
prescribed by the Government of Gujarat from time to time for
daily wager employees falling in Class Ill and Class IV.
4. 'The seniority o.f the daily rates Class III and IV employees so
H regularised vis-a-vis Class III and IV employees appointed on
GU.IA RAT AGRI. UNI. v. RATllOD LAB HU BECHAR [MISRA, J.] 421
regular basis shall be deiennined w.e.f. 1.1.2000. The inter se A
seniority of such daily rate Class Ill & IV employees shall be
determined in accordance with the date of joining the post on
daily rated basis. If the date of joining the post(s), on daily rated
basis by such daily rated employees was the same, then the
elder employee shall rank senior to an employee younger in age. B
If the date of joining of the directly recruited regular employees
and the date of regularised employees as per this scheme is the
same, the direct recruit shall be senior."

So, the larger issues inter se between the University and its workers,
at this stage, are no more contentious as the University has decided to grant C
permanent status to the contesting and other workers in a phased manner for
which the aforesaid scheme has been finalised. Thus the question which
~ focuses our attention is, whether the scheme sub serves the workers'
aspirations and satisfy the judicial scrutiny, on the facts and circumstances
of this case. The fact which emerges is, that reference for the adjudication of
industrial dispute was made in the year 1987. The Industrial Tribunal directed D
the appellant to regularise the services of all such workers who have completed
10 years of service as on Ist January, 1993. The Single Judges records:

"It is also true that the facts of the present case have also similar
shade as was in the case of Chief Consen•ator of Fores ts and another
v. Jagannath Maruti Kondhara, reported in (1996) 1 LLJ 1223 to E
prime facie reach a conclusion about the unfair labour practice in
depriving the workmen of their status of permanency and privileges
attached thereto."

It further records that the Tribunal has not adverted to some of the
questions which implicitly arises in any industrial dispute concerning grant F
of permanent status. It records that no opportunity was given to the employer
after reaching this conclusion of giving workmen permanent status hence
these issues require investigation. Thus it set aside the finding of the Tribunal
to make all workmen permanent w.e.f. the date they complete 10 years on or
before 1st January, 1993 and directed it to decide this question afresh through G
a scheme. But the direction to make payment to such workmen at the minimum
pay scale of similarly situated workmen on permanent basis remained
unaffected. This direction was confirmed by the Division Bench of the High
Court.

Learned senior counsel, Mr. Rajeev Dhawan appearing for the appellant H
422 SUPREME COURT REPORTS [2001] I S.C.R.

A submits, that the scheme as proposed has been thoroughly scrutinised,
examined taking into consideration the interests of the workers within the
permissible limit of the availability of finance. He submits with vehemence, it
would not be possible for the University to grant permanency to all its
employees working as daily rated workers, who have completed 10 years of
B service, on the Ist January, 1993. The proposal for grant of permanent status
as per the scheme is that all such employees who have completed I 0 years
or more of continuous service with minimum of240 days in each calendar year
as on 31st December, 1999 should be regularised. This extension of period
from I st January, l 993 to 3 l st December, l 999 was made for two purposes.
First, to bring more workers in its arm for regularisation and secondly, to bring
C it within the financial means available to the University. In fact, Single Judge
has set aside the grant of permanency from l st January, l 993 and left it open
to the appellant to frame a scheme for their absorption. Mr. Dhawan also
challenges the grant to all such employees minimum pay scale who have
completed I 0 years of service, based on the anvil of equal pay for equal work,
"A minimum regular pay scale" is only admissible to the regularised employees
D doing the same nature of work .. The submission is, such employees could
only be entitled to the minimum wages admissible to class IV employees of
the State. Unless an incumbent is regularised he would not be entitled for this
minimum pay scale. He further submits, since there are no equivalent posts
in existence today, hence question of equal pay on equivalent post does not
E arise, so also no question of applying the principle of 'equal pay for equal
work'.

