Contractual Employees Cannot Be Terminated Without Issuance Of Notice: Kerala High Court

The Kerala High Court recently held that contractual employees cannot be terminated on the ground of 'unsatisfactory performance' of service without the issuance of notice or finding to that effect.   

Setting aside an order passed by Mananthavady Municipality by which the service of petitioners at Ayush NHM Homeopathic Dispensary was discontinued, Justice Anu Sivaraman said that the primary reason for termination of services of the contract was that their services had been found to be unsatisfactory. 

"If that be so, even though the petitioners are contractual employees, they were entitled to a notice with regard to the unsatisfactory nature of their service and their services could have been terminated only on a finding being rendered on the same," the court said.

The court further noted that even in case the contention of the respondents is that the petitioners were not appointed after a full process of selection was carried out, it is not in dispute that they have been continuing in service on contract basis from 2010 and 2016 onwards.

"The contention that they can be sent out of service on the specific ground of unsatisfactory performance without any notice or finding to that effect, according to me, is perversive," said the bench.

The petitioners in this case had been appointed as the Attender and Part-Time Sweeper at the dispensary in Mananthavady. It was argued that their appointments to the posts were made after due selection. 

It was submitted that orders had been issued by the Government to the effect that appointments made on contract basis to a particular project or scheme does not have to be discontinued on the basis of general orders for discontinuance of temporary employees. The court was also informed that orders have also been issued as regards the continuance of temporary employees and contract appointees during the COVID period.

It was argued by the counsels on behalf of the petitioners that no reason was cited for terminating the services of the petitioners, rather it was done on the "whims and fancies of the employer".

It was contended that since the petitioners had been continuing from 2010 and 2016 onwards after undergoing a due selection process, the direction to terminate their services only to replace them with similarly situated employees is vitiated.

It was also submitted that there was no performance appraisal carried out in respect of the petitioners and it was only on the subjective satisfaction of the respondents that the decision to terminate their services was taken. 

In the counter affidavit submitted by the municipality, it was contended that following the directions of the court in the earlier round of litigation, the Director had concluded that the government orders that were relied on were not applicable to the petitioners and they were thus, not entitled to continue in service.

The municipality further argued that the petitioners were only contractual employees and they did not have any indefeasible right to continue in service. The petitioners were not employed after undergoing a due process and that the appointment was not under Rule 9 or Rule 9A of the KS&SSR, the court was told.

The Court said it is not in dispute that the petitioners were contract employees and that they did not have any claim for permanent appointment under the Panchayat. However, the question was with respect to their claim for continuance, it added.

It is in this context that the court observed that the petitioners could not have been terminated without the issuance of notice.

The Court accordingly set aside the order of termination, and directed the respondents to permit the continuance of the petitioners in service as contractual employees in the municipality. 

"However, this will not stand in the way of the municipality to take an appropriate action against them in accordance with law after issuing due notice," it was added. 

The petitioners were represented by Advocates Kaleeswaram Raj, Thulasi K. Raj, and Shilpa Soman. Central Government Counsel Mini Gopinath and Advocate Santharam P. appeared on behalf of the respondents. Senior Government Pleader V.K. Sunil also appeared in the case. 

Case Title: Tintu K. & Anr. v. Union of India & Ors. 

Citation: 2023 LiveLaw (Ker) 18

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