The Bombay High Court has clarified that prolonged engagement of workers in core manufacturing activities, despite artificial breaks and casual designation, constitutes an unfair labour practice under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The judgment affirms that the label of 'casual' cannot override the reality of continuous service, and employers cannot evade statutory obligations through procedural manipulation.
Background & Facts
The Dispute
The dispute arose from Complaint (ULP) No. 109 of 2022 filed before the Industrial Court at Thane by 12 workmen against Sulzer Pumps India Private Limited. The complainants alleged that they were engaged as casual workers for extended periods - some since 2009 - performing duties integral to the company’s manufacturing operations, yet were systematically denied permanency through artificial breaks and rotational employment. The company claimed the workmen were purely casual labourers engaged on a need-based, intermittent basis, with no expectation of regular employment.
Key Facts
- The 12 complainants were engaged between 2009 and 2012, primarily as helpers in production, maintenance, and logistics.
- Work assignments were not fixed to one department but rotated across functions based on operational needs.
- Payments were made regularly via bank transfers and Provident Fund contributions from 2009 to 2022, establishing continuous financial engagement.
- No appointment letters or formal service records were issued by the employer.
- The company introduced periodic breaks in employment, typically lasting 1 - 3 months, after which workers were re-engaged.
- Complainant Nos. 1 to 6 were terminated in early 2022, prior to the filing of the complaint.
- Complainant Nos. 7 to 12 remained in service at the time of filing.
- The company did not produce any documentation to substantiate the claim that the work was incidental or non-core to manufacturing.
- The complainants submitted bank statements and Provident Fund contribution records covering 13 years as proof of continuous service.
Procedural History
- 2009 - 2022: Continuous engagement of complainants as casual workers with intermittent breaks.
- January 2022: Termination of Complainant Nos. 1 to 6.
- March 2022: Complaint (ULP) No. 109 of 2022 filed before the Industrial Court at Thane under Section 28 read with Items 5, 6, and 9 of Schedule IV of the MRTU and PULP Act.
- 20 June 2025: Industrial Court passed the Impugned Order, finding unfair labour practices and directing permanency for Complainant Nos. 7 to 12 with effect from 6 May 2022, and directing placement of Complainant Nos. 1 to 6 on a waiting list.
- 26 March 2026: Judgment reserved by the Bombay High Court.
The Parties' Positions
Petitioner (Sulzer Pumps India Pvt. Ltd.):
- Argued that all complainants were engaged as casual workers under Rule 3(2)(e) of the Model Standing Orders.
- Claimed work was non-core, intermittent, and contingent on operational needs.
- Asserted that Complainant Nos. 1 to 6 were lawfully terminated, and the Industrial Court lacked jurisdiction to adjudicate termination disputes.
- Contended that the Industrial Court erred by granting consequential relief without first classifying the nature of employment.
Respondents (Workmen):
- Argued that their work was integral to manufacturing, not casual.
- Highlighted 13 years of continuous service evidenced by PF and bank records.
- Alleged artificial breaks were instituted to circumvent permanency obligations.
- Asserted that the absence of appointment letters was the employer’s failure, not their burden.
- Maintained that the Industrial Court had jurisdiction under Section 21(1) since no recognised union existed.
Relief Sought
By Petitioner:
- Quash the Impugned Order in its entirety.
- Declare that the Industrial Court lacked jurisdiction to grant permanency or place terminated workers on a waiting list.
By Respondents:
- Uphold the Impugned Order.
- Extend permanency benefits to all 12 workmen.
- Direct payment of differential wages and allowances from 6 May 2022.
The Legal Issue
The central questions were: (1) Whether the Industrial Court had jurisdiction to adjudicate complaints of unfair labour practices under the MRTU and PULP Act when no recognised union exists; (2) Whether long-term casual workers engaged in core manufacturing activities, despite artificial breaks, are entitled to permanency; and (3) Whether the Industrial Court can grant consequential relief to workers who have been terminated, where the primary grievance is discharge.
Arguments Presented
For the Appellant/Petitioner
The petitioner relied on Nikhila Divyang Mehta & Ors. v. Hitesh Sangavi & Ors. (2025 INSC 485) to argue that the Industrial Court lacks jurisdiction over termination disputes, which fall exclusively under Section 7 of the MRTU and PULP Act and the Labour Court’s domain. It contended that Items 5, 6, and 9 of Schedule IV relate to conditions of service, not termination. The petitioner further cited Rule 3(2)(e) and Rule 4-C of the Model Standing Orders to assert that permanency can only be granted to badli or temporary workmen, not casual workers. It argued that the Industrial Court failed to classify the nature of work performed and ignored material evidence, including testimony of CW-2 and CW-3, rendering the order unsustainable under CCT v. Shukla & Bros. (2010) 4 SCC 785 and Jai Singh & Ors. v. Municipal Corporation of Delhi (2010 INSC 642).
For the Respondent/State
The respondents argued that Section 21(1) of the MRTU and PULP Act permits individual workmen to file complaints where no recognised union exists, which was the case here. They relied on CCT v. Shukla & Bros. to assert that the label of 'casual' is not conclusive and that the nature of work must be determined by facts. They submitted that Provident Fund records and bank statements spanning 13 years established continuous service, and that artificial breaks were a deliberate tactic to deny permanency, falling squarely under Item 6 of Schedule IV. They further contended that Section 30 of the Act empowers the Industrial Court to grant affirmative relief, including permanency, to remedy unfair labour practices, and that splitting the matter into multiple proceedings would defeat the Act’s purpose.
The Court's Analysis
The Court undertook a detailed examination of jurisdictional boundaries, statutory interpretation, and evidentiary appreciation under the MRTU and PULP Act. It began by affirming that Section 21(1) does not impose an absolute bar on individual workmen; rather, it conditions the right to file on the existence of a recognised union. Since the petitioner failed to produce any evidence of such recognition, the complaint was held maintainable.
"The scheme of Section 21(1) shows that it is not a complete bar against individual workmen. It is a conditional restriction. The condition is the presence of a recognised union under the Act. If such a union exists, then the law prefers that the union should represent the workmen. But if no union is recognised under Chapter III, then the workmen cannot be left without remedy."
The Court rejected the petitioner’s reliance on the Maharashtra Industrial Relations Act, 1946, noting that no notification of the industry under that Act was produced, and the company’s own conduct - entering settlements under the Industrial Disputes Act, 1947 - demonstrated its recognition of the applicable legal framework.
On the merits, the Court held that the designation of workers as 'casual' is not determinative. The true nature of employment must be assessed by examining the duration, continuity, and integration of work into the main manufacturing process. The Court found the respondents’ evidence - 13 years of PF contributions and bank statements - compelling and unchallenged by any credible rebuttal from the employer.
"The label is not final. The Court must find out the real position behind that label."
The Court accepted the respondents’ contention that artificial breaks were not genuine terminations but a mechanism to avoid permanency obligations, constituting an unfair labour practice under Item 6 of Schedule IV. The Industrial Court’s finding that the workmen were engaged in core activities and denied permanency through systemic manipulation was upheld.
However, the Court drew a critical distinction regarding Complainant Nos. 1 to 6. It acknowledged that the Industrial Court itself had recognised their primary grievance was termination, which falls under Item 1 of Schedule IV and is exclusively within the jurisdiction of the Labour Court. The Court held that once jurisdiction over the principal issue is lacking, no ancillary relief - such as placing terminated workers on a waiting list - can be granted.
"If the main issue itself is outside jurisdiction, then no further direction can be built upon it."
The Court further noted that while the work pattern of Complainant Nos. 1 to 6 may have been similar to those still employed, their legal position diverged due to the nature of their grievance. The Industrial Court’s attempt to extend permanency benefits to terminated workers was therefore legally untenable.
The Verdict
The Bombay High Court partly allowed the writ petitions. The Impugned Order dated 20 June 2025 is set aside to the extent it directs the placement of Complainant Nos. 1 to 6 on a waiting list for future engagement as badli or temporary workmen. That relief is quashed. The finding of unfair labour practice against the petitioner and the direction granting permanency to Complainant Nos. 7 to 12, with effect from 6 May 2022, are upheld. The petitioner shall pay differential wages and allowances at par with permanent employees in the corresponding category to Complainant Nos. 7 to 12 within ninety days from the date of this order. No costs are awarded.
What This Means For Similar Cases
Artificial Breaks Cannot Circumvent Permanency Rights
- Employers cannot use intermittent breaks to deny permanency to workers engaged in core activities for over a decade.
- Provident Fund and bank records spanning years are strong evidence of continuous service, even in the absence of appointment letters.
- The burden shifts to the employer to explain prolonged engagement if no formal records exist.
Jurisdictional Boundaries Are Strictly Enforced
- Industrial Courts cannot adjudicate termination disputes; such matters lie exclusively with Labour Courts under Section 7 of the MRTU and PULP Act.
- Consequential relief cannot be granted if the principal issue is outside the forum’s jurisdiction.
- Courts must examine the substance of the grievance, not its label, to determine jurisdiction.
Permanency Is a Remedy for Systemic Unfair Labour Practices
- Section 30 of the MRTU and PULP Act empowers Industrial Courts to grant affirmative relief, including permanency, to rectify systemic exploitation.
- The doctrine of 'substance over form' applies: if work is continuous and integral, the designation of 'casual' is legally irrelevant.
- Collective complaints by similarly situated workers are maintainable even without a recognised union, provided the cause of action is common.