Reliance was placed in the case of State of Haryana and Ors., v. Jasmer
Singh and Ors., [ 1996] 11 SCC 77 and State of Haryana v. Surinder Kumar
and Ors., [ 1997] 3 SCC 633, to give credence to this submission of equal pay
F for equal work. He further relies on the following observation of the Division
Bench that present is not a case where such an issue arises:

"The w.orkmen are not claiming equal pay for equal work but they
are claiming permanent status as Class IV employees."
G The submission on behalf of the respondents is, the stand of the
University that there are no permanent posts for absorption of such workers,
on the facts of this case, where the appellant has been taking work from its
workers year after year for more than one decade, then non-creation of posts
itself constitutes an unfair labour practice. In fact by the time this industrial
dispute was referred, respondent-workers completed 5 years of their continuous
H service and when arguments were concluded they completed IO years of their
GU.IARATAGRI. UNI. v. RATHOD LABHU BECHAR [MlSRA,J.] 423
continuous service.· Both, the Tribunal and the learned Single Judge found A
the existence of permanent nature work requiring them to be regularised.

Respondents objection to Item No. I of the proposed aforesaid scheme
which requires completion of I 0 years prior to 31st December, 1999 for
regularisation is that it is dehors the interest of the workers, specially when
some of the workers are working from I 973 onwards. Thus this cut off date B
for regularisation requires a re-look. With reference to Item No. l(a), the
objection is, that the University had failed to produce any evidence to show
any qualification for the posts on which they are to be absorbed. The
recruitment rules which have been placed for the first time beforf this Court
do lay down some qualifications but their experience of working for such a C
long time itself should be sufficient for their eligibility. With reference to Item
{l)(b) and l(d) the objection is, there should not be any phased regularisation,
when work has been taken for such a long time. All such qualified workers
should be regularised from the date they completed IO years of their continuous
service. With reference to Item No. I (c) the submission is, there is no case
whatsoever about any unsatisfactory work of any of these respondent D
workmen nor any proceedings are pending against them. In other words, there
is no serious objection to it. Next, with reference to Item No. 2 which provides,
all daily workers who have completed I 0 years of continuous service with
minimum of 240 days in each calendar year as on 31st December, I 999 but
could not be regularised, w.e .. f. 1st January, 2000 they would be entitled for~· E
a fixed pay without allowance as prescribed by the Gqvernment from time to
time for skilled, semi-skilled and unskilled workers plus Rs. 500 p.m. They
would also be entitled to annual increment of Rs. I 5, Rs. 20 and Rs. 25
respectively for the unskilled, semi-skilled and skilled workers till their services
are regularised. The objection is instead these workers should be paid minimum
pay scale (without increment) as admissible to regularised workman on such F
post from !st January, 1993. Similarly, Item No.3 refers to such daily wagers,
skilled, semi- skilled or unskilled who have not completed I 0 years of service
with a minimum of240 days in each calendar year to be paid minimum wages
at the rates as prescribed by the Government of Gujarat from time to time for
daily wagers falling in Class Ill and Class IV. The objection is the same that G
they should also be paid minimum pay scale. No serious submission with
reference to Item No.4 has been made.

From the aforesaid, it emerges that the learned Single Judge had concurred
with the finding of the Tribunal that contesting workmen have been working
in the appellant University regularly for a long number of years. The existence H
424 SUPREME COURT REPORTS [200 I] I S.C.R.

