Telangana High Court
Mr. Vudugula Venkatesh vs The State Of Telangana on 19 August, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 21301 OF 2024
O R D E R:
The case of petitioners is that they joined the service of Respondent No.3 company through Respondent No. 4 provider of contract labourers, between 2008 and 2014. At the time of their appointment, Respondent No. 4 assured that they would soon be transferred to the rolls of Respondent No. 3 as casual and permanent employees, however, despite several Long-Term Settlements dated 17.08.2006, 20.04.2009, 16.10.2012, 05.10.2018 and 27.04.2022, whereunder other contract workers were regularized as permanent employees of Respondent No. 3, petitioners were not given the opportunity to be considered or transferred. They state that they were in continuous employment and did not receive proper notice or explanation for this denial.
1.1 In addition to this, petitioners' complaint is that their ESI contributions were not submitted appropriately and no interest was provided for the delay. Despite bringing this to the attention of both Respondents 3 and 4, no corrective action was taken. Therefore, on 13.06.2022, petitioners submitted a 2 complaint to Respondent No.2 explaining that despite more than 10 years of service, their employment had not been made permanent. They also stated that they were compelled to perform the duties of skilled labourers but were paid the wages of a helper, and that they were not given benefits such as gratuity, bonus, casual leaves, or timely wages. Consequently, Respondent No. 3 restricted petitioners' employment and denied them entry to the company premises. On mediation conducted on 26.07.2023, 09.08.2023, and 02.09.2023, Respondent No. 2 ordered Respondent No. 3 to reinstate petitioners' employment and give them a fair opportunity to be considered as permanent employees. However, these orders have not been implemented and they have not been provided with written copies of the orders.
1.2 Subsequently, complaint dated 26.02.2024 was filed seeking reinstatement and permanent employee status, following which, notice dated 15.03.2024 was issued for a joint meeting scheduled for 27.03.2024 at 12 Noon. During this meeting, petitioners submitted that they had been illegally "retrenched" without notice or explanation. In response, the representatives of Respondent No. 3 stated that they were not 3 liable as petitioners were employees of Respondent No. 4, not their own. At this meeting, Respondent No. 2 reportedly stated that principle of res judicata should apply, as the matter had already been resolved by the Order dated 02.09.2023. Respondent No. 2 also reportedly stated that since Respondents 3 and 4 did not have adequate opportunities to employ petitioners, they should seek alternative job options. It was clarified that meeting was for conciliation and that any unsatisfied party could approach a relevant court. Petitioners were then asked to sign a blank paper, which they were told was for the purpose of typing and preparing the order. However, it was only after multiple visits and requests that they were provided with a copy of the Order dated 27.03.2024, four months later which, according to them is "not legible and makes no sense."
2. The case of Respondent No.2 is that their role is that of a Registering and Licensing Issuing Authority under the Contract Labour (Abolition and Regulation) Act, 1970. They acts as a facilitator for the principal employer, contractor, and contract workers regarding health, safety, and welfare matters. Hence, they have no jurisdiction to entertain or hear matters 4 pertaining to the service of contract labour, such as reinstatement or absorption as permanent employees. It is also stated, on the representation dated 13-06-2023 of petitioners, they conducted a joint meeting on 26-07-2023, during which, Respondent No. 3 contractor reported that due to lack of work, they adjusted the contract workers' duties at other work sites. Since petitioners did not agree to this, they settled their accounts through a "full and final settlement." It is stated, Respondent No. 2, while closing the meeting on 02-09-2023, advised the contract workers to approach proper forum for their relief. Without doing so, they once again filed the subject complaint. In response, Respondent No. 2 issued notice dated 15-03-2024 to Respondents No. 3 and 4, calling for a joint meeting on 27-03-2024 to amicably resolve the issue. After hearing all the parties, Respondent No. 2 closed the joint meeting and advised the complainants that since the matter had already been decided in his office during previous joint meetings on 26-07-2023, 09-08-2023, 19-08-2023, and was finally closed on 02-09-2023, their only recourse was to approach an appropriate forum if they felt they had suffered an injustice.
52.1 In relation to petitioners' grievance regarding ESI contributions, it is stated there is a separate and independent statutory forum available for ESI-related issues and Respondent No. 2 has no involvement in ESI contributions. Since the matter pertains to termination and absorption of contract workers, he advised them to approach the proper forum.
