-
by sayum
06 March 2026 2:57 PM
“An Employer Cannot Repeatedly Engage Workers As Temporary For Work Which Is Clearly Permanent”, Bombay High Court has held that continuing employees on temporary status for several years despite the existence of vacancies and the performance of perennial work constitutes unfair labour practice under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
Bombay High Court while exercising jurisdiction under Article 227 of the Constitution of India. The Court set aside the Judgment and Award dated 20 May 2022 passed by the Industrial Court, Nashik, which had dismissed complaints filed by employees alleging unfair labour practices.
The Court ultimately held that the Bank had unlawfully continued the petitioners as temporary employees for years despite admitted manpower shortage and perennial work and directed the Bank to undertake an exercise for regularisation of the petitioners within twelve weeks.
The petitioners were working with the Nashik District Central Co-operative Bank as clerks and peons. They had been appointed several years prior to filing the complaints and had continuously performed duties essential to the Bank’s regular operations. Despite performing work identical to that carried out by permanent employees, they continued to be treated as temporary employees and were paid only consolidated wages.
The employees approached the Industrial Court alleging unfair labour practices under Items 5, 6, 9 and 10 of Schedule IV of the MRTU & PULP Act. They contended that they had been appointed against vacant posts and had worked continuously for more than a decade, yet the Bank deliberately retained them as temporary employees in order to deny them permanency and the benefits attached to regular employment.
The petitioners further pointed out that while permanent employees received regular pay scales, allowances, leave benefits, promotions and other privileges, the petitioners were paid consolidated wages of Rs. 6000 to Rs. 9000 and were denied such benefits despite performing identical duties.
The Industrial Court, however, dismissed their complaints solely on the ground that the staffing pattern of the Bank had not received Government approval, and therefore permanency could not be granted.
Aggrieved by this decision, the employees approached the Bombay High Court.
Justice Amit Borkar carefully examined the pleadings, evidence and admissions made by the respondent Bank. The Court noted that several critical facts were not in dispute. The Bank itself admitted that the work performed by the petitioners was of a perennial nature and formed part of the normal functioning of the institution.
The Court observed that banking activities such as clerical work, customer service and maintenance of records are part of the daily operations of a bank and cannot be characterised as temporary assignments. The Court emphasised that when an employer itself acknowledges that the work is permanent and essential for day-to-day functioning, the engagement of workers cannot be treated as purely temporary.
Justice Borkar noted:
“When an employer itself acknowledges that the work is permanent and necessary for the day-to-day functioning of the institution, it indicates that the work exists on a continuing basis and is not temporary or seasonal.”
The Court also noted that the petitioners had worked continuously for several years and that their services were never terminated. Provident fund contributions had been regularly deducted from their wages, which reflected an ongoing employer-employee relationship.
Another crucial admission by the Bank was that after the year 2005 nearly 700 permanent employees had left service due to retirement, voluntary retirement, resignation or death, yet no permanent recruitment had taken place thereafter. At the same time the Bank admitted that its manpower requirement was approximately 1934 employees, whereas far fewer permanent employees were actually in service.
The Court held that these admissions clearly showed the existence of genuine vacancies and a serious manpower shortage.
“NABARD Guidelines Do Not Have Statutory Force”
The respondent Bank attempted to justify its actions by arguing that permanency could not be granted because the staffing pattern had not been sanctioned, relying on certain communications and guidelines issued by NABARD.
The High Court rejected this argument after examining Section 35 of the Banking Regulation Act, 1949.
Justice Borkar clarified that the provision primarily deals with inspection and supervisory functions of banking authorities, and does not confer authority on NABARD to prescribe binding staffing patterns or service conditions.
The Court observed:
“The provision does not confer authority on NABARD to frame service regulations or prescribe mandatory staffing patterns having the force of law.”
According to the Court, communications issued by NABARD in the course of supervisory functions may contain advice or recommendations, but they do not acquire binding force unless supported by statutory provisions.
“Binding Directions On Staffing Can Be Issued Only Under Section 79A”
The Court then examined the scope of Section 79A of the Maharashtra Co-operative Societies Act, 1960, which empowers the State Government to issue directions to co-operative societies in the interest of proper management.
Justice Borkar clarified that directions relating to staffing pattern or management of a co-operative bank can acquire binding force only if they are issued by the State Government in writing under Section 79A after recording satisfaction that such directions are necessary in public interest.
In the present case, however, no such order had been placed on record.
The Court observed:
“A statutory prohibition cannot be presumed. It must be shown through a specific order, notification or directive issued under the authority of the statute.”
Therefore, the Bank could not rely on the alleged absence of staffing approval as a legal barrier to regularisation.
“Courts Can Grant Relief Where Temporary Status Is Used To Deny Permanency”
The High Court relied on the Supreme Court judgment in Casteribe Rajya Parivahan Karmachari Sanghatana v. MSRTC (2009) while considering the legal principles governing regularisation.
Justice Borkar reiterated that regularisation cannot be granted merely because an employee has served for many years. However, where an employer deliberately continues workers as temporary employees for years while extracting work of a permanent nature, such conduct amounts to unfair labour practice under Item 6 of Schedule IV of the MRTU & PULP Act.
The Court stated:
“An employer cannot repeatedly engage workers on temporary basis for work which is clearly permanent and then rely on that temporary label to deny them legal rights.”
The Court emphasised that where the work is perennial, vacancies exist and employees are retained for years, refusal to grant permanency indicates exploitation of temporary status to avoid statutory obligations.
After analysing the material on record, the Court concluded that the petitioners had successfully established unfair labour practices by the respondent Bank. The evidence clearly showed that the petitioners had worked continuously for long periods, that the work performed was permanent in nature, and that the Bank itself admitted the existence of vacancies and manpower shortage.
The Court therefore held that the Bank had engaged in unfair labour practices under Items 5 and 6 of Schedule IV of the MRTU & PULP Act by continuing the petitioners on temporary status despite the availability of permanent work and vacancies.
Accordingly, the Judgment and Award dated 20 May 2022 passed by the Industrial Court, Nashik was quashed and set aside.
The High Court directed the respondent Bank to undertake an exercise for regularisation of the petitioners against available vacant posts within twelve weeks, subject to verification of eligibility and service record. The Court further directed that eligible petitioners be granted permanency with continuity of service, while the regular pay scale and service benefits would apply prospectively from the date of regularisation.
The Court also directed that the petitioners’ services shall not be terminated until completion of the regularisation exercise. An oral request made by the Bank for stay of the judgment was rejected.
The ruling reinforces an important principle in labour jurisprudence that employers cannot indefinitely retain employees on temporary status where the work performed is permanent and vacancies exist. The judgment also clarifies that NABARD guidelines regarding staffing patterns are advisory and do not have binding statutory force, and that binding directions relating to management of co-operative societies must originate from the State Government under Section 79A of the Maharashtra Co-operative Societies Act.
Date of Decision: 05 March 2026
