Industrial adjudicators may regularize qualified irregular appointees after ten years, but cannot confer permanency after 240 days.

ONGC engaged the concerned workmen as Assistant Rigmen/Field Operators for fixed tenures to undertake offshore drilling and production activities at Mumbai High.

The workmen were sponsored through the Employment Exchange, met the prescribed qualifications, underwent written tests, interviews and medical examinations, and were repeatedly re-engaged over the years.

In 2008, 79 workmen raised an industrial dispute concerning their fixed-term employment and sought regularization.

During the pendency of the Reference, 55 workmen obtained regular appointments, while 15 ceased to prosecute the dispute; the Reference was ultimately pursued by nine workmen.

The CGIT-II, Mumbai, by Award dated 24 April 2025, directed ONGC to make the nine workmen permanent from the date on which each completed 240 days of service, with consequential financial benefits.

ONGC challenged the Award, contending that the Industrial Disputes Act, 1947 did not apply to workmen posted on rigs beyond 12 nautical miles from the coast, and that the Tribunal could not grant permanency where the appointments were fixed-term and no sanctioned posts or regular selection process had been established.

1. Whether the CGIT-II had jurisdiction to adjudicate the industrial dispute concerning workmen deployed on offshore rigs situated beyond 12 nautical miles from India’s coastline?

2. Whether the Tribunal exceeded the terms of the Reference by granting “permanency” when the dispute concerned regularization?

3. Whether the nine workmen, initially engaged on fixed-term appointments but continuously employed for over ten years, could be regularized or made permanent in ONGC’s service merely on completion of 240 days, notwithstanding the requirements governing public employment?

4. Whether the workmen’s participation in later regular recruitment processes, and the regular appointment of 55 similarly placed workmen, barred their claim for regularization?

The Court applied the constitutional principles governing regularization in public employment under Secretary, State of Karnataka v. Umadevi (3), (2006) 4 SCC 1, holding that temporary or contractual employment does not ordinarily confer a right to absorption or permanency, but that duly qualified persons appointed against duly sanctioned vacant posts and continuously employed for ten years may be considered for regularization as a one-time exception.

It distinguished regularization from conferment of permanence, relying on Umadevi (3), R.N. Nanjundappa v. T. Thimmiah and B.N. Nagarajan v. State of Karnataka, which establish that regularization cures a procedural irregularity but is not itself a mode of recruitment or an automatic conferment of permanence.

The Court further relied on MSRTC v. Casteribe Rajya Parivahan Karmachari Sanghatana, (2009) 8 SCC 556, and Hari Nandan Prasad v. Employer, FCI, (2014) 7 SCC 190, for the principle that industrial adjudicators dealing with government instrumentalities must also comply with the constitutional scheme and may direct regularization only where supported by an employer’s scheme, treatment of similarly situated employees, or Article 14 considerations.

It also applied Municipal Council, Tirora v. Tulsidas Baliram Bindhade, 2016 (6) Mh.L.J. 867, holding that an industrial adjudicator cannot create posts or direct permanency merely because a workman has completed 240 days, absent sanctioned vacancies and authority to create and fill posts.

The Court rejected ONGC’s jurisdictional objection.

Although the workmen performed duties on offshore rigs, their appointments were issued in Mumbai, their service-related decisions and disciplinary proceedings were undertaken in India, and their employment relationship was administered from Mumbai; therefore, Indian labour law and the CGIT’s jurisdiction applied.

On the merits, the Court found that the workmen were not backdoor entrants: they had been sponsored by the Employment Exchange, possessed the prescribed qualifications, and underwent written tests, interviews and medical examinations.

Their repeated fixed-term appointments over more than 25 years demonstrated continuing organizational need and could not be treated as genuinely project-specific engagements.

Nevertheless, the Tribunal erred in directing permanency from completion of 240 days because such an order effectively created posts and bypassed the constitutional requirements applicable to ONGC as a public-sector undertaking.

The Court therefore treated the appointments as, at the highest, irregular rather than wholly illegal and applied the Umadevi (3) exception, holding that the workmen’s qualifications, selection process and more than ten years of continuous service justified regularization.

Their participation in later selection processes did not operate as estoppel, particularly because the Reference remained pending for 17 years and similarly placed workmen had secured regular appointments.

The Court upheld the applicability of the Industrial Disputes Act and the CGIT’s jurisdiction, but set aside the direction granting permanency from completion of 240 days because the Tribunal could not create posts or confer automatic permanence on that basis.

The Award dated 24 April 2025 was modified: the nine workmen were directed to be treated as being in the regular service of ONGC from the date on which each completed ten years of service from initial engagement, with consequential benefits to be granted within eight weeks.

Rule was made partly absolute, with no order as to costs.