3. The 3rd respondent also filed counter-affidavit almost on similar lines as that of the 2nd respondent. Apart from that, it is stated, petitioners incorrectly named both the contractors as the 4th Respondent. Further, there is no 'privity of contract' or 'employer and employee relationship' between petitioners and the 3rd Respondent. Therefore, petitioners cannot raise an industrial dispute as defined under Section 2(k) of the Industrial Disputes Act, 1947. The affidavit also points out the existence of a Trade Union, M/s United Spirits Company Employees Union, at the unit, which has entered into Long Term Settlements under Section 12(3) of the Industrial Disputes Act, 1947, binding on all workmen.
3.1 The 3rd Respondent explains that it is a company registered under the Companies Act, 2013, engaged in manufacturing liquor at its Nacharam unit. All products are 6 supplied to the Telangana Beverages Corporation Limited. The unit employs about 300 permanent employees. The trade union and management have a history of entering into settlements every three years. An earlier settlement dated 20/04/2009, made under Section 12(3) of the Industrial Disputes Act, 1947, in the presence of the Conciliation Officer, resulted in regularization of about 98 casual workers with a condition not to engage casual labour thereafter. In Writ Petition No.13293 of 2010 filed by 47 ex-casual workers who were not satisfied with the settlement, this Court initially ordered their reinstatement but without back wages. When appealed in Writ Appeal No.1788 of 2013, workers were directed to approach the Labour Court. Some of these ex-casual workers pursued their cases, which were later dismissed, while others agreed to a settlement dated 24/10/2018.
3.2 Since 2010, the 3rd Respondent stopped engaging casual workers and instead engages manpower for non-core activities through contractors, in accordance with the provisions of the Contract Labour (Abolition & Regulation) Act, 1970, as amended by the Government of A.P. in 2003. The affidavit quotes the amendment, which defines "Core Activity" and lists 7 non-core activities, and also Section 10, which prohibits contract labour in core activities but allows it under certain conditions, such as for intermittent work or sudden increases in workload. The 3rd Respondent asserts that petitioners worked in these unskilled, non-core activities as per the exigencies of work, therefore, have no legal claim against the principal employer.
3.3 The 3rd Respondent clarifies that there were no orders for reinstatement passed by the 2nd Respondent nor did the 2nd Respondent have the authority to issue such orders. The allegation that petitioners were asked to sign blank papers is also denied, with the 3rd Respondent stating that minutes were recorded and signed by all parties on the day of the meeting. The 3rd Respondent also rejects the claims that it violated Section 25F and 25N of the Industrial Disputes Act, 1947, or that it discriminated against petitioners due to their physical disability in violation of the Rights of Persons with Disabilities Act, 2016. The affidavit concludes by stating that since the petitioners refused to report for work offered by their contractors, the question of illegal termination or retrenchment does not arise.
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4. Petitioners filed rejoinder affidavits refuting the assertion that the 2nd respondent office lacks jurisdiction to handle their complaint. They state that Labour Commissioner's office is duty-bound to resolve and settle industrial disputes and complaints between employers and employees amicably as well as to enforce employee welfare. They attach a copy of the website of the Ministry of Labour & Employment as Annexure No. 1 to support this claim. They also highlight that Respondent No. 2 acknowledged their complaint dated 26.02.2024 and issued a notice based on it, which they argue undermines the claim of lacking jurisdiction.
5. Heard Sri Akshay Nautiyal, learned counsel representing Sri Mohd. Abdul Kareem Khan, learned counsel for petitioners. He submits that ESI cards prove that petitioners are employees of Respondent No. 4 and are entitled to job security, and thus cannot be illegally terminated without explanation. As per the Long Term Settlements, other contract workers were regularized, but petitioners were not, despite continuous employment. The respondents have failed to comply with Sections 25F and Section 25N of the Industrial Disputes Act, 1947, which pertain to conditions for retrenchment, as no prior 9 notice or compensation was given, and government permission was not sought. It is argued that Respondent No. 3 is using contract employment as a "camouflage" to discriminate against them, especially because some are physically-disabled, which violates their fundamental right to equality and the provisions of the Rights of Persons with Disabilities Act, 2016. Since their work is of a perennial and permanent nature, they cannot be treated as contract workers under the Contract Labour (Regulation & Abolition) Act, 1970, to deny them regularization benefits. Respondent No. 4 is also held liable to pay compensation as per the Industrial Disputes Act. Learned counsel submits that Respondent No. 3 failed to act on the complaint against both itself and Respondent No. 4. According to learned counsel, Respondents, including Government of Telangana, Joint Labour Commissioner, The Deputy Labour Commissioner, and M/s. United Spirits Limited, are stated to fall under the definition of "State" under Article 12 of the Constitution of India and the cause of action arose in Hyderabad, placing it within the Court's territorial jurisdiction.
