Preference and Age Relaxation in Future Contractual Employment Upon Project Closure After Long-Term Service

The applicants were appointed on a contract basis as an Assistant Administrative Officer (2012) and a Data Entry Operator (2017) at the National Collaborative Centre for Facility-Based Newborn Care (NCC-FBNC) at Kalawati Saran Children’s Hospital.

Despite their initial short-term engagements, they continued in service for approximately 13 and 8 years respectively.

In March 2025, the respondents issued termination notices following a decision to close the NCC-FBNC project, citing the withdrawal of funding by UNICEF.

The applicants challenged the termination and sought regularization, arguing that the work was perennial and the project’s closure was an arbitrary departmental decision rather than a Ministry directive.

1. Whether the termination of contractual employees due to the closure of a project funded by external agencies (UNICEF) constitutes arbitrary action warranting judicial interference.

2. Whether long-term contractual service in a project-based role entitles the employees to regularization or preferential treatment in future engagements.

The Tribunal considered the principles of equity and reasonableness in public employment.

The State cannot use "temporary" labels or "financial constraints" as a shield to justify decades of exploitative ad-hocism when the work is of a perennial nature as held in Dharam Singh Ors. v. State of UP and Anr. (2025).

The court referenced Secretary, State of Karnataka v. Umadevi, distinguishing between illegal and irregular appointments.

Recent precedents like Jaggo v. Union of India caution against the misuse of temporary contracts to evade long-term employer obligations.

The Tribunal examined whether the project's closure was genuine or a pretext for termination, noting the applicants relied on Dharam Singh to argue that 13 years of uninterrupted service suggested the work was perennial.

The respondents contended that the applicants were "backdoor entries" via walk-in interviews for non-sanctioned, project-specific posts that had now ceased due to lack of UNICEF funding.

The Tribunal noted that while it could not bypass constitutional schemes for permanent absorption, the long service rendered by the applicants created an equitable claim for preference.

During proceedings, a consensus was reached: the project's closure remained effective, but the applicants’ tenure entitled them to protections against recovery of past wages and a right of first refusal for future roles.

The Tribunal directed that applicants must be given "first preference" for any future contractual employment if the centre is revived.

Applicants shall receive age relaxation equivalent to their years of contractual service for such future roles.

All outstanding salary for the period served must be released within six weeks.

No order was made for costs.