Principle Of Res Judicata Bars Second Reference To Labor Court, After Adjudication: Punjab & Haryana High Court

Background

Swarup Parkash and other petitioners worked at GMCH, Chandigarh through various contractors. Parkash, who joined on May 8, 1995, worked until December 30, 1997, when his services were terminated. After serving a demand notice on November 15, 1999, the matter was referred to the Labor Court. In the initial reference dated March 21, 2000, the Labor Court ruled against the workers on March 5, 2007, finding that they failed to prove either their appointment or termination by GMCH. Subsequently, a dispute regarding minimum wages led to the High Court's intervention, resulting in GMCH paying Rs. 17,982 to each contract worker as differential wages. This payment prompted the workers to file a second reference before the Labor Court, which was dismissed on July 3, 2023.

Arguments

The petitioners, represented by Mr. S.K. Guleria, contended that the principle of res judicata was inapplicable as a fresh cause of action arose when GMCH made the differential wage payment. They argued that this payment validated their claim of being GMCH employees, making the second reference maintainable despite the earlier adverse ruling. Conversely, Mr. Aman Bahri, Additional Standing Counsel for GMCH, argued that since both references were made against the same management and the first reference was never challenged, the principle of res judicata clearly applied. He emphasized that the workers' acceptance of the first award without challenge made the second reference inadmissible.

Court's Reasoning

Firstly, the court emphasized that mere payment of wages under the Minimum Wages Act does not alter the fundamental status of workers or their relationship with the principal employer. The court clarified that such payments do not automatically convert contract workers into direct employees. Secondly, examining the res judicata principle, the court found it fully applicable to these proceedings. The court noted that the petitioner had accepted their engagement through contractors in the first reference itself, and the Labor Court had explicitly ruled on their failure to prove direct employment with GMCH. The principle of res judicata applies exactly to such situations, to prevent indefinite litigation.

Thirdly, the court stressed that subsequent payment of differential wages under the Minimum Wages Act did not create a fresh cause of action or nullify the res judicata principle. The court emphasized that this principle is universal and essential for ending litigation, preventing losing parties from filing repeated claims. Finally, the court concluded that since both references were filed against the same management (GMCH) and the first reference had categorically determined the absence of direct employment, the second reference was clearly barred. The court found no merit in the argument that payment of differential wages created a new cause of action, and hence dismissed the petitions.

Date: 24-10-2024

Citation: 2024:PHHC:139833

Counsel for the Petitioners: Mr. S.K. Guleria

Counsel for the Respondents: Mr. Aman Bahri, Additional Standing Counsel and Mr. Rohit Kaushik, Panel

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