6. Heard Sri V. Hariharan, learned Senior Counsel representing Sri K.V.R. Chowdary, learned Counsel for the 3rd 10 respondent and Sri Rela Krishna Swamy, learned Assistant Government Pleader on behalf of learned Government Pleader for Labour.
7. On perusing the material on record and considering the arguments advanced on behalf of both the parties, this Court comes to the conclusion that jurisdiction issued raised by Respondent No. 2 to be unconvincing and, in fact, contradictory to his own actions. Respondent No. 2 repeatedly accepted complaints, issued notices and convened joint meetings on 26.07.2023, 09.08.2023, 02.09.2023, and 27.03.2024, and he cannot, at the final stage, claim total lack of jurisdiction. Petitioners' grievance is not merely lack of a specific order, but the arbitrary manner in which the entire process was concluded. The claim of res judicata also cannot be taken when petitioners allege that previous order was never implemented or even provided to them in a legible format. This alleged procedural irregularity by a public authority is a clear basis for issuance of a writ of Mandamus. The action of the Joint Labour Commissioner in allegedly disposing of the matter without a clear, reasoned, and transparent order, and based on what the 11 petitioners claim was a coerced signature, constitutes a failure to perform his public duty in a lawful manner.
8. Learned counsel places reliance on the judgment of the Hon'ble Supreme Court in Jaggo v. Union of India (Civil Appeal No. 4092 of 2024) and this judgment is of critical importance in this case. In Jaggo's case, it has been held as under:
22. The pervasive misuse of temporary employment contracts, as exemplified in this case, reflects a broader systemic issue that adversely affects workers' rights and job security. In the private sector, the rise of the gig economy has led to an increase in precarious employment arrangements, often characterized by lack of benefits, job security, and fair treatment. Such practices have been criticized for exploiting workers and undermining labour standards. Government institutions, entrusted with upholding the principles of fairness and justice, bear an even greater responsibility to avoid such exploitative employment practices. When public sector entities engage in misuse of temporary contracts, it not only mirrors the detrimental trends observed in the gig economy but also sets a concerning precedent that can erode public trust in governmental operations.
23. The International Labour Organization (ILO), of which India is a founding member, has consistently advocated for employment stability and the fair treatment of workers. The ILO's Multinational Enterprises Declaration encourages companies to provide stable employment and to observe obligations concerning employment stability and social International Labour Organization- Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. It emphasizes that enterprises should assume a leading role in promoting employment security, particularly in contexts where job discontinuation could exacerbate long-term unemployment.12
24. The landmark judgement of the United States in the case of Vizcaino v. Microsoft Corporation serves as a pertinent example from the private sector, illustrating the consequences of misclassifying employees to circumvent providing benefits. In this case, Microsoft classified certain workers as independent contractors, thereby denying them employee benefits. The U.S. Court of Appeals for the Ninth Circuit determined that these workers were, in fact, common-law employees and were entitled to the same benefits as regular employees. The Court noted that large Corporations have increasingly adopted the practice of hiring temporary employees or independent contractors as a means of avoiding payment of employee 97 F.3d 1187 (9th Cir. 1996) benefits, thereby increasing their profits. This judgment underscores the principle that the nature of the work performed, rather than the label assigned to the worker, should determine employment status and the corresponding rights and benefits. It highlights the judiciary's role in rectifying such misclassifications and ensuring that workers receive fair treatment.
