Supreme Court decides on dispute related to regularization of part time workers in LIC

The Supreme Court on Wednesday, decided on a four-decade-old dispute related to the regularization of part-time workers in the Life Insurance Corporation(LIC).

The Bunch of litigation has a long and chequered history. The dispute, a familiar terrain in service jurisprudence, pertains to the claim for absorption of persons who were engaged by the Life Insurance Corporation of India1 as temporary/badli/part-time workers. Section 23(1) of the Life Insurance Corporation Act 19562 enables LIC to employ such a number of persons as it thinks fit to discharge its functions. Pursuant to clauses (b) and (d) of Section 49(2), LIC has framed the Life Insurance Corporation of India (Staff Regulations) 19603 . Regulation 8 empowers LIC to appoint persons on a temporary basis in Class III and Class IV posts.

On 31 January 1981, Sections 48 and 49 were amended to impart statutory force to the Staff Regulations. According to LIC, its staff and employees are governed by the parent enactment and fall outside the purview of the Industrial Disputes Act 1947. On 13 August 1982, an industrial dispute was raised by the Western Zonal Insurance Employees Association alleging that LIC had been engaging in unfair labour practices by employing temporary, badli and part-time workers and was restricting their employment to short tenures to deprive them of the claim for permanency. On 20 May 1985, the dispute was referred for adjudication by the Central Government to the National Industrial Tribunal , Bombay presided over by Justice R D Tulpule , a former Judge of the Bombay High Court. On 15 January 1986, the Tulpule Tribunal issued an interim order restraining LIC from recruiting regular employees and from terminating the services of the ad hoc workers working with LIC. On 18 April 1986, the Tulpule Tribunal passed an award which was gazetted on 7 June 1986 stipulating that those ad hoc workers who were in employment between 1 January 1982 and 20 May 1985 will be entitled for absorption.

On 1 June 1987, LIC issued circulars for implementing the Tulpule Award. These circulars were disputed by the Unions and Associations representing the workers. Following this dispute over the LIC circulars, the Central Government referred the Tulpule Award for interpretation under Section 36-A of the ID Act to another NIT presided over by Justice M S Jamdar , a former Judge of the Bombay High Court. By an interim order dated 29 June 1987, the Jamdar Tribunal prohibited LIC from recruiting persons to Class III and Class IV posts from the ‘open market’ during the pendency of the proceedings. The Jamdar Tribunal rendered its award on 26 August 198810 and it was notified in the gazette on 1 October 1988. It held that the absorption contemplated in the Tulpule Award did not imply recruitment. LIC challenged the interpretation rendered by the Jamdar Award under Article 136 of the Constitution. The Supreme  Court granted leave in the proceedings.

On 7 February 1996, the above civil appeal in LIC v. Their Workmen (supra) was disposed of. The Apex Court accepted the contention of LIC that since eight unions had already accepted the compromise, the ninth union (Karamchari Sangh) should fall in line and act on the terms and conditions of the compromise in the interest of industrial peace. On 18 June 2001, the CGIT which was presided over by Shri K S Srivastav, pronounced the award by directing the absorption of the temporary/badli workers on the same terms as the Tulpule and Jamdar Awards, with some modifications. The Srivastav Award was challenged by LIC in a writ petition16 before the Delhi High Court. By a judgment dated 15 April 2004, a Single Judge of the Delhi High Court set aside the award and held that the decisions of this Court in E Prabavathy v. Life Insurance Corporation of India and LIC of India v. G Sudhakar18 directing LIC to formulate a scheme for regularisation were binding on the CGIT.

The judgment of the Division Bench of the Delhi High Court was assailed in a batch of Special Leave Petitions filed by six Unions and Associations representing the workers. In the meantime, LIC began the process of implementing the judgment of the Division Bench of the Delhi High Court on 21 March 2007 by issuing an advertisement for recruitment of Assistants, by allowing age relaxations and weightage for temporary workers to compete with candidates from the open market. On 11 February 2008, the Top Court directed the maintenance of status quo. Following the judgment of the Supreme  Court, LIC issued an advertisement on 21 July 2015 calling for applications from workers who were employed as badli/temporary/part-time workers in its establishment from 20 May 1985 to 4 March 1991, in terms of the eligibility criteria determined by the award.

In 2017, various divisions of LIC found 245 workmen to be eligible and they were offered absorption by the Zonal Offices. This led to the initiation of contempt proceedings by the Unions who sought the absorption of all temporary, part-time and badli workers and daily wagers who were engaged after 20 May 1985 till date. On 11 May 2018, a two-judge Bench of the Supreme  Court directed the petitioning Unions in the contempt proceedings to submit material documents to show the engagement of the workers between 20 May 1985 and 4 March 1991. Thereafter, on 12 December 2018, while dealing with the batch of contempt petitions, a two-judge Bench of the Apex Court directed the CGIT, in terms of this Court’s previous directions dated 7 September 2018 in the same contempt proceedings, to “look into the matter with regard to the claims made by the Union(s) individual workmen”.