A of permanent nature of work was inferred on this account and also due to the
vastness of appellant establishment. The regularisation is claimed only in
respect of Class IV employees. The main objection, which was raised earlier
and is raised before us is that a person could only be regularised on any
vacant post and if there be one he should be qualified for the same as per
B qualification, if any, prescribed. In fact, the Tribunal has held on the date of
the award, most of the workmen had completed I0 years of their service. It
is also well settled, if work is taken by the employer continuously from daily
wage workers for a long number of years without considering their
regularisation for its financially gain as against employees legitimately claim,
has been held l:fy this Cburt repeatedly as an unfair labour practice'. In fact,
C taking work, from daily wage worker or ad hoc appointee is always viewed
to be only for a sho11 period or as a stop gap arrangement, but we find new
culture is growing to continue with it for a long time, either for financial gain
or for controlling its workers more effectively with sword of damocles hanging
over their heads or to continue with favourved one in the cases of ad hoc
D employee withstaling competent and legitimate climants. Thus we have no
hesitation to denounce this practice. If the work is of such a nature, which
has to be taken continuously and in any case when this pattern become
apparent, when they continue to work for year after year, only option to the
employer is to regularise them. Financial viability no doubt is one of the
co~iderations but then such enterprise or institution should not spread its
E arms longer than its means. The consequent corollary is, where work is taken
not for a short period or limited for a season or where work is not of part time
nature and if pattern shows work is to be taken continuously year after year,
there is no justification to keep such persons hanging as daily rate workers.
In such situation a legal obligation is cast on an employer if there be vacant
F post to fill it up with such workers in accordance with rules if any and where
necessary by relaxing the qualifications, where long experience could be
equitable with such qualifications. If no post exists then duty is cast to assess
the quantum of such work and create such equivalent post for their absorption.

Learned Single Judge set aside the order of the Tribunal granting
G regularisation from the date of the award and left it to the University to
formulate an appropriate scheme for their absorption. The Division Bench felt
certain enquiry is necessary before grant of permanent status to its employees,
namely, to find the extent of permanent nature of work required for creating
corresponding posts before absorption. The relevant portion of the Division
H Bench judgment is quoted hereunder:
GUJARAT AGRI. UNI. v. RATH OD LABHU BECHAR [MISRA, .1.) 425

"The learned single judge observed tha( the Tribunal had not A
taken into consideration certain relevant aspects notwithstanding that
such question implicitly arises in a case of industrial dispute concerning
grant of permanent status and emoluments and privileges attached
there to by the workmen under the Industrial Dispute Act, nor the
Tribunal had considered after reaching the conclusion about long B
duration of work and existence of permanent work the extent to which
permanent nature of work is available in each trade and corresponding
necessity of number of permanent workmen to discharge that work
before directing the employer to make all the workmen as permanent
on completion of I 0 years of service as on 1.1.1993 nor thereafter if
they were in service prior to the date of making of reference, nor does C
it appear from the award that in the first instance any opportunity was
given to the employer after reaching the conclusion about necessity
for making the concerned workmen permanent to discharge its
managerial obligation for framing a scheme or making such employees
permanent and placing before the Tribunal. These issues require
investigation into further facts and depend upon evidence of variable D

-
nature which can be led before the Tribunal."

What emerges is, all the respondent workmen are eligible for absorption
on the facts of this case subject to any eligible qualification under the rule
if any. Though no recruitment rules were filed in the proceedings either before E
the Tribunal or in the High Court but while proposing the scheme a copy of
the recruitment rules for various cadres have been placed before us on behalf
of the appellant University. This gives in column no. I the serial no., in column
no. 2 the name of the post, in column no.3 the pay scale, in column no.4 t_he
age limit and in column no.5 the qualification. Serial no. IO deals with Peon and
Class IV servants, serial no.13 deals with Operator-cum- Mechanic, serial F
no.14 deals with Chowkidar, serial no.25 deals with Plumber and serial no.33
deals with Carpenter. This shows that recruitment rules did have these posts
in its ambit about which we are concerned, yet no posts were created. This
proposed creation of post is churned ~ut only after this long battle by the
workmen as against the appellant. It was not expected from the institutions G
like the present appellant, especially when it is fully funded by the State
Government that this process of absorption should have taken such a long
time and to have yielded to it only after this long battle. This legal position
is well known not only to the appellant but the State who is funding it, then
why to do it only after courts' intervention. It is true, creation of post does
involve financial implication. Hence financial health of a particular institution H
426 SUPREME COURT REPORTS [200 I) I S.C.R.