25. It is a disconcerting reality that temporary employees, particularly in government institutions, often face multifaceted forms of exploitation. While the foundational purpose of temporary contracts may have been to address short-term or seasonal needs, they have increasingly become a mechanism to evade long- term obligations owed to employees. These practices manifest in several ways:
• Misuse of "Temporary" Labels:
Employees engaged for work that is essential,
recurring, and integral to the functioning of an institution are often labelled as "temporary" or "contractual," even when their roles mirror those of regular employees. Such misclassification deprives workers of the dignity, security, and benefits that regular employees are entitled to, despite performing identical tasks.
* Arbitrary Termination: Temporary employees are frequently dismissed without cause or notice, as seen in the present case. This practice undermines the principles of natural justice and subjects workers to a state of constant insecurity, regardless of the quality or duration of their service.
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* Lack of Career Progression: Temporary employees often find themselves excluded from opportunities for skill development, promotions, or incremental pay raises. They remain stagnant in their roles, creating a systematic disparity between them and their regular counterparts, despite their contributions being equally significant. * Using outsourcing as a shield: Institutions increasingly resort to outsourcing roles performed by temporary employees, effectively replacing one set of exploited workers with another. This practice not only perpetuates exploitation but also demonstrates a deliberate effort to bypass the obligation to offer regular employment. * Denial of Basic Rights and Benefits: Temporary employees are often denied fundamental benefits such as pension, provident fund, health insurance, and paid leave, even when their tenure spans decades. This lack of social security subjects them and their families to undue hardship, especially in cases of illness, retirement, or unforeseen circumstances."
9. The above judgment reinforces the principle that Courts must look at the substance of the employment relationship, not its form. The Supreme Court condemned the practice of using temporary or contract employment for work that is perennial in nature, recognizing it as a means to circumvent labour laws and constitutional protections. The petitioners' claim that their work was essential and continuous for over a decade directly aligns with the reasoning in this judgment. The company's argument of "lack of work" and the offering of alternative employment by the contractor appears 14 weak in the face of the petitioners' long tenure and the alleged continuation of similar work by other employees.
10. In another judgment relied on by learned counsel for petitioners in Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers Union (Civil Appeal No. 4092 of 2024), the Hon'ble Supreme Court unequivocally held that selective regularization of contract workers performing the same work as others is discriminatory and impermissible. It underscores the principle that workers performing tasks of a permanent and perennial nature, regardless of their initial contractual status, are entitled to regularization and the associated benefits. Petitioners' case, where other contract workers were regularized while they were not, is a mirror image of the facts in that judgment. This case law directly supports petitioners' claim of discriminatory treatment and provides a strong legal basis for their demand for equal treatment. Respondents cannot simply hide behind the veil of a Long-Term Settlement and declare it inapplicable to petitioners without offering a valid, non- discriminatory reason.
11. Furthermore, petitioners' allegations regarding violation of the Industrial Disputes Act, 1947, specifically 15 Sections 25F and 25N, are serious. Respondents have not provided sufficient evidence to show that the mandatory procedures for retrenchment, such as prior notice and compensation, were followed. This constitutes a prima facie violation of a fundamental labour law.
12. The allegation of discrimination based on physical disability, if proven, would not only be a violation of the Rights of Persons with Disabilities Act, 2016, but also a gross violation of the constitutional right to equality and dignity. Respondents' claim that only one of the petitioners is disabled does not negate the seriousness of the allegation regarding that individual and the petitioners' assertion that three of them are handicapped warrants a thorough investigation.
13. Based on this analysis, this Court concludes that petitioners presented a prima facie case of arbitrary state of action, discriminatory labour practices and procedural irregularities. The defense raised by the respondents are largely technical and fail to address the substantive injustices alleged by petitioners. The very purpose of a writ of Mandamus is to ensure that public authorities perform their duties in a lawful 16 and non-arbitrary manner. Petitioners' right to a fair and transparent process before the 2nd respondent has been denied.
14. In view of the above the writ petition is allowed. Respondent No.2 is directed to consider the complaint dated 26.02.2024 and pass appropriate orders thereon, keeping in view the judgments of the Hon'ble Supreme Court in Jaggo's case and Mahanadi Coal Fields case (supra), within a period of three months from the date of receipt of a copy of this order. No costs.
15. Miscellaneous Applications, if any shall stand closed.
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NAGESH BHEEMAPAKA, J 19th August 2025 ksld