Jaggo vs. Union of India: Supreme Court judgment on ensuring the rights of “temporary workers”
“It is true that labor produces for the rich wonderful things – but for the worker it produces privation. It produces palaces – but for the worker, hovels. It produces beauty – but for the worker, deformity. It replaces labor by machines, but it throws one section of the workers back into barbarous types of labor and it turns the other section into a machine.”
- Estranged Labour, Economic and Philosophic Manuscripts of 1844, Karl Marx
On December 20, 2024, the Supreme Court delivered a landmark judgment in Jaggo vs. Union of India and Ors. addressing the pervasive issue of “temporary employment” arrangements, which often facilitate the large-scale exploitation of workers within the public sector. This ruling sheds light on how such employment practices are increasingly employed to circumvent workers’ rights and deny them the benefits and protections they are entitled to. The judgment underscores the troubling trend of using temporary or casual designations to mask permanent roles, thereby undermining job security and fair labor standards. The Court emphasized the responsibility of the public sector to uphold principles of fairness and justice in its treatment of employees.
Background Facts
The facts of this case tells a familiar story of contract and casual workers in various public establishments.
The Appellants before the Supreme Court were engaged by the Central Water Commission on “part-time, ad-hoc terms” for cleaning and maintaining the office premises and performing the work of gardening, dusting, and other maintenance work.
Initially, the Appellants sought regularization of their services before the Central Administrative Tribunal who dismissed their case on the ground that the Appellants were not engaged on what it considered "regular vacancies," that they had not completed what it termed as sufficient "full-time" service and that their case did not attract the principles enabling regularization. Within ten days after the dismissal of the original application, the services of all these individuals were abruptly terminated without issuance of any show-cause notice.
The Appellants then approached the High Court to set aside the order of the Tribunal and to direct the Central Water Commission to reinstate them and to regularize their services. The High Court rejected their petition, relying on the judgment in Secretary, State of Karnataka v. Uma Devi holding that the workers could not claim a vested right to be absorbed or regularized without fulfilling the requisite conditions.
The Supreme Court allowed the Appeal filed by the workers set aside the orders passed by the High Court and the Tribunal and quashed the termination orders and directed that the Appellants be taken back on duty and their services be regularised.
There are certain essential aspects of this judgment which highlight the exploitative nature of such casual appointments, that enable the unfair treatment of workers which are to be highlighted:
Misuse of Terminology and Classification:
It is a widespread practice to label workers as “casual,” “temporary,” or “contract” employees solely to deny them their rightful entitlements, even though the actual terms of their employment clearly indicate that they are, in essence, permanent workers.
The Supreme Court has held that it was necessary to look beyond these labels, and consider the realities of employment: continuous, long- term service, indispensable duties, and absence of any mala fide or illegalities in their appointments. The Supreme Court also looks at the case of the U.S. Court of Appeals in Vizcaino v. Microsoft Corporation where Microsoft classified certain workers as independent contractors, thereby denying them employee benefits. The U.S. Court of Appeals determined that these workers were, in fact, employees and were entitled to the same benefits as regular employees, and also noted that large Corporations have increasingly adopted the practice of hiring temporary employees or independent contractors as a means of avoiding payment of employee benefits, thereby increasing their profits.
Exploitation of temporary employee and misuse of temporary employment contracts
The Supreme Court notes that the pervasive misuse of temporary employment contracts, as exemplified in this case, reflects a broader systemic issue that adversely affects workers' rights and job security. It highlights how it has become a mechanism to evade long-term obligations owed to employees, and elaborates on the various forms of exploitation it allows for:
• Misuse of "Temporary" Labels: Employees engaged for work that is essential, recurring, and integral to the functioning of an institution are often labelled as "temporary" or "contractual," even when their roles mirror those of regular employees. Such misclassification deprives workers of the dignity, security, and benefits that regular employees are entitled to, despite performing identical tasks.
• Arbitrary Termination: Temporary employees are frequently dismissed without cause or notice, as seen in the present case. This practice undermines the principles of natural justice and subjects workers to a state of constant insecurity, regardless of the quality or duration of their service.
• Lack of Career Progression: Temporary employees often find themselves excluded from opportunities for skill development, promotions, or incremental pay raises. They remain stagnant in their roles, creating a systemic disparity between them and their regular counterparts, despite their contributions being equally significant.
• Denial of Basic Rights and Benefits: Temporary employees are often denied fundamental benefits such as pension, provident fund, health insurance, and paid leave, even when their tenure spans decades. This lack of social security subjects them and their families to undue hardship, especially in cases of illness, retirement, or unforeseen circumstances.