A plays important role to which courts also keep in· mind. The Court does
exercise its restrain where facts are such where extent of creation of post
creates financial disability. But at this juncture we would like to express our
note of caution, that this does not give largess to an institution to engage
larger number of daily wage workers for long number of years without absorbing
B them or creating posts which constitutes an unfair labour practice. If finances
are short engagement of such daily wage workers could only be for a short
limited period and if continuous work is required it could only do so by
creating permanent post. If finances are not available, take such work which
is within financial mean. Why take advantage out of it at the cost of workers.

C One of the questions which is also up for our consideration is, apart
from the fact who are to be regularised, what would be payable to these daily
wage workers who have completed more than I 0 years of continuous service.
Submission for the respondents is, that such daily wage workers should be
paid the same minimum scale of pay as admissible to the regularised incumbent
based on the principle of 'equal pay for equal work'. Daily rated casual
D labour employed under P& T Department through Bhartiya Dak Tar Ma=door
Manch v. Union of India and Ors., (Supra), was a case of daily rated casual
labourers of the P&T department doing work similar to that of the regular
workers of the department. This Court held:

" ... Even though the Directive Principle contained in Articles 38
E and 39(d) may not be enforceable as such by virtue of Article 37 but
it may be relied upon by the petitioners to show that in the instant
case they have been subjected to hostile discrimination. The State
cannot deny at least the minimum pay in the pay scales of regularly
employed workmen even though the Government may not be compelled
to extend all the benefits enjoyed by regularly recruited employees.
F Such denial amounts to exploitation of labour. The Government cannot
take advantage of its dominant position, and compel any worker to
work even as a casual labourer on starvation wages. It may be that
the casual labourer has agreed to work on such low wages .... "

G State of Haryana and Ors. v. Piara Singh and Ors., [ 1992) 4 SCC 118.
This was a case of ad hoc/temporary government employees. This Court held,
those eligible and qualified and continuing in service satisfactorily for a long
period have right to be considered for regularisation. Long continuing in
service gives rise to a presumption about the need for a regular post. In such
cases government should consider feasibility of regularisation having regard
H to the particular circumstances with a positive approach and empathy for the
GUJARAT AGRJ. UNI. v. RA THOD LAB HU BECHAR [MISRA • .I.] 427
concerned person. A

In Stirinder Singh and Anr. v. Engineer-in-Chief C.P. W.D. and Ors.,
[ 1986] I SCC 639, this Court holds entitlement of 'equal pay for equal work'
for the daily wage workers ofC.P.W.D. to the wages equal to the regular and
permanent employees employed to do identical work. Moot Raj Upadhyaya B
v. State of H.P. and Ors., [ 1994] Supp 2 SCC 3 16, was a case of regularisation
based on the claim for 'equal pay for equal work' of daily wages of Class III
and Class IV employees in the Irrigation and Public Health Wings of H.P.
Some of them worked for more than IO years. They were being paid minimum
wages prescribed by the State Government but were seeking regularisation
and parity of pay with regular employees. The State Government came out C
with a scheme which was modified by this Court to the following effect. The
relevant portion of which is quoted hereunder:

"Taking into consideration the facts and circumstances of the
case, we modify the said scheme:
D
xxx xxx xxx

(3) daily-wage/muster-roll workers, whether skilled or unskilled
who have not completed I 0 years of service with a minimum of 240
days in a calendar year on 31.12.1993., shall be paid daily wages at
the rates prescribed by the Government of Himachal Pradesh from time E
to time for daily wage employees falling in Class III and Class IV till
they are appointed as work-charged employees in accordance with
paragraph 2;

(4) daily-wage/muster-roll workers shall be regularised in a phased F
manner on the basis of seniority-cum-suitability including physical
fitness. On regularisation they shall be put in the minimum of the time-
scale payable to the corresponding lowest grade applicable to the
Government and would be entitled to all other benefits available to
regular government servants of the corresponding grade."
G
Strong reliance is placed on this decision on behalf of the University.
Submission is, heavy financial constrain would result in case all employees
are to be regularised or minimum pay scale is to be given to unabsorbed
employees which would be beyond the capacity of the appellant. The affidavit
of G. A. Shah, Deputy Secretary to the Government, Agricultural Department, H
428 SUPREME COURT REPORTS [20Q I j 1 S.C.R.
~'

