Absence of a sanctioned staffing pattern does not justify denying permanency for perennial work performed against vacancies.

The Petitioners were employed as clerks and peons for over ten years on a temporary basis by the Respondent Bank, a cooperative entity.

Despite performing work of a perennial nature against vacant posts (created by the exit of ~700 permanent staff since 2005), they were paid low consolidated wages and denied benefits available to permanent employees.

The Petitioners filed complaints alleging unfair labour practices under Items 5, 6, 9, and 10 of Schedule IV of the MRTU and PULP Act, 1971.

The Industrial Court, Nashik, dismissed the complaints on May 20, 2022, primarily on the ground that the Bank’s staffing pattern had not received formal approval from the State Government, thus precluding regularisation.

The Petitioners challenged this dismissal via writ petitions under Article 227 of the Constitution.

The Court applied Items 5 (discrimination) and 6 (keeping employees temporary to deny permanency) of Schedule IV of the MRTU and PULP Act, 1971.

It relied on the Supreme Court’s precedent in Mahatma Phule Gramin Bank v. Castribe Rajya Parivahan Karmachari Sanghatana (Casteribe), which empowers Industrial Courts to direct regularisation to erase unfair labour practices where work is perennial and vacancies exist.

The Court interpreted Section 35(6) of the Banking Regulation Act, 1949, noting that NABARD’s supervisory powers are advisory and do not constitute statutory restrictions on service conditions.

Additionally, it analyzed Section 79A of the Maharashtra Co-operative Societies Act, 1960, holding that binding directions on staffing must be issued in writing by the State Government and cannot be presumed.

The Court found that the Respondent Bank admitted the work was perennial and that the Petitioners were working against 700+ vacancies resulting from natural attrition since 2005.

The Court rejected the Bank’s defense that it was "powerless" to regularize due to a lack of sanctioned staffing pattern, noting that the Bank failed to produce any specific prohibitory order issued under Section 79A of the Co-operative Societies Act.

Regarding NABARD, the Court clarified that its guidelines are "suggestive in nature" for financial prudence and do not possess the statutory character required to override labour laws or create a legal bar to permanency.

Applying the Casteribe principle, the Court reasoned that continuing employees for over a decade on fixed wages for regular banking work while denying them the benefits given to permanent peers constitutes a classic unfair labour practice under Items 5 and 6.

The Industrial Court’s reliance on the "non-sanction of posts" was held to be a legal error as no statutory restraint was proven.

It held that the Respondent Bank engaged in unfair labour practices under Items 5 and 6.

The Court directed the Bank to undertake a regularisation exercise for the Petitioners against vacant posts within twelve weeks, subject to eligibility and service record verification.

Eligible petitioners are to be granted permanency with continuity of service and prospective regular pay scales.

The Court further restrained the Bank from terminating the Petitioners or altering their service conditions to their prejudice pending this exercise.

Oral request for a stay on the judgment was rejected.