Courts Cannot Compel Employers To Retain Contractual Employees Or Alter Terms Of Employment: J&K High Court

A bench of Justice Wasim Sadiq Nargal went on to explain,

“It is important to distinguish between the legality of termination and the automatic continuation of contractual employment. While a worker may have the right to challenge the termination if it is in violation of statutory protections, but there is no automatic right to employment continuation simply because the individual was employed under a contract”

He added,

“Thus, the Court's role is limited to ensuring that the termination of the contract is done in accordance with the law and the terms of the contract, but it cannot compel the employer to extend the contractual relationship, once it has come to an end provided that the termination/ disengagement is lawful and does not violate any legal provision”

The petitioners were engaged as contractual employees under a Government Order as the government had sanctioned 1366 posts for 500-bedded temporary COVID hospitals in Jammu and Srinagar in collaboration with DRDO during the pandemic. Their initial appointment was for one year, extendable up to three years, based on performance and requirement.

As COVID-19 cases declined, the government repatriated regular doctors and conducted a review of the contractual staff. While the extension was sought by GMC, Jammu, the government allowed only a six-month extension until December 31, 2022. On April 13, 2023, the government communicated that, due to the closure of DRDO hospitals, there was no justification for further extension, leading to the petitioners' disengagement.

Advocates S.S. Ahmed and Sheikh Najeeb argued that the petitioners were not confined to DRDO hospitals but were deployed across GMC Jammu and its associated hospitals due to acute staff shortages. The government's decision was arbitrary as it disregarded the requirement of skilled staff in hospitals like Maternity Hospital, Gandhi Nagar, and New Emergency GMCH, Jammu, they submitted.

Arguing that the disengagement violated the principles of natural justice, as the petitioners were neither given notice nor paid salaries from January to April 2023 the counsel submitted that the petitioners had no claim for regularization but were entitled to serve the full three-year period as initially provided in the government order.

The respondents, represented by Mr. Raman Sharma, Additional Advocate General, argued that the petitioners were engaged on a temporary basis specifically for the COVID-19 hospitals. Once the hospitals were closed, there was no justification for extending their services. The respondents emphasized that the petitioners had accepted the six-month extension without objection and could not now claim a right to a full-year extension.

While dismissing the petition Justice Nargal held that the petitioners had no vested right in contractual employment as contractual appointments do not create a right to permanent employment. Once a contract expires, the court cannot compel an employer to renew it, the court stated and added that the Supreme Court has consistently ruled that unless a contract explicitly provides for continuation, the expiry of a fixed-term employment does not grant automatic entitlement to further engagement.

“The absence of vested rights is particularly relevant when dealing with fixed-term contracts, where the nature of employment is temporary. The employee's right to continue working beyond the contract period is contingent on the employer's willingness to extend or renew the contract, and such a decision lies within the discretion of the employer”, the court remarked.

Highlighting the temporary nature of appointments the court maintained that the petitioners were hired specifically to address the emergency posed by the COVID-19 pandemic. As the crisis subsided and DRDO hospitals closed, there was no legal basis to continue their engagement, he emphasised.

The court emphasized that its jurisdiction is limited to ensuring that disengagement is lawful and hence it cannot interfere with policy decisions or compel the government to retain contractual employees beyond the agreed terms.

“.. once the Government has decided to close down the temporary hospitals, established in view of emergency related to Covid-19 pandemic, where the petitioners were contractually engaged, the respondents cannot be asked to continue their services as contractual employees without any work or their need”, Justice Nargal opined.

In consonance with these considerations the court dismissed the petition. However, it directed the government to release the pending wages of petitioners for the period they had worked, provided no legal impediment existed.

Case Title: Damni Rajrah & Ors Vs UT Of J&K

Citation: 2025 LiveLaw (JKL)

Click Here To Read/Download Judgment