Even Long-Serving Temporary Employees Entitled To Hearing If Termination Is Punitive & Stigmatic: Kerala High Court

"Any punitive action in the nature of Ext.P11 can only be in compliance with the principles of natural justice, " Kerala High Court, in a significant ruling, held that a long-serving temporary employee cannot be terminated without being afforded a reasonable opportunity of hearing if the termination is punitive and attaches a stigma.

A single-judge bench of Justice Viju Abraham observed that while contractual employees may not require full-scale departmental inquiries, any action that affects an individual's livelihood and future employment prospects must comply with the principles of natural justice.

The petitioner, Dr. Subhadra K.S., had been serving as a Shift Supervisor at the Kerala State Homoeopathic Co-operative Pharmacy Ltd. (HOMCO) since 2012 through renewed contractual spells of 179 days. Following a complaint regarding the presence of fungus in tablets supplied by the factory, the petitioner was issued a memo of charges and subsequently terminated from service by the Managing Committee without any formal inquiry or hearing.

The primary question before the court was whether the service of a long-term temporary employee could be terminated on grounds of misconduct or negligence without conducting an inquiry or providing a hearing. The court was also called upon to determine if such a termination, being punitive and stigmatic, violates the principles of natural justice.

Termination Affects Livelihood and Future Prospects

The Court noted that the petitioner had been in continuous service for nearly 14 years through successive renewals. The bench observed that the termination order specifically cited "dereliction of duty" and a failure to maintain quality standards as the grounds for removal.

Such an order, the Court found, was not a simple discharge as per contract but was clearly punitive. Justice Abraham remarked that this action "definitely affects her future employment also, since it casts a stigma on the petitioner." The Court emphasized that when an order attaches stigma and affects livelihood, the protection of natural justice must be extended to the employee.

"Admittedly, Ext. P11 order affects the livelihood of the petitioner, attaches stigma, and is punitive in nature."

Distinction Between Contractual Termination and Punitive Action

The respondents argued that since the petitioner was a daily-wage temporary appointee, no inquiry was mandated before termination. They cited precedents like M/s. Francis Klein & Co. (P) Ltd. v. Their Workmen to argue that loss of confidence justifies removal.

However, the Court distinguished between a simple termination of a contract and an order passed as a punishment for alleged misconduct. Relying on Jayarani T. v. Assistant Registrar of Co-operative Societies, the bench held that even a probationer or temporary employee is entitled to a reasonable opportunity to show cause against a proposed punitive action.

Court Addresses Requirements for Contractual Employees

The Court referred to its recent ruling in Divya P.S. v. Aralam Grama Panchayat, noting that while a full-fledged departmental proceeding with a formal enquiry officer might not be strictly mandatory for contractual staff, a basic hearing is non-negotiable.

The bench highlighted that the decision to terminate was taken by the Managing Committee without ever hearing the petitioner's side. "There is no contention raised in the counter affidavit as to whether the petitioner was heard before the Managing Committee took a decision to terminate the service," the Court noted.

"The Managing Committee while taking a decision... ought to have heard the petitioner, considered her objection and granted opportunity to her to produce sufficient evidence to prove her innocence."

The Court concluded that the impugned termination order was unsustainable as it was issued solely based on a committee decision without providing the petitioner a chance to defend herself. Since her current contract was slated to expire in May 2026, the Court set aside the termination and remanded the matter.

The Managing Committee has been directed to afford a proper and unbiased hearing to the petitioner. The Court clarified that only after considering her evidence and contentions should a fresh decision be taken regarding her continuation for the remainder of the contract period.

The ruling reinforces the doctrine that the "power to fire" even a temporary employee is not absolute when the grounds are disciplinary. By emphasizing that stigma and loss of livelihood trigger the requirement of a hearing, the Court has provided a safeguard against arbitrary administrative actions in public sector cooperatives.

Date of Decision: 17 April 2026