Introduction:

In a significant ruling reinforcing the rights of employees performing permanent and essential duties, the Bombay High Court, through Justice Milind N. Jadhav, held that financial constraints or inability to create sanctioned posts cannot justify employing workers on a temporary or contractual basis for years, only to abruptly terminate them. The judgment arose from writ petitions filed by drivers and firemen of the Malegaon Municipal Corporation, challenging the orders of the Industrial Court which had dismissed their complaints of unfair labour practices. The petitioners had been serving the Corporation since 2017 without interruption but were terminated in July 2025. The case highlights the constitutional protections of equality, dignity, and fair labour practices under Articles 14, 16, and 21 of the Constitution of India, and emphasizes that employees performing continuous, essential duties cannot be relegated to temporary status to circumvent employment rights.

Arguments of the Petitioners:

The petitioners contended that despite rendering continuous service since 2017, the Corporation had engaged them on temporary terms, denying them permanent status, benefits, and security of service, which they were rightfully entitled to, given the nature of their duties. The petitioners were engaged in critical municipal functions, including driving essential vehicles and operating fire services, which are integral to the functioning of the Corporation. They argued that the mere administrative or financial limitation cited by the Corporation—that expenses had crossed 45% of the total establishment costs—cannot serve as a legitimate justification to deny permanency. Counsel for the petitioners submitted that such reasoning effectively amounts to exploitation and bonded labour, where employees performing regular, permanent duties are treated as temporary despite their essential contributions. The petitioners also contended that similarly placed employees in other departments had been granted permanent status, and differential treatment was arbitrary and unconstitutional. They relied on the principles of fair labour practices and the doctrine of equality, asserting that the Corporation’s failure to confer permanent employment amounted to a violation of fundamental rights under Articles 14, 16, and 21.

Arguments of the Respondent (Malegaon Municipal Corporation):

The Corporation contended that the petitioners were temporary workers, engaged due to the non-availability of sanctioned posts, and that the termination was lawful. The respondents argued that the financial limitations imposed by the State Government, particularly the ceiling on administrative expenditure, constrained their ability to grant permanent positions to temporary staff. They maintained that the petitioners’ continuation was subject to administrative approval and budgetary availability, and that no substantive right to permanency arose merely because they had served continuously in a temporary capacity. The Corporation also emphasized that other sanctioned appointments, such as Safai Kamgars, were made under explicit governmental sanction, implying that the petitioners could not claim equivalence to those positions. In essence, the Corporation argued that the temporary engagement was within administrative discretion, and the petitioners’ termination did not constitute unfair labour practice or a breach of constitutional provisions.

Court’s Analysis and Findings:

Justice Jadhav undertook a detailed analysis of the nature of employment, the duties performed by the petitioners, and the constitutional framework protecting labour rights. The Court observed that the petitioners were engaged in continuous, essential functions alongside permanent employees of the Corporation, and their duties were neither sporadic nor incidental. They were involved in critical operations, including fire services and essential municipal transport functions, which are core to public safety and welfare. The Court emphasized that continuing employees in such roles on temporary or contractual terms for years, while denying them permanency, amounts to unfair labour practice and exploitation.

The Court rejected the Corporation’s reliance on financial limitations or non-availability of sanctioned posts as a justification for denying permanent status. Justice Jadhav noted that the Corporation had powers to appoint other employees, including Safai Kamgars, as sanctioned by the State Government, and thus had the administrative capacity to confer permanent status to petitioners. The Court observed that accepting the Corporation’s argument would create a scenario akin to bonded labour, where employees performing essential services are held in limbo, without security or benefits, for indefinite periods.

Further, the Court highlighted that the Industrial Court’s dismissal of the petitioners’ complaints failed to consider the continuous and essential nature of the duties performed, and therefore the orders were unsustainable. The Court reiterated the principle of equal treatment of similarly placed employees, observing that denial of permanency to the petitioners, while other workers enjoyed substantive benefits, amounted to arbitrariness violating Articles 14, 16, and 21 of the Constitution. The Court underscored that constitutional guarantees of equality and dignity in employment are non-negotiable and cannot be overridden by administrative convenience or financial limitations.

Judgment and Directions:

Accordingly, the Bombay High Court quashed the orders of the Industrial Court and the termination orders issued by the Malegaon Municipal Corporation on July 2, 2025. The Court directed the Corporation to reinstate the petitioners within one week with continuity of service and full back wages. Furthermore, the petitioners were to be conferred permanent employee status from the date of the judgment. The Court’s ruling establishes a binding precedent that employees performing permanent, essential duties cannot be kept on temporary contracts indefinitely, and financial or administrative constraints cannot justify denial of permanency. This decision reinforces the rights of workers, ensures fair and dignified treatment, and emphasizes that public service employers must align their administrative practices with constitutional values.

The Court’s observations extend beyond the petitioners, sending a strong message to public bodies and municipal corporations nationwide: temporary employment should not be a mechanism to exploit workers performing critical public functions. The ruling aligns with principles of natural justice, fair labour practice, and constitutional morality, promoting dignity, equality, and security of employment in the public sector.