'Backdoor Entries Anathema To Public Service' : Supreme Court Refuses To Direct LIC To Absorb 11,000 Part Time Workers

Observing that a public employer cannot be asked to carry out a mass absorption of over 11,000 workers without a recruitment process, the Supreme Court on Tuesday decided a four-decade old dispute related to the regularization of part-time workers in the Life Insurance Corporation(LIC).

"LIC as a statutory corporation is bound by the mandate of Articles 14 and 16 of the Constitution. As a public employer, the recruitment process of the corporation must meet the constitutional standard of a fair and open process. Allowing for back-door entries into service is an anathema to public service", a bench comprising Justices DY Chandrachud, Surya Kant and Vikram Nath observed.

The dispute was regarding the claim for regularization of workers who were employed from 20 May 1985 till 4 March 1991. During the 1980s, several rounds of litigation were initiated for absorption of temporary workers, which ended in a compromise in a 1988 case before the Supreme Court with the LIC agreeing to absorb temporary workers engaged during the period from 01.01.1982 till 20.05.1985. The compromise was approved by the Supreme Court in the case LIC v. Their Workmen (1989).

In 1992, in the case E Prabhavathy, the Court accepted a scheme proposed by LIC to regularise all those who have worked for 85 days in any two consecutive years between 20.05.1985 till 23.10.1992.

The issue here was whether the compromise terms are applicable to part-time workers in the latest round. The bench noted that the Dogra Report, which verified the claims of the workers, suffered from "clear and manifest errors". The LIC had taken an objection that there were duplicate entries. The Court said, among other things, that the report failed to carry out an accurate verification of only those Class III workers who had put in at least 85 days of work in a period of two years and Class IV workers who had put in 70 days of work in a period of three years.

The bench also noticed that the situation was complicated by conflicting judgments given by two different benches in earlier rounds of cases.

"A public employer such as LIC cannot be directed to carry out a mass absorption of over 11,000 workers on such flawed premises without following a recruitment process which is consistent with the principles of equality of opportunity governed by Articles 14 and 16 of the Constitution. Such an absorption would provide the very back-door entry, which negates the principle of equal opportunity and fairness in public employment, which has been specifically decried by this Court in Secretary, State of Karnataka v. Umadevi", the Court stated.

The Court came to the conclusion that the claims of those workers who are duly found upon verification to meet the threshold conditions of eligibility should be resolved by the award of monetary compensation in lieu of absorption, and in full and final settlement of all claims and demands.

The Court directed a fresh verification of the claims of workers who claim to have been employed for at least 70 days in Class IV posts over a period of three years or 85 days in Class III posts over a period of two years shall be carried out.

The task of verification shall be carried out by a Committee consisting of: (a) Mr Justice P K S Baghel, former Judge of the Allahabad High Court; and (b) Shri Rajiv Sharma, former District Judge and member of the UPHJS.

"All persons, found to be eligible on the norm shall be entitled to compensation computed at the rate of Rs 50,000 for every year of service or part thereof. The payment of compensation at the rate shall be in lieu of reinstatement, and in full and final settlement of all claims and demands of the workers in lieu of regularisation or absorption...The payment of compensation in lieu of reinstatement shall be effected by LIC within a period of three months from the date of receipt of the report of verification by the Committee", the Court orderd.

Case Title : Ranbir Singh versus SK Roy, Chairman Life Insurance Corporation and Another

Citation : 2022 LiveLaw (SC) 417

Service Law - LIC as a statutory corporation is bound by the mandate of Articles 14 and 16 of the Constitution. As a public employer, the recruitment process of the corporation must meet the constitutional standard of a fair and open process. Allowing for back-door entries into service is an anathema to public service (Para 72)

Service Law - Regularization - A public employer such as LIC cannot be directed to carry out a mass absorption of over 11,000 workers on such flawed premises without following a recruitment process which is consistent with the principles of equality of opportunity governed by Articles 14 and 16 of the Constitution. Such an absorption would provide the very back-door entry, which negates the principle of equal opportunity and fairness in public employment, which has been specifically decried by this Court in Secretary, State of Karnataka v. Umadevi (Para 74.iii)

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