A on behalf of the State, avers that 'the financial burden which would surface
and to be fastened on the State Government will be very heavy which would
be more than 15 crores towards the arrears only as per the award if it is
implemented. The averment is, there are 5100 daily rated labourers including
seasonal labourers which in addition will place heavy recurring financial
B burden on the State Government. However, we do respect and give due I
consideration for any unbearable financial strains but we are not impressed
by this, specially on the facts of this case, when work is being taken from
them for a long number of years without giving them the due benefit for their
regularisation. As we have said, which we are keeping in mind that financial
constraint is also to be kept in mind when any scheme is framed at a pa11icular
C time.
I
In Dharwad Distt. P. W. D. literate daily ll'age employees Association
and Ors. v. State of Karnataka and Ors., [ 1990] 2 SCC 396 this Cout1 held:

"Though the scheme so finalised is not the ideal one but it is the
D obligation of the court to individualise justice to suit a given situation
in a set of facts that are placed before it. Under the scheme of the
Constitution the purse remains in the hands of the executive. The
legislature of the State controls the Consolidated Fund out of which
the expenditure to be incurred, in giving effect to the scheme, will
E have to be met. The flow into the Consolidated Fund depends upon
the policy of taxation depending perhaps on the capacity of the payer.
Therefore, unduly burdening the State for implementing the
constitutional obligation forthwith would create problems which the
State may not be able to handle. Therefore, the directions have been
made with judicious restraint."
F
To the similar effect, namely, involvement of financial burden is also
a relevant consideration was held in Rao Somashekara and Ors. v. State of
Karnataka and Anr., [1997] 7 SCC 649, Raj Narain Prasad and Ors. v. State
of U.I'. and Ors., [ 1998] 8 SCC 473 and Hindustan Machine Tools and Ors.
G v. M. Rangareddy and Ors., [2000] 7 SCC 741.

In Delhi Veterinary Association v. Union of India and Ors., [1984] 3
SCC 1, it was observed by th is Court:

"At the same time while fixing the pay scales, the paying capacity
H of the Government, the total financial burden which has to be borne

I
I
GUJARAT AGRI. UNI. v. RATH OD LABl-IU BECl-IAR [MISRA, .1.) 429
by the general public, the disparity between the incomes "of the A
:--.
~ Government employees and the incomes of those who are not in
Government service and the net amount available for Government at
the current taxation level::'

In the light of the aforesaid decisions we now proceed to examine the
proposed scheme. Under Clause I it is proposed that all daily wage workers, B
whether skilled, semi·skilled or unskilled who have completed 10 years or
~ more of continuous service with a minimum of240 days in each calendar year
as on 31st December, 1999 is to be regularised and be put in the time scale
of pay applicable to the corresponding lowest grade in the university. However,
the said regularisation is subject to some conditions. Under Clause l(a) such c
employee is eligible only if he possess the prescribed qualifications for the
post at the time of their appointment. The strong objection has been raised
to this eligi~ility clause. The submission is, those working for a period of 10
or more years without any complaint is by itself a sufficient requisite
qualification and any other rider on the facts of this case would prejudice
these workers. We find merit in this submission. We have perused the D
qualifications referred in the aforesaid recruitment rules according to which,
qualification for Peon is that he should study upto 8th std., for Operator-cum-
Mechanic, should have Diploma in Mechanic having sufficient knowledge of
-v- vehicle repairing experience in automobiles or tractors Dealers workshop for
two years, for Chowkidar, he must be literate and have good physique. E
Literate is not defined. For Plumber to have LT.I. Certificate.

We feel that daily rate workers who have been working on the aforesaid
posts for such a long number of years without complaint on these posts is
a ground by itseif for the relaxation of the aforesaid eligibility condition. It
would not be appropriate to disqualify them on this ground for their absorption, F
hence Clause I (a) need modification to this effect.

In Bhagwati Prasad v. Delhi State Mineral Development Corporation,
[ 1990] I SCC 361, this Court observed:
G
"The main controversy centres round the question whether some

-· petitioners are possessed of the requisite qualifications to hold the
posts so as to entitle them to be confirmed in the respective posts
held by them. The indisputable facts are that the petitioners were
appointed between the period I983 and 1986 ever since, they have
been working and have gained sufficient experience in the actual H
430 SUPREME COURT REPORTS [2001] I S.C.R.

A discharge of duties attached to the posts held by them. Practical
experience would always aid the person to effectively discharge the
duties and it is sure guide to assess the suitability. The initial minimum
educational qualification prescribed for the different posts is
undoubtedly a factor to be reckoned with, but it is so at the time of
the initial entry into the service. Once the appointments were made as
B daily rated workers and they were allowed to work for a considerable
length of time, it would be hard and harsh to deny them the confinnation
in tile respective posts on the ground that they lack the prescribed
educational qualifications."

C Thus in vi~w of their long experience on the fact of this case and for
the concerned posts the prescribed qualification, if any, should not come in
the way of their regularisation. Clause I(b) provides for the regularisation of
daily wagers in a phased manner to the extent of available sanctioned post.

The decision to absorb some of the employees at one point of time or
D in a phased manner depends on facts and circumstances of each case. Where
very large number of workers are required to be absorbed, this Court accepted
the formula, in the past to absorb such employees under a Scheme in a
phased manner. This is done to work it out within its financial means. Every
liberty and entitlement is always subject to such financial limits. But in
E considering such absorption, the financial means have to be stretched to the
maximum but should not be a defence with motive to disentitle the claim of
the workmen. The grant of this phased absorption thus is in itself a mechanism
under this principle. But as we have said this mechanism is not a tool to
misuse for taking away any legitimate right of any worker. The Court has to
be cautious in exercising its discretion. On the one hand it has to keep the
F interest of the workers alive and on the other' to see that employer does not
become spineless for the lack of funds eroding the very workers interest. In
the present case admittedly in the first phase in terms of Clause 1, one block
of daily wage worker is to be regularised for which the posts are being
created. We want to make it clear, in creating posts Government shall see
G maximum posts are created to absorb maximum such workers who have
completed ten years as on 31st December, 2000, as these workers have more
than eligible claim. Thereafter, even reassessment for additional posts, about
which we are referring should be done in the same perspective. In other words
there may still be number of workers who may still not be covered for
absorption under the first phase of Clause 1 due to initial non-availability of
H posts though working for a long number of years. We are saying so because

n
GUJARAT AGRI. UNI. v. RATHOD LAB HU BECH AR [MISRA, J.) 431
· Clause 1 (d) is silent, what number of posts Government is being created A
... initially for the first phase of absorption.
"' According to the State counter if absorption is made from 1.1.1993 of
all those who have completed ten years of service as per Tribunal order, the
payment towards arrears would be to the tune of 15 crores. Since in the
proposed scheme, absorption is from I st January, 200 I, the State has already B
gained much more than this arrears of more than 15 crores. In this light and
in the absence of details being placed before us, we are leaving the extent
of creation of the posts on the State Government. We hope and trust, the
Government who is the guardian of the people and is obliged under Article
38 of the Constitution, to secure a social order for the promotions of welfare
of the people, to eliminate inequalities in status, will endeavour to give
c
maximum posts even at the first stage of absorption, and do the same in the
same spirit for creating additional posts after enquiry as we are indicating
hereunder. It is necessary that the State Government to set up an enquiry to
find what further number of additional posts are required for regularising such
other daily rated workers, and after assessing it, to create such additional D
posts for their absorption. This exercise should be done by the State
Government within a period of six months. The submission on behalf of the
respondent is that those who are not regularised and are continuously working
for 10 or more years with minimum of 240 days in each calendar year, they
should be paid minimum pay scale as admissible to an incumbent regularised
E
on similar post doing similar work instead of minimum wages as prescribed
by the Government. The dispute thus is, whether such workers to be paid
minimum daily wage as Government prescribes as per the scheme or pay them
the minimum pay scale admissible to such regularised worker without increment
a~d other benefit. This Court in one set of decisions have said t'.> regularise
them in one block and pay them the same minimum pay scale as admissible F
to a regular employee as in; Surinder Singh and Anr. v. Engineer-in-<!hief.
C.P. W.D. and Ors., (1986] 1 SCC 639; UP. Income Tax Department Contingent
Paid Staff Welfare Association v. Union of India and Ors., [ 1987) Supp. SCC
658, 1998; State of Punjab and Ors. v. Devinder Singh and Ors., [ 1998) 9 SCC
595 and Chief Conservator of Forests and Anr. v. Jagannath Maruti Kondhare
G
and Ors., [ 1996) 2 SCC 293 and in other cases to absorb in a phased manner
... under a scheme which depends on the facts of each case. In Moo/ Raj
Upadhyaya v. State of H.P. and Ors., (supra), this Court approved a scheme
under which the daily wage workers whether skilled or unskilled who have
not completed I0 years of service was to be paid daily wage at the rates
prescribed by the Government of H.P. from time to time for daily wage H
432 SUPREME COURT REPORTS (200 I) I S.C.R.

A employees falling under Class Ill and IV till they are appointed regularly.
,#.;
Strong reliance is placed on behalf of the University on this case and also, ~
looking to the fact that it has no impressive source of its own, being an
Agricultural University, depending on the State fund, we hold they should be
paid minimum wages as prescribed by the Government from time to time as
proposed under the scheme. We approve both clauses 2 and 3 on the facts
B and circumstances of this case. In fact, in seeking minimum pay scale to such
daily rated workers as admissible to a regular employee is based on the
principle of 'equal pay for equal work'. It is pertinent to refer, in this case the
observation of the High Court:

" ...... Workmen are not claiming equal pay for equal work but they are
c claiming permanent status as Class IV employees as they are working
and have gained more than sufficient experience in their work .... "

Gha;iabad Development Authority and Ors. v. Vikram Chaudhary
and Ors., 1995 (5) SCC 210, this was a case of temporary daily wage employees
claiming parity with regular employees. It was held, in the absence of availability
D
of regular post for appointment, such a claim is not sustainable. However, it
was held that they should be given minimum wages under the statute if any,
or the prevailing wages in the locality. To the same effect is Basudev Pali v.
State of Orissa and Anr., [ 1997) 3 SCC 632.

E State of Haryana and Ors. v. Jasmer Singh and Ors., (1996) I I S..CC 77,
this was a case where Mali-cum-Chowkidars/Pump Operators claimed parity
in employment based on the anvil of 'equal pay for equal work' who were
daily wagers. It was held, they are not entitled to such parity with regular
workmen. They can get only the minimum wages.

F In the present case after absorption of employees under Clause I, we
have already directed, the State Government what they have to do in
coordination with the appellant University to assess and find additional
regular posts required by the university. In doing so, they shall keep in mind
the continuous work which the workers are doing for long number of years
and after fixing the number it should further create such additional posts as
G
necessary and absorb them. This exercise to be undertaken, as aforesaid,
within six months. So for this reason we would not like to disturb the proposed -;,.
scheme except to the extent we have observed above. We are sure no slackness
would be exercised both by the appellant and the State in completing this
exercise within the said period. Apart from what we have observed, we do not
H find any infirmity in the scheme.
GU.JARA T AGRI. UNI. v. RA THOD LAB HU BECHAR [MISRA, J .] 433
Accordi11gly we approve the aforesaid scheme framed by the University A
and as approved by the State Government, subject to the modifications which
we have recorded above. In terms of the said modified scheme, the judgment
of the High Court stands modified. As respondents/workmen have suffered
for a long duration of time it is appropriate that aforesaid scheme is implemented
expeditiously ~t an early date. The first phase of absorption to be compl.eted B
within three months. The appeals are accordingly disposed of in the aforesaid
terms. Costs on the parties.

V.S.S. Appeal disposed of.