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A Worker Who Has Been In Continuous Service For Years Cannot Be Denied Benefits Under Section 25f Of The Industrial Disputes Act Simply Because He Is Employed On A Contractual Basis: Gujarat HC

Shvena Neendoor ,
  02 August 2022       Share Bookmark

Court :
Gujarat High Court
Brief :

Citation :

Case title:
Jamnagar Municipal Corporation Vs Avdesh Kishorbhai Solanki

Date of Order:
25th July, 2022

Justice AY Kogje

Petitioner- Jamnagar Municipal Corporation
Respondent- Avdesh Kishorbhai Solanki


The Gujarat High Court ruled that a worker cannot be refused the benefit of Section 25F of the Industrial Disputes Act, which specifies the conditions precedent to retrenchment, simply because he is employed on a contractual basisif he has provided consistent services over several years without a break.


  1. Article 227, Constitution of India- The High Courts have superintendence over all Courts and Tribunals across the territory, according to Article 227 of the Indian Constitution. Superintendence is both administrative and judicial in character.
  2. 2(00) (bb),Industrial Disputes Act, 1947- The section states that when an employee's defined term of work expires, rejection from service by the employer does not constitute illegal termination of that employee's services.
  3. Section 25(F), Industrial Disputes Act, 1947- It provides the conditions precedent to retrenchment of workmen. It stipulates that no worker in any industry who has been in continuous employment for at least one year with an employer may be retrenched unless specific requirements are met.


  • This petition is based on the same facts and raises the same problems, thus they are heard together and decided together. The petition is filed under Article 227 of the Indian Constitution for the quashing and setting aside of the award dated 02.01.2018 issued by the Labour Court, Jamnagar. The Labour Court, in the aforementioned disputed judgment, mandated restoration to the original job with the continuation of service and back earnings of 20%.
  • The petitioner is a Corporation, and the respondents are workers who were hired as wiremen-helpers in the Corporation's Light Department to maintain street lights.


Whether Workmen can be rejected the benefit of section 25F of the Industrial Disputes Act if they are employed on a contractual basis?


  • The counsel for the petitioner argued that the respondent-laborer's participation was for a limited time, on an ad hoc and contract basis.
  • It was claimed that as technology advanced, the entire process of street lighting changed, and the Corporation adopted LED technology, requiring the petitioner-Corporation to issue a tender for this unique type of work, and a work order was placed in 2015 for the objective of installing LED lights. As a result, with the installation, upkeep, and operation of street lights being outsourced through a work order through a bidding procedure, the need for a workman was no longer required.
  • The decision was made to finally enter into the agreement with the respondent for a time frame between 06.12.2015 and 31.05.2016, which the respondent knowingly and willingly entered into, and thus, as per the condition of such contract, the relationship between the petitioner and the workman came to a conclusion with the lapse of time.
  • It was vehemently contended that the Labour Court erroneously depended on resolution No.1010 of the Jamnagar Municipal Corporation's Standing Committee to come to the decision that the respondent is also to be ordained as a daily rated worker of the Corporation, when, in fact, due to the new scheme of the setup of LED lights on contractual basis for maintenance and operation resolution No.1010 was never placed into implementation insofar as the respondents are concerned.
  • It was claimed that because the respondents had entered into an agreement with the Company, their issue would be covered by Section 2(oo)(bb) of the Industrial Disputes Act, and thus Section 25(F) would not apply. There can be no order of reinstatement until Section 25(F) is invoked.


  • It was argued that the Labour Court had taken into account compelling evidence brought on record in favor of the respondents stating that from 2010, the respondents have been continually working as linemen for the maintenance of street lights in Jamnagar city, and until 2016, the respondents have given services as such and consequently have performed more than 240 days and hence are in continuous employment for almost six years.
  • It was claimed that the Labour Court correctly ruled that the case violated Section 25(G) and (H).
  • It was submitted that the dispute on the change in the manner of installing LED by the contract of installation, maintenance, and operation is purely artificial, but does not imply that no labour will be necessary for the maintenance and installation of such street lights, even if such street lights are LED.
  • Reliance was placed on the case of State of Gujarat &Ors. v Vinodbhai Shivrambhai Rathod & Ors.[ Letters Patent Appeal No.1155 of 2019]in which the court had condemned the practise of terminating workers and replacing them with contract labourers, which will be clearly encompassed under the definition of unfair labour practice.
  • It was further submitted that Section 2(oo)(bb) cannot safeguard the petitioner-Corporation since the contract upon which the petitioner is depending was the last contract. However, the respondent-first worker's appointment was in 2008, when he was appointed by order dated June 25, 2010.
  • It was not the position of the petitioner-Corporation that after 2010, the respondent was terminated for the full period and was immediately appointed by another contract in 2015. In reality, the evidence on file indisputably shows that he has worked continually.
  • The case of Gujarat Agro Industries Corporation Ltd. Vs. Ramniklal Talsibhai Sitapara[2017 (1) GLR, 108] was relied upon in which it was held that to propose that successive order in a short period of time by providing an artificial gap is not covered by Section 2(oo)(bb) of the Industrial Disputes Act.


  • The court reiterated the Labour Court’s finding that after the initial appointment, the respondents worked consistently without a rest period, and there was nothing on record deposited by the petitioner-Corporation to challenge such finding aside from the argument offered that each time a necessity of wireman-helper arose, the Corporation followed the procedure of releasing advertisement and giving appointments to eligible workers.
  • The bench was of the opinion that such conduct of engaging the worker in this manner and then abruptly terminating the person would not be covered by clause (bb) of Section 2(oo), and such practise would not be protected by the concept of fixed-term appointment recognized by clause (bb) of Section 2(oo) (bb).
  • It was stated that the fact that successive orders repetitively appointing the complainant for short periods of time are issued from time to time demonstrates that this type of arrangement is a deliberate choice and endeavour on the part of the petitioner to create artificial breaks in the service in order to bypass the statutory provisions, notably section 25F of the Act, and to misuse, the provisions under clause (bb) of section 2(oo) of the Act in order to deprive the respondent.


Given the respondents' ongoing appointment and discharge of services, the Court held that their case will not be covered by Section 2(oo) (bb).Justice AY Kogje dismissed the case brought by the Jamnagar Municipal Corporation contesting the Labour Court's decision to restore one such contractual worker whose services were terminated owing to contract labour outsourcing

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