Outsourcing of workers
Important, the Supreme Court notes how institutions are increasingly resorting to outsourcing roles performed by temporary employees, effectively replacing one set of exploited workers with another. It notes how this “practice not only perpetuates exploitation but also demonstrates a deliberate effort to bypass the obligation to offer regular employment.”
ILO standards of employment stability and the fair treatment of workers:
The Court also highlights that the International Labour Organization (ILO), of which India is a founding member, has consistently advocated for employment stability and the fair treatment of workers. It holds that “the ILO's Multinational Enterprises Declaration encourages companies to provide stable employment and to observe obligations concerning employment stability and social security. It emphasizes that enterprises should assume a leading role in promoting employment security, particularly in contexts where job discontinuation could exacerbate long-term unemployment.”
Understanding the judgment in Uma Devi:
Importantly the Supreme Court considers the manner in which the judgment in Uma Devi have been misinterpreted any misapplied to deny legitimate claims of long-serving employees. It notes how the “judgment is being subverted when institutions rely on it to indiscriminately reject the claims of employees, overlooking the judgment's explicit acknowledgment of cases where regularization is appropriate”. It notes that this “selective application distorts the judgment's spirit and purpose, effectively weaponizing it against employees who have rendered indispensable services over decades”.
Precarious employment arrangement in Gig economy
The Supreme Court has also highlighted that the rise of the gig economy has resulted in precarious employment arrangements “characterized by lack of benefits, job security, and fair treatment that result in the exploitation of workers and undermining of labour standards”.
Duty of the Government to act as a model employer
Highlighting the role of the Government, while compared to the private sector, the Supreme Court notes that government institutions, entrusted with upholding the principles of fairness and justice, bear an even greater responsibility to avoid exploitative employment practices. It notes that “when public sector entities engage in misuse of temporary contracts, it not only mirrors the detrimental trends observed in the gig economy but also sets a concerning precedent that can erode public trust in governmental operations”.
The Supreme Court underscores the critical responsibility of government departments to set a precedent in providing fair and stable employment. It has held that engaging workers on a temporary basis for extended periods contravenes international labour standards and also exposes the organization to legal challenges and undermines employee morale.
The Court has held that it is essential that the Government ensure fair employment practices, promote job security, and uphold the principles of justice and fairness that they are meant to embody. This would also as a positive precedent for the private sector to follow, “thereby contributing to the overall betterment of labour practices in the country”.
We must remember that this is not the first time that the Supreme Court has come down on this form of exploitative practices. Way back in 1964, the Supreme Court in Sankar Mukherjee and Ors. vs. Union of India (UOI) and Ors. [AIR 1990 SC 532] held that the the system of contract labour was 'archaic', 'primitive' and of 'baneful nature' and “nothing but an improved version of bonded-labour.
In Bhilwara Dugdh Utpadak Sahakari S. Ltd. [AIR 2011 SC 3546] the Supreme Court has come down on the "subterfuge" employed by employers to evade their obligations under various labor laws by falsely designating workers as daily wage earners or employees of a contractor and has held that such practices cannot be permitted and that “Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers.”
However, despite the same the Government only continued to increase these subterfuges that allowed for exploitation. The present judgment comes at a time when informalization of the labour force is the mantra of the Union Government. According to the Public Enterprises Survey for 2019-2020, the number of contractual workers in Central Public Sector Enterprises rose from 2,67,929 in March 2016 to 4,98,807 in March 2020. The data shows that the share of daily-wage workers rose by 178% and that for contractual workers rose by 86% from 2015-16 to 2019-20 in Central Public Sector Enterprises. In the same period, the number of permanent employees reduced by 25%.
A look at the type of the works in which such arrangements made would show that this work is manual labour and very often caste-ordained work performed by historically oppressed communities. In fact, the Union Government has abolished all D-group posts ensuring that this work can only be contracted out – the work continues to exist but the government can only contract it out. Even in the case before the Supreme Court, the workers were performing the work of house-keeping and cleaning, which is a caste ordained occupation.
In this context, this judgment serves as a reminder to the Government of its Constitutional obligations, and that the growing repressive practices are in violation of the same.
The BJP Government's active pursuit of neo-liberal policies has consistently opposed the demands of casual and contract workers for fair and equitable treatment. This stance is starkly reflected in the new Labour Codes, which not only sustain oppressive systems but also intensify and codify discrimination, further undermining the rights of workers.
The Union Government must acknowledge and act in accordance with the Supreme Court’s conclusions, putting an immediate end to these exploitative practices. However, we are aware that the BJP Government will not do the same, and will only continue to perpetuate such oppresive policies. A prolonged and intensified struggle is essential to compel the government to comply with the Court’s directives and to ensure that workers are provided with fair, secure, and dignified conditions of employment.