A bench comprising Justices DY Chandrachud, Surya Kant and Vikram Nath observed that LIC as a statutory corporation is bound by the mandate of Articles 14 and 16 of the Constitution. As a public employer, the recruitment process of the corporation must meet the constitutional standard of a fair and open process. Allowing for back-door entries into service is an anathema to public service.

In structuring the relief in present proceedings, the Court  recapitulate the key legal findings that will govern the determination of rights and equities: 
(i) On 7 February 1996, a two-judge Bench of this Court in LIC v. Their Workmen (supra) had accepted the terms of compromise which was arrived at on 1 March 1989 between the management of LIC and eight Unions, and imposed them upon the ninth Union as well. In addition, the two-judge Bench of the Supreme  Court had issued certain directions: 
(a) LIC should exempt Class IV workers from a test and interview, if the management has the power to do so under the regulations/instructions governing their conditions of service; and 
(b) In the event that the management of LIC does not possess such a power, the test to be prescribed for these workers would be of a lesser standard compared to other applicants from the open market till the next regular recruitment; 
(ii) On 23 October 1992, a three-judge Bench of this Court, while disposing of the civil appeals in E Prabavathy (supra), specifically accepted the scheme formulated by LIC for regularising the workers who were engaged on a temporary basis. 
(iii)On 22 November 2001, a two-judge Bench of this Court in G Sudhakar (supra) directed that though the order dated 23 October 1992 in E Prabavathy (supra) applied to the workers of the Tamil Nadu division, the scheme would equally be applicable to the workers of all divisions of LIC in the country; 
(iv)The judgment of the two-judge Bench of this Court dated 8 March 2015 in TN Terminated Employees Association (supra) failed to notice that as a result of the final order dated 7 February 1996 in LIC v. Their Workmen (supra), the Tulpule and Jamdar Awards had been substituted by the terms of compromise. The two-judge Bench of this Court overlooked the final order dated 7 February 1996 in LIC v. Their Workmen (supra) and while advertising only to the interim order dated 1 March 1989, it arrived at a palpably erroneous conclusion that the Jamdar and Tulpule Awards were still operative and binding; and 
(v) Though the petition seeking review of TN Terminated Employees Association (supra) and the curative petition stand dismissed, LIC is confronted with a situation in which it is equally bound by the earlier decision of the three-judge Bench dated 23 October 1992 in E Prabavathy (supra), the judgment of the two-judge Bench dated 7 February 1996 in LIC v. Their Workmen (supra) dealing with the appeals arising out of the Tulpule and Jamdar Awards and the judgment of the two-judge Bench dated 22 November 2001 in G Sudhakar (supra).

The Court held that the dispute is now of antiquity tracing back nearly four decades. Finality has to be wrung down on the dispute to avoid uncertainty and more litigation. Nearly thirty-one years have elapsed since 1991. The Court has come to the conclusion that the claims of those workers who are duly found upon verification to meet the threshold conditions of eligibility should be resolved by the award of monetary compensation in lieu of absorption, and in full and final settlement of all claims and demands. Thus, the Court directs the following: 
(i) A fresh verification of the claims of workers who claim to have been employed for at least 70 days in Class IV posts over a period of three years or 85 days in Class III posts over a period of two years shall be carried out; 
(ii) The verification shall be confined to persons who were working between 20 May 1985 and 4 March 1991; 
(iii)All persons who are found to be eligible on the above norm shall be entitled to compensation computed at the rate of Rs 50,000 for every year of service or part thereof. The payment of compensation at the above rate shall be in lieu of reinstatement, and in full and final settlement of all claims and demands of the workers in lieu of regularisation or absorption and notwithstanding the directions issued by this Court in TN Terminated Employees Association (supra); 
(iv)In carrying out the process of verification, the Committee appointed by this Court shall not be confined to the certified list before the CGIT and shall consider the claims of all workers who were engaged between 20 May 1985 and 4 March 1991; 
(v) For the purpose of verification, LIC shall make available all the records at the Divisional level to the Committee appointed by this Court; (vi)It will be open to the workers concerned or, as the case may be, the Unions and Associations representing them, to make available such documentary material in their possession for the purpose of verification; 
(vii) The process of verification shall be carried out independently without regard to the Dogra Report, which is held to be flawed; 
(viii) The payment of compensation in lieu of reinstatement shall be effected by LIC within a period of three months from the date of receipt of the report of verification by the Committee; and 
(ix) The task of verification shall be carried out by a Committee consisting of: (a) Mr Justice P K S Baghel, former Judge of the Allahabad High Court; and (b) Shri Rajiv Sharma, former District Judge and member of the UPHJS.

“LIC shall provide all logistical assistance to the Committee and bear all expenses, including secretarial expenses, travel and incidental expenses, as well as the fees payable to the members of the Committee. Justice P K S Baghel shall fix the terms of remuneration payable to the members of the Committee”, the order